Exhibit 10.2
C&D TECHNOLOGIES, INC.
Board of Directors
Nominating/Corporate Governance Committee Charter
As Amended to be Effective as of March 1, 2005
The Corporate Governance policies of the Company, including the duties and
functions of the Nominating/Corporate Governance Committee of the Board of
Directors, shall be as follows:
A. Composition of the Board
1. Management Directors
As a matter of policy, there should be a substantial majority of
independent directors on the board (1). While exceptions may occur
from time to time, the Charter suggests that the only management
member of the Board will be the Chief Executive Officer.
2. Board Size
To ensure that an adequate number of independent directors are
available to serve on committees, while at the same time fostering
close working relationships and avoiding excessive formality, a Board
of seven to nine directors is desirable. However, the Board also
recognizes that having more than nine directors may be desirable (when
new directors join the Board prior to the departure of retiring
directors) and also, that fewer than seven directors may be necessary
when a vacancy occurs and a suitable new candidate is not immediately
available.
3. Selection of Independent Directors and Stockholder Nominations
The Nominating/Corporate Governance Committee shall have primary
responsibility for screening and identifying individuals qualified to
become Board members, with input from other members of the Board and
in consultation with the Chief Executive Officer, and for selecting,
or recommending that the Board select, the director nominees for C&D
Technologies' next annual meeting of stockholders. Criteria for
independent director consideration include senior management
experience, appropriate skill sets, diversity, and overall business
acumen. The Committee shall have the sole authority to retain and
terminate any search firm to be used to identify director candidates,
including the authority to approve the search firm's fees and other
retention terms. The Committee shall also oversee the process by which
stockholders may nominate directors at an annual meeting as set forth
in Article II, Section 11 of the Company's By-laws. In addition, the
Committee shall consider persons recommended by stockholders as
director candidates as part of its responsibilities under this
paragraph. It is the policy of the Board that the Committee evaluate
candidates for director recommended by stockholders on the same basis
that other individuals are evaluated under this paragraph. In
reporting its selection of a director nominee to the Board, or its
recommendation that the Board select an individual as a director
nominee, the Committee shall report which one or more of the following
categories of persons or entities recommended that nominee:
stockholder, non-management director, chief executive officer, other
executive officer, third party search firm, or other specified source.
4. Re-election of Independent Directors
The Chair of the Nominating/Corporate Governance Committee in
consultation with the Committee, the Chairman of the Board (if he is
not then a member of the Committee) and Chief Executive Officer, will
determine the appropriateness of nominating each director for
re-election on an annual basis. In this regard, independent directors
will periodically be evaluated on their respective contributions
toward advancing the Corporation and enhancing stockholder value.
Following evaluation, the Chair of the Committee will make
recommendations to the Board.
In addition to the duties and responsibilities described above, the
Committee shall:
o Review potential conflicts of prospective Board members;
o Maintain a list of persons who may be potential directors;
o Perform such other functions as may be assigned by the Board; and
o Establish programs for director orientation and suggestions and
policies for continuing director education.
5. Retirement Age
Directors shall normally be required to retire from the Board at the
annual meeting following the year in which he/she reaches age 70.
6. Change in Director's Responsibilities
It is not the Board's intention that an independent director leave the
Board in the event of retirement or other change in the position
he/she held when joining the Board. However, if such an event occurs,
the independent director would be expected to tender his or her
resignation to the Chairman of the Board who, in consultation with the
Nominating/Corporate Governance Committee, shall determine if the
director's change in status appears consistent with the strategic
requirements of the Board and overall corporate requirements.
7. Board Service by Retired Chief Executive Officer
The Board believes that continued service on the Board by a retired
Chief Executive Officer must be decided on a case-by-case basis.
Whether the individual remains a member of the Board is a matter for
the full Board and the new Chief Executive Officer to discuss at the
appropriate time.
Any former employee serving on the Board will be considered a
management director for purposes of corporate governance (ineligible
to serve on the Audit, Compensation or Nominating/Corporate Governance
Committee) for a period of at least three years after termination of
employment, but will be compensated as an independent director.
8. Service on Other Boards of Directors
It is imperative that each current and prospective member of the Board
has adequate time to devote to C&D Board service. Accordingly, the
Nominating/Corporate Governance Committee will consider the number of
public and private board seats held by current board members as well
as prospective board candidates as part of the annual nomination
process and in the context of recommendation of new board members,
respectively. Generally, unless the facts and circumstances dictate a
different conclusion, Board members shall not simultaneously serve on
the boards of directors of more than three other public and/or private
companies.
B. Operation of the Board
1. Selection for Chairman of the Board and Chief Executive Officer
The Board will determine whether the roles of the Chairman of the
Board and Chief Executive Officer should be separate or held by one
individual, based on the circumstances at hand. If the roles are to be
held by two individuals, the Board will determine whether the Chairman
of the Board should be a management or an independent director.
2. Board Committees
The Company will have three committees: Audit, Compensation and
Nominating/Corporate Governance, and such subcommittees as the
Committees may, from time to time, designate. Each of these committees
is responsible for the development of a Charter to be approved by the
full Board. Each committee, including the Nominating/Corporate
Governance Committee, should revisit its respective Charter on an
annual basis, and shall seek approval of the Board of any material
modification of its Charter. Committees are otherwise authorized to
interpret, modify, suspend effectiveness of any part of, make rules
under, and otherwise interpret and administer their Charters in their
reasonable discretion. To the extent possible, committee meetings will
be scheduled on the same day as Board meetings.
3. Assignment and Rotation of Committee Members
The Nominating/Corporate Governance Committee, in consultation with
the Chairman of the Board (if he is not then a member of the
Committee) and Chief Executive Officer, is responsible for committee
assignments, subject to Board approval. Chairpersons of committees
will be chosen in the same manner, and will always be independent
directors. The Board committee assignments should be changed from time
to time, but no fixed schedule has been established.
4. Committee Meetings
Committee chairpersons, in consultation with the appropriate members
of senior management, will determine the frequency and length of
meetings, as well as agendas for each meeting. Each committee will
issue in advance of each meeting a schedule of agenda subjects to be
discussed. Copies of all committee-meeting minutes will be shared with
the full Board.
5. Attendance at Board and Committee Meetings and Annual Meeting of
Stockholders
Board and committee members are expected to attend all meetings of the
Board and each Board committee upon which the director serves. Under
the rules of the Securities and Exchange Commission, the Company is
required to report in its proxy statement for its annual meeting the
name of each incumbent director who during the preceding fiscal year
(or such shorter period the individual served as a Board or committee
member) attended fewer than 75% of the aggregate of the meetings of
the Board and the meetings of all Board committees on which the
director served. Attendance at Board and committee meetings shall be a
factor for consideration by the Committee under Section A, Paragraph 4
of this charter. It is the policy of the Board that Board members are
expected to attend the Annual Meeting of Stockholders of the Company.
6. Agendas for the Full Board
The Chairman of the Board and Chief Executive Officer will establish
the agenda for each Board meeting, with each Board member encouraged
to submit items for consideration.
7. Board Materials in Advance of Meetings
It is the Board's desire that important material be provided, in
writing, in advance of meetings. For the months between Board
meetings, when appropriate, materials should likewise be forwarded to
Board members.
8. Executive Session
The independent directors will meet in Executive Session, without
management participation, at least once each year, and time will be
made available at each regularly scheduled Board meeting to provide an
opportunity for the independent directors to meet in Executive
Session. The Chair of the Nominating/Corporate Governance Committee or
the Chairman of the Board will schedule the meeting and the Chair of
the Nominating/Corporate Governance Committee will preside with the
following objectives in mind:
o Evaluate the Chief Executive Officer's performance and make
recommendations to the Compensation Committee regarding
compensation and employment contract issues;
o Provide input for the following year regarding corporate goals as
part of the Chief Executive Officer's performance objectives; and
o Review such matters as may be brought to the attention of
independent directors by persons who have communicated their
concerns to the independent directors, the Chair of the
Nominating/Corporate Governance Committee or the Chairman of the
Board.
Such meetings should follow regular Board meetings whenever possible.
9. Board Compensation and Stock Ownership
o Compensation
Annual Retainer: Restore to the non-executive Chairman of the
Board the former retainer of $65,000 per year with an option to
receive up to one-third ($21,666.66) of the total in cash, with
the remainder in stock, or take the entire retainer in stock. Pay
all other independent directors a retainer of $25,000 per year
with an option to receive up to one-third ($8,333.33) of the
total in cash with the remainder in stock, or take the entire
retainer in stock. The effective date for accrual of the annual
retainer shall be the date of the Company's annual meeting of
stockholders.
Committee Chairpersons: Pay the Chair of the Audit Committee
$10,000 per year and each of the Chairpersons of the
Nominating/Corporate Governance Committee and Compensation
Committee $5,000 per year, in cash. The effective date for
accrual of the referenced payment to the committee chairpersons
shall be the date of the Company's annual meeting of
stockholders.
Board Meeting Fees: Pay $1,750 per Board meeting to all
independent directors (including the Chairman of the Board, in
cash.
Committee Meeting Fees: Pay $1,500 per committee meeting to each
committee member (including the committee chairperson), in cash.
Telephonic meeting fees: At the option of the Chief Executive
Officer, pay $750 for telephonic Board or Committee meetings
where such meetings are of a more limited nature, or require less
time commitment than for regularly scheduled meetings, or no fees
for brief informational meetings.
Stock Option Grants: Grant stock options to independent directors
pursuant to the provisions of Article VI of the 1998 Stock Option
Plan.
Timing and Method of Payments: Except for the stock portion of
the Annual Retainer and the Stock Option Grants, which shall be
delivered as soon as administratively practicable following the
annual meeting of stockholders, compensation earned during the
preceding three full calendar months will be paid quarterly on or
about the 15th day of each of March, June, September and
December. To the extent practicable, such payments will be made
electronically, via direct deposit to such account as may be
designated by each director (unless alternative arrangements are
made by a director with the Corporation).
Compensation review: Conduct annual reviews of Board
compensation, typically in February of each year.
o Stock Ownership
All independent directors have a fiduciary responsibility to the
Corporation and a commitment to enhancing stockholder value. In
this regard, a strong equity position by each Board member is
essential. As a guideline, independent directors should own a
minimum of $100,000 in C&D Technologies stock, excluding stock
options. An independent director may take a maximum of five (5)
years to obtain this equity position, calculated from the date
that he/she initially joined the Board.
C. Board Interaction with Management
1. Evaluation of Chief Executive Officer
The Compensation Committee will formally evaluate the Chief Executive
Officer's compensation on an annual basis, soliciting input from
independent directors, individually as well as by the independent
directors serving on the Nominating/Corporate Governance Committee.
The Compensation Committee will then discuss its findings with
independent directors in Executive Session after which the results
will be reviewed with the Chief Executive Officer.
2. Succession Planning and Management Development
An annual report will be prepared by the Chief Executive Officer on
the subjects of succession planning and management development, and
this information will be communicated in Executive Session with
independent directors. The Nominating/Corporate Governance Committee
shall establish policies regarding succession of the Chief Executive
Officer in the event of an emergency or the retirement of the Chief
Executive Officer.
3. Access to Senior Management
Board members shall have full access to senior management, and the
Chief Executive Officer shall be advised of significant contacts
between Board members and senior management.
4. Access to Advisors Independent of Management
From time to time, it may be appropriate for the Board and Board
committees to seek advice from outside advisors independent of
management with respect to matters within their responsibility.
D. Performance Evaluation of the Board and Each Board Committee
At least annually, the Board shall conduct a self-evaluation of its
performance and a performance evaluation of the Audit Committee, the
Compensation Committee and the Nominating/Corporate Governance Committee.
The purpose of the evaluations shall be to determine whether the Board and
such committees are functioning effectively. Also, the Nominating/Corporate
Governance Committee shall review its own performance at least annually.
E. Training for the Board
The Nominating/Corporate Governance Committee will consider training and
education opportunities and make materials and/or programs available to
enhance the abilities of the members of the Board to perform their
responsibilities.
F. Other Provisions Regarding the Nominating/Corporate Governance Committee
In addition to the other provisions of this Charter that assign
responsibilities and duties to the Committee, the Nominating/Corporate
Governance Committee shall be subject to the provisions set forth in this
section.
1. Composition of the Nominating/Corporate Governance Committee
The Nominating/Corporate Governance Committee shall be comprised of at
least two independent directors (1).
2. Procedures
The Nominating/Corporate Governance Committee shall hold at least two
regular meetings each year, and such special meetings as may be
required. Meetings may be called by the Chair of the
Nominating/Corporate Governance Committee or the Chairman of the
Board. The results of the meetings shall be reported to the full
Board.
3. Responsibilities with Respect to this Charter
The Nominating/Corporate Governance Committee shall review from time
to time the adequacy of the corporate governance guidelines in this
Charter in light of broadly accepted practices of corporate
governance, emerging governance issues and market and regulatory
expectations, and will advise and make recommendations to the Board
with respect to appropriate modifications. The Nominating/Corporate
Governance Committee shall advise the Board with respect to such other
matters relating to the governance of the Company as the Committee may
from time to time approve, including changes to terms or scope of this
Charter and the Committee's overall responsibilities and carry out
such other tasks as the Board may from time to time delegate to it for
action consistent with this Charter.
G. Stockholder Communications with the Board of Directors
Stockholders of the Company may contact any of the Company's directors by
writing to them c/o C&D Technologies, Inc., 1400 Union Meeting Road, Blue
Bell, Pennsylvania 19422, Attention: Corporate Secretary.
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1 No director qualifies as "independent" unless the board of directors
affirmatively determines that the director has no material
relationship with the Company, either directly or as a partner,
shareholder or officer of an organization that has a relationship with
the Company. In addition a director is not independent if:
(a) The director is, or has been within the last three years, an
employee of the Company, or an immediate family member is, or has
been within the last three years, an executive officer, of the
Company.
(b) The director has received, or has an immediate family member who
has received, during any twelve-month period within the last
three years, more than $100,000 in director compensation from the
Company, other than director and committee fees and pension or
other forms of deferred compensation for prior service (provided
such compensation is not contingent in any way on continued
service).
(c) (A) The director or an immediate family member is a current
partner of a firm that is the Company's internal or external
auditor; (B) the director is a current employee of such a firm;
(C) the director has an immediate family member who is a current
employee of such a firm and who participates in the firm's audit,
assurance or tax compliance (but not tax planning) practice; or
(D) the director or an immediate family member was within the
last three years (but is no longer) a partner or employee of such
a firm and personally worked on the Company's audit within that
time.
(d) The director or an immediate family member is, or has been within
the last three years, employed as an executive officer of another
company where any of the Company's present executive officers at
the same time serves or served on the compensation committee of
that other company.
(e) The director is a current employee, or an immediate family member
is a current executive officer, of a company that has made
payments to, or received payments from, the Company for property
or services in an amount which, in any of the last three fiscal
years, exceeds the greater of $1 million, or 2% of such other
company's consolidated gross revenues.