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Frequently Asked Questions
  Staff Interpretation Letter 2005-12  
Identification Number 859
This is in response to your letter wherein you requested an interpretation of the definition of the term “independent director” set forth in Marketplace Listing Rule 4200(a)(15)(B).  Specifically, you asked whether Mr. X (the “Director”) would be considered “independent”, notwithstanding the fact that his son, Mr. Y, received a payment from the company as described below.
Prior to the acquisition, Mr. Y and his wife owned 26% Target.  The company acquired Target in a transaction structured such that the assets of Target were distributed to its shareholders and then sold to a subsidiary of the company in exchange for cash payments.  Mr. Y received a payment in excess of $60,000 from the company as part of this transaction.
Following our review of the information you provided, we have determined that the Director is not considered “independent” under the Rule because the payment to his son, Mr. Y, exceeds the threshold amount of $60,000.  As stated in the Rule, a director is not considered independent who accepted or who has a Family Member who accepted any payments from the company or any parent or subsidiary of the company in excess of $60,000 during any period of twelve consecutive months within the three years preceding the determination of independence.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 859
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