From: gbader [gbader@cox.net] Sent: Wednesday, December 03, 2003 11:26 PM To: rule-comments@sec.gov Subject: File number S7-19-03 December 3, 2003 Mr. William Donaldson Chairman United States Securities and Exchange Commission 450 5th Street, N.W. Washington, D.C. 20549 Dear Chairman Donaldson: Subject: Rule Number: S7-19-03 For over 40 years I have been an individual investor, since the age of 12, and I am writing regarding the proposed rule on proxy access that the Commission will be issuing soon. I am very gratified that the Commission has recognized the importance of addressing the issue of nomination access to corporate board of directors by the common shareholders. However I am also extraordinary concerned that the Commission's proposals to date, do not go far enough in leveling the playing field between the current corporate management and the true corporate owners - the common shareholder. The business magazines over the years have chronicled numerous instances of the common shareholder's loss of control over their very own corporations, while management receives rubber stamp approval by the corporation's board of directors. The common shareholder's sole voice is through "their" board of directors. Improved access and control by the common shareholders is absolutely imperative. The proposed rule should, for the first time, allow long- term investors the ability to nominate directors and have those nominees placed on the proxy materials that public corporations provide to all stockholders. However the mechanics for the new rules are so extreme that they render the new rules moot and utterly useless. The Christian Science Monitor[1] recently estimated that of 2,227 director elections held over the past 2 years, only approximately 1.1% of the companies had sufficient votes withheld so as to activate the proposed rules providing common shareholder access to the nominating process for boards of directors. This, in my opinion is absolutely insufficient and inadequate. This is the equivalent of attempting to put out a forest fire with and eye dropper. I would recommend at least five changes. 1) A substantially lower threshold (if a threshold is necessary at all) of withheld votes, to not exceed 5%, and hopefully something on the order of 1% as opposed to the SEC proposed threshold of 35%. 2) Upon reaching the withheld vote threshold a new proxy vote within 60 days, rather than allowing another year to pass. To allow another year to pass is absolutely criminal. 3) An absolute separation between the Chief Executive Officer (CEO) and the position of Chairman of the Board of Directors of the corporation. That the Chairman of the Board of Directors be held by a fully independent person and not a current or past member of the company's management. 4) Common shareholders should have access to the proxy. Currently, the management via the board of directors have access to the proxy, thus eliminating all but the most well funded common shareholder. I might also add that management has call on all the assets of the corporation to fight any and all shareholders. The corporation is owned by the shareholders and thus they should have absolute rights to access the proxy. 5) An yearly election of an "At-Large Shareholder Director". A shareholder at large can do no more harm that any of the current directors usually elected that is an officer, member of senior management, outside consul, etc. You must remember that the corporation is OWNED by the shareholders, and not only the special interests. I would like to direct your attention to the current mutual fund scandal. I would simply point out that the public shareholders have been sheared like sheep by the fund's management and financial industry insiders. I would also ask, "Where were the individual boards of directors of the various mutual funds under investigation"? The management companies essentially appoint the individual members of the board of directors for each of these funds. Who was looking out for the fiduciary interests of the at large public shareholder? This on going scandal has the potential of dissolving the trust the general public has for the overall financial establishment in this country. This on going outrage threatens the entire general public's retirement and 401K funds. To date, not one mutual fund board of directors have taken any action on behalf of their shareholders, with respect to the various items of mismanagement performed by the management of the mutual fund. I would like to point out that the SEC has jurisdiction in this last example. I would also like to point out that the crime the mutual fund management companies, their executives and the other financial industry insiders should be equal to federal bank robbery and thus if found guilty, should serve hard prison time, making large rocks into smaller rocks for 30 years, rather than going to the country club lockup and playing tennis for stealing the public's retirement and 401K funds. In conclusion, changes for the positive are absolutely mandatory at this time. The public shareholders must be given a greater voice in how their OWN companies are run. Thank you for allowing me to voice my opinions in this important matter. Respectfully submitted, /s/ Gordon Bader 8651 N 55th Place Paradise Valley, AZ _______________________________ 1 http://www.csmonitor.com/2003/1031/p10s01-comv.html