Corporate Governance Guidelines
Amended and Restated as of May 22, 2019
The board of directors (the “Board”) of CompX International Inc., a Delaware corporation (the “Company”), has adopted these Corporate Governance Guidelines to assist the Board in exercising its responsibilities. These are only guidelines that the Board will review, and may modify, from time to time. Except where these guidelines reflect requirements of the NYSE American (the “AMEX”) for listed companies, they are neither intended to be, nor are they, rigid rules that govern the Board’s activities. These guidelines do not, and are not intended to, modify or constitute an interpretation of the Delaware General Corporation Law, the Company’s certificate of incorporation or bylaws or any federal, state or local law or regulation.
I. Board of Directors - Organization
A. Director Qualification Guidelines and Independence Standards
The Board is responsible for nominating candidates for election and re-election as directors. As permitted by the listing standards of the NYSE American, the Board has chosen not to have a nominating committee. The Board has no specific minimum qualifications for director candidates. Board members should possess (i) the necessary business background, skills and expertise at the policy-making level and (ii) a willingness to devote the required time to the duties and responsibilities of Board membership.
The Board does not restrict directors from serving on boards or committees of other organizations, provided that such service does not interfere with their ability to satisfy their responsibilities for Board membership. However, the charter of the audit committee of the Board requires Board approval for service on more than three non-affiliated public company audit committees.
In determining the independence of a director, the Board will apply the requirements of the listing standards of the NYSE American and other applicable laws or regulations that may be implemented from time to time. As permitted by the listing standards of the NYSE American, the Board may from time to time choose not to have a majority of independent directors.
The Board has not established a retirement age or term limits for directors. The Board believes that experience as a director of the Company is a valuable asset and that directors who have served on the Board for an extended period of time are able to provide important insight into the operations and future of the Company.
B. Board and Committee Structure
The Board determines from time to time the number of directors that comprises the Board within the limits prescribed by the Company’s bylaws. Directors generally serve for a one-year term and until their successors are elected. Vacancies on the board will be filled as prescribed by the Company’s bylaws.
In accordance with the Company’s bylaws, the Board may establish such committees as the Board deems appropriate. The Board currently has an audit committee and a management development and compensation committee. Directors who are members of the audit committee must meet the applicable independence and other requirements of the listing standards of the NYSE American. The operation and responsibilities of the audit committee are governed by the audit committee charter approved by the Board. While the members of the management development and compensation committee currently satisfy the independence requirements of the NYSE American listing standards, the Company has chosen not to satisfy all of the NYSE American listing standards for such committee. The operation and responsibilities of the management development and compensation committee, and any other committee that the Board may establish in the future, will be governed by the Board. As permitted by the listing standards of the NYSE American, the Board has chosen not to have a nominating/corporate governance committee.
II. Director Responsibilities
A. Collective Responsibilities
The Board is responsible for the review of the strategic direction and significant policies of the Company and the oversight and governance of the Company. Directors carry out this responsibility through individual preparation, group discussion and the exercise of their collective business judgment.
As part of its responsibility, the Board or a committee of the Board to which the task is delegated will review and, if applicable approve, all matters required by applicable law, including the following matters:
- the annual selection of the Company’s executive officers;
- the Company’s quarterly and annual financial reports and proxy statement and other matters submitted to a vote of its stockholders; and
- material acquisitions, divestitures, mergers and other strategic transactions involving the Company that are material to the Company and not in the ordinary course of its business.
In addition, the Board or a committee of the Board to which the task is delegated will monitor:4
- the Company’s compliance with its Code of Business Conduct and Ethics, which includes compliance with applicable laws and regulations;
- the Company’s compliance with its Policy Regarding Related Party Transactions;
- the Company’s performance against the strategic and business plans and related financial objectives developed by management;
- the Company’s financial reporting, disclosure processes, internal controls and risk management practices; and
- the performance of the Company’s executive officers, including the chief executive officer, and the compensation of the executive officers who are compensated directly by the Company.
B. Individual Responsibilities
Among other things, the Board expects each director:
- to adhere to the Company’s Code of Business Conduct and Ethics, and to inform the chair of the audit committee about any actual or potential conflicts of interest involving the director that may arise;
- to understand the Company’s businesses and the market and regulatory environments in which they operate;
- to regularly attend meetings of the Board and each committee on which he serves; and
- to review and understand the agenda and related materials provided to the director in preparation for Board and committee meetings.