SanDisk 2012 Annual Report Download - page 83

Proxy Statement
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 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 a written related person transaction policy 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.
In accordance with the adopted policy and procedures, 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 material interest in such a transaction, and any such
transaction is submitted to the Audit Committee for review. The Audit Committee has delegated authority to the
chair of the Audit Committee to review any such transactions involving an amount less than $1,000,000. The
Audit Committee or the chair of the Audit Committee, as applicable, 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.
The son of Irwin Federman, one of the Company’s directors, is a Senior Manager in the business
development department of the Company’s Retail group. Mr. Federman’s son’s compensation is consistent with
that of others who hold similar roles at the Company. Mr. Federman plays no personal role in determining his
son’s compensation or reviewing his son’s performance. Mr. Federman does not receive a direct or indirect
benefit from his son’s position with the Company. In accordance with the related-person transaction approval
policy described above, Mr. Federman’s son’s employment with the Company was reviewed by the legal
department of the Company and submitted for review to the chair of the Audit Committee, who ratified the
transaction.
The Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of
Incorporation”), authorizes the Company to provide indemnification of the Company’s Directors and officers,
and the Company’s Bylaws require the Company to indemnify its Directors and officers, to the fullest extent
permitted by the Delaware General Corporation Law (the “DGCL”). In addition, each of the Company’s current
Directors and executive officers has entered into a separate indemnification agreement with the Company.
Finally, the Company’s Certificate of Incorporation and Bylaws limit the liability of Directors to the Company or
its stockholders to the fullest extent permitted by the DGCL.
The Company intends that all future transactions between the Company and its officers, Directors, principal
stockholders and their affiliates be approved by the Audit Committee, and be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.
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