Corporate Governance Guidelines of Trimble Inc.
The following Corporate Governance Guidelines have been adopted by the Board of Directors (the “Board”) of Trimble Inc. (the “Company”) to assist the Board in the exercise of its responsibilities. These Corporate Governance 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 long-term stockholder value. These Corporate Governance Guidelines are not intended to change or interpret any Federal or state law or regulation, including the Delaware General Corporation Law, or the Certificate of Incorporation or By-laws of the Company. These Corporate Governance Guidelines are subject to modification from time to time by the Board.
Role of Directors
The business and affairs of the Company shall be managed and all corporate powers shall be exercised by or under the direction of the Board. Each director is expected to spend the time and effort necessary to properly discharge his or her responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees on which such director sits, and to review prior to meetings material distributed in advance for such meetings. A director shall make reasonable effort to keep informed of the activities and circumstances of the Company in order to discharge his or her responsibilities. A director who is unable to attend a meeting (which it is understood will occur on occasion) is expected to notify the Chairman of the Board or the Chairman of the appropriate committee in advance of such meeting.
The Board's Goals
The Board's goal is to build long-term value for the Company's stockholders and to assure the vitality of the Company for its customers, employees and the other individuals and organizations who depend on the Company.
To achieve these goals the Board will monitor both the performance of the Company (in relation to its goals, strategy and competitors) and the performance of the Chief Executive Officer and other officers, and offer them constructive advice and feedback. When it is appropriate or necessary, it is the Board's responsibility to remove the Chief Executive Officer or any other officer and to select his or her successor.
Selection of the Chairman of the Board
The Board does not require the separation of the offices of the Chairman of the Board and the Chief Executive Officer. The Board shall be free to choose its Chairman of the Board in any way that it deems best for the Company at any given point in time.
Size of the Board
The Board believes that it should generally have no fewer than five and no more than nine directors. This range permits diversity of experience without hindering effective discussion or diminishing individual accountability. The size of the Board could, however, be increased or decreased if determined to be appropriate by the Board. For example, it may be desirable to increase the size of the Board in order to accommodate the availability of an outstanding candidate for director.
Selection of New Directors
The 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 Nominating and Corporate Governance Committee is responsible for identifying, screening and recommending candidates to the Board for Board membership. When formulating its Board membership recommendations, the Nominating and Corporate Governance Committee shall also consider advice and recommendations from others as it deems appropriate.
Board Membership Criteria
Nominees for director shall be selected on the basis of, among other things, experience, knowledge, skills, expertise, integrity, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment and willingness to devote adequate time and effort to Board responsibilities.
The Nominating and Corporate Governance Committee shall be responsible for assessing the appropriate balance of criteria required of Board members.
In an uncontested election, if any nominee for director receives a greater number of votes
“withheld” from such nominee than votes “for”, such nominee must tender his or her resignation to the Board within five days following the certification of the election results. Within 90 days following the date of the Annual Meeting, the remaining members of the Board shall, through a process managed by the Nominating and Corporate Governance Committee and excluding the director nominee in question, determine whether to accept such resignation. The Board will then publicly disclose its determination.
Minimum Ownership Requirements
The CEO must own a minimum number of shares of the Company's common stock equal to a value of five times his or her annualized base salary. The non-employee members of the Board must own a minimum number of shares of the Company's common stock equal to a value of $200,000. The number of shares necessary to meet the minimum ownership level may be accumulated during the first five years following adoption of the guidelines or, if later, during the first five years after becoming CEO or a member of the Board, as applicable. The shares of the Company's common stock counted toward the ownership guidelines include shares owned directly and indirectly, provided there is an economic interest in the shares.
Other Public Company Directorships
Directors should serve on no more than four public company boards of directors.
Independence of the Board
The Board shall be comprised of a majority of directors who qualify as independent directors ("Independent Directors") under the listing standards of the NASDAQ Stock Market (the "NASDAQ"), or under applicable law.
The Board shall review annually the relationships that each director has with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). Following such annual review, only those directors who the Board affirmatively determines have no relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company), which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director will be considered Independent Directors, subject to additional qualifications prescribed under the listing standards of the NASDAQ or under applicable law. The Board may adopt and disclose categorical standards to assist it in determining director independence.
Lead Independent Director
If the Chairman of the Board is not an Independent Director, the Company's Independent Directors will designate one of the Independent Directors on the Board to serve as a lead Independent Director (the "Lead Independent Director"). If the Chairman of the Board is an Independent Director then he or she shall serve as Lead Independent Director. The Lead Independent Director's duties will include coordinating the activities of the Independent Directors, coordinating the agenda for and moderating sessions of the Board's Independent Directors and facilitating communications between the other members of the Board.
In performing the duties described above, the Lead Independent Director is expected to consult with the Chairmen of the appropriate Board committees and solicit their participation in order to avoid diluting the authority or responsibilities of such committee Chairmen.
Directors Who Change Their Present Circumstances
The Board does not believe that directors who change the position they held when they became a member of the Board should necessarily leave the Board. Directors must notify the Nominating and Corporate Governance Committee promptly following a change of position or acceptance of a new board of directors position, and the Nominating and Corporate Governance Committee shall review the continued appropriateness of the affected director remaining on the Board under the circumstances. The affected director is expected to act in accordance with the Nominating and Corporate Governance Committee’s recommendation following such review.
It is the general policy of the Company that no director having attained the age of 75 years shall be nominated for re-election or reappointment to the Board. However, the Board may determine to waive this policy in individual cases.
The Board has not established term limits for its members. However, the Board shall periodically review director tenure in connection with its procedures for the selection and nomination of directors to ensure the presence of diverse viewpoints and ideas on the Board that would benefit the Company, and to ensure that the Board maintains an openness to new ideas and a willingness to critically re-examine the status quo.
Conflicts of Interest
A director shall promptly disclose to the Board any personal or outside interest, relationship, or responsibility (financial, professional, or otherwise) held by such director with respect to any potential or actual transaction, agreement, or other matter that is or may be presented for consideration by the Board.
Such director shall also recuse himself from any reporting, discussions, or vote on the issue that gave rise to the conflict and, if necessary, from the Board meeting or applicable part thereof.
A director shall protect and hold confidential all confidential information obtained through his or her position as director, absent the express permission of the Board, the Chairman of the Board, or the CEO to disclose such information. Confidential information includes all non- public information entrusted to a director by reason of his or her position as a director of the Company, including but not limited to all discussions that occur at meetings of the Board, except to the extent that disclosures of portions of such discussions may be legally required. Directors must take all appropriate steps to minimize the risk of disclosure of confidential information. This obligation persists during and after each director's tenure.
Directors shall also use confidential information only for the benefit of the Company, and not for personal benefit nor for the benefit of any third party.
A director who is also an officer of the Company shall not receive additional compensation for such service as a director.
The Company believes that compensation for non-employee directors should be competitive and should encourage increased ownership of the Company’s stock through the payment of a portion of director compensation in Company stock, options to purchase Company stock or similar compensation. The Compensation Committee will periodically review the level and form of the Company's director compensation, including how such compensation relates to director compensation of companies of comparable size, industry and complexity. Such review will also include a review of both direct and indirect forms of compensation to the Company's directors, including any charitable contributions by the Company to organizations in which a director is affiliated and consulting or other similar arrangements between the Company and a director. Changes to director compensation will be proposed to the full Board for consideration.
Director's fees (including any additional amounts paid to chairs of committees and to members of committees of the Board) are the only compensation a member of the Audit Committee may receive from the Company.
Separate Sessions of Non-Management Directors
The non-management directors of the Company shall meet in executive session without management on a regularly scheduled basis, but no less than four times a year. The Lead Independent Director shall preside at such executive sessions, or in such director's absence, another Independent Director designated by the Lead Independent Director shall preside at such executive sessions.
Any interested parties desiring to communicate with the Lead Independent Director and the other non-management directors regarding the Company may directly contact such directors by written communication addressed to 935 Stewart Drive, Sunnyvale, California 94085 or by email addressed to firstname.lastname@example.org.
Self-Evaluation by the Board
The Board, in conjunction with the Nominating and Corporate Governance Committee will undertake a periodic self-assessment of the Board's performance as well as the performance of each committee of the Board, the results of which will be discussed with each committee. The assessment should include a review of any areas in which the Board or management believes the Board can make a better contribution to the Company. The Nominating and Corporate Governance Committee will utilize the results of this self-evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees.
Strategic Direction of the Company
Normally it is management's job to formalize, propose and implement strategic choices and the Board's role to approve strategic direction and evaluate strategic results. However, as a practical matter, the Board and management will be better able to carry out their respective strategic responsibilities if there is an ongoing dialogue among the Chief Executive Officer, other members of top management and other Board members. To facilitate such discussions, members of senior management who are not directors may be invited to participate in Board meetings when appropriate.
Board Access to Management and Advisors
Board members shall have access to the Company's management and, as appropriate, to the Company's outside advisors. Board members shall generally coordinate such access through the Chief Executive Officer and Board members will use judgment to assure that this access is not distracting to the business operation of the Company. The Board may conduct or authorize investigations into or studies of matters within the Board’s scope of responsibilities, and may retain, at the Company’s expense, such independent counsel or other advisors as it deems necessary.
Attendance of Management Personnel at Board Meetings
The Board encourages the Chief Executive Officer to bring members of management from time to time into Board meetings to (i) provide management insight into items being discussed by the Board which involve the manager; (ii) make presentations to the Board on matters which involve the manager; and (iii) bring managers with significant potential into contact with the Board. Attendance of such management personnel at Board meetings is at the discretion of the Board. Should the Chief Executive Officer desire to add additional members of management as attendees on a regular basis, this should be suggested to the Board for its concurrence.
Board Materials Distributed in Advance
Information and materials that are important to the Board's understanding of the agenda items and other topics to be considered at a Board meeting should, to the extent practicable, be distributed sufficiently in advance of the meeting to permit prior review by the directors. In the event of a pressing need for the Board to meet on short notice or if such materials would otherwise contain highly confidential or sensitive information, it is recognized that written materials may not be available in advance of the meeting.
Board Interaction with Institutional Investors, Analysts, Press and Customers
The Board believes that management generally should speak for the Company. It is suggested that each director shall refer all inquiries from institutional investors, analysts, the press or customers to the Chief Executive Officer or his or her designee.
Board Orientation and Continuing Education
The Company shall provide new directors with a director orientation program to familiarize such directors with, among other things, the Company's business, strategic plans, significant financial, accounting and risk management issues, compliance programs, conflicts policies, code of business conduct and ethics, corporate governance guidelines, principal officers and independent auditors. The Company shall periodically make opportunities available to participate in continuing educational programs in order to maintain the necessary level of expertise to perform his or her responsibilities as a director. Board members are expected to participate in continuing educational programs at least once every two years.
Frequency of Meetings
There shall be at least four regularly scheduled meetings of the Board each year. At least one regularly scheduled meeting of the Board shall be held quarterly.
Number and Names of Board Committees
The Company shall have three standing committees: Audit, Compensation and Nominating and Corporate Governance. The purpose and responsibilities for each of these committees shall be outlined in committee charters adopted by the Board. The Board may want, from time to time, to form a new committee or disband a current committee depending on circumstances. In addition, the Board may determine to form ad hoc committees from time to time, and determine the composition and areas of competence of such committees.
Independence of Board Committees
Each of the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee shall be composed entirely of Independent Directors satisfying applicable legal, regulatory and stock exchange requirements necessary for an assignment to any such committee.
Assignment and Rotation of Committee Members
The Nominating and Corporate Governance Committee shall be responsible, after consultation with the Chairman of the Board, for making recommendations to the Board with respect to the assignment of Board members to various committees. After reviewing the Nominating and Corporate Governance Committee's recommendations, the Board shall be responsible for appointing the Chairman and members to the committees on an annual basis.
The Nominating and Corporate Governance Committee shall annually review the Committee assignments and shall consider the rotation of the Chairman and members with a view toward balancing the benefits derived from continuity against the benefits derived from the diversity of experience and viewpoints of the various directors.
Selection of the Chief Executive Officer
The Board shall be responsible for identifying potential candidates for, and selecting, the Company's Chief Executive Officer. In identifying potential candidates for, and selecting, the Company's Chief Executive Officer, the Board shall consider, among other things, a candidate's experience, understanding of the Company's business environment, leadership qualities, knowledge, skills, expertise, integrity, and reputation in the business community.
Evaluation of Chief Executive Officer
The Board will provide the Chief Executive Officer with an annual performance review for the prior year at the second regularly scheduled meeting of the Board each fiscal year.
Succession Planning and Management Development
The Board shall plan for the succession to the position of the Chief Executive Officer. The Board shall determine that a satisfactory system is in effect for education, development, and orderly succession of senior and mid-level managers throughout the Company.