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Which NASDAQ rule was violated?<\/h2>\n
Nasdaq Stock Market Listing Rule 5605(b)(1) requires that a majority of the company\u2019s Board of Directors be comprised of directors who satisfy the independence requirements of the Nasdaq Stock Market Listing Rule. The actual rule states<\/a>: “Independent Directors (as defined in Rule 5605.a.2) play an important role in assuring investor confidence.<\/p>\n Through the exercise of independent judgment, they act on behalf of investors to maximize shareholder value in the Companies they oversee and guard against conflicts of interest. Requiring that the board be comprised of a majority of Independent Directors empowers such directors to carry out more effectively these responsibilities.”<\/p>\n On a previously disclosed Current Report (Form 8-K), filed with the Securities and Exchange Commission on March 8, 2016, it was stated that Gregory Waldorf did not stand for re-election to Zillow\u2019s Board of Directors at the expiration of his (then-current) term at the company\u2019s annual shareholders\u2019 meeting. While Waldorf\u2019s departure was voluntary, it did create a bit of a problem for Zillow, and not just in creating a vacant place on the Board of Directors.<\/p>\n As a result of Waldorf\u2019s departure, a majority of the company\u2019s Board is not longer comprised of directors who meet the independence requirements set forth by NASDAQ.<\/p><\/blockquote>\n On June 15, 2016, Zillow notified Nasdaq of their non-compliance (to Rule 5605.b.1) as well as their intent to reestablish a majority of independent directors before the expiration date.<\/p>\n According to NASDAQ\u2019s rules, the expiration date will be the first anniversary of Waldorf\u2019s departure, Zillow\u2019s 2017 Annual Shareholders\u2019 Meeting, and December 12, 2016 if the company\u2019s next annual meeting is held before that date.<\/p>\nHow was it violated?<\/h2>\n