From: mparrott@sra.state.md.us Sent: Friday, June 13, 2003 8:29 AM To: rule-comments@sec.gov Cc: tlee@sra.state.md.us Subject: RE: File No. S7-10-03 June 13, 2003 Mr. Jonathan G. Katz Secretary U.S. Securities and Exchange Commission 450 Fifth Street, NW, Washington, DC 20549-0609 RE: File No. S7-10-03 Dear Mr. Katz: The State Retirement and Pension System of Maryland (the Retirement System) administers retirement plans for 89,000 retirees and beneficiaries as well as the future benefits for more than 190,000 active participating members. These groups include state government employees, teachers, law enforcement personnel, legislators, judges and local government employees and fire fighters whose employers have elected to participate in the Retirement System. The Board of Trustees of the Retirement System commends the Commission for undertaking this review of its proxy rules and supports reforms to streamline and improve the shareholder proposal process. As you are aware, the Council of Institutional Investors and others have advanced proposals to amend the proxy rules so as to increase shareholders' ability to select corporate directors. For a number of reasons, the Retirement System hopes that the Commission will give careful consideration to these proposals. First, we view corporate governance as an important set of tools for the protection and enhancement of the long-term value of our investments. Second, the existing legal framework does not give shareholders a meaningful chance to nominate directors. The costs and requirements inherent in the current system make it very difficult for institutional investors to exercise this right. Third, we believe that giving qualified shareholders of publicly traded companies access to companies? proxy statements and ballots for the purpose of nominating candidates for election to corporate boards would increase the accountability of corporate boards to shareholders. This particular corporate governance tool would likely not be wielded often. Its mere existence, however, would have a curative effect. On behalf of our participants and Board of Trustees, I thank the Commission for extending investors the opportunity to present their views regarding the proxy rules. Sincerely, Thomas K. Lee Secretary to the Board