Exhibit 99.1
WHOLE FOODS MARKET, INC.
CORPORATE GOVERNANCE PRINCIPLES,
BOARD OF DIRECTORS' MISSION STATEMENT
& ROLE DEFINITION
EFFECTIVE FEBRUARY 16, 2007
1. ROLE AND COMPOSITION OF THE BOARD OF DIRECTORS.
1.1. Role of the Board of Directors. The Board of Directors is elected
by the stockholders to oversee the management of the Company and its business.
In so doing, the Board of Directors should be guided by what it considers to be
in the best long-term interests of the Company's stockholders and other
stakeholders.
1.2. Interaction. Sound governance requires effective interaction among
the Board of Directors, management, the external auditors and the internal
auditors. This interaction should occur both formally and informally throughout
the year.
1.3. Responsibilities. The major areas of the Board of Directors'
responsibility are monitoring management's operation of the Company's business,
overseeing the Company's business strategy, and monitoring risks and the
Company's control systems. The Board of Directors performs the following
specific functions, among others:
o Engaging a CEO to manage the Company, monitoring the performance of the
CEO, and approving the CEO's compensation;
o Overseeing the integrity of the financial statements and the Company's
financial reporting processes, and the adequacy of the Company's internal
controls;
o Reviewing and monitoring a management succession plan;
o Reviewing and approving the compensation of executive officers other
than the CEO;
o Reviewing and approving significant corporate actions and advising
management on significant issues;
o Nominating directors, appointing committee members and shaping
effective corporate governance;
o Assessing the performance of the Board of Directors and its committees;
o Reviewing the Company's long-term strategy and approving annual
operating and capital expenditure plans;
o Overseeing legal and ethical compliance; and
o Assisting management in dealing with crisis situations.
1.4. Independence. The Board of Directors currently has seven members.
The majority of the members of the Board of Directors are independent directors.
An independent director is one who meets the NASDAQ Market Place Rules
("NASDAQ") definition of "independent director." This independence should be in
both fact and appearance so as to promote arms-length oversight. The Board makes
an affirmative determination regarding the independence of each director
annually, based upon the recommendation of the Nominating and Governance
Committee.
1.5. Director Qualifications. The Nominating and Governance Committee is
responsible for reviewing annually with the Board of Directors the
qualifications for membership on the Board of Directors. The Board believes that
it is in the best interests of the Company and its stockholders to identify and
select highly-qualified candidates to serve as directors and for the Board of
Directors to be comprised of a diverse group of individuals with different
backgrounds and perspectives. The Nominating and Governance Committee reviews
director candidates in light of the Board membership qualifications and
recommends candidates to the Board for election by the Company's stockholders at
the annual meeting. The Committee considers nominations by Company shareholders
that recommend candidates for election to the Board in compliance with the
procedures described in the Company's proxy statement. The Committee also
recommends candidates for appointment by the Board as necessary to fill
vacancies and newly created directorships. All nominations or appointments of
new directors must be approved by a majority of the independent directors.
1.6. Leadership; Lead Director. The Board of Directors presently
believes that it is in the best interests of the Company for a single person to
serve as Chairman of the Board and CEO. The Board of Directors may in its
discretion separate the roles if it deems it advisable and in the Company's best
interests to do so. The Board of Directors will annually appoint one of its
independent members to serve as the Lead Director. The primary responsibilities
of the Lead Director are as follows:
o To act as a liaison between the CEO and the Board of Directors and
facilitate communication between meetings;
o To lead the annual performance review of the CEO;
o To lead the full Board of Directors in an annual review of the
performance and effectiveness of the Board and its committees;
o To facilitate the Board of Directors' input into the agenda for the
Board of Directors' meetings and work with the Chairman and CEO or his
designee to set the agenda for each meeting;
o To act as chair of regular and special meetings of the Board of
Directors; and
o To act as chair of the executive sessions of the independent directors.
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1.7. Change in Principal Occupation. When a director's principal
occupation or business association changes substantially during the director's
tenure on the Board of Directors, the director must promptly notify the
Nominating and Governance Committee. The Committee evaluates the propriety of
continued service on the Board of Directors and recommends to the Board of
Directors the action, if any, to be taken with respect to the notice.
1.8. Service on Other Boards. Directors are encouraged to limit the
number of other boards on which they serve so as not to interfere with their
service as a director of the Company. Directors should also advise the chair of
the Nominating and Governance Committee in advance of accepting an invitation to
serve on another corporate board.
1.9. Term Limits; Retirement. The Board has established a term limit of
12 years for directors. This term limit applies prospectively to all individuals
who were members of the Board as of the 2003 annual meeting and to individuals
who join the Board after that date. A director who serves 12 years may sit out
two years and is then eligible to serve another 12 years. Non-management
directors may not stand for reelection after age 75.
2. BOARD OF DIRECTORS' MEETINGS AND COMMUNICATIONS.
2.1. Meetings. In discharging its fiduciary responsibility to the
stockholders of the Company, the Board of Directors meets as necessary, but no
less than five times a year.
2.2. Agendas. The Chairman and CEO or his designee, working together
with the Lead Director to facilitate input from other directors, set the agenda
for each Board of Directors meeting. However, the Lead Director shall have final
approval of the agenda for all regular and special meetings of the Board of
Directors (including the meeting schedule to assure sufficient time for
discussion of all agenda items), as well as, final approval of information sent
to the Board of Directors for each such regular and special meeting. Directors
are encouraged to suggest the inclusion of items on the agenda. Directors are
also free to raise subjects at a Board of Directors meeting that are not on the
agenda for that meeting.
2.3. Distribution of Board Materials. Materials related to agenda items
generally are distributed one week prior to each Board meeting, unless timing or
the sensitivity of information dictates that information be presented only at a
meeting.
2.4. Executive Sessions of Independent Directors. The independent
directors meet regularly in executive sessions at which only independent
directors are present. The Lead Director presides at meetings in executive
sessions and may call such a meeting.
2.5. Access to Management. The Board of Directors should have open
access to the information and personnel it needs to perform its duties.
Regarding communication and the relationship between the Board of Directors and
management, it is crucial that an atmosphere of courtesy and respect exist.
Feedback between the Board of Directors and management should be given freely,
without hesitation, and received in a constructive spirit.
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2.6 Communications from Management. The Board of Directors shall be
notified immediately upon (a) receipt of any communication from the SEC, IRS or
any regulatory agency outside of the normal course of business (b) notice of any
significant pending or threatened litigation or (c) the occurrence of any other
situation which might result in a significant loss or other exposure to the
Company.
2.7. Access to Outside Advisors. The Board of Directors has the
authority to retain such outside counsel, experts and other advisors as it
determines appropriate to assist it in the performance of its functions. Each of
the Audit, Nominating and Governance, and Compensation Committees has similar
authority to retain outside advisors as it determines appropriate to assist it
in the performance of its functions.
2.8 Lead Director Access. The Lead Director shall be reasonably
available to speak with Company shareholders owning 5% or more of the Company's
stock.
3. COMMITTEES.
3.1. Number, Structure and Independence of Committees. The Board of
Directors has three standing committees, an Audit Committee, a Compensation
Committee and a Nominating and Governance Committee. These Committees consist
solely of independent Directors. In addition, members of the Audit Committee
must meet additional, heightened independence criteria applicable to audit
committee members under NASDAQ rules. The Board of Directors may also establish
and maintain other committees from time to time as it deems necessary and
appropriate.
3.2. Assignment of Committee Members. Committee members and chairs are
recommended to the Board of Directors by the Nominating and Governance Committee
and appointed by the full Board of Directors.
3.3. Responsibilities. Each standing committee operates under a written
charter that sets forth the purposes and responsibilities of the committee and
qualifications for committee membership. Each standing committee assesses the
adequacy of its charter annually and recommends changes to the Board of
Directors as appropriate. All committees report regularly to the full Board of
Directors with respect to their activities.
3.4. Meetings and Agendas. The chairperson of each committee, in
consultation with other directors and management as appropriate, determines the
frequency, length and agenda of the committee's meetings. Materials related to
agenda items are provided to committee members sufficiently in advance of
meetings to allow the members to review and prepare for discussion of the items
at the meeting.
4. DIRECTOR COMPENSATION; STOCK OWNERSHIP GUIDELINES. The Compensation Committee
annually reviews the compensation of directors. Director compensation is set by
the Board of Directors based upon the recommendation of the Committee.
Non-management directors receive a combination of cash and equity compensation
for service on the Board of Directors. Management directors do not receive
additional compensation for service on the Board of Directors. It is the policy
of the Board of Directors to encourage all directors to maintain an outright
investment in the Company equal to the total estimated cash compensation
received for serving on the Board of Directors over three years.
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5. SUCCESSION PLANNING. The Board of Directors reviews succession plans for the
position of CEO as well as certain other senior management positions. The CEO
reports to the Board of Directors periodically on succession planning and
management development and provides the Board with recommendations of potential
successors. The CEO also makes available to the Board of Directors, on a
continuing basis, recommendations regarding who should assume the position of
CEO in the event that he or she becomes unable or unwilling to perform the
duties of this position.
6. EVALUATION OF THE CEO. The Board is responsible for reviewing annual and
long-term performance goals for the CEO and evaluating the CEO's performance
against those goals. Both the goals and the evaluation are submitted for
consideration by the independent directors meeting in executive session. The
results of the evaluation are shared with the CEO and used by the Compensation
Committee in considering the CEO's compensation, which is approved by the
independent directors meeting in executive session.
7. DIRECTOR ORIENTATION AND CONTINUING EDUCATION. The Company has an orientation
process for directors that is designed to familiarize new directors with the
Company's business, operations, finances, and governance practices. The Board of
Directors encourages directors to participate in education programs.
8. ANNUAL PERFORMANCE EVALUATIONS. The Board of Directors conducts an annual
evaluation to assess the effectiveness of the Board, its committees, and
individual directors. The Nominating and Governance Committee is responsible for
administering the processes for conducting evaluations and for reviewing the
results of the evaluations with the Board of Directors.
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