AGM 2019

Dec 17, 2019

Good afternoon, and welcome to Guidewire Software's 2019 Annual Meeting of Stockholders. I would now like to introduce Mike Rosenbaum. Good afternoon. It's now 1:30 p. M. Pacific Time, and I call this meeting to order. Welcome to the 2019 Annual Meeting of Stockholders of Guidewire Software Incorporated. I am Mike Rosenbaum, CEO and a member of the Board of Directors of the company, and I will be presiding as Chairman of the meeting. Winston King, who is the Chief Administrative Officer, General Counsel and the Secretary of the company, will act as the Secretary of the meeting. At this point, I would like to turn the meeting over to Winston. Thanks, Mike, and welcome everyone to our 2019 Annual Meeting of Stockholders. We are pleased to be hosting our 1st virtual annual meeting. We hope that hosting the meeting virtually provides easy access for our stockholders and facilitates participation from any location around the world. Meeting participants can enter questions online at any point during the webcast. In advance of the voting, we will only address questions related to the proposals. To allow us to answer questions from as many stockholders as possible, we will limit each stockholder to 2 questions. No one attending via the webcast or telephone is permitted to use any audio recording device. Thank you in advance for your cooperation. Broadridge Financial Solutions has appointed Lewis Larsen of L2 Elections to act as the Inspector of Elections. Mr. Larson is with us today and has taken an oath of office promising to execute faithfully the duties of the Inspector of Election. The oath will be filed with the minutes of this annual meeting. After we have voted on all matters subject to a vote, Mr. Larson will tabulate the votes and determine the results of the voting. Each of you has received a copy of the notice of meeting and the proxy statement for this meeting, which were mailed on or about November 18, 2019 to all stockholders of record at the close of business on October 21, 2019. As Secretary, I'll file a copy of the notice of meeting with the minutes of this annual meeting. An affidavit has been delivered attesting to the fact that the notice of the meeting, the proxy statement and the annual report on Form 10 ks were mailed on or about November 18 to all stockholders as of the record date and will be incorporated into the minutes of this annual meeting. The stockholder list shows that as of the record date, there were 82,574,169 shares of common stock outstanding and entitled to vote at this meeting. As we are informed by the Inspector of Election that there are represented via virtual meeting or by proxy, shares of common stock more than a majority of the voting power of all issued in outstanding stock entitled to vote on the record date, a quorum is present for purposes of transacting business. In order to expedite the flow of business, we will use the following sequence. The polls will be opened, then each of the matters to be voted on by stockholders at this meeting will be presented in the order set forth in the proxy statement. The polls will then be closed, the votes tabulated and the preliminary results will be announced. We will proceed with voting on the agenda items. The polls are now open and will remain open during the discussion of the proposals and the question and answer period for the proposals. You may vote online during this meeting while the polls are open. If you have already voted and you do not wish to change your vote, you do not need to vote again at today's meeting. Your vote will be cast as you have previously instructed. However, if you have already voted and now wish to change your vote or if you have not already voted and you wish to vote now, please vote during this meeting. Again, I want to emphasize that it is not necessary to vote again if you have previously voted. Submission of a new vote during the meeting will revoke all prior votes that you have submitted. The purposes of this meeting are 1, to elect 3 Class II directors each to serve a 1 year term if the board declassification proposal, Proposal 4 is approved or a 3 year term if Proposal 4 is not approved and until their successors are elected and qualified 2, to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ended July 31, 2020 3, to conduct a non binding advisory vote to approve the compensation of the company's named executive officers 4, to approve the amendment and restatement of the company's restated certificate of incorporation to eliminate the classified structure of the company's Board of Directors. 5, to vote on a stockholder proposal regarding majority voting for the election of directors if properly presented at this annual meeting And finally 6, to transact such other business as may properly come before the annual meeting or at any adjournments, continuations or postponements of the annual meeting. We will now proceed with proposal number 1, voting on the election of 3 Class 2 directors, each to serve a 1 year term if proposal 4 is approved or a 3 year term if proposal 4 is not approved. The Board of Director nominees are Margaret Dillon, Michael Keller and Michael Rosenbaum. Each director must be elected by plurality of the votes cast, meaning that the 3 nominees receiving the most 4 votes among the votes properly cast at the annual meeting or by proxy will be elected. The Board of Directors of the company unanimously recommends the election of Ms. Dillon and Mrs. Keller and Rosenbaum and pursuant to the notice of this meeting and the proxy statement, the proxy solicited by the Board of Directors will be voted in favor of Ms. Dillon and Mrs. Keller and Rosenbaum. We will now proceed with the voting on proposal number 2, ratification of the appointment of KPMG LLP as the company's independent auditors for the fiscal year ending July 31, 2020. To be approved by our stockholders, a majority of the shares represented and entitled to vote at the annual meeting must vote for this proposal. The Board of Directors of the company unanimously recommends that stockholders vote to ratify the appointment of KPMG LLP and pursuant to the notice of this meeting and the proxy statement, the proxy solicited by the Board of Directors will be voted in favor of this proposal. Cecil Mack, Ron Lopes and Purvi Mehta of KPMG LLP are in attendance and will be available to respond to appropriate questions during the question and answer session. Next, we will proceed with proposal number 3, the approval by non binding advisory vote of the compensation of the company's named executive officers. To be approved by our stockholders, a majority of the shares represented and entitled to vote at this annual meeting must vote for this proposal. The Board of Directors of the company unanimously recommends that stockholders vote to approve the compensation of the company's named executive officers and pursuant to the notice of this meeting and the proxy statement, the proxy solicited by the Board of Directors will be voted in favor of this proposal. Next, we will proceed with proposal number 4, the amendment and restatement of our restated certificate of incorporation to eliminate the classified structure of the company's Board of Directors. To be approved by our stockholders, at least 66.2% of the voting power of all of the then outstanding shares of capital stock of the company entitled to vote at the annual meeting must vote for this proposal. The Board of Directors of the company unanimously recommends that stockholders vote to approve the amendment and restatement of the company's Restated Certificate of Incorporation to eliminate the classified structure of the Board of Directors and pursuant to the notice of this meeting and the proxy statement, the proxy solicited by the Board of Directors will be voted in favor of this proposal. Finally, we will proceed with proposal number 5, a stockholder proposal submitted by John Chevedden on behalf of stockholder Mary Young regarding voting for the election of majority voting for the election of directors. For the reasons outlined in the proxy statement, the Board of Directors does not support the adoption of this proposal and recommends that the stockholders vote against the stockholder proposal regarding majority voting for the election of directors and pursuant to the notice of this meeting and the proxy statement, the proxy solicited by the Board of Directors will be voted against this proposal. To be approved by our stockholders, a majority of shares represented and entitled to vote at the annual meeting must vote for this proposal. Mr. James McRitchie will be presenting the proposal on behalf of Mr. Chevedden and Ms. Young. Mr. Ritchie, would you like to speak concerning this proposal? Yes, thank you. This is Jim McRitchie presenting proposal number 5, elect uncontested directors by majority vote. On behalf of my young of my wife, Myra Young. We believe this is another good governance proposal like her proposal to declassify the Board that got 92% of the vote last year. We believe that directors can't get a majority of the vote in an uncontested election, they should step down. The company's opposition is based on their belief that a majority vote standard does not provide our Board of Directors with any discretion to consider the circumstances, interests and needs of the company and its stockholders as well as legal requirements and could therefore be detrimental to the company. Well, that opposition statement seems to ignore the clear wording of the proposal, which includes the following: This proposal includes that a director who receives less than a majority vote be removed from the Board immediately or as soon as a replacement director can be qualified on an expedited basis? Why would the Board object to removing a director that does not even win a majority of votes cast when that director faces no actual challenger? That seems like a very low bar. Why wouldn't the Board want to replace a failing Director on an expedited basis? More than 90% of companies in the S and P 500 have adopted majority voting for uncontested elections as have 67% of the S and P 600 Companies. Several funds, including CBIS, BCIB, Calvert, CalSTRS and the New York City Comptroller have announced their votes in favor of this proposal in advance of this meeting. We ask that you vote for proposal number 5. Thank you. Thank you, Mr. McRitchie. This concludes the discussion of the proposals. We'll now address questions related to the proposals. As a reminder, please enter any questions about the proposals or voting procedures online and if appropriate, we will read them aloud. As there are no questions, we will pause for a few minutes to allow any final voting. Now that everyone has had the opportunity to vote, I now declare the polls for the 2019 Annual Meeting of Stockholders closed. No additional ballots, proxies or votes and no changes or revocations will be accepted. I now have the preliminary report of the Inspector of Election on the results of the voting. Mr. Chairman and stockholders, the preliminary results based on the voting of shares represented by valid proxies on files and tabulated this afternoon show that each of the class of the 3 Class II Director nominees, Ms. Dillon and Mrs. Keller and Rosenbaum has been elected as a Class II Director. The ratification of the appointment of KPMG LLP as independent registered public accounting firm has been ratified. The compensation of company's named executive officers has been approved by a non binding advisory vote. The amendment and restatement of the company's restated certificate of incorporation has been approved and the stockholder proposal regarding majority voting for the election of directors is approved. That concludes the report of preliminary voting results. The final voting results will be set forth in the report of the Inspector of Election and will be included in the minutes of the meeting. The final results will also be reported in a current report on Form 8 ks filed with the SEC within 4 business days of this annual meeting. I will order that the original proxies, ballots and the report of the Inspector of Elections be filed as a part of the minutes of the meeting. There being no further business to be properly brought before this annual meeting, I hereby declare the formal portion of the 2019 annual meeting of stockholders adjourned. Thank you for your attendance.