ELECTION OF DIRECTORS
(Item 1)
Eight directors are to be elected at the Annual Meeting to hold office until the next Annual Meeting of Shareholders and until their successors are elected and qualified. Unless otherwise directed, it is the intention of the persons named in the accompanying proxy to vote each proxy for the election of the
nominees listed below. All nominees are presently directors of REX.
If at the time of the Annual Meeting any nominee is unable or declines to serve, the proxy holders will vote for the election of such substitute nominee as the Board of Directors may recommend. We have no reason to believe that any substitute nominee will be required.
Directors are elected by a majority of votes cast unless the election is contested, in which case directors are elected by a plurality vote. A majority of votes cast means that the number of shares voted for a nominee must exceed the number of votes cast against that nominee. Abstentions and broker
non-votes will have no effect. If a non-incumbent nominee receives a greater number of votes cast against than cast for, that non-incumbent nominee is not elected to the Board. Any incumbent director nominee who receives a greater number of votes cast against than votes for shall continue to serve as a
holdover director under Delaware law, but shall tender his or her resignation as a director. Within 90 days, the Board will decide, after taking into account the recommendation of the Nominating/Corporate Governance Committee and excluding the nominee in question, whether to accept the resignation. The
Board will promptly disclose its decision on a Form 8-K filed with the Securities and Exchange Commission.
Set forth below is certain information with respect to the nominees for director, including the experience, qualifications and skills we believe these individuals bring to the Board and qualify them to serve as directors.
STUART A. ROSE, 62, was appointed our Executive Chairman of the Board and Head of Corporate Development in 2015. Mr. Rose had served as our Chairman of the Board and Chief Executive Officer since our incorporation in 1984 as a holding company. Prior to 1984, Mr. Rose was Chairman of the
Board and Chief Executive Officer of Rex Radio and Television, Inc., which he founded in 1980 to acquire the stock of a corporation which operated four retail stores. Mr. Roses past leadership and current position provides the Board with essential insight into the Companys strategic activities.
LAWRENCE TOMCHIN, 89, retired as our President and Chief Operating Officer in 2004, a position he held since 1990, and remained a part-time employee and consultant until 2006. From 1984 to 1990, he was our Executive Vice President and Chief Operating Officer. Mr. Tomchin has been a director since
1984. Mr. Tomchin was Vice President and General Manager of the corporation which was acquired by Rex Radio and Television, Inc. in 1980 and served as Executive Vice President of Rex Radio and Television, Inc. after the acquisition. Mr. Tomchins service as our retired Chief Operating Officer provides the
Board with additional perspective of the Companys operations.
EDWARD M. KRESS, 67, has been our Secretary since 1984 and a director since 1985. Mr. Kress has been a partner of the law firm of Dinsmore & Shohl LLP (formerly Chernesky, Heyman & Kress P.L.L.), our legal counsel, since 1988. Mr. Kress has practiced law in Dayton, Ohio since 1974. Mr. Kress, a
lawyer and our legal counsel, provides the Board with critical legal advice and perspective.
CHARLES A. ELCAN, 53, has been a director since 2003. Mr. Elcan is a founder and President of China Healthcare Corporation, organized in 2008 to build and operate hospitals in China. Mr. Elcan was Executive Vice PresidentMedical Office Properties of Health Care Property Investors, Inc. (HCP), a real
estate investment trust specializing in health care related real estate, from 2003 to 2008, and served as the Chief Executive Officer and President of MedCap Properties, LLC, a real estate company located in Nashville, Tennessee that owned, operated and developed real estate in the healthcare field, from 1998 to
2003. (HCP acquired MedCap Properties in 2003.) From 1992 to 1997, Mr. Elcan was a founder and investor in Behavioral Healthcare Corporation (now Ardent Health Services LLC), a healthcare company that owns and operates acute care hospitals. Mr. Elcan, a founder of health care real estate companies,
brings to the Board entrepreneurial experience and real estate expertise.
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DAVID S. HARRIS, 57, has been a director since 2004 and Lead Director since 2015. Mr. Harris has served as President of Grant Capital, Inc., a private investment company, since 2002. During 2001, Mr. Harris served as a Managing Director in the investment banking division of ABN Amro Securities LLC
(ABN). From 1997 to 2001, Mr. Harris served as a Managing Director and Sector Head of the Retail, Consumer and Leisure Group of ING Barings LLC (ING). The investment banking operations of ING were acquired by ABN in 2001. From 1986 to 1997 Mr. Harris served in various capacities as a member of the
investment banking group of Furman Selz LLC. Furman Selz was acquired by ING in 1997. Mr. Harris is also a director of Carrols Restaurant Group, Inc. where he is Chairman of the Audit Committee and serves on the Compensation Committee. Prior to its sale in 2015, Mr. Harris was a director of Steiner
Leisure Limited, a worldwide provider in the fields of beauty, wellness and education. Mr. Harris served on the Audit Committee of Steiner Leisure Limited and was Chairman of its Compensation Committee. Mr. Harris experience in investment banking, corporate finance and capital markets is valuable to the
Board in developing strategy and evaluating senior management.
MERVYN L. ALPHONSO, 76, has been a director since 2007. Mr. Alphonso retired as Vice President for Administration and Chief Financial Officer of Central State University in 2007, a position he held since 2004. Mr. Alphonso has over 30 years of experience in the banking industry. He was President,
Dayton District, KeyBank National Association from 1994 to 2000 and held various management positions with KeyBank of New York, N.A., Crocker National Bank and Bankers Trust Company. Mr. Alphonso served as a Peace Corps volunteer from 2001 to 2003. Mr. Alphonsos experience in the banking
industry and as a chief financial officer provides the Board with financial management expertise.
LEE FISHER, 65, has been a director since 2011. Mr. Fisher was appointed Interim Dean of Cleveland State Universitys Cleveland-Marshall College of Law for the 2016-2017 academic year. Prior to his appointment, he was President and Chief Executive Officer of CEOs for Cities, a non-profit national
organization of urban leaders focused on revitalizing American cities, and currently serves as a senior advisor. Mr. Fisher is also a Senior Fellow with the Levin College of Urban Affairs at Cleveland State University and an Urban Scholar with the College of Urban Planning and Public Affairs at the University of
Illinois-Chicago. Mr. Fisher served as Lieutenant Governor of Ohio from 2007 to 2011, including as Director of the Ohio Department of Development. Mr. Fisher was a director of REX from 1996 to 2006. He served as President and Chief Executive Officer of the Center for Families and Children, a private
non-profit human services organization, from 1999 to 2006. Mr. Fisher was a partner in the law firm of Hahn Loeser & Parks LLP from 1995 to 1999, served as Ohio Attorney General from 1991 to 1995, State Senator and State Representative, Ohio General Assembly, from 1981 to 1990, and practiced law with Hahn
Loeser & Parks from 1978 to 1990. Mr. Fisher was formerly a director of OfficeMax Incorporated. Mr. Fisher brings to the Board experience and understanding of law, government, public affairs, economic development, and regulatory and public policy.
ZAFAR RIZVI, 67, was appointed our Chief Executive Officer and a director in 2015. Mr. Rizvi has been our President and Chief Operating Officer since 2010, was Vice President from 2006 to 2010, and has been President of Farmers Energy Incorporated, our alternative energy investment subsidiary, since
2006. From 1991 to 2006, Mr. Rizvi was Vice PresidentLoss Prevention. Mr. Rizvis knowledge of the Companys alternative energy investments and operations provides the Board with operational perspective and promotes efficiencies in communications between management and the Board.
Board of Directors
Our Board of Directors currently consists of eight directors. The Board has determined that five of the eight directors, Charles A. Elcan, David S. Harris, Mervyn L. Alphonso, Lee Fisher and Lawrence Tomchin, are independent within the meaning of Section 303A.02 of the New York Stock Exchange
(NYSE) Listed Company Manual.
To be considered independent, the Board must determine 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, including commercial, industrial, banking, consulting, legal, accounting,
charitable and family relationships, among others. Our Board has established the following guidelines,
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consistent with Section 303A.02 of the NYSE listing standards, to assist it in determining independence of directors.
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A director who is an employee, or whose immediate family member is an executive officer, of the Company is not independent until three years after the end of such employment relationship.
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A director who receives, or whose immediate family member receives, more than $120,000 during any 12-month period in direct compensation from the Company, other than director or committee fees and pension or other forms of deferred compensation for prior service (not contingent in any way on
continued service), is not independent until three years after he or she does not receive more than $120,000 of such compensation during any 12-month period. (Compensation received by an immediate family member for service as a non-executive employee need not be considered in determining independence
under this test.)
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A director who is a partner or employee of the Companys internal or external auditor, or whose immediate family member is a partner of such a firm, or an employee of such a firm and personally works on the Companys audit, or a director or immediate family member who was within the last three years a
partner or employee of such a firm and personally worked on the Companys audit within that time, is not independent.
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A director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of the Companys present executives at the same time serve on that companys compensation committee is not independent until three years after the end of such service or the
employment relationship.
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A director who is an employee, or whose immediate family member is an executive officer, of a company that makes payments to, or receives payments from, the Company for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other companys
consolidated gross revenues, is not independent until three years after falling below such threshold.
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Messrs. Harris, Alphonso, Fisher and Tomchin have no relationships with the Company other than being a director. Mr. Elcan has only an indirect, immaterial relationship with the Company.
Elcan & Associates, Inc., a firm owned by Mr. Elcans brother, provides real estate brokerage and finder services to REX. During fiscal 2016, REX paid Elcan & Associates $2,488 in real estate commissions. Because Mr. Elcan has no financial interest or involvement in Elcan & Associates, nor any involvement in
REXs business activities with Elcan & Associates, and the amount of our annual payments to Elcan & Associates falls within our director independence guidelines, the Board has determined that the relationship is not a material relationship affecting Mr. Elcans independence.
Our Board of Directors held one meeting during the fiscal year ended January 31, 2017. The average attendance by incumbent directors at Board and Board Committee meetings was 97%.
Directors are invited and encouraged to attend our Annual Meeting of Shareholders. All directors attended the 2016 Annual Meeting.
The non-management directors have the opportunity to meet at executive sessions without management following Audit Committee meetings. The presiding director for each executive session is the independent Lead Director.
Board Leadership Structure
The Board is responsible for periodically evaluating the leadership structure of the Companys Board of Directors, including whether to combine or separate the roles of Chairman of the Board and Chief Executive Officer. The Board recognizes that different structures may be appropriate at different times or
under different circumstances and believes it is important to retain the flexibility to have structures best suited to the Companys specific characteristics or circumstances. If the offices of Chairman of the Board and Chief Executive Officer are held by the same person, or if the Chairman is not independent, the
Board will annually elect an independent director to serve in a lead capacity.
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In 2015, the Board appointed Zafar Rizvi Chief Executive Officer of the Company. Mr. Rizvi was also appointed a director to fill a vacancy on the Board. Mr. Rizvi succeeded Stuart A. Rose as Chief Executive Officer, who had served as Chairman and CEO since 1984. Mr. Rose was appointed Executive
Chairman and Head of Corporate Development. The Board believes this leadership structure is appropriate and will provide consistent oversight and implementation of corporate strategy, operations and executive succession.
In 2015, the Board elected David S. Harris to serve as Lead Director. The Lead Directors responsibilities include, among others, the following:
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Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors.
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Serve as principal liaison between the Chairman and the independent directors.
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Approve information sent to the Board, meeting agendas for the Board, and meeting schedules to assure there is sufficient time for discussion of all agenda items.
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Authority to call meetings of the independent directors.
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Be available, when appropriate, for consultation and direct communication with shareholders.
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Board Role in Risk Oversight
The Board administers its risk oversight function principally through the Audit Committee. The Audit Committee oversees financial, legal, regulatory and operational risks and risk management. The Committee receives periodic reports from members of senior management who supervise day-to-day risk
management activities on specific risks to the Company, risk management and risk mitigation. The Audit Committee reports to the full Board as appropriate. Overall review of risk is inherent in the full Boards consideration of long-term strategies and in the transactions and other matters presented to the Board.
The Boards role in risk oversight has no effect on its leadership structure.
Board Committees
Our Board of Directors has four standing committees: the Audit Committee, the Compensation Committee, the Nominating/Corporate Governance Committee and the Executive Committee.
Audit Committee.
The Audit Committee assists Board oversight of the integrity of the financial statements of the Company, our compliance with legal and regulatory requirements, the independent accountants qualifications and independence, and the performance of the Companys internal audit function and
independent accountants. The Audit Committee is directly responsible for the appointment, retention and oversight of the work of the independent accountants. The Audit Committee acts pursuant to a written charter. The members of the Audit Committee are Messrs. Harris (Chairman), Alphonso and Fisher. All
members of the Audit Committee are independent within the meaning of applicable NYSE listing standards and rules of the Securities and Exchange Commission (SEC). The Board has determined that Mr. Harris and Mr. Alphonso are each an audit committee financial expert as defined by applicable SEC rules
and that all members of the Audit Committee are financially literate within the meaning of NYSE listing standards. The Audit Committee met five times during fiscal 2016.
Compensation Committee.
The Compensation Committee has direct responsibility to review and approve CEO compensation, makes recommendations to the Board with respect to non-CEO compensation and compensation plans, and administers the Companys stock plans. The Compensation Committee acts
pursuant to a written charter. The members of the Compensation Committee are Messrs. Harris, Alphonso and Fisher. All members of the Compensation Committee are independent within the meaning of applicable NYSE listing standards. The Compensation Committee met two times during fiscal 2016.
Nominating/Corporate Governance Committee.
The Nominating/Corporate Governance Committee identifies individuals qualified to become Board members consistent with criteria approved by the Board, recommends for the Boards selection a slate of director nominees for election to the Board at the
Annual Meeting of Shareholders, develops and recommends to the Board the Corporate Governance Guidelines applicable to the Company, and oversees the evaluation of the Board and management. The Nominating/Corporate Governance Committee acts pursuant to a written charter. The members of the
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Nominating/Corporate Governance Committee are Messrs. Alphonso (Chairman), Harris and Fisher. All members of the Nominating/Corporate Governance Committee are independent within the meaning of applicable NYSE listing standards. The Nominating/Corporate Governance Committee met two times
during fiscal 2016.
The Board seeks director candidates who possess the background, skills and expertise to make a significant contribution to the Board, the Company and shareholders. In identifying and evaluating director candidates, the Nominating/Corporate Governance Committee may consider a number of attributes,
including experience, skills, judgment, accountability and integrity, financial literacy, time, industry knowledge, networking/contacts, leadership, independence from management and other factors it deems relevant. The Nominating/Corporate Governance Committee also considers diversity of professional
experience, skills and individual qualities and attributes in identifying director candidates. The Nominating/Corporate Governance Committee reviews the desired experience, mix of skills and other qualities to assure appropriate Board composition, taking into account the current directors and specific needs of the
Company and the Board. The Company is committed to a policy of inclusiveness. In performing its responsibilities for identifying, screening and recommending candidates to the Board, the Nominating/Corporate Governance Committee should (i) insure that candidates with a diversity of ethnicity and gender are
included in each pool of candidates from which Board nominees are chosen and (ii) seek diverse candidates by including in the candidate pool (among others) individuals from non-executive corporate positions and non-traditional environments. The Nominating/Corporate Governance Committee may solicit advice
from the CEO and other members of the Board.
The Nominating/Corporate Governance Committee will consider director candidates recommended by our shareholders. Shareholders must submit the name of a proposed shareholder candidate to the Nominating/Corporate Governance Committee at our corporate offices by the date specified under
Shareholder Proposals.
Executive Committee.
The Executive Committee is empowered to exercise all of the powers and authority of the Board of Directors between meetings of the Board, other than the power to fill vacancies on the Board or on any Board committee and the power to declare dividends. The members of the
Executive Committee are Messrs. Rose and Rizvi. The Executive Committee took no action during fiscal 2016.
Code of Ethics, Corporate Governance Guidelines and Committee Charters
We have adopted a Code of Business Conduct and Ethics applicable to our employees, officers and directors. A copy of the Code of Business Conduct and Ethics has been filed as an exhibit to our Annual Report on Form 10-K for the year ended January 31, 2004 and is posted on our website
www.rexamerican.com
.
We have adopted a set of Corporate Governance Guidelines addressing director qualification standards, director responsibilities, director access to management and independent advisors, director compensation and other matters. A copy of the Corporate Governance Guidelines is posted on our website
www.rexamerican.com
.
The charters of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee are posted on our website
www.rexamerican.com
.
Procedures for Contacting Directors
Shareholders and interested parties may communicate with the Board, the non-management directors as a group, or a specific director by writing to REX American Resources Corporation, 7720 Paragon Road, Dayton, Ohio 45459, Attention: Board of Directors, Non-Management Directors or [Name of Specific
Director]. All communications will be forwarded as soon as practicable to the specific director, or if addressed to the Non-Management Directors to the Chairman of the Audit Committee, or, if addressed to the Board, to the Chairman of the Board or other director designated by the Board to receive such
communications.
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