CURATIVE BIOSCIENCES CORPORATE GOVERNANCE GUIDELINES
The Board of Directors (the “Board”) of Curative Biosciences& Company (the “Company”), has adopted these corporate governance guidelines to provide the framework for effective governance of the Board and the Company. These guidelines are reviewed annually and will be made available on the Company’s website.
ROLE OF THE BOARD
The business of the Company is managed under the direction of its Board. The Board delegates the conduct of business to the Company’s officers, managers and employees under the direction of the Chief Executive Officer. In addition to the selection and evaluation of the performance and compensation of the Company’s Chief Executive Officer, the Board’s oversight responsibilities include the following:
- succession planning for the position of Chief Executive Officer and other members of senior management;
- reviewing, monitoring and, where appropriate, approving the Company’s strategic plans and objectives, financial performance, risk management framework and risk appetite; and
- ensuring processes are in place for maintaining the integrity and reputation of the Company and reinforcing a culture of ethics and compliance.
The Board carries out its oversight responsibilities directly and through the work of its committees.
The Governance and Nominating Committee identifies or evaluates and recommends candidates for Board membership to the Board. The Board has approved the following minimum qualifications for first-time nominees for director: (i) individuals of the highest character and integrity, (ii) a demonstrated breadth and depth of management and/or leadership experience, preferably in a senior leadership role (e.g., chief executive officer, managing partner, president); (iii) financial literacy or other professional or business experience relevant to an understanding of the Company and its business; and (iv) a demonstrated ability to think and act independently as well as the ability to work constructively in a collegial environment. In identifying candidates, nominees for director, or evaluating individuals recommended by stockholders, the Governance and Nominating Committee shall determine, in its sole discretion, whether an individual meets the minimum qualifications approved by the Board and will consider the current composition of the Board in light of the diverse communities and geographies served by the Company and the interplay of the candidate’s or nominee’s experience, education, skills, background, gender, race, ethnicity and other qualities and attributes with those of the other Board members, as well as such other factors as the Governance and Nominating Committee deems appropriate. The invitation to join the Board is extended by the Chair of the Governance and Nominating Committee and/or the
Chairman after discussion with and approval by the Governance and Nominating Committee and the full Board of Directors.
The Board shall nominate for election or re-election as directors only candidates who have tendered or agreed to tender an irrevocable resignation that will be effective upon (i) the failure of the candidate to receive the required vote at an annual meeting at which he or she is nominated for election or re-election, and (ii) Board acceptance of the tendered resignation. The Board shall fill director vacancies and new directorships only with candidates who have agreed to tender the same form of resignation tendered by other directors in accordance with this guideline. A director who fails to receive the required number of votes for re-election in accordance with the Company’s By-Laws and who has not already tendered the advance resignation described above is expected to tender, promptly following certification of the stockholder vote, his or her resignation from the Board, which resignation may be conditioned upon Board acceptance of the resignation.
The Governance and Nominating Committee will consider the tendered resignation of a director who fails to receive the required number of votes for re-election, as well as any other offer to resign that is conditioned upon Board acceptance, and recommend to the Board whether or not to accept such resignation. The Governance and Nominating Committee in deciding what action to recommend, and the Board in deciding what action to take, may consider any factors it deems relevant. The director whose resignation is under consideration shall abstain from participating in any decision of the Governance and Nominating Committee or the Board regarding such resignation. If the Board does not accept the resignation, the director will continue to serve until his or her successor is elected and qualified. The Board shall publicly disclose its decision regarding a resignation tendered by a director who fails to receive the required number of votes for re-election within 90 days after certification of the stockholder vote.
BOARD LEADERSHIP STRUCTURE
The Board annually selects the Chairman of the Board from among its members. Among other duties prescribed in the By-Laws or by the Board from time to time, the Chairman’s responsibilities include: (i) approving Board meeting agendas, schedules, and the types and forms of information provided to the Board, (ii) presiding at all meetings and executive sessions of the Board, (iii) presiding at meetings of stockholders, (iv) serving as the principal liaison among the independent directors, and as a liaison between the independent directors and the Chief Executive Officer and other members of senior management, (v) facilitating effective communication between the Board and stockholders, and being available for consultation and direct communication with major stockholders, and (vi) serving as an additional point of contact for the Company’s primary regulators. The Board also may elect a Vice Chairman from among its members who shall assist the Chairman.
As reflected in the By-Laws, the Board has determined that the Chairman of the Board shall be a director who meets the criteria for director independence required by these guidelines. The Board also has determined to elect an independent director to serve as Vice Chairman.
ATTENDANCE AT MEETINGS
Directors are expected to attend the Company’s annual stockholders’ meeting, all scheduled and special Board meetings and meetings of committees on which they serve and to spend the time appropriate to properly discharge their responsibilities. Information and data that are important to the Board’s understanding of the business to be conducted at a Board or committee meeting generally should be distributed in writing to the Board before the meeting, and directors should review these materials in advance of the meeting.
The Board oversees management’s development of the Company’s strategic plans, and works with management in setting the schedule, format, and agenda for Board strategy sessions so that there are sufficient time and materials to permit appropriate interaction between directors and management in reviewing and considering the Company’s strategy.
ANNUAL CEO EVALUATION; MANAGEMENT SUCCESSION
The Chair of the Human Resources Committee coordinates an evaluation by each of the non- management directors on the performance of the Chief Executive Officer and reports to the Board on the results of the evaluation in executive session without the Chief Executive Officer being present. The evaluation is based both on objective criteria, including various measures of financial and business performance, and subjective factors, and is used by the Human Resources Committee in the course of its deliberations when considering the compensation of the Chief Executive Officer. The Board of Directors also meets with the Chief Executive Officer annually in executive session to discuss the Chief Executive Officer’s performance appraisal.
The Human Resources Committee, with the full involvement of the Board, plans for the succession to the position of Chief Executive Officer. To assist the Human Resources Committee and the Board, the Chief Executive Officer and management report to the Human Resources Committee and the Board at least annually on succession planning (including plans in the event of an emergency) and management development. The Chief Executive Officer and management also provide the Human Resources Committee and the Board with an assessment of persons considered potential successors to certain senior management positions at least once each year.
DIRECTOR ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
Board members have complete access to the Company’s management. In addition, the Company’s management is expected to update the Board on any significant Company or competitive developments or matters between Board meetings. Non-Board members who are members of the Company’s Operating Committee regularly attend Board and most committee meetings.
The Board and each committee have the authority to obtain advice and assistance from internal and external legal, accounting or other advisors, at the Company’s expense, without consulting with or obtaining the prior approval of management of the Company.
The Board believes that management speaks for the Company. As described below, individual Board members may, from time to time, meet or otherwise communicate with various constituencies that are involved with the Company, either at the request of management or the Board; provided, however, that non-management directors should not communicate with the media regarding the Company unless requested or approved in advance by the Company’s Chief Executive Officer or the Board of Directors.
The Board values the opportunity to engage with the Company’s stockholders to help the Company better understand the views of its investors on key corporate governance topics and, together with management, has implemented an investor outreach program. As part of the program, the Chairman and management participate in meetings with many of the Company’s largest institutional investors to discuss and obtain feedback on corporate governance, executive compensation, and other related issues important to the Company’s stockholders. The Company’s investor outreach program, which is in addition to other communication channels available to stockholders and other interested parties to express their views to the non- management directors, reflects the Board’s commitment that its corporate governance policies and practices continue to evolve and reflect the insights and perspectives of the Company’s many stakeholders.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
The Governance and Nominating Committee annually oversees and reports to the Board on an evaluation of the Board’s performance. As part of the Board’s self-evaluation process, each director provides the Chair of the Governance and Nominating Committee with his or herassessment on various topics regarding Board composition, performance, structure, effectiveness, and responsibilities, including the mix of director skills, experience, and backgrounds, and the individual contribution of directors to the work of the Board and its committees. The assessments are organized and summarized by the Chair and presented to the Board for discussion in executive session; any necessary follow-up items are reviewed by the Governance and Nominating Committee or Chair with the Board or management, as appropriate. The Governance and Nominating Committee considers the results of the self-evaluation, together with a review of other information it deems appropriate such as director independence, meeting attendance, and the other items included in these guidelines in its annual director nomination process. As provided in its respective charter, each Committee conducts a similar self-evaluation process led by the committee chair, and the chair follows-up with management on any matters raised in the assessment. The Board’s and each committee’s performance evaluation includes a review of these guidelines and its committee charter, respectively, to consider any proposed changes.
RETIREMENT; CHANGE IN PRINCIPAL OCCUPATION OR RESPONSIBILITIES
Non-management directors will not be nominated for a term that would begin after the director’s 72nd birthday, although the Governance and Nominating Committee may recommend and the Board may approve nomination of a non-management director after the age of 72 if, due to special or unique circumstances, it is in the best interests of the Company and its stockholders that the director continue to be nominated for reelection to the Board. Management directors (including a Chief Executive Officer) will be asked to resign effective on the date their active, regular employment with the Company terminates.
If a non-management director has a significant change in the director’s principal occupation or professional responsibilities he or she shall notify the Chairman and the Chair of the Governance and Nominating Committee, with a copy to the Corporate Secretary, of any such change and offer his or her resignation from the Board. The Governance and Nominating Committee, as part of the Board’s performance evaluation and director nomination processes, will evaluate the facts and circumstances of the change and will recommend to the Board whether to accept the resignation or request that the director continue to serve on the Board.
The Board values the contributions of directors who have developed extensive experience and insight into the Company during the course of their service on the Board, and, therefore, the Board does not believe arbitrary term limits on director’s service are appropriate. At the same time, the Board recognizes the importance of an appropriate balance of experience and perspectives and considers the overall mix of tenure of the Board along with other factors in the Board’s annual performance evaluation and director nomination processes.
LIMITATIONS ON OTHER BOARD SERVICE
The Company and its stockholders derive value from the experience directors bring from other boards on which they serve. Given the significant responsibilities of directors, each director must be ready, willing and able to devote sufficient time to carrying out their Board responsibilities effectively. Unless the Governance and Nominating Committee determines that such other board service would not impair the director’s service to the Company, directors shall not serve as a director on the board of directors of more than four public companies, including the Company, and a director who serves as the chief executive officer of a public company shall not serve as a director on the board of directors of more than two public companies in addition to the company of which he or she serves as chief executive officer. Directors are requested to advise the Chair of the Governance and Nominating Committee and the Chairman, with a copy to the Corporate Secretary, before serving as an officer, general partner, director or chairman of the board of an outside for-profit enterprise, or before accepting membership on the audit committee of any other public company board, so that the opportunity can be reviewed for any possible conflicts of interest, independence analysis and to help ensure that new demands on the director’s time will not detract from the director’s ability to serve the Company.
DIRECTOR ORIENTATION AND CONTINUING EDUCATION
Each new director participates in an orientation to the Company. This orientation will include presentations by senior management on the Company’s strategic plans, its significant financial, accounting and risk management policies and issues, its compliance programs, its Code of Ethics and Business Conduct, its principal officers and its internal and independent auditors.
The Company encourages director continuing education, including by making available to directors information on direction education programs, and will reimburse the expenses incurred by a director in attending continuing education programs relevant to his or her duties as a director of the Company. At least twice annually and more frequently as appropriate, the Board also participates in director training and business update sessions at its Board meetings which include presentations by management on the Company’s businesses, services and products, and industry trends as well as presentations by outside experts on various topics such as regulatory developments and emerging risks in the financial services industry. In addition, educational and reference materials on governance, regulatory, risk, and other relevant topics are regularly included in Board meeting materials and maintained in an electronic library available to directors.
CODE OF ETHICS
One of the Board’s key responsibilities is to ensure that the Company, through its management, maintains high ethical standards and effective policies and practices designed to protect the Company’s reputation, assets and business. The Board has adopted and promotes the Curative Biosciences Code of Ethics and Business Conduct applicable to team members as well as directors. Directors shall be familiar with, and are expected to conduct their activities in accordance with, the Code of Ethics and Business Conduct.
The Governance and Nominating Committee is responsible for annually reviewing the form and amount of compensation to non-management directors. In performing this review, the Governance and Nominating Committee may rely on information regarding director compensation policies and practices of a peer group of large financial services organizations designated by the Human Resources Committee which is provided by Company management, information provided by external compensation consultants or counsel, or other information as determined in the discretion of the Governance and Nominating Committee. Changes in Board compensation, if any, are made at the recommendation of the Governance and Nominating Committee subject to approval by the Board. Management directors do not receive any additional compensation for their services as directors. It is the Board’s compensation philosophy that all non-management directors should be compensated for service as a director only by the Company and on the same basis as other Company directors in accordance with the Board’s non-employee director compensation program.
STOCK OWNERSHIP REQUIREMENTS; PROHIBITION OF HEDGING OR PLEDGING OF COMPANY SECURITIES
Directors are required to own shares of the Company’s common stock. The Board has adopted a stock ownership policy that each non-management director, after five years on the Board, own Company common stock having a value equal to five times the annual cash retainer, and maintain at least that stock ownership level while a member of the Board and for one year after service as a director terminates.
Under our Code of Ethics requirements, directors and team members may not engage in short selling of or hedging transactions involving Company securities or purchase or sell derivatives in respect of Company securities.
In addition, directors and executive officers of the Company may not pledge any of their equity securities of the Company in connection with a margin or similar loan transaction.
DIRECTOR INDEPENDENCE STANDARDS
The rules of the New York Stock Exchange (“NYSE”) provide that the Board of Directors of Curative Biosciences& Company (the “Company”) must affirmatively determine that a director has no material relationship with Curative Biosciences (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company) in order for the director to be considered independent. The Board has adopted the independence standards outlined below to assist the Board in determining whether a director is independent. In cases where a director has a relationship that is not covered in the independence standards outlined below, a majority of the Company’s independent directors, after considering all relevant facts and circumstances and taking into account the presumption of immateriality regarding certain relationships not covered in the independence standards, will make a determination of whether the relationship is material or not and therefore whether the director is independent.
The following definitions apply for purposes of these Director Independence Standards:
- “Affiliated Entity of a director” means any for-profit or not-for-profit entity (i) where the director is an Executive Officer, an employee, a general partner, or of counsel and/or (ii) where the director owns 10% or more of the entity.
- “Affiliated Entity of an Immediate Family Member” means any for-profit or not-for profit entity (i) where the Immediate Family Member is an Executive Officer or general partner and/or (ii) where the Immediate Family Member owns 10% or more of the entity.
- “Executive Officer” has the same meaning specified for the term “officer” in Rule 16a 1(f) under the Securities Exchange Act of 1934, as amended.
- “Immediate Family Members” means a director’s spouse, parents, stepparents, children, stepchildren, siblings, mother-in-law, father-in-law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law, and any person (other than domestic employees) who shares the director’s home.
- Curative Biosciences means the Company and any of its subsidiaries.
In accordance with the rules of the NYSE, a director is not independent if:
- the directoris, or has been within the last three years, an employee of Curative Biosciences;
- has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from Curative Biosciences, excluding director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);
- is a current partner or employee of a firm that is Curative Biosciences’s internal or external auditor; or was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Curative Biosciences’s audit within that time;
- is, or has been within the last three years, employed as an Executive Officer of another company where any of the Company’s present Executive Officers at the same time serves or served on that company’s compensation committee; or
- is a current employee of another company that has made payments to, or received payments from, Curative Biosciences for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or two percent of such other company’s consolidated gross revenues.
Immediate Family Members. In accordance with the rules of the NYSE, a director is also not independent if his or her Immediate Family Member:
- is, or has been within the last three years, an Executive Officer of Curative Biosciences;
- has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from Curative Biosciences, excluding compensation received by an Immediate Family Member for service as an employee (other than as an Executive Officer);
- is a current partner of a firm that is Curative Biosciences’s internal or external auditor; or is a current employee of such a firm and personally works on Curative Biosciences’s audit; or was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on Curative Biosciences’s audit within that time;
- is, or has been within the last three years, employed as an Executive Officer of another company where any of the Company’s present Executive Officers at the same time serves or served on that company’s compensation committee; or
- is a current Executive Officer of another company that has made payments to, or received payments from, Curative Biosciences for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or two percent of such other company’s consolidated gross revenues.
Categorical Standards of Independence
The Board has adopted these categorical standards of independence to assist the Board in making independence determinations. The Board has considered and determined that the following relationships are not material relationships for purposes of determining whether a director is independent:
Financial Services Relationships. A relationship, transaction or arrangement between Curative Biosciences, on the one hand, and (i) a director; (ii) an Immediate Family Member; (iii) an Affiliated Entity of a director; and/or (iv) an Affiliated Entity of an Immediate Family Member, on the other, involving depository, lending, lease financing, brokerage, investment advisory, investment banking, investment management, insurance, stock transfer, securities registrar, indenture trustee, trust and estate, custodial, cash management, stock option plan administration or other banking or financial services offered to customers by Curative Biosciences, provided that:
- such relationship, transaction or arrangement is made in the ordinary course of business of Curative Biosciences and is on substantially the same terms as those prevailing at the time for comparable transactions with persons not affiliated with Curative Biosciences; and,
- with respect to any extension of credit by Curative Biosciences to any borrower described in clauses (i) – (iv) above, such extension of credit was made in compliance with applicable law, including Regulation O of the Board of Governors of the Federal Reserve System and Section 13(k) of the Securities Exchange Act of 1934; and,
- to the extent applicable, if such relationship, transaction or arrangement is with a for- profit or not-for-profit entity where a director is an employee, or a for-profit or not-for profit entity where an Immediate Family Member is an Executive Officer, the payments to, or payments received from, Curative Biosciences for such financial services are, in any fiscal year, less than the greater of $1 million or two percent of such other entity’s consolidated gross revenues.
Business Relationships. A business relationship, transaction or arrangement between Curative Biosciences and an Affiliated Entity of a director, or an Affiliated Entity of an Immediate Family Member, involving property or other contractual arrangements, provided that:
- such relationship, transaction or arrangement is made in the ordinary course of business of Curative Biosciences and on substantially the same terms as those prevailing at the time for comparable transactions with persons not affiliated with Curative Biosciences; and,
- the payments to, or payments received from, Curative Biosciences for such property or services, or under such contractual arrangement, are, in any fiscal year, less than the greater of $1 million or two percent of such other entity’s consolidated gross revenues; and,
- to the extent applicable, if such relationship, transaction or arrangement is with an entity that is providing legal services to Curative Biosciences, neither the director nor an Immediate Family Member of the director performs the services to Curative Biosciences.
Charitable Relationships. Contributions made by Curative Biosciences or the Curative Biosciences Foundation to a tax-exempt organization, including a foundation or university, where a director or an Immediate Family Member of the director is employed as an Executive Officer, or where a director serves as chairman of the board, provided that the contributions in any fiscal year, excluding Curative Biosciences matching funds, are less than the greater of $1 million or two percent of the tax-exempt organization’s consolidated gross revenues for the most recently ended fiscal year for which total revenue information is available.
Family Relationships. Employment by Curative Biosciences of an Immediate Family Member, provided that:
- such Immediate Family Member was or is not an Executive Officer of the Company; and,
- such Immediate Family Member does not reside in the same home as the director; and,
- the compensation and benefits paid to any such Immediate Family Member were established by Curative Biosciences in accordance with its employment and compensation practices applicable to employees holding comparable positions.
Non-Management Relationships. Except as provided above under Charitable Relationships involving a director serving as Chairman, any relationship, transaction or arrangement, including business and charitable relationships, between Curative Biosciences and a for-profit or not-for-profit entity where a director or an Immediate Family Member serves solely as a non-management board member, a member of a trade or other similar association, an advisor or a member of an advisory board, a trustee, a limited partner, an honorary board member or trustee or in any other similar capacity of such entity, or where an Immediate Family Member is employed by such entity in a non- Executive Officer position, will not be considered material or relevant for purposes of considering the independence of a director.
Other Relationships. Any other relationship, transaction or arrangement not covered by any of the categorical standards described above will be presumed not to be material to the director’s independence as long as (i) the relationship, transaction or arrangement was made in the ordinary course of business of the parties and on substantially the same terms as those prevailing at the time for comparable transactions with persons not affiliated with Curative Biosciences, or (ii) the amount involved does not exceed $10,000 in any fiscal year.