Nominating and Corporate Governance Committee
This Nominating and Corporate Governance Committee Charter (the “Charter”) was adopted by the Board of Directors (the “Board”) of Allison Transmission Holdings, Inc. (the “Company”) on August 10, 2017.
The purpose of the Nominating and Corporate Governance Committee of the Board (the “Committee”) is to assist the Board in discharging the Board’s responsibilities regarding:
- the identification of qualified candidates to become Board members;
- the selection of nominees for election as directors at the next annual meeting of stockholders (or special meeting of stockholders at which directors are to be elected);
- the selection of candidates to fill any vacancies on the Board or on the committees of the Board;
- (c)(d) review and approve all forms of compensation to be provided to the directors of the Company; and
- oversight of the evaluation of the Board.
In addition to the powers and responsibilities expressly delegated to the Committee in this Charter, the Committee may exercise any other powers and carry out any other responsibilities delegated to it by the Board from time to time consistent with the Company’s bylaws. The powers and responsibilities delegated by the Board to the Committee in this Charter or otherwise shall be exercised and carried out by the Committee as it deems appropriate without requirement of Board approval, and any decision made by the Committee (including any decision to exercise or refrain from exercising any of the powers delegated to the Committee hereunder) shall be at the Committee’s sole discretion. While acting within the scope of the powers and responsibilities delegated to it, the Committee shall have and may exercise all the powers and authority of the Board. To the fullest extent permitted by law, the Committee shall have the power to determine which matters are within the scope of the powers and responsibilities delegated to it. Notwithstanding anything in this Charter to the contrary, all responsibilities of the Committee that are required under the rules of the New York Stock Exchange to be performed by directors who satisfy the independence requirements of New York Stock Exchange (the “Independent Directors”) shall be performed solely by the members of the Committee who are Independent Directors.
The Committee shall be comprised of at least three (3) directors, as determined by the Board, each of whom has experience, in the business judgment of the Board, that would be helpful in addressing the matters delegated to the Committee.
The members of the Committee, including the Chairperson (the “Chair”) of the Committee, shall be appointed by the Board. Committee members may be removed from the Committee, with or without cause, by the Board. Any action duly taken by the Committee shall be valid and effective, whether or not the members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership provided herein.
III. Meetings and Procedures
The Chair (or in his or her absence, a member designated by the Chair) shall preside at each meeting of the Committee and set the agendas for Committee meetings. The Committee shall have the authority to establish its own rules and procedures for notice and conduct of its meetings so long as they are not inconsistent with any provisions of the Company’s bylaws that are applicable to the Committee.
The Committee shall meet on a regularly scheduled basis at least two (2) times per year or more frequently as the Committee deems necessary or desirable.
The Committee may, at its discretion, include in its meetings members of the Company’s management, or any other person whose presence the Committee believes to be desirable and appropriate. Notwithstanding the foregoing, the Committee may exclude from its meetings any person it deems appropriate, including but not limited to, any non-management director who is not a member of the Committee.
The Committee may retain any independent counsel, experts or advisors that the Committee believes to be desirable and appropriate. The Committee may also use the services of the Company’s regular legal counsel or other advisors to the Company. The Company shall provide for appropriate funding, as determined by the Committee, for payment of compensation to any such persons employed by the Committee and for ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties. The Committee shall have the authority to retain and terminate any search firm to be used to identify director candidates, including the authority to approve such search firm’s fees and other retention terms.
The Chair shall report to the Board regarding the activities of the Committee at appropriate times and as otherwise requested by the Chairperson of the Board.
IV. Duties and Responsibilities
(a) At an appropriate time prior to each annual meeting of stockholders at which directors are to be elected or reelected, the Committee shall recommend to the Board for nomination by the Board such candidates as the Committee, in the exercise of its judgment, has found to be well qualified and willing and available to serve.
(b) At an appropriate time after a vacancy arises on the Board or a director advises the Board of his or her intention to resign, the Committee shall recommend to the Board for appointment by the Board to fill such vacancy, such prospective member of the Board as the Committee, in the exercise of its judgment, have found to be well qualified and willing and available to serve.
(c) At an appropriate time after a vacancy arises on a committee of the Board or a director advises the Board or committee chair of his or her intention to resign, the Committee shall recommend to the Board for appointment by the Board to fill such vacancy, such prospective member of the Board as the Committee, in the exercise of its judgment, have found to be well qualified and willing and available to serve.
(d) For purposes of (a) (b) and (c) above, the Committee may consider the following criteria, among others the Committee shall deem appropriate, in recommending candidates for election to the Board:
- (a) At an appropriate time prior to each annual meeting of stockholders at which directors are to be elected or reelected, the Committee shall recommend to the Board for nomination by the Board such candidates as the Committee, in the exercise of its judgment, has found to be well qualified and willing and available to serve.
- personal and professional integrity, ethics and values;
- experience in corporate management, such as serving as an officer or former officer of a publicly held company, and a general understanding of elements relevant to the success of a publicly-traded company in today’s business environment;
- experience in the Company’s industry and with relevant social policy concerns;
- experience as a board or committee member of another publicly held company;
- academic expertise in an area of the Company’s operations; and
- practical and mature business judgment, including the ability to make independent analytical inquiries.
- equity ownership in the Company; and
- gender and racial diversity, which includes the Committee’s commitment to actively seek women and minority candidates for the pool from which new Board candidates are chosen.
- The Committee shall periodically review the performance of each current director and the Committee shall consider the results of such evaluation when determining whether or not to recommend the nomination of such director for an additional term.
- In appropriate circumstances, the Committee, in its discretion, shall consider and may recommend the removal of a director for cause, in accordance with the applicable provisions of the Company’s certificate of incorporation and bylaws.
- The Committee shall review and approve or ratify all related party transactions in which any executive officer, director, director nominee or more than 5% stockholder of the Company, or any of their immediate family members, have a direct or indirect material interest, and review reports and disclosures of related party and affiliated party transactions.
- The Committee shall review and approve compensation plans and programs for non-employee directors of the Company.
- The Committee shall oversee the Company’s compliance with any applicable laws, rules, regulations or guidelines related to compensation of non-employee directors of the Company.
- The Committee shall oversee the Board in the Board’s annual review of its performance (including its composition and organization), and will make appropriate recommendations to improve performance.
- The Committee shall consider, develop and recommend to the Board such policies and procedures with respect to the nomination of directors or other corporate governance matters as may be required or required to be disclosed pursuant to any rules promulgated by the Securities and Exchange Commission or otherwise considered to be desirable and appropriate in the discretion of the Committee.
- The Committee shall evaluate its own performance on an annual basis, including its compliance with this Charter, and provide the Board with any recommendations for changes in procedures or policies governing the Committee. The Committee shall conduct such evaluation and review in such manner as it deems appropriate.
- The Committee shall periodically report to the Board on its findings and actions
- The Committee shall review and reassess this Charter at least annually and submit any recommended changes to the Board for its consideration.
V. Delegation of Duties
In fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee of the Committee, to the extent consistent with the Company’s certificate of incorporation, bylaws and applicable law and rules of markets in which the Company’s securities then trade.
VI. Consistency With Certificate
To the extent that any provision or section of this Charter may be inconsistent with any article, provision or section of the Certificate of Incorporation or By-Laws of the Company or any applicable law or regulation, the Certificate of Incorporation or the Bylaws or the law or regulation, as appropriate, shall fully control.
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