September 2, 2003

My hunch is that a

My hunch is that a “town hall” website for shareholders to vote on proposals year-round – as recommended in Breeden’s MCI bankruptcy filing – would not be used much by saavy institutional investors. Instead, those investors would continue to rely on the Rule 14a-8 process and submit shareholder proposals in the normal course. This is because those investors often have other agenda items they wish to discuss with management and the proposal is more of a “calling card” to open a dialouge.

In many cases, investors will withdraw their proposals after satisfactory talks with management before the proposals are ever publicized. The ability to use a proposal as leverage to enter into broader negotiations would not exist with the town hall website because once posted, the proponent arguably would no longer be able to control the destiny of the proposal (although we have not seen details about how the town hall site would work, the logic is that once posted, all shareholders would have an interest in it).

Instead, the town hall website likely would be used primarily by retail investors and perhaps by institutional investors at companies that either are generally unresponsive to reasonable shareholder requests or have pressing performance issues.

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