ZBRA » Topics » Related Party Transactions Policy

This excerpt taken from the ZBRA DEF 14A filed Apr 24, 2007.
Related Party Transactions Policy

     In February 2007, the Company adopted written policies and procedures (“Related Party Transaction Policy”) regarding related party transactions. The Related Party Transaction Policy requires each director and executive officer to inform the Company of his or her relationships with other individuals and entities that could be “Related Persons” (as defined below). It also requires the distribution of such information to key personnel within the Company so that proposed transactions may be identified as “Related Party Transactions” (as defined below), if applicable.

     For purposes of the Related Party Transaction Policy, a “Related Party Transaction” is a transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which the Company (including any of its subsidiaries) was, is or will be a participant, and in which any “Related Person” had, has or will have a direct or indirect interest. Related Party Transactions do not include the following:

      1.       most transactions involving approved compensation of executive officers of the Company;
2. transactions involving compensation of directors for service on the Board of Directors or committees thereof;
3. transactions available to all employees of the Company generally or to all salaried employees of the Company generally;
4. transactions in which the interest of the Related Person arises solely from the ownership of a class of the Company’s equity securities and all holders of that class receive the same benefit on a pro rata basis; or
5. transactions with Unique Building Corporation (including any transactions involving the Company’s real property leases with Unique Building Corporation), each of which must be approved by the Company’s Facilities Committee, a committee of the Company’s Board of Directors consisting of non-employee directors.

     For purposes of the Related Party Transaction Policy, a “Related Person” means:

      1.       any director or executive officer of the Company or nominee to become a director of the Company;
2. any person known to be the beneficial owner of more than 5% of any class of the Company’s voting securities;
3. any immediate family member of any of the foregoing persons, which means 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 the director, executive officer, nominee or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such foregoing person; and
4. any firm, corporation or entity in which any of the foregoing persons is employed or is a general partner or principal or in a similar position, or in which such person, together with all other Related Persons, have in the aggregate a 10% or greater beneficial ownership interest.

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     Related Party Transactions in the following categories are treated as pre-approved:

      1.       any transaction with another company in which a Related Person’s only relationship is as an employee (other than as an executive officer), director or beneficial owner of less than 5% of that company’s shares (i) if the aggregate amount involved does not exceed the greater of $1,000,000, or 2 percent of that company’s total annual revenues; (ii) the Related Person has no direct or indirect involvement in the Related Party Transaction; and (iii) the Related Person is not compensated for the transaction with the Company or its subsidiary; and
2. Any charitable contribution, grant or endowment by the Company to a charitable organization, foundation or university at which a Related Person’s only relationship is as an employee (other than as an executive officer) or a director, if the aggregate amount involved does not exceed the lesser of $100,000, or 2 percent of the charitable organization’s total annual receipts.

     The Related Party Transaction Policy is administered by the Company’s General Counsel and the Audit Committee (the “Committee”). Under the Related Party Transaction Policy, the Company’s General Counsel assesses whether proposed transactions are Related Party Transactions. If the General Counsel determines that a proposed transaction is a Related Party Transaction, then the appropriate party or parties further described below review the proposed transaction and either approve or disapprove it. In reviewing the proposed Related Party Transaction and making such determination, all of the relevant facts and circumstances available shall be considered, including (if applicable) but not limited to: the benefits to the Company; the impact on a director’s independence (if the Related Person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer); the availability of other sources for comparable products or services; the terms of the transaction; and the terms available to unrelated third parties or to employees generally.

     Depending on the dollar amount involved in a proposed Related Party Transaction, the review and determination of whether to approve or disapprove the proposed Related Party Transaction is made by different parties.

     If a proposed Related Party Transaction involves less than $100,000, the General Counsel and the Chairman of the Committee (the “Chair”) and such other executive officers that either of them may deem appropriate, or the full Committee at the option of the Chair, shall determine whether the proposed Related Party Transaction is approved or disapproved.

     If a proposed Related Party Transaction involves $100,000 or more, the proposed Related Party Transaction is submitted to the Committee for consideration at the next Committee meeting or, to the Chair in those instances in which the General Counsel, in consultation with the Chief Executive Officer or the Chief Financial Officer, determines that it is not practicable or desirable for the Company to wait until the next Committee meeting.

     If the Company’s Controller or General Counsel becomes aware of a Related Party Transaction that was not previously approved or previously ratified under the Related Party Transaction Policy, the Related Party Transaction shall be submitted to the Committee or the Chair. If the Related Party transaction is still ongoing, the Committee or Chair must evaluate all options, including ratification, amendment or termination of the Related Party Transaction. If the Related Party transaction is completed, the Committee or Chair shall evaluate the Related Party Transaction to determine if rescission of the Related Party Transaction and/or any disciplinary action is appropriate, and shall request the Chief Compliance Officer to evaluate the Company’s controls and procedures to ascertain the reason that the Related Party Transaction was not submitted for prior approval and whether any changes to the Related Party Transaction Policy are recommended.

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"Related Party Transactions Policy" elsewhere:

RadiSys (RSYS)
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