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Forum Summary
(October 27, 2006)
A “Forum” program is being initiated for shareholders of
companies in relation to which options pricing and similar issues may be
relevant to investors’ capital commitment and voting decisions. Several
companies will be invited to participate, in each case based on
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the commitment of the board of
directors to an open, cooperative exchange of views among the managers,
investors and professionals concerned with developing economically
practical policies suited to their company’s particular circumstances,
and
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the apparent significance of
corporate value enhancement to be derived from aligning management
rewards with the achievement of long-term performance objectives.
The intent of the Options Policies
Forum is to facilitate a rational marketplace definition of adaptations
that support a corporate participant’s fair competition for both
management resources and capital. For companies that must respond to
recent discoveries of options backdating or similar reporting
inaccuracies, the Forum objective will be to assure management’s
understanding of investor interests as a foundation for new policies
that may be accepted without adversarial processes. Specifically, if a
corporate participant has received a shareholder proposal for proxy
voting on options policies, such as those initiated in September 2006 by
the Amalgamated Bank LongView Funds providing for the setting of pricing
dates, the proponent shareholder will be encouraged to participate
actively in the Forum’s cooperative process and to consider withdrawal
of the proposal if management satisfactorily resolves investor
interests.
The Forum will first address the
development of general, broadly applicable principles which reflect a
consensus of all key marketplace constituencies. To guide this process,
an Advisory Panel will be formed with representatives of invited
corporate participants, leading investors, and recognized experts. The
process will include opportunities for publicly open exchanges of views,
including an initial meeting to be scheduled in early December, and a
final report will present the Advisory Panel’s conclusions together with
any individual comments offered by its members by March 2007, in time
for reference during that spring’s proxy season.
The Forum will also address
company-specific issues for any corporate participant requesting its own
“workshop.” Each workshop will be organized separately in response to
the particular needs for informal exchanges of views among managers,
investors and professionals interested in the company’s resolution of
issues.
The Forum will be open, free of
charge, to all shareholders of the corporate participants and to any
fiduciaries or professionals concerned with their investment decisions.
As stated in the “Conditions of
Participation” which are publicly posted on the
Forum web site, the Forum will be conducted for the purpose of
providing shareholder participants with access to information and a free
exchange of views on issues relating to their evaluations of
alternatives. All participants – including corporate and professional
as well as investor – are expected to make independent use of
information obtained through the Forum, subject to the privacy rights of
other participants. It is a Forum rule that participants will not be
identified or quoted without their explicit permission.
This Forum program is organized
with the support of
Hermes Equity Ownership Services, Ltd. It is the first in an
expected series that will be the responsibility of a not-for-profit
“Institute” to be established for the purpose of continuing the Forum
programs conducted by Gary Lutin.
Members of the Advisory Panel:
Amalgamated Bank/Longview Funds: Julie Gozan, Cornish F. Hitchcock
Association of BellTel Retirees: C. William Jones
Blue Harbour Group: David Silverman
Delaware Investments/Lincoln National: Kenneth Broad
Federal Reserve Bank of Richmond: Thomas J. Mackell, Jr.
Forbes: Vahan Janjigian
Hermes Equity Ownership Services: Bess Joffe, Paul Munn
Palmer Brennan; also NYSSA: Peter F. Brennan
Pfizer: Margaret M. Foran
Putnam Mutual Funds: John A. Hill
Reda & Associates: James F. Reda
Reinhart Boerner Van Deuren; also International Roundtable on Executive
Remuneration: Keith L. Johnson
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