From: Bucklan, Lane [LBucklan@iridian.com]
Sent: Wednesday, November 19, 2003 2:19 PM
To: 'rule-comments@sec.gov'
Subject: File No. S7-19-03

November 19, 2003

 

Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549

Re:       File No. S7-19-03

Dear Mr. Katz:

Iridian Asset Management LLC ("Iridian") appreciates the opportunity to 
comment on the proposed rules concerning security holder director 
nominations.

Iridian is a federally registered investment adviser with approximately 
$9 billion under management. Our clients consist primarily of large 
institutions many of which are public funds. As a fiduciary, we have always 
been sensitive to corporate governance issues, and the difficulty in 
effectuating meaningful change. Having exercised our franchise in various 
ways, including a long and costly proxy fight, we welcome the Commission's 
proposed rules that would allow institutional shareholders greater 
participation in the proxy process governing director elections.

It is our view that, in general, the Commission's proposed minimum 
requirements (substantial minimum ownership, holding periods, and limitations 
on the number of shareholder nominees) will allow access to the proxy process 
while stemming the potential flood of frivolous nominees.  We believe that 
the adoption of the proposed rules will impact positively director performance, 
independence and accountability.

The potential benefits of the rule are greatly hindered, however, by the 
proposed triggering requirements which require too high a threshold and 
result in substantial delay for shareholders seeking to include a nominee 
in a proxy.  We believe that the triggering requirements should be amended 
so that the triggering events for a company including a shareholder nominee 
in a proxy and the time period for doing so is eased.  

Additionally, the requirement that a shareholder own more than five percent 
of a company's outstanding voting securities in order to nominate a director 
will serve only to exclude many sizeable long-term shareholders from the 
nomination process.  While we recognize that five percent is consistent 
with the reporting requirements on Schedule 13G under Exchange Act Rule 
13d-1(b), it creates too a high a barrier especially considering the 
substantial investment that would be required in the average S&P 500 
Company.  We believe that a three percent ownership threshold to nominate 
directors will allow the proposed rule to operate much more effectively.

Thank you for providing us this opportunity to comment on the proposal.  
We hope that the Commission will consider our comments in formulating its 
final rules.

Sincerely,

Lane S. Bucklan
General Counsel 
Iridian Asset Management LLC
276 Post Road West
Westport, CT 06880
(203) 341-9053
(203) 341-7809 (fax)