In accordance with the listing requirements of the New York Stock Exchange, independent directors must constitute a majority of the Board.
All members of the Audit Committee, the Governance and Nominating Committee, the Compensation Committee, and the Equity Plans Committee must be independent.
Subject to further determinations of independence as set forth below, an independent director is one who during the past three years:
Has not been an employee, and whose immediate family member has not been an executive officer, of the Company, although this standard will not prevent any director who served as interim chief executive officer during that period from qualifying as independent;
Has not received, and whose immediate family member has not received, more than $100,000 per year in direct compensation from the Company, other than director or committee fees, pension or other forms of deferred compensation for prior service or, in the case of a family member, compensation as a non-executive employee of the Company;
Has not been affiliated with or employed by, and whose immediate family member has not been affiliated with or employed in a professional capacity by, a present or former internal or external auditor of the Company;
Has not been employed, and whose immediate family member has not been employed, as an executive officer of another company where any of the Company’s current executive officers serve on the other company’s compensation committee;
Has not been an executive officer or employee, and whose immediate family member has not been an executive officer, of a company that makes payments to, or receives payments from, the Company for property or services in an amount that, in any single fiscal year, exceeds the greater of $1 million or 2% of the other company’s consolidated gross revenues;
Has not been an executive officer of any charitable organization that has received grants or endowments from the Company in excess of the greater of $1 million or 2% of the organization’s consolidated gross revenues; and
Has not been a partner, executive officer, or owner of a 10% or greater equity or voting interest and whose immediate family member has not been a partner, executive officer, or 10% Owner, of a company or firm providing consulting, legal, or financial advisory services to the Company, if such services are in an amount that, in any single fiscal year, exceeds the greater of $1 million or 2% of the other company’s or firm’s consolidated gross revenues. This standard does not apply to business relationships with the Company’s independent auditors because those relationships are covered by the applicable standard described above.
If a director or any member of the director’s immediate family has any relationship of any of the types described above that does not meet the applicable thresholds, that relationship will not be material for purposes of assessing the director’s independence.
The directors who satisfy the independence standards set forth above will review any other relationship, direct or indirect, between a director and the Company not covered by the above standards to determine whether it is material, and therefore whether the director is independent. The Company will disclose the basis for any such determination in the annual proxy statement. Each director shall notify the Board of any change in circumstances that may put his or her independence at issue.
For purposes of the independence standards set forth above, an immediate family member shall include that person’s spouse, parents, children, siblings, in-laws and anyone who shares the person’s home. All references to the Company include any subsidiary in a consolidated group with the Company.
In addition, members of the Audit Committee must satisfy the independence requirements of Rule 10A-3 under the Securities and Exchange Act.
The Company will not make any personal loans or extensions of credit to directors or executive officers.
