Laura Anthony

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    • Member Type(s): Expert
    • Title:Founding Partner
    • Organization:Legal & Compliance, LLC
    • Area of Expertise:Securities Law
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NASDAQ Capital Market Corporate Governance Standard
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Uploaded By: Laura Anthony, Esq.
Date Added: May 26, 2017
Description: NASDAQ Capital Market Corporate Governance Standard- All NASDAQ companies are required to comply with stringent corporate governance standards. The categories of corporate governance include: (1) Distribution of Annual or Interim Reports, (2) Independent Directors, (3) Audit Committee, (4) Compensation Committee, (5) Nomination of Directors, (6) Code of Conduct, (7) Annual Meetings, (8) Solicitation of Proxies, (9) Quorum, (10) Conflict of Interest, (11) Shareholder Approval and (12) Voting Rights. A company must make its annual and interim reports available to shareholders, either by mail or electronically through the company’s website. The company’s board of directors is required to have a majority of independent directors. The company is required to have an audit committee consisting solely of independent directors who also satisfy the requirements of SEC Rule 10A-3 and who can read and understand fundamental financial statements. The audit committee must have at least three members. One member of the audit committee must have experience that results in the individual's financial sophistication. The company is required to have a compensation committee consisting solely of independent directors and having at least two members. In addition, there are additional independence test for compensation committee members. The compensation committee must determine, or recommend to the full board for determination, the compensation of the chief executive officer and all other executive officers. The nomination committee of the directors must be independent and must select or recommend nominees for directors. The company must adopt a code of conduct applicable to all directors, officers and employees. The company is required to hold an annual meeting of shareholders no later than one year after the end of its fiscal year. The company is required to solicit proxies for all shareholder meetings. Quorum must be set at not less than 33 1/3% of the outstanding shares of it voting stock for any meeting of the holders of its common stock. The company must conduct appropriate review and oversight of all related party transactions for potential conflict of interest situations. The company is required to obtain shareholder approval of certain issuances of securities, including: • Acquisitions where the issuance equals 20% or more of the pre-transaction outstanding shares, or 5% or more of the pre-transaction outstanding shares when a related party has a 5% or greater interest in the acquisition target • Issuances resulting in a change of control • Equity compensation • Private placements where the issuance equals 20% or more of the pre-transaction outstanding shares at a price less than the greater of book or market value. Finally, Corporate actions or issuances cannot disparately reduce or restrict the voting rights of existing shareholders.
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