Can a company rely on the “exceptional and limited circumstances” provision as set forth in Listing Rule 5605(c)(2)(B) if it has three or more independent directors on its audit committee?
A company may use this provision to include a non-independent director on the audit committee even if there are already three or more independent directors on the audit committee, provided the individual meets the criteria for audit committee service under Section 10A(m)(3) under the Act and the rules thereunder and is not a current officer or employee or a Family Member of an officer or employee of the company, and the company’s board determines that membership on the audit committee by the individual is required by the best interests of the company and its shareholders. The company must also make the required disclosure concerning this individual in its next annual proxy statement (or, if the company does not file a proxy, in its Form 10-K or 20-F).
