Note:  The article available from the link below repeats the newspaper's previously reported misperception that one of the shareholder proposals submitted for this year's annual meeting would change the process or rules for indemnification of directors.  In fact, as noted in response to the previous article, the Franklin Mutual shareholder proposal actually follows rather than changes the existing rules established by Section 317 of the California Corporations Code and the company's Bylaws, which allow shareholders to decide whether directors have met the standards of conduct required for indemnification.  The proposed resolution would make this determination if adopted by a shareholder vote at the annual meeting, and does not address any future process for determining indemnification.  The current article is correct, though, in reporting that management's preliminary proxy filing states that their plans for a new incorporation would invalidate the shareholder proposal for indemnification.

Reference should of course be made directly to Franklin Mutual's shareholder proposal and to management's preliminary proxy filing with the SEC.

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