"Independent Director" means a director whom the board has specifically determined has no material relationship which could affect his independence of judgment, taking into account all known facts. The board should consider that, although a particular director meets the formal requirements, he may not be independent owing to specific circumstances of the person or the company, ownership structure of the company, or for any other reason. The board's determination should be a good faith finding after diligent review and full discussion.

Formal Requirements — "Independent director" means a director of the company who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the company (not counting director's remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:

(a) Was not an employee of the company;
(b) Did not:
(i) Make to, or receive from, the company payments of more than BD31,000 or equivalent (not counting director's remuneration);
(ii) Own more than a 5% share or other ownership interest, directly or indirectly, in an entity that made to or received from the company payments of more than such amount;
(iii) Act as a general partner, manager, director, or officer of a partnership or company that made to or received from the company payments of more than such amount;
(iv) Have any significant contractual or business relationship with the company which could be seen to materially interfere with the person's capacity to act in an independent manner.
(c) Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the company;
(d) Was not engaged directly or indirectly as an auditor or professional adviser for the company; and
(e) Was not an associate of a director or a member of senior management of the company.

Volumes 1 and 2 CBB licensees should consult the guidance issued under the definition of "Independent Director" in the Glossary of Volumes 1 and 2 with respect to the CBB's interpretation of the above formal requirements.

July 2011