EXHIBIT 99.3
THOMAS & BETTS CORPORATION
GOVERNANCE GUIDELINES
(AS ADOPTED BY THE BOARD OF DIRECTORS ON FEBRUARY 4, 2004)
The Board of Directors (the "Board") of Thomas & Betts Corporation (the
"Corporation") has adopted the following guidelines to reflect the principles by
which the Corporation and the Board operates. The Board will review these
guidelines from time to time and make such changes as it deems necessary or
appropriate.
I. RESPONSIBILITIES OF THE BOARD
The Board is the ultimate decision-making and oversight body of the
Corporation, except with respect to matters reserved to the shareholders. The
Board is charged with the responsibility of exercising its fiduciary duty to act
in the best interests of the Corporation. The Board selects and oversees members
of senior management who have the authority and responsibility for the conduct
of the day-to-day operations of the business.
In discharging their responsibilities, the directors must exercise
their business judgment to act on an informed basis in a manner that they
believe in good faith is in the best interest of the Corporation and its
shareholders. In doing so, the directors are entitled to rely on the honesty and
integrity of the Corporation's senior management and its outside advisors and
auditors.
Directors are expected to attend all Board meetings and meetings of the
committees of the Board on which they serve and to review in advance of the
meetings all meeting materials. Directors are expected to spend the necessary
time to discharge their responsibilities appropriately and to ensure that other
existing or future commitments do not materially interfere with their
responsibilities as members of the Board.
II. DIRECTOR QUALIFICATION STANDARDS AND STRUCTURE OF THE BOARD
A. SIZE AND COMPOSITION
The Corporation's Charter provides that the Board will consist of not
less than 7 or more than 15 members, as determined by the Board. On an annual
basis, the Nominating and Governance Committee (the "Committee") will consider
the size and composition of the Board and report to the Board the results of its
review and any recommendations for change.
There will be at least a majority of directors that meet the
independence requirements of applicable law and the listing standards of the New
York Stock Exchange ("NYSE") as amended from time to time.
The Board sets no specific limitation on the number of publicly-held
company boards, board committees or other boards on which a director may serve.
The Committee will consider in the
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course of its nomination process whether a person's service on other boards or
board committees may impair the person's ability to effectively serve as a
director of the Corporation.
The Committee is responsible for recommending to the Board nominees to
serve as members of the Board in accordance with its Charter and, together with
the Chairman of the Board, for extending invitations to join the Board. Nominees
are selected for their character, judgment, business experience and specific
areas of expertise, among other relevant considerations, and in accordance with
the requirements of applicable law and the NYSE listing standards and any
guidelines established by the Committee.
The Board does not believe that it is advisable to establish term
limits or a succession policy for its directors because they may deprive the
Corporation and its shareholders of the contribution of directors who have been
able to develop valuable insights into the Corporation and its operations over
time. A director will, however, not be re-nominated for election after he or she
reaches the age of 70.
Any director whose principal occupation or business association has
changed substantially from the time he or she was elected to the Board should
notify the Board of such change so the Committee and the Board may consider
whether such director should continue to serve on the Board. In addition, any
director elected to serve on another company's board of directors should
promptly notify the Chairman of the Committee.
B. INDEPENDENCE
No director qualifies as "independent" unless the Board of Directors
affirmatively determines that the director has no material relationship with the
Corporation, either directly or as a partner, shareholder or officer of an
organization that has a relationship with the Corporation.
In the following situations, a director would not be considered
independent, except as stated below:
(i) a director who is an employee, or whose family member is an
executive officer, of the Corporation until three years after
the end of such employment;
(ii) a director (or immediate family member) who receives more than
$100,000 per year in direct compensation from the Corporation,
other than director and committee fees, pension or deferred
compensation for prior service (provided such compensation is
not contingent in any way on continued service), until three
years after he or she ceases to receive more than $100,000 per
year in such compensation;
(iii) a director (or immediate family member) who is affiliated with
or employed by, a present or former internal or external
auditor of the Corporation until three years after the end of
the affiliation or the employment or auditing relationship.
(iv) a director (or immediate family member) who is employed as an
executive officer of another company where any of the
Corporation's present executives serve on the
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company's compensation committee until three years after the
end of such service or the employment relationship.
(v) a director (or immediate family member) who is an executive
officer or an employee of a company that makes payments to, or
receives payments from, the Corporation for property or
services in an amount which, in any single fiscal year,
exceeds the greater of $1 million or 2% of such other
company's consolidated gross revenues, until three years after
failing below such threshold.
C. OFFICES OF CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Throughout the history of the Corporation, the offices of Chairman of
the Board and Chief Executive Officer have been at times combined and at times
separated. The Board believes it should continue to exercise its business
judgment in combining or separating the positions as it deems appropriate in
light of prevailing circumstances. The Board believes that the combination or
separation of these offices should be considered as part of the succession
planning process and to make a determination as to the combination or separation
of the offices of Chairman of the Board and Chief Executive Officer at such time
as it elects a new Chief Executive Officer.
A director who is an employee of the Corporation (other than the Chief
Executive Officer) is expected to retire from the Board effective as of the date
of the annual meeting of shareholders next following the date of his/her
retirement as an employee. A director who has served as Chief Executive Officer
of the Corporation is eligible for renomination as a director for a period of
five years following the date of his or her retirement as an employee, but not
after he or she reaches the age of 70.
D. BOARD MEETINGS
o FREQUENCY AND CONDUCT OF MEETINGS
The Board will meet at least six times each year. Additional meetings
may be called upon appropriate notice as necessary or appropriate. The Chairman
of the Board will submit to the Board for approval an annual schedule of
meetings for the Board and the standing committees thereof. The Chairman of the
Board shall establish a calendar of standard agenda items to be discussed at
each scheduled meeting and shall also establish the agenda for each Board
meeting. Each Board member is free to suggest agenda items or to raise subjects
that are not on the agenda for that meeting. Any members of management may
attend nonexecutive sessions of the Board at the invitation of the Chairman of
the Board.
o EXECUTIVE SESSIONS
The non-management directors will meet in executive session without
management at each regularly scheduled Board meeting. In addition, if the Board
includes a non-management director who is not independent as defined by the NYSE
listing standards, the independent directors will meet in executive session at
least one (1) time each year. Such executive sessions will be part of a
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regular Board meeting. Each such executive session is to be led by one of the
chairpersons of the standing board committees. The committee chairperson will be
rotated for each executive session.
o INFORMATION TO BE DISTRIBUTED PRIOR TO MEETINGS
Insofar as practicable, information to inform the directors about the
Corporation's business, performance and prospects and regarding recommendations
for action by the Board will be made available to the Board a reasonable period
of time before meetings. Information should be relevant, concise and timely.
Requests for action by the Board should include the recommendation of management
and be accompanied by historical or analytical data that may be necessary or
useful to the directors in making a determination as to the advisability of the
action requested.
III. BOARD ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
Directors will have full and free access to management and other
employees of the Corporation. Management will be responsive to requests for
information from Board members. The Board encourages the Chairman of the Board
to invite members of management to make presentations at Board meetings in order
to provide particular insights into aspects of the Corporation's business or to
provide individuals with exposure to the Board for purposes of management
development. Directors may suggest possible guests to the Chairman.
Where necessary or appropriate, the Board and each committee of the
Board shall have the authority and power to engage and compensate independent
advisors, without consulting or obtaining the approval of any officer of the
Corporation in advance.
IV. BOARD INTERACTION WITH THIRD PARTIES
The Board believes that senior management speaks for the Corporation.
Directors may, from time to time, be contacted by institutional investors, other
shareholders, sellers of businesses or merger partners, governmental or
community officials, analysts or the press or other constituencies of the
Corporation to comment on or discuss the business of the Corporation. Directors
are expected to refrain from communicating with any of the foregoing without
prior consultation with the Chief Executive Officer, the Chief Financial Officer
or the General Counsel.
V. COMMITTEES APPOINTED BY THE BOARD
o STANDING COMMITTEE STRUCTURE
There are four standing committees of the Board: Audit, Compensation,
Nominating and Governance and Executive. From time to time, the Board may
designate other committees in conformity with law and the Corporation's Bylaws.
Each standing committee has the authority and responsibilities delineated in the
Corporation's Bylaws, the resolutions creating them and any applicable charter.
The Board may disband any committee when it deems it appropriate to do so,
provided that the Corporation must at all times have an Audit, Compensation and
Nominating and Governance committee and such other committees as may be required
by applicable law or the NYSE listing standards.
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Committees and their chairpersons will be appointed by the Board
annually at the May meeting of the Board, on recommendation of the Committee. It
is the Board's policy that, with the exception of the Executive Committee, only
independent directors will serve on the standing committees. The members of the
Audit, Compensation and Nominating and Governance committees must also at all
times meet the independence and other requirements of applicable law and NYSE
listing requirements. Members of the Audit Committee may not simultaneously
serve on the audit committees of more than three public companies, unless the
Board determines that such simultaneous service would not impair the ability of
such member to effectively serve on the Corporation's Audit Committee. In
appointing committee members, the Board will consider rotating the membership
from time to time in accordance with any policies established or recommended in
that regard by the Committee.
o OTHER COMMITTEE STRUCTURE
There are three other committees that have been appointed by the Board:
Corporate Compliance Committee, Disclosure Committee and Retirement Plans
Committee. Each of these committees is made up of members of senior management.
Each such committee has the authority and responsibilities delineated in the
resolutions creating them and any applicable charter. The Board may disband any
committee when it deems it appropriate to do so.
o COMMITTEE CHARTERS
Each standing and other committee must have a written charter, which
has been reviewed by the Committee and then approved by the Board and which
states the purpose of such committee. Committee charters will be reviewed not
less frequently than annually to reflect the activities of each of the
respective committees, changes in applicable law or regulations and other
relevant considerations, and proposed revisions to such charters will be
approved by the Board. Committee charters will be publicly disclosed as required
by law or NYSE listing standards.
o COMMITTEE MEETINGS
The chairpersons of the various committees, in consultation with their
committee members, shall determine the frequency and length of committee
meetings. The chairperson of each committee, in consultation with appropriate
Corporation officers, will establish the agenda for each committee meeting.
Committee members and other directors may suggest the addition of any matter to
the agenda for any committee meeting upon reasonable notice to the committee
chairperson.
To the extent practicable, information regarding matters to be
considered at committee meetings will be distributed to committee members a
reasonable period of time before such meetings. Each committee chairperson may
designate an individual of his or her choice to act as secretary at, and to
record the minutes of, committee meetings. The chairperson of each committee
will report on the activities of the committee to the Board or as otherwise
provided in its charter following committee meetings. Upon approval of the
minutes, the committee chairperson will sign the minutes, which will be
maintained by the Corporation's Secretary.
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VI. COMPENSATION OF THE BOARD
The amount and form of compensation of the Board is recommended by the
Committee and approved by the full Board. The Board's compensation may be a
combination of cash, restricted stock, stock options and deferred stock
appreciation rights.
The Committee is charged with the responsibility of reviewing the
compensation of the Board and recommending changes thereto to the Board from
time to time. In this regard, the Committee may request that management report
to the Committee periodically on the status of the Board's compensation in
relation to other similarly situated companies. Directors who are Corporation
employees will not be compensated for their services as a director.
VII. ANNUAL PERFORMANCE EVALUATION OF BOARD
Consistent with its charter, the Committee will annually oversee the
performance evaluation of the Board as a whole to determine whether it and its
committees are functioning effectively. At the conclusion of this process, the
Chairperson of the Committee will report the conclusions to the Board and may
make recommendations regarding changes for consideration by the Board.
VIII. DIRECTOR ORIENTATION AND CONTINUING EDUCATION
New directors are expected to participate in an orientation program,
which will generally be conducted within three months of the annual meeting of
shareholders at which new directors are elected or the Board meeting at which a
new director is appointed. The agenda for the orientation program will be
determined by the Chairman of the Board who may consult with the chairpersons of
the standing committees of the Board in consultation with the Chief Executive
Officer, the Chief Financial Officer and the General Counsel. The orientation
program should address, among other matters, the Corporation's strategic plans,
significant risk exposures, and ethics and compliance program.
The Board will enable directors to participate in continuing education
programs, and the Corporation will pay the reasonable expenses of attendance by
a director at one such program per year.
IX. MANAGEMENT SUCCESSION
The Committee will report periodically to the Board regarding the
succession planning process with respect to the office of the Chief Executive
Officer and other senior management, as may be determined by the Board. The
Chief Executive Officer will meet periodically with the Board to make available
his or her recommendations and evaluation of potential successors, along with a
review of any development plans recommended for such individuals.
In the event of an unexpected disability or retirement of the Chief
Executive Officer, the Chairperson of the Committee will be responsible for
presenting to the Board emergency actions to be taken for management succession.
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The performance review of the Chief Executive Officer is conducted
annually by the Compensation Committee and discussed with the Board of Directors
in an executive session.
X. ANNUAL REVIEW OF GOVERNANCE GUIDELINES
The Committee will reevaluate annually these guidelines and recommend
to the Board such revisions as it deems necessary or appropriate.
XI. ETHICS AND COMPLIANCE POLICIES
The Board will comply with the Corporation's Ethics and Compliance
Policies. Any waiver of a violation of such policies by a director or executive
officer of the Corporation must be approved only through actions of
disinterested members of the Board and will be publicly disclosed as required by
law or the NYSE listing standards.
XII. REPORTING OF INTERESTED PARTY CONCERNS
In order that interested parties, including shareholders, may be able
to make their concerns known to the Board, the Corporation shall provide on its
website a method by which such parties can communicate directly and
confidentially to the Board.
XIII. PUBLIC DISCLOSURE
The Corporation will make publicly available its Ethics and Compliance
Policies, these guidelines and the charters of the standing committees appointed
by the Board at such times and in such manner as required by law or the NYSE
listing standards.
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