From: Jack Swift [email@example.com]
I own a True Value hardware store. It is part of the TruServ Co-Op which appears to be loosely regulated by your Commission. These comments relate to the effect that your proposal about Shareholder Nomination of Directors could have on our Co-Op.
Our by-laws state that no shareholder may own more than 100 voting shares and the balance of the required shares are non-voting. The result is to make it nearly impossible to mount a challenge to management from the 6,000 shareholders. The only effective method of changing management is to change our affiliation to another Co-Op.
Management selects the board members. They may claim that they don't, but we wouldn't have lost half our equity and incurred at least 2 SEC inconclusive investigations if the board was independent of management. It is extremely difficult for a sufficient number of the 6,000 members to form groups to challenge management's 'pet' directors and extremely expensive for any such group to solicit proxies from the 6,000 members.
If your proposal allowed groups of shareholders to submit nominations for directors and ensure that those nominations got equitable treatment in the ballot materials, we might be able to form such groups. We, and you, must understand that a nationwide organization like ours (and Ace and Do It Best) only averages 120 dealers per state.
Thank you for your consideration and your concern for the small employers.