The following comment on Letter Type H,
Letter Type H:
I oppose the proposal because:
* Shareholder nominees would most likely represent the special interest agendas of the shareholders that nominated them rather than the interests of all shareholders. Directors should represent all shareholders.
* The recent governance reforms initiated by the stock exchanges and the SEC will make boards more independent and accountable. The SEC should allow time for those reforms to work before imposing additional, unproven requirements on issuers.
* 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.
* 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.
* 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 comment letter submitted by the American Society of Corporate Secretaries.
Very truly yours,