The business of National Fuel Gas Company (the “Company”) is conducted by its employees, managers and officers, under the oversight of the Board of Directors (the “Board”), in order to serve the long-term interests of its stockholders. The Board and management recognize that the long-term interests of stockholders are served by considering the interests of customers, employees and the communities in which the Company operates. In addition, the Board requires directors, officers and employees to comply with all legal and regulatory requirements and to adhere to the highest ethical standards in the performance of their duties. To help discharge its responsibilities, the Board has adopted the following guidelines on corporate governance matters.
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Board of Directors
The Board shall consist of a number of directors, not less than seven nor more than eleven, as determined by a majority vote of the full Board.
The business and affairs of the Company shall be managed by or under the direction of the Board, acting as a body, in accordance with Section 14A:6-1 of the New Jersey Business Corporation Act. Individual directors shall have no authority to act for or on behalf of the Company without the express authorization of the Board, or as may be provided by law, the Certificate of Incorporation or the By-Laws.
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Independent Directors
A majority of the Board must qualify as independent directors under the listing standards of the New York Stock Exchange. The Board will annually review the relationship that each director has with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). All determinations of director independence will be disclosed in the Company’s annual proxy statement.
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Director Qualifications
The Board, with input from the Nominating/Corporate Governance Committee, is responsible for periodically determining the appropriate skills, perspectives, experiences, and characteristics required of Board candidates, taking into account the Company’s needs and current make-up of the Board. This assessment should include knowledge, experience, and skills in areas critical to understanding the Company and its business; personal characteristics, such as integrity and judgment; and candidates’ commitments to the boards of other publicly-held companies. Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the member’s service as a director and that he or she devotes the time necessary to discharge his or her duties as a director.
The Nominating/Corporate Governance Committee is responsible for periodically reviewing these qualification guidelines and recommending modifications, as appropriate. The Board believes the qualification guidelines included as
Exhibit A
are currently appropriate, but it may change these guidelines as the Company’s and Board’s needs warrant.
Directors are expected to carry out the functions of the Board in a professional and diligent manner, and to spend the time and effort necessary to properly discharge such responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and Committees on which such director sits, with the understanding that on occasion a director may be unable to attend a meeting. A director who is unable to attend a meeting is expected to notify the Chairman of the Board or the Chair of the appropriate Committee in advance of such meeting. A director is also expected to review provided materials in advance of a meeting.
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Selection of New Directors
The Board is responsible for selecting Board candidates and nominating them for election by the stockholders and for filling vacancies on the Board. The Nominating/Corporate Governance Committee will recommend to the Board nominees for election, including, as appropriate, incumbent directors for re-election.
Stockholders may propose candidates for consideration by the Nominating/Corporate Governance Committee in accordance with the Process for Identifying and Evaluating Nominees for Director included as
Exhibit B
. In addition, the Company’s By-Laws provide a process for stockholders meeting certain requirements to have nominees included in the Company’s proxy materials.
In recommending individuals for nomination, the Nominating/Corporate Governance Committee
will seek the input of the Chairman of the Board and Chief Executive Officer and will
evaluate candidates using the qualification guidelines included as
Exhibit A
and the Process for Identifying and
Evaluating Nominees for Director included as
Exhibit B
, as they may be supplemented from time to
time. Once a candidate is selected to join the Board, the Chairman of the Board and/or
the Chair of the Nominating/Corporate Governance Committee will extend the invitation to
join the Board on the Board’s behalf.
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Term Limits
The Board does not believe it should limit the number of terms for which an individual may serve as a director. While term limits could help ensure fresh ideas, they also would force the Board to lose the contributions of directors who have developed an insight into the Company. This insight and continuity of directors is an advantage, not a disadvantage. As an alternative to term limits, the Nominating/Corporate Governance Committee will review a director’s continuation on the Board whenever the director experiences a change in professional responsibilities, as a way to assure that the director’s skills and experience continue to match the needs of the Board. In addition, in connection with nomination of the slate of directors that the Board proposes for election by stockholders each year, the Nominating/Corporate Governance Committee will consider re-nominated directors’ continuation on the Board and take steps as may be appropriate to ensure that the Board maintains an openness to new ideas.
A director shall serve on the Board for a term of one year. All directors stand for election annually. A director appointed to fill a vacancy shall stand for election at the next annual meeting of stockholders.
In an uncontested election of directors, a nominee for director who fails to receive a majority “FOR” vote of votes cast, as defined under New Jersey law, for election in accordance with the Company’s By-Laws is expected to tender, promptly following certification of the stockholder vote, his or her resignation from the Board, which resignation may be conditioned upon Board acceptance of the resignation.
The Nominating/Corporate Governance Committee will consider the tendered resignation of a director who fails to receive a majority of votes cast for election, as well as any other offer to resign that is conditioned upon Board acceptance, and recommend to the Board whether or not to accept such resignation. The Nominating/Corporate Governance Committee in deciding what action to recommend, and the Board in deciding what action to take, may consider any factors they deem relevant. The director whose resignation is under consideration shall abstain from participating in any decision of the Nominating/Corporate Governance Committee or the Board regarding such resignation. If the Board does not accept the resignation, the director will continue to serve until his or her successor is elected and qualified. The Board shall publicly disclose its decision regarding a resignation tendered by a director who fails to receive a majority of votes cast for election within 90 days after certification of the stockholder vote.
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Change in Professional Responsibilities
It is the view of the Board that each director who experiences a change in his or her business or professional affiliation or responsibilities should bring this change to the attention of the Board and should offer to resign. The Board does not believe that each director who retires or has a change in position or responsibilities should necessarily leave the Board. The Nominating/Corporate Governance Committee will, however, review the continued appropriateness of Board membership under these circumstances and make a recommendation to the Board.
This same guideline applies to any inside directors, including the Chief Executive Officer of the Company, in the event he or she no longer serves in that position.
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Service on Other Boards
It is the view of the Board that directors are expected to ensure that other commitments, including other board memberships, do not interfere with their duties and responsibilities as members of the Board. Current directors should notify the Chief Executive Officer or Corporate Secretary, who in turn will notify the Chair of the Nominating/Corporate Governance Committee, when considering a request for service on the board of any other public company or other for-profit entity. The Nominating/Corporate Governance Committee, in consultation with the Chief Executive Officer (or the Corporate Secretary, in the case of the Chief Executive Officer who is the subject of the request), will consider potential conflicts of interest and whether the service would interfere with such director’s ability to properly discharge his or her duties. The Committee will make a recommendation to the Board, and the Board, exercising its business judgement, will consider any further action.
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Director Age
A Company director must submit his or her resignation from the Board at the annual meeting of stockholders immediately following his or her 75th birthday.
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Board Leadership
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Chairman of the Board and Chief Executive Officer
- The Chairman of the Board, who may also be the Chief Executive Officer,
shall be a director and preside at all meetings of the Board and meetings of
the stockholders. The Chairman of the Board is chosen on an annual basis by
at least a majority vote of the remaining directors.
- The Chief Executive Officer, who may also be the Chairman of the Board,
shall be appointed by the Board and serve at the pleasure of the Board.
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Lead Independent Director
The Lead Independent Director will preside at all meetings of the non-management
directors at which he or she is present and all meetings of the independent
directors at which he or she is present. The Lead Independent Director will
perform such other functions as the Board may direct. The Lead Independent
Director is chosen on an annual basis by at least a majority vote of the
remaining directors.
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Succession Planning and Leadership Development
Each year, the Chief Executive Officer will report to the Compensation Committee on succession planning and his or her recommendation as to a potential successor, along with a review of any development plans recommended for such individuals. The Committee will make an annual report to the Board on succession planning, and the Board will work with the Committee to evaluate potential successors to the Chief Executive Officer. When the Compensation Committee and the Board review management succession plans for the Chief Executive Officer, they will consider succession in the event of an emergency or retirement of the Chief Executive Officer. The Committee and the Board, as they deem appropriate, will also review succession candidates for executive officers other than the Chief Executive Officer, and for other senior managers.
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Board Committees
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Number of Committees
Currently there are five Committees: Executive, Audit, Compensation,
Nominating/Corporate Governance, and Financing. The Board believes the current
Committee structure is appropriate. From time to time, depending upon the
circumstances, the Board may form a new Committee or disband a current
Committee.
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Assignment of Committee Members
The Board appoints members of the Committees on an annual basis. Vacancies in the Committees will be filled by the Board. Only independent directors may serve on the Audit Committee, the Compensation Committee, and the Nominating/Corporate Governance Committee, and at least one member of the Audit Committee must have accounting or financial management experience, as defined by U.S. Securities and Exchange Commission rules or as required under applicable New York Stock Exchange listing requirements. Additionally, a member of the Audit Committee may not sit on more than three other Audit Committees of other public companies, unless the Board determines that such commitments would not impair his or her effective service to the Company.
The Board will take into account tenure on a Committee and give consideration to rotating Committee members periodically, but the Board does not feel that rotation should be mandated as a policy.
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Committee Charters and Authority
The Audit Committee, Compensation Committee and Nominating/Corporate Governance
Committee each have a written charter, which has been approved by the Board.
Each charter delegates certain responsibilities to the respective Committee.
The Executive Committee may exercise Board authority with respect to matters
other than those for which action of the full Board is required under applicable
law. The Financing Committee may exercise Board authority with respect to
specific matters for which the Board has delegated responsibility to it.
Unless delegated to one of the Committees either in the Charter, the By-Laws, a
resolution of the Board or a vote of stockholders, each Committee shall make
recommendations to the Board and the Board will consider and approve the
recommendations. The Committee charters may be changed from time to time by
approval of the Board.
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Board Meetings
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Number of Meetings
The Board has at least four scheduled meetings per year at which it reviews and
discusses reports by management on the performance of the Company, its plans and
prospects, as well as immediate issues facing the Company.
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Role of the Chairman of the Board
The Chairman of the Board shall preside at all meetings of the Board. The
Chairman of the Board shall determine the agenda for all Board meetings with the
assistance of the Chief Executive Officer. Each director shall be entitled to
suggest the inclusion of items on the agenda, with the final determination of
the agenda to be made by the Chairman of the Board. The Chairman of the Board
shall also determine the timing and length of Board meetings, and the time to be
devoted to each topic on the agenda. All procedural matters with respect to the
conduct of Board meetings shall be determined by the Chairman of the Board,
including whether any individuals other than Board members shall be invited to
attend and/or participate in all or any portion of any meetings, and the
conditions of such individuals’ attendance and/or participation. In the absence
of the Chairman of the Board, the Chief Executive Officer shall exercise all
powers and authority conferred herein.
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Distribution of Board Materials in Advance
Materials for review, discussion and/or action of the Board should be distributed
to Board members in advance of meetings whenever practicable.
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Non-Management Director Meetings / Independent Director Meetings
The non-management directors will meet at regularly scheduled executive sessions
without management. The Audit Committee Chair, Nominating/Corporate Governance
Committee Chair and Compensation Committee Chair may call the non-management
directors to additional sessions without management. The independent directors
will meet in executive session without management at least once per year. The
Board shall not take formal actions at meetings of the non-management directors
or independent directors, although the participating directors may make
recommendations for consideration by the full Board.
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Confidentiality
Pursuant to their fiduciary duties, directors are required to protect and hold
confidential all non-public information obtained by reason of their directorship
position absent the express or implied permission of the Board of Directors to disclose
such information or the written agreement of the Company to permit disclosure. No
director shall use Confidential Information for his or her own personal benefit or to
benefit persons or entities outside the Company. No director shall disclose Confidential
Information outside the Company, either during or after his or her service as a director
of the Company, except (i) with authorization of the Board of Directors, (ii) as may be
permitted by written agreement with the Company, or (iii) as may be otherwise required
by law.
“Confidential Information” is all non-public information entrusted to or obtained by a
director by reason of his or her position as a director of the Company. It includes, but
is not limited to, non-public information that might be of use to competitors or harmful
to the Company or its customers if disclosed, such as
- information about the Company’s financial condition, results of operations,
prospects, plans, objectives or strategies, and information relating to mergers and
acquisitions, stock splits, stock repurchases, divestitures and other transactions;
- trade secrets, information or techniques, marketing and research and development
information, drilling and exploration data, information concerning customers,
suppliers, producers and joint venture partners, payroll and benefits information,
current/past employee information, technical and computer/software related
information, and legal information;
- information about discussions and deliberations relating to business issues and
decisions, between and among employees, officers and directors.
To promote a free and unfettered exchange of ideas among directors, the directors will
treat all discussions and deliberations that take place at Board meetings as
confidential unless disclosure of those discussions is otherwise required by law or
permitted by written agreement with the Company. No video or electronic recording of
Board proceedings shall be made without the consent of the Chairman of the Board and a
majority of the Board.
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Board and Committee Performance Evaluations
The Board and the Audit, Compensation and Nominating/Corporate Governance Committees will
perform an annual self-evaluation. Each year the directors will provide assessments of
the effectiveness of the Board, and the members of the Audit, Compensation and
Nominating/Corporate Governance Committees will provide assessments of the effectiveness
of their respective committees. These evaluations will be submitted to the
Nominating/Corporate Governance Committee which will review them and determine if any
additional evaluation is necessary. If the Nominating/Corporate Governance Committee
determines that additional evaluation is necessary, it may elect to have such evaluation
performed internally, or by an independent corporate governance expert. The
Nominating/Corporate Governance Committee will report all evaluation results to the
Board and make recommendations for areas which, in its judgment, require improvement.
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Board Compensation
The Board’s compensation philosophy is that directors (other than those who are also salaried officers of the Company or any of its subsidiaries) are entitled to receive reasonable compensation for their services and reimbursement for certain expenses, as may be determined by the Board. The Compensation Committee shall have the responsibility for recommending to the Board changes in compensation levels for non-employee directors. In discharging this duty, the Committee shall be guided by four general principles: compensation should fairly pay directors for work required; compensation should attract and retain highly qualified candidates for Board membership; compensation should align directors’ interests with the long-term interests of stockholders; and compensation should be transparent and as simple as possible within the limitations of tax and legal considerations.
Reasonable compensation also may be paid to any person (other than a salaried officer or employee of the Company or any of its subsidiaries) formally requested by the Board to attend a meeting.
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Board Access to Company Officers
Board members will have access to all officers of National Fuel Gas Company. Independent Board members may consult with such officers without senior corporate management present. Members of committees of the Board will also have such access to management as is provided in committee charters or as may otherwise be authorized by the Board. Management is encouraged to invite Company personnel to any Board meeting at which their presence and expertise would help the Board to have a full understanding of matters being considered and to introduce managers with significant potential.
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Access to Independent Advisors
The Board shall have the power at any time by majority vote to retain independent outside financial, legal or other advisors, at the Company’s expense.
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Director Contact with the Company's Constituencies
Except as otherwise required by New York Stock Exchange listing standards or applicable law, or as authorized by the Board, communications with parties external to the Company (including but not limited to stockholders, the media, attorneys, vendors, service providers, etc.) shall be the responsibility of the Chief Executive Officer or delegated by the Chief Executive Officer to the appropriate area of the Company. The directors will be consulted from time to time for their advice, as the Chief Executive Officer so determines.
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Director Orientation and Continuing Education
All directors, upon their initial appointment to the Board, shall attend an educational session, thereby enabling them to better perform their duties and recognize and deal with various issues that may arise during their tenure as directors. Subsequently, the directors shall attend ongoing educational programs related to their Board service as the Board deems appropriate.
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Risk Oversight and Oversight of Environmental, Social, Corporate Governance and Cybersecurity Matters
The Board retains risk oversight and oversight of environmental, social and corporate
governance matters, any related health and safety issues, and any cybersecurity matters
that might arise from the Company’s operations rather than delegating that
responsibility to a Committee of the Board. Management is expected to integrate these
corporate responsibility concerns into decision-making throughout the organization.
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Hedging or Pledging of Company Stock
It is the view of the Board that directors and executive officers should not purchase or
sell options on Company stock, nor engage in short sales with respect to Company common
stock. Trading by executive officers and directors in puts, calls, straddles, equity
swaps or other derivative securities that are directly linked to Company stock is
prohibited. Directors and executive officers may not pledge Company equity as security
for an extension of credit.
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Amendment and Interpretation
These Guidelines are in addition to and are not intended to change or interpret any
federal or state law or regulation, or the Company’s Certificate of Incorporation or
By-Laws or any Committee Charter reviewed and approved by the Board. The Guidelines are
subject to modification from time to time by the Board.
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Exhibit A: Director Qualification Guidelines
The Board of Directors in considering qualifications of directors standing for
re-election and candidates for Board membership will consider the following factors, in
addition to those other factors it may deem relevant:
- Strong management experience, ideally with major public companies.
- Other areas of expertise or experience that are desirable given the Company’s
business and the current make-up of the Board, such as expertise or experience in:
the natural gas industry, information technology businesses, manufacturing,
financial or investment banking, scientific research and development, senior level
government experience, and academic administration or teaching.
- Desirability of range in age, so that retirements are staggered to permit
replacement of directors of desired skills and experience in a way that will permit
appropriate continuity of Board members.
- Independence, as defined by the Board.
- Diversity of perspectives, including all aspects of diversity (race, ethnicity,
national origin, gender and other protected classes), brought to the Board by
individual members.
- Knowledge and skills in accounting and finance, business judgment, general
management practices, crisis response and management, industry knowledge and
leadership.
- Personal characteristics matching the Company’s values, such as integrity,
accountability, financial literacy, and high performance standards.
- Additional characteristics, such as:
- willingness to commit the time required to fully discharge their
responsibilities to the Board, including the time to prepare the Board and
Committee meetings by reviewing the material supplied before each meeting;
- commitment to attend a minimum of 75% of meetings;
- ability and willingness to represent the stockholders’ long and short-term
interests;
- awareness of the Company’s responsibilities to its customers, employees,
suppliers, regulatory bodies, and the communities in which it operates; and
- willingness to advance their opinions, but once a decision is made by a majority
of the Board, a willingness to support the majority decision assuming questions
of ethics or propriety are not involved.
- The number of commitments to other entities, with one of the more important factors
being the number of other public-company boards on which the individual serves.
- In order to qualify for election as a director, a nominee must be a stockholder of
the Company.
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Exhibit B: Process for Identifying and Evaluating Nominees for Director
- The Nominating/Corporate Governance Committee (the Committee) will observe the
following procedures in identifying and evaluating candidates for election to the
Company’s Board of Directors.
- The Company believes that the continuing service of qualified incumbents promotes
stability and continuity in the boardroom, contributing to the Board’s ability to
work as a collective body, while giving the Company the benefit of the familiarity
and insight into the Company’s affairs that its directors have accumulated during
their tenure. Accordingly, the process of the Committee for identifying nominees
shall reflect the Company’s practice of re-nominating incumbent directors who
continue to satisfy the Board’s criteria for membership on the Board, whom the
Committee believes continue to make important contributions to the Board and who
consent to continue their service on the Board.
- Consistent with this policy, in considering candidates for election at annual
meetings of stockholders, the Committee will consider incumbent directors who wish
to continue their service on the Board.
- The Board will evaluate the qualifications and performance of the incumbent
directors who desire to continue their service. In particular, as to each such
incumbent director, the Committee will –
- consider if the director continues to satisfy the Director Qualification
Guidelines which are Exhibit A to the Company’s Corporate Governance Guidelines;
- review any prior assessments of the performance of the director during the
preceding term made by the Committee; and
- determine whether there exist any special, countervailing considerations
against re-nomination of the director.
- If the Committee determines that:
- an incumbent director consenting to re-nomination continues to be qualified
and has satisfactorily performed his or her duties as a director during the
preceding term; and
- there exist no reasons, including considerations relating to the composition
and functional needs of the Board as a whole, why in the Committee’s view the
incumbent should not be re-nominated, the Committee will, absent special
circumstances, propose the incumbent director for re-nomination.
- The Committee will identify and evaluate new candidates for election to the Board,
including for the purpose of filling vacancies arising by reason of the resignation,
retirement, removal, death or disability of an incumbent director or the desire of
the directors to expand the size of the Board. The Committee will seek the most
qualified candidates under the Director Qualification Guidelines in Exhibit A, while
encouraging a diversity of perspectives and backgrounds, including, but not limited
to race, ethnicity, national origin, and gender. The Company is committed to
diversity among its directors, officers and employees, and in identifying
independent director candidates for nomination to the Board, the Committee, and any
search firm it engages, is committed to including in any initial candidate pool
qualified racially, ethnically and/or gender diverse candidates.
- The Committee will accept recommendations for nominees from persons that the
Committee believes are likely to be familiar with qualified candidates. These
persons may include members of the Board, including members of the Committee, and
management of the Company. The Committee may also determine to engage a professional
search firm to assist in identifying qualified candidates. If such a firm is
engaged, the Committee shall set its fees and the scope of its engagement.
- As to each recommended candidate that the Committee believes merits consideration,
the Committee will:
- cause to be assembled information concerning the background and
qualifications of the candidate;
- determine if the candidate satisfies the Director Qualification Guidelines
which are Exhibit A to the Company’s Corporate Governance Guidelines; if so, then
- consider the contribution that the candidate can be expected to make to the
overall functioning of the Board.
- The Committee shall solicit the views of the Chief Executive Officer and the
Chairman of the Board, and the views of such other persons as the committee deems
appropriate, regarding the qualifications and suitability of candidates to be
nominated as directors.
- In its discretion, the Committee may designate one or more of its members (or the
entire Committee) to interview any proposed candidate.
- Based on all available information and relevant considerations, the Committee will
select a candidate who, in the view of the Committee, is suited for membership on
the Board. The Committee will then recommend to the Board that the candidate be
nominated. The Board would then, if it chooses, nominate the candidate by a
resolution adopted by the Board at a meeting or by unanimous written consent.
- Stockholders may propose candidates for consideration by the Committee by
communication directed to the Company’s Secretary at its principal office, received
not less than 120 calendar days before the anniversary date of the Company’s proxy
statement released to stockholders in connection with the previous year’s annual
meeting of stockholders. However, if the date of the annual meeting is changed more
than 30 days from the date corresponding to the date of the prior year's annual
meeting, then a stockholder's communication must be received not later than the
close of business on the tenth day following the date on which notice of the meeting
is given by the Company (or, if earlier, by the tenth day following public
disclosure of the new date of the annual meeting). The communication must include,
as to (a) each stockholder that is proposing candidates under this Section 12, (b)
each person associated with such stockholder, and (c) each proposed candidate, the
information required to be provided regarding Noticing Parties, Stockholder
Associated Persons and Proposed Nominees (as such terms are defined in the Company’s
By-Laws) in a notice under Sections 6(B)(i) and 6(B)(iii) of Article I of the
Company By-Laws, including the proposed candidate’s written consent to be named in
the proxy statement as a nominee and to serving as a director if elected. In making
its selection of nominees, the Committee will evaluate candidates proposed by
stockholders owning at least five percent (5%) of the Company’s outstanding common
stock, under criteria similar to the evaluation of other candidates. The Committee
shall have no obligation whatsoever to consider other unsolicited recommendations
received from stockholders proposing candidates for the Board. The Committee may
consider, as one of the factors in its evaluation of stockholder recommended
nominees, the size and duration of the interest of the recommending stockholder or
stockholder group in the equity of the Company, and the candidate’s relationship to
that stockholder or group, in order to determine whether the candidate can
effectively represent the interests of all stockholders. The Committee may also
consider the extent to which the recommending stockholder or group intends to
continue holding its interest in the Company, including, in the case of candidates
recommended for nomination and election at an annual meeting of stockholders,
whether the recommending stockholder intends to continue holding its interest at
least through the time of such annual meeting.