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AN » Topics » Progress Begins with One Step

This excerpt taken from the AN DEF 14A filed Apr 28, 2006.
“Progress Begins with One Step
 
It is important to take one step forward in our corporate governance and adopt the above RESOLVED statement since our 2005 governance standards were not impeccable. For instance in 2005 it was reported (and certain concerns are noted):
 
  •  The Corporate Library http://www.thecorporatelibrary.com/ a pro-investor research firm rated our company “D” in Accounting.
 
  •  And our key Audit Committee was made up of only active CEOs.
 
  •  Concern that active CEOs run the risk of serving as sympathetic support for the CEO they are supposed to oversee, rather than providing independent oversight.
 
  •  There are too many active CEOs on our board with 4 — Independence concern and over-commitment concern.
 
  •  Furthermore our Compensation Committee was made up of only active CEOs plus one problem director.
 
  •  Mr. Dawes was designated a problem director by The Corporate Library due to his involvement in a lawsuit filed against Delphi Corporation by two state pension funds alleging Delphi’s senior executives encouraged inventor deals with a bank that artificially boosted profits from 1999 to 2002. Mr. Dawes was the Chief Financial Officer at that time.
 
  •  Mr. Maroone, new to our board in 2005, was an insider.
 
  •  Hence our 9-member board was made up of 2 insiders and 3 directors with non-director links to our company — thus only 44% independent.
 
  •  We had no Independent Chairman and not even a Lead Director- Independent oversight concern.
 
  •  Annual CEO pay was $5 million plus he had $16 million in exercisable options.
 
  •  Our directors can be re-elected with one yes-vote from our 260 million shares under plurality voting.


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Table of Contents

 
  •  Mr. Burdick held zero (0) stock in spite of 14-years on our board to accumulate stock — confidence concern.
 
“These less-than-best practices reinforce the reason to take one step forward and adopt cumulative voting.
 
“Cumulative voting could help improve our corporate governance and increase the possibility of electing at least one director with a specialized expertise and focus needed to turnaround the above practices.
 
“Cumulative voting allows a significant group of shareholders to elect a director or directors of its choice — safeguarding minority shareholder interests and bringing independent perspectives to Board decisions. This is especially important at our company with 29% of stock held by a dominate shareholder.
 
Cumulative Voting
Yes on 3”
 
 

"Progress Begins with One Step" elsewhere:

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