Size of the Board
The number of directors serving on the Board should be established with a view toward balancing the need for diversity of experience and talent against the risk of diluting responsibility and participation of Board members. It is the sense of the Board that a size of between six and ten members will generally be appropriate for the Board depending upon the circumstances.
Offices of Chair and Chief Executive Officer
The Board will determine whether the offices of Chief Executive Officer and Chair of the Board (the “Chair”) should be combined or separate, based on an analysis of then-existing facts and what is in the best interests of the Company at any particular time.
Non-Executive Chair
If the offices of Chief Executive Officer and Chair are not combined, the Board will elect a Non-Executive Chair from among the independent directors. The Non-Executive Chair will be selected by the independent directors and will serve for a term to be determined by the independent directors, contingent on the selected individual’s continued election to the Board.
The Non-Executive Chair’s responsibilities include the following:
- to serve as a resource to the Chief Executive Officer in connection with his or her transition, as necessary;
- to serve as a resource to the Chief Executive Officer in connection with strategic planning and other matters of strategic importance to the Company;
- to receive reports from the Chief Executive Officer and to organize and facilitate the Chief Executive Officer evaluation process and provide ongoing, constructive feedback to the Chief Executive Officer;
- to consult with the Chief Executive Officer regarding the Company’s relations and communications with stockholders of the Company, analysts and the investor community;
- to chair meetings of the Board;
- to set the schedule and agenda for Board meetings in consultation with the Chief Executive Officer;
- in consultation with the Chief Executive Officer, to determine the information that is sent to the Board;
- to preside over the executive sessions and other meetings of the independent directors; and
- to communicate the results of meetings of the independent directors to the Chief Executive Officer and other members of management, as appropriate.
The Board may, but shall not be required to, elect a Non- Executive Vice Chair from among the independent directors. Any Vice Chair will be selected by the independent directors and will serve for a term to be determined by the independent directors, contingent on the selected individual’s continued election to the Board.
The Non-Executive Vice Chair, if any, shall assist the Non-Executive Chair in the performance of his responsibilities as set forth above, to the extent requested by the Non-Executive Vice Chair.
If the Non-Executive Chair is unable to attend a meeting of the Board, then the Non-Executive Vice Chair, if any, shall chair the meeting. In the event that both the Non-Executive Chair and the Non-Executive Vice Chair, if any, are unable to attend a meeting of the Board, the Chief Executive Officer shall chair the meeting. In the event both the Non-Executive Chair and the Chief Executive Officer are unable to attend a meeting of the Board, then the Chair of the Governance Committee shall chair the meeting. The Chair of the Governance Committee shall also preside over any executive session or other meeting of the independent directors in the event the Non-Executive Chair and the Non-Executive Vice Chair are unable to attend such meeting.
Lead Director
If the offices of Chief Executive Officer and Chair are combined, the Board will establish a Lead Director position. The Lead Director will be an independent director selected by the independent directors and will serve for a term to be determined by the independent directors, contingent on the selected individual’s continued election to the Board, and subject to the procedures for selecting a Lead Director developed by the Board.
The Lead Director’s responsibilities include the following:
- establishing the agenda for the executive sessions of the independent directors;
- calling meetings of the independent directors, in addition to the executive sessions of independent directors held after each Board meeting;
- chairing the executive sessions and other meetings of the independent directors;
- communicating the result of meetings of the independent directors to the Chair and other members of management, as appropriate;
- regularly consulting with the Chair;
- discussing the schedule and agenda for the Board meetings with the Chair;
- approving the meeting schedules to assure that there is sufficient time for discussion of all agenda items;
- presiding at Board meetings in the absence of the Chair;
- reviewing information that is sent to the Board and all critical communications to the Board; and
- being available for consultation and direct communication at the request of major stockholders.
In the event both the Chair and the Lead Director are unable to attend a meeting of the Board, then the Chair of the Governance Committee shall preside at such meeting. The Chair of the Governance Committee shall also chair any executive session or other meeting of the independent directors in the event the Lead Director is unable to attend such meeting.
Selection of Members
The Board will work together in seeking and nominating candidates for Board membership. The Board has delegated the screening process for new directors to the Governance Committee in consultation with the Chair and the Lead Director, if any. Consistent with its charter, the Governance Committee is responsible for screening director candidates, for establishing criteria for director nominees and for recommending to the Board a slate of nominees for election to the Board at the Annual Meeting of Stockholders, and nominees for election by the Board to fill vacancies on the Board. In addition, the Governance Committee will make a serious evaluation of each incumbent director prior to any re-nomination.
Independence
At least two-thirds of the Board should be “independent” directors as defined by the New York Stock Exchange.
The Board shall undertake an annual review of the independence of all non-employee directors, which shall be administered by the Governance Committee. At or prior to the meeting in which this review is to occur, the Governance Committee shall provide the Board with sufficient information about each non-employee director’s business relationships with the Company and its management to enable it to evaluate the director’s independence. Based on this evaluation and any other facts and circumstances the Board deems appropriate, the Board will affirmatively determine and identify which directors qualify as independent. Directors who have been designated as independent are expected to inform the Board promptly of any material changes in their circumstances or relationships that may impact their designation by the Board as independent.
Majority Vote Standard for Election of Directors: Resignation Policy
The bylaws of the Company provides that, in an uncontested election of directors, a director nominee is elected to the Board of Directors if the number of votes cast “for” the nominee’s election exceeds the number of votes cast “against” the nominee’s election.
If an incumbent director who was a nominee for reelection is not reelected in an uncontested election of directors, then such incumbent director shall tender his or her resignation in writing to the Chair promptly following the certification of the election results, which resignation will be conditioned upon acceptance by the Board. The Governance Committee shall evaluate each such resignation tendered and shall recommend to the Board whether to accept or reject each such resignation. The Board shall act on each such resignation, taking into account the recommendation of the Governance Committee, within 90 days following the certification of the election results. Upon making its determination, the Board will promptly disclose (i) its decision whether to accept or reject the incumbent director’s tendered resignation and (ii) if rejected, the reasons for rejecting the tendered resignation. The Governance Committee, in making its recommendation, and the Board, in making its decision, may consider any factors or other information that it considers appropriate and relevant. If a director’s resignation is not accepted by the Board, then such director shall continue to serve as a director, except as required by law.
A director who tenders a resignation pursuant to the foregoing shall not vote with respect to the recommendation of the Governance Committee or the decision of the Board as to whether to accept his or her resignation. If, however, each member of the Governance Committee failed to be was not reelected in the same uncontested election, then the Board will appoint a committee comprised solely of independent directors who either did not stand for reelection or were reelected in that election to consider each tendered resignation and make a recommendation to the Board with respect thereto.
Qualities of a Director
The Governance Committee works with the full Board to determine the appropriate characteristics, perspectives, backgrounds, skills and experiences for the Board as a whole and its individual members. While the Governance Committee has not established minimum criteria for a director candidate, it has established important factors to consider in evaluating a director candidate. These diverse factors include the following (although candidates need not possess all of the following factors, and not all factors are weighted equally):
- integrity and strength of character;
- mature judgment;
- strategic thinker;
- demonstrated leadership skills;
- business experience, including relevant industry experience;
- experience with international business issues and risk;
- public company experience;
- innovation, technology or information technology expertise;
- availability;
- relevant technical skills;
- time and willingness to perform duties as a director;
- absence of conflicts of interest that would impair his or her ability to perform his or her director duties; and
- the extent to which the candidate would fill a present need on the Board.
To ensure the Board is comprised of members with an appropriate mix of characteristics, perspectives, skills, experiences and backgrounds, the Board is committed to a policy of inclusiveness. To that end, and consistent with applicable legal requirements and the Board’s fiduciary duties, the Board is committed to seeking out highly qualified candidates with diverse characteristics, perspectives, backgrounds, experiences and skills as illustrated above as part of each Board search the Company undertakes.
Retirement Age
It is the Board’s policy that no person who has attained the age of 72 prior to the next Annual Meeting at which such person would otherwise stand for reelection is eligible to stand for election to the Board.
Term Limits
The discretion of the Governance Committee and Board in carefully reviewing directors for re- nomination and the stockholders in reelecting directors provides appropriate protection against directors remaining on the Board despite declining performance. Therefore, the Board has determined that the more arbitrary measure of director term limits is unnecessary.
Service on Other Boards
Independent directors who are members of the Audit Committee may serve on audit committees of no more than three public companies, including the Company. Non-executive directors may serve on the boards of directors of no more than public companies, including the Board.
Exceptions to these limits shall be approved on a case-by-case basis by the Board. Directors should advise the Chair and the Chair of the Governance Committee in advance of accepting an invitation to serve on the board of directors (or similar body) of another for-profit company. The Governance Committee will take into consideration the extent to which a director’s ability to adequately fulfill his or her responsibility to the Company and the Board may be impaired by service on other boards and committees.
Additionally, the Chief Executive Officer must obtain the approval of the Board before accepting membership on other for-profit boards (or similar bodies), which approval shall only be granted if the Board believes such service to be in the best interests of the Company. In addition, prior to accepting membership on other for-profit boards or similar bodies, executive officers other than the Chief Executive Officer must obtain the approval of the Chief Executive Officer.
In determining whether to approve the Chief Executive Officer’s request to serve on the board or similar body of a for-profit entity, the Board shall consider the totality of facts and circumstances surrounding the request, including the expected time commitment involved with service on the proposed entity’s board, the number of other boards (both public and private, non-profit and for-profit) on which the Chief Executive Officer currently serves, the length of time the Chief Executive Officer has been with the Company, the length of time the Chief Executive Officer has been in his or her current position with the Company and its predecessors, whether the proposed entity is a customer, supplier, or competitor of the Company, and any other facts and circumstances the Board deems appropriate. Neither the Chief Executive Officer nor an executive officer of the Company may serve on any board of directors of a company if the Chief Executive Officer or another executive officer of that company is serving on the Board. Further, in no event shall an executive officer, including the Chief Executive Officer, serve on more than one other for-profit board or similar body of a publicly traded company (in addition to the Board, where applicable).
The Board shall also, as part of its annual review of the Chair, any Vice-Chair and/or Chief Executive Officer, look particularly at the impact any outside board service may have on the performance of his or her responsibilities for the Company.
Changes in Professional Circumstances
When there is a change in a director’s professional circumstances from those that pertained at the time of their election to the Board, the director is expected to offer in writing to resign from the Board. A director who retires or changes position or responsibility after being elected to the Board will not necessarily be required to leave the Board. The Governance Committee will review the continued appropriateness of Board membership and make recommendations for action by the Board.