First off you are interpreting that scenario wrong. Y is the president and director of Z Corp, Y is a member of the registrants BoD. Z Corp is a supplier of registrant. This would require disclosure.
Second off the scenario is not the same and that scenario they would not be allowed to bypass disclosure. Sonny is the ceo, cfo, President, and chair of the board so his disclosure would be even more strict. So you can bet sonny would have to report this agreement and the compensation received from his own company.
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