The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be the best interests of the Company and its shareholders. In discharging that obligation, directors should be entitled to rely on the honesty and integrity of the Company’s senior executives and its outside advisors and auditors as well as outside advisors engaged by the Board or its committees. The directors shall also be entitled to have the Company purchase reasonable directors’ and officers’ liability insurance on their behalf, to the benefits of indemnification to the fullest extent permitted by law and the Company’s charter, bylaws and any indemnification agreements, and to exculpation as provided by state law and the Company’s charter.
All directors are expected to own stock in the Company. Non-employee directors are required to own the lesser in value of 7,500 shares of Company stock, or three times the annual cash Board retainer for non-employee directors within five years of July 1, 2010, or the date of their initial appointment or election, whichever is later. The share value shall be calculated using a 200-day average stock price.
Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. Information and data that are important to the Board’s understanding of the business to be conducted at a Board or committee meeting should generally be distributed in writing to the directors before the meeting, and directors should review these materials in advance of the meeting.
The Board has no policy with respect to the separation of the offices of Chair and the Chief Executive Officer. The Board believes that this issue is part of the succession planning process and that it is in the best interests of the Company for the Board to make a determination on a periodic basis.
The Chair will establish the agenda for each Board meeting. At the beginning of the year, the Chair will establish a schedule of agenda subjects to be discussed during the year (to the degree this can be foreseen). Each board member is free to suggest the inclusion of items on the agenda. Each board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Company’s long-term strategic plans and the principal issues that the Company will face in the future during at least one Board meeting each year.
The non-management directors will meet in executive session at least quarterly. The Vice Chair of the Board will preside at these meetings and his/her name will be disclosed in the annual proxy statement. In his/her absence, the Chair of the Nominating/Governance Committee will preside over the executive sessions.
The Board believes that management speaks for the Company. Individual board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company. But it is expected that board members would do this with the knowledge of management and, absent unusual circumstances or as contemplated by the committee charters, only at the request of management.