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Director Selection Process
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Consistent with its charter, the Governance Committee is responsible for screening candidates, for establishing criteria for nominees, and for recommending to the Board a slate of nominees for election to the Board at the Annual Meeting of Shareholders. Candidates are approved by the full Board. The Committee considers candidates suggested by its members, other Directors, senior management and shareholders in anticipation of upcoming Director elections and when Board vacancies occur or are scheduled to occur. The process for shareholder nominations shall be described in the Company’s Proxy Statement for the Annual Meeting of Shareholders.
The Committee is authorized, at the expense of the Company, to retain search firms, consultants, and any other advisors it may deem appropriate, in order to identify and screen potential candidates. The Committee will determine whether or not the engagement of an outside advisor is warranted in connection with the identification of potential candidates on a case-by-case basis. The Committee may also utilize the services of a search firm to evaluate and/or perform background reviews on potential candidates, including those recommended by shareholders. The purpose of any such evaluation shall be to determine the extent to which a potential candidate possesses the qualifications that the Board is then seeking and to report to the Committee to that effect.
When evaluating candidates, the Committee will take into account the needs of the Board and the Company at the time. In determining these needs, the Committee will: (1) consult with the Chairman, other Board members and key members of senior management; (2) consider the results of recent Board and Committee self-evaluations; (3) review the current size and composition of the Board of Directors and identify needs due to upcoming retirements and anticipated vacancies; and (4) if needed, consult with external advisors of its choosing.
In addition to considering the Board’s and Company’s needs at any particular time, the Committee shall consider potential candidates in light of the entirety of their credentials, including:
• Their integrity and business ethics;
• Their strength of character and judgment;
• Their ability and willingness to devote sufficient time to Board duties;
• Their potential contribution to the diversity and culture of the Board;
• Their educational background;
• Their business and professional achievements and experience and industry background, particularly in light of the Company’s strategic challenges;
• Their ability to represent the interests of the shareholders of the Company;
• Their leadership experience at the policy-making level in business, government, education, technology or public interest;
• Their demonstrated ability to understand and respect the advisory and proactive oversight responsibility of the Board;
• Their comprehension of the role of a public company director, particularly the fiduciary obligation owed to the Company and its shareholders;
• Their independence from an agreement, arrangement or understanding with any person or entity that might limit or interfere with their ability to comply with their fiduciary duties under applicable law;
• Their independence from management under NYSE Listing Standards, the Company’s Governance Principles and Standards on Director Independence;
• Their expressed willingness to comply with all publicly disclosed policies and guidelines of the Company with respect to codes of conduct, corporate governance, conflict of interest, confidentiality, stock ownership and trading applicable to the Company’s Directors; and
• Board policies related to matters such as the number of Boards on which a Director may sit and other requirements as set forth in the Company’s Governance Principles.
The Committee shall endeavor to find candidates of high integrity who have a solid record of accomplishment in their chosen fields and who display the independence of mind and strength of character to effectively represent the best interests of all shareholders. Candidates shall be selected for their ability to exercise good judgment, and to provide practical insights and diverse perspectives.
After reviewing the qualifications of potential candidates and considering the recommendations of its advisors (if any), the Committee shall determine which candidates shall be proceed to the next step of evaluation, which shall normally be an in-person interview. To the extent feasible, potential candidates shall be interviewed by the Chairman, CEO and a majority of Committee members. The results of these interviews shall be considered by the Committee in its decision to recommend a Director candidate to the Board for nomination. In addition to reviewing the qualifications of new candidates, the Committee shall also review sitting Directors whose terms are nearing expiration and who are being considered for re-nomination in light of the aforementioned desirable characteristics and their past contributions to the Board.
Adopted by the Governance Committee on
October 20, 2006
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