From: Marnie Thompson [marniethompson@triad.rr.com]
Sent: Friday, June 06, 2003 11:08 AM
To: rule-comments@sec.gov
Subject: File No. S7-10-03

I am writing regarding the adoption of rules that would provide shareholders
with a real opportunity to place nominees on corporate proxy ballots
(S7-10-03, on possible changes to proxy rules governing director elections).
I am a shareholder in several corporations, and I have in the past filed
shareholder resolutions to attempt to influence the business policies of
certain corporations' in which I hold stock. I have attended several
corporate shareholder meetings, and I have seen first hand how limited the
influence of shareholders is under current rules. There is a lot of rhetoric
in the corporate world that implies that "one share-one vote" is  a form of
participatory democracy, but the concentration of shares within a small
number of controlling interests stifles influence from small investors, even
when they collectively make up a large proportion of shareholders. Thus, I
believe that it is necessary to open up corporate boards of directors to
include a wider range of interests and experiences. This will ultimately be
good for corporate governance, profitability, and democracy in general,
since corporations are playing such a large role in campaign finance and
lobbying.

I am a member of Responsible Wealth and United for a Fair Economy, and I am
aware of their proposal in this matter. I would take it one step further, to
allow a greater percentage of open seats to be determined by shareholder
coalitions. I think that the SEC should adopt rules to allow coalitions of
at least 25 qualified investors collectively owning 1% of outstanding shares
should be able to nominate individuals to fill up to  40% of the Board seats
that are up for election.

While several corporate governance reform efforts have been adopted over the
last year, the real reform remains restructuring a board election process
whereby boards nominate themselves, leaving shareholders with a largely
ceremonial role of affirmation. Broadening the experiential diversity of
directors and breaking some of the endemic personal ties among directors
that lead to inherent conflicts of interests will strengthen businesses,
protect shareholder value and increase corporate accountability.

In 2000 and again in 2002 another Responsible Wealth member sought to take
advantage of the existing process for shareholders to nominate directors to
the Board of Walt Disney Company, of which she was a long-time shareholder.
The two individuals nominated by our member were of national stature -- one
the former chief counsel of the US Senate Finance Committee, the other the
founder and director of a well-respected national non-profit. In neither
year, did Disney even so much as contact the shareholder's board nominees
and only in 2002 did Disney even respond to the shareholder with a cursory
letter explaining that neither nominee would be considered.  In another
dialogue over shareholder nominees to the board with a major international
oil company, representatives of the company laughed when explaining that one
of the candidates nominated by a shareholder the previous year was a truck
driver. Our members found nothing amusing about a truck driver sitting on an
oil company board, in fact the customer perspective of such an individual
might bring valuable insights into the board room.  The current system of
shareholders suggesting names to board nominating committees is a sham set
up to make shareholders think they have a role in a process that is
incestuously controlled by sitting directors.

Responsible Wealth and I believe that nominating a director for the proxy
ballot should require a higher threshold than that required for submitting a
shareholder proposal. We favor a qualification process that includes both a
coalition of investors, and a threshold of stock ownership. Specifically, we
believe that a group of at least 25 investors, collectively owning at least
1% of a company's stock shall be required to directly nominate a director to
the ballot. Each of the 25 investors shall meet the rules governing
introduction of a shareholder proposal (presently $2,000 worth of stock for
one year prior to filing the proposal).

Like Responsible Wealth, I believe the coalition of investors is important
to protect against the power of large institutional investors, which could
single-handedly nominate director candidates. Requiring a coalition of
investors would require even powerful institutions to persuade other
investors to join in the effort. Requiring an ownership threshold would
assure that direct access to the ballot would not be trivialized. I  further
believe that each qualified shareholder coalition should be able to nominate
candidates to fill no more than  40 % of the director candidate seats up for
election. This condition will serve to prevent the direct shareholder
nomination of directors to be used as a takeover device.

The nominating shareholders shall provide a supporting statement of up to
200 words for each director candidate nominated, outlining the
qualifications of the candidate and how the nominee would improve the Board.

In order to ease shareholder compliance with recently enacted laws and
regulations, the Company shall provide a chart of director nominees denoting
which meet independence and audit committee qualifications.

In adopting new rules governing direct shareholder nominations for director,
the Commission should make two additional changes to its proxy rules.
First, the Commission should no longer allow broker non-votes to be counted
in support of the management slate of directors. Furthermore, the Commission
could insure fairer elections by mandating that director nominees be listed
alphabetically, rather than as a Director-nominated slate followed by
shareholder-nominated alternatives.

Second, the Commission should repeal the Rule 14a-8(i) exclusion which has
been interpreted broadly to limit criticism or critique of the Board's
effectiveness and competence. If candidates are to be placed in nominations
against an existing slate of sitting directors, the additional candidates
must be free to express their disagreements with the judgments of the
current Board, without having those disagreements stifled as statements that
impugn the integrity of the Board.

Marnie Thompson
712 South Elam Avenue
Greensboro, NC 27403