|PAR PACIFIC HOLDINGS, INC.
CORPORATE GOVERNANCE GUIDELINES
Approved by the Board of Directors effective January 1, 2019
The following Corporate Governance Guidelines (the “Guidelines”) have been adopted by the Board of Directors (the “Board”) of Par Pacific Holdings, Inc. (the “Company” or “Par”) to assist the Board in the exercise of its responsibilities. These Guidelines reflect the Board’s commitment to monitor the effectiveness of policy and decision making both at the Board and management level, with a view to enhancing stockholder value over the long term. These Guidelines are in addition to, and are not intended to change or interpret, any federal or state law or regulation, including the Delaware General Corporation Law, New York Stock Exchange (“NYSE”) rules, or the Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws of the Company. The Guidelines are subject to modification from time to time by the Board, as such modifications may be recommended from time to time by the Nominating and Corporate Governance Committee of the Board (the “Nominating and Governance Committee”).
Size of the
The Board believes that it should generally have no fewer than five and no more than ten directors. This range permits diversity of experience without hindering effective discussion or diminishing individual accountability.
After due consideration of the recommendation of the Corporate Governance and Nominating Committee, the entire Board shall be responsible for nominating members for election to the Board and for filling vacancies on the Board that may occur between annual meetings of stockholders.
The Board shall consider individuals who have distinguished records for leadership and success in their area of activity and who will make meaningful contributions to the Board. Nominees for director shall be selected on the basis of broad experience, character, integrity, ability to make independent analytical inquiries, as well as their understanding of the Company’s business environment. Nominees shall be free from any conflict of interest that would interfere with their ability to properly discharge their duties as a director or would violate any applicable law or regulation.
It is the Board’s policy that its directors may not serve concurrently on more than four public company boards, including the Board. For the purposes of this limitation, a “public company board” is defined as (i) a board of a public corporation whose securities are registered with the United States Securities and Exchange Commission and which is subject to the reporting requirements of the Securities Exchange Act of 1934 and (ii) a board of a registered investment fund. If a director serves on multiple registered investment fund boards within the same investment fund family, the board service for such family of registered investment funds will only count as service on one board for purposes of the computation of the foregoing limitation. The Company’s Audit Committee Charter will limit the number of public company audit committees on which a committee member may simultaneously serve.
The Board believes that stockholders will benefit from the continuity, experience and stability that comes with longevity of service on the Board. As such, the Board does not believe it is appropriate to limit the terms of its directors or require retirement at a specific age.
of Independent Directors on Board
A majority of directors on the Board shall be independent directors (as defined in Section 6 hereof).
of Director Independence
The Board has adopted a definition of independent director which includes the NYSE definition of independent director. The Company’s definition of independent director is set forth in full below:
(a) No director qualifies as “independent” unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). References to the Company or another company include any parent or subsidiary in consolidated group with Par. The Company will disclose these determinations annually in its proxy statement.
(b) In addition, a director is not independent if:
(i) The director is, or has been within the last three years, an employee of the Company, or an immediate family member (as defined in the NYSE Listed Company Manual) who is, or has been within the last three years, an executive officer, of the Company. Employment as an interim Chairman or Chief Executive Officer (“CEO”) or other executive officer shall not disqualify a director from being considered independent following that employment.
(ii) The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). Compensation received by a director for former service as an interim Chairman or CEO or other executive officer need not be considered in determining independence under this test. Compensation received by an immediate family member for service as an employee of the Company (other than an executive officer) need not be considered in determining independence under this test.
(iii) (A) The director is a current partner or employee of a firm that is the Company’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time.
(iv) The director or an immediate family member is, or has been with the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee.
(v) The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. Both the payments and the consolidated gross revenues to be measured shall be those reported in the last completed fiscal year of such other company. The look-back provision for this test applies solely to the financial relationship between the Company and the director or immediate family member’s current employer; the Company need not consider former employment of the director or immediate family member. Contributions to tax exempt organizations shall not be considered payments for purposes of this test, provided however the Company shall disclose in its annual proxy statement, or if the Company does not file an annual proxy statement, in the Company’s annual report on Form 10-K filed with the SEC, any such contributions made by the Company to any tax exempt organization in which any independent director serves as an executive officer if, within the preceding three years, contributions in any single fiscal year from the Company to the organization exceeded the greater of $1 million, or 2% of such tax exempt organization's consolidated gross revenues. The Board is obligated to consider the materiality of any such relationship in accordance with Section 6(a) above.
This definition of independent director amends and supersedes any previous definition of independent director adopted or utilized by the Board.
6. Selection of Chairman of the
Board and Chief Executive Officer
The Board shall be free to choose its Chairman in any way that seems best for the Company at any given point in time. Therefore, the Board does not have a policy whether the role of the CEO and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee.
Who Change Their Present Job Responsibility
Upon termination of his or her primary occupation or other significant change in business/professional circumstances, a Board member shall inform the Board. The Board shall discuss whether or not such change is of a nature such that the Board asks the affected director for his or her resignation from the Board.
The basic responsibility of a director of the Company shall be to exercise his or her business judgment and act in a manner that he or she believes in good faith to be in the best interests of the Company and its stockholders. The Board shall be the ultimate decision-making body of the Company except with respect to those matters reserved to the stockholders. The Board shall select the Chairman of the Board and the CEO. The CEO in turn selects the Company’s senior management team, subject to Board approval. The Board shall elect all officers of the Company. Together, the CEO and senior management shall be charged with the conduct of the Company’s business. The Board acts as an advisor and counselor to the CEO and senior management and ultimately monitors their activities and their performance.
Obtain Independent Advisors
The Board has the power to retain outside counsel or other consultants or experts as the Board may deem appropriate in its sole discretion, and shall receive funding from the Company to engage such advisors, and have sole authority to approve related fees and retention terms.
Contact with Management
A Board member shall have complete access to Company management and may initiate contact with management at any time.
Interaction with Institutional Investors, Press and Customers
Directors will not be expected or generally requested to speak for the Company or otherwise communicate with the various constituencies of the Company. The Board believes that management generally should speak for the Company. It is suggested that each director shall refer all inquiries from institutional investors, the press or customers to Company management.
The Board of Directors maintains a process for stockholders or other interested parties to communicate with the Board or any Board member. Stockholders or interested parties who desire to communicate with the Board should send any communication to the Company’s Corporate Secretary, c/o Par Pacific Holdings, Inc., One Memorial City Plaza, 800 Gessner Road, Suite 875, Houston, Texas 77024. The Corporate Secretary will forward such communication to the full Board of Directors or to any individual director or directors to whom the communication is directed unless the communication is threatening or illegal, uses inappropriate expletive language or is similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or take appropriate legal action regarding the communication.
with Independent Auditors
Board members shall have complete
access to the independent auditors.
Orientation and Continuous Education
The Company has and will continue
to maintain orientation and education programs that contain written materials
and oral presentations for directors.
Each director is encouraged to
participate in continuing education programs pertinent to service on the
Board. To facilitate this participation,
the Company will pay the expenses of any director attending accredited director
In order to facilitate open discussion, the proceedings and deliberations of the Board and its committees shall be confidential. Each director shall maintain the confidentiality of information received in connection with his or her service as a director.
Only independent directors will receive compensation for service as directors. Non-independent directors will not receive compensation for service as directors. Compensation to independent directors, as established and reviewed periodically by the Compensation Committee or the Board, shall be the only compensation for Board and/or committee service. Compensation shall be in the form established by the Compensation Committee or the Board and should be competitive and consistent with the compensation paid by other similarly situated public companies.
Sessions of Independent Directors
The independent directors shall
meet at regularly scheduled executive sessions without Company management.
of the Board
The Board shall be responsible for annually conducting a self-evaluation to determine if the Board and its committees are functioning effectively. The Board shall be responsible for establishing the evaluation criteria and implementing the process for such evaluation.
There shall generally be four regularly scheduled meetings of the Board each year. Additional meetings may be held from time to time as the need arises. Directors are encouraged to attend all Board meetings called unless extenuating circumstances dictate otherwise. The Board does not have a policy requiring that all directors attend Company annual meetings of stockholders, but it encourages all directors to do so. Board materials related to agenda items should be provided to directors sufficiently in advance of a meeting to allow directors to review and study the materials in preparation for their discussion and consideration at the meeting. Directors are expected to review and study meeting materials in advance of each meeting.
Agenda Items for Board Meetings
Each Board member shall be free to suggest inclusion of items on the agenda as well as free to raise at any Board meeting subjects that are not specifically on the agenda for that meeting.
Names of Board Committees
The Company shall have four standing committees: Audit, Compensation, Executive, and Nominating and Corporate Governance. The duties for each of these committees shall be outlined in committee charters. The Board may form a new committee or disband a current committee depending on circumstances..
of Audit, Compensation, and Corporate Governance and Nominating Committees
The Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee shall be composed entirely of independent directors.
of Committee Members
The Board shall be responsible
for appointing the Chairs and members to the committees.
MANAGEMENT SUCCESSION PLANNING
The Board shall discuss with the CEO from time to time his current recommendations for succession planning in the event that all or a portion of the senior officers (including the CEO) should unexpectedly become unable to perform their duties. The Board shall review succession planning at least annually.
DISCLOSURE OF CORPORATE GOVERNANCE GUIDELINES
of Corporate Governance Guidelines
These Corporate Governance Guidelines will be made available on the Company’s website.