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Frequently Asked Questions
  Staff Interpretation Letter 2003-20
Identification Number 991
 Rule 4350(a):  NASDAQ will provide exemptions to the extent that a rule requires any foreign issuer to do any act that is contrary to a law, rule or regulation of any public authority exercising jurisdiction over such issuer or the rule is 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 Israeli company intends to amend an existing Employee Stock Option Plan (the “Plan”) by materially increasing the number of ordinary shares available under its Plan.  The company’s board of directors has approved the amendment to the Plan.  Pursuant to Listing Rule 4350(i)(1)(A), NASDAQ would require shareholder approval for the proposed amendment because it would result in a material increase in the number of shares available under the Plan.  As such, the company requests an exemption from the shareholder approval requirement based on Listing Rule 4350(a).
 
Issue:  Is the company eligible for an exemption from the shareholder approval rules?
 
Determination:  The company's home country counsel represented that the laws, rules, and regulations of the home country do not require the company to obtain additional shareholder approval, and that obtaining such approval is not consistent with the requirements of the primary stock market in the company's domicile. Accordingly, counsel represented that in this instance, NASDAQ's shareholder approval requirements are contrary to generally accepted business requirements in the company’s home country.  Based on these representations, NASDAQ granted the requested exemptions to Listing Rule 4350(i)(1)(A).
 
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 991
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