Increase in Mandatory Retirement Age of Directors to Age 72
The Board of Directors has adopted, declared advisable and is submitting for stockholder approval an amendment to the Company's Bylaws to increase the mandatory retirement age for directors from age 70 to age 72. The adoption of this amendment requires approval of not less than 80% of the outstanding shares of common stock entitled to vote.
The final sentence of Article II, Section 5 of the Company's Bylaws currently provides as follows:
"No person shall be elected a director of the Corporation after having attained the age of seventy years."
For the reasons set forth below, the Company's Board of Directors has adopted and is submitting for stockholder approval an amendment to this provision of the Bylaws to increase the mandatory retirement age for directors to age 72.
The Board believes that 72, rather than 70, is a more appropriate retirement age for the Company's directors. The current retirement age could deter well-qualified candidates who are approaching the mandatory retirement age from agreeing to serve as directors and could result in the premature retirement of experienced directors who are valuable members of the Board of Directors with deep knowledge of the Company's history and operations. Increasing the mandatory retirement age to 72 would give the Company the opportunity to benefit from the valuable expertise of directors for a longer time, while maintaining a mandatory retirement age that is in line with the average retirement age of directors of major corporations.
The Company's current mandatory retirement age is not in alignment with the practices of the Peer Group Companies, discussed below, against which the Company compares itself for executive compensation purposes. Based on the 2014 proxy filings and publicly-available corporate governance guidelines of the Peer Group Companies, eleven of the twelve Peer Group Companies have a mandatory retirement age higher than that of the Company or have no mandatory retirement age at all.
|Number of Peer Group Companies||Mandatory Retirement Age|
|5||No mandatory retirement age|
Increasing the Company's mandatory retirement age for directors to age 72 will bring the Company into better alignment with the Peer Group Companies and allow the Company to be more competitive with its peers in the recruitment of experienced directors.
If the proposed amendment is approved by stockholders, the final sentence of Article II, Section 5 of the Company's Bylaws will be amended to read as follows:
"No person shall be elected a director of the Corporation after having attained the age of seventy-two years."
If approved by the stockholders, this amendment to the Company's Bylaws will become effective immediately upon approval, and the Board of Directors will also make conforming changes to its corporate governance guidelines regarding the retirement age for directors.
The Board of Directors recommends a vote "FOR" the proposal to amend the Company's Bylaws to increase the mandatory retirement age of directors to age 72.