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Frequently Asked Questions
  Staff Interpretation Letter 2003-48
Identification Number 1015
Rule 4350(a):  NASDAQ shall have the ability to provide exemptions from Listing Rule 4350 to a Foreign Private Issuer when provisions of this Rule are contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or contrary to generally accepted business practices in the issuer’s country of domicile.
 
Rule 4350(i)(1)(A):  Each issuer shall require shareholder approval … when a stock option or purchase plan is to be established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, directors, employees, or consultants.
 
Relevant Facts:  An English company has established equity compensation plans (the “Plans”) that may be funded by purchases on the open market.  While all of the Plans were approved by shareholders and conform to the securities laws and regulations of the United Kingdom and the rules of The London Stock Exchange, the company’s home country marketplace, the Plans are considered “unlimited” plans under NASDAQ’s rules because they may be funded by open market purchases.  Therefore, pursuant to Listing Rule 4350(i)(1)(A), NASDAQ would require shareholder approval of each award under the Plans.  Consequently, the company requested an exemption from NASDAQ’s shareholder approval requirement based on Listing Rule 4350(a).
 
Issue:  Is the company eligible for an exemption from NASDAQ’s shareholder approval rules?
 
Determination:  Yes.  The company’s home country counsel represented that: (i) the company is in compliance with the securities laws and regulations of its country of domicile; (ii) the company’s equity plans are in compliance with the rules of its home country marketplace, The London Stock Exchange; and (iii) compliance with NASDAQ’s shareholder approval rule would be contrary to generally accepted business practices in the United Kingdom.  Based on these representations, NASDAQ granted the requested exemption to Listing Rule 4350(i)(1)(A).
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 1015
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