Guideline No. 1
Selection of Chairman and CEO

The Company’s current practice is to combine the Chief Executive Officer (“CEO”) and Chairman roles. The Board has determined that combining these positions serves the best interests of the Company and its shareholders at this time, but the Board does not believe that there should be a set policy. The Board will annually review whether combining these positions continues to serve the best interests of the Company.

Guideline No. 2
Board Operation

The size of the Board is relatively small. The independent Directors are expected to play a very active role in Board matters. The independent Directors will annually designate a Director to serve as Lead Director who will perform the functions set forth in these Guidelines and such other functions as the Board may direct, including presiding at all meetings of the Board at which the Chairman is not present and serving as liaison between the CEO and independent Directors. The Nominating and Corporate Governance Committee will reassess on an annual basis the continuing effectiveness of the role of Lead Director.

Currently, there are three standing Board committees: Audit; Nominating and Corporate Governance; and Compensation. The Board may, from time to time, form a new committee or disband a current committee depending on the circumstances. The current charters and key practices of the Nominating and Corporate Governance Committee, the Compensation Committee and the Audit Committee are published on The Company’s website, and will be mailed to shareholders on written request. Each committee has a designated committee chair. The committee chairs provide a report on their meetings to the Board following each meeting of the respective committees. The Nominating and Corporate Governance Committee has the responsibility of annually reviewing the committee structure, charters and membership, and recommending changes to the Board, if any.

Each of the Audit Committee, Nominating and Corporate Governance Committee and Compensation Committee shall be comprised solely of Independent Directors.

Guideline No. 4
Committee Meetings

The committee chairs, in consultation with committee members, and the assistance of staff management, will determine the frequency and length of the meetings of their respective committees.

Guideline No. 5
Committee Agenda

The committee chairs, in consultation with committee members and with the assistance of staff management, will develop their respective committee's agenda. Additional agenda items may be recommended by other committees or Board members.

An annual Board Core Agenda shall be determined by the Board based upon key strategic direction and operational challenges identified by the CEO and the Lead Director together with standard items scheduled throughout the year and presentations according to approval level requirements or other business purposes. Directors are also encouraged to suggest items to be included on the Core Agenda. Directors may make suggestions for additional agenda items to the Chairman, the Lead Director, or appropriate committee chair at any time. Prior to each Board meeting, the CEO will discuss the agenda items for the meeting and the amount of time allocated for agenda items with the Lead Director, who shall have the authority to make changes or approve the agenda for the meeting.

The CEO and the Lead Director, or committee chair as appropriate, shall determine the type of information that shall be provided to the Directors for each scheduled Board or committee meeting. Directors are also encouraged to suggest additional materials. Directors may make suggestions for additional materials to the Chairman, the Lead Director, or appropriate committee chair at any time. Generally, materials are sent approximately one week in advance of the Board or committee meeting.

Attendance at the Board meetings by the Management members is a routine practice while other company personnel (including business division leaders) are invited to attend Board meetings depending on the agenda.

The Board will meet in executive sessions of the independent Directors without management present at regularly scheduled Board meeting, which will be presided over by the Lead Director. Additional sessions may convene at any time by the Lead Director, either on his or her own initiative or at the request of any other Director. The Lead Director shall develop a regular agenda of items to be considered at executive sessions and distribute to the outside Directors in advance a specific agenda for each meeting. The Lead Director shall discuss the conclusions of the executive session with the CEO promptly after such session and report to the Board on the discussions with the CEO at the next executive session (or sooner if warranted by the nature of the matter discussed). In the event that the subject of discussion at any meeting of a committee pertains to a person in attendance, such committee will conduct such discussion in executive session as it deems appropriate.

Directors have open access to management, and as stated earlier, the members of Management attend Board meetings. Directors may communicate with such persons directly or may request the Lead Director to serve as a liaison in such communications. As a general rule, Directors will inform the CEO and coordinate with the Corporate Secretary when scheduling visits with management.

Guideline No. 11
Independence of Directors

Generally. No more than three of the Directors will not be independent Directors as such term is defined in the listing standards of the Company and NASDAQ as set forth below.

Definition of Independent. "Independent Director" means a person other than an Executive Officer or employee of the Company or any other individual having a relationship which, in the opinion of the Company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. For purposes of this rule, "Family Member" means a person's spouse, parents, children and siblings, whether by blood, marriage or adoption, or anyone residing in such person's home. The following persons shall not be considered independent:

 

(A) a director who is, or at any time during the past three years was, employed by the Company;

 

(B) a director who accepted or who has a Family Member who accepted any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence, other than the following:

 

(i) compensation for board or board committee service;

 

(ii) compensation paid to a Family Member who is an employee (other than an Executive Officer) of the Company; or

 

(iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation.

Provided, however, that in addition to the requirements contained in this paragraph (B), audit committee members are also subject to additional, more stringent requirements under Rule 5605(c)(2).

 

(C) a director who is a Family Member of an individual who is, or at any time during the past three years was, employed by the company as an Executive Officer;

 

(D) a director who is, or has a Family Member who is, a partner in, or a controlling Shareholder or an Executive Officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient's consolidated gross revenues for that year, or $200,000, whichever is more, other than the following:

(i) payments arising solely from investments in the Company's securities; or

(ii) payments under non-discretionary charitable contribution matching programs.

(E) a director of the Company who is, or has a Family Member who is, employed as an Executive Officer of another entity where at any time during the past three years any of the Executive Officers of the Company serve on the compensation committee of such other entity; or

(F) a director who is, or has a Family Member who is, a current partner of the Company's outside auditor, or was a partner or employee of the Company's outside auditor who worked on the Company's audit at any time during any of the past three years.

(G) in the case of an investment company, in lieu of paragraphs (A)-(F), a director who is an "interested person" of the Company as defined in Section 2(a)(19) of the Investment Company Act of 1940, other than in his or her capacity as a member of the board of directors or any board committee. (NASDAQ Rule 5605)

Categorical Standards of Independence. The Board of Directors has determined that the following relationships will not be considered material relationships that would impair a Director's independence:

I. Business Relationships.

(a) The Company does business with a Director’s business affiliate or the business affiliate of an immediate family member of a Director for goods or services, or other contractual arrangements, in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons and the annual revenues or purchases from such business affiliate are less than the greater of $500,000 and 1% of such person’s consolidated gross revenues;

(b) A company (of which a Director or an immediate family member is an officer) does business with the Company and the annual sales to, or purchases from, the Company during such other company’s preceding fiscal year are less than the greater of $500,000 and 1% of the gross annual revenues of such other company;

(c) A law firm of which a Director or an immediate family member is a partner or of counsel performs legal services for the Company, the Director or the immediate family member does not personally perform any legal services for the Company, and the annual payments to such law firm are less than the greater of $500,000 and 1% of such law firm’s consolidated gross revenues;

(d) An investment bank or consulting firm of which a Director or an immediate family member is a partner or of counsel performs investment banking or consulting services for the Company, the Director or the immediate family member does not personally perform any investment banking or consulting services for the Company and the annual payments to such investment bank or consulting firm are less than the greater of $500,000 and 1% of such investment bank’s or consulting firm’s consolidated gross revenues; and

(e) The Director serves on a regularly constituted advisory board of the Company, for which such Director receives standard fees of no more than $50,000 per annum.

II. Relationships with Not-for-Profit Entities.

(a) A foundation, university or other not-for-profit organization of which a Director or immediate family member is an officer, director or trustee receives from the Company contributions in an amount which does not exceed the greater of $100,000 and 1% of the not-for-profit organization’s aggregate annual charitable receipts during the entity’s preceding fiscal year. (The Company’s automatic matching of employee charitable contributions are not included in the Company’s contributions for this purpose.)

Definition of “Immediate Family Member.” For purposes of the independence standards described above, an “immediate family member” includes a person’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares such person’s home. When applying the “look-back” provisions above, the Company need not consider individuals who are no longer immediate family members as a result of legal separation or divorce, or those who have died or become incapacitated.

Standard of Independence for Audit Committee Membership. Also, NASDAQ and Securities Exchange Commission have additional requirements, to be considered independent for purposes of serving on the Audit Committee, and the Company shall conform to those requirements.

Director Disclosure and Board Determination. Each Director is required to disclose to the Company certain relationships between and among that Director, the Company, and senior management of the Company in order to allow for an appropriate determination of that Director’s independence. Each Director shall promptly disclose to the Corporate Secretary, who will then notify the Chairman, the Lead Director and the Chair of the Nominating and Corporate Governance Committee with respect to, any change in circumstances that may affect his or her independence.

The determination that a Director is independent or eligible to serve on the Audit Committee shall be made by the Board following a review of all relevant information and a recommendation by the Nominating and Corporate Governance Committee; such determination shall be made by the Board at least annually and at the next Board meeting after the Board receives information from or in connection with a Director indicating a significant change in information previously received.

Related Party Transactions. It is the policy of the Board that all Interested Transactions with Related Parties shall be subject to approval or ratification in accordance with the procedures set forth in its Related Party Transactions Policy..

The Board believes that the Company should not enter into paid consulting arrangements with independent Directors, excluding service by an independent Director on any regularly constituted advisory board of the Company for which such Director receives standard fees of less than $50,000 per annum.

The Board believes that it is appropriate for the CEO to offer his/her resignation from the Board at the same time he/she resigns or retires from the CEO position. Whether the individual continues to serve on the Board is a matter for discussion with the new CEO and the Board. It is also recommended that should the Board decide that the former CEO should continue on the Board, the period of service should be reviewed periodically.

The Nominating and Corporate Governance Committee is responsible for reviewing annually the Board’s future requirements for Board members and the appropriate criteria for membership to the Board. Generally, non-employee Directors shall have unquestioned personal ethics and integrity;  shall possess specific skills and experience aligned with ePlus’ strategic direction and operating challenges and that complement the overall composition of the Board, as well as diversity in skills and experience; core business competencies of high achievement and a record of success, financial literacy and history of making good business decisions and exposure to best practices; interpersonal skills that maximize group dynamics; should be enthusiastic about ePlus and have sufficient time to become fully engaged.

The Nominating and Corporate Governance Committee has, as one of its responsibilities, the recommendation of Director candidates to the Board. In making such recommendation, the Nominating and Corporate Governance Committee shall, in respect of new candidates, seek input from sources the Committee deems helpful and, in respect of incumbent Directors standing for reelection, conduct an evaluation of such Directors in accordance with the Committee’s Charter and Operating Guidelines. Nominees suggested by shareholders shall be communicated to the Nominating and Corporate Governance Committee and shall be considered in the selection process for nominees to be included among the Director candidates to be recommended to the Board.

Currently, an invitation to join the Board is extended by the Chairman of the Nominating and Corporate Governance Committee and the CEO after approval by the Board.

In accordance with the charter of the Nominating and Corporate Governance Committee, the Board and each of the committees will perform an annual self-evaluation of its overall performance. The Nominating and Corporate Governance Committee is responsible for developing and conducting or coordinating such self-evaluations and reviewing the results with the Board and each committee.

Guideline No. 18
Directors Who Change Their Present Job Responsibility

A Director shall submit his/her resignation to the Board when a change in the Director's status or job responsibility occurs. The Nominating and Corporate Governance Committee is responsible for recommending to the Board whether such resignations should be accepted. Non-employee Directors are also required to advise the Corporate Secretary, who will then advise the Chairman of the Board and the Chair of the Nominating and Corporate Governance Committee, of any significant change in their employment or other personal circumstances, which might affect their service on the Board.

With the evaluation of incumbent Directors standing for reelection (Guideline No. 15), the annual assessment of Board performance (Guideline No. 17), and the resignation requirement upon a change in job responsibility (Guideline No. 18), the Board does not believe that an artificial term limit should be established.

The non-employee Directors shall conduct an annual performance evaluation of the CEO against predetermined objectives. In addition, the CEO also shall annually prepare a self-evaluation prior to such annual performance evaluation by the Board.

The Nominating and Corporate Governance Committee shall review with the Company’s management, the succession plans for executive officers and senior operations executives. Succession planning is also annually reviewed with the Board in a separate organizational planning meeting. The current CEO's recommendation for his or her successor (as the result of an unexpected event) will be communicated to the Chair of the Nominating and Corporate Governance Committee in a letter to be opened only in case of such an event. The CEO will update the recommendation periodically.

Guideline No. 22
Management Development

The Nominating and Corporate Governance Committee is responsible for reviewing with appropriate representatives of management, ePlus’ organization structure and, in particular, the responsibilities and performance of executive officers, and from time to time, senior operations executives and the plans for their succession and to report at least annually to the Board on this subject.

Board members should, in most instances, only communicate with the outside constituents at the request of management. However, the Lead Director may determine to meet with ePlus shareholders, as appropriate. Such sessions are not intended to serve as a forum for the communication of material non-public information that is subject to SEC Regulation FD.

In addition, only the Chairman and Chief Executive Officer, the Chief Financial Officer, , and the Treasurer (and others specifically authorized by the above) to disclose information about ePlus to the investment community.

Guideline No. 24
Other Directorships

The number of other for-profit boards on which non-management Directors may serve is limited to five, provided that any Director who was serving on more than five for-profit boards on June 17, 2009, shall not be required to withdraw from serving on such Boards but shall not agree to serve on any additional Board while in excess of the five Board limit. In addition non-management Directors shall advise the Corporate Secretary, who will then advise the Chairman of the Board, the Lead Director and the Chair of the Nominating and Corporate Governance Committee, in advance of accepting an invitation to serve on another board. The Nominating and Corporate Governance Committee and the Board will take into account the nature of and the time involved in a Director's service on other boards in evaluating the suitability of new Directors and incumbent Directors for election (or re-election) to the Board and making its recommendations to shareholders.

Guideline No. 25
Duties of Directors

The basic responsibility of the Directors is to exercise their business judgment to act in the best interests of ePlus and its shareholders. In carrying out this responsibility, the Board also considers the concerns of the Company’s other stakeholders and interested parties, including its employees, customers, suppliers, partners, local communities, and the public at large. The Directors rely on the honesty and integrity of ePlus’ officers, employees, and outside advisors in making Board decisions.

The CEO, together with the other members of the Management Committee, shall be responsible for providing an orientation for new Directors. Each new Director shall, as soon as practicable, spend a day at the Company's offices for personal briefing by senior management on the Company's strategic plans, its financial statements, and its key policies and practices. All Directors are encouraged to attend, from time to time, continuing education programs for Directors at the Company’s expense and to make at least one visit annually to a business unit of ePlus (in addition to any visits made in connection with Board or Committee meetings).

Guideline No. 27
Ethics and Conflicts of Interest

The Board expects its Directors, officers and other employees to act ethically at all times and to acknowledge adherence to the ePlus’ Corporate Ethics Policy. The Board will not permit any waiver of any ethics policy for any Director or executive officer. Directors are expected to avoid any action, position or interest that conflicts with an interest of ePlus or that gives the appearance of a conflict. If any actual or potential conflict of interest arises for a Director, the Director shall promptly inform the Chairman and Chief Executive Officer and the Chair of the Nominating and Corporate Governance Committee. If a significant conflict exists and cannot be resolved, the Director should resign. All Directors will recuse themselves from any discussion or decision affecting their personal, business or professional interests.

Guideline No. 28
Reporting of Concerns to Non-Employee Directors or the Audit Committee

Anyone who has a concern about the Company's conduct, or a complaint regarding the Company's accounting, internal accounting controls or auditing matters, may communicate that concern directly to the outside Directors or to the Audit Committee. Such communications may be confidential or anonymous, and may be emailed, submitted in writing, or reported by phone to special addresses and a toll-free phone number that will be published on the company's website. All communications to the outside Director(s) or the Audit Committee (other than unsolicited commercial communications unrelated to the Company) will be forwarded to the appropriate outside Director(s) or the Audit Committee for their review and will be simultaneously reviewed and addressed by the Company's compliance, internal audit or legal staffs in the same way that other concerns are addressed by the Company. The status of all outstanding concerns addressed to the outside Directors or the Audit Committee will be reported to the Directors on a quarterly basis. The outside Directors or the Audit Committee may direct special treatment, including the retention of outside advisors or counsel, for any concern addressed to them. The ePlus Corporate Ethics Policy prohibits any employee from retaliating or taking any adverse action against anyone for raising or helping to resolve an integrity concern.

Guideline No. 29
Access to Independent Advisors

The Board and its committees shall have the right at any time to retain and authorize the compensation of independent outside financial, legal or other advisors.

Guideline No. 30
Periodic Review

The Nominating and Corporate Governance Committee is responsible for annually reviewing these guidelines, as well as considering other corporate governance principles that may, from time to time, merit consideration by the Board.