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Standing exhibit · Adopted 2024-02-19 · Last reviewed 2025-12-04

Related-party transactions policy.

A "related-party transaction" is any transaction between the company and a person whose relationship to the company could appear to influence the deal. We do not avoid these transactions categorically; we surface them, scrub them, and let the Audit Committee — not management — decide whether they proceed.

Disclosure flow Audit Committee

1. Definitions.

"Related party" means: (a) any director or executive officer of the company; (b) any holder of more than 5% of any class of the company's voting securities; (c) any immediate family member of a person in (a) or (b), defined to include spouse, domestic partner, parents, stepparents, children, stepchildren, siblings, parents-in-law, children-in-law, siblings-in-law, and any person (other than a tenant or employee) sharing the household; and (d) any entity in which a person in (a)–(c) has a material direct or indirect interest, generally meaning at least 10% equity ownership or a board seat. "Immediate family" tracks Item 404 of Regulation S-K.

2. Covered transactions.

Any transaction, arrangement, or relationship — or series of similar transactions — in which (i) the company or any subsidiary is a participant, (ii) the amount involved exceeds $120,000 in any twelve-month period, and (iii) any related party has or will have a direct or indirect material interest. The threshold tests gross dollar value, not net; barter and in-kind arrangements are valued at fair market value.

3. Approval thresholds.

  • ≤ $120,000 — disclosure required; approval not required, but the Audit Committee chair receives a quarterly summary.
  • $120,001 – $1,000,000 — Audit Committee chair pre-approval, with the full committee informed at the next meeting.
  • > $1,000,000 — full Audit Committee pre-approval at a meeting; the interested director recuses.
  • Any amount, if it involves an officer or director's outside business — full Audit Committee pre-approval regardless of dollar size.
  • Any amount, if it involves a validator institution — additional Trust Council notice; the chain-integrity dimension is reviewed in parallel.

4. Disclosure flow.

Any director, officer, or 5% holder must notify the General Counsel of a proposed transaction at the earliest of (a) negotiation of material terms, (b) execution of a term sheet, or (c) any commitment of company resources. The General Counsel routes the proposal to the Audit Committee chair, with a one-page summary covering: parties, scope, dollar value, term, whether the terms are at or better than arm's-length, and any non-financial considerations. The interested party may not participate in the routing, scoring, or vote.

5. Audit Committee review standard.

The Audit Committee approves a related-party transaction only if it determines, in its business judgment, that the transaction is on terms no less favorable to the company than terms available from an unrelated party in an arm's-length transaction, and that the transaction is in the best interests of the company. In making that determination, the Committee considers:

  • The benefits to the company.
  • The terms relative to comparable transactions with unrelated third parties, including any documentation of competitive bids.
  • The availability of alternative sources for comparable products, services, or financing.
  • The materiality of the related party's interest, including whether the related party would benefit from the transaction beyond the value the company is paying.
  • The reputational, regulatory, and chain-integrity implications, including whether public knowledge of the transaction would embarrass the company or the Trust Council.

6. Pre-approved categories.

The Audit Committee has pre-approved the following categories of related-party arrangements, subject to the disclosure-only threshold in Section 3:

  • Compensation paid to directors and executive officers, where approved through the company's standard compensation processes (Compensation Committee).
  • Routine consumer purchases by a related party of company services on terms generally available to all consumers (e.g., a director enrolling in Conceptual Health® on standard terms).
  • Indemnification arrangements pursuant to the company's bylaws and indemnification agreements.
  • Transactions in which the related party's interest arises solely from being an employee, director, or 5% holder of an unrelated public company that is a vendor or customer.

7. Standing transactions.

Transactions extending across multiple fiscal years are reviewed annually by the Audit Committee, who may modify, terminate, or reaffirm the company's participation. Material amendments require fresh approval at the threshold corresponding to the amended dollar value.

8. Public disclosure.

All transactions required to be disclosed under Item 404 of Regulation S-K are disclosed in our annual report and proxy statement. Transactions material under the federal securities laws are disclosed on Form 1-U within four business days of execution. The Audit Committee maintains an internal register of all reviewed transactions for at least seven (7) years.

9. Enforcement and remedies.

Failure to disclose a covered transaction is a material violation of this policy and the Code of Conduct. Remedies available to the Audit Committee include rescission of the transaction, claw-back of profits, removal from committee assignments, and recommendation of removal from the board or termination of employment. The company will report any failure of the policy to discover or address a material related-party transaction in the next periodic SEC filing.