- Number and Structure
The Board shall at all times have an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. It is not anticipated that all independent directors will serve on all of these required committees. The Nominating and Corporate Governance Committee shall periodically review the structure and operations of committees of the Board in accordance with its charter. The Board may, from time to time, and upon the recommendation of the Nominating and Corporate Governance Committee establish or maintain additional committees.
- Appointment and Independence
All members of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee shall be independent in accordance with the criteria established by these Guidelines. Committee members will be appointed and removed by the Board upon the recommendation of the Nominating and Corporate Governance Committee after considering the skills and qualifications of Board members and consultation with the Chairman of the Board and the Chief Executive Officer.
- Committee Charters
Each of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee shall, and each other committee of the Board may, have its own charter which shall set forth the purposes, goals and responsibilities of the committee, committee member qualifications, committee member appointment and removal, committee structure and operations, and committee reporting to the Board. Each committee charter shall also provide for an annual performance evaluation of the committee as a unit.
- Committee Meetings and Agenda
The chairman of each committee, in consultation with committee members, shall have the right to determine the frequency and length of the committee meetings and to develop the committee’s agenda for specific committee meetings. The agendas, materials and meeting minutes of the committees shall be available to all directors upon request. Each committee chair shall give a meaningful report of the committee’s activities to the entire Board.
- Committee Advisors
Each of the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee shall have the authority to hire independent legal, financial and other advisors as it deems necessary or appropriate, without consulting or obtaining the approval of the Board or any member of management.
- Board Leadership
- Chairman of the Board and Chief Executive Officer
The Board shall select a Chairman of the Board in the manner and upon the criteria which the Board deems appropriate at the time of selection. The Board does not have a policy with respect to whether or not the role of Chairman of the Board and Chief Executive Officer should be separate or combined. It is the Board’s policy that when the positions of Chairman of the Board and Chief Executive Officer are held by the same person or the position of Chairman of the Board is held by a non-Independent Director, the Independent Directors shall select an Independent Director to serve as Lead Independent Director.
- Lead Independent Director
The Independent Directors, by vote of a majority of the Independent Directors, shall annually select an Independent Director to serve as Lead Independent Director. The Independent Director selected to serve as Lead Independent Director shall serve in such role until he or she ceases to be an Independent Director, resigns from the position or a successor is selected by a majority of the Independent Directors. The Lead Independent Director shall preside at all meetings of the Board at which the Chairman of the Board is not present. The Lead Independent Director shall have the responsibilities set forth herein and in Exhibit B attached hereto.
- Responsibilities and Duties of the Board
The basic responsibility of the directors is to exercise their business judgment on behalf of the Company to act in what they reasonably believe to be in the best interests of the Company and its shareholders. Toward this objective, the Board has identified the following key responsibilities and duties of the Board. In discharging these responsibilities and duties, the Board may call on management and outside advisors and auditors to provide advice, counsel and other assistance. The Board may also delegate responsibilities to committees of the Board or the independent members of the Board, as it deems appropriate.
- Key Responsibilities
The Board, or a committee to which such responsibility is delegated, shall give special attention to the following key responsibilities:
- Strategy. The Board should review periodically management’s proposed strategy for the Company.
- Selection of Chief Executive Officer and Succession Planning. The Board shall select the Chief Executive Officer and develop, with the assistance of the Chairman of the Board (if he or she is a member of management) and the Chief Executive Officer, a management succession plan as contemplated by Section G of these Guidelines.
- Evaluation and Compensation of Key Executive Officers. The Board shall annually evaluate the performance of the Chairman of the Board (if he or she is a member of management), the Chief Executive Officer and such other executive officers that may be designated by the Chairman of the Board and/or the Chief Executive Officer (collectively, the “Designated Officers”), and determine and approve the compensation of such Designated Officers in consideration of such evaluation.
- Board Membership Criteria and Performance. The Board shall annually review the Board membership criteria contemplated by Section A of these Guidelines and evaluate its own performance and the performance of its committees as contemplated by Section F of these Guidelines.
- Company Systems and Procedures. The Board shall ensure that the Company has sufficient systems and procedures in place to prevent and detect wrongdoing by monitoring the audit and financial statement review functions, as well as the Company’s legal compliance policies.
- Meeting Attendance
Regularly scheduled Board and Committee meetings shall be scheduled in advance throughout the year. Directors should make every reasonable effort to attend all such meetings in person, it being recognized that attendance by telephone may be necessary in limited cases of unavoidable conflicts. In addition, all directors are expected to attend all annual meetings of shareholders in person unless doing so is impracticable due to unavoidable conflicts.
- Preparation of Meeting Agenda and Materials
The agenda for each Board meeting shall be prepared by the Chief Executive Officer, in consultation with the Chairman of the Board , and be distributed in advance of the meeting to the entire Board. Each Board member is welcome to suggest items for inclusion on the agenda and the agenda for each Board meeting shall be subject to approval by the Lead Independent Director.
Material to be presented at any Board meeting shall be distributed to the entire Board in writing a sufficient time in advance of the meeting to allow for meaningful review, although the Board recognizes that this timing may not be possible in exceptional circumstances where the Board needs to meet on short notice or in order to preserve the confidential or sensitive nature of certain information. Materials to be presented by management should be concise and to the point while still communicating the important information. Any materials or information sent to the Board shall be subject to approval by the Lead Independent Director.
- Participation in Meetings
Each director should sufficiently review and familiarize himself or herself with the materials presented in advance of meetings and the Company’s general business and operations to permit meaningful discussion at such meetings.
Each director owes his or her primary duty of loyalty to the Company. Consistent with the Company’s Code of Business Conduct and Ethics, each director should inform the Board of any actual or potential conflict of interest and, if necessary or appropriate, recuse him or herself from any discussions or decisions involving such matters.
- Board Interaction with Institutional Investors, Press and Customers
The Board generally believes that management should serve as the spokesperson for the Company. Individual Board members may, from time to time at the request of the Board or management, meet or otherwise communicate with outside constituents on behalf of the Company and, if requested by major stockholders, the Lead Independent Director should ensure that he or she is available for consultation and direct communication. Directors should otherwise refer all inquiries from institutional investors, the press, customers, and other third parties to management.
Each director shall keep confidential the deliberations of the Board and its committees and any confidential or nonpublic information received or learned in connection with his or her service as a director.
- Access to Management and Independent Advisors
Directors shall have complete access to officers and employees of the Company, as well as the Company’s outside counsel and auditors. Directors shall use their judgment to ensure that contacts with management or employees are not distracting to the business operation of the Company. In addition, the Board welcomes the attendance and/or participation of non-director members of management at Board or committee meetings upon the invitation of the Chairman of the Board, the Chief Executive Officer, the Lead Independent Director or one or more other Independent Directors.
- Executive Sessions of Non-Management/Independent Directors
Directors who qualify as “non-management directors,” in compliance with the requirements of the New York Stock Exchange, shall meet on a regular basis in executive session, without management participation. The executive sessions shall occur after each regularly scheduled meeting of the entire Board and at such other times that the non-management directors deem appropriate. Each director shall have the right to call an executive session. In addition, at least once per year an executive session shall be held with only Independent Directors present. The Lead Independent Director shall have the right to call an executive session of Independent Directors at any time.
The executive sessions shall be chaired by the Lead Independent Director. If the Lead Independent Director is not present at any executive session, a majority of the Independent Directors present shall select a director to act as chair for the purpose and duration of such executive session.
In order that interested parties may be able to make their concerns known to the non-management directors, the Company will disclose in its annual proxy statement a method for such parties to communicate directly with the non-management directors as a group.
- Director Evaluation, Compensation and Stock Ownership Guidelines
- Annual Performance Evaluation
The Board shall conduct an annual self-evaluation. The Nominating and Corporate Governance Committee shall establish the evaluation criteria and process. The results of the evaluation shall be reported to the entire Board. The purpose of the annual self-evaluation will be to improve the effectiveness of the Board as a unit. The evaluation should include a review of those areas in which the Board and/or management believes the Board can make a better contribution to the Company.
- Director Compensation Review
Director compensation shall be set annually by the Board upon consideration of the recommendation of the Compensation Committee. The Compensation Committee, with the assistance of management, shall review the form and amount of director compensation and make recommendations to the Board annually.
- Director Compensation Guidelines
In determining the form and amount of director compensation, the Board shall consider all relevant factors including the effort and time required of directors, the annual performance evaluation of the Board, the impact of compensation on a director’s actual or perceived independence, and periodic reports of senior management to the Compensation Committee on the status of the Company’s director compensation as compared to compensation of directors of comparable companies. In addition, a meaningful portion of a director’s total compensation shall be provided in equity of the Company in order to create a direct linkage between director compensation and the Company’s performance. Executive officers shall not receive any additional compensation for their service as directors.
- Director Stock Ownership Guidelines
The Board believes it is important to align the interests of the directors with those of the stockholders and for directors to hold equity ownership positions in the Company. Accordingly, each non-employee director is expected to retain an aggregate number of shares of common stock of the Company, deferred stock units (and related dividend equivalent rights) in the Company, and LTIP units, Series Two preferred units (on an as-converted basis) and common units in the Company’s operating partnership, whether vested or not, equal to at least the aggregate number of such shares or units received by the director as annual retainers during the first three years following the later of: (a) the 2007 annual meeting of stockholders of the Company or (b) the annual meeting of stockholders of the Company at which the director was initially elected or, if earlier, the first annual meeting of stockholders following the initial appointment of the director. Compliance with these ownership guidelines will be measured as of the end of each fiscal year. Any director who is prohibited by law or by applicable regulation of his or her employer from owning equity in the Company shall be exempt from this requirement. The Nominating and Corporate Governance Committee may consider whether exceptions should be made for any director on whom this requirement could impose a financial hardship.
- Evaluation and Compensation of the Designated Officers; Chief Executive Officer Succession
- Evaluation and Compensation of the Designated Officers
The Compensation Committee shall annually review the performance of the Designated Officers based on the accomplishment of the Company’s long term and short term objectives and such other principles as the Compensation Committee may deem appropriate from time to time. The Compensation Committee shall use this evaluation in determining the compensation of the Designated Officers.
- Chief Executive Officer Succession Planning
The Nominating and Corporate Governance Committee, with the active participation of the Chairman of the Board and the Chief Executive Officer, shall prepare and distribute to the entire Board an annual report on succession planning for the Chief Executive Officer. The Chief Executive Officer shall review the succession plan and provide his or her recommendations and evaluation. The succession plan shall include a plan for the Chief Executive Officer succession in the event of an emergency (e.g., who internally or externally could fill the position of Chief Executive Officer immediately) and in the ordinary course of business following his or her retirement.
- Related Person Transaction Approval and Disclosure Policy
All related person transactions must be reviewed and approved by a majority of the disinterested directors on the Board (i.e., directors that do not have a personal financial interest in the transaction that is adverse to that of the Company or its stockholders) in advance of the Company or any of its subsidiaries entering into the transaction; provided that, if the Company or any of its subsidiaries enters into a transaction without recognizing that such transaction constitutes a related person transaction, this approval requirement will be satisfied if such transaction is ratified by a majority of the disinterested directors on the Board promptly after the Company recognizes that such transaction constituted a related person transaction. The term “related person transaction” shall refer to a transaction required to be disclosed by the Company pursuant to Item 404 of Regulation S-K (or any successor provision) promulgated by the SEC. For purposes of determining whether such disclosure is required, a related person will not be deemed to have a direct or indirect material interest in any transaction that is deemed to be not material (or would be deemed not material if such related person was a director) for purposes of determining director independence pursuant to the Company’s categorical standards of director independence, attached hereto as Exhibit A. This policy will be in addition to, and not in substitution of, any other policy of the Company relating to the approval of conflict of interest transactions, including the policy set forth in Section III.F. of the Company’s Code of Business Conduct and Ethics, as amended from time to time.
The Nominating and Corporate Governance Committee (with the active participation of the Chairman of the Board and the Chief Executive Officer) shall have general responsibility for the Company’s approach to corporate governance matters and shall periodically review these Guidelines and, when appropriate, recommend changes for consideration by the Board.
Effective: May 20, 2014