Corporate Governance - Guidelines
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The Board of Directors (the “Board”) of Greatbatch, Inc. (the “Company”) has adopted these guidelines to reflect the Company’s commitment to good corporate governance, and to comply with any applicable legal requirements. In furtherance of these goals, the Board has adopted a Company Code of Business Conduct and Ethics and has written charters for each of its Corporate Governance and Nominating Committee, Compensation and Organization Committee, Audit Committee and Science and Technology Development Committee. The Corporate Governance and Nominating Committee periodically reviews these guidelines and proposes modifications to the Board for consideration as appropriate.
The business affairs of the Company are managed under the direction of the Board, which represents and is accountable to the shareholders of the Company. The Board’s responsibilities are active and not passive and include the responsibility to evaluate the strategic direction of the Company, management policies and the effectiveness with which management implements its policies. The basic responsibility of the directors is to act in good faith and with due care so as to exercise their business judgment on an informed basis in what they reasonably and honestly believe to be in the best interests of the Company and its shareholders. In discharging that obligation, the directors must inform themselves of all relevant information reasonably available to them. Directors are expected to prepare for and use reasonable efforts to participate in all Board meetings and meetings of committees on which they serve. The Board and each committee will meet as frequently as necessary to discharge their responsibilities, provided that the full Board will meet at least four times per year. The Board Chairman and the Company’s Chief Executive Officer will jointly prepare the agenda for each Board meeting. At the December meeting, the Chairman and the Chief Executive Officer will present a schedule of the key Board priorities and timetables for the next calendar year. Each director is free to suggest the inclusion of items on the agendas. Information and data that are important to the Board’s understanding of the business to be included at a Board or committee meeting should, to the extent practical, be distributed in writing to the directors sufficiently in advance of the meeting to permit meaningful review, and directors are expected to review in detail the provided materials in advance of each meeting. The independent non-management directors will meet without management in executive session at each regularly scheduled Board meeting and at such other times as they deem appropriate. The Chairman will act as the “lead independent director” to preside at all executive sessions of the non-management directors and act as a liaison between independent directors and management. As a general rule, management will speak on behalf of the Company. Comments and other statements from the entire Board, if appropriate, will generally be made by the Chairman. In normal circumstances, each director will refer all inquiries from third parties to management. The number of directors constituting the entire Board shall be no fewer than one (1) and no more than twelve (12), or such other number as may be fixed from time to time by action of the Board, one of whom may be selected by the directors to be Chairman. The Board will have a majority of directors who meet the criteria for independence, that being neither a current or former employee or officer of the Company and one who does not receive remuneration from the Company, either directly or indirectly, in any capacity other than as a director, and who is not a partner or controlling shareholder or executive officer of any organization that has a business relationship with the Company. Each independent director is expected to notify the Chair of the Corporate Governance and Nominating Committee, as soon as reasonably practicable, in the event that his or her personal circumstances change in a manner that may affect the Board’s evaluation of such director’s independence. The Corporate Governance and Nominating Committee is responsible for reviewing with the Board, on an annual basis, the composition of the Board as a whole, and whether the Company is being well served by the directors taking into account the director’s independence, age, skills, experience and availability for services to the Company. The Corporate Governance and Nominating Committee will recommend director nominees to the Board in accordance with the policies and principles in its charter. The invitation to join the Board should be extended by the Chairman and the Chair of the Corporate Governance and Nominating Committee. Directors must inform the Chair of the Corporate Governance and Nominating Committee in advance of accepting an invitation to serve on another company board and secure approval from the Corporate Governance and Nominating Committee. Independent Directors shall not serve on more than four boards of publicly traded companies. The Company’s Chief Executive Officer shall not serve on the board of more than one publicly held outside company. No director may sit on the board of, or beneficially own any stock in (other than through mutual funds or similar non-discretionary, undirected arrangements), any of the Company’s competitors in its principal lines of business. In the event a director is uncertain about beneficial ownership, he or she is encouraged to seek guidance from the Company’s General Counsel. Directors, including employee directors, who retire from or change the job or principal responsibility they held when they were selected for the Board will notify the Corporate Governance and Nominating Committee and offer to resign from the Board. The Corporate Governance and Nominating Committee will then review whether it is appropriate for such director to continue to be a member of the Board and recommend to the Board whether the director’s offer to resign should be accepted. The Board has not established any term limits to an individual’s membership on the Board. As an alternative to term limits, the Corporate Governance and Nominating Committee will, as part of its annual assessment of the composition and performance of its Board members, review a director’s continuation on the Board. The Board will have at all times an Audit Committee, a Compensation and Organization Committee, a Corporate Governance and Nominating Committee, and any other committees the Board deems appropriate. All of the members of the Audit, Compensation and Organization, and Corporate Governance and Nominating Committees will be independent directors. The members of the Audit, Compensation and Organization, and Corporate Governance and Nominating Committees will be appointed by the Board upon recommendation of the Corporate Governance and Nominating Committee based on each committee’s member qualification standards. Consideration should be given to the desires, skills and characteristics of individual directors. The Board will appoint the Chair of each committee upon the recommendation of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee will annually review committee assignments and will consider the rotation of committee chairs and committee members every four years, or more frequently, with a view toward balancing the benefits derived from continuity against the benefits derived from the diversity of experience and viewpoints of the various directors. The Board will adopt charters setting forth the purposes, goals and responsibilities of each of the Audit Committee, the Compensation and Organization Committee, the Corporate Governance and Nominating Committee, and any other committees the Board deems appropriate, as well as qualifications for committee membership, procedures for committee member appointment and removal, committee structure and operations and committee reporting to the Board. The Corporate Governance and Nominating Committee reviews, approves and recommends all committee charters to the Board. The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company in advance. The Company will provide sufficient funding to the Board and to each committee, as determined by the Board and each of its committees, to exercise their functions and provide compensation for the services of their advisors and, in the case of the Audit Committee, independent auditors. The Audit Committee will encourage the submission, and establish procedures for the confidential treatment by the appropriate officers, under the supervision of the Audit Committee, of complaints and concerns by officers and employees regarding accounting and auditing matters and of reports regarding alleged violations of the Company Code of Business Conduct and Ethics or other Company policies or law. The senior executives of the Company are encouraged to initiate direct contact with the Chair of the Audit Committee if they believe that there is a matter that should be brought to the attention of the Board. All new directors must be provided with these Corporate Governance Guidelines and will participate in the Company’s orientation initiatives as soon as practicable after the meeting at which new directors are elected. The initiatives will include presentations by senior management and outside advisors as appropriate to familiarize new directors with the Company’s business, its strategic plans, its significant financial, accounting and risk management issues and its compliance programs, as well as their fiduciary duties and responsibilities as directors. All other directors are also invited to attend any orientation initiatives. Directors are encouraged to participate in continuing education as appropriate for the directors, at least once every two years. The Corporate Governance and Nominating Committee will periodically review and recommend, and the Board will approve, the form and amount of director compensation in accordance with the corporate policies and principles relevant to director compensation. It is the Company’s policy that a significant portion of director compensation be in the form of Company stock or equity-based awards. The Board will consider that directors’ independence may be jeopardized if director compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which a director is affiliated, or if the Company enters into consulting contracts with (or provides other indirect forms of compensation to) a director or an organization with which the director is affiliated. Directors will be expected to own three times the Annual Cash Individual Retainer in Greatbatch Stock within five years of Board service. The Compensation and Organization Committee will review and approve corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance based on these goals and objectives and set the Chief Executive Officer’s compensation level based on this evaluation. The Chairman will solicit input from the entire Board. The results of the annual review will be discussed with the entire Board of Directors in order to ensure that the Chief Executive Officer is providing the necessary leadership for the Company in the long-and short-term. The Corporate Governance and Nominating Committee will report to the Board at least annually on succession planning for the Chief Executive Officer. The Board will work with the Corporate Governance and Nominating Committee as necessary to nominate a successor to the Chief Executive Officer. The Chief Executive Officer should make available to the Board his or her recommendations and evaluations of potential successors, including in the event of an unexpected emergency, along with a review of any development plans recommended for such individual. The Corporate Governance and Nominating Committee, on behalf of the Board, will conduct an annual evaluation of the Board and of each committee to determine whether they are functioning effectively, and will submit a report to the full Board at the end of the review. The assessment will focus on the contribution to the Company by the Board and each committee. Individual self evaluation will be completed by each director and reviewed annually with the Chairman and the Chair of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee will establish the criteria to be used in such evaluations. The Company intends to, and the directors will be entitled to have the Company, purchase reasonable directors’ and officers’ liability insurance on behalf of the directors to the extent reasonably available. In addition, the directors will receive the benefits of indemnification provided by the Company’s certificate of incorporation and by-Laws, as well as the benefits afforded by the provisions regarding absence of personal liability contained in the Company’s certificate of incorporation. |
