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PROPOSAL: PROTECTING EMPLOYEE PENSION RIGHTS
Resolved, that it is in the interests of shareholders to assure the
integrity of employee pension plans, and that Article VII of the Bylaws is
therefore amended to add the following:
ESOP Governance. To assure the independent management of any
Employee Stock Ownership Plan (“ESOP”) established for the benefit of the
Corporation’s employees, the Board of Directors shall take such actions as
permitted by applicable laws to provide for the ESOP’s management by an
independent trustee and a governing committee elected by the ESOP's employee
participants, voting confidentially. No director of the Corporation may
serve simultaneously as a trustee or member of the ESOP’s governing
committee, other than for a brief transition period approved by the Board of
Directors, unless such simultaneous service is specifically required by
law. The Board of Directors may not act, or permit the Corporation to act,
to replace the ESOP trustee, amend the ESOP or otherwise change the ESOP’s
governance provisions without the consent of the ESOP governing committee
elected by employees or a direct vote of the ESOP’s employee participants.
This section is not intended, however, to restrict actions by the
Corporation to support the processes by which the ESOP's employee
participants elect members of the ESOP's governing committee and determine
the voting or disposition of stock held by the ESOP. This section may be
amended only by the stockholders.
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SUPPORTING STATEMENT
Although we questioned the motives and propriety of management’s actions to
establish an ESOP with what is now 19% of the company’s stock, we believe
that it is in the interests of all shareholders to assure the integrity of
what has been promised to the company’s employees.
Therefore, we propose making independent employee control of their ESOP a
provision of the corporate bylaws, so employees will know that their
retirement rights cannot be withdrawn or changed without their consent. If
the proposal is adopted, the company’s management would no longer be able to
act on its own, as it did during the past year, to modify employees’ ESOP
rights and replace members of the ESOP’s governing committee. Instead,
employees’ ESOP rights will be protected by their own elected
representatives, and will not be subject to the whims of a future board of
directors.
Protecting the employees’ ESOP rights should also protect the integrity of
the company’s governance. The proposed prohibition of a corporate
director’s service on the ESOP committee, for example, should prevent
conflicts of interest that could arise if an individual is acting as a
fiduciary simultaneously for the employee beneficiaries of an ESOP and for
the shareholders of a corporation that loaned over $60 million to the ESOP.
We hope you will agree that this proposal is fair to the company’s employees
and good for all its shareholders, and that you will vote for it to
establish the kind of sound corporate governance demanded by employees who
can make a business grow. |