From: Gary Lutin To: Distribution: Options Policies Forum Cc: Distribution: Scoring Systems ; Distribution: PAIS Project/Amazon Forum ; Distribution: CA Forum Sent: Thursday, May 10, 2007 6:01 PM Subject: NYC reports 57% support of their Blockbuster proposal for advisory voting   Copied below is a press release issued yesterday by the Office of the New York City Comptroller reporting that 57% of the votes cast by shareholders of Blockbuster, Inc., supported their proposal for advisory voting on executive compensation.   Following the press release are sections of the company's proxy statement presenting to composition of the board and its opposition to the advisory voting proposal.  As indicated in the included table, the Compensation Committee was chaired by Gary J. Fernandes and included James W. Crystal, Jules Haimovitz, and Carl C. Icahn.   (Note: Mr. Fernandes, Chairman of the Blockbuster board's Compensation Committee, has also been serving on the board of CA, Inc., formerly known as Computer Associates, since 2003.)       http://www.comptroller.nyc.gov/press/2007_releases/pr07-05-052.shtm       PR07-04-052   May 9, 2007 Contact: Press Office 212-669-3747     THOMPSON: BLOCKBUSTER SHAREHOLDERS VOTE TO STRENGTHEN EXECUTIVE COMPENSATION POLICY   New York City Comptroller William C. Thompson, Jr. today announced that Blockbuster shareholders have overwhelmingly endorsed a New York City Employees’ Retirement System proposal calling on the company to allow shareholders to ratify executive compensation packages. The NYCERS’ shareholder proposal specifically called on Blockbuster’s Board of Directors to adopt a policy that allows its shareholders to vote at each annual meeting on an advisory resolution - proposed by management - to ratify compensation for named executive officers. The NYCERS proposal – which was submitted for the first time with the company - was supported by a 57% majority of the total votes cast for and against at the Company's annual meeting in New York City on Wednesday. “We are encouraged by the high level of shareholder support and hope that Blockbuster’s Board of Directors will act swiftly to implement the expressed will of its shareholders,” Comptroller Thompson said. NYCERS holds 157,000 shares valued at $998,520 in Blockbuster. NYCERS additionally filed shareholder resolutions on executive pay this season with Home Depot of Atlanta, GA, and Par Pharmaceutical Companies, Inc. of Woodcliff Lake, N.J.  NYCERS holds 2.5 million shares valued at approximately $95.8 million in Home Depot – which votes on the measure on May 24 - and 28,347 shares valued at more than $767,000 in Par Pharmaceutical. The resolutions point out that shareholders should be informed that the vote is non-binding and would not affect any compensation paid or awarded to the named executive officers. In addition to Thompson, NYCERS trustees are: New York City Finance Commissioner Martha E. Stark (Chair); New York City Public Advocate Betsy Gotbaum; Borough Presidents Scott Stringer (Manhattan), Helen Marshall (Queens), Marty Markowitz (Brooklyn), Adolfo Carrion (Bronx), and James Molinaro (Staten Island); Lillian Roberts, Executive Director, District Council 37, AFSCME; Roger Toussaint, President Transport Workers Union Local 100; and, Gregory Floyd, President, International Brotherhood of Teamsters, Local 237. ###     April 2, 2007 Proxy Statement of Blockbuster, Inc.     Board of Directors and Board Committees Our business is managed under the direction of our Board. The Board meets on a regularly scheduled basis to review significant developments affecting our Company, to act on matters requiring approval by the Board and to otherwise fulfill its responsibilities. It also holds special meetings when an important matter requires action or review by the Board between regularly scheduled meetings. The Board met 8 times and acted by unanimous written consent 7 times during the 2006 fiscal year. During the 2006 fiscal year, each incumbent director participated in at least 75% of the aggregate number of meetings of the Board and applicable committee meetings held during the period for which he or she was a director.   6   The Board has separately designated standing audit, nominating/corporate governance and compensation committees. The following table provides Board and committee membership and meeting information for each of the Board’s standing committees:                     Director    Independent (1)    Audit Committee    Nominating / Corporate Governance Committee    Compensation Committee John F. Antioco    No                Edward Bleier    Yes         Member      Robert A. Bowman    Yes    Chair (2)           James W. Crystal    Yes              Member Jackie M. Clegg    Yes    Member (2)    Chair      Gary J. Fernandes    Yes         Member    Chair Jules Haimovitz    Yes              Member Carl C. Icahn    Yes              Member Strauss Zelnick    Yes    Member           Number of Meetings in 2006      14    8    4 Number of Written Consents in 2006      —    1    — (1) The Board has determined that the director is independent as described below under “Director Independence.”   (2) The Board has determined that the director is an audit committee financial expert as described below under “Audit Committee Financial Experts and Financial Literacy.”     ***     PROPOSAL IV (STOCKHOLDER PROPOSAL) ANNUAL ADVISORY RESOLUTION OF STOCKHOLDERS TO RATIFY CERTAIN NAMED EXECUTIVE OFFICER COMPENSATION DISCLOSURES *** Opposing Statement of Our Board of Directors Our Board strongly supports accountability to our stockholders and already provides many effective alternatives for stockholder communications with our Board. As described elsewhere in this proxy statement and posted on the investor relations section of our public website, our Board already provides an effective process to enhance the ability of stockholders and other interested parties to communicate directly with the non-management directors as a group, the entire Board or individual directors, including the Chairman and chair of any Board committee. Stockholders may communicate their views on any number of topics, including specific aspects our executive compensation program, by telephone, Internet or mail. In addition, stockholders are able to readily communicate their views on executive compensation matters through Blockbuster’s investor relations department and by attending our annual stockholders meetings. The proponent’s suggested “FOR” or “AGAINST” vote on selected portions of our annual executive compensation disclosures would not provide our Board with meaningful information about our stockholders’ various viewpoints on complex executive compensation matters. As recognized by the SEC’s recent overhaul of companies’ executive compensation disclosures, executive compensation policies, practices and determinations have become increasingly complex and must take into account a number of factors. We believe that the complexity and breadth of information that boards of directors and compensation committees consider and evaluate in connection with executive compensation decisions is fundamentally at odds with the proponent’s suggestion of annually requesting a “For” or “Against” ratification on selected portions of our overall executive compensation disclosures. As a result, we believe that the proposal, even if implemented, would not provide our Board with meaningful input regarding our stockholders’ various positions on complex executive compensation matters. Instead, we believe that the proposal creates a risk that the vote results may send an inaccurate or incomplete message to our Board, rather than communicating the actual and numerous viewpoints of our stockholders on particular aspects of our executive compensation program. Board Recommendation on Proposal For the reasons set forth above, the Board of Directors recommends a vote AGAINST this stockholder proposal. The management proxy holders will vote all duly submitted proxies AGAINST this proposal unless duly instructed otherwise.   56