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Frequently Asked Questions
  Staff Interpretation Letter 2005-49
Identification Number 896
This is in response to your letter regarding the applicability of Marketplace Listing Rule 4200(a)(15)(E) (the “Rule”).  You asked whether Mr. X, a member of the company’s board of directors since May 2002, is eligible to serve as an independent director pursuant to the definition set forth in the Rule under the circumstances you described.
According to the information you provided, in August 2004, Mr. X was appointed to serve as Chairman of the board of directors and interim Chief Executive Officer of Company A.  At the time of such appointment, Mr. Y, co-Chairman of the board of directors, co-President and co-Chief Executive Officer of the company, served on the compensation committee of the board of directors of Company A.  Later in August of 2004, Mr. Y resigned as a member of Company A’s compensation committee.  Mr. X resigned as the interim CEO of Company A on August 1, 2005.  Both Mr. Y and Mr. X continue to be members of Company A’s Board.
Following our review of the information you provided, we have determined the company’s Board is not precluded by the Rule from finding that Mr. X is independent.  The Rule applies in the event a director of the listed company is currently employed as an executive officer the other entity.  Because Mr. X is no longer employed by Company A, the Rule does not apply.  Please note that we are not making a determination regarding the eligibility to qualify as an independent director under any other provision of Listing Rule 4200(a)(15).  In addition, pursuant to IM-4200, a company’s board has a responsibility to make an affirmative determination that no relationship exists that would impair the independence of any individuals serving as independent directors.  We are not expressing any opinion as to whether it would be appropriate for the company’s Board to make such a finding.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 896
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