From: Jay Hill [jhill@providencecapitalnyc.com]
Sent: Monday, May 12, 2003 6:47 PM
To: rule-comments@sec.gov
Subject: Release No. 34-47778 (s7-10-03)

To Whom It May Concern:

 

The current rules regarding the election of directors need to be altered so that 
shareholders are given more of a voice regarding who represents them on corporate 
boards.  Having participated in multiple proxy contests regarding the election of 
directors, I have first hand knowledge of how difficult and prohibitively expensive 
it is to mount an effective dissident election campaign.  Under the present system, 
the time and cost requirements necessary to submit an alternative slate of director 
candidates are so great that most shareholders don’t even consider it an option.  
The remaining few shareholders that do consider submitting an alternative slate of 
directors as a viable option typically won’t take that step unless the issues at 
hand are “unfathomable” at a particular company.  Often, by this time it’s too late; 
shareholder value has been destroyed beyond repair. 

 

The single most important way to improve the present system is to allow shareholders 
to submit director nominees via rule 14-a8 (on the Company’s proxy statement).  Under 
the current system, a large portion of the expense of running a proxy contest gets 
paid out to lawyers and proxy solicitors that help draft/mail/track the dissident’s 
own proxy material.  If dissident shareholders were to have access to the Company’s 
proxy statement, the costs of running dissident nominees could be reduced dramatically.  
This would allow all shareholders to consider submitting alternative director candidates 
a viable option.

 

Jay Hill, CFA

Providence Capital

212-888-3200