Corporate Governance Guidelines
Corporate Governance Guidelines Quicklinks
I. Role of the Board
II. Director Independence
III. Board Membership Criteria
IV. Board Leadership Structure and Presiding Director
V. Selection of New Directors
VI. Board Size
VII. Frequency of Meetings
VIII. Term of Office
IX. Director Retirement Policy
X. Number and Composition of Board Committees
XI. Executive Sessions
XII. Code of Business Conduct and Ethics
XIII. Board Compensation
XIV. Board Access to Senior Management and Employees
XV. Director Orientation and Education
XVI. Evaluation of Board Performance
XVII. Chief Executive Officer Performance Review and Succession Planning
XVIII. Stock Ownership Guidelines
XIX. Non-Employee Directors Whose Responsibilities Change
XX. Authority to Retain Independent Advisors
XXI. Amendments, Modifications and Waivers
These guidelines have been adopted by the Board of Directors (the "Board") of TIBCO Software Inc. (the "Company" or "TIBCO"). The guidelines, in conjunction with the Certificate of Incorporation, Bylaws, Board Committee charters and the Company's Code of Business Conduct and Ethics, form the framework for governance of the Company.
The Board, which is elected annually by the Company's stockholders, oversees and provides policy guidance on the business and affairs of the Company. It monitors overall corporate performance, the integrity of the Company's controls and the effectiveness of the Company's legal compliance programs. The Board selects the Chief Executive Officer of the Company, elects officers, oversees management and reviews succession planning for the CEO and other executive officers. The Board also oversees the Company's strategic and business planning process. This is generally a year-round process culminating in an annual Board review of the Company's updated corporate strategic plan, the Company's business plan, the upcoming year's capital expenditures budget, and key financial and supplemental objectives. The Board also reviews and assesses risks facing the Company and management's approach to addressing such risks.
Directors are expected to attend at least 75% of the Board and applicable Committee meetings, absent extraordinary circumstances, and to review meeting materials provided in advance of such meetings.
The Board believes that a substantial majority of the Board should consist of independent Directors,. TIBCO defines "independent" in accordance with the Securities Exchange Act of 1934, as amended, and the criteria established by The NASDAQ Stock Market listing requirements.
Members of the Board are required to have the highest professional and personal ethics and values, consistent with longstanding Company values and standards. They have broad experience and business acumen, and a record of professional accomplishment in his or her field, at the policy-making level in business, government, education, technology, finance, marketing, financial reporting, national and international business matters or public interest. They are committed to enhancing stockholder value and have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. Their service on other boards of public companies is limited to a number that permits them, given their individual circumstances, to perform responsibly all Director duties. Each Director must represent the interests of all stockholders. Directors are encouraged to attend the Company's Annual Meetings of Stockholders.
While the Board recognizes the potential value of splitting the roles of Chairman of the Board and CEO, the Company currently has no fixed policy mandating whether these roles should be separate or combined. The Board believes the decision whether these positions should be combined is based on the Company's best interests and the best interests of the Company's stockholders under the circumstances existing at the time.
The independent Directors on the Board appoint a Presiding Director every three years. The Presiding Director may decide to call unscheduled meetings of the independent Directors, and he or she presides at any meetings of the Board at which the Chairman is not present. The Presiding Director also ensures that the information sent to the Board is organized and complete after consultation with the Board; modifies meeting agendas for the Board after consultation with the Board; approves meeting schedules to assure that there is sufficient time for discussion of all agenda items; serves as liaison between the Chairman and CEO and the independent Directors; and ensures that he or she is available for consultation and direct communication if requested by major stockholders.
Directors are elected annually by the stockholders at the Annual Meeting of Stockholders. The Nominating and Governance Committee proposes a slate of nominees for consideration each year. Between Annual Meetings, the Board, in accordance with the Company's Bylaws, may elect Directors to serve until the next Annual Meeting. Formal offers to join the Board or to be included in the slate of nominees are extended jointly by the chairperson of the Nominating and Governance Committee and the Chairman.
Stockholders may recommend Director nominees for consideration by the Nominating and Governance Committee by writing to the Company's Secretary in a timely manner specifying the nominee's name and certain other details and qualifications for Board membership, as set forth in the Company's Bylaws. Following verification of the stockholder status of the person submitting the recommendation, all properly submitted recommendations are brought to the attention of the Nominating and Governance Committee at a regularly scheduled Committee meeting.
The Board is currently set at six (6) members as prescribed by TIBCO's bylaws.
There are at least four (4) regularly scheduled meetings of the Board each year. Regular meetings of the Board may be held without notice at such time and at such place as determined by the Board.
Directors serve for one-year terms and until their successors are elected. Subject to Section IX below, there are no limits on the number of one-year terms that may be served by a Director. While term limits could help insure that there are new ideas and viewpoints available to the Board, the Board recognizes the value of continuity of Directors who have experience with TIBCO and who have gained over a period of time a level of understanding about TIBCO and its operations that enable the Director to make a significant contribution to the deliberations of the Board.
Non-employee Directors may not stand for re-election after reaching age 72, unless the Board approves an exception to the guideline on a case-by-case basis. Employee Directors are expected to submit their resignation from the Board at the time they retire or resign from the Company.
The Board currently has three Committees: Audit, Compensation and Nominating and Governance. All members of the Audit, Compensation, and Nominating and Governance Committees are independent Directors, as defined by Nasdaq listing requirements and as determined by the Board based on a review of the facts and circumstances of each Director or nominee. Members of all Committees and the Committee chairpersons are designated annually by the Board, based on the recommendation of the Nominating and Governance Committee in consultation with the chairperson of each applicable committee. The Board determines the exact number of members and can at any time remove or replace a Committee member.
Each Committee is chaired by an independent Director who determines the agenda, frequency and length of Committee meetings and who has unlimited access to management, Company information and independent advisors, as necessary and appropriate.
Committee charters are available on the Company's website and a brief description of Committee functions is available in the Company's most recent annual proxy statement.
The Board may, from time to time, establish and maintain additional Committees as it deems appropriate.
Executive sessions of independent Directors are held approximately four (4) times a year. The sessions are scheduled and chaired by the Presiding Director. Any non-employee Director can request that an additional executive session be scheduled.
The Board expects all Directors, as well as officers and employees, to display the highest standard of ethics, consistent with longstanding TIBCO values and standards. The Company has and will continue to maintain a code of conduct, known as the Code of Business Conduct and Ethics. The Audit Committee periodically reviews compliance with the Code of Business Conduct and Ethics. Directors are expected to report any possible conflict of interest between the Director and the Company to the Board, and the Board will take appropriate action.
Non-employee Directors receive compensation that consists of a combination of cash and equity. Employee Directors are not paid additional compensation for their services as Directors. The Compensation Committee reviews the amount and form of non-employee Director compensation and provides a recommendation to the Board as to such compensation based upon the Committee's consideration of the responsibilities and time commitment of such Directors, as well as competitive information. The Company does not make substantial charitable contributions to organizations in which a Director is affiliated, although such organizations are not excluded from the Company's charitable donation matching program, and has not entered into consulting contracts with, or provided compensation other than Director fees to, its non-employee Directors. The Compensation Committee has full authority to engage, at the Company's expense, third party consultants to advise on compensation levels and compensation components.
Directors are encouraged to talk directly to any member of management or any employee regarding any questions or concerns the Directors may have. Members of senior management are encouraged to attend Board meetings when practical.
The Company has and will continue to maintain an orientation program for Directors that contains written material, oral presentations and site visits. In addition, the Company provides Directors continuing education about the Company's business and encourages directors to attend appropriate outside continuing education programs, the costs of which TIBCO will reimburse directors. The Secretary of the Company is responsible for implementing the orientation and educational programs.
The Board and each Board Committee conducts a self-evaluation annually. Committees assess their performance relative to their charter and to best practices. The Nominating and Governance Committee, when appropriate, oversees and makes recommendations on the procedures for this self-evaluation process.
The Board annually reviews the performance of the CEO. The Compensation Committee gathers input from Directors and reviews the CEO's performance in light of the Company's goals and objectives, and presents the results of this review to the independent Directors. The Compensation Committee also uses this review in determining CEO compensation.
If and to the extent requested by the Board, the Nominating and Governance Committee assists the Board in establishing the procedures for reviewing and assessing succession planning for executive officers. The Nominating and Governance Committee works with the Board in evaluating potential successors to executive management positions.
The Compensation Committee periodically assesses the appropriateness of stock ownership guidelines for Directors and senior executives, including whether and to what extent executives should be restricted from selling stock acquired through equity compensation. Individuals subject to the stock ownership guidelines will have until the later of February 2014 or five years from the date such person becomes subject to the guidelines to meet their ownership requirements. Currently, the Company's stock ownership guidelines provide that non-employee Directors own a minimum of 30,000 shares of the Company's common stock. Additionally, the ownership guidelines provide that the CEO of the Company own a minimum of 1,000,000 shares of the Company's common stock, and each of the Company's Executive Vice Presidents own a minimum of 50,000 shares of the Company's common stock.
Individual non-employee Directors whose job responsibilities change materially from when they were elected to the Board should volunteer to resign from the Board. Such Directors should not necessarily leave the Board. However, there should be an opportunity for the Board, through the Nominating and Governance Committee, to review the continued appropriateness of Board membership under these circumstances.
The Board and each Board Committee has the authority, at the Company's expense, to retain and terminate independent advisors as the Board and any such Committee deems appropriate.
The Board may amend or modify these Corporate Governance Guidelines, or grant waivers in exceptional circumstances, provided that any such amendment, modification or waiver may not be a violation of any applicable law, rule or regulation and further provided that any such modification or waiver is appropriately disclosed.