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February 18, 2003

Securities and Exchange Commission
Attention: Jonathan G. Katz, Secretary
450 Fifth Street, NW.
Washington, DC 20549-0609

Re: File No. S7-02-03

Dear Ladies and Gentlemen:

The Commission's proposed rules under Section 301 of the Sarbanes-Oxley Act unfortunately contain a "safe harbor" that would purport to shelter less-than-10% shareholders from being deemed "affiliated persons" of an issuer. See Standards Relating to Listed Company Audit Committees, 68 Fed. Reg. 2638 (Jan. 17, 2003). We fear that this safe harbor would in practice became a hard-and-fast rule and that, from the perspective of the large shareholder, it could consequently do more harm than good.

We believe that any specific, quantitative criteria for director independence may not always be appropriate in the context of large shareholder nominations particularly if, as the New York Stock Exchange recently observed, "the concern is independence from management." NYSE, Corporate Governance Rule Proposals Reflecting Recommendations from the NYSE Corporate Accountability and Listing Standards Committee (SEC File No. SR-NYSE-2002-33, Aug. 16, 2002). Indeed, the Commission's proposed 10% safe harbor may have the perverse effect of actually weakening investor rights by taking away board representation from those shareholders best equipped to stand up to management-the large, institutional shareholders. This may not be, we hope, what the Commission intends.

Although the Commission does claim that its proposed safe harbor "would not create a presumption that those outside the safe harbor are affiliates," it is hard to see how this would always be so. In our experience, counsel frequently treat safe harbors as mandatory rules, particularly if going outside the harbor might be viewed as being in any way adventurous or aggressive. We believe, for example, that the safe harbor for public sales by affiliates, the Rule 144 dribble-out provision, has fairly well become in practice an almost absolute rule. A Commission-approved bright-line test, moreover, might easily give a possibly recalcitrant company management a convenient excuse for rejecting an otherwise highly qualified nominee.

And 10% is, in any event, a very small number. The "passive" or non-controlling investor amendments to Schedule 13G adopted five years ago use 20% as the applicable threshold. See Release No. 34-39,538 (Jan. 16, 1998). The SEC's own Advisory Committee on the Capital Formation and Regulatory Processes also used 20% as the ownership threshold for affiliate status. See their Report, Appendix B, Part III.A.2 (Sales by Affiliates) (July 24, 1996), reprinted in Fed. Sec. L. Rep., Extra Issue No. 1725 (Aug. 5, 1996). In a word, there is considerable and recent justification for using a number more in the range of 20%, and 10% would appear to be an unfortunate return to "affiliate" standards that have never been formally codified. See SEC, The Wheat Report (1969) (proposing Rule 160, which was never adopted but had a 10% threshold).

We believe that the Commission should therefore remove the "10% shareholder" safe harbor entirely and leave the term "affiliate" defined, as it traditionally has been, by reference to non-quantitative concepts of "control." Thank you for your consideration.

Very truly yours,

/s/ Thomas W. Briggs

Thomas W. Briggs