Related Person Transaction Policy
This Policy was created and adopted by the Board of Directors of the Company to (i) assist the Board in reviewing, and if deemed appropriate, in approving or ratifying Related Person Transactions (as defined below) and (ii) assist the Company in preparing all disclosures required under the rules of the Securities and Exchange Commission (“SEC”).
Any Related Person Transaction must be approved or ratified by the Board of Directors or a designated committee thereof consisting solely of independent directors (the “Committee”). In reviewing any such Transaction or proposed Transaction, the Board or Committee shall consider all material facts and circumstances. The Board or Committee will approve or ratify a Transaction only if it determines that the Transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. The Board or Committee also may conclude, upon review of all material information, that the Transaction does not constitute a Related Person Transaction, and thus that no further review is required under this Policy. For purposes of this Policy, “Related Person Transaction” means any financial or commercial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving the Company (including subsidiaries) in which a Related Person (as defined below) has a direct or indirect material interest, as determined by the Board or Committee.
Reporting and Review
Each director, director nominee and executive officer shall promptly notify the Corporate Secretary of any potential Related Person Transaction, which notice shall include a description of the material terms thereof.
Notwithstanding the foregoing, the following types of transactions are deemed not to create or involve a material interest on the part of the Related Person and will not be reviewed, nor will they require approval or ratification, under this Policy:
- (i) Transactions involving the purchase or sale of products or services in the ordinary course of business, not exceeding $120,000.
- (ii) Transactions in which the Related Person’s interest derives solely from his or her service as a director of another corporation or organization that is a party to the transaction.
- (iii) Transactions in which the Related Person’s interest derives solely from his or her ownership of less than 10% of the equity interest in another person (other than a general partnership interest) which is a party to the transaction.
- (iv) Transactions in which the Related Person’s interest derives solely from his or her service as a director, trustee or officer (or similar position) of a not-for-profit organization or charity that receives donations from the Company where the donations are made in accordance with policies approved by the Nominating and Governance Committee or the Board.
- (v) Compensation arrangements of any executive officer, other than an individual who is an Immediate Family Member (as defined below) of a Related Person, if such arrangements have been approved by the Compensation Committee.
- (vi) Director compensation arrangements, if such arrangements have been approved by the Compensation Committee or the Board.
- (vii) Transactions involving less than $10,000.
For purposes of this Policy, the following terms have the meanings set forth below. “Related Person” means:
- (i) any director or executive officer of the Company;
- (ii) any Immediate Family Member of a director or executive officer of the Company;
- (iii) any nominee for director and the Immediate Family Members of such nominee; and
- (iv) a 5% beneficial owner of the Company’s voting securities or any Immediate Family Member of such owner.
“Immediate Family Member” means a child, stepchild, parent, stepparent, spouse, sibling, mother in law, father in law, son in law, daughter in law, brother in law, sister in law, or any person sharing the household (other than a tenant or employee).