Corporate Governance Guidelines continued
C. Board Operations
The Board will meet regularly throughout the year at the intervals determined by the chair of the board. Special meetings may be held in accordance with the bylaws of the Company. The chair of the board, with the assistance of the Company’s management, will propose an agenda for each Board meeting. Each director may request items to be added to the agenda.
Committees of the Board will meet regularly throughout the year at the intervals determined by the chair of the committee. Special meetings may be held in accordance with the committee charter or, in the absence of a committee charter, as deemed appropriate by the chair of the committee. The chair of each committee, with the assistance of the Company’s management, will propose an agenda for each committee meeting. Each member of the committee may request items to be added to the agenda.
The chief executive officer or his or her designee will provide to each director reasonably detailed information about each item appearing on the agenda for each Board or committee meeting in advance of such meeting whenever practical.
III. Independent Director Meetings; Access to Management and Independent Advisors
The independent directors of the Company (as defined by the rules of the New York Stock Exchange) are entitled to meet regularly throughout the year, and will meet at least once annually, without management participation. The chair of the audit committee shall be the presiding director at all of these meetings.
Each director will have reasonable access to the Company’s management, including the individuals who function as the chief executive officer, chief operating officer, chief financial officer, principal accounting officer and general counsel. The Company’s management will arrange for the Board’s access to other employees upon request.
The Board may, in its discretion, retain the services of independent financial, legal or other independent advisors at the Company’s expense and may grant such authority to a committee or committees of the Board.
IV. Director Compensation
As provided in the Company’s bylaws, the Board approves the compensation the Company pays to its directors for their service as a director, and the directors eligible to receive such compensation. In determining the amount of such compensation, the Board will evaluate whether the amount of compensation, in all forms, that the Company directly or indirectly pays its directors would impair an independent director’s ability to make decisions independent of the Company’s management. The Board has delegated to the management development and compensation committee the authority to determine the stock-based compensation that a director receives for his services and the directors eligible to receive such stock-based compensation.
V. Director Stock Ownership Guidelines
Non-employee directors (i.e., directors who are not employed by the Company or one of its affiliates) are required to hold a number of shares of the Company’s common stock having a value of at least three times the Company’s base annual cash retainer for service as a director. For purposes of such minimum, ownership will include shares owned by the director’s immediate family members residing in the same household as the director or shares held by a trust for the benefit of the director or an immediate family member. Non-employee directors have until the later of: (i) June 1, 2024 or (ii) the first June 1st that immediately follows the fifth anniversary of the date the individual became a director to comply with the stock ownership guidelines. Until a non-employee director has reached the minimum stock ownership set forth in these guidelines, such director may not sell or otherwise dispose of any shares of the Company’s common stock acquired as part of the annual stock awards granted to non-employee directors. Once a director has reached the minimum stock ownership set forth in these guidelines, in the event there is a decline in the Company’s stock price that causes a director’s holdings to fall below the required minimum, the director will not be required to purchase additional shares to meet the required minimum, but the prohibition on sale or other disposition in the preceding sentence will apply.
VI. Intercorporate Services Agreement
Whenever the Company is a party to an intercorporate services agreement between the Company and an affiliated company (other than a wholly owned subsidiary of the Company) the Board will consider the agreement for approval (including, as applicable, the portion of the service fee attributable to the services relating to the executive officers of the Company) and vote upon it with the non-independent directors abstaining. The Board may authorize a committee of the Board to make a recommendation to the Board with respect to the approval of such intercorporate services agreement.
VII. Director Orientation and Continuing Education
The Company arranges for the initial orientation of a new director by providing the director copies of the Company’s filings with the Securities and Exchange Commission and certain other materials, an overview of the Company’s business and operations and meetings with the Company’s management. Directors also receive periodic updates and presentations on matters relevant to their responsibilities at Board and committee meetings.
VIII. Management Succession
The Company’s succession planning emphasizes the development of a skilled, experienced management team who are capable of sustaining the Company’s operations in the event of executive officer succession in the ordinary course of business or in the case of unexpected events, including the resignation, retirement or unexpected disability or death of an executive officer. From time to time, the Company’s succession planning is reviewed with the chief executive officer. In the event that the chief executive officer can no longer serve the Company for any reason, the Company’s senior management team would continue to operate the Company’s business, and the Board would determine a suitable replacement.
IX. Performance Evaluation of the Board and its Committees
Each year, the Board will evaluate the effectiveness of the Board and its committees based on criteria determined appropriate by the Board. In addition, each year each committee will evaluate the effectiveness of such committee based on criteria determined appropriate by the committee, and such evaluation will be reported to the full Board.
X. Director Interaction with Stockholders and the Media
As a general rule, the Board believes that the chair of the board, the chief executive officer and other senior managers of the Company should speak for the Company. Non-management directors should speak for the Company only at the request of the chair of the board or the chief executive officer.
AMENDED AND RESTATED
BY THE BOARD OF DIRECTORS
OF COMPX INTERNATIONAL INC.
ON MAY 22, 2019.
/s/ Jane R. Grimm
Jane R. Grimm, Secretary