hhgregg, Inc., and its subsidiaries (collectively, the “Company”) recognize that Related Person Transactions (as defined below) can present potential or actual conflicts of interest and create the appearance that Company decisions are based on considerations other than the best interests of the Company and its stockholders. Accordingly, as a general matter, it is the Company’s preference to avoid Related Person Transactions. The Company recognizes that there are situations where Related Person Transactions may be in, or may not be inconsistent with, the best interests of the Company and its stockholders, including but not limited to situations where the Company may obtain products or services of a nature, quantity or quality, or on other terms, that are not readily available from alternative sources or when the Company provides or obtains products or services to or from Related Persons (as defined below) on an arm’s length basis on terms comparable to those provided to unrelated third parties or on terms comparable to those provided to employees generally. Therefore, the Company has adopted the procedures set forth below for the review, approval or ratification of Related Person Transactions.
This policy has been approved by our Board of Directors (the “Board”). The Board will review and may amend this policy from time to time.
Related Person Transactions
For the purposes of this policy, a “Related Person Transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant and the amount involved exceeds $120,000, and in which any Related Person had, has or will have a direct or indirect material interest.
For purposes of this Policy, a “Related Person” means:
Identification of Related Persons (Five Percent Owners)
At the time the Company becomes aware of a person’s status as a beneficial owner of more than 5% of any class of the Company’s voting securities by examining SEC filings and through the use of Internet search engines and a review of applicable websites, the Chief Financial Officer shall create a list, to the extent the information is readily available, of (a) if the person is an individual, the same information as is requested of directors and executive officers under this policy and (b) if the person is a firm, corporation or other entity, a list of principals or executive officers of the firm, corporation or entity, and shall update the list on a quarterly basis.
Related Person Transactions that are identified as such prior to the consummation thereof or amendment thereto shall be consummated or amended only if the following steps are taken:
In the event the Company’s Chief Executive Officer, President or Chief Financial Officer becomes aware of a Related Person Transaction that has not been previously approved or previously ratified under this policy:
Review of Ongoing Transactions
At the Board’s first meeting of each fiscal year, the Board shall review, as appropriate to determine whether to renew such Related Party Transaction, any previously approved or ratified Related Person Transactions that remain ongoing and have a remaining term of more than six months. Based on all relevant facts and circumstances, taking into consideration the Company’s contractual obligations, the Board shall determine if it is in the best interests of the Company and its stockholders to renew, modify or terminate the Related Person Transaction.
No immediate family member of a director or executive officer shall be hired as an employee of the Company unless the employment arrangement is approved by the Board at the next Board meeting. In the event a person becomes a director or executive officer of the Company and an immediate family member of such person is already an employee of the Company, no material change in the terms of employment, including compensation, may be made without the prior approval of the Board, or the Compensation Committee, as appropriate (except, if the immediate family member is himself or herself an executive officer of the Company, any proposed change in the terms of employment shall be reviewed and approved in the same manner as other executive officer compensatory arrangements).
All Related Person Transactions that are required to be disclosed in the Company’s filings with the Securities and Exchange Commission, as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and related rules and regulations, shall be so disclosed in accordance with such laws, rules and regulations.
The material features of this policy shall be disclosed in the Company’s annual report on Form 10-K or in the Company’s proxy statement, as required by applicable laws, rules and regulations.
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3:59 PM ET | Mar 7, 2017
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