2018 Guide to Effective Proxies

2.9 Board diversity graphics | 147 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES HUNTINGTON INGALLS INDUSTRIES, INC. INTEL CORPORATION INTERCONTINENTAL EXCHANGE, INC. INVESCO LTD 2018ProxyStatementSummary BoardComposition,Qualifications andDiversity WebelievetheBoardiscomprisedofaneffectivemixofexperience,skillsandperspectives.The followingchartsandgraphshighlightthecurrentcompositionofourBoard. DirectorIndependence IndependentDirectors (9) Executive Director (1) Independent,Non-Executive Chairman DirectorDiversity Maleand Non-Minority (7) 30PercentFemaleorMinorityRepresentation Femaleor Minority (3) DirectorAgeMix 71-76 (1) 61-70 (5) 50-60 (4) RetirementAge76 DirectorExperienceandSkills 10 6 8 8 8 5 8 10 9 9 8 7 Senior LeadershipExperience Finance,AccountingandCapitalMarketsExperience IndustryExperience ManufacturingandOperationsExperience HumanResourcesExperience MilitaryandGovernmentExperience GovernmentRelationsandRegulatoryExperience Legal,RegulatoryandComplianceExperience TechnologyExperience RiskManagementExperience CorporateDevelopmentandStrategyExperience GlobalExperience 4 HuntingtonIngallsIndustries,Inc. VSeniorLeadershipExperienceFinance,AccountingandCapitalMarketsExperienceIndustryExperienceManufacturingandOperationsExperienceHumanResourcesExperienceMilitaryandGovernmentExperienceGovernmentRelationsandRegulatoryExperienceLegal,RegulatoryandComplianceExperienceTechnologyExperienceRiskManagementExperienceCorporateDevelopmentandStrategyExperienceGlobalExperience DIRECTORTENURE TheBoardbelievesthatamixoflong-andshort-tenureddirectors ensuresanappropriatebalanceofviewsandinsightsandallowsthe Boardasawholetobenefitfromthehistoricalandinstitutional knowledgethatlonger-tenureddirectorspossessandthefresh perspectivescontributedbynewerdirectors.OurCorporate GovernanceGuidelinesprovidethatasanalternativetotermlimits, theBoardseekstomaintainanaveragetenureof10yearsorlessfor theindependentdirectorsasagroup. IfeachindependentdirectornomineeiselectedtotheBoard,after the2018AnnualStockholders’Meeting,ourindependentdirectors willhaveservedanaverageof4.3yearsontheBoard,andsixoutof eightofourindependentdirectorswillhavebeenontheBoardfor lessthanthatperiodoftime.Overall,ourBoard,includingboth independentandemployeedirectors,willhaveanaveragetenureof 4.6years.WebelievethatthismixoftenureontheBoardrepresents adiversified“portfolio”ofnewperspectivesanddeepinstitutional knowledge. BOARDDIVERSITYANDREFRESHMENT OurBoardiscommittedtoactivelyseekingqualitywomenand minoritydirectorcandidatesforconsideration.Representationof gender,ethnic,geographic,cultural,orotherdiverseperspectives expandstheBoard’sunderstandingoftheneedsandviewpointsof ourcustomers,partners,employees,governments,andother stakeholdersworldwide.Aspartofourongoingcommitmentto creatingabalancedBoardwithdiverseviewpointsanddeepindustry expertise,weregularlyaddnewdirectorstoinfusenewideasand freshperspectivesintheboardroom. Ourdirectorsreflectdiverseperspectives,includinga complementarymixofskills,experience,andbackgroundsthatwe believeareparamounttoourabilitytorepresentyourinterestsas stockholders.Inthelasttwoyears,fivenewdirectorshavebeen electedtotheBoard.Ifeachdirectornomineeiselectedtothe Board,afterthe2018AnnualStockholders’Meeting,50%ofthe Boardwouldbegender,racially,andnationalitydiverse. TENURE 0-4Years 5-10Years 11+Years 6 1 1 4.3YEARS average tenure of independent director nominees BOARDDIVERSITY 5 5 5 DIVERSE DIRECTORS outof10 Diverse Directors Non-Diverse Directors BOARDEVALUATIONS WearecommittedtoprovidingtransparencytoourBoardandcommitteeevaluationprocess.TheChairmanoftheBoardor independentLeadDirector,leadstheBoard’sself-evaluationprocess,whichrequireseachdirectortocompleteacomprehensive evaluationoftheperformanceofboththeBoardasawholeand,totheextentapplicable,thecommitteesonwhichthedirector serves.Theresultsofthedirectors’evaluations,supplementedwiththird-partydata,providetheLeadDirectorwithvaluable insightregardingareaswheretheBoardfeelsitfunctionseffectively,andmoreimportantly,areaswheretheBoardbelievesit canimprove.Basedontheinputgeneratedbyitsownmembers,ourBoardcanadaptandevolvetomeetnewopportunitiesas theyariseandtocontinueitscriticalworkinsafeguardingtheinterestsofourstakeholdersthrougheffectivecorporate governance. 20 Proposal1:ElectionofDirectors 2018PROXYSTATEMENT FOR POSITION ONLY Non-Executive Directors Average tenure 9.1 years Average age 65.8 years Boardmember highlights Diversity Director independence •• ••••••• 2 of9 directors are female •••••••• • 8 of9 directors are independent •• ••••••• 2 of9 directors are outside of theU.S. Tenure 1-3 years 4-10 years 10+ years 2 directors 4 directors 3 directors Director tenure Our directors contribute awide range of knowledge, skills and experience. We believe the tenure of themembers of ourBoard ofDirectors provides the appropriate balance of expertise, experience, continuity and perspective to our board to serve the best interests of our shareholders. We believe providing ourBoardwith new perspectives and ideas is an important component to awell-functioning board.As theBoard considers new director nominees, it takes into account a number of factors, including nominees that have skills thatwillmatch the needs of the company’s long-term global strategy andwill bring diversity of thought, global perspective, experience and background to our Board. Formore information on our director nomination process, see Information about ourBoard and itsCommittees—DirectorRecruitment . 5 PROXY-BRO-1 03-18.indd 5 3/20/18 4:13PM CORPORATE GOVERNANCE PROPOSAL 1 — ELECTION OF DIRECTORS Board of Directors UnderourcurrentAmendedandRestatedCertificateofIncorporationandourcurrentAmendedandRestatedBylaws,ourBoardof DirectorssetsthenumberofdirectorswhomayserveontheBoardofDirectorsthroughresolutionsadoptedbyamajorityofthedirectors theninoffice.ThesizeofourBoardofDirectorsiscurrentlysetattwelvedirectorsandpresentlyconsistsoftwelvedirectors.Wehave nominatedallofourcurrentdirectorsforre-electionattheAnnualMeetingofStockholders.Allofournominees,ifelected,willservefora one-yeartermexpiringatthe2019AnnualMeetingofStockholders.Eachdirectorwillholdofficeuntilhisorhersuccessorisduly electedandqualifiedoruntilthedirector’searlierresignationorremoval. Eachofourdirectorsiselectedbymajorityvoteinanuncontestedelection.Adirectorwhofailstoreceiveamajorityof“FOR”votescast bystockholdersentitledtovotewillberequiredtotenderhisorherresignationtoourBoardofDirectors.OurNominating&Corporate GovernanceCommitteewillthenactonanexpeditedbasistodeterminewhethertoacceptthedirector’sresignationandwillsubmitsuch recommendationforpromptconsiderationbyourBoardofDirectors.OurBoardofDirectorsexpectsthedirectorwhoseresignationis underconsiderationtoabstainfromparticipatinginanydecisionregardingthatresignation.OurBoardofDirectorsandourNominating& CorporateGovernanceCommitteemayconsideranyfactorstheydeemrelevantindecidingwhethertoacceptadirector’sresignation. Nominees for Election as Directors at the 2018Annual Meeting OntherecommendationoftheNominating&CorporateGovernanceCommittee,ourBoardofDirectorshasnominatedthepersons namedbelowforelectionasdirectorsattheAnnualMeetingofStockholders,eachtoserveforaone-yeartermexpiringatthe2019 AnnualMeetingofStockholders.AllofthenomineescurrentlyaremembersoftheBoardofDirectors.OurBoardofDirectors,uponthe recommendationofourNominating&CorporateGovernanceCommittee,hasdeterminedthateachofournon-employeedirectorsis independentinaccordancewithNYSElistingstandardsandourBoardofDirectorsGovernanceGuidelinesasdescribedbelowunder CorporateGovernance—StructureandRoleofOurBoard—IndependentNon-EmployeeDirectors . Eachofthenomineeshasconfirmedthatheorsheexpectstobeabletocontinuetoserveasadirectoruntiltheendofhisorherterm. If,however,atthetimeoftheAnnualMeeting,anyofthenomineesnamedbelowisnotavailabletoserveasadirector(aneventwhich theBoardofDirectorsdoesnotanticipate),alltheproxiesgrantedtovoteinfavorofsuchdirector’selectionwillbevotedfortheelection ofsuchotherpersonorpersons,ifany,recommendedbytheNominating&CorporateGovernanceCommitteeandapprovedbythe BoardofDirectors.ProxiescannotbevotedforagreaternumberofdirectorsthanthetwelvenomineesnamedinthisProxyStatement. Foradiscussionofourpolicyregardingqualificationandnominationofdirectorcandidates,see CorporateGovernance—Structureand RoleofOurBoard—NominationofDirectors below. 33% WOMENDIRECTORS 4 out of our 12 director nominees arewomen 4 out of our 12 director nominees are under 60 5 out of our 12 director nominees have a tenure of less than5 years 40’S 50’S 60’S 70’S 33% YOUNGERTHAN 60 5 1 3 3 42% UNDER5YEARS GENDER AGE TENURE 4 5 4 INTERCONTINENTALEXCHANGE 2018ProxyStatement