This excerpt taken from the GMCR DEF 14A filed Jan 25, 2007.
The Board of the Company met seven times in fiscal 2006. During that year each of the directors attended at least 75% of the aggregate of all meetings of the Board and committees of which he or she was a member. Following the 2007 Annual Meeting, provided that the nominees, Ms. Carlini and Ms. Miller, are re-elected to the Board, the Board has determined that a majority of the directors will be independent as required by the NASD Marketplace Rules (the NASDAQ Rules). The Board has affirmatively determined by resolution that directors (or nominees) Davis, Carlini, Miller and Moran are independent within the meaning of Rule 4200(a)(145) of the NASDAQ Rules. During fiscal 2006 the independent directors attended three special executive session meetings in which no other directors were present.
Although the Company does not have a formal policy regarding attendance by members of the Board at the Companys Annual Meeting of Stockholders, it encourages directors to attend and historically more than a majority have done so. All members of the Board who were members on March 16, 2006, the date of the last annual meeting of stockholders, attended the meeting.
Historically, the Company has not adopted a formal process for stockholder communications with the Board. In view of the infrequency of stockholder communications to the Board, the Board does not believe that a formal process is necessary. Every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. The Company believes its responsiveness to stockholder communications to the Board has been excellent.
Governance and Nominating Committee. The principal function of the Boards standing Governance and Nominating Committee is to review and recommend qualified candidates to the Board for nomination for election to the Board. Directors Carlini, Miller (Chairperson) and Moran constituted this committee in fiscal 2006. Each of these directors is considered an independent director as prescribed by the NASDAQ Rules. The committee met three times in fiscal 2006.
The Governance and Nominating Committee will consider director candidates recommended by stockholders. Recommendations may be sent to the Governance and Nominating Committee c/o Frances G. Rathke, Secretary, Green Mountain Coffee Roasters, Inc., 33 Coffee Lane, Waterbury, VT 05676.
The Board has adopted a charter for the Governance and Nominating Committee. The Governance and Nominating Committee Charter is posted on the Companys website. The Internet address for the Companys website is http://www.GreenMountainCoffee.com and the Governance and Nominating Committee Charter may be found as follows:
Historically, the Company has not had a formal policy concerning stockholder recommendations of nominees to the Board or the Governance and Nominating Committee. To date, the Company has not received any recommendations from stockholders requesting consideration of a candidate for inclusion among the Committees slate of nominees in the Companys proxy statement. The absence of such a policy does not mean, however, that a recommendation would not have been considered had one been received.
In evaluating director nominees, the Governance and Nominating Committee considers the following factors:
The Governance and Nominating Committees goal is to assemble a Board of Directors that brings to the Company a variety of perspectives and skills derived from business and professional experience. In doing so the Governance and Nominating Committee also considers candidates with appropriate non-business backgrounds.
Other than the foregoing guidelines there are no stated minimum criteria for director nominees, although the Governance and Nominating Committee may also consider such other factors as it may deem are in the best interests of the Company and its stockholders. In its deliberations, the Governance and Nominating Committee is aware that one member of the Board should meet the criteria for an audit committee financial expert as defined by SEC rules, and that a majority of the members of the Board must be comprised of independent directors as defined in Rule 4200 of the NASDAQ Rules. The Governance and Nominating Committee also believes it appropriate for Companys management to participate as members of the Board.
The Governance and Nominating Committee identifies nominees by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and experience that are relevant to the Companys business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service or if the Governance and Nominating Committee or the Board decides not to re-nominate a member for re-election, the Governance and Nominating Committee identifies the desired skills and experience of a new nominee in light of the criteria above. Current members of the Governance and Nominating Committee and Board are polled for suggestions as to individuals meeting the criteria of the Governance and Nominating Committee. Research may also be performed to identify qualified individuals. In October 2006, the Company engaged Spencer Stuart, an executive recruiting firm, to assist in identifying potential candidates for the Board with the intention of appointing one or two new Board members in fiscal 2007.
Compensation Committee. The Boards standing Compensation Committee, composed of non-employee directors, establishes, implements and monitors the strategy, policies and plans of the Company for the compensation of all executive officers of the Company. Its duties include reviewing and determining the compensation of the executive officers of the Company, including setting any Company or business unit performance goals. Directors Carlini (Chairperson), Davis, Miller and Moran constituted this Committee in fiscal 2006. All of these directors are independent within the meaning of Rule 4200 of the NASDAQ Rules. The Committee met five times during fiscal 2006.
Audit Committee. The Audit Committee currently consists of Directors Carlini, Davis (Chairperson), and Miller, each of whom satisfies the audit committee independence standard under Section 301 of the Sarbanes-Oxley Act of 2002 and Rule 4200 of the NASDAQ Rules. The Board has determined that Mr. Davis is an audit committee financial expert, as that term is defined in Item 401(h) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the Exchange Act). The principal duties and responsibilities of the Audit Committee are to:
The Audit Committee met eight times during fiscal 2006. Seven of these eight meetings included the PricewaterhouseCoopers LLP audit partner, the audit manager, as well as the Companys Chief Financial Officer and Senior Internal Auditor and other members of management. Additional information regarding the Audit Committee and the Companys independent registered public accounting firm is disclosed under the heading Independent Registered Public Accounting Firm and Audit Committee Report.
The Audit Committee Report below, and the Performance Graph on page 19, shall not be deemed to be soliciting material or to be filed with the Securities and Exchange Commission or subject to Regulation 14A or 14C under the Exchange Act, or to the liabilities of Section 18 of the Exchange Act. Notwithstanding anything to the contrary set forth in any of the Companys previous filings under the Securities Act of 1933 or the Exchange Act that might incorporate future filings, including this Proxy Statement, in whole or in part, neither of the reports nor the Performance Graph shall be incorporated by reference into any such filings.