As Amended and Restated October
The Board of Directors believes that its primary responsibility is to provide
effective governance of the Company for the benefit of all shareholders. That
- Evaluating the performance
of the CEO and other executive officers annually and taking appropriate
action any time it is warranted;
- Setting the compensation of
the Company’s SEC reporting officers and establishing
- policies regarding the
compensation of other members of management;
- Reviewing succession plans
and development programs for members of senior management;
- Periodically reviewing and
approving strategic and business plans and monitoring the Company’s
performance against those plans;
- Adopting policies of
corporate conduct and ethics and reviewing the adequacy of compliance
systems and controls;
- Annually conducting an
evaluation of the overall effectiveness of the Board;
- Annually reviewing the work
and effectiveness of the Board’s committees; and
- Deciding matters of corporate
The Board will always have an Audit
Committee, a Compensation
Committee and a Nominating
& Corporate Governance Committee. All of the members of these
committees will be independent directors under the criteria established by
the New York Stock Exchange and SEC rules and regulations.
The Board has adopted these guidelines to assist it in the exercise of its
responsibilities. It intends these guidelines to be just that – guidelines –
and not rigid rules. The Nominating and Corporate Governance Committee will
periodically assess these guidelines and will advise the Board of suggested
changes. The Board’s goal is to ensure that the guidelines continue to be
appropriate and effective.
GENERAL GOVERNANCE GUIDELINES
Board Structure and Membership
1. Independence. The majority of the
members of the Board will meet the applicable independence and experience
requirements of the New York Stock Exchange, the federal securities laws and
the rules and regulations of the Securities and Exchange Commission (the
In addition to the independence requirements above, directors who serve on
the Audit Committee must, in addition, meet all additional independence and
experience qualifications required of Audit Committee members by the New York
Stock Exchange, the federal securities laws and the rules and regulations of
the SEC. At least one member of the Audit Committee will have accounting or
related financial management expertise and at least one member of the Audit
Committee will qualify and be designated by the Board as a financial expert.
No member of the Audit Committee may accept any consulting, advisory or other
compensatory fees from the Company, other than fees paid to such member in
his or her capacity as a member of the Committee, the Board or any other
The Board believes that no more than two employees should serve as directors.
The CEO should at all times be a member of the Board. Other than the CEO,
only those employees whose positions make it appropriate for them to sit on
the Board should be directors.
2. Size of the Board. The Bylaws specify that the Board will be made up of
not less than 3 nor more than 10 directors. The Board believes that,
optimally, the Board should number between 7 and 10 members.
3. Service of Former Employees on the Board. When an employee director
resigns or retires from employment, he or she should submit his or her
resignation from the Board at the same time. Whether the person will be
invited to remain or rejoin the Board will be considered by the Nominating
and Corporate Governance Committee and approved by the Board.
4. Directors with Change in Responsibilities. An individual director who
substantially changes the responsibilities he or she held when elected to the
Board should immediately submit his or her resignation from the Board. This
should provide an opportunity for the Board, via the Nominating and Corporate
Governance Committee, to review the continued Board membership of such a
director under changed circumstances and to determine whether or not to
accept the resignation.
5. Annual Election of All Directors. As provided in the Company’s Bylaws, all
directors are elected annually.
6. Term Limits. The Board does not believe that term limits for directors are
necessary. While term limits could help ensure that new ideas and different
perspectives are expressed, they would cause the Company to automatically
lose the contribution of directors who have developed necessary insight into
the Company and its operations. As an alternative to term limits, the
Nominating and Corporate Governance Committee will review annually each
director’s continuation on the Board.
7. Board Membership Criteria. The Nominating and Corporate Governance
Committee is responsible for assessing the appropriate mix of skills and
characteristics required of Board members. The Nominating and Corporate
Governance Committee will review the needs of the Board and any of its committees
at least annually and will review and update selection criteria as deemed
necessary. The Nominating and Corporate Governance Committee will evaluate
the qualifications of each director candidate against criteria outlined in
these guidelines and in its charter as well as any additional criteria it
deems appropriate in making its recommendation to the Board concerning the
nomination of any candidate for election or reelection as a director.
Candidates nominated for election or reelection to the Board should possess
high personal and professional ethics, integrity and values, an independent
mind, and mature judgment. Candidates should be involved only in activities
or interests that do not conflict with responsibilities to the Company and
8. Selection of Directors. The Board is ultimately responsible for nominating
members to the Board and for filling vacancies on the Board that may occur
between annual meetings of shareholders. The Nominating and Corporate
Governance Committee is responsible for identifying and screening candidates
for Board membership.
9. Director Retirement. The Nominating and Corporate Governance Committee
will review each director’s continuation on the Board annually. The Board
believes that each non-employee director should offer to retire from the
Board immediately prior to the annual meeting of shareholders following his
or her 70th birthday, but acceptance of such offer is at the Board’s
Director Relations with Management
1. Board Access to Senior Management. Directors will have unrestricted access
to the Company’s management, subject to reasonable time constraints. Members
of the Company’s senior management will, at the request of the Board or the
appropriate committee, routinely attend Board and committee meetings and they
and other managers should frequently brief the Board and the committees on
particular topics. The Board encourages senior management to bring managers
into Board or committee meetings and other scheduled events who (a) can provide
additional insight into matters being considered or (b) represent managers
with future potential whom senior management believe should be given exposure
to the members of the Board.
2. Role of the CEO. The CEO is responsible to the Board for the overall management
and functioning of the Company. The Board will assist the CEO in complying
with his or her obligations under the rules of the Securities and Exchange
Commission and the rules of the NYSE.
3. Evaluation of the CEO. Annually, typically in March of each year, the
Compensation Committee should evaluate the compensation package of the CEO
and will consider the performance of the CEO in the course of its
deliberations. The Chairman of the Compensation Committee is charged with
communicating the results of this evaluation to the CEO following the
4. Reliance on Senior Management. In discharging its obligations, the Board
is entitled to rely on the honesty and integrity of the Company’s senior
management and its outside advisors and auditors.
Operation of the Board – Meetings
1. Chairman and Chief Executive Officer. The Board does not have a policy on
whether or not the roles of Chairman and CEO should be separate or combined
and, if those roles are to be separate, whether the Chairman should be
selected from the non-employee directors or be an employee. The Chairman of
the Board will preside at all Board meetings unless a majority of the full
Board votes in favor of appointing a different presiding officer for a
2. Executive Sessions of Independent Directors. The independent directors
will meet in executive session outside the presence of the CEO, any other
employee director and other Company personnel immediately following each
regularly scheduled meeting of the Board. One independent director may be
designated by majority vote of the independent directors to function as the
presiding director during executive sessions and to serve as the interface
between the independent directors and the CEO in communicating the matters
discussed during the executive sessions. The name of any director designated
as the presiding director of such executive sessions will be disclosed in the
Company’s annual proxy statement.
3. Regular Attendance of Non-Directors at Board Meetings. The President, the
Chief Financial Officer and the General Counsel & Secretary will be
present during Board meetings, except where there is a specific reason for
them to be excluded. In addition, with the concurrence of the Board, the CEO
may invite one or more members of management to be in regular attendance at
Board meetings and may include other officers and employees from time to time
as appropriate under the circumstances.
4. Frequency and Length of Board Meetings. The Board has at least four
regularly scheduled meetings per year. Special meetings are called as
necessary. It is the responsibility of the directors to attend all of the
meetings either in person or by telephone. If a director is unable to attend
a regularly scheduled meeting of the Board he or she is expected to notify
the Corporate Secretary prior to the meeting date. Because the Board believes
personal interaction with management is important, during each full year of
service, directors are expected to attend at least seventy-five percent of
the regularly scheduled Board meetings in person.
Long-term strategic and business plans will be reviewed at least annually at
one of the Board’s regularly scheduled meetings.
Each regularly scheduled Board meeting will last until the Board agrees to
adjourn such meeting.
5. Selection of Agenda Items for Board Meetings. The CEO establishes the
agenda for each Board meeting, although the other Board members are free to
and encouraged to suggest items for inclusion on the agenda. Each director is
free to raise at any Board meeting subjects that are not on the agenda for
that meeting. At each Board meeting, each Committee of the Board should
present a report of its activities since the last Board meeting.
6. Board/Committee Forward Agenda. A forward agenda of matters requiring
recurring and focused attention by the Board and each Committee will be
prepared and distributed prior to the beginning of each calendar year in
order to ensure that all required actions are taken in a timely manner and
are given adequate consideration.
7. Information Flow; Pre-meeting Materials. In advance of each Board or
Committee meeting, a proposed agenda will be distributed to each member. In
addition, to the extent feasible or appropriate, information and data
important to the members’ understanding of the matters to be considered,
including background summaries of presentations to be made at the meeting,
will be distributed in advance of the meeting. Directors should review the
advance materials prior to each meeting and should come prepared to discuss
the items on the agenda.
Committees of the Board
1. Numbers and Types of Committees. A substantial portion of the analysis and
work of the Board is done by its standing Committees. Each Committee will
have its own charter setting forth its purpose, goals, powers and
responsibilities. In addition, each charter will outline qualifications for
membership as well as set forth procedures, structure and reporting
requirements. In accordance with each Committee’s charter, a director is
expected to participate actively in the meetings of each Committee to which
he or she is appointed.
The Board has established the following standing Committees: Audit;
Compensation; Nominating and Corporate Governance; and Health, Safety &
Environment. Each Committee’s charter is to be reviewed periodically by the
relevant Committee and the Board. The Nominating and Corporate Governance
Committee is charged with conducting an annual review of all Committee
charters. Annually, each Committee will review and evaluate its own
2. Composition of Committees. The Board believes that, as a matter of policy,
only independent directors should serve on the Audit, Compensation, and
Nominating and Corporate Governance Committees.
The Nominating and Corporate Governance Committee is charged with reviewing
the qualifications of the members of each Committee to ensure that each
member meets the criteria set forth in applicable SEC, NYSE and IRS rules and
regulations as well as the Committee’s charter.
3. Assignment and Rotation of Committee Members. The Nominating and Corporate
Governance Committee recommends to the Board the membership of the various
Committees and considers rotation of Committee members. The Board approves
the Committee assignments. In making its recommendations to the Board, the
Committee takes into consideration the need for continuity; subject matter
expertise; applicable SEC, IRS or NYSE requirements; the performance of the
incumbent member; tenure; and the desires of individual Board members.
4. Frequency and Length of Committee Meetings. Each Committee will meet as
frequently and for such length of time as may be required to carry out its
assigned duties and responsibilities. The schedule for regular meetings of
the Board and Committees for each year is submitted and approved by the Board
in advance. In addition, the Chairman of a Committee may call a special
meeting at any time he or she deems advisable.
5. Committee Agendas; Reports to the Board. Appropriate members of management
and staff will prepare draft agenda and related background information for
each Committee meeting which, to the extent desired by the relevant Committee
Chairman, will be reviewed and approved by the Committee Chairman in advance
of distribution to the other members of the Committee. A forward agenda of
recurring topics to be discussed during the year will be prepared for each
Committee and furnished to all directors. Each Committee member is free to
suggest items for inclusion on the agenda and to raise at any Committee
meeting subjects that are not on the agenda for that meeting.
Reports on each Committee meeting are made to the full Board. All directors
are furnished copies of each Committee’s minutes and reports.
6. Independent Advisors. Each Committee will have the power to hire
independent legal, financial or other advisors as they deem necessary to
assist them in fulfilling the Committee’s responsibilities.
Other Board Practices
1. Director Orientation and Continuing Education. The Nominating and
Corporate Governance Committee intends to develop an orientation program for
new directors which includes comprehensive information about the Company’s
business and operations; general information about the Board and its
Committees, including a summary of director compensation and benefits; a
review of director duties and responsibilities; a review of the Company’s
strategic plans and risk management issues; and a review of the Company’s
compliance program and its Code of Business Conduct and Ethics. The
Nominating and Corporate Governance Committee will review and update the
program as necessary. Each new director must participate in the Company’s
orientation program within eight weeks of his or her initial election as a
In addition, the Board believes continuing education is important for its
directors and each year the Board will offer opportunities for its directors
to receive training in areas relevant to their service as the Company’s
2. Board Interaction with Institutional Investors and Other Stakeholders. The
Board believes that it is senior management’s responsibility to speak for the
Company. When any individual board member receives an inquiry from any
analyst, institutional investor or other stakeholder, he or she should refer
such inquiry to the CEO, the Vice Chairman or the CFO of the Company.
3. Communications with Shareholders. The Board has adopted formal policies
and procedures that provide shareholders the means to communicate directly
with the Board, individual directors and committees of the Board by mail or
via the Company’s confidential hotline. Shareholders may also use that
procedure to communicate with the director designated to preside at executive
sessions of the independent directors or with the independent directors as a
4. Periodic Review of These Guidelines. The operation of the Board is a
dynamic and evolving process. Accordingly, these guidelines will be reviewed
at least annually by the Nominating and Corporate Governance Committee and
any recommended revisions will be submitted to the full Board for
5. Director Compensation Review. It is appropriate for senior management of
the Company to report periodically to the Nominating and Corporate Governance
Committee as well as to the Compensation Committee on the status of the
Company’s director compensation practices in relation to other companies of
comparable size and the Company’s competitors. The form and amount of
director compensation should be determined by the Compensation Committee in
accordance with its charter. Changes in director compensation, if any, should
come upon the recommendation of the Compensation Committee, but with full
discussion and concurrence by the Board.
6. Evaluation of Board Performance. The Nominating and Corporate Governance
Committee is responsible for overseeing an annual assessment of the Board’s
performance. Its purpose is to increase the effectiveness of the Board, not
to target individual Board members.
7. Conflicts of Interest. If an actual or potential conflict of interest
develops because of a change in the business operations of the Company or a
subsidiary, or in a director’s circumstances (for example, significant and
ongoing competition between the Company and a business with which the director
is affiliated), the director should report the matter immediately to the
Chairman of the Nominating and Corporate Governance Committee for evaluation.
(In the event the reporting director is the Chairman of the Nominating and
Corporate Governance Committee, he or she should report the matter to another
member of the committee). A significant conflict must be resolved or the
director must resign from the Board.
If a director has a personal interest in a matter before the Board, the
director will disclose the interest to the full Board and excuse himself or
herself from participation in the discussion and will not vote on the matter.
Directors also are required to follow the Company’s Code of Conduct described
8. Succession Planning. There should be an annual report from the
Compensation Committee on succession planning. There should also be
available, on a continuing basis, the CEO’s ongoing recommendations as to a
successor should he or she be unexpectedly disabled.
9. Insurance and Indemnification. The Board will be entitled to have the
Company purchase reasonable directors’ and officers’ liability insurance on
its behalf. Directors will be entitled to the benefits of indemnification to
the fullest extent permitted by law, the Company’s charter and by-laws and to
the extent provided in any indemnification agreements. Directors will be
entitled to the benefits of exculpation provided by state law as well as
provided in the Company’s charter.
10. Code of Business Conduct and Ethics. The Board has adopted a Code of
Conduct for its directors, officers and employees. The Code addresses
conflicts of interest; corporate opportunities; confidentiality; fair
dealing; protection and proper use of company assets; compliance with laws,
rules and regulations and reporting illegal or unethical behavior. The
Nominating and Corporate Governance Committee will periodically review the
Code of Conduct and make recommendations with respect to any changes,
amendments and modifications that it deems desirable.