From: Tom McGimpsey [tom.mcgimpsey@mcdata.com] Sent: Tuesday, December 23, 2003 4:52 PM To: rule-comments@sec.gov Subject: Comments to SEC Proposed Release S7-19-03 December 22, 2003 Mr. Jonathan G. Katz, Secretary Securities and Exchange Commission 450 Fifth Street, NW Washington, DC 20549 Re: File No. S7-19-03 Security Holder Director Nominations Dear Mr. Katz: As the Vice President and General Counsel of McDATA Corporation, I oppose the SEC's proposed release regarding "Security Holder Director Nominations" because: 1. An independent governance committee is best suited to select qualified directors with the unique mix of skills and experience needed to oversee each company. 2. The recent governance reforms initiated by Nasdaq and the SEC will likely make boards more independent and accountable. The SEC should allow time for those reforms to work before imposing additional, unproven requirements on issuers. 3. The proposed thresholds for triggering a shareholder nomination are too low. They would result in frequent contested elections. Even companies that are performing well could face annual election contests. Annual election contests would be distracting and costly and could dissuade qualified individuals from serving as corporate directors. 4. A proposal of this magnitude raises many issues and questions, and could produce unintended consequences. The comment period should be extended for an additional 60 days to allow adequate study and consideration of the issues and potential ramifications of the proposal. 5. Companies should have a reasonable amount of time to anticipate and prepare for actions and events that may ultimately qualify as a triggering event for shareholder access under the proposed rule. Therefore, shareholder action or voting results during the 2004 proxy season should not qualify as a trigger for shareholder access under the proposed rule. There will be tremendous shareholder and company confusion with the new disclosures in 2004 proxy statements that attempt to provide information about a shareholder access process. Moreover, companies may need to add additional governance staff or retain counsel to assist with the proposals that may ultimately qualify as triggering events and related issues. I share the concerns and endorse the opinions expressed in the letter submitted by 3M Corporation dated December 5, 2003. Very truly yours, /s/ Thomas O. McGimpsey Thomas O. McGimpsey, Esq. McDATA Corporation 380 Interlocken Crescent Broomfield, Colorado 80112 SPECIAL NOTICE All information transmitted hereby is intended only for the use of the addressee(s) named above and may contain confidential and privileged information. Any unauthorized review, use, disclosure or distribution of confidential and privileged information is prohibited. If the reader of this message is not the intended recipient(s) or the employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that you must not read this transmission and that disclosure, copying, printing, distribution or use of any of the information contained in or attached to this transmission is STRICTLY PROHIBITED. Anyone who receives confidential and privileged information in error should notify us immediately by telephone and mail the original message to us at the above address and destroy all copies. To the extent any portion of this communication contains public information, no such restrictions apply to that information. (gate01)