Governance Committee Charter
The Governance Committee’s (“Committee”) primary function is to assist the Board of Directors (“Board”) by: (i) identifying individuals qualified to become Board members, consistent with criteria approved by the Board, and recommending candidates for election to the Board and its committees, (ii) overseeing and evaluating the Board and management, (iii) recommending changes in Board composition and committee structure, (iv) developing, reviewing and recommending changes to governance guidelines, policies and procedures, (v) supporting the Board's responsibilities with respect to management succession planning, including the role of the Chief Executive Officer; and (vi) overseeing matters of broad corporate significance affecting CSX Corporation (“Corporation”).
Membership and OperationsThe Committee shall consist of no fewer than three directors. Each member shall meet the independence requirements of the NASDAQ Stock Market’s listing standards.
The members of the Committee and the Committee Chair shall be elected by the Board annually and shall serve until their successors have been duly elected and qualified. Any member of the Committee may resign at any time by giving written notice of his or her intention to do so to the Chairman of the Board or the Corporate Secretary, or may be removed, with or without cause, at any time by the Board.
The Committee shall meet at least three times each year at such times as it determines to be appropriate or at the call of the Chair of the Committee. The Chair of the Committee shall prepare or approve an agenda in advance of each meeting. Each member is free to suggest the inclusion of items not on the agenda.
A majority of the members of the Committee shall constitute a quorum for the transaction of business, and the affirmative vote of the majority of those present shall be necessary for any action by the Committee.
The Committee shall keep minutes, report its activities to the full Board on a regular basis and make recommendations with respect to the matters covered by this Charter and other matters as the Committee may deem necessary or appropriate.
Duties and ResponsibilitiesThe Committee periodically reviews the size, function and duties of the Board (as well as composition) consistent with the Board’s needs. The Committee identifies individuals qualified to become Board members, and recommends candidates to fill Board vacancies and for election to the Board at the next annual or special meeting of shareholders. In identifying and recommending Board nominees, the Committee uses guidelines, consistent with criteria approved by the Board, that it has developed with respect to qualifications for nominations to the Board and for continued membership on the Board. The criteria for selecting new directors includes identifying individuals with demonstrated leadership ability and outstanding integrity, values and judgment. The Committee seeks to maintain a Board with a broad diversity of experience in business matters and the ability to assess and evaluate the role and policies of the Corporation in the face of changing conditions in the economy, regulatory environment and customer expectations.
The Committee shall review suggestions from shareholders for potential Board nominees, and, when appropriate, Committee members will meet with interested shareholders to discuss suggested candidates. Potential nominees suggested by shareholders will be evaluated by the Committee on the same basis as individuals identified directly by the Committee or from other sources.
It is the Committee’s responsibility to oversee and evaluate the Board. At least annually, the Committee shall conduct evaluations of director independence and performance, committee performance and the effectiveness of the Board as a working group. The Committee reviews and makes recommendations to the Board regarding director independence, Board composition generally, Board committee structure, committee membership, committee chairs, and director compensation policies and practices. The Committee shall periodically, but at least once every three years, review and make recommendations to the Board regarding the compensation for nonmanagement directors.
The Committee shall periodically review the Corporation’s organizational documents, including the Articles of Incorporation, Bylaws and other governance documents, as it deems appropriate. The Committee also develops, recommends to the Board and monitors corporate governance guidelines and committee charters for the Corporation. In this capacity, the Committee shall oversee the annual evaluations of each committee charter, considering such issues as the committee’s size and composition, the quality of information and presentations given by management, the suitability of the duties given to that committee and such other issues as the Committee deems appropriate.
The Committee shall report periodically to the Board on significant results of the foregoing activities.
Delegation to SubcommitteeThe Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee as appropriate and consistent with applicable regulations, laws and exchange listing standards.
EvaluationAt least annually, the Committee shall conduct an evaluation of its performance. The evaluation shall compare the performance of the Committee with the requirements of this Charter. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate.
Resources and AuthorityThe Committee shall have available to it the resources and authority appropriate to discharge its duties and responsibilities, including support from management personnel. The Committee shall also have the sole authority to select, retain and terminate (and approve or ratify the fees and other retention terms of) special or independent counsel, accountants, consultants and other advisors, including any search firm for identifying Board or committee candidates, as it deems necessary or appropriate without seeking approval of the Board or management. The Corporation shall provide appropriate funding to the Committee to allow the Committee to compensate any advisors retained by the Committee and to pay for ordinary administrative expenses of the Committee.
Ms. Pamela L. Carter Mr. John J. Zillmer Ms. Linda H. Riefler Ms. Linda H. Riefler
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