|
|
|
| |
|
Timeframe
|
|
|
|
|
Category
|
|
|
| |
|
Sub-Category
|
|
|
|
| ** To make multiple selections, select the first criterion and then press and hold
the Ctrl Key **
|
|
| |
|
1- 1 of 1
Search Results for:
|
Ordering of Search Results
When searching across multiple libraries:
FAQs will appear in alphabetical order by category and sub-category
Listing Council Decisions will appear in reverse chronological order by year.
Staff Interpretations will appear in reverse chronological order by year
When searching using keywords:
Results are returned in order of term frequency (i.e., the number of times the keywords appear in the material).
|
|
Libraries:
Staff Interpretation Letters
|
|
Filters:
All Years; Board Composition/Committee Assignments; All
|
|
|
|
|
Identification Number
1039
|
|
|
This is in response to your interpretive request asking whether the Director is eligible to be an independent member of the company's board of directors under
Listing Rule 5605(a)(2)(B) (the "Rule"). The Director received certain payments and benefits from the company, which are described below. You asked whether these amounts are "non-discretionary" for purposes of the Rule and, therefore, not prohibited by
the Rule's limit on compensation (the "Limitation").
The Director previously was the company's Chief Executive Officer. He ceased being an employee of the company more than three years ago. At that time, the company and the Director negotiated an agreement (the "Transition Agreement") pursuant to which
the company is obligated to make payments for various periods of time, including ongoing payments for: (i) healthcare coverage; and (ii) payments under the company's Supplemental Executive Retirement Plan (the "SERP"). In addition, other payment obligations
under the Transition Agreement ended during the prior three years, including payments for: (i) life insurance coverage; (ii) a car allowance; and (iii) compensation for serving as Chairman of the company's Board, or, if the Director died or was removed as
Chairman, the lump sum value of the amounts he would have otherwise received as Chairman (collectively with the ongoing payments described in the prior sentence, the "Payments"). The Transition Agreement accelerated the date when the Director became eligible
to receive payments under the SERP and resulted in a recalculation of the amount of those payments. In addition, the Transition Agreement extended the post-employment period during which the Director retained his eligibility for healthcare coverage under
his employment agreement. You stated that the Payments are legal obligations of the company, which are not contingent in any way on continued service to the company by the Director.
Following our review of the information you provided, we have concluded that for purposes of the Rule, the Payments are non-discretionary and, as such, need not be considered in determining whether the Director has accepted compensation from the company
in excess of the Limitation. We have reached this conclusion because the Payments are legal obligations of the company and are not contingent on continued service to the company by the Director. Accordingly, under the Rule, the Payments do not preclude the
company's board of directors from determining that the Director is independent.
Notwithstanding this conclusion, pursuant to Listing Rule 5605(a)(2) and
IM-5605, the company's board has the responsibility to make an affirmative determination that no relationship exists that would impair the independence of any individual serving as an independent director. In assessing the Director's independence, the
Board should consider his prior service as the company's Chief Executive Officer and the Payments made to him pursuant to the Transition Agreement, along with any other relationships that the Director has with the company and its executive officers and employees,
in order to determine whether any of these relationships individually or in the aggregate may interfere with the Director's exercise of independent judgment in carrying out his responsibilities of a director. We are not expressing an opinion as to whether
it would be appropriate for the company's board to make such a finding with respect to the Director.
|
Publication Date*:
7/31/2012
|
|
|
Identification Number:
1039
|
|
|
|
|