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triangle Board and Committee Governance
triangle Director Compensation


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BOARD AND COMMITTEE GOVERNANCE

Our business is managed under the direction of the Board of Directors. Except for Messrs. Golub and Chenault, all of our Board members are independent and not employed by the Company. The Board limits membership of the Audit Committee, Compensation and Benefits Committee and Committee on Directors to non-employee Directors. We keep Board members informed of our business through discussions with management, materials we provide to them, visits to our offices and their participation in Board and Board committee meetings.

During 1999 the Board of Directors met nine times. The Board of Directors has six committees. All of our Directors attended 75 percent or more of the meetings of the Board and Board committees on which they served in 1999.

This table lists our committees, the Directors who currently serve on them and the number of committee meetings held in 1999.

Membership on Board Committees

Audit Committee. The Audit Committee has oversight responsibility for the Company’s financial and internal controls and its accounting and public reporting policies. The Committee:

  • Recommends to the Board the annual selection of our outside auditors.
  • Reviews:
      (1) the scope and results of the audit of our financial statements, including significant audit findings and management’s responses;
      (2) comments and suggestions the auditors make about our internal controls, accounting practices or procedures;
      (3) the scope of the auditors’ plans for the upcoming year; and
      (4) significant legal matters.
  • Receives reports on our compliance with laws, regulations and internal procedures, including compliance with our Code of Conduct, contingent liabilities and important risks.

Compensation and Benefits Committee. The Compensation and Benefits Committee has overall responsibility for our executive officer and other compensation and benefit programs. The Committee may hire and consult with independent advisors. The Committee also:

  • Approves the compensation of certain key employees and makes recommendations to the Board as required.
  • Evaluates the performance of the Chief Executive Officer.
  • Reviews senior management development programs and appraises senior management performance.
  • Approves material changes to our incentive compensation and benefit plans and policies.
  • Carries out the Board’s responsibilities under our pension, savings and welfare benefit plans and appoints management employees to serve on the committees that are responsible for the administration of these plans and the management of plan assets.

Committee on Directors. The Committee on Directors considers and makes recommendations to the Board concerning board composition and performance. The Committee:

  • Recommends individuals for election to the Board and the duties and membership of Board committees.
  • Advises the Board on the factors it should consider in selecting Directors.
  • Advises the Board on compensation we pay to our outside Directors and retirement policies we apply to Board members.
  • Recommends ways for the Board to evaluate its performance and approves procedures for training and orientation of new Board members.
  • Considers candidates for election to the Board that shareholders recommend in accordance with the requirements we provide on pages 49-50.

Executive Committee. The Executive Committee may meet instead of the full Board if the Board needs to take action on a significant matter but is unable to convene a full meeting on short notice.

Finance Committee. The Finance Committee oversees our investment programs and reviews our capital needs. The Committee:

  • Considers our investment strategies in light of dynamic economic and market conditions.
  • Reviews with management our need for capital and how we allocate it.
  • Reviews our dividend policies with management.
  • Consults with management when we consider important transactions, such as acquiring other businesses, obtaining loans or issuing securities.

Public Responsibility Committee. The Public Responsibility Committee reviews our practices that affect the communities we work in or the public interest in general. For example, the Committee considers our consumer policies, the ways we create employment opportunities for minorities and women, how we safeguard confidential information about our customers and our charitable giving programs.

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