If a company is not in compliance with NASDAQ's continued listing standards, and NASDAQ has determined to delist its securities, the company may accept the delisting or appeal the decision to a NASDAQ Hearing Panel. The company may also appeal NASDAQ's denial of initial listing. This section answers many of the frequently asked questions regarding the hearings process.

Applicable Rules: Marketplace Rule 4800 series.

Where can I locate information on the hearings process?
Series 4800 of the Marketplace Rules govern the NASDAQ's hearings process. See NASDAQ Marketplace Rules.

Under what circumstances is a company entitled to a hearing?
A listed company that has received a delisting determination letter from NASDAQ may appeal that determination by requesting a hearing. A company that has been denied initial listing may also appeal the denial by requesting a hearing. When NASDAQ determines to delist a company due to its failure to meet continued listing standards, NASDAQ will send a delisting determination letter, which will include the basis for the delisting. The company then has seven calendar days from the date of the determination letter to request a hearing. A request for a hearing will stay the delisting pending a decision by the Hearing Panel. Failure to request a hearing within seven calendar days will result in the company's suspension and delisting, pursuant to the terms of the delisting determination.

When should the company request a hearing? Will our securities be delisted prior to attending a hearing?
The company must request a hearing within seven calendar days of the date of NASDAQ's delisting determination letter. If a request for a hearing is made within seven days, no delisting action will be taken until the company has had its hearing and the Hearing Panel has issued a written decision. Failure to request a hearing within seven calendar days will result in the suspension and delisting of the company's securities pursuant to the terms of the delisting determination letter.

How should I request a hearing, and how can I assure that the request is timely received?
Specific instructions for requesting a hearing, and applicable deadlines, are contained in the delisting determination letter. Hearing requests are to be sent by email to hearings@nasdaqomx.com. Requests should not contain arguments regarding delisting. Hearings staff will acknowledge receipt of a hearing request, generally within several hours, by replying to the email address from which the request was sent. If you do not receive an email confirmation of your request within 24 hours of sending it, please contact Hearings at 301.978.8040.

How are the deadlines computed in the delisting determination letters and for subsequent dates set by Hearings?
In accordance with Marketplace Rule 4885, a company has seven calendar days from the date of the delisting determination letter to request a hearing. If the company does not request a hearing by the seventh day, then NASDAQ will cease trading the company's securities two business days thereafter. The "clock" does not begin until the day after the letter date, and the deadline date is included in the calculation. However, if the deadline date should fall on a Saturday, Sunday, federal holiday or NASDAQ holiday, then the deadline date will be moved to the next business day. In computing all subsequent deadlines, the same principle applies.

Are we required to issue a press release regarding the potential delisting?
Yes. Companies that receive a delisting determination from NASDAQ are required to issue a press release announcing the receipt of NASDAQ's delisting determination and the basis for the delisting, which includes citation of the applicable Marketplace Rule(s).

What will happen if the company does not issue the press release?
If the company fails to issue a press release within four business days of receipt of the delisting notice, NASDAQ will halt trading in its securities until the press release is issued. Failure to issue the press release is an additional basis for delisting.

While in the hearings process, my company received notification that it does not comply with another listing requirement. Are we required to issue an additional press release?
Yes. The company must issue a press release for each additional deficiency within four business days of the violation notice.

What are the choices regarding the type of hearing?
The company may choose either an oral or a written hearing. By selecting an oral hearing, the company will have the opportunity to meet in person with and answer questions by the Panel. If the company selects a written hearing, it will present its case in writing only.

Are there fees associated with a hearing?
Yes. The fee for an oral hearing is $5,000. The fee for a written hearing is $4,000. NASDAQ requests that the hearings fee be paid concurrently with the hearings request by wire transfer according to the instructions on the payment form sent with the delisting determination letter. If you do not have access to wire transfer, you may pay by check, payable to The NASDAQ Stock Market LLC. Checks should be sent by courier/overnight service to the address contained in the delisting determination letter.

Where are oral hearings held?
Hearings are held in Washington, D.C.

Once I request a hearing, how long before the hearing will be scheduled?
You will receive a letter scheduling the time and date of the hearing, and containing information to facilitate the process, within seven days of making the request. Hearings are typically scheduled 30 to 45 days from the company's request.

Am I required to submit any information before the hearing for the Panel's review?
As detailed in the scheduling letter from Hearings, the company is asked to provide information to the Panel to facilitate the hearing. Among other things, the company should provide a written submission that outlines its plan to regain compliance with NASDAQ listing standards. A copy of this plan to regain compliance will be forwarded to the Panel and to the NASDAQ Listing Qualifications Staff. Based on the information provided, the Staff will write a Hearings Memorandum to the Panel, containing its recommendation and any concerns the Staff may have. The company will be given copy of the Staff's Memorandum prior to the hearing.

At the hearing, the company may update the information it has previously submitted and respond to the Staff's Hearing Memorandum.

How long will the hearing itself take? How should I present my case?
The hearing takes about 50 minutes. The company may make its presentation in any form it wishes, and should expect questions from the Panel. The Panel will want to understand the reasons for the company's deficiency and the specific details of its plan of compliance, including a timeline.

How soon will the Panel make a decision on my case?
The Panel generally issues a written decision approximately 30 days after the hearing, but the company could receive a written decision sooner.

What factors should our company consider when preparing the submission to the Listing Qualifications Panel?
In your submission to the Listing Qualifications Panel, please note the following suggested guidelines:

• Your submission should be definitive, concise, and directly address your company’s plan to regain compliance in the near term and maintain compliance over the long term.

• The plan of compliance should discuss how the company intends to remedy the deficiency within the next 30-60 days and should evidence the company’s ability to sustain compliance for the next six to twelve months.

• If the company's plan of compliance includes a private placement involving common stock, or any securities convertible or exercisable into common stock, a merger, a debt conversion, or other similar transactions, please ensure that the proposed action complies with NASDAQ's corporate governance requirements, particularly the shareholder approval rules, and other provisions of the Marketplace Rules. Please contact your Listing Analyst or Hearings for further guidance on these matters.

• If a transaction is being contemplated to remedy the deficiency, please include a balance sheet and income statement, evidencing the pro forma effect of the transaction. The financial statements should be based on historical financial information, not more than 45 days old. Please show three columns of data – historical, all adjustments, and the pro-forma totals.

• The submission should include projections, if available, for the next 12 months. Please include balance sheet and income projections. Clearly state all assumptions being made.

• Provide copies of all definitive or draft agreements or contractual arrangements for private placements, mergers, or other financial arrangements. Please include a list of investors for private placements. The company should file all applicable Notifications for Listing of Additional Shares under the Listing of Additional Shares Program.

For further assistance, please direct all of your questions to your Listing Analyst or Hearings.

In the event a company appeals a Staff determination to delist its securities based on a filing delinquency, what information should it present to the Panel?
Companies are generally expected to explain to the Panel the reason for the late filing and provide an estimated date by which they will become current in all SEC filing obligations, together with a schedule of actions to be completed by the company and its auditors. The company should describe any expected adjustments or restatements relating to the financial statements contained in prior filings. The company should also provide information regarding all public disclosures pertinent to the filing delinquency or forthcoming restatements.

In the event an investigation into the issues underlying the filing delinquency has been initiated by the company's board, audit committee or other investigative committee, what information should the company provide to the Panel?
The company should be prepared to provide the following information to the extent it has been ascertained, and to supplement that information in writing upon completion of the investigation:

1. A summary of the investigation, including:

• a description of how and when the issues/improprieties originally came to the attention of management and/or the board of directors or audit committee;

• a description of the particular issues under investigation and the scope of the investigation (years covered, geographical reach, etc.);

• a summary or time line of meetings and actions taken by the board, audit committee, or other investigative committee and the law firms, forensic accountants or other consultants retained to assist in the investigation; and

• the findings of the investigation, including a description of all questionable, improper and/or fraudulent actions or practices identified and the names of all individuals found to be responsible for, or have participated in, such conduct (by act or omission), the status of those individuals' employment with the company, and a description of any sanctions or remedial actions taken against those individuals;

2. A description of internal control and/or accounting weaknesses identified during the course of the investigation;

3. A description of all remedial measures that have been or will be implemented by the company (including a schedule for the implementation of those measures not yet implemented);

4. A description of any and all remedial measures and/or internal controls that the company does not plan to implement, which were recommended by the investigatory committee, or by any law, accounting or consulting firm involved in the investigation; and

5. A description of any and all investigations or inquiries by other regulatory authorities.

Who makes decisions at a hearing?
The Hearings Panel makes decisions with respect to the company's ability to regain compliance with the listing standards. The Panel consists of two professionals from the business community, who are independent of NASDAQ, and have been authorized by NASDAQ's Board of Directors to render decisions. The pool of panelists includes accountants, auditors, investment bankers, corporate officers and securities lawyers.

Will NASDAQ Staff attend the hearing?
Staff generally will not attend the company's hearing as the Staff's position will have been presented in the Hearings Memorandum. However, in some circumstances, Staff may choose to attend the hearing. The company will be notified if Staff plans to attend.

May we submit additional information at a later date?
Generally, the company will not be allowed to submit additional information to NASDAQ Staff or Hearings after the date set forth in the letter scheduling the hearing. However, the company may submit additional information at the hearing and should bring at least five (5) copies of any submissions.

Will we receive a copy of our hearing transcript?
The company may request a copy of its written transcript directly from the court reporter and will need to pay the applicable fee.

When can I expect to receive a hearing decision?
The company will not receive a decision on the day of the hearing. The decision time varies, in part, on whether the Panel requires additional information. Generally, decisions are issued approximately 30 days after the hearing.

Will the Panel's decision be made public?
No. NASDAQ does not make the Panel's decision letter publicly available. However, we cannot guarantee confidentiality since documents and information provided to NASDAQ may be subject to subpoenas from private parties or requests for access from federal or state government agencies and self-regulatory bodies. Under some circumstances, NASDAQ may also transfer company materials or information to FINRA. We recommend that each company consider whether the terms of the Panel's decision require disclosure under the federal securities laws.

What types of decisions might the Panel make?
If the Panel determines that the company has presented a definitive plan that will likely enable it to achieve and sustain long-term compliance, it may grant the company a conditional listing, known as an exception. Exceptions are of limited duration and often incorporate milestones measuring the company's progress in regaining compliance. A Panel has discretion to grant an exception not to exceed the earlier of 90 days from the date of the Panel decision or 180 days from the date of the Staff delisting notification.

If the Panel determines not to grant an exception, the company will be notified in writing that the Panel has determined to delist the company's securities, or that its securities will be transferred to The NASDAQ Capital Market. When a Panel issues a delisting decision, the company's securities will be suspended from trading on the Nasdaq Stock Market, effective on the second business day after the decision. The formal removal of the company's listing on the Nasdaq Stock Market will occur after all appeal rights have been exhausted, which may take several months. NASDAQ will notify the SEC of removal of the company's listing by filing a Form 25, and send a copy to the company. Under SEC rules, NASDAQ must also issue a press release at that time announcing the removal.

How long can a company remain listed if it becomes filing delinquent because of issues related to the accounting of stock options or other concerns?
When a company is late in filing a required periodic report with the SEC, NASDAQ Staff is required to immediately send a delisting letter to the company. The Staff does not have discretion to allow a company in this situation additional time to remain listed. However, the company may appeal the delisting determination letter to a Hearings Panel. A request for a hearing before the Panel will stay the delisting pending the Panel's decision.

The Panel has the discretion to grant the company additional time to remain listed, provided the company has a specific plan to regain compliance and is taking appropriate steps to deal with the circumstances which caused the delinquency. The Panel may not, however, grant an extension which would exceed 180 days from the date of the initial staff determination of deficiency.

A company may appeal a Panel decision to the NASDAQ Listing and Hearing Review Council. The Listing Council, which is comprised of individuals who are independent of NASDAQ, is charged with reviewing all decisions of the Panel and with advising the NASDAQ Board on questions relating to company listings. An appeal to the Listing Council does not stay the Panel's decision to delist the company's securities. See Appeals Process for additional information.

In addition, all Panel decisions are subject to a "call for review" by the Listing Council. In connection with a call for review, the Listing Council has the discretion to stay the Panel's decision. Should the Listing Council grant a stay, then the company would remain listed during the pendency of the Listing Council's review. If the Listing Council determines it is appropriate, it may grant the company additional time to regain compliance. This exception can be for a period of time not to exceed 360 days from the date of the initial staff determination of deficiency.

Finally, the NASDAQ Board of Directors has the ability to call any Listing Council decision for review. Like the Listing Council process, the Board has the discretion to stay the Listing Council's decision in connection with a call for review. Should the Board grant a stay, then the company would remain listed during the pendency of the Board's review. If the Board determines it is appropriate, it may grant the company additional time to regain compliance while listed. While the rules do not limit the maximum time the Board may provide, it should be noted that the Board has been unwilling to allow a company to remain listed for more than one year from the due date of the company's first delinquent annual report.

The Securities and Exchange Commission has reviewed NASDAQ's actions in connection with an appeal by a company that did not regain compliance in the time permitted by the NASDAQ Board. The Commission found that the company had not established a likelihood that it would succeed on the merits of its argument challenging the decision to delist the company if it remained delinquent one year after the due date of its first delinquent annual report. See In the Matter of Coherent, Inc. (December 18, 2007).

May I appeal the Panel's decision?
Yes. The company may appeal the Panel's decision to the Listing Council. The Listing Council may also decide to call the decision for review. The appeal to the Listing Council does not stay the Panel's decision or the suspension of the trading of the company's shares pending a final determination by the Listing Council. If the Listing Council overturns the Panel decision, then the company's securities may be reinstated on NASDAQ. After a determination by the Listing Council, the company may appeal to the SEC and, from there, it may proceed to the federal court system. Appeals to the Listing Council are conducted in writing only. The cost to appeal to the Listing Council is $4,000. See Appeals Process for additional information.

If my company is delisted from The NASDAQ Stock Market, what are some alternatives?
A company that is delisted by NASDAQ may be eligible for quotation on FINRA's Over-the-Counter Bulletin Board (the "OTCBB") if a market maker makes application to register and quote the security in accordance with SEC Rule 15c2-11, and such application (a Form 211) is cleared. Only a market maker, not the company, may file a Form 211. For more information on the OTCBB, see http://www.otcbb.com.

When can a company become listed on NASDAQ again?
NASDAQ does not impose a waiting period to relist the company's securities. The company can file a new listing application at any time after it is delisted, provided that it successfully completes the initial listing process and meets all the initial listing requirements for the respective market. Ordinarily, a company will be required to pay the initial listing fees to relist. However, If a company was removed solely for failure to timely file its periodic reports and regains compliance with this requirement within one year of its delisting, then NASDAQ will waive initial listing fees.