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  Staff Interpretation Letter 2004-9
Identification Number 909
Rule 4200(a)(15)(E):  “Independent director” means a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.  The following persons shall not be considered independent … (E) a director of the listed company who is, or has a Family Member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the listed company served on the compensation committee of such other entity.
 
Relevant Facts:  An individual (the “Director”) was appointed to the company’s board of directors in April 2003.  Before joining the company’s board, the Director was an executive officer at another company (“Entity A”).  The Director retired from Entity A in September 2002.  An executive officer of the company (the “Officer”) has served on Entity A’s compensation committee since 1997.
 
Issue:  Based on these facts, is the Director precluded from serving as an independent director, pursuant to Listing Rule 4200(a)(15)(E)?
 
Determination:  Since the Director is no longer employed as an executive officer of Entity A, NASDAQ determined that the company’s board is not precluded by Listing Rule 4200(a)(15)(E) from finding that the Director is independent.
 
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 909
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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