Related Person Transactions Policy
1. Policy. Each Related Person Transaction must be considered for approval or ratification in accordance with the guidelines set forth in this policy (i) by the Audit Committee of the Board of Directors or (ii) if the Audit Committee of the Board of Directors determines that the approval or ratification of such Related Person Transaction should be considered by all of the disinterested members of the Board of Directors, by such disinterested members of the Board of Directors by the vote of a majority thereof.
In considering whether to approve or ratify any Related Person Transaction, the Audit Committee or the disinterested members of the Board of Directors, as the case may be (the "Reviewing Directors"), shall consider all factors that are relevant to the Related Person Transaction, including, without limitation, the following:
- the size of the transaction and the amount payable to a Related Person;
- the nature of the interest of the Related Person in the transaction;
- whether the transaction may involve a conflict of interest; and
- whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties.
2. Procedure. The General Counsel shall advise the Chairman of the Audit Committee of any Related Person Transaction of which he becomes aware. The Audit Committee shall consider such Related Person Transaction at its next regularly scheduled meeting or, if it deems it advisable, prior thereto at an interim meeting called for such purpose, unless the Audit Committee determines that the approval or ratification of such Related Person Transaction should be considered by all of the disinterested members of the Board of Directors, in which case such disinterested members of the Board of Directors shall consider such Related Person Transaction at the Board's next regularly scheduled meeting or, if they deems it advisable, prior thereto at an interim meeting called for such purpose. Except as set forth below, any Related Person Transaction not approved in advance by the Reviewing Directors shall not be entered into by the Company unless the consummation of such Related Person Transaction is expressly subject to ratification by the Reviewing Directors. If the Reviewing Directors do not ratify such Related Person Transaction, the Company shall not consummate such Related Person Transaction.
If the Company enters into a transaction that (i) the Company was not aware constituted a Related Person Transaction at the time it was entered into but which it subsequently determines is a Related Person Transaction prior to full performance thereof or (ii) did not constitute a Related Person Transaction at the time such transaction was entered into but thereafter becomes a Related Person Transaction prior to full performance thereof, then in either such case the Related Person Transaction shall be presented for ratification in the manner set forth above. If such Related Person Transaction is not ratified by the Reviewing Directors, then the Company shall take all reasonable actions to attempt to terminate the Company's participation therein.
3. Disclosure. The Company shall disclose all Related Person Transactions as may be required under applicable securities laws and regulations, including, without limitation, Item 404 of Regulation S-K. Consideration and approval of any particular transaction by the Reviewing Directors shall not be dispositive in determining whether such transaction requires disclosure under applicable securities laws. The Audit Committee shall timely advise the Board of Directors of all Related Person Transactions, if any, approved or ratified by the Audit Committee.
4. Definitions. For purposes of this policy, the following definitions shall apply:
"Executive Officer" means the President, any Vice President in charge of a principal business unit, division or function of the Company or any officer or other person who performs a policy making function for the Company, including any executive officer of a subsidiary of the Company if such person performs policy making functions for the Company.
"Immediate Family Member" means, with respect to any person, any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of such person, and any individual (other than a tenant or employee) sharing the household of such person.
"Related Person " means any of the following: (i) an Executive Officer or director of the Company or a nominee for director of the Company, (ii) a beneficial owner of more than 5% of any class of voting securities of the Company, (iii) an Immediate Family Member of any of the persons identified in clauses (i) or (ii) hereof or (iv) an entity in which any of the persons identified in clauses (i) - (iii) hereof acts as an officer or general partner of or otherwise controls or in which such person, together with any other persons identified in clauses (i) - (iii) hereof, holds an aggregate ownership interest of at least 10%.
"Related Person Transaction" means any transaction involving an amount in excess of $120,000 in which the Company is a participant and in which a Related Person has or will have a direct or indirect material interest, including without limitation any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships, but excluding: (i) any indebtedness incurred for the purchase of goods and services subject to usual trade terms, for ordinary business travel and expense payments and for other transactions in the ordinary course of business; (ii) any indebtedness incurred with respect to a beneficial owner of more than 5% of any class of voting securities of the Company or any Immediate Family Member thereof; (iii) any transaction in which the rates or charges involved in connection therewith are determined by competitive bids; (iv) any transaction in which a person is deemed a Related Person solely on the basis of such person's equity ownership and all holders of that class of equity receive the same benefit on a pro rata basis; (v) any transaction involving compensation payable to an Executive Officer or director of the Company for services in such capacity which compensation has been approved by the Compensation Committee of the Board of Directors or by the Board of Directors on the recommendation of the Compensation Committee, or (vi) any transaction or series of transactions in the ordinary course of the Company's business in which the Related Person's interest in the transaction is solely as a non-executive officer employee of the transacting party and where the Related Person will not receive any incremental personal benefit from the Company's dealings with the transacting party.
Adopted: March 1, 2007