New Nasdaq Disclosure Requirement – Third-Party Payments to Directors

The new rule covers not only cash payments, but also “non-cash compensation and other payment obligations, such as health insurance premiums or indemnification.” However, companies need not disclose agreements or arrangements: relating to reimbursement of expenses in connection with a nominee’s candidacy; existing before the nominee’s candidacy and where the nominee’s relationship with the third party has already been disclosed (for example, in the director/nominee’s proxy statement or annual report biography); or previously disclosed under Schedule 14A, Item 5(b) or Form 8-K, Item 5.02(d)(2) relating to interests of certain persons in connection with a proxy contest (though disclosure will be required annually thereafter).

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