Jonathan G. Katz, Secretary
RE: Proposed Rules 10A(m)(1) of the Securities Exchange Act, as added by Sarbanes Oxley Act §301 Standards Relating to Listed Company Audit Committees; Commission File No. S7-02-03
Dear Mr. Katz:
We are pleased to submit this letter to the Securities and Exchange Commission in response to certain questions that we received from the staff and to further clarify some of the issues we raised in our letter to you of February 18, 2003 in response to the SEC's proposed Rule on Standards Relating to Listed Company Audit Committees. Capitalized terms used in this letter have the same meaning as ascribed to such terms in our letter of February 18, 2003.
We confirm, on behalf of ASML, that the members of the Company's Supervisory Board that are on the Audit Committee and that are also on the board of either the Priority Foundation or the Preference Foundation, except for sitting on these boards, otherwise meet the independence requirements of proposed Rule 10A-3(b)(1)(ii) for both the Company and the relevant Foundation.
As described in more detail in our letter of February 18, 2003, the participation of members of the Company's Supervisory Board (whether or not members of its Audit Committee) on the board of the Priority Foundation and the Preference Foundation are activities directly related to these individuals' Supervisory Board membership. In fact, should these individuals cease to be members of ASML's Supervisory Board, they would also cease to serve on the boards of the Foundations.
The Commission has proposed to exempt from the "affiliated person" requirement, in proposed Rule 10A-3(b)(1)(iv)(B), a committee member that sits on the board of directors of both a parent and a direct or indirect consolidated majority-owned subsidiary, if the committee member otherwise meets the independence requirements for both the parent and the subsidiary. Likewise, given that the Audit Committee members of ASML are otherwise independent, merely serving also on the board of the Priority Foundation or Preference Foundation should not adversely affect an Audit Committee member's independence. In this respect, it should be irrelevant whether or not ASML "consolidates" or "majority-owns" (or is "consolidated by" or "majority-owned by") the relevant Foundation (and we note that these concepts of financial consolidation have no particular relevance to ASML's relationship with the Foundations, which have no business operations, are not required under Netherlands law to produce and disclose financial statements, and are non-profit entities without a share capital).
In light of the above, we respectfully suggest that proposed Rule 10A-3(b)(1)(iv)(B) be amended by replacing the words "its direct or indirect consolidated majority-owned subsidiary" with the words "any of its affiliates" and delete the language between parentheses contained therein. In addition, we suggest replacing the words "for both the parent and the subsidiary", as used in proposed Rule 10A-3(b)(1)(iv)(B), with the words "for both the listed issuer and the affiliate", and to replace the words "of the parent or subsidiary" with the words "of the listed issuer or affiliate".
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Please contact Richard A. Ely (at 011-44-20-7519-7171 or firstname.lastname@example.org) or Alexander Kaarls (at 011-44-20-7519-7163 or email@example.com) with any questions relating to this request.
cc: Jeffrey J. Minton