Purpose. The purpose of these Corporate Governance Guidelines (these “Guidelines”) adopted by the Board of Directors (the “Board”) of Doofus Corporation, a Delaware corporation (the “Corporation”), is to assist the Board in the exercise of its responsibilities. These Guidelines are intended to serve as a flexible framework within which the Board may conduct its business and are subject to modification from time to time by the Board.
Objectives. The Board’s objectives are to build long-term value for the Corporation’s shareholders and to assure the vitality of the Corporation for its customers, employees, and other stakeholders. The Board understands that the shareholders rely upon the Board to act in the best interest of the Corporation in making decisions or taking actions not requiring shareholders’ approval and shall at all times act accordingly.
Responsibilities. The business and affairs of the Corporation shall be managed by or under the direction of the Board. A director is expected to spend the time and effort necessary to properly discharge such director’s responsibilities. Accordingly, a director is expected to regularly attend meetings of the Board and committees of which such director is a member, and to review prior to meetings material distributed in advance for such meetings. A director is also expected to attend the Corporation’s annual meeting of shareholders. A director who is unable to attend any meeting (which it is understood shall occur on occasion) is expected to notify the Chairperson of the Board or the Chairperson of the appropriate committee in advance of such meeting. In addition, directors are expected to act in the best interests of the Corporation, maintain independence and integrity, develop and maintain a sound understanding of the Corporation’s businesses, industries and strategies, review management development and succession planning, endeavor to be available on reasonable notice, attend and prepare for meetings, and provide active, objective and constructive participation at meetings of the Board and its committees.
The Board’s responsibilities include, but are not limited to the following:
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 shareholders based on the recommendations of the Nominating and Corporate Governance Committee. The Board shall identify and review possible candidates for Board membership consistent with criteria approved by the Board and annually recommend qualified candidates to be proposed for election to the Board at the annual meeting of the Corporation’s shareholders. The Board shall consider the appropriate size of the Board with a view to facilitating effective decision making. In the event of a vacancy on the Board between annual meetings of the Corporation’s shareholders, the Board may identify, review, and recommend qualified candidates for Board membership for Board consideration to fill such vacancies, if the Board determines that such vacancies shall be filled. When formulating these recommendations, the Board shall seek and consider advice and recommendations from management and may seek or consider advice and recommendations from accountants, auditors, consultants, outside counsel, or other advisors as it or the Board may deem appropriate.
Board Membership Criteria. The Board is responsible for periodically determining the appropriate skills, perspectives, experiences, and characteristics required of Board candidates, taking into account the Corporation’s needs and current composition of the Board. This assessment should include appropriate knowledge, experience, and skills in areas deemed critical to understanding the Corporation and its businesses; personal characteristics, such as integrity and judgment; and candidates’ commitments to the boards of other companies. Each Board member is expected to ensure that other existing and planned future commitments do not materially interfere with the board member’s service as a director and that he or she devotes the time necessary to discharge his or her duties as a director. The Board is responsible for periodically reviewing and suggesting appropriate modifications to these qualification guidelines. The Board believes the qualification guidelines provided are currently appropriate, but it may change these qualification guidelines as the Corporation’s and Board’s needs warrant.
Other Directorships. The Corporation does not have a policy limiting the number of other company boards upon which a director may serve. The Board, however, shall consider the number of other public company boards and other boards (or comparable governing bodies) on which an individual is a board member in making a determination of whether to recommend such individual to the Board as a candidate for a Board position. Board members are expected to promptly notify the other board members of any changes in status on other boards and their committees.
Independence of the Board. The Board shall identify each director who qualifies as an independent director (collectively, “Independent Directors”) under the requirements of any securities exchange on which the Corporation’s securities are listed or quoted for trading. The Board shall review annually the relationships that each director has with the Corporation (either directly or as a partner, shareholder, officer, or representative of an organization that has a relationship with the Corporation). Following such annual review, only those directors who the Board affirmatively determines have no material relationship with the Corporation (either directly or as a partner, shareholder, officer, or representative of an organization that has a relationship with the Corporation) shall be considered Independent Directors, subject to any additional requirements prescribed by applicable law. The Board may adopt and disclose categorical standards to assist it in determining director independence.
Board Compensation. A director who is also an officer of the Corporation shall not receive additional compensation for such service as a director. The Corporation believes that compensation for non-employee directors should be competitive and may from time to time encourage ownership of the Corporation’s common stock through the payment of a portion of director compensation in Corporation stock, options to purchase Corporation stock, stock appreciation rights, or similar compensation whose value is based on the Corporation’s stock. The Compensation Committee shall periodically review the level and form of the Corporation’s director compensation, including how such compensation compares to director compensation of companies of comparable size, industry, and complexity. Such review shall also include a review of both direct and indirect forms of compensation to the Corporation’s directors, including, if applicable, any charitable contributions by the Corporation to organizations in which a director is affiliated and consulting or other similar arrangements between the Corporation and a director. Proposed changes to director compensation shall be submitted to the Board for approval. Members of the Audit Committee may not, other than in their capacity as a member of the Audit Committee, the Board, or any other board committee, accept directly or indirectly any consulting, advisory, or other compensatory fees from the Corporation or any of its subsidiaries; provided that, unless the rules of any relevant securities exchanges require otherwise, compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Corporation (provided that such compensation is not contingent in any way on continued service).
Complaint Procedures. Any employees or other interested parties desiring to voice their complaints or concerns regarding the Corporation with the independent directors of the Corporation may do so by the method set forth in the Corporation’s Code of Ethics and Business Conduct, a copy of which shall be maintained on the Corporation’s website.
Self-Evaluation by the Board. The Board shall conduct an annual self-assessment of its performance as well as the performance of each committee of the Board, the results of which shall be discussed with the Board and each committee. The assessment should include a review of any areas in which the Board or management believes that the Board or its committees could improve.
Management Succession Planning. The Board shall oversee the management succession planning process. The Board shall work with the Compensation Committee to ensure that the Corporation has a plan in place for the succession of the Chief Executive Officer and other senior executives. The plan should address both planned and unexpected vacancies and include development and retention strategies for high-potential candidates. The Board shall periodically review and discuss with management the succession plans and the Corporation’s efforts to develop and retain key talent.
Director Orientation and Continuing Education. The Corporation shall provide a comprehensive orientation program for new directors. The program shall include an overview of the Corporation’s business, operations, and strategic plans, as well as the roles and responsibilities of the Board and its committees. The Corporation encourages directors to participate in continuing education programs to enhance their understanding of the Corporation’s business and industry and to stay informed about current developments in corporate governance.
Code of Ethics. The Board shall adopt and maintain a Code of Ethics and Business Conduct applicable to all directors, officers, and employees. The Code shall address conflicts of interest, confidentiality, compliance with laws and regulations, and reporting procedures for ethical violations. The Board shall review the Code annually and update it as necessary to reflect changes in laws or regulations and evolving best practices.
Clawback Policy. The Corporation shall adopt a clawback policy to recover incentive-based compensation in the event of a financial restatement due to misconduct or a material violation of the Corporation’s Code of Ethics and Business Conduct. The policy shall be designed to comply with applicable laws and regulations and to provide clear procedures for the recovery of compensation.
Diversity and Inclusion. The Board is committed to fostering diversity and inclusion in its membership. The Nominating and Corporate Governance Committee shall consider diversity as a key factor when evaluating potential director candidates. The Board shall periodically review and assess its diversity goals and practices and report on its diversity efforts.
Risk Oversight. The Board is responsible for overseeing the Corporation’s risk management practices. The Board shall ensure that the Corporation has implemented appropriate systems and processes to identify, assess, and manage risks. The Board may establish a risk committee or designate a committee to focus on specific risk areas.
Shareholder Communication. The Corporation shall maintain procedures for shareholders to communicate with the Board or with independent directors. The procedures shall be designed to ensure that shareholder communications are reviewed and addressed in a timely and effective manner. The Corporation shall make information about these procedures readily accessible to shareholders.
Review and Amendment of Guidelines. The Board shall review these Guidelines at least annually and make revisions as necessary to reflect changes in laws, regulations, or best practices. Any amendments to these Guidelines shall be approved by the Board and disclosed in accordance with applicable rules and regulations.
Adopted as of September 4, 2024