Related Party Transaction Policy
GREENHILL & CO., INC.
A Delaware corporation
Related Person Transaction Policy
Adopted January 28, 2009
This Policy was created and adopted by the Board of Directors of the Company to:
- assist the Board in reviewing, approving and ratifying related person transactions; and
- assist the Company in preparing the disclosure that the Securities and Exchange Commission rules require to be included in the Company’s applicable filings as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and their related rules.
This policy is intended to provide guidance to the executive officers and directors of the Company to help them recognize and deal with actual or apparent conflicts of interests. Conflicts may arise when an executive officer or director, or a member of the officer or director’s immediate family, has or could have a material interest in a transaction with the Company. This Policy is further intended to supplement, and not to supersede, our other policies that may be applicable to or involve transactions with related persons, such as our policies for determining director independence and our Code of Business Conduct & Ethics.
Transactions Covered By This Policy
Transactions covered by this Policy include any Transaction which is or may be a Related Person Transaction, as defined herein.
For purposes of this Policy, the following definitions apply:
“Immediate Family Member” means a child, stepchild, parent, stepparent, spouse, sibling, mother‑in‑law, father‑in‑law, son‑in‑law, daughter‑in‑law, brother‑in‑law, sister‑in‑law, or any person sharing the household (other than a tenant or employee).
“Related Person” means:
- any director or executive officer of the Company;
- any Immediate Family Member of a director or executive officer of the Company;
- any nominee for director and the Immediate Family Members of such nominee; and
- a 5% beneficial owner of the Company’s voting securities or any Immediate Family Member of such owner.
“Related Person Transaction” means any Transaction involving the Company in which a Related Person has a direct or indirect material interest, as determined by the Committee of the Board named below.
“Transaction” means any financial transaction, arrangement or relationship or any series of similar transactions, arrangements or relationships. The term also includes indebtedness and guarantees of indebtedness and transactions involving employment and similar relationships.
Board Committee Responsible For This Policy
The Board of Directors has designated a committee consisting solely of independent directors of the Nominating and Corporate Governance (the “Committee”) as responsible for the implementation of this Policy.
Reporting Related Person Transactions
Each director, director nominee and executive officer shall promptly notify the General Counsel (“GC”) of any potential Related Person Transaction involving the Company and a Related Person. The notice shall include a complete description of the Transaction including:
- the name of the Related Person and the basis on which the person is a Related Person;
- the Related Person’s interest in the Transaction with the Company, including the Related Person’s position(s) or relationship(s) with, or ownership in, a firm, corporation, or other entity that is a party to, or has an interest in, the Transaction;
- the parties to the Transaction, and if the Company is not a party, then the nature of the Company’s participation in the Transaction;
- the approximate dollar value of the amount involved in the Transaction;
- the approximate dollar value of the amount of the Related Person’s interest in the Transaction, which shall be computed without regard to the amount of profit or loss;
- the purpose and timing of the Transaction; and
- any other information regarding the Transaction or the Related Person in the context of the Transaction that could be material to investors in light of the circumstances of the particular Transaction.
The GC, in consultation with outside counsel, to the extent appropriate, shall determine whether a potential Transaction with a Related Person constitutes a “Related Person Transaction” requiring review under this Policy (including whether the Related Person has a material interest). If the GC determines that (i) the proposed Transaction constitutes a Related Person Transaction or (ii) it would be beneficial to further review the Transaction under this Policy, then, in either case, the Transaction will be referred to one or more chief executive officer (“CEO”) or the Committee for additional consideration.
Review, Approval or Ratification
Proposed Related Person Transactions involving executive officers (and/or their Immediate Family Members) other than a CEO or the GC shall be referred to one or more CEO and the GC for review, approval or ratification. Those involving the GC (and/or the GC’s Immediate Family Members) shall be referred to a CEO for review, approval or ratification. Proposed Related Person Transactions involving 5% stockholders, directors, director nominees or a CEO (and/or their Immediate Family Members) will be referred to the Committee for review, approval or ratification. All determinations by a CEO and the GC under this Policy shall be reported to the Committee at its next regularly scheduled meeting or earlier if appropriate. The persons responsible shall be referred to herein as the “Reviewing Party” for the remainder of this section.
The Reviewing Party shall review Transactions to determine whether the Related Person involved has a direct or indirect material interest in the Transaction. If the Reviewing Party determines that a Transaction is a Related Person Transaction, it shall proceed with its review as described below. The Reviewing Party may conclude, upon review of all relevant information, that the Transaction does not constitute a Related Person Transaction, thus the Reviewing Party will communicate the conclusion to the Related Party and no further review would be required under the Policy. On an annual basis, the Reviewing Party shall review previously approved Related Person Transactions that are ongoing, under the standard described below, to determine whether such Transactions should continue.
The Reviewing Party shall be provided with full details of the Transaction. In reviewing the Transaction or proposed Transaction for possible approval or ratification, the Reviewing Party shall consider all relevant facts and circumstances, including without limitation the commercial reasonableness of the terms, the benefit and perceived benefit, or lack thereof, to the Company, the availability and/or opportunity costs of alternate Transactions, the materiality and character of the Related Person’s direct or indirect interest, and the actual or apparent conflict of interest of the Related Person. If the Related Person is an independent director (or an Immediate Family Member of an independent director), then the Committee shall also consider the impact on the director’s independence as relevant.
The Reviewing Party will not approve or ratify a Related Person Transaction unless it shall have determined that, upon consideration of all relevant information, the Transaction is in, or not inconsistent with, the best interests of the Company. If after the review described above, the Reviewing Party determines not to approve or ratify a Related Person Transaction (whether such Transaction is being reviewed for the first time or has previously been approved and is being rereviewed), the Reviewing Party shall communicate that back to the Related Party and the Transaction will not be entered into or continued, as the Reviewing Party shall direct.
Transactions Not Covered By This Policy
Notwithstanding the foregoing, the following types of transactions are deemed not to create or involve a material interest on the part of the Related Person and will not be reviewed, nor will they require approval or ratification, under this Policy:
- Transactions in which the Related Person’s interest derives solely from his or her service as a director of another corporation or organization that is a party to the transaction.
- Transactions in which the Related Person’s interest derives solely from his or her ownership of less than 5% of the equity interest in another person (other than a general partnership interest) which is a party to the transaction.
- Transactions in which the Related Person’s interest derives solely from his or her ownership of a class of equity securities of the Company and all holders of that class of equity securities received the same benefit on a pro rata basis.
- Compensation arrangements of any executive officer, other than an individual who is an Immediate Family Member of a Related Person, if such arrangements have been approved by the Compensation Committee.
- Director compensation arrangements, if such arrangements have been approved by the Nominating and Corporate Governance Committee.
- Indemnity payments made to directors and executive officers in accordance with the Company’s charter, bylaws and applicable law.
Transactions Not Previously Approved
If the Company becomes aware of a Related Person Transaction that has not been approved under this Policy, the Related Person Transaction shall be reviewed under this Policy. A Related Person Transaction entered into without approval under this Policy shall not be deemed to violate this Policy, or to be invalid or unenforceable, so long as the Transaction is reviewed in accordance with this Policy as soon as reasonably practical after the Company becomes aware of the Transaction. When reviewing a Related Person Transaction that has not been approved under this Policy, the reviewer shall consider all the relevant facts and circumstances respecting the Transaction, and shall evaluate all options available to the Company, including ratification, revision or termination of such Transaction, and shall take such course of action as the reviewer deems appropriate under the circumstances.
In connection with administering this Policy, management and the Committee shall coordinate with such other committees of the Board of Directors as may be advisable (e.g., to ensure appropriate consideration of accounting or financial reporting implications).
All Related Person Transactions shall be disclosed in the Company’s applicable filings to the extent required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and related rules.
Any questions regarding the interpretation or application of this Policy shall be directed to the GC.
The Board shall periodically review this Policy and make changes as appropriate.
The Greenhill Team
Greenhill’s success relies on the excellence, dedication and experience our team brings to every client engagement. Our global team is among the most experienced in the industry with significant transactional expertise and leading specialists in all major industry and geographical verticals. We are unique in our collaborative culture which allows for close coordination between our professionals around the globe and across disciplines to provide our clients superior advice on their most strategic, and often complex, transactional needs.