Nominating & Corporate Governance Committee: The primary responsibilities of the Nominating & Corporate Governance Committee (the “Committee”) are to (a) determine the slate of director nominees for election to the Company’s Board of Directors, (b) identify and recommend candidates to fill vacancies occurring between annual shareholder meetings, and (c) review, evaluate, and recommend changes to the Company’s Corporate Governance Guidelines. The Nominating & Corporate Governance Committee’s role includes periodic review of the compensation paid to non-employee directors for annual retainers (including Board and committee chairs) and meeting fees, if any, and making recommendations to the Board for any adjustments. The specific responsibilities of the Nominating & Corporate Governance Committee are delineated in the Nominating & Corporate Governance Committee Charter. The Nominating & Corporate Governance Committee regularly reviews the charters of Board committees and, after consultation with the respective committee chairs, makes recommendations, if necessary, about changes to the charters. The Committee will consider shareholder recommendations for candidates for the Board, but only if they have held 3% or more of the outstanding shares of the Company for more than three years and otherwise comply with the requirements of S.E.C. Rule 14(a)11. The name of any recommended candidate for director, together with a brief biographical sketch, a document indicating the candidate’s willingness to serve, if elected, and evidence of the nominating person’s ownership of 3% or more of Company stock and the date of acquisition should be sent to the attention of the Chairman of the Nominating & Corporate Governance Committee, in care of the Company’s corporate address. There can be no more than the greater of one shareholder nominee or the number of the nominees that represent 25% of the total number of directors according to various guidelines set forth in S.E.C. Rule 14(a)11 on the proxy statement in any given annual meeting.
The membership of the Committee consists of at least three directors appointed annually by the Board of Directors. Each member shall meet the experience requirements of the listing standards of The New York Stock Exchange and applicable laws and regulations. Each member will be free of any relationship that, in the opinion of the Board, would interfere with his or her individual exercise of independent judgment. Applicable laws and regulations will be followed in evaluating a member’s independence. The Board appoints the chairperson and may remove any committee member for failure to attend regularly called meetings or breaches of duty or care.
The Committee meets at least two times during the fiscal year and on an as-needed basis as determined by the Chair. The Committee will keep adequate minutes of all its proceedings, and will report its actions to the next meeting of the Board. Committee members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent. The Committee will be governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board. The Committee is authorized and empowered to adopt its own rules of procedure not inconsistent with (a) any provision hereof, (b) any provision of the Bylaws of the Corporation, or (c) the laws of the state of Texas and may delegate such actions it deems necessary to subcommittees. The Committee is also empowered to retain or terminate any search firm to be used to identify director candidates, including sole authority to approve the search firm’s fees and other retention terms.
The Committee receives recommendations from management, the board and any shareholder of prospective nominees as members of the Board, and will consider each recommendation on an equal basis according to the criteria outlined below. They can be oral or written recommendations. The Company has not utilized outside search firms in the past for prospective candidates but the option is clearly available to the Committee if they so choose to utilize that route for candidates. The Committee will strive to have at least one or more candidates screened to fill vacancies that may occur from time to time. The Committee will request and review the resume of any of the candidates based upon the following minimum qualifications;
1. Knowledge of the Company’s industry
2. Proximity to corporate headquarters
3. Business and financial acumen
4. Financial and personal stability
5. Ability to devote time and energy to regularly scheduled board and committee meetings in
6. Ability to meet Board requirement for the ownership of shares
The Board also interviews the candidates to ensure that they understand the duty of loyalty and care required of directors to all shareholders of the Company under the law of the state of incorporation of the Company. The Board looks for candidates who are of the highest moral character, strong work ethic and a commitment to timely attend all scheduled board meetings and committee meetings in person. The Board deems it important that candidates have strong interpersonal skills, the ability to understand and/or express complex issues in a simple manner, and high integrity.
The Board also requires that any Director must agree that he or she will tender a resignation from the Board in the event of a material change in his or her personal circumstances, including a change in principal job responsibilities (other than a promotion with the director’s current employer). The decision whether to accept the resignation would be made by the Board, with a recommendation from this Committee to accept or reject the resignation.
The Committee is expected to maintain free and open communication with shareholders, Company employees, and the Company’s management. This communication will include periodic separate executive sessions with management and employees on an as-needed basis. Shareholders can communicate to the Committee through the Company’s website in the form of an email to a corporate email address, or through written communications to the Committee chair in care of the Company’s corporate address. All such communications will be sent directly to the Committee chair and will not be screened by the Company.
Shareholders wishing to submit the name of a candidate for the board of the Company must submit a resume of the candidate, proof of ownership of 3% or more of the Company’s stock, and that they have held such stock at a 3% or more level for more than three years from the date of their proposal and such other requirements of S.E.C. Rule 14(a)11. They must also consent to have their name disclosed in the Proxy Statement. The failure to provide this information will force the Committee to shelve consideration of the prospective nominee subject to the limitations set forth in S.E.C. Rule 14(a)11.
The Company is responsible for providing the Committee with educational resources related to current corporate governance issues, current legal topics pertinent to the Company and other material as may be requested by the Committee. The Company will assist the Committee in maintaining appropriate corporate and legal literacy.
The Committee will have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants, as it deems appropriate. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Company, and the Committee will take all necessary steps to preserve the privileged nature of those communications.