Corporate Governance Guidelines
- ANCESTRY.COM INC.
CORPORATE GOVERNANCE GUIDELINES
Effective February 13, 2012
- I. PURPOSE
These Corporate Governance Guidelines (these "Guidelines") were adopted by the Board of Directors (the "Board," and each director, individually, a "Director") of Ancestry.com Inc. (Ancestry.com Inc. and its subsidiaries, collectively referred to herein as the "Company") to promote the functioning of the Board and its committees and to set forth a common set of expectations as to how the Board should perform its functions.
The Guidelines are designed to be a template. The Board retains the flexibility to focus on the most critical issues facing the Company on a case-by-case basis. The Guidelines are not intended to modify any applicable law or any provision of the Company's Bylaws or Certificate of Incorporation. All applicable laws and regulations and the Company's Bylaws and Certificate of Incorporation shall prevail over any conflicting provision of these Guidelines.
- II. BOARD COMPOSITION
In determining the composition of the Board, the following goals should be considered:
- The range and diversity of skills, experience, age, industry knowledge and other factors in the context of the needs of the Board; and
- In accordance with the rules of the Nasdaq Stock Market, a majority of the Board must be comprised of independent Directors who the Board has determined have no material relationship with the Company and who are otherwise "independent directors" under the rules of the Nasdaq Stock Market.
- III. BOARD FUNCTIONS AND RESPONSIBILITIES
The primary functions of the Board directly or through its committees are the following:
- Representing the stockholders' interest in perpetuating a successful business;
- Reviewing the Company's strategic and financial plans and changes thereto, and reviewing the Company's progress in executing such plans;
- Selecting, evaluating and compensating the Chief Executive Officer and reviewing compensation of other executive officers;
- Reviewing and approving plans for succession of the Chief Executive Officer and the other executive officers;
- Reviewing and approving material transactions and reviewing other major transactions and changes in the direction of the Company's business;
- Reviewing the Company's processes for maintaining the integrity of the Company's financial statements, the Company's compliance with law and the Company's compliance with its public disclosure obligations;
- Evaluating periodically the overall effectiveness of the Board; and
- Establishing and maintaining appropriate corporate governance policies.
In performing its functions, the Board is entitled to rely on the advice, reports and opinions of management, counsel, accountants, auditors and other expert advisors. The Board and its committees shall, as appropriate, obtain advice and assistance from independent legal, accounting or other advisors at the Company's expense.
The following are the Board's responsibilities:
- Commitment and Attendance. Directors are expected to attend meetings of the Board and of Committees of which they are members. Directors are expected to attend the annual meeting of the Company's stockholders. Each Director should be sufficiently familiar with the business of the Company, including its financial statements and capital structure, and the risks and competition it faces, to facilitate active and effective participation in the deliberations of the Board and of each committee on which he or she serves.
- Loyalty and Ethics. All Directors owe a duty of loyalty to the Company. This duty of loyalty mandates that the best interests of the Company take precedence over any interests possessed by a Director. Directors are expected to adhere to the Company's Code of Business Conduct and Ethics.
- Contact with Management. All Directors are invited to contact members of management to discuss any aspect of the Company's business. It is assumed that Board members will use judgment to ensure that this contact does not interfere with the business operations of the Company. Furthermore, the Board encourages management to, from time to time, bring managers into Board meetings who (i) can provide additional insight into the items being discussed because of personal involvement and substantial knowledge in those areas and (ii) are managers with future potential that the executive management believes should be given exposure to the Board.
- Contact with Other Constituencies. It is the responsibility of the Company's executive management to speak for the Company with the press and other outside parties. Each Director should refer inquiries from institutional investors, analysts, the press or clients to the executive management or to the Authorized Spokespersons set forth in the Company's Procedures and Guidelines for Public Disclosures and Communications with the Investment Community.
- Change in Status. Directors who change the business or professional responsibility they held when they were elected to the Board, or whose personal circumstances change to the extent that it affects their ability to contribute to the Company's continued development, should consult with the Chairperson of the Board and the Chairperson of the Nominating and Corporate Governance Committee and shall offer a letter of resignation to the Board in order to provide the Board an opportunity, through the Nominating and Corporate Governance Committee, to review the continued appropriateness of Board membership of the individual under the circumstances. The Board is free to accept or reject the resignation.
- Confidentiality. The proceedings and deliberations of the Board and its committees are to remain confidential. Each Director shall maintain the confidentiality of information received in connection with his or her service as a Director.
- Other Directorships and Positions. The Company values the experience Directors bring from other boards on which they serve, but recognizes that those boards may also present demands on a director's time and availability and may present conflicts or legal issues. Directors should advise the Chairperson of the Nominating and Corporate Governance Committee before accepting membership on other boards of directors or other significant commitments involving affiliation with other businesses or governmental units. Additionally, executive officers should also advise the Chairperson of the Nominating and Corporate Governance Committee before accepting membership on other boards of directors or other significant commitments as described above. Directors should limit their service as directors on publicly held company and investment company boards to no more than four (not including the Company's Board).
- IV. BOARD SELECTION
The Nominating and Corporate Governance Committee is responsible for developing and recommending criteria for identifying and evaluating director candidates, as well as identifying, reviewing the qualifications of and recruiting candidates for election to the Board. The Nominating and Corporate Governance Committee recommends to the Board candidates for election or reelection to the Board at each annual stockholders' meeting.
The Nominating and Corporate Governance Committee will recommend nominees for the Board in accordance with criteria and procedures established by the Board or the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will consider nominees for the Board who are proposed by stockholders, if such nominees meet the qualification standards established by the Board or the Nominating and Corporate Governance Committee.
Majority Voting; Director Resignation Policy
The Board shall conduct the election of each Director according to the rules and procedures in the Bylaws.
The Bylaws provide for majority voting in the uncontested election of Directors and plurality voting in contested elections. In uncontested elections, Directors are elected by a majority of the votes cast, which means that the number of shares voted "for" a Director must exceed the number of shares voted "against" that Director. The Nominating and Corporate Governance Committee has established procedures for any Director who is not elected to offer his or her resignation. The Nominating and Corporate Governance Committee will then recommend to the Board whether to accept or reject the resignation offer, or whether other action should be taken. In determining whether to recommend that the Board accept any resignation offer, the Nominating and Corporate Governance Committee will be entitled to consider all factors that the Committee's members believe are relevant.
The Board will act on the Nominating and Corporate Governance Committee's recommendation within 90 days following certification of the election results. In deciding whether to accept the resignation offer, the Board will consider the factors considered by the Nominating and Corporate Governance Committee and any additional information and factors that the Board believes to be relevant. If the Board accepts a Director's resignation offer pursuant to this process, the Nominating and Corporate Governance Committee will recommend to the Board and the Board will thereafter determine whether to fill the vacancy or reduce the size of the Board. Any Director who tenders his or her resignation pursuant to this provision will not participate in the proceedings of either the Nominating and Corporate Governance Committee or the Board with respect to his or her own resignation offer.
The Board is free to select its Chairperson and the Company's Chief Executive Officer in the manner it considers to be in the best interests of the Company at the point of selection. The Chairperson and the Chief Executive Officer may be filled by one individual or by two different individuals. The Board does not have a policy on whether or not the role of the Chairperson and Chief Executive Officer should be separate or combined and, if it is to be separate, whether the Chairperson should be selected from the non-employee Directors or be an employee.
When the positions of Chairperson and Chief Executive Officer are combined, or when the positions are separate and the Chairperson is not an independent Director, an independent Director who is elected annually by the remaining independent Directors shall serve as the lead independent director. In the event the Company has a lead independent director, he or she shall perform the functions determined by the Board.
Directors are encouraged to attend continuing education programs at the reasonable expense of the Company. From time to time, the Board may arrange for related presentations to the Board during its regularly scheduled meetings.
- V. BOARD MEETINGS
The Board should receive presentations from the management of the Company, engage in a discussion on the Company's key strategic initiatives and conduct an evaluation of the Company's competitive position at least one time per year.
The Chairperson or the Chief Executive Officer shall establish all Board meeting agendas and schedules. Each Director shall have the right to suggest items to be included on the Board meeting's agenda. Management generally shall provide the Board with concise written information with respect to each agenda item, as appropriate, requiring action or discussion by the Board. Management should seek to provide materials related to agenda items sufficiently in advance of Board meetings to allow Directors to review and prepare for discussion of the items at the meeting. In some cases, due to the timing or the sensitive nature of a specific issue, materials presented at the Board meeting will not be available for removal from the Board meeting by meeting participants.
Independent Directors, who the Board has determined have no material relationship with the Company and who are otherwise "independent directors" under the rules of the Nasdaq Stock Market shall have regularly scheduled meetings, at least once per year, at which only independent Directors are present.
- VI. COMMITTEES
The Board currently maintains three committees: the Nominating and Corporate Governance Committee, the Audit Committee and the Compensation Committee. The committees shall have the responsibilities set forth in their respective charters. The Board reserves the right to disband committees or form new committees, including ad hoc committees to handle specifically defined assignments.
The Nominating and Corporate Governance Committee, the Audit Committee and the Compensation Committee shall be composed entirely of Directors who are "independent directors" under the rules of the Nasdaq Stock Market and satisfy the other applicable requirements under the rules of the Nasdaq Stock Market (including, with respect to the members of the Audit Committee, for example, the requirements of Rule 10A under the Securities Exchange Act of 1934, as amended).
Each Committee will meet as often as may be deemed necessary or appropriate, in its judgment, either in person or telephonically, and at such times and places as the Committee shall determine with further meetings to occur, or actions to be taken by unanimous written consent, when deemed necessary or desirable by the Committee or the chairperson of each committee (each, a "Committee Chairperson"). The Committee Chairperson, or his or her designee, shall preside at each meeting of his or her respective committee and set the agendas for such committee meetings. All Directors, whether members of a committee or not, are invited to make suggestions for additions to the agenda of his or her committee or to request that an item from a committee agenda be considered by the Board. Each committee shall give a periodic report of its activities to the Board.
- VII. EVALUATION
The Board should conduct a self-evaluation periodically to determine whether it and its members and committees are functioning effectively. The evaluation may include such items as an assessment of the Board's contribution to the Company, compliance with these Guidelines, and an assessment of areas in which the Board and each committee could improve.
Each committee of the Board should also conduct a self-evaluation periodically and report the results to the Board. Each committee's evaluation should compare the performance of the committee with the requirements of its written charter.
The Nominating and Corporate Governance Committee shall annually oversee an evaluation of each Director's individual performance.
The Board shall conduct an annual performance assessment of the Chief Executive Officer based on objective criteria. This annual performance assessment, together with an evaluation of the achievement of any specific performance objectives, will be used by the Compensation Committee in the course of its deliberations when considering its recommendation to the Board of the compensation of the Chief Executive Officer.
- VIII. COMPENSATION
The Compensation Committee will periodically review the status of Board compensation and make recommendations to the Board with respect to this matter.
- IX. MANAGEMENT SUCCESSION
The Compensation Committee shall review succession plans relating to positions held by executive officers, and make recommendations to the Board regarding the selection of individuals to fill these positions. Additionally, the Chairperson's and the Chief Executive Officer's recommendation of a successor, should either person be unexpectedly disabled, shall be maintained by an officer of the Company.
- X. AMENDMENTS
The Board may amend or modify these Guidelines at any time, in accordance with applicable law and regulations.
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