Selection of Chairman and CEO
Lead Independent Director
Assignment and Rotation of Committee Members
Selection of Agenda Items for Board Meetings
Board Materials Distributed in Advance
Regular Attendance of Non-Directors at Board Meetings
Executive Sessions of Non-Management Directors
Board Access to Senior Management and Outside Advisors
Board Compensation Review
Size of the Board
Mix of Inside and Outside Directors
Board Definition of What Constitutes Independence for Non-Management
Former Chief Executive Officer’s Board Membership
Board Membership Criteria
Selection of New Director Candidates
Extending Invitations to New Director Candidates
Assessing the Board’s Performance
Changes in Director’s Principal Employment
Retirement from Director’s Principal Employment
Tender of Resignation if Not Elected by Shareholders
Formal Evaluation of the Chief Executive Officer
Board Interaction with Institutional Investors, the Press, Customers, Etc.
Orientation and Continuing Education
Director Attendance at Annual Meeting of Shareholders
The Board of Directors has adopted these policies and
principles to serve the best interests of the Company and its shareholders.
1. Selection of Chairman and CEO
The Chairman of the Board may, but is not required to, also hold the office
of the Chief Executive Officer. The offices of CEO and Chairman of the Board
are separately evaluated by the independent members of the Board of Directors
2. Board Committees
The Board has the following Committees: Audit, Finance, Nominating and
Governance, Compensation, and Corporate Responsibility.
The Board has flexibility to form new committees or disband a current
The Nominating and Governance Committee, Compensation Committee, Audit
Committee, Finance Committee and the Corporate Responsibility Committee shall
each be composed exclusively of independent directors.
There are formal position descriptions for the Audit, Finance, Nominating and
Governance, Compensation, and Corporate Responsibility Committees which
define their respective functions and responsibilities.
3. Lead Independent Director
If the Chief Executive Officer is also the Chairman of the Board, the Board
may appoint a lead independent director. The lead independent director shall
chair executive sessions of non-management directors, and have the
responsibility to coordinate the annual performance reviews of the CEO and
Chairman of the Board based on the input of the independent members of the
Board, serve as liaison between the Chief Executive Officer and the
non-management directors, assure that agendas for Board meetings reflect any
input of the independent directors and have authority to convene meetings of
non-management directors at every meeting.
4. Assignment and Rotation of Committee Members
The Board appoints members of its committees on an annual basis. The
Nominating and Governance Committee is responsible for reviewing and
recommending to the Board the members for the respective Board committees.
Committee assignments are rotated periodically.
5. Committee Meetings
The Corporation annually prepares a master agenda setting forth each Board
and committee meeting during the annual cycle and the general items to be
considered at each such meeting. The full Board of Directors annually
approves the frequency of all committee meetings.
6. Committee Agendas
While the master agenda sets forth each Board committee meeting during the
annual cycle and the general items to be considered at each such meeting, the
Chairperson of the respective committee reviews the specific agenda for each
such committee meeting.
7. Selection of Agenda Items for Board Meetings
The master agenda sets forth the general items to be considered by the Board
of Directors at each of its regular meetings during the year. The Chairman of
the Board may adjust the agenda to include special items not contemplated on
the annual master agenda.
The Board of Directors annually reviews the Corporation’s long-term strategic
plans and principal issues. Periodically during the year the Board receives
strategic updates from management of the Corporation.
Each Board member is free to suggest inclusion of items on the agenda and to raise at any Board meeting subjects that are not
specifically on the agenda for that meeting.
8. Board Materials Distributed in Advance
The Board of Directors is fully informed in advance of all major proposals
and has an opportunity to make meaningful and deliberate contributions to the
decision-making process. To further that policy, information and data that is
deemed important to the Board’s understanding of the business is distributed
in writing to the Board prior to the Board meeting at which such matters will
be considered. Management makes every attempt to see that this material is
brief while still providing the desired information. On occasions where the
subject matter is too sensitive to be put on paper, certain proposals will be
discussed at the meeting.
9. Regular Attendance of Non-Directors at Board
Such executive officers of the Corporation as the Board may request attend
each meeting of the Board, excluding its executive sessions.
10. Executive Sessions of Non-Management Directors
Each Board meeting begins with an executive session of all non-management
directors and the CEO. The non-management directors have a scheduled
opportunity to meet in executive session without the CEO present at the end
of each regular meeting of the Board of Directors.
11. Board Access to Senior Management and Outside
Board members have complete access to the Corporation’s senior management as
well as its outside counsel and auditors, and, as necessary or appropriate,
its own independent advisors.
Each non-management director is expected to become familiar with the
condition and operations of the Corporation through Board and Committee
meetings and by personal observation and inquiry.
In addition, it is the responsibility of the Chairman of the Board to
facilitate constructive interaction between the Board and management of the
12. Board Compensation Review
The Compensation Committee of the Board of Directors is responsible for
reviewing and recommending to the independent members of the Board of
Directors all compensation plans for the Board of Directors.
13. Size of the Board
The Corporation’s Articles provide for a Board of Directors with 5 to 21
members. The Board believes that a membership of about 11 directors is
14. Mix of Inside and Outside Directors
A preponderance of the Board should consist of outside directors who meet the
independence standards of the New York Stock Exchange. Only top corporate
management who have potential to be CEO should serve
on the Board. No member of Corporation management will serve on an outside
15. Board Definition of What Constitutes
Independence for Non-Management Directors
Board members should have broad perspective, experience, knowledge and
independence of judgment, and business backgrounds that can bring a different
set of experiences and perspectives to the Board. In order to be independent
a director must not have any material relationship with the Corporation or
its management. Independence determinations are made annually by the Board, or more frequently if circumstances warrant.
The Audit, Nominating and Governance, and Compensation Committees are
required to follow the securities laws and the New York Stock Exchange rules
for independence of their respective members.
16. Former Chief Executive Officer’s Board
No former CEO should serve on the Board for an extended time. Whether a
former CEO should serve on the Board for a limited time is a matter to be
decided in each individual instance.
A former Chief Executive Officer serving on the Board will not be considered
an independent director for purposes of corporate governance.
17. Board Membership Criteria
The Nominating and Governance Committee of the Board of Directors reviews and
recommends the composition, organization and responsibilities of the Board
and its committees.
Board members should have broad perspective, experience, knowledge and
independence of judgment; the members should represent a predominance of
business backgrounds who can bring a different set
of experiences and perspectives to the Board. Regional balance is recognized
as highly desirable, and a high degree of interest and involvement are prime
requisites for membership.
18. Selection of Director Candidates
The ultimate responsibility for selection of candidates for director resides
in the Board of Directors. The screening process for that responsibility is
delegated to the Nominating and Governance Committee, which reviews
candidates for election or reelection as directors and recommends candidates
for approval by the Board.
19. Extending Invitations to New Director
The Chairman of the Board and the senior personnel manager play important
roles in contacting potential Board members under the direction of the
Nominating and Governance Committee. Candidates for nomination to the Board
of Directors may be invited to meet with individual directors in an informal
setting. The formal appointment of a new director is subject to approval by
the full Board.
20. Assessing the Board’s Performance
The Board annually reviews its performance and takes steps (including
evaluating its composition, organization, responsibilities and compensation)
to improve its performance and the performance of its committees.
21. Changes in Director’s Principal Employment
Any director (including management directors) whose affiliation or position
of principal employment changes substantially after election to the Board
will be expected to offer to tender his or her resignation as a director
promptly to the Board. The Nominating and Governance Committee shall make a
recommendation to the Board on whether to accept or reject the offer, taking
into consideration the effect of such change in employment on the director’s
qualification as an independent director and on the interests of the Corporation.
22. Retirement from Director’s Principal
A non-management director who retires from principal employment may serve up
to an additional three years from the date of such retirement, but only to a
maximum of 20 years of service on the Board and not beyond the director’s
23. Term Limits
No non-management director will serve for more than a total of 20 years in
that capacity, except that when three or more such directors are due to
retire within a 12 month period, the Board may request the director who is
under 71 with the least service on the Board to serve up to an additional 12
months to smooth the rotation of Board members.
24. Retirement Age
All directors must retire upon reaching age 72.
25. Tender of Resignation if Not Elected by
If a nominee for director who is an incumbent director is not elected at a
meeting of shareholders and no successor to the incumbent director is elected
at the meeting of shareholders, the incumbent director shall promptly offer
to tender his or her resignation to the Board. The Nominating and Governance
Committee shall make a recommendation to the Board on whether to accept or
reject the offer, or whether other action should be taken. The Board shall
act on whether to accept the director’s offer, taking into account the
Nominating and Governance Committee’s recommendation, and publicly disclose
(by press release, a filing with the Securities and Exchange Commission or
other broadly disseminated means of communication) its decision and the
rationale behind it within 90 days after the date of the certification of the
election results. The Nominating and Governance Committee, in making its
recommendation, and the Board, in making its decision, may each consider any
factors or other recommendations that it considers relevant and appropriate.
The incumbent director who offers to tender his or her resignation shall not
participate in the Board’s decision with respect to that director. If such
incumbent director’s offer to tender his or her resignation is not accepted
by the Board, such director shall continue to serve until the next annual
meeting and until his or her successor is duly elected, or his or her earlier
death, resignation, retirement, disqualification or removal.
26. Formal Evaluation of the Chief Executive
The Compensation Committee of the Board of Directors annually reviews the
performance of the CEO as it relates to all elements of compensation. The
independent members of the Board annually review the recommendations of the
Compensation Committee and approve the performance review of the Chief
Executive Officer and the principal elements of the CEO’s compensation.
27. Succession Planning
The Board is responsible for assuring that the status of organizational strength
and succession planning is consistent with the long-range goals of the
The Chief Executive Officer is required to annually present to the Board an
evaluation of the pace, direction and organizational strength of the
Corporation and to see that the Corporation has an effective top management
team, with provision for succession.
28. Board Interaction with Institutional
Investors, the Press, Customers, Etc.
The CEO, the CFO and the senior investor relations manager are charged with
responsibility to serve as the chief spokespeople for the Corporation, and
thereby see that the Corporation is properly represented to its various
29. Orientation and Continuing Education
New directors participate in an orientation program that includes discussions
with senior management, background materials on the Corporation’s plans,
organization and financial statements and visits to the Corporation’s
30. Director Attendance at Annual Meeting of
All directors are expected to attend the Corporation’s Annual Meeting of
Shareholders except in the event of unavoidable or extenuating circumstances.