This document discusses the NYSE MKT listing requirements regarding director independence. It notes that under NYSE MKT rules, a majority of the board of directors must be independent, as well as all audit and compensation committee members. Moreover, these committee members are subject to additional independence standards. The document then outlines situations that would violate independence, such as a director being employed by the company in the last three years, accepting over $120,000 in compensation from the company in the last three years, having a family member who worked as an executive for the company in the last three years, or having certain business relationships with the company that exceed thresholds.

1. NYSE MKT; Director
Independence
NYSE MKT; Director Independence- Today is the continuation of a LawCast series
discussing NYSE MKT listing requirements. In the prior LawCast in this series I gave a
brief summary of the corporate governance standards including the requirement that,
subject to certain exceptions, a majority of the board of directors be independent and
that all audit and compensation committee members be independent. Moreover,
audit and compensation committee members are subject to even more stringent
independence requirements…

2. NYSE MKT; Director Independence
• Today is the continuation of a LawCast series discussing NYSE MKT listing requirements.
In the prior LawCast in this series I gave a brief summary of the corporate governance
standards including the requirement that, subject to certain exceptions, a majority of the
board of directors be independent and that all audit and compensation committee
members be independent. Moreover, audit and compensation committee members are
subject to even more stringent independence requirements.
• Under NYSE MKT rules a person is independent only if that person is not an executive
officer or employee of the company and the Board determines that the person does not
have any material relationships, directly or indirectly, with the company outside of being
a director which could interfere with the exercise of independent judgment in carrying
out the responsibilities of a director. An independence determination must be made at
the time of nomination or appointment and must be reviewed at least annually.
Moreover, a director has the responsibility of updating the board of any change in
relationships or interests that might effect that director’s independence.

3. NYSE MKT; Director Independence
• NYSE MKT provides a list of people that would definitely not qualify as
independent, including the following:
• (i) a director who has been employed by the company at any time during the past 3
years;
• (ii) a director who has, or has a family member who has, accepted any compensation
from the company in excess of $120,000 during any period of 12 consecutive months
within the prior 3 years other than (a) compensation for serving as a director, (b)
compensation to a family member who is an employee but not an executive officer;
(c) compensation received as a former interim executive officer; or (d) funds received
under certain qualified retirement plans;
• (iii) a director who is a family member of an individual who was employed as an
executive officer of the NYSE MKT company at any time during the past 3 years;

4. NYSE MKT; Director Independence
• (iv) a director who is, or has a family member who is a partner, controlling
shareholder or executive officer of any entity that either gave or received payment
for property or service of either $200,000 or 5% or more of the company’s gross
revenues, whichever is greater, during any of the prior most recent 3 years. Excluded
from this disqualification category would be payments made solely for investments
in the NYSE MKT Company’s securities or payment under a non-discretionary
charitable matching program.
• (v) Next not qualifying as independent would be a director who is, or has a family
member that is, employed as an executive officer of another company where a
director of the NYSE MKT company serves or served on the compensation committee
within the last 3 years; and
• (vi) A director who is or has a family member who is, a current partner of the
company’s outside auditor, or was a partner or employee of an outside auditor who
worked on the NYSE MKT company’s audit at any time during the past three years;

5. NYSE MKT; Director
Independence