Note: Rule proposals in this press release may have been revised. See "Summary of NASDAQ Corporate Governance Proposals" for the most recent version of NASDAQ's rule proposals. Click here.

Nasdaq Takes New Actions on Corporate
Governance Reform

• Boards Comprised of Majority Independent Directors
• Independent Directors and Audit Committees Empowered
• Accelerated Disclosure of Insider Transactions
• Director Education Mandated

New York, NY— The Nasdaq Stock Market, Inc. (Nasdaq^®) announced that its Board of Directors yesterday approved more than 25 new corporate governance reform proposals designed to increase accountability and transparency for the benefit of investors. Pending approval by the NASD board, they will be forwarded to the SEC for final approval.

"Nasdaq has adopted listing standards that will help our companies build on their commitment to provide increased transparency for investors," said Hardwick ("Wick") Simmons, Chairman & CEO, Nasdaq. "The new requirements are designed to help investors make better decisions."

Nasdaq solicited input from a wide range of parties, including the investor, legal, accounting and academic communities, as well as its listed companies to address the full gamut of corporate governance issues.

Actions taken by the Nasdaq board include:

Increase board independence

• Majority of board members will be independent
• Regular meetings of independent directors in executive session
• Further tightening of definition of "independence"
  - Excludes large shareholders, relatives of executives, and employees of outside auditor
  - Establishes a three-year cooling off period for all non-independent directors before they can be considered independent

Empower audit committees

• Sole authority to hire and fire independent auditors
• Sole authority to approve all non-audit related services
• Authority to retain legal, accounting and other experts

Strengthen the role of independent directors in compensation and nomination decisions

• Executive officer compensation must be approved by an independent compensation committee or by a majority of the independent directors
• All director nominations must be approved by an independent nominations committee or by a majority of the independent directors
• Allow one non-independent director to serve on compensation or nomination committees under certain disclosed circumstances

Mandate director continuing education

• The Board indicated the desire for companies to require continuing education for all directors. The board has asked the Nasdaq Listing and Hearing Review Council to develop appropriate rules.

Stock options

• Consistent with the recommendations of the President, Nasdaq will require shareholder approval for all stock option plans
• Existing exemptions for ESOP and inducement options will be retained

Codes of conduct

• All companies must have codes of conduct
• Each code must address conflicts of interest and compliance with applicable laws
• Must have enforcement mechanisms
• Must disclose waivers to officers/directors
• Must be publicly available

Mandate accelerated disclosure of insider transactions

• Mandate that companies disclose insider transactions in company stock within two business days for transactions exceeding $100,000

Non-U.S. Companies

• Must disclose all exemptions to corporate governance listing standards due to contrary home country practice
• Must file with the SEC and Nasdaq semi-annual and interim reports, including statement of operations and balance sheet, prepared in accordance with rules of home country marketplace

"Last month, Nasdaq was the first market to file rule proposals on corporate governance with the SEC. The Board approved these reforms yesterday and we expect to file them with the SEC shortly," said Richard G. Ketchum, president and deputy chairman, Nasdaq. "We designed the rules to be easy to apply and enforce, with specific 'bright line' standards to ensure proper interpretation. Some reforms will go into effect in as little as 60 days after SEC approval."

Simmons said, "We have taken a targeted approach to reform, one that will not discourage continued innovation and economic growth. Through this process, Nasdaq and its listed companies are contributing to the public quest for transparency and trustworthiness in both governance and reporting in corporate America."

Nasdaq is the world's largest stock market. With nearly 4,000 companies, Nasdaq lists more companies and trades more shares per day than any other U.S. market. Over the past five years, Nasdaq has outpaced all other U.S. markets in listing IPOs. It is also home to category-defining companies that are leaders across all areas of business including technology, retail, communications, financial services, media and biotechnology industries. With operations on three continents, Nasdaq is a key driver of global capital formation.

For more information about The Nasdaq Stock Market, visit the Nasdaq Web site at http://www.nasdaq.com or the Nasdaq Newsroom^SM at http://www.nasdaq.com/newsroom.