The Shareholder Forum

supporting investor access

for the informed use of capital to produce goods and services

 

The Shareholder Forum

Purpose

The Shareholder Forum provides all decision-makers – from the ultimate owners of capital to the corporate managers who use their capital, and all of the professionals in between – with reliably effective access to the information and views participants consider relevant to their respective responsibilities for the common objective of using capital to produce goods and services.

Access Policies

To provide the required investor access without regulatory constraints, the Forum developed policies and practices allowing it to function as an SEC-defined independent moderator. We also adopted well-established publishing standards to assure essential participant privacy and communication rights.

These carefully defined and thoroughly tested Forum policies are the foundation of our unique marketplace resource for clearly fair access to information and exchanges of views.

History

We have been doing this for more than two decades. The Forum programs were initiated in 1999 by the CFA Society 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 the Society’s members.

Independently supported by Mr. Lutin since 2001, the Forum’s public programs – often in collaboration with the CFA Society as well as with other educational institutions such as the Columbia Schools of Business and Journalism, the Yale School of Management and The Conference Board – have achieved wide recognition for their effective definition of both company-specific and marketplace issues, followed by an 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.

Commitment

The Forum welcomes suggestions for its continuing support of fair access to the information needed by both shareholders and corporate managers.

Responding to the recent increases in investor engagement and activism, we have established a strong policy commitment to supporting corporate managers who wish to provide the leadership expected of them by assuring orderly reviews of issues. We will of course also continue to welcome the initiation of company-specific programs by shareholders concerned with the use of their capital to produce goods and services, and we naturally remain committed to addressing general marketplace interests in collaboration with educational institutions and publishers.

 

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

 

 

 

 

Inquiries, requests to be included in email distribution lists, and suggestions of new Forum subjects may be addressed to inquiry@shareholderforum.com.

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.

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and had been offering for several years with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.