2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 196 STATE STREET CORPORATION TERADATA UNUM GROUP VALERO ENERGY CORPORATION Corporate Governance Summary Our Board of Directors is committed to strong corporate governance practices and is intent on maintaining State Street’s reputation for quality, integrity and high ethical standards. The following is a summary of our corporate governance stan- dards: BoardofDirectors •11 of 12 director nominees are independent •Annualdirector elections •Annual assessment of effectiveness and qualifications of each directornominee •33% of director nominees arewomen •Active independent Lead Director elected annually by all independent directors •Board and committeesmeet regularly in executive sessionwithoutmanagement present •At least 75% attendance by eachdirector atBoard and committeemeetings ShareholderRights andEngagement •Directors are electedby a majority of votes cast in uncontested elections and by plurality vote in contested elections •Active investor outreach program •Nopoisonpill •Proxy access by-law allows shareholders to include in State Street's proxymaterials directornominees constituting up to20% of theBoard StrategyandRisk •Board oversight of our strategy, financial performance, ethics and risk culture •Board oversight ofCEO and management succession planning •No restrictions in directors' access tomanagement •Directors and executive officers subject to stock ownership guidelines •Prohibition on short selling, options trading,hedging or speculative transactions in State Street securities • Incentive compensation subject to clawback, forfeiture and ex ante mechanisms FormoreinformationaboutStateStreet’scorporategovernancepractices,see“CorporateGovernanceatStateStreet.” Corporate Responsibility State Street’s commitment to social and environmental responsibility and our belief in giving back to the communities in which we live and work are critical to our long-term success. We recognize that sustainable growth comes from operating withabsoluteintegrityandinawaythatrespectsourshareholders,clients,employees,communitiesandtheenvironment. Wefirmlybelieveintheprinciplesofsoundgovernanceandtohelpingourclientssucceed.Wearededicatedtomaintain- ing a global and inclusive workplace where employees feel valued and engaged. We believe we have a responsibility to enrichourcommunities,andtobealeaderinenvironmentalsustainability,bothinthewaywecarryoutouroperationsand intheproductsandservicesweoffer.Corporateresponsibilityhighlightsandachievementsfor2017includethefollowing: We actively engage and support the local communities inwhich we operate: • $20.3million philanthropic contributions including $5.1million ofmatching gifts • 123,300 employee volunteer hours We establishednew goals to reduce our operational impact by: Giving and Volunteering Environmental Sustainability Community Involvement We partner with not-for-profit organizations and groups in each of the regions in which we operate. For example: • BostonWINs (BostonWorkforce InitiativeNetwork) isStateStreet’s four-year,$20million initiative seeking to accelerate our impact on education andworkforce development across the city ofBoston YouthWork Ireland’s “Work to Learn” program provides education,work experience, mental health, life skills and support to at-risk teens The “GirlsGo Tech” program, launched by theWomen’s Foundation inHongKong, empowers underprivileged teenage girls to pursueSTEM subjects and careers - • • • Reducing our CO 2 emissions • Reducing our water usage • Increasingwaste recycling iv CORPORATE SOCIAL RESPONSIBILITY Optimizing Our World Teradatacontinuestofosteracultureofsustainabilityandresponsibility.Wehaveadvancedourcommitmentto corporateresponsibilitythroughanumberofsustainabilityinitiatives. OurPeopleandCommunities: Wehirethemostqualifiedpeoplepossible,andweendeavortoretainourtalentedresources.Ourpeople reflectthediversityofourglobalmarketplaceand,throughouremployeeresourcegroups,weactively supportdiversitythroughoutourCompanybecausewebelievethatinclusioncreatesbetteroutcomes. OurTeradataCaresProgramempowersouremployeestomakeadifferenceintheircommunitiesthrough volunteerismandgiving.Employeesarededicatedtoimprovingeducation,strengtheningcommunities andhelpingtheenvironment.ThroughTeradataCares,ouremployeesvolunteeredmorethan25,000 hoursofservicein2017. CorporateGiving: Ourstrategicgivingfocusofdataphilanthropyalignswithourcorporateemphasisondataandanalytics. Together,ouremployees,partners,andcustomerscometogetheranduseourcollectiveanalyticskillsto helpnon-profitagenciesaroundtheworldminetheirdatatrovestorevealinsightsthatservethepublic good.WesupportnumeroushackathonsandcodingeventstoadvanceDoingGoodwithData™. OurProducts: Wedesigntechnologyforthefuture,andthefuturedemandspowerfulanalyticsolutionsthatare intendedtomeetincreasinglystringentstandardstosupporttheearth’spreciousresources,including efficientusageofpowerandwater,aswellasspaceefficiency.Therefore,wefocusonproviding customerswithbest-in-classproductsthatarenotonlyhighlyscalable,butenvironmentallysustainable aswell.Tothatend,wecontinuouslysearchtofindandleveragetechnologyalternativesthatcan improveperformance-per-watt,reducecoolingrequirements,andshrinkfloorspaceneedsindatacenter requirementsaspartofourproductdesigninitiatives. N EthicalBusinessConduct: TeradatahasbeenincludedontheEthisphereInstitute’slistoftheWorld’sMostEthicalCompaniesevery yearsince2010.Wehaveazero-tolerancepolicyfornon-ethicalbehaviorandexpectthehighest standardsofcompliancethroughouttheworld. OurSuppliers: OursuppliersandbusinesspartnersareexpectedtomeetorexceedthestandardsofourCodeof Conductwhichincludesadherencetoethical,responsibleandenvironmentallysustainablebusiness practiceswithrespecttoalloftheirTeradata-relatedactivities.Wehavealsoestablishedamanaged inventoryprogramthatrequiressupplierstoshipbulkquantitiesofproducttolocalhubsnearour manufacturingsite,ratherthandiscretecustomershipments.Thisnotonlyreducesourinventorycosts, butalsogreatlyreducestheenvironmentalimpactofourmanufacturingsupplychain. OurFacilities: TeradatahasdesignedourfacilitiestoreducetheCompany’senvironmentalimpactandhasimplemented manyprogramsintheareasofvideoconferencing,virtualemployment,recyclingandenergy conservationthatgetthejobdonewhileusingandre-usingresourcesatthemostefficientlevelpossible. Fromprintingallcorporatebusinesscardsonstockthatis100%recycled/post-consumerwastematerial, toinstallingacutting-edgebuildingautomationsystemtooptimizeefficiencyinlightingandHVAC systems,tosendingourannualreportandproxystatementelectronicallytoreduceunnecessarypaper usage,weadoptsustainablepoliciesandproceduresateveryopportunity. Formoreinformation: VisitourCorporateSocialResponsibilitywebsite:https://www.teradata.com/About/Corporate-Social-Responsibility-en. 22 2018PROXYSTATEMENT CLIMATE CHANGE DISCLOSURE In2017,theFinancialStabilityBoard’sTaskForceonClimate-relatedFinancialDisclosure(TCFD)issueditsfinalrecommendationson reportingclimate-relatedfinancialinformation.Valeroispresentlyatworkpreparingdraftsofareport—withongoingBoardoversight ledbytheNominating/GovernanceandPublicPolicyCommittee—thatisalignedwiththemainprinciplesoutlinedinthe recommendationsoftheTCFD.Weplantoincludetheresultsofastress-testofourbusinessagainsttheInternationalEnergy Agency’shypothetical450Scenario(alsoknownasthe“2degreescenario”).FollowingthefullBoard’sfinalreviewofthereport,we expecttopublishourreportinthethirdquarterof2018. 8 OTHER GOVERNANCE MATTERS OTHERGOVERNANCEMATTERS 38 2018PROXYSTATEMENT Shareholder Engagement Inlinewithourcommitmenttoopencommunicationandtransparency,wehavearobustshareholder engagementprocessthatoccursthroughouttheyear. Inthelatesummerandearlyfall,webeginour shareholderengagementeffortsbycontactingeachof ourtop50investors,whichin2017representedover 70%ofouroutstandingshares.Thefocusofthese meetingsistodiscussourbusinessstrategyandour governanceandcompensationpractices,aswellasto learnaboutanyothertopicsthatareimportanttoour shareholders.Inaddition,during2017,basedon feedbackfromshareholdersintheprioryear,our independentBoardChairmanjoinedmanagementfor themeetingswithourlargestshareholders.Inthelate fall,wealsomeetwithkeyproxyadvisoryfirmsto provideanupdateonourshareholderengagement effortsandgainfurtherinsightintotheirviews regardingourcompensationandgovernancepractices andproxydisclosures.Thesecommunicationspromote greaterengagementwithourshareholdersonvarious corporategovernanceissuesandprovideanopen forumtoshareperspectivesonourpoliciesand practices. Summer Reviewcurrenttrends inglobalcompensation andgovernance practices.Schedulefall meetingswithtop shareholders. ð Fall Conductmeetingswith shareholderstodiscuss keyissuesandsolicit shareholderfeedback. ñ ò Spring Holdfollow-up conversationswithtop shareholders,as necessary,toaddress importantannual meetingissues. ï Winter Reviewshareholder feedbackwiththe Board.Enhanceproxy disclosuresandadjust ourcompensationand governancepracticesas appropriate. Duringthewinter,wereviewwithourGovernanceandHumanCapitalCommittees,andwiththefullBoard,the feedbackwereceivedduringtheseshareholdermeetingsanduseittoenhanceproxydisclosuresandmake anyrecommendedgovernanceandcompensationchangespriortothenextAnnualMeeting.Followingour AnnualMeetinginthespring,wereviewourshareholdervotingresults,considercompensationand governancetrendsandcurrentbestpractices,andconductfollow-upmeetingswithinvestorstoaddressany issues. Foradditionalinformationonfeedbackwereceivedfromourshareholdersduringouroutreachefforts,referto page49. Corporate Social Responsibility AtUnum,socialresponsibilityhaslongbeenintegratedintoourbusiness.Withmillionsofpeopledepending onthecoverageweprovide,Unumunderstandstheimportanceofhelpingothers.Thatphilosophypermeates everythingwedo-fromadvocatingforaccesstobenefitsandinvestinginthewellbeingofourpeople,to improvingourlocalcommunitiesandminimizingtheimpactwehaveonourenvironment.Herearejustafew ofthewaysthatweaspiretointegratesocialresponsibilityintoourbusiness. Total of 03 pages in section