SanDisk 2006 Annual Report Download - page 47

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CERTAIN TRANSACTIONS AND RELATIONSHIPS
Under the Company’s related party transaction policies and procedures, information about transactions
involving related persons is assessed by the Audit Committee. Related persons include (i) the Company’s directors,
executive officers and nominees to become a director, (ii) any beneficial owner of more than 5% of any class of the
Company’s voting securities, (iii) any immediate family members of the foregoing persons, or (iv) any firm,
corporation or other entity in which any of the foregoing persons is employed or in which all the related persons, in
the aggregate, have a 10% or greater beneficial ownership interest. If the determination were made that a related
person has a material interest in any Company transaction (a “related party transaction”), then the Audit Committee
would review, approve, ratify or, at its discretion, take other action with respect to the transaction. Any related party
transaction would be required to be disclosed in accordance with SEC rules. If the related person at issue is a
member of the Audit Committee, or an immediate family member of a member of the Audit Committee, then that
member would not participate in those discussions.
In reviewing a proposed related party transaction, the Audit Committee considers all the relevant facts and
circumstances of the transaction available to the Audit Committee on a case-by-case basis, including (i) the nature
and terms of the transaction, (ii) the relationship with the related person, (iii) whether the terms of the transaction are
fair to the Company and on terms at least as favorable as would apply if the other party was not a related person,
(iv) whether there are demonstrable business reasons for the Company to enter into the related party transaction,
(v) whether the related party transaction would impair the independence of a director, and (vi) whether the related
party transaction would present an improper conflict of interest for any director, executive officer or employee of
the Company, taking into account the size of the transaction, the overall financial position of the director, executive
officer or employee, the direct or indirect nature of the interest of the director, executive officer or employee in the
transaction, the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems
appropriate.
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