SanDisk 2007 Annual Report Download - page 45

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CERTAIN TRANSACTIONS AND RELATIONSHIPS
The Audit Committee is responsible for review, approval, or ratification of “related-person transactions”
between the Company or its subsidiaries and related persons. Under the SEC rules, a related person is a director,
officer, nominee for director, or 5% stockholder of the company since the beginning of the last fiscal year and their
immediate family members. The Company has adopted written policies and procedures that apply to any
transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved
exceeds $120,000, and a related person has a direct or indirect material interest. The Audit Committee has
determined that, barring additional facts or circumstances, a related person does not have a direct or indirect
material interest in the following categories of transactions:
• any transaction with another company for which a related person’s only relationship is as an employee (other
than an executive officer), director, or beneficial owner of less than 5% of that company’s shares, if the
amount involved does not exceed the greater of $200,000, or 2% of that company’s total annual revenue;
• compensation to executive officers determined by the Compensation Committee;
• compensation to directors determined by the Board;
• transactions in which all security holders receive proportional benefits; and
• banking-related services involving a bank depository of funds, transfer agent, registrar, trustee under a trust
indenture, or similar service.
Transactions involving related persons that are not included in one of the above categories are generally
reviewed by the Company’s legal department. The legal department determines whether a related person could have
a significant interest in such a transaction, and any such transaction is forwarded to the Audit Committee for review.
The Audit Committee determines whether the related person has a material interest in a transaction and may
approve, ratify, rescind, or take other action with respect to the transaction in its discretion.
Irwin Federman, the Company’s Vice Chairman of the Board of Directors, Lead Independent Director and a
member of the Company’s Compensation and Audit Committees, is a general partner of U.S. Venture Partners, a
venture capital firm. One of U.S. Venture Partners’ funds holds a 13% interest in Intermolecular, Inc, a privately
held company. Mr. Federman also serves on Intermolecular’s board of directors. In August 2006, the Company
entered into an agreement with Intermolecular pursuant to which Intermolecular agreed to provide research and
development services to the Company. In 2006 and 2007, the Company paid Intermolecular $1.5 and $5.0 million,
respectively, for services rendered. In light of the relationship between Mr. Federman and Intermolecular, Inc., the
Audit Committee reviewed and approved the Company’s transactions with Intermolecular, Inc.
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