From: Donna Hamel [HamelD@ncr.disa.mil]
Jonathan G. Katz, Secretary
Re: File Number S7-19-03
Dear Mr. Katz:
I am writing to express my support of the adoption of Proposed Rule: Security Holder Director Nominations issued October 8, 2003 by the Commission.
Over the past several years, we have experienced the abuse of many Board of Directors authority in running important corporations. We have watched the cronyism rampant on these boards, and we have watched as corporations have worked in opposition to shareholder interests.
This rule does not go far enough in protecting shareholder interests; however it is a start. In particular, I believe the triggering requirements are unnecessary given the high ownership threshold required for shareholders to place nominees in the proxy. Moreover, the two proposed triggers create serious additional problems. First, the proposed triggers entail a two-year process, an untenable delay at a company or board in crisis. Second, the proposed 1% ownership requirement for shareholders to submit a triggering proposal is far too high. A shareholder seeking to introduce such a proposal at the average S&P 500 company would need to hold shares worth over $180 million.
In addition, while I support a significant ownership requirement for placing nominees in the proxy, we believe the proposed 5% threshold is too high. This threshold would require a shareholder or shareholder group seeking to place nominees in the proxy of the average S&P 500 company to own shares worth roughly $900 million. We encourage the Commission to lower the threshold to 3%, a level that would more fairly balance the Commission's concerns with the interests of corporations and their shareholders.
I respectfully request that the proposed rule or any similar rule authorizing direct nomination of directors and use of the issuer's proxy statement to conduct a contested election be adopted.
Very truly yours,