The Shareholder Forum

supporting investor interests in the use of their capital to produce goods and services


Purpose & History of Services

The Shareholder Forum

The Shareholder Forum supports investor interests in corporate enterprise value with services that require independence – and that may benefit from the Forum’s network resources and recognition for advocacy of long term investor interests – to assure a definition of relevant issues and fair access to information that can be relied upon by both corporate and investor decision-makers.

The policies that provide a foundation for the Forum’s marketplace functions have been carefully developed and tested to allow any investor to participate in its communications, either anonymously or visibly, without acting in concert. Established originally to accommodate professional fund managers, this independent moderator function has proved to be consistently effective in managing orderly processes of issue definition for rational analysis by fiduciaries who are responsible for informed decisions.

Initiated in 1999 by the CFA Society of New York (at the time known as the New York Society of Security Analysts) with lead investor and former corporate investment banker Gary Lutin as guest chairman to address the professional interests of its members, and independently supported by Mr. Lutin since 2001, Forum programs have achieved wide recognition for their effective definition of important issues and orderly exchange of the information and views needed to resolve them. The Forum's ability to convene all key decision-making constituencies and influence leaders has been applied to subjects ranging from corporate control contests to the establishment of consensus marketplace standards for fair disclosure, and has been relied upon by virtually every major U.S. fund manager and the many other investors who have participated in programs that addressed their interests.

Currently important applications of the Forum’s independent position include the support of corporate managers who wish to provide the leadership expected of them by responding to shareholder engagement as well as activist challenges with orderly reviews of issues relevant to long term investor interests.

Requests for Shareholder Forum consideration of support may be initiated confidentially by any investor or by the subject company, or by the professional advisors to either.  


Forum Report & Request for Shareholder Views

(July 9, 2001)

From: Gary Lutin
To: Distribution: Lone Star shareholders
Sent: Monday, July 09, 2001 9:23 AM
Subject: Confidential - Report & request for shareholder views

Confidential to Lone Star shareholders: Report & request for views
The issue that attracted national attention to the Lone Star proxy contest -- the rights of shareholders to choose the directors who represent them -- has been resolved.  The message was clear.  Based on preliminary reports of the vote at Friday's shareholders meeting, the count was about 10 million shares for the challenger Adams and 7 million for the incumbent CEO Coulter, roughly a 2 to 1 ratio of the non-management ownership for the independent candidate.
Now that the interests of the broader investment community have been served, it's time to address the narrower interests of a shareholder's specific investment in Lone Star: enhancing shareholder value.  The election of an independent director is only a step.  As you may know, it's become common practice after a challenger wins a vote to negotiate a settlement with the company's management, and the result of those negotiations can be just as important to shareholders as the election.  In this case it's likely that a settlement could take one of two forms, and I'd like to have a sense of shareholder support for either of these alternatives during the next couple of days:
  • The easiest settlement would be to agree on some by-law amendments or other governance concessions in exchange for the challenger's resignation from the board, or for his acceptance of conditions assuring undisturbed management control.  This would secure the essential precedent-setting achievements of the proxy contest without exposing anyone to further costs.
  • Alternativley, concessions would be limited to conditions which facilitate the function of the board without compromising the ability of any director -- including the challenger, of course -- to be informed and to communicate.  For example, this could involve expanding the board to allow the displaced incumbent to resume his position as a director, in exchange for provisions barring claims against any director for legitimate communications with a shareholder forum.  This kind of settlement, or even the absence of any settlement, would permit monitoring the next year's board performance of its duties to shareholders.  But negotating this kind of settlement requires being prepared to undertake additional costs without any assurance of reimbursement by the company.
I need to know whether you're satisfied with what's already been accomplished by the message you sent with your vote, or if you want to support an independent director's continuing efforts to serve you.  For those of you who will continue to own the stock, it's really a question of what a responsible shareholder should do, if anything, to perform his own duties of oversight.
I plan to report the general ranges of shareholder support to all shareholders participating in the Forum as well as to Lone Star's management and Mr. Adams, so that the negotiating parties may be guided by your views.  Of course, unless someone specifically asks to be identified as the source of a view or statement, all of our communications will be considered confidential and no participants will be identified.
I hope most of you will want to build on the foundation of what's been accomplished so far.  One way to look at it is that about half a million dollars has been spent to secure your right to a fair vote, with all the risks assumed by a fund manager candidate and a few shareholders and professionals who had nothing to gain but investment community goodwill.  You, as shareholders, have a lot more to gain, in dollars and in tangible realization: $18 per share.  And you'll be exposed to only a fraction of the original cost to get the ultimate prize.
                GL - 7/9/01





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Publicly open programs of the Shareholder Forum are conducted for free participation of all shareholders of a subject company and any fiduciaries or professionals concerned with their decisions, according to the Forum’s stated "Conditions of Participation." In all cases, each participant is expected to make independent use of information obtained through the Forum, and participation is considered private unless the party specifically authorizes identification.

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