The business and affairs of NYFIX, Inc. (the "Company") shall be managed by or under the direction of the Board.
The directors shall act only as a board, and the individual directors shall have no power as such.
Except as otherwise provided in the Certificate of Incorporation or the By-Laws, the Board may exercise any and all of the authority and power which are not by the General Corporation Law of the State of Delaware (the "Law"), the Certificate of Incorporation or the By-Laws required to be exercised by the stockholders.
If corporate governance guidelines are required under the rules of the primary trading market or securities exchange on which the Company's securities are then traded or, if there is none, the Nasdaq Global Market (the "Listing Market"), then these guidelines are intended to comply with such requirements.
The Board shall be comprised of that number of directors (but not less than 5) as shall be determined from time to time by the Board. It is the sense of the Board that 5 to 10 directors is the right size for the Board, but that a slightly larger size may be justifiable in order to accommodate the availability of an outstanding candidate.
A majority of the directors shall be independent directors within the meaning of the rules of the Listing Market. The Board believes that management should encourage senior managers to understand that Board membership is not necessary or a prerequisite to promotion to a higher position in the Company.
Each director shall serve until the next annual meeting of stockholders or the earlier of the election of his or her successor as a director or his or her death, resignation or removal.
It is the sense of the Board that term limits should not be established. While term limits provide the advantage of creating a structural mechanism to facilitate challenging existing and creating new viewpoints, they create the disadvantage of losing the contributions of directors who have been able to develop, over a period of time, increasing insight into the Company and its businesses, operations, opportunities and risks. It is expected that the Corporate Governance & Nominating Committee will review annually the continuation of the membership of each director on the Board. In addition, it is expected that the Corporate Governance & Nominating Committee will ask each director annually to confirm his or her desire to continue as a member of the Board.
Unless a Chairman of the Board is designated by the stockholders, the Chairman of the Board shall be designated by the Board at the annual organizational meeting of the Board or at such other times as determined by the Board.
It is the sense of the Board that it should not adopt a policy with respect to the separation of the offices of Chairman of the Board and Chief Executive Officer. While this matter relates to corporate governance, it also relates to succession planning and it is in the best interests of the Company for the Board to make a determination with respect to this matter on a case-by-case basis as part of the succession planning process.
The Board shall establish and maintain three standing committees: the Audit Committee; the Compensation Committee; and the Corporate Governance & Nominating Committee. The Board may establish and maintain, at any time from time to time and for so long as it shall deem necessary or appropriate, other committees.
All of the members of the standing committees of the Board will be independent directors within the meaning of the rules of the Listing Market and, in the case of the Audit Committee, the meaning of the Sarbanes-Oxley Act of 2002 and Rule 10A-3 under the Securities Exchange Act of 1934. If an Audit Committee member simultaneously serves on an audit committee of more than three public companies, such member shall so advise the Corporate Governance & Nominating Committee so that it may determine whether such simultaneous service would impair the ability of such member to effectively serve on the Audit Committee.
Committee members will be appointed by the Board upon recommendation of the Corporate Governance & Nominating Committee, taking into consideration the desires of individual directors.
It is the sense of the Board that consideration should be given to rotating committee members periodically, but the Board does not believe that rotation should be mandated as a matter of policy.
Each committee will have its own charter. The charter will set forth the purposes, powers and responsibilities of the committee as well as additional qualifications for committee membership, appointment and removal of committee members, committee procedures and committee reporting to the Board. The charter will also provide that the committee will evaluate its charter and its performance annually. All committee charters and changes thereto must be approved by the Board, after taking into account the views of the Corporate Governance & Nominating Committee.
The chairman of each committee, in consultation with the committee members, will determine the frequency, place and length of committee meetings, consistent with any requirements set forth in the committee charter or applicable law. The chairman of each committee, in consultation with the committee members and management, will develop the agenda for each committee meeting. After each annual organizational meeting of the Board, each committee will establish a schedule of agenda subjects to be discussed during the year and the meeting at which such subjects shall be discussed (in each case, to the degree that these can be foreseen). The schedule for each committee will be furnished to all directors.
IV. DIRECTOR QUALIFICATIONS
It is expected that the Corporate Governance & Nominating Committee shall review periodically with the Chairman of the Board and Chief Executive Officer the requisite skills and characteristics for the continuation of directors as members of the Board, the selection of new members of the Board and the composition of the Board, all in the context of the needs of the Company. These skills and characteristics will include independence, diversity, age and experience. A list of the skills and characteristics currently identified is attached to these guidelines as Annex A. Directors must be able to perform their duties in the best interests of the Company and its stockholders, without disabling conflicts of interest. The Company endeavors to have a Board representing diverse experience at policy-making levels in business, finance and technology, and in other areas that are relevant to the Company's activities.
It is expected that prospective nominees for election as a director will be recommended to the Board by the Corporate Governance & Nominating Committee for nomination for election to fill a new or existing vacancy by the Board or for nomination for election at the annual meeting of stockholders. Each invitation to join the Board should be extended by the Board itself, through the Chairman of the Corporate Governance & Nominating Committee, the Chairman of the Board and the Chief Executive Officer. The Corporate Governance & Nominating Committee shall establish a process for stockholders to suggest nominees to it.
It is the sense of the Board that directors whose positions, responsibilities or commitments change materially after they were elected to the Board should so inform the Corporate Governance & Nominating Committee and volunteer to resign from the Board. It is not the sense of the Board that in every (or even most) instance those directors should cease to be directors, but rather that there should be an opportunity for a review of the appropriateness of continued membership under the circumstances. It is expected that the Corporate Governance & Nominating Committee will conduct such review and make recommendations to the Board, which could accept the volunteered resignation.
It is the sense of the Board that directors should serve on a limited number of other public company boards. Prior to accepting an invitation to serve on another public company board, a director must advise the Corporate Governance & Nominating Committee and must receive written confirmation from the General Counsel that there are no legal or regulatory impediments to such service.
No director will be nominated for election or re-election as a director if he or she would be age 74 or older at the time of the election, unless special circumstances so warrant.
The Chief Financial Officer and the General Counsel shall be responsible for providing an orientation for new directors, and for periodically providing materials or briefing sessions for all directors on subjects that would assist them in discharging their duties. Each new director shall, within six months after his or her election to the Board, spend time at corporate headquarters for a personal briefing by senior management on the Company's strategic plans, its financial statements and its key policies and practices.
All other directors are welcome to attend the orientation program.
Except to the extent that continuing education is covered by reports described under Part X below, the Company shall make available to the non-management directors every year at its expense, an eight hour continuing professional education program held in the continental United States, covering such topics as directors' duties and responsibilities, corporate governance matters, corporate accounting matters or relevant topics under the federal securities laws.
VI. DIRECTOR RESPONSIBILITIES
The basic responsibility of a director is the exercise of his or her duty of care, duty of undivided loyalty and duty of candor to the Company and its stockholders, which includes the exercise of his or her business judgment in good faith, on a reasonably informed basis and in a manner that he or she reasonably believes to be in the best interests of the Company and its stockholders. In discharging that responsibility, each director is entitled to:
Directors are subject to all codes of conduct adopted by the Company, including codes relating to ethics, integrity, conflicts of interest, confidentiality, public disclosure and insider trading.
It is the sense of the Board that directors and executive officers should have a meaningful long-term financial interest in the Company to better align their interests with those of the stockholders. Accordingly, the Board expects to adopt voluntary stock ownership guidelines, a copy of which will be attached to these guidelines as Annex B after such adoption. It is expected that the Corporate Governance & Nominating Committee will periodically review and recommend to the Board changes in such guidelines.
No compensation or perquisites should be provided to directors or executive officers without full disclosure to (and, to the extent required by its charter, without prior approval by) the Compensation Committee. Any compensation or other benefit received by any director or executive officer from any affiliated entities should also be fully disclosed to (and, to the extent required by its charter, first approved by) the Compensation Committee and carefully reviewed to confirm compliance with the Company's Code of Business Conduct and Ethics and applicable law.
It is expected that the Compensation Committee will conduct an annual review of director compensation and report to the Board. The form and amount of director compensation will be determined by the Compensation Committee.
It is the sense of the Board that the independence and objectivity of a director should be reviewed if equity compensation and perquisites exceed customary levels, if the Company makes substantial charitable contributions to organizations with which the director is affiliated or if the Company enters into consulting arrangements with (or provides other indirect forms of compensation to) a director or an organization with which the director is affiliated.
The Board shall meet in regular sessions at least four times annually (including telephonic meetings and the annual retreat discussed below) and in special sessions as circumstances warrant. Regular sessions of committee meetings are expected to be held at least four times annually, typically shortly before and in connection with a regular session meeting of the Board. Directors are expected to attend meetings of the Board and its committees on which they serve (which may include telephonic attendance) and to spend the time needed to properly discharge their duties and responsibilities. After each annual meeting of stockholders, the Board shall conduct an annual organizational meeting at which it shall, among other things:
The Chairman of the Board (or, in the case of executive sessions of non-management directors, the presiding director), in consultation with the Chief Executive Officer (except in the case of executive sessions of non-management directors) and the directors, will determine the frequency, length and place of meetings, consistent with the requirements set forth herein. The Chairman of the Board (or, in the case of executive sessions of non-management directors, the presiding director), in consultation with the Chief Executive Officer (except in the case of executive sessions of non-management directors) and the directors, shall establish and distribute to each director prior to each meeting an agenda for the meeting. After each annual organizational meeting of the Board, the Board will establish a schedule of agenda subjects to be discussed during the year and the meeting at which such subjects shall be discussed (in each case, to the degree that these can be foreseen). Each director is free to raise at any meeting subjects that are not on the agenda for that meeting.
The non-management directors will meet in executive session at least once annually. The director who presides at these meetings will be chosen by a majority of the non-management directors. The Chairman of the Corporate Governance & Nominating Committee shall collaborate with the other non-management directors to establish the frequency and location of these meetings.
To the extent required by the rules of the Listing Market or applicable laws, the Board, in consultation with the General Counsel, shall establish a means for stockholders and employees to communicate with non-management directors, and the name of each such presiding director and the means for such communication shall be disclosed in the annual proxy statement.
The Board shall keep minutes of its meetings and other proceedings. It is expected that the secretary of each meeting will keep the only minutes or other records of that meeting and that, if a director desires to have an item recorded in the minutes, he or she will so advise the secretary at that time or prior to or upon review of the draft of such minutes submitted for approval at a subsequent meeting of the Board.
It is expected that the Board will function as a collegial body and that directors will respect the confidentiality of all deliberations of the Board.
IX. BOARD RETREAT
It is expected that the Board will have a retreat with executive officers annually or otherwise as it deems appropriate, at which there will be a full review of financial statements and financial disclosures, long-term strategies, plans and risks, and current developments in corporate governance.
X. ADVANCE MATERIALS
Management shall distribute (electronically, to the extent practicable) to the directors at least four days (or, if that is not feasible, as soon as practicable) before each meeting information that would reasonably be expected to be important to understanding the business to be conducted at the meeting, except for those occasions when a different process would be more appropriate in light of considerations of confidentiality. In addition, management shall direct independent auditors, outside counsel and other external advisors to provide to the directors all information known to them that would reasonably be expected to be important to understanding business conducted by the Board on which they have been consulted. Management is responsible for insuring that this material is both succinct and comprehensive. Directors are expected to review this information before the meeting.
Directors are reminded of their significant
responsibilities under federal securities laws regarding registration
statements and annual reports on Form 10-K, both of which are signed by
directors, and proxy statements and other documents filed with the
Unless circumstances otherwise warrant, management shall report to the Board at each regular meeting on the following matters:
Management shall notify the directors as soon as possible of each matter described above which could reasonably be expected to have a material adverse effect on the Company.
XI. ANNUAL EVALUATION
Under the leadership of the Corporate Governance & Nominating Committee, the Board will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively, are making contributions to the Company and could improve such contributions. It is expected that the Corporate Governance & Nominating Committee will receive comments from all directors and report to the Board.
XII. ACCESS TO OFFICERS, EMPLOYEES
Directors are entitled to full and open access to officers, employees, counsel, auditors and advisors employed or retained by the Company. Meetings or contacts that a director wishes to initiate should ordinarily be arranged through the Chief Executive Officer or the Secretary, although, if the circumstances require, any such meeting or contact may be arranged directly by the director. It is expected that directors will use their judgment to ensure that no such meeting or contact will be disruptive to the business of the Company. To the extent not inappropriate, it is expected that directors will send to the Chief Executive Officer and the General Counsel a copy of all written communications between a director and an officer, employee, counsel, auditor or advisor.
It is expected that non-directors who are executive officers of the Company will attend Board meetings as requested by the Board. If the Chief Executive Officer desires to invite other individuals to attend a meeting, the Chief Executive Officer should obtain the Board's concurrence before doing so.
The Board has the power and authority to retain independent experts, investigators and valuation, legal, recruiting, actuarial, accounting or other advisors as it deems necessary or appropriate, and to set aside for payment, pay and direct the payment of such experts, investigators and advisors, without approval of or notice to management. The independent experts, investigators and advisors retained by the Board shall report directly to, and shall be accountable to, the Board for their services.
The General Counsel represents the Company and is the senior officer responsible for legal, regulatory and ethical conduct compliance. In addition to his or her other reporting responsibilities, the General Counsel shall report directly to, and shall be accountable to, the Board. The Board must approve any termination or replacement of the General Counsel.
In general, management speaks for the Company to employees, stockholders, creditors, regulators, vendors, customers and other constituencies. Directors may from time to time meet or contact various constituencies, but it is expected that directors would do so only with the knowledge of the Chief Executive Officer and, absent unusual circumstances or as contemplated by the committee charters, only at the request of the Chief Executive Officer. It is also expected that where it is necessary for non-management directors to do so other than at the request of management, one of them will be designated as the sole spokesperson.
XIII. BOARD DUTIES
Without limiting the scope of its responsibilities, duties and authority set forth above, the primary duties of the Board shall include:
Board Procedure and Governance
Represent Stockholders' Interests
Notwithstanding anything contained herein or in any charter of any committee of the Board to the contrary, neither the Board, any committee nor any director shall have any duty or responsibility to:
These guidelines do not address the duties of directors in a change-of-control situation or other special or extraordinary circumstances.
Nothing in these guidelines or in the charter of any committee of the Board shall expand or increase the duties, responsibilities or liabilities of any director under any circumstance beyond those then existing under the Law.
If there is a conflict or inconsistency between these guidelines and the Law, the Certificate of Incorporation or By-Laws, the Law, the Certificate of Incorporation or the By-Laws, as the case may be, shall govern.
These guidelines shall be placed on the Company's web site.
As approved by the
/s/ Scott A. Bloom
The Board as a whole should possess the following core competencies:
Each director should have the following skills and characteristics:
1Unless expressly required by these guidelines or the Charter of the relevant Committee, "review with" a Committee means (a) receive a report from the Committee, (b) ask questions of the Committee and (c) as appropriate, give guidance to the Committee as to future actions and consider the actions and recommendations of the Committee in the Board's decision-making process, but does not mean that the Board needs to ratify or approve action taken by the Committee.