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Frequently Asked Questions
  Staff Interpretation Letter 2003-7
Identification Number 978
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 of a plan or arrangement … when a stock option or purchase plan is to be established or other arrangement made pursuant to which stock may be acquired by officers or directors, except for warrants or rights issued generally to security holders of the company or broadly based plans or arrangements including other employees (e.g. ESOPs).  The establishment of a plan or arrangement under which the amount of securities which may be issued does not exceed the lesser of 1% of the number of shares of common stock, 1% of the voting power outstanding, or 25,000 shares will not generally require shareholder approval.  
 
Relevant Facts:  A non-U.S. company proposes to transfer to an officer of the company approximately 200,000 shares in lieu of cash bonuses.  The shares would not come from a shareholder-approved plan. Without the requested exemption, shareholder approval would be required pursuant to Listing Rule 4350(i)(1)(A).
 
Issue:  Is the company eligible for an exemption from the shareholder approval rules?
 
Determination:  The company’s foreign counsel represented that: (i) shareholder approval of the transfer is not required under any relevant law, rule, or regulation in the company’s home country, and (ii) the rules of the primary market in the company’s home country would not require shareholder approval.  Counsel also stated that it would be contrary to generally accepted business practice in the home country to seek approval from its shareholders for a transaction of this kind.  Based on these representations, NASDAQ granted the requested exemption to Listing Rule 4350(i)(1)(A).
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 978
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