As discussed in the article entitled "Nasdaq Clarifies Definition of a Controlled Company in Release No. 34-59424" in the February 24, 2009, issue of Accounting & Compliance Alert, the SEC recently approved a Nasdaq proposal to amend its definition of a controlled company.

Under Nasdaq's rules, in a controlled company, more than 50% of the voting power is held by an individual, group, or another company. Nasdaq allows a controlled company to exempt itself from the requirement to have a majority of independent directors on its board and to have independent compensation and nomination committees.

Release No. 34-59424, Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Clarify Nasdaq?s Definition of "Controlled Company," amends the definition to include language that specifies that the voting power is for the election of directors. Nasdaq proposed the amendment to provide transparency and clarity to companies and investors about the availability of the controlled company exception.