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bebe stores, inc.
CORPORATE GOVERNANCE PRINCIPLES AND PRACTICES FOR THE BOARD OF DIRECTORS
The fundamental role of the Board of Directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the bebe stores, inc. (“Company”) and its shareholders. The Board of Directors of the Company (the "Board") is responsible for overseeing the exercise of corporate powers and ensuring that the Company's business and affairs are managed to meet its stated goals and objectives. The Board recognizes its responsibility to engage, and provide for the continuity of, executive management that possesses the character, skills and experience required to attain the Company's goals and its responsibility to ensure that nominees for the Board of Directors possess appropriate qualifications and reflect a reasonable diversity of backgrounds and perspectives.
The Board shall be comprised of between 5-9 members, a majority of whom shall meet the independence requirements of The Nasdaq Stock Market, Inc. then in effect. Except as otherwise provided in the charter of the Nominating and Corporate Governance Committee, upon receipt of the recommendation of the Nominating and Corporate Governance Committee, the Board of Directors shall appoint a new member or members in the event that there is a vacancy on the Board or in the event that the Board determines that the number of members on the Board should be increased.
The Board shall meet at least four times each fiscal year, and may hold additional meetings in person or telephonically as often as may be necessary or appropriate, in the discretion of the Chairman of the Board. One meeting of the Board each fiscal year shall be dedicated primarily to strategic planning for the Company. Prior to each meeting, the Chairman of the Board\ or his or her designee will circulate the agenda for the meeting and appropriate preparatory materials to each member of the Board.
Members of the Board are expected to use all reasonable efforts to attend each meeting. The Chairman of the Board or his or her designee may also request that members of management, in-house or outside legal counsel, or other advisors attend the meetings of the Board.
Minutes of each meeting shall be prepared under the direction of the Chairman of the Board and circulated to each member of the Board for review and approval.
4. Authority and Responsibilities of the Board
The specific authority and responsibilities of the Board and its members shall include, but are not limited to, the following:
5. Policies and Practices
The Board is responsible for organizing its functions and conducting its business in the manner it deems most effective and efficient, consistent with its duties of good faith, due care and loyalty. To meet that responsibility, the Board has adopted a set of flexible policies to guide its governance practices in the future. These practices, set forth below, will be regularly re-evaluated by the Nominating and Corporate Governance Committee in light of changing circumstances in order to continue serving the best interests of shareholders. Accordingly, the summary of current practices is not a fixed policy or resolution by the Board, but merely a statement of current practices that is subject to continuing assessment and change.
6. Determination of Independence of Non-Employee Directors
No relationship between any non-employee director and the Company should be of a nature that could compromise the independence or judgment of any Board member in governing the affairs of the Company. The determination of what constitutes independence for a non-employee director in any individual situation shall be made by the Board in light of the totality of the facts and circumstances relating to such situation and in compliance with the requirements of The Nasdaq Stock Market, Inc.'s applicable listing standards and other applicable rules and regulations.
The present Board Committees are the Audit Committee, the Compensation and Management Development Committee and the Nominating and Corporate Governance Committee. Members of all committees are non-employee directors of the Company. The Board considers its current committee structure to be appropriate but the number and scope of committees may be revised as appropriate to meet changing conditions and needs.
8. Board Member Criteria
The Nominating and Corporate Governance Committee is responsible for reviewing the appropriate skills and characteristics required of directors in the context of prevailing business conditions and for making recommendations regarding the size and composition of the Board. The objective is a Board that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience.
9. Procedure for Selecting New Director Candidates
The Board is responsible for selecting its members, subject to shareholder approval, but delegates the screening process to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is expected to work closely with the Board in determining the qualifications desired in new Board members and making recommendations of candidates to the full Board.
10. Board Member Orientation
An orientation process will be implemented to acquaint new directors with the business, history, current circumstances, key issues and top managers of the Company.
11. Selection of Agenda Items for Board Meetings
The Chairman of the Board with appropriate members of management develop the agenda for each Board meeting. The agenda is circulated in advance and Board members may suggest additional items for consideration.
12. Board Materials Distributed in Advance
As much information and data as practical relating to the meeting agenda items and the Company's financial performance is sent to Board members for review in advance of meetings.
13. Executive Sessions
Each Board meeting agenda will include time for an executive session. In addition, at least two times a year, the independent members of the Board will meet in executive session.
14. Board Access to Senior Management
All Board members have access to all Company employees, with the expectation that such contact would be minimally disruptive to the business operations of the Company. The president and chief executive officer is encouraged to invite senior managers who can provide additional insight into business matters being discussed and those with high future potential who should be given personal exposure to members of the Board to the meetings.
15. Assignment and Rotation of Committee Members
The Nominating and Corporate Governance Committee is responsible for reviewing and recommending to the Board the assignment of directors to various committees. The Nominating and Corporate Governance Committee will also recommend to the Board an appropriate rotation process to ensure diversity of Board member experience.
16. Frequency and Length of Committee Meetings
Generally, committees meet in conjunction with regular Board meetings. Committee chairpersons may also call meetings when they deem it necessary or appropriate. Committee meetings may be as frequent and as long as needed.
17. Committee Meeting Agendas
The agenda for each committee meetings is developed by the chairperson of the committee in consultation with appropriate members of management. The agenda for each meeting is circulated or discussed in advance of the meeting and Committee members may suggest additional items for consideration.
18. Board Compensation Review
Each year, the Nominating and Corporate Governance Committee of the Board will review the Board's compensation in relation to other comparable companies nationwide. Any changes in Board compensation will be recommended by the Nominating and Corporate Governance Committee and approved by the Board.
19. Assessing the Board's Performance
The Nominating and Corporate Governance Committee will conduct an annual evaluation of the overall effectiveness of the organization of the Board and the Board's performance of its governance responsibilities. The Committee will report its findings to the whole Board for discussion.
20. Conflicts of Interest
Directors are expected to avoid any action, position or interest that conflicts with an interest of the Company or gives the appearance of a conflict. If a Director has any concerns about whether any action, position or interest might conflict with his or her duties to the Company, the Director should consult with the Board in advance of taking any such action, position or interest and the Board in its discretion will determine whether such member should continue to serve as a director for any portion of his or her unexpired term.
21. Term Limits/Retirement Age
The Board believes that significant tenure as a Board member is advantageous to the Company and its shareholders. Accordingly, no term limits for directors have been established.
22. Formal Evaluation of the Chief Executive Officer
Each year the Chairman of the Nominating and Corporate Governance Committee and the Chairman of the Compensation and Management Development Committee will conduct a formal evaluation of the performance of the chief executive officer based on appropriate quantitative and qualitative criteria.
23. Succession Planning
The Chairman of the Compensation and Management Development Committee, together with the chief executive officer, will annually review succession planning practices and procedures with the Board, and provide the Board with a recommendation as to succession in the event of each senior officer's termination of employment with the Company for any reason (including death or disability).
24. Board Interaction with Institutional Investors, the Media and Customers
The responsibility for communications and relationships on behalf of the Company with institutional investors, the media, and customers should be management's. The Board may participate occasionally in such interaction at the request of or with the prior knowledge of management.
These Corporate Governance Principles and Practices are intended to provide a set of flexible guidelines for the effective functioning of the Board of Directors. The Board may modify or amend these Corporate Governance Principles and Practices and the authority