EXHIBIT 99.1
NEWPARK RESOURCES, INC.
CORPORATE GOVERNANCE POLICY
The following Corporate Governance Policy (the "Policy") has been
approved by the Board of Directors (the "Board") of Newpark Resources, Inc.
("Newpark" or the "Company"), and, along with the Company's Code of Ethics and
the charters of its Audit Committee, Compensation Committee and Nominating and
Corporate Governance Committee, constitutes the framework for the governance of
Newpark. The Policy may be revised periodically to maintain its relevance and
efficacy.
1. Board Membership.
1.1 Number of Directors. The Bylaws provide that the number of
directors is a minimum of five and a maximum of ten, with the exact number to be
set by the Board. On the date of first adoption of this Policy, the Board
comprises eight directors.
1.2 Director Qualifications. The general qualification
criteria for Board membership are set forth below. The Nominating and Corporate
Governance Committee may establish different or additional criteria from time to
time.
o Each director shall be a person of the highest
integrity and character.
o Each director shall be willing and able to devote
sufficient time to satisfy the director
responsibilities set forth in Section 3 below and
such additional responsibilities as may be determined
from time to time by the Board or Nominating and
Corporate Governance Committee.
o Each director shall have the objectivity, ability and
desire to represent the interests of the stockholders
as a whole, free from any conflict of interest that
would violate any applicable law or regulation or
interfere with the proper performance of the
responsibilities of a director.
1.3 Independence.
(a) At least a majority of the directors must be
"Independent Directors," hereby defined as follows:
o an "independent director," as defined under the rules
of the New York Stock Exchange or other securities
exchange or association on which Newpark stock is
listed or traded, as amended from time to time (the
"Rules"), except as may be otherwise permitted under
the Rules; and
o a "non-employee director," as defined in Rule 16b-3
promulgated under Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange
Act").
(b) Whenever it is necessary for the Board to
determine whether a relationship between Newpark and a director or prospective
director is material (such that the individual cannot be considered an
Independent Director), the Board shall consider all relevant facts and
circumstances.
1.4 No Term Limits. Each director's term expires when his or
her successor is elected, and he or she may be re-elected. There is no limit on
the number of terms, consecutive or not, for which a director may be elected.
2. Board Committees.
2.1 The Board has established three committees that are
integral to the corporate governance of the Company. They are the Audit
Committee, the Compensation Committee and the Nominating and Corporate
Governance Committee, and their charters are attached to this Policy as Exhibits
A, B and C, respectively.
(a) As set forth in its charter, the purpose of the
Audit Committee is to provide independent review and oversight of: the integrity
of the Company's financial statements; the financial reporting process; the
Company's systems of internal accounting and financial controls; the performance
of the Company's internal audit function and independent auditors; the
independent auditor's qualifications and independence; and the Company's
compliance with ethics policies and legal and regulatory requirements.
(b) As set forth in its charter, the purpose of the
Compensation Committee is to discharge the Board's responsibilities with respect
to all forms of compensation of the Company's senior officers, administer the
Company's equity incentive plans and produce an annual report on executive
compensation for inclusion in the Company's proxy statement.
(c) As set forth in its charter, the purpose of the
Nominating and Corporate Governance Committee is to assist and advise the Board
with respect to the size, composition and functions of the Board, to identify
individuals qualified to become members of the Board and to recommend that the
Board select a group of qualified nominees for each annual meeting of the
Company's stockholders, and to develop and recommend to the Board a set of
corporate governance principles applicable to the Company.
2.2 The Board may establish other committees from time to time
in accordance with the Bylaws.
3. Director Responsibilities. Each director is expected to devote
sufficient time to the affairs of Newpark to fulfill the responsibilities of a
director and a member of each committee on which he or she serves, including
developing and maintaining sufficient knowledge of Newpark and its industry;
reviewing and analyzing reports and other information important to Board and
committee responsibilities, preparing for, attending and participating in Board
and committee meetings and participating in the orientation and continuing
education programs offered by Newpark.
4. Meetings of Non-Employee Directors. The Nominating and Corporate
Governance Committee shall schedule in advance and convene at least two regular
meetings during each calendar year for the non-employee directors, without
senior management present. The Committee may require the presence at such
meetings or portions thereof of such
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management employees, if any, including senior management and subordinate
management, as the members of the Committee shall determine. The non-employee
directors may meet without management present at such other times as they shall
determine. Such meetings (in addition to the two regularly scheduled meetings)
may be called by any two non-employee directors or by the Chairman of the
Nominating and Corporate Governance Committee.
5. Access to Senior Management. The Board, as well as the non-employee
directors and each Board Committee involved in corporate governance, shall have
complete access to the management of Newpark at reasonable times during normal
business hours.
6. Code of Ethics. The Nominating and Corporate Governance Committee
shall develop and recommend to the Board a Code of Ethics to be maintained by
the Company. The Nominating and Corporate Governance Committee shall be
responsible for amending the Code of Ethics from time to time, as needed, and
the Audit Committee shall oversee compliance therewith.
7. Compensation of Directors. The Board shall determine the
compensation and benefits of the non-employee directors, taking into account the
recommendations of the Nominating and Corporate Governance Committee. In making
their recommendations and decision, the Committee and the Board shall take into
account one or more of the following factors and such other factors as they deem
relevant: (a) the compensation paid to their directors by companies in the
industries served by Newpark that are deemed by the Committee and Board to be
comparable in size and scope to Newpark; (b) the amount of time and effort that
the directors are required to expend in order to discharge their duties; (c)
attempting to align the directors' interests with the long-term interests of the
stockholders; and (d) making the compensation structure easy for the
stockholders to understand. The Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee, in the sole discretion of each,
may award additional compensation and benefits to their chairpersons, in view of
the additional time and effort such persons are required to expend in order to
perform their duties as chairpersons.
8. Succession Plan. The Board shall develop, approve and maintain a
succession plan for the Chief Executive Officer and other senior executives.
9. Director Orientation. Company counsel and the Chief Financial
Officer, with assistance from the Nominating and Corporate Governance Committee,
shall be responsible for providing an orientation for new directors and for
periodically providing materials and briefings to all directors on subjects that
would assist them in discharging their duties. The orientation of new directors
shall include visits to key sites and, to the extent not provided at meetings of
the Board, briefings by senior management on the Company's financial statements,
strategic plans, key policies and key practices.
10. Access to Independent Advisors. The Board, the Audit Committee,
Compensation Committee and Nominating and Corporate Governance Committee may use
reasonable amounts of time of the Company's internal and independent
accountants, internal and outside lawyers and other internal staff and
independent accountants, lawyers and consultants to assist the Board and such
committees in the discharge of their duties.
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11. Assessment of Performance. At least annually, following receipt of
a performance assessment of the Board by the Nominating and Corporate Governance
Committee, the Board shall discuss the Committee's assessment and
recommendations, if any, with a view to improving the effectiveness of the
Board. The Audit Committee, Compensation Committee and Nominating and Corporate
Governance Committee shall each perform a similar assessment of their
performance.
12. Reporting of Concerns. On or before December 31, 2003, the Company
shall implement procedures for the receipt, retention and treatment of
complaints regarding accounting, internal accounting controls or auditing
matters, including procedures for the confidential, anonymous submission to the
Audit Committee of such complaints.
13. Disclosure of this Policy. This Policy, the Company's Code of
Ethics and the charters of the Audit Committee, Compensation Committee and
Nominating and Corporate Governance Committee shall be posted on the Company's
website and also shall be made available in print to any stockholder requesting
it. Such availability shall be noted in the Company's Annual Report to
Stockholders.
Adopted by the Board of Directors - June 11, 2003
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