Corporate Governance Guidelines
The following Corporate Governance Guidelines shall provide the principles by which the Board of Directors of Met-Pro Corporation intends generally to organize and execute its responsibilities along with the requirements of the Company’s Articles of Incorporation, Bylaws and the laws and regulations governing the Company and its Board of Directors. These Guidelines have been developed by the Corporation’s Corporate Governance and Nominating Committee, which shall review these Guidelines at least annually and recommend to the full Board of Directors any changes that are deemed necessary or appropriate.
Composition
of the Board
| 1. |
A majority of the Board of Directors shall be comprised of independent Directors as determined under the guidelines established by the New York Stock Exchange and other applicable regulation and/or law. Other Directors may be members of Met-Pro management as well as other persons who are not members of management and who are not deemed to be independent. |
| 2. |
No Director shall be deemed to be independent unless the Board 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). |
| 3. |
The Board has established the following standards for determining Director Independence: |
a) |
Categorical Standards. A Director shall not be deemed independent if, within the period prescribed by the New York Stock Exchange or other applicable regulation or law: |
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i. |
the Director was employed by the Company during the prior three years (excluding service as an interim Chairman and/or CEO of Met-Pro); |
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ii. |
someone in the Director’s immediate family was employed as an “executive” of the Company during the prior three years (excluding service as an interim Chairman of Met-Pro); |
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iii. |
the Director was employed by or affiliated with the Company’s present or former internal auditor or outside independent auditor; |
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iv. |
someone in the Director’s immediate family was employed or affiliated with the Company’s present or former internal auditor or outside independent registered public accounting firm in a professional capacity; |
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v. |
the Director or someone in her/his immediate family was employed as an executive of another entity that concurrently has or had as a member of its compensation committee of the Board of Directors any of the Company’s executives; or |
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vi. |
the Director received, or someone in the Director’s immediate family received, more than $30,000 per year (i.e., during any twelve month period) in direct 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) and, in the case of an immediate family member, other than compensation for service as a non-executive employee of the Company. |
b) |
In addition, a Director shall not be deemed independent if: |
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i. |
the Director is an executive or employee, or someone in her/his immediate family is an executive of, another company that, during any of the other company’s past three fiscal years made payments to, or received payments from, the Company for property or services in an amount which, in any single fiscal year of the other company, exceeds $250,000 or one-half of one percent, whichever is greater, of the other company's consolidated gross revenues; or |
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ii. |
the Director serves as an executive of a charitable organization and, during any of the charitable organization’s past three fiscal years, the Company made charitable contributions to the charitable organization in any single fiscal year of the charitable organization that exceeded $30,000 or one-half of one percent, whichever is greater, of the charitable organization’s consolidated gross revenues. |
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iii. |
For the purposes of these categorical standards, the terms “immediate family member” and “executive” shall have the meanings set forth in the New York Stock Exchange’s corporate governance rules. |
c) |
For relationships not prohibited by the guidelines in subsection a or b above, the determination of whether the Director would be independent or not shall be made by the Board of Directors, unless an independence determination is otherwise precluded by a listing or regulatory requirement.
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| 4. |
In accordance with the Company’s Articles and Bylaws, the size of the Board of Directors is determined by the Board of Directors from time to time. |
| 5. |
The nomination of candidates for election to the Board of Directors is the responsibility of the Board of Directors. The identification, evaluation and recommendation of candidates for nomination for election is the responsibility of the Corporate Governance and Nominating Committee, taking into consideration input from other members of the Board, input from management and candidates recommended by shareholders. Recommendations of candidates by shareholders should be submitted to the Chairman of the Corporate Governance and Nominating Committee at least 120 days before the anniversary date on which the Company first mailed its proxy materials for the prior year’s annual meeting of shareholders. |
| 6. |
Candidates for nomination to the Board shall be considered based on their personal abilities and qualifications, independence, and the diversity of their expertise and experience in fields and disciplines relevant to the Company, including financial expertise. Due consideration shall also be given to the position the candidate holds at the time of their nomination and their capabilities to advance the Company’s interests with its various constituencies, as well as to a candidate’s race and gender, as part of the Company’s commitment to diversity. |
| 7. |
The Board believes that having three classes of Directors, with as nearly equal number of members as practicable, serves the best interests of the Company and provides for the effective continuance of the knowledge and experience gained by the members of the Board. |
| 8. |
Prior to the meeting of the Board of Directors to consider the Company’s proxy statement for the annual meeting of shareholders, the Chair of the Corporate Governance and Nominating Committee and the Chairman of the Board (or, if the term of one or both of them shall presently be expiring, other independent Director(s) whose term(s) shall not presently be expiring, as selected by a majority of the independent Directors whose terms shall not presently be expiring) shall confer to discuss the appropriateness of nominating the Directors whose term is presently expiring for re-election to another term. In determining whether to recommend a Director for re-election, consideration shall be given to, among other things, the Director’s past attendance at meetings and participation in and contributions to the activities of the Board. The Chair of the Corporate Governance and Nominating Committee shall then make a recommendation to the Corporate Governance and Nominating Committee regarding the Director’s re-nomination. |
| 9. |
Directors are expected to devote sufficient time to fulfill their responsibilities as Directors in accordance with these Corporate Governance Guidelines. Accordingly, Directors may serve on the boards of directors of other public companies, as well as other boards of directors and boards of trustees, but shall limit such service to a reasonable amount so as not to conflict with or detract from his or her effectiveness as a Met-Pro Director. |
| 10. |
Directors are expected to inform the Chairman of the Board and the Chairman of the Corporate Governance and Nominating Committee of any public company directorships that they have been offered before accepting such a directorship. In addition, no Director shall serve on the board of directors of any Met-Pro competitor. |
| 11. |
The Board does not believe that it should establish term limits. Term limits have the disadvantage of causing the loss of the contribution of Directors who have developed, over a period of time, meaningful insight into the Company and its operations, and therefore can provide an increasing contribution to the Board as a whole. |
| 12. |
Any new Director whose term begins on or after January 1, 2004 shall be required to retire at the end of the term of service in which the Director turns age 70. All Directors in office prior to January 1, 2004 shall be required to retire at the end of the term of service in which the Director turns age 75. |
| 13. |
Directors are expected to report to the Chairman of the Board and the Chairman of the Corporate Governance and Nominating Committee when they experience a significant change in their business or professional affiliation or responsibility or the location of their office or home and to offer to resign from the Board. The Corporate Governance and Nominating Committee, in consultation with the Chairman of the Board, shall then determine whether the Director continues to adequately meet the Company’s needs for continued service on the Board and whether or not to accept the resignation. If the Director in question is the Chairman of the Board or the Chairman of the Corporate Governance and Nominating Committee, the other independent Directors as a group shall determine whether the resignation shall be accepted. |
| 14. |
The Board’s policy is that the positions of Chairman and Chief Executive Officer be held by the same person, except in unusual circumstances such as a transition in leadership. The Board believes this combination has served the Company well over many years by providing unified leadership and direction. Notwithstanding this, the Board retains the discretion to separate these positions in the future. |
| 15. |
The Board endorses the role of a Lead Director, who shall be the Chairman of the Corporate Governance and Nominating Committee unless the independent Directors shall otherwise determine. The Lead Director shall make recommendations to the Board regarding the structure of Board meetings; recommend matters for consideration by the Board; consult with the Chairman of the Board as to the agenda for each Board meeting and appropriate materials for each meeting, and the annual calendars for Board and committee meetings; serve as an independent point of contact for shareholders wishing to communicate with the Board, other than through the Chairman of the Board; preside at meetings of the independent Directors, and determine the agendas for such meetings; and such other duties as the Board may from time to time determine. |
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| Responsibilities of the Board |
| 1. |
It is the responsibility of the Board to provide guidance and direction on the Company’s general business goals and strategy, and to provide general oversight of, and direction to, management so that the affairs of the Company are conducted in the long-term interests of all its shareholders. |
| 2. |
The Board, directly and through its committees, is responsible for: (a) oversight of the preparation of the Company’s financial statements; (b) oversight of the Company’s compliance with legal and regulatory requirements; (c) the selection and oversight of the Company’s independent registered public accountants; (d) the establishment of an internally consistent and externally competitive executive compensation program designed to attract, retain and incent qualified executives and approval of the annual and long-term compensation of the Company’s Chief Executive Officer (the “CEO”) and executives; (e) the identification and selection of qualified individuals to become Board members; (f) the development and review of appropriate Corporate Governance Guidelines; (g) the development and periodic review of a management succession plan for the CEO and other executives as appropriate; and (h) the review, approval and monitoring of fundamental financial and business strategies and major corporate actions. |
| 3. |
The Board shall review and, if it deems appropriate, approve changes to these Corporate Governance Guidelines that have been recommended to the Board by the Corporate Governance and Nominating Committee. |
| 4. |
The Board believes that the Company should maintain an appropriate code of ethical business conduct applicable to all of the Company’s employees that addresses: (i) conflicts of interest, (ii) corporate opportunities, (iii) confidentiality, (iv) fair dealing, (v) protection and proper use of company assets, (vi) compliance with laws, rules, and regulations, (vii) encouraging the reporting of any illegal or unethical behavior and (viii) such other matters as the Board deems appropriate. The Corporate Governance and Nominating Committee shall annually review and recommend any changes to this code that it believes are appropriate and shall oversee management’s practices as to dissemination and employee adoption of this code. |
| 5. |
The Board believes that the Company should in addition to the code referenced above maintain a separate and distinct code of ethical and business conduct applicable to the CEO and the Chief Financial Officer (the “CFO”), designed to promote: (i) honest and ethical conduct, (ii) full, fair, accurate, timely, and understandable disclosure in the periodic reports, proxy statements, and other filings under the Securities Exchange Act that are required to be filed by the Company, (iii) compliance with applicable governmental rules and regulations, (iv) the prompt internal reporting of violations of the codes, (v) a responsible and ethical corporate cultural and “tone at the top” and (vi) the accountability for adherence to this code and other applicable codes. The Corporate Governance and Nominating Committee shall annually review and recommend any changes to this code that it believes are appropriate and shall oversee management’s practices as to dissemination and adoption of this code. |
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| Operation of the Board and Responsibilities of Board Members |
| 1. |
Directors are expected to attend all regularly scheduled Board meetings, presently six in number, all regularly scheduled meetings of the committees of which they are members, and the annual meeting of shareholders, and to make every effort to attend special meetings of the Board and of the committees of which they are members. The Board expresses a strong preference for in person attendance at each such meeting but recognizes that from time to time other commitments may require a Board member to attend a meeting by conference telephone. Board members are expected to have reviewed prior to the meeting the written materials that are distributed in advance of the meeting. |
| 2. |
The Board believes that maintaining confidentiality of Met-Pro’s confidential information and Board and committee deliberations is an affirmative obligation of each Board member. |
| 3. |
Directors must disclose to the rest of the members of the Board any potential conflict of interest they may have with respect to a matter under discussion and, if appropriate, refrain from voting on a matter as to which they may have a conflict. |
| 4. |
The Board of Directors believes that certain of its responsibilities can be fulfilled most effectively through the operation of committees. Each of these committees shall be designated by the Board and shall have a written charter intended to meet all legal and stock exchange requirements that shall be reviewed periodically by the full Board. At present, the Board believes that three committees are appropriate: Audit, Corporate Governance and Nominating, and Compensation and Management Development Committees. The Board shall review and, if it deems appropriate, approve changes to the committee charters that have been recommended to the Board by such committees. |
| 5. |
The Corporate Governance and Nominating Committee, in consultation with the Chairman of the Board, shall propose the members of the committees as well as a chairman of each committee to the Board of Directors for review and approval. The Board’s current view is that committee appointments shall be for a two year term. The Board does not believe there is any per se value in imposing a limit on the number of terms that a Board member may serve on a given committee. |
| 6. |
The Chairman of the Board, in consultation with the Lead Director, shall establish the agenda for each Board of Directors meeting. Each Board member is encouraged to submit items for consideration for inclusion. The Chairman of each committee shall establish the agenda for each meeting of such committee, in consultation with the Chairman of the Board, and each committee member is encouraged to submit items for consideration for inclusion. The Chairman of each committee may determine the extent to which attendance and participation by guests at a meeting shall be permitted, including Directors who are not members of the committee. |
| 7. |
At the meetings of the Board, the Directors shall review and discuss reports by management on the performance of the Company, its strategic and operating plans and any significant issues facing the Company. Such matters may also be reviewed in committee meetings, to the extent within the scope of the committee and as the Board may from time to time determine it is management’s responsibility to submit important information and data to the Board of Directors in writing in advance of each Board and committee meeting. |
| 8. |
The Board of Directors shall have such access to management as it deems necessary or desirable for the accomplishment of its responsibilities. The Board, including the independent members of the Board, has the authority, in its discretion and at the Company’s expense, to retain independent advisors. |
| 9. |
Met-Pro’s senior management, as distinguished from individual Directors, shall provide the public voice of Met-Pro, other than in unusual circumstances. |
| 10. |
The independent Directors shall meet as a group in executive session at the conclusion of each Board meeting in a session led by the Lead Director, unless the independent Directors shall determine otherwise at the time. |
| 11. |
The Board of Directors shall establish a self-evaluation process and annually engage in a self-evaluation. These discussions shall typically be led by the Lead Director. |
| 12. |
The Compensation and Management Development Committee shall periodically review the compensation package for Board and committee membership and shall make recommendations to the Board of Directors for any changes. The Board should make changes in its Director compensation only upon recommendation by the Compensation and Management Development Committee. Both the Compensation and Management Development Committee and the Board should be guided by the following principles: compensation should fairly pay Directors for the work required; compensation should align Directors’ interests with the long-term interests of shareholders, while not calling into question their objectivity; and the structure of the compensation should be simple, transparent and easy for shareholders to understand. |
| 13. |
These Guidelines may be waived or changed only by the Board of Directors. |
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| (Last amended: June 28, 2010) |
Corporate
Governance Guidelines | Code of
Conduct & Ethics
Whistleblower Policy | Board
Committees |
