To protect the interests of GIL and its Shareholders, the Board has adopted the following general principles:
- the Directors will not vote on matters which involve an interested person transaction (“IPT”) where a conflict of interest may arise;
- IPTs will be conducted with the Manager on a third party arm’s length basis; and
- any fee payments outside the Management Agreements will be market based, approved by a majority of the Independent Directors.
Notification of Interested Person Transactions
Any interested person of the Company shall promptly notify the Board of any material interest that such person had, has or may have in an IPT. The notice shall include a description of the transaction and the aggregate dollar amount.
Review of Interested Person Transactions
The Board shall be responsible for the review, approval or ratification of the following IPTs:
- Any IPT in which a Director or an associate of Director has a material interest.
- If advance notice of an IPT has been given to the Chairman of the Board and it is not possible to convene a meeting of the Board, then the Chairman of the Board shall consider whether the IPT is appropriate and, if so, shall approve the IPT. The Board will be asked to ratify the IPT at the Board’s next regularly scheduled meeting.
- No Director shall participate in any discussion or approval of an IPT for which he or she or any member of his or her immediate family member is an interested person, except that the Director shall provide all material information concerning the IPT to the Board.
General Criteria for Approving Interested Person Transactions
In determining whether to approve, ratify, disapprove or reject an IPT, the Board shall take into account, among other factors it deems appropriate, whether the IPT is entered into on terms no less favourable to the Company than terms generally available to an unaffiliated third-party under the same or similar circumstances; the results of an appraisal, if any; whether there was a bidding process and the results thereof; review of the valuation methodology used and alternative approaches to valuation of the transaction; and the extent of the interested person’s interest in the transaction.
The Board will review the following information when assessing an IPT:
- A general description of the transaction, including the material terms and conditions of such transaction;
- The name of the interested person and the basis on which such person or entity is an interested person;
- The interested person’s interest in the transaction, including the interested person’s position or relationship with, or ownership of, any entity that is a party to or has an interest in the transaction;
- The purpose and timing of the transaction;
- Whether the Company is a party to the transaction, and if not, the nature of the Company’s participation in the transaction;
- If the transaction involves the sale of an asset, a description of the asset, including date acquired and costs basis;
- Information concerning potential counterparties in the transaction;
- The approximate dollar value of the transaction and the approximate dollar value of the interested person’s interest in the transaction;
- Description of any provisions or limitations imposed as a result of entering into the proposed transaction;
- In the case of a lease or other transaction providing for periodic payments or instalments, the aggregate amount of all periodic payments or instalments expected to be made;
- In the case of indebtedness, the aggregate amount of principal to be outstanding and the rate or amount of interest to be payable on such indebtedness;
- Whether the proposed transaction includes any potential reputational risk issues that may arise as a result of or in connection with the proposed transaction and
- Any other relevant information regarding the transaction.
In the event the Company becomes aware of an IPT with an interested person that has not been approved under this Policy prior to its consummation, the matter shall be reviewed by the Board. The Board shall consider all of the relevant facts and circumstances regarding the IPT, including the items listed in Section 4 above, and shall evaluate all options available to the Company, including ratification, revision or termination of the IPT. The Board shall also examine the facts and circumstances pertaining to the failure of reporting such IPT to the Board under this Policy, and shall take any such action it deems appropriate.