The Board shall be comprised of a substantial majority of "independent" directors, as that term is defined from time to time by the listing standards of the New York Stock Exchange (NYSE). The Board has adopted the Director Independence Criteria set forth in the attached Exhibit A to assist it in determining director independence. The Director Independence Criteria are intended to comply with the NYSE corporate governance rules and all other applicable laws, rules and regulations regarding director independence in effect from time to time. The Board believes it should never have more than two management directors.
The Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole. This assessment will include members' qualification as independent, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Board. Nominees for directorship will be selected by the Governance Committee in accordance with the policies and principles in its charter. The Board is committed to actively seeking out diverse candidates, including qualified women and individuals from minority groups, to include in the pool from which nominees for the Board are selected. The invitation to join the Board should be extended by the Board itself, through the Chair of the Governance Committee, the Chairman of the Board or the Lead Director. As an alternative to term limits, the Governance Committee will evaluate each existing director's performance and contributions to the Board, as well as the director's qualifications, skills, independence and competence prior to recommending such director to the Board for renomination. In conducting its evaluation, the Governance Committee shall also consider the director's past attendance at meetings and participation in the activities of the Board.
All non-employee directors are required to hold at least 5,000 shares of the Company's common stock. New directors shall have five years to obtain this ownership threshold. Shares or units held by a director under any deferred plan will be included in calculating the director's ownership.
When a director's principal occupation or business association changes substantially during his or her tenure as a director, that director shall automatically be deemed to have offered his or her resignation as a director of the Company for consideration by the Governance Committee. The Governance Committee will recommend to the Board whether to accept the resignation.
The Company expects all directors to devote sufficient time and attention to fulfill properly their duties and responsibilities to the Company. Accordingly, directors are encouraged to restrict the number of public company boards on which they serve. Directors who also serve as executive officers of public companies should not serve on more than one board of a public company other than the Board (two total), and other directors should not serve on more than three boards of public companies other than the Board (four total). Directors should advise the Chairman of the Board and the Chair of the Governance Committee in advance of accepting an invitation to serve on another public company board. If a director serves on the audit committee of more than three public companies (including the Audit Committee of the Board), the Board must determine whether or not such simultaneous service impairs such director’s ability to effectively serve on the Audit Committee of the Board, and the Board’s decision shall be disclosed in the Company’s proxy statement or in another manner permitted by the applicable rules of the NYSE. No director may be nominated for election or re-election after his or her 74th birthday; provided, however, the Board may nominate a director who has reached such retirement age of 74 for an additional term of one or more years if the Board determines such nomination is in the best interest of the Company and its shareholders.
The Board believes that it should generally have no less than nine (9) and no more than thirteen (13) directors.