The Company’s business is conducted by its employees, managers and officers, under the direction of the Company’s Chief Executive Officer (“CEO”) and the oversight of the Board, to enhance the long-term value of the Company for its stockholders. The Board is elected by the Company’s stockholders to oversee management and to assure that the long-term interests of the stockholders are being served.
The Board reviews and discusses reports by management on the performance of the Company, its plans and prospects, as well as immediate issues facing the Company. In addition to its general oversight of management, the Board (either directly or through its committees) also performs a number of specific functions, including:
Board SizeThe Board size will be within the limits prescribed by the Company’s By-Laws, which currently provide that the Board may have no fewer than five and no more than eleven members. The Board will review the specific number of Board members from time to time and adjust the size of the Board as necessary and appropriate to promote the best overall interests of the Company and its stockholders, taking into account the size and breadth of the Company’s business.
Board Composition and SelectionBoard composition will be determined so that the Board will possess, in the aggregate, the strategic, managerial and financial skills and experience necessary to fulfill its duties and to achieve its objectives. The Corporate Governance and Nominating Committee shall be responsible for establishing criteria for selecting potential directors, taking into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoints and industry knowledge. The Corporate Governance and Nominating Committee will look for individuals who have displayed the highest personal and professional ethics, integrity and values and sound business judgment.
The primary responsibilities of the lead independent director are as follows:• Preside at all meetings of the Board at which the Chairman is not present, and at executive sessions of the independent directors, and establish agendas for such executive sessions in consultation with the other directors and the Chairman, and provide feedback from such sessions to the Chairman;
• Review in advance, in consultation with the Chairman, the schedule and agenda for all Board meetings as well as materials distributed to the directors in connection with such meetings;
If the Company does not have a lead independent director, but instead has only a Chairman who is an independent director, the responsibilities of the lead independent director set forth in these Guidelines will be performed by the independent Chairman.Independence of DirectorsThe Board believes that the interests of the Company’s stockholders will be best served by having a substantial number of objective, independent directors on the Board. A majority of the directors shall be independent directors that meet the independence rules of the NYSE as well as other applicable laws, regulations and rules.
Other Board ServiceRecognizing the substantial time commitment required of directors, it is expected that directors will serve on the boards of other publicly-held entities only to the extent that, in the judgment of the Board, such services do not detract from a director’s ability to devote the necessary time and attention to the Company. The Corporate Governance and Nominating Committee will, at least annually, review all directors’ service on the boards of other publicly-held entities.
Change in StatusA non-employee director who experiences a significant change in employment status (including resignation, retirement or a significant decrease in job responsibilities) from that when the director was most recently elected to the Board will promptly tender to the Chair of the Corporate Governance and Nominating Committee a letter of proposed resignation from the Board. The Corporate Governance and Nominating Committee shall review the proposed resignation and the circumstances surrounding the director’s change in employment status and recommend to the Board whether, in light of all circumstances, the Board should accept such proposed resignation.Term Limits and Retirement PolicyAs a general policy, the CEO and other senior executives of the Company who are Board members will resign from the Board upon the termination of their employment with the Company. However, the Board may ask the former CEO to remain on the Board if it believes that an exception to this policy is in the best interests of the Company and its stockholders.
An executive session of the independent directors will normally be held in conjunction with each meeting of the full Board. Additional executive sessions may be convened by the lead independent director at his or her discretion and will be convened if requested by any other director. The lead independent director will preside at all executive sessions and provide feedback to the Chairman as appropriate.
CommitteesThe Board shall at all times have an Audit Committee, a Corporate Governance and Nominating Committee and a Compensation Committee, each comprised solely of independent directors, as well as such other committees as the Board may from time to time create.Committee Assignment and RotationThe Corporate Governance and Nominating Committee, in consultation with the Chairman and the CEO, will recommend committee assignments and committee rotation to the entire Board for final approval. Board members will rotate between committees from time to time as the Board deems appropriate. Committee Composition In addition to the requirement that a majority of the Board satisfy the independence standards discussed above, members of the Audit Committee and Compensation Committee must also satisfy any additional independence requirements imposed by the NYSE or the Securities and Exchange Commission.Committee chairs shall be recommended by the Corporate Governance and Nominating Committee in consultation with the Chairman and CEO, and approved by the Board. Committee chairs will be responsible, in consultation with the Chairman, for scheduling committee meetings, setting meeting agendas, leading the conduct of each meeting, reporting the committee’s findings and making recommendations to the full Board, and presenting resolutions requiring Board action. Committee chairs will confer with the Chairman and CEO in performing these duties.Committee FundingThe Company will provide each Board committee with sufficient funds to discharge the committee’s responsibilities in accordance with its charter.
Non-employee directors and committee chairs shall receive reasonable compensation for their services, as may be determined from time to time by the Board upon recommendation of the Compensation Committee. Compensation for non-employee directors and committee chairs shall be consistent with the reasonable practices of other similarly situated companies but shall not be at a level or in a form that would call into question the Board’s objectivity. The Compensation Committee shall periodically review and report to the Board with respect to director compensation and benefits.
The Board is expected to be highly interactive with members of the Company’s senior management, and the Board and its individual members have access to individual senior executives of the Company. The Company also maintains an environment that permits senior managers to contact Board members directly.
The Company has adopted comprehensive standards of business conduct and ethics. The Board expects the Company’s directors, as well as its officers and employees, to act ethically at all times and in compliance with the Company’s standards. Actual or potential conflicts of interest should be reported, and will be addressed, in the manner described in the Company’s code of business conduct and ethics.
Director Orientation and Continuing Education
The Board shall ensure a comprehensive orientation program for newly elected directors. The Corporate Governance and Nominating Committee shall oversee and maintain this orientation program.
The Board shall develop and maintain an appropriate succession plan with respect to the position of CEO, to address both succession in the ordinary course of business and contingency planning in the case of unexpected events. The Corporate Governance and Nominating Committee is responsible for making recommendations to the Board about succession planning for the CEO.
The Board will conduct a self-assessment at least annually to determine whether it and its committees are functioning effectively. The Corporate Governance and Nominating Committee will manage the annual evaluation processes.
Stock Ownership Guidelines
The Corporate Governance and Nominating Committee has established stock ownership guidelines for the members of the Board. Each director is expected to hold shares of Company common stock with a value of at least $300,000 within five years of joining the Board. Shares that count towards satisfaction of these guidelines include: (1) shares owned outright by the director or his or her immediate family members residing in the same household; and (2) restricted shares or restricted share units granted under the Company’s employee plans. These guidelines may be waived at the discretion of the Corporate Governance and Nominating Committee for directors joining the Board from government, academia, or similar professions, or in other situations that the Corporate Governance and Nominating Committee may deem appropriate.
The Company encourages stockholders to communicate with directors. The Corporate Governance and Nominating Committee will maintain procedures for stockholders to communicate directly to a particular director, the non-management directors as a group, the lead independent director or the full Board. The Company may screen emails to directors for relevance.
The Company’s management continually communicates with its major institutional investors and sends feedback to the Board. If an investor requests contact with the Board, management refers the request to the lead independent director for his or her recommendation and any necessary action by the Board.
Nothing in these Guidelines is intended to expand the fiduciary obligations of Board members beyond those provided for under applicable law.