The Board of Directors has adopted the following guidelines to promote the effective governance of the Company. The Board will also review and amend these guidelines as it deems necessary or appropriate.
On behalf of the Company’s shareholders, the Board is responsible for overseeing the management of the business and affairs of the Company. The Board acts as the ultimate decision-making body of the Company, except on those matters reserved to or shared with the shareholders of the Company under applicable laws.
1. Director Qualifications
In choosing directors, the Company seeks individuals who have very high integrity, business savvy, shareholder orientation and a genuine interest in the Company. The Company is required to elect a majority of directors who are independent. All references to “independent directors” in these guidelines are to directors who are independent in that they hold no full time executive position in the company or any of its subsidiaries or affiliated companies and businesses. The Board does not have limits on the number of terms a director may serve. The Board does not have any retirement or tenure policies that would limit the ability of a director to be nominated for reelection. The Governance, Compensation and Nominating Committee is responsible for nominating directors for election or reelection.
2. Board Size and Committees
The Board will have a maximum of 14 members (four management directors, two non-management but not independent directors and eight independent directors). Under the Bylaws of the Company, the Board has the authority to change its size, and the Board will periodically review its size as appropriate. The Board has three committees:
ii. Governance, Compensation and Nominating; and
The Audit and Governance, Compensation and Nominating Committees each consist solely of independent directors. The Board may, from time to time, establish and maintain additional or different committees, as it deems necessary or appropriate.
3. Voting for Directors
Any nominee for director in an uncontested election (i.e., an election where the number of nominees is not greater than the number of directors to be elected) who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall, promptly following certification of the shareholder vote, offer his or her resignation to the Board for consideration in accordance with the following procedures. All of these procedures shall be completed within 90 days following certification of the shareholder vote.
The Qualified Independent Directors (as defined below) shall evaluate the best interest of the Company and its shareholders and shall decide on behalf of the Board the action to be taken with respect to such offered resignation, which can include:
i. accepting the resignation,
ii. maintaining the director but addressing what the Qualified Independent Directors believe to be the underlying cause of the withhold votes,
iii. resolving that the director will not be re-nominated in the future for election, or
iv. rejecting the resignation.
In reaching their decision, the Qualified Independent Directors shall consider all factors they deem relevant, including:
i. any stated reasons why shareholders withheld votes from such director,
ii. any alternatives for curing the underlying cause of the withheld votes,
iii. the director’s tenure,
iv. the director’s qualifications,
v. the director’s past and expected future contributions to the Company, and
vi. the overall composition of the Board, including whether accepting the resignation would cause the Company to fail to meet any applicable legal or regulatory requirements.
Following the Board’s determination, the Company shall promptly disclose in a document the Board’s decision of whether or not to accept the resignation offer. The disclosure shall also include an explanation of how the decision was reached, including, if applicable, the reasons for rejecting the offered resignation.
A director who is required to offer his or her resignation in accordance with this Section 3 shall not be present during the deliberations or voting whether to accept his or her resignation or, except as otherwise provided below, a resignation offered by any other director in accordance with this Section 3. Prior to voting, the Qualified Independent Directors will afford the affected director an opportunity to provide any information or statement that he or she deems relevant.
For purposes of this Section 3, the term “Qualified Independent Directors”
a) All directors who (1) are independent directors (as defined above) and (2) are not required to offer their resignation in accordance with this Section 3.
b) If there are fewer than three independent directors then serving on the Board who are not required to offer their resignations in accordance with this Section 3, then the Qualified Independent Directors shall mean all of the independent directors and each independent director who is required to offer his or her resignation in accordance with this Section 3 shall recuse himself or herself from the deliberations and voting only with respect to his or her individual offer to resign.
The foregoing procedures will be summarized and disclosed each year in the proxy statement for the Company’s annual meeting of shareholders.