May a company rely on the “exceptional and limited circumstances” provision as set forth in Listing Rule 5605(c)(2)(B) if it has three or more independent directors on its audit committee?
A company may use this provision to include a non-independent director on the audit committee even if there are already three or more independent directors on the audit committee, provided the individual meets the criteria for audit committee service under Section 10A(m)(3) under the Act and the rules thereunder and is not a current officer or employee or a Family Member of an officer or employee of the company, and the company’s board determines that membership on the audit committee by the individual is required by the best interests of the company and its shareholders. A company, other than a Foreign Private Issuer, that relies on this exception must comply with the disclosure requirements set forth in Item 407(d)(2) of Regulation S-K. A Foreign Private Issuer that relies on this exception must disclose in its next annual report (e.g., Form 20-F or 40-F) the nature of the relationship that makes the individual not independent and the reasons for the board’s determination. A member a
Related Questions
- Can a company rely on the "exceptional and limited circumstances" provision as set forth in Listing Rule 5605(c)(2)(B) if it has three or more independent directors on its audit committee?
- Must a company obtain approval from NASDAQ in order to utilize the "exceptional and limited circumstances" according to Listing Rule 5605(e)(3)?
- How does NASDAQ apply the look back set forth in Listing Rule 5605(a)(2)(D)?
