The Audit Committee (“Audit Committee”) of the Board of Directors (the
“Board”) of Ulticom, Inc. (the “Company”) recognizes that
related party transactions present a heightened risk of conflicts of interest and/or
improper valuation (or the perception or appearance thereof) and therefore has adopted
this Related Party Transactions Policy (this “Policy”) to be followed
in connection with all related party transactions involving the Company. The
Audit Committee recognizes that transactions between related parties and the Company
or its subsidiaries may occur in the ordinary course of business. This Policy
is not designed to prohibit such related party transactions; rather, its intent
is to encourage timely internal disclosure of such transactions and appropriate
review and reporting of them.
Persons Covered. For purposes hereof, a “Related Party”
is:
- Each director and executive officer of the Company;
- Any nominee for election as a director of the Company;
- Any security holder who is known by the Company to own of record or beneficially
more than 5% of any class of the Company’s voting securities; and
- Any immediate family member of any of the foregoing persons. An “immediate
family member” includes the spouse, parents, stepparents, children, stepchildren,
siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and
sisters-in-law, and any person (other than a tenant or employee) sharing the household
of a director, executive officer, director nominee or greater than 5% security holder
of the Company.
Related Party Transactions. For purposes of this Policy,
a “related party transaction” is any transaction or series of transactions
in which the Company participates and a Related Party has a direct or indirect material
interest. Examples of related party transactions include sales, purchases,
and transfers of real or personal property, use of property and equipment by lease
or otherwise, services received or furnished and borrowings and lendings, including
guarantees. Examples of a transaction in which a Related Party would have
a direct or indirect material interest include transactions between the Company
and any entity that is owned or controlled by a Related Party, or an entity in which
a Related Party has a substantial ownership interest or control.
Review. The Board has determined that the Audit Committee
is best suited to review and approve related party transactions. Related party
transactions shall be reviewed or approved by the Audit Committee in its discretion.
Standards. In evaluating a related party transaction, the
Audit Committee shall, in its judgment, consider the relevant facts and circumstances
of the related party transaction and any of the following factors that are relevant:
- The position or relationship of the Related Party at or with the Company;
- The materiality of the transaction to the Related Party, including the dollar value
of the transaction;
- The business purpose for and reasonableness of the transaction;
- Whether the related party transaction is comparable to a transaction that could
be available on an arms-length basis; and
- The effect of the transaction on the Company’s business and operations.
Disclosure. All related party transactions are to be disclosed
in the Company’s applicable filings as required by the Securities Act of 1933,
as amended and the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) and the related rules and regulations promulgated thereunder.
Furthermore, all related party transactions shall be disclosed to the Audit Committee
and any material related party transaction shall be disclosed to the entire Board.
Exceptions - Transactions to be Reported to the Audit Committee with No Further
Action. The following transactions should be reported to the
Audit Committee, but require no further Audit Committee action:
- Any related party transaction or series of transactions that does not equal or exceed
$120,000 or an equivalent fair value.
- Transactions that have been approved by a majority of independent directors of the
Board or by a majority of the stockholders of the Company.
- Exceptions - Transactions that Need Not be Reported to the Audit Committee.
- Compensation arrangements approved by the Company’s Compensation Committee.
- Reimbursement or advances of business travel and expenses incurred or to be incurred
directly by a director or executive officer of the Company in connection with the
performance of his or her duties and approved in accordance with the Company’s
expense reimbursement policy.
- The establishment or maintenance of a banking, trading, investment management, custody
or other account with an affiliate of the Company, if the terms of such account
are generally the same as or similar to accounts offered by the affiliate of the
Company in the ordinary course.
- The extension or maintenance of credit, arrangements for the extension of credit,
or renewals of an extension of credit, in the form of a personal home improvement
or manufactured home loan, consumer credit, any extension of credit under an open
end credit plan or a charge card, if such loan, consumer credit, extension of credit
or charge card otherwise is permitted to such Related Party under the terms of Section
13(k) of the Exchange Act.
- Any transaction otherwise exempt from the reporting requirements of Item 404 of
Regulation S-K under the Exchange Act.
Policy Amendment; General. This Policy may be changed at
any time by the Audit Committee in its discretion. This Policy is intended
as a component of the flexible framework within which the Board, assisted by its
committees, directs the affairs of the Company. While it should be interpreted
in the context of applicable laws, regulations and listing requirements, as well
as in the context of the Company’s Amended and Restated Certificate of Incorporation
and Amended and Restated By-laws, it is not intended to establish by its own force
any legally binding obligations.
For more information, please contact ir@ulticom.com
Important Considerations for Investors:
Please note that many of the materials available on Ulticom®'s Investor
Relations web page are dated materials that reflect Ulticom's thoughts at that time.
Ulticom undertakes no obligation to update or revise these materials. For a more
detailed explanation, refer to the Safe Harbor.