CORPORATE GOVERNANCE GUIDELINES
BRT APARTMENTS CORP.
Effective March 11, 2021
The Board of Directors (the "Board") of BRT Apartments Corp. (the "Company") has adopted the following Third Amended and Restated Corporate Governance Guidelines (the "Guidelines") to assist the Board in the exercise of its responsibilities and to serve the best interests of the Company and its stockholders. These Guidelines should be interpreted in the context of all applicable laws and the Company's Articles of Incorporation (“Charter”), Bylaws (“Bylaws”) and other corporate governance documents. The Guidelines are subject to modification from time to time by the Board as the Board may deem appropriate in the best interests of the Company and its stockholders or as required by applicable laws and regulations. In the event of any inconsistency between the Company’s Charter and/or Bylaws (collectively the “Organizational Documents”), on the one hand, and these Guidelines on the other hand, the Organizational Documents shall govern.
These Guidelines shall be made available on the Company's website at www.brtapartments.com and to any stockholder who requests a copy.
Size of the Board
Pursuant to the Organizational Documents, the Board will consist of ten directors, subject to increase or decrease as determined by the Board. The Board will periodically review the size of the Board, and determine the size that is most effective in relation to the Company's operations.
Independence of the Board
The Board will be comprised of a majority of directors who qualify as independent directors (the “independent directors”) under Sections 303A.01 and 303A.02 of the New York Stock Exchange (the “NYSE”) Listed Company Manual (the “Manual”). Further, to assist the Board in making independence determinations with respect to relationships individual directors have that are not covered by the Section 303A.02(b) of the Manual but may be subject to review under Section 303A.01(a)(i) of the Manual, the Board has adopted the following categorical standard for director independence (the “Categorical Independence Standard”) and has determined that the following transactions shall not be deemed to be a material relationship or transaction that would cause a director not to be independent:
The Nominating and Corporate Governance Committee (the “Nominating Committee”) will review annually the relationships that each Non-Management Director (as defined) has with the Company, other than those meeting the requirements of Categorical Independence Standard and will make recommendations to the Board as to the independence of such director.
Any nominee for director who is an incumbent director but who is not elected by the vote required in the Organization Documents, and with respect to whom no successor has been elected, shall promptly tender his or her offer to resign to the Board for its consideration. The Nominating Committee shall consider such offer and shall recommend to the Board whether to accept the offer to resign. No later than the next regularly scheduled Board meeting to be held at least ten days after the date of the election, the Board shall decide whether to accept the offer to resign. The Board will promptly and publicly disclose its decision. The nominee may address the Nominating Committee and/or the Board, but may not be present during deliberations or voting on whether to accept the nominee’s offer to resign. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. The Nominating Committee and the Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
Separate Sessions of Non-Management Directors
The Directors that are not members of the Company's management ("Non-Management Directors") will meet in executive session on a regular basis without management or the management members of the Board present. The leader of these sessions will rotate among the independent directors. The leader will chair the regularly scheduled executive session and bear such other responsibilities that the Non-Management Directors as a whole might designate from time to time. The Non-Management Directors will consider such matters as they may deem appropriate at such executive sessions.
Director Qualification Standards
In evaluating the suitability of individual candidates to serve as directors, the Nominating Committee, in recommending candidates for election, and the Board, in approving (and, in the case of vacancies, appointing) such candidates, will take into account various factors, including such candidate’s ability to qualify as an independent director, whether the candidate has the relevant business experience, the candidate’s judgement, skill, integrity and reputation, whether the candidate has a background in accounting, finance or other skills deemed relevant by the Board, and the size and composition of the Board. The Board evaluates each individual in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment.
The Board does not believe it should establish term limits or a mandatory retirement age.
No Specific Limitation on Other Board Service
The Board does not believe that its members should be prohibited from serving on boards of other organizations and has not adopted any guidelines limiting such activities. However, the Nominating Committee and the Board will take into account the nature of and time involved in a director's service on other boards and/or committees in evaluating the suitability of individual candidates and current directors and making its recommendations to the Company's stockholders.
The business and affairs of the Company will be overseen by or under the direction of the Board or its committees in accordance with the Maryland General Corporation Law (the “MGCL”) and the Organizational Documents. In performing their duties, the primary responsibility of the directors is to exercise their business judgment in the best interests of the Company. The Board has developed the following specific expectations of directors to promote the discharge of this responsibility and the efficient conduct of the Board's business:
The Board believes that the amount of director compensation should be fair and competitive in relation to the director compensation at other companies with businesses similar in size and scope to the Company; the type and amount of compensation should align directors' interest with the long-term interests of stockholders; and the structure of the compensation program should be simple, transparent and easy for stockholders to understand. The Board should review the compensation (including the amount and type) of the Non-Management Directors at least once every two years.
Interaction with Institutional Investors, the Press and the Public
The Board believes that management speaks for the Company. Each Non-Management Director should refer all inquiries from institutional investors, the press and the public to management. Individual Board members may, from time to time at the request of the management, meet or otherwise communicate with various constituencies that are involved with the Company. If comments from the Board are appropriate, they should, in most circumstances, come from the Chairman of the Board, the Chief Executive Officer or their designees(s).
Board Access to Independent Advisors
The Board committees may hire independent advisors as set forth in their applicable charters. The Board as a whole shall have access to such advisors and such other independent advisors that the Company retains or that the Board considers necessary to discharge its responsibilities.
The Board, either directly, or through the Nominating Committee, will (i) oversee an annual assessment of the performance of the Board and its committees and (ii) be responsible for establishing the criteria and implementing the process for such evaluation, as well as considering other corporate governance principles that may, from time to time, merit consideration by the Board.
Frequency of Meetings
The Board will meet at least four times annually. In addition, special meetings may be called from time to time as determined by the needs of the business.
Participation of Non-Directors
The Board and its committees are encouraged to bring management and outside advisors from time-to-time into Board and/or committee meetings to provide insight into, and/or make presentations with respect to, items being discussed by the Board or the committee, as the case may be. Attendance of non-directors at Board or committee meetings is at the discretion of the Board or the committee, as the case may be.
The Chairman of the Board establishes the agenda for each Board meeting with input from the management and, as necessary or desired, from the other directors.
Number, Name, and Responsibilities of Committees
The Company shall have at least the committees required by NYSE rules (currently, these are the Audit, Compensation and Nominating committees). These committees must have a written charter satisfying NYSE rules and the membership of these committees must satisfy the NYSE and, as applicable, SEC requirements. From time-to-time, the Board may form a new committee or disband a current committee, depending upon the circumstances.
Frequency of Committee Meetings
Except for the Audit Committee, each committee will meet at least once annually. The Audit Committee will meet at least four times annually.
On an annual basis, each committee will review its performance and recommend to the Board any changes it deems necessary.
Annual Review of Chief Executive Officer
The Compensation Committee should evaluate the performance of the Chief Executive Officer on an annual basis. The evaluation should be based on criteria that such committee deems appropriate.
There should be available, on a continuing basis, the Chief Executive Officer's recommendation as to his successor should the Chief Executive Officer be disabled or retire. The Chief Executive Officer shall report on a periodic basis to the Board on succession planning.
The Company shall assist the directors in continuing to stay informed about the Company, its activities and the directors’ duties and responsibilities.