This excerpt taken from the AEPI DEF 14A filed Feb 27, 2008.
The Board of Directors and Committees
General. The Board currently consists of nine directors and is led by our Chairman, J. Brendan Barba. The Board has general oversight responsibility for our affairs and, in exercising its fiduciary duties, the Board represents and acts on behalf of the stockholders. Although the Board does not have responsibility for our day-to-day management, it stays informed about our business and provides guidance to our management through periodic meetings and other communications. The Board is deeply involved in our strategic planning process, leadership development and succession planning.
Meetings. The Board and its committees meet throughout the year on a set schedule, and also hold special meetings and act by written consent from time to time as appropriate. The independent directors hold regularly scheduled executive sessions to meet without management present, with rotating directors leading such sessions. These executive sessions generally occur around regularly scheduled meetings of the Board.
All directors are expected to attend all meetings, including the annual meeting of stockholders. The Board met three times during fiscal 2007. In fiscal 2007, each current director attended more than 75% of the aggregate of all meetings of the Board and the committees of which he was a member. All directors attended last year's annual meeting of stockholders.
Director Independence. The Board believes that there should be a substantial majority of independent directors on the Board. In fiscal 2007, the Board undertook its annual review of director independence in accordance with the applicable rules of Nasdaq. The independence rules include a series of objective tests, including that the director is not employed by us and has not engaged in various types of business dealings with us. In addition, the Board is required to make a subjective determination as to each independent director that no relationships exist which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, the Board reviewed and discussed information provided by the directors and us with regard to each director's business and personal activities as they may relate to us and our management. The Board has affirmatively determined, after considering all of the relevant facts and circumstances, that Messrs. Avia, Bell, Davis, Gallagher, Gelbard and Stewart are independent directors under the applicable rules of Nasdaq. Messrs. Barba, Feeney and Noll are employed by us and therefore are not independent directors.
Each of the members of the Audit Committee, Compensation Committee and Nominating Committee are independent under the Nasdaq rules. In addition, each member of the Audit Committee of the Board must qualify under special independence standards established by the Securities and Exchange Commission (the "SEC"). The Board has affirmatively determined that the members of the Audit Committee qualify as independent directors under SEC rules.
The Board has delegated various responsibilities and authority to Board committees. Each committee has regularly scheduled meetings and reports on its activities to the full Board. Each committee operates under a written charter approved by the Board, which is reviewed annually by the respective committee and the Board. Each committee's charter is posted on the Investor Relations
section of our website at www.aepinc.com. The table below sets forth the membership and meeting information for the three Board committees in fiscal 2007:
Audit Committee. The Audit Committee assists the Board in its general oversight of our financial reporting and internal controls functions, and is directly responsible for the appointment, retention, compensation and oversight of the work of our independent registered public accounting firm, currently KPMG. The responsibilities and activities of the Audit Committee are described in greater detail in the "Audit Committee Report" and the Audit Committee's charter.
The Board has determined that each Audit Committee member has sufficient knowledge in reading and understanding financial statements to serve on the Audit Committee. The Board has further determined that Messrs. Bell, Davis and Stewart qualify as "audit committee financial experts" in accordance with SEC rules. The designation of an "audit committee financial expert" does not impose upon such persons any duties, obligations or liability that are greater than are generally imposed on each of them as a member of the Audit Committee and the Board, and such designation does not affect the duties, obligations or liability of any other member of the Audit Committee or the Board.
Compensation Committee. The Compensation Committee administers the executive compensation program of the Company. The Compensation Committee's responsibilities include recommending and overseeing compensation and benefit plans and policies, approving equity grants and otherwise administering share-based plans, and reviewing annually all compensation decisions relating to the Company's executive officers and directors. The responsibilities and activities of the Compensation Committee are described in greater detail in "Compensation Discussion and Analysis" and the Compensation Committee's charter.
The Board has determined that members of the Compensation Committee, except Mr. Gelbard, qualify as "non-employee directors" as defined in Rule 16b-3 of the Securities Exchange Act of 1934, as amended ("Exchange Act").
Nominating Committee. The Nominating Committee is responsible for identifying individuals qualified to become Board members and recommending director nominees to the Board. The Nominating Committee's general view is to re-nominate incumbent directors who will continue to satisfy the Nominating Committee's criteria for membership on the Board, continue to make important contributions to the Board and consent to continue their service on the Board. As part of the selection and nomination process, the Nominating Committee reviews the experience, mix of skills and other qualities of a nominee to assure appropriate Board composition after taking into account the current Board members and the specific needs of us and the Board.
If a vacancy on the Board occurs, the Nominating Committee will actively seek individuals who have demonstrated excellence in their chosen field, high ethical standards and integrity, sound business judgment and appropriate financial and other expertise relevant to our business. The committee generally relies on multiple sources for identifying and evaluating nominees, including referrals from our current directors and management. In fiscal 2007, we did not employ a search firm or pay fees to other third parties in connection with identifying or evaluating Board nominee candidates.
The Nominating Committee will consider recommendations by stockholders with respect to elections to be held at an annual meeting, so long as such recommendations are sent on a timely basis to the Corporate Secretary in accordance with our Third Amended and Restated By-Laws and applicable law. See "Additional InformationRequirements for Submission of Stockholder Proposals for 2009 Annual Meeting" for additional information on director nominations by stockholders. The committee will evaluate nominees recommended by stockholders against the same criteria that it uses to evaluate other nominees. We did not receive any timely nominations of directors by stockholders for the 2008 annual meeting of stockholders.