Director Independence Criteria
Federal securities regulations, stock exchange listing standards and principles of corporate governance encourage publicly-traded companies to be mindful of the independence status of directors. For example, the Audit Committee of a publicly-traded company must be comprised solely of independent Directors. Independent Directors should have no material relationship with the Company.
To address these issues, the Company has established criteria by which to assess the independence of its Directors. On an annual basis, the Board of Directors will affirmatively determine whether or not each Director can be classified as independent. The conclusions of such determinations will be disclosed as required by law.
For purposes of these criteria, “Company” shall mean The Taylor Communications Company and its consolidated group affiliates and subsidiaries. “Immediate family member” shall mean a person’s spouse, parents, children, siblings, in-laws and anyone who shares such person’s home. The term “executive officer” shall have the same meaning specified for the term “officer” under applicable provisions of the Securities Exchange Act of 1934, as amended.
A Company Director will not be considered to be “independent” from management under any of the following circumstances:
- The Director, is, or within the past three years has been, employed by the Company, other than as an interim executive officer. The Director’s immediate family member is, or within the past three years has been, an executive officer of the Company.
- The Director or immediate family member receives, or has received within the past three years, more than $120,000 during any twelve month period in direct compensation from the Company, other than Director and Committee fees, pension or other forms of deferred compensation for prior service, and compensation for services as an interim executive officer of the Company. Compensation received by an immediate family member for service as a non-executive employee of the Company will not be considered to impair independence of the Director.
- The Director is a current partner or employee of a firm that is the Company’s internal or external auditor; the Director has an immediate family member who is a current partner of such a firm; the Director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit, or the Director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time.
- The Director or immediate family member is, or has been within the last three years, employed as an executive officer of another entity, and any of the Company’s present executives serve at the same time or served on the Compensation Committee of the second entity’s Board of Directors. Independence will be affected until three years after the end of such service or the employment relationship.
- The Director is an executive officer or an employee, or his or her immediate family member is an executive officer of a second entity:
- that accounts for at least 2% or $1 million, whichever is greater, of the Company’s consolidated gross revenues in any of the last three completed fiscal years, or
- for which the Company accounts for at least 2% or $1 million, whichever is greater, of the second entity’s consolidated gross revenues in any of the last three completed fiscal years.
In each case, independence will be affected until three years after the revenues fall below such threshold.
In the absence of any of these enumerated factors, a director will be considered independent of management. Such determination will be disclosed in public filings as required by applicable laws, regulations, and listing standards.
Adopted by Board of Directors on December 11, 2003
Amended by Board of Directors February 24, 2005
Amended by Board of Directors October 23, 2008