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RELATED PERSON TRANSACTIONS
The Company recognizes that transactions between
the Company and any of its Directors or executives
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 shareholders. Accordingly,
consistent with the Company’s Code of Business
Conduct and Ethics, as a general matter, it is the
Company’s preference to avoid such transactions.
Nevertheless, the Company recognizes that there are
situations where such transactions may be in, or may
not be inconsistent with, the best interests of the
Company and its shareholders. Therefore, the
Company has adopted a written policy which requires
the Company’s Audit and Risk Committee to review
and, if appropriate, to approve or ratify any such
transactions. Pursuant to the policy, the Audit and
Risk Committee will review any transaction in which
the Company is or will be a participant and the
amount involved exceeds $120,000 in any fiscal year,
and in which any of the following had, has or will have
a direct or indirect material interest: (i) the Company’s
Directors, (ii) the Company’s executive officers, (iii)
holders of more than 5% of the Company’s
outstanding shares, (iv) immediate family members of
any of these persons, or (v) any firm, corporation or
other entity in which these persons are employed or is
a general partner or principal or in a similar position or
in which such person has a 5% or greater beneficial
interest. During its review the Audit and Risk
Committee considers a number of factors it deems
appropriate including whether the related person
transaction is on terms no less favorable to the
Company than may reasonably be expected in arm's-
length transactions with unrelated parties. The Audit
and Risk Committee will only approve or ratify those
transactions that are in, or are not inconsistent with,
the best interests of the Company and its
shareholders, as the Audit and Risk Committee
determines in good faith.
Each of the following ongoing transactions has been
reviewed and ratified
by the Audit and Risk
Committee:
Kriss Cloninger III is President of the Company and a
member of the Board of Directors. His son, Kriss Alan
Cloninger, has been employed with the Company
since 2013. Kriss Alan Cloninger is a Field Force
Consultant and in 2015, his total compensation,
including salary, bonuses, commissions and other
benefits was $208,819. The compensation for Kriss
Alan Cloninger is commensurate with that of his
peers.
Thomas J. Kenny was appointed by the Board of
Directors to fill a vacancy on the Board on February
10, 2015. Effective February 9, 2015, the Company
terminated a consulting agreement that it entered into
with Mr. Kenny on April 19, 2012, pursuant to which
Mr. Kenny provided certain consulting services to the
Investment and Investment Risk Committee of the
Board. Prior to April 19, 2014, Mr. Kenny’s fee was
$150,000 per year for his consulting services, and
after April 19, 2014, in exchange for additional
consulting services. Mr. Kenny’s fee was raised to
$240,000 per year. In 2015, Mr. Kenny was paid
$60,000 in consulting fees prior to his Board
appointment.
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