September 23, 2002

In a speech today before the Council of Institutional Investors, Chairman Pitt noted that he has asked the Division of Corporation Finance to consider eliminating the “ordinary business” exclusion basis from the shareholder proposal rule. This basis – under Rule 14a-8(i)(7) – has been the most controversial basis under a very controversial rule.

This follows recent sentiment expressed by Chairman Pitt regarding the inclusion of a shareholder proposal regarding stock option expensing. Historically, this type of proposal has been excluded by the Corp Fin staff – and an appeal is pending before the Commission on this matter.

This also follows a recent rule petition that requests the SEC to revise the shareholder proposal rule to allow shareholders to elect directors through the proposal process.

Chairman Pitt’s speech before the Council of Institutional Investors is at