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Forum Summary: Options Policies 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 w 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 w 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.
October 27, 2006
Forum chairman: Gary Lutin Lutin & Company, 575 Madison Avenue, New York, New York 10022 Telephone: 212-605-0335 Email: gl@shareholderforum.com
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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