LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
125 West 55th Street
New York, NY 10019-5389
(212) 424-8000
FACSIMILE: (212) 424-8500

May 8, 2003

VIA E-MAIL

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Proposed Rule Change and Amendment No. 1 Thereto by the New York
Stock Exchange, Inc. Relating to Corporate Governance
File No. SR-NYSE-2002-33                                                                      

Dear Mr. Katz:

We are submitting this letter in response to the request of the Securities and Exchange Commission (the "SEC") for comments on the proposed New York Stock Exchange ("NYSE") rule change and Amendment No. 1 thereto relating to corporate governance (the "Proposed NYSE Rules"). We appreciate the opportunity to comment on the Proposed NYSE Rules.

Our comments pertain to the interplay between the general director independence requirements set forth in Section 303A(2) of the Proposed NYSE Rules and the Parent-Subsidiary Exemption (as defined below) to the additional audit committee member independence criteria set forth in Section 303A(6) of the Proposed NYSE Rules and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We write to suggest that the SEC and the NYSE consider a modification to the Proposed NYSE Rules to clarify the interplay of Section 303A(2) and the Parent-Subsidiary Exemption.

Pursuant to Section 303A(6) of the Proposed NYSE Rules, audit committee members, in addition to being required to meet the general director independence requirements set forth in Section 303A(2) of the Proposed NYSE Rules, must meet the requirements of Exchange Act Rule 10A-3(b)(1), subject to the exemptions provided for in Exchange Act Rule 10A-3(c). Under Exchange Act Rule 10A-3(b)(1), subject to certain exemptions, an audit committee member must not (i) accept any compensatory fee from the issuer or any subsidiary thereof or (ii) be an affiliated person of the issuer or any subsidiary thereof.

Clause (iv)(B) of Exchange Act Rule 10A-3(b)(1) contains an exemption from the requirement that an audit committee must not be an affiliated person of the issuer or any of its subsidiaries (the "Parent-Subsidiary Exemption"). Pursuant to the Parent-Subsidiary Exemption, "[a]n audit committee member that sits on the board of directors of a listed issuer and an affiliate of the listed issuer is exempt from the requirements of [Exchange Act Rule 10A-3(b)(1)(ii)(B) (i.e., the requirement that the person must not be an "affiliated person" of the issuer or any subsidiary thereof)] if the member except for being a director on each such board of directors, otherwise meets the independence requirements of [Exchange Act Rule 10A-3(b)(1)(ii)] for each such entity, including the receipt of only ordinary course compensation for serving as a member of the board of directors, audit committee or any other board committee of each such issuer."

While a director who meets the requirements of the Parent-Subsidiary Exemption would meet the additional audit committee member independence requirements of Section 303A(6) of the Proposed NYSE Rules, it is unclear from the Proposed NYSE Rules whether the Parent Subsidiary Exemption would also apply in the general director independence context of Section 303A(2) of the Proposed NYSE Rules. One would expect that a relationship that does not impair a director's independence under the more comprehensive audit committee member independence criteria set forth in Section 303A(6) of the Proposed NYSE Rules should likewise not impair a director's independence under the general director independence criteria set forth in Section 303A(2) of the Proposed NYSE Rules. In other words, the fact that a director of the listed company also sits on the board of directors of an affiliate of the listed company should not impair the director's independence under the general director independence requirements set forth in Section 303A(2) of the Proposed NYSE Rules if the other requirements of the Parent-Subsidiary Exemption are met. This should be the case regardless of whether the director is an audit committee member of the listed company.

We suggest, therefore, that the Proposed NYSE Rules be modified to clarify that sitting on the board of directors of one or more affiliates of the listed company without more will not impair a director's independence under the general director independence requirements set forth in Section 303A(2) of the Proposed NYSE Rules. This clarification would appear to be consistent with the purpose of Section 303A(2)(a) of the Proposed NYSE Rules which specifically states that indirect material relationships between a director and the listed company would impair a director's independence only if the directors is "a partner, shareholder or officer of an organization that has a relationship with the company," but not if the director only sits on the board of directors of that organization.

We would be happy to discuss with you our comments or any other matters you think would be helpful in your review of our comments. Please do not hesitate to contact Michael Groll at (212) 424-8616 or Oliver Rust at (212) 424-8571 if you would like to discuss these matters further.

Very truly yours,

LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.