UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-PX
ANNUAL REPORT OF PROXY VOTING RECORD OF REGISTERED MANAGEMENT
INVESTMENT COMPANY
Investment Company Act file number 811-09759
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Principal Partners MidCap Growth Fund, Inc.
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(Exact name of registrant as specified in charter)
711 High Street, Des Moines, Iowa 50392-2080
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(Address of principal executive offices) (Zip code)
MICHAEL D. ROUGHTON Copy to:
The Principal Financial Group John W. Blouch, Esq.
Des Moines, Iowa 50392-0300 Dykema Gossett PLLC
Franklin Square, Suite 300 West
1300 I Street, N.W.
Washington, DC 20005-3306
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(Name and address of agent for service)
Registrant's telephone number, including area code: 515-248-3842
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Date of fiscal year end: 10/31/2004
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Date of reporting period: 07/01/2004 - 06/30/2005
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FUND: Principal Partners MidCap Growth Fund, Inc.
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Mgmt Rec - Company Management Recommended Vote
Vote Summary Report
Jul 01, 2004 - Jun 30, 2005
Principal Mutual Fund
Principal Partners MidCap Growth Fund, Inc.
Mtg Company/ Mgmt Vote Record Shares
Date/Type Ballot Issues Security Rec Cast Date Prpnent Voted
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09/21/04 - A Activision, Inc. *ATVI* 004930202 07/30/04 12,890
1 Elect Directors For Split Mgmt
1.1 Elect Director Robert A. Kotick --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of affiliated outsiders
Barbara S. Isgur and Kenneth L. Henderson and
insiders Robert A. Kotick, Brian G. Kelly and
Ronald Doornink, from whom we will WITHHOLD votes
for lack of a two-thirds majority independent
board. We will also WITHHOLD votes from Barbara
S. Isgur for serving as an affiliated outsider on
the Audit and Compensation committees, and from
Kenneth L. Henderson for serving as an affiliated
outsider on the Nominating Committee. In
addition, we will WITHHOLD votes from Robert A.
Kotick for serving as both chairman and CEO.
1.2 Elect Director Brian G. Kelly --- Withhold
1.3 Elect Director Ronald Doornink --- Withhold
1.4 Elect Director Robert J. Corti --- For
1.5 Elect Director Kenneth L. Henderson ---
Withhold
1.6 Elect Director Barbara S. Isgur --- Withhold
1.7 Elect Director Robert J. Morgado --- For
1.8 Elect Director Peter J. Nolan --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this item. The
non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
05/26/05 - A Advanced Medical Optics, Inc. *EYE* 00763M108 04/14/05 5,560
1 Elect Directors For For Mgmt
1.1 Elect Director James V. Mazzo --- For
The director nominees meet our guidelines.
1.2 Elect Director James O. Rollans --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest.
05/26/05 - S Advanced Medical Optics, Inc. *EYE* 00763M108 04/20/05 5,560
1 Issue Shares in Connection with an For For Mgmt
Acquisition
Based on our review of the terms of the
transaction and the factors described above, in
particular the sensible strategic rationale, we
believe that the merger agreement warrants
shareholder support.
2 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
3 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
20.92% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Advanced Medical Optics
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
4 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS approves of these items because the plans comply with
Section 423 of the Internal Revenue Code, the number of
shares being added is relatively conservative, the
offering periods are reasonable, and there are limitations
on participation.
5 Amend Qualified Employee Stock Purchase Plan For For Mgmt
06/01/05 - A Affiliated Managers Group, Inc. *AMG* 008252108 04/15/05 4,965
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard Floor --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Sean M. Healey, William J. Nutt and
affiliated outsider Richard E. Floor, from whom
we will WITHHOLD votes for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from William J. Nutt for standing as a
non-independent board chairman.
1.2 Elect Director Sean M. Healey --- Withhold
1.3 Elect Director Harold J. Meyerman --- For
1.4 Elect Director William J. Nutt --- Withhold
1.5 Elect Director Robert C. Puff, Jr. --- For
1.6 Elect Director Rita M. Rodriguez --- For
2 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit exceeds
our guidelines for executive incentive programs. As such,
this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
02/15/05 - S Alamosa Holdings, Inc. *APCS* 011589108 01/12/05 14,920
1 Issue Shares in Connection with an For For Mgmt
Acquisition
PVS Comment and Vote Recommendation Based on our
review of the terms of the transaction and the
factors described above, we believe that the
share issuance warrants shareholder support. As
such, PVS will support this item.
06/02/05 - A Alamosa Holdings, Inc. *APCS* 011589108 04/08/05 23,040
1 Elect Directors For Split Mgmt
1.1 Elect Director Kendall W. Cowan --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insider Kendall W. Cowan
and affiliated outsider Thomas F. Riley from whom
we will WITHHOLD votes for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from Thomas F. Riley for standing as an
affiliated outsider on the Audit and Nominating
committees.
1.2 Elect Director Schuyler B. Marshall --- For
1.3 Elect Director Thomas F. Riley --- Withhold
1.4 Elect Director Jane E. Shivers --- For
2 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
3 Amend Omnibus Stock Plan For For Mgmt
PVS supports amendments which provide that future awards
be contingent upon the attainment of specified performance
goals. Approval of this amendment would also allow the
company tax deductibility under Section 162(m).
4 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/22/05 - A Allegheny Technologies, Inc. *ATI* 01741R102 03/03/05 10,960
1 Elect Directors For For Mgmt
1.1 Elect Director Robert P. Bozzone --- For
The director nominees meet our guidelines.
1.2 Elect Director James C. Diggs --- For
1.3 Elect Director Michael J. Joyce --- For
1.4 Elect Director W. Craig McClelland --- For
1.5 Elect Director Louis J. Thomas --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
3 Re-Approve Performance-Based Goals under For For Mgmt
Incentive Plan
Approval of this item will continue the tax
deductibility benefits for performance-based
compensation under Section 162(m). As such, we
support this item.
06/07/05 - A Alliance Data Systems Corp. *ADS* 018581108 04/14/05 8,660
1 Elect Directors For Split Mgmt
1.1 Elect Director Bruce K. Anderson --- For
We will vote FOR the director nominees with the
exception of Audit Committee member Roger H.
Ballou, from whom we will WITHHOLD votes for
neglecting to include auditor ratification on the
proxy ballot.
1.2 Elect Director Roger H. Ballou --- Withhold
1.3 Elect Director E. Linn Draper, Jr --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for this incentive plan is
14.63%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Alliance Data Systems
Corp. should follow suit, to better reflect the company's
true earnings and provide additional discipline against
overuse.
3 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
4 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS approves of this item because the amendments are to
comply with Section 423 of the Internal Revenue Code.
05/10/05 - A Altera Corp. *ALTR* 021441100 03/14/05 26,710
1 Elect Directors For Split Mgmt
1.1 Elect Director John P. Daane --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insider John P. Daane and
affiliated outsiders William E. Terry, Paul
Newhagen and Robert W. Reed from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from John P. Daane for serving as both chairman
and CEO, and from William E. Terry and Robert W.
Reed for standing as non-independents on key
board committees.
1.2 Elect Director Robert W. Reed --- Withhold
1.3 Elect Director Charles M. Clough --- For
1.4 Elect Director Robert J. Finocchio, Jr ---
For
1.5 Elect Director Kevin McGarity --- For
1.6 Elect Director Paul Newhagen --- Withhold
1.7 Elect Director William E. Terry --- Withhold
1.8 Elect Director Susan Wang --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
17.25% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Altera should follow
suit, to better reflect the company's true earnings and
provide additional discipline against overuse.
3 Amend Stock Option Plan For Against Mgmt
PVS notes that Proposal 3 is an alternative to Proposal 2.
In the event that stockholders do not approve Proposal 2,
they have been requested to approve the amendment to the
1996 Stock Option Plan. We do not support this
proposal. The company's potential Voting Power Dilution
(VPD) for all incentive plans is 17.25% which exceeds our
guidelines. Proposals that add to a company's VPD can
potentially dilute the voting interests of common
shareholders. Additionally, the company does not fully
expense its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives perverse
incentives to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan. Numerous
companies have chosen to acknowledge the distortion to
reported earnings caused by the non-expensing of options
and have elected to expense options going forward. We
believe Altera should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
4 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
5 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
6 Expense Stock Options Against For ShrHoldr
PVS supports the general principle motivating this
non-binding proposal. In the wake of financial reporting
problems and excessive executive compensation at companies
like Enron Corp., Worldcom Inc., and Tyco International
Ltd., we agree with the growing investor consensus that
companies should expense the costs associated with stock
options in order to increase the accuracy of their
financial statements. Since the expensing of options
lowers earnings, most companies have elected not to do so.
Instead, most companies have opted to disclose option
values only in the footnotes to their annual reports.
According to an Apr. 14, 2005 letter from
the SEC, mandatory option expensing will be
delayed by six months from its initial
implementation date of June 15 2005. Until then,
the absence of an accepted methodology with which
to value the contingent cost of stock options
will allow companies like Altera to keep the cost
of stock options off the income statement.
However, given the fact that stock options have
become an integral component of compensation,
their value cannot be ignored and treated as
"no-cost" compensation. Given that (1) many
companies use stock options as a significant
component of overall compensation, (2) the
exercise of options result in a transfer of
shareholder value, and (3) the contingent cost of
options reduces earnings, we believe that options
should be expensed along with all other forms of
compensation to better reflect the company's true
earnings and provide additional discipline
against overuse.
7 Require a Majority Vote for the Election of Against For ShrHoldr
Directors
PVS views the debate over the current director
election system as useful and timely. A variety
of reform measures should be considered. We
believe it is important to have a discussion over
the merits and flaws of the current director
election system in the U.S. The arguments against
a majority vote requirement raise serious issues.
Therefore, we support the majority vote principle
but we believe that boards should have wide
latitude in designing a workable standard. If
this proposal were presented as a binding agenda
item, we would carefully consider the
ramifications of implementation. If a company
were to receive majority shareholder support on
this proposal, we would look to the company to
create a workable model for its own election
system. In supporting this precatory proposal, we
advocate that the director election system give
full effect to the shareholder franchise. Perhaps
with support for this proposal, coupled with
continued debate on election reforms, the
director election system can evolve to the next
level.
01/20/05 - A Amdocs Limited *DOX* G02602103 11/24/04 6,230
Meeting for Holders of ADRs
1 Elect Directors For For Mgmt
1.1 Elect Director Bruce K. Anderson --- For
These are routine board elections.
1.2 Elect Director Adrian Gardner --- For
1.3 Elect Director Dov Baharav --- For
1.4 Elect Director Julian A. Brodsky --- For
1.5 Elect Director Charles E. Foster --- For
1.6 Elect Director Eli Gelman --- For
1.7 Elect Director James S. Kahan --- For
1.8 Elect Director Nehemia Lemelbaum --- For
1.9 Elect Director John T. Mclennan --- For
1.10 Elect Director Robert A. Minicucci --- For
1.11 Elect Director Simon Olswang --- For
1.12 Elect Director Mario Segal --- For
2 APPROVAL OF CONSOLIDATED FINANCIAL For For Mgmt
STATEMENTS FOR FISCAL YEAR 2004.
We will support this routine item.
3 RATIFICATION AND APPROVAL OF ERNST & YOUNG For For Mgmt
LLP AND AUTHORIZATION OF AUDIT COMMITTEE OF
BOARD TO FIX REMUNERATION.
06/09/05 - A American Power Conversion Corp. 029066107 04/13/05 5,320
*APCC*
1 Fix Number of Directors For For Mgmt
PVS believes that the proposed change is minor
and that it is not motivated by a desire to
entrench management.
2 Elect Directors For Split Mgmt
2.1 Elect Director Rodger B. Dowdell, Jr. ---
Withhold
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insiders Neil E. Rasmussen, Rodger B.
Dowdell, Jr. and affiliated outsiders James D. Gerson and
Ervin F. Lyon, from whom we will WITHHOLD votes for lack
of a two-thirds majority independent board. We will also
WITHHOLD votes from James D. Gerson and Ervin F. Lyon for
standing as affiliated outsiders on key board committees,
and from Rodger B. Dowdell, Jr. for serving as both
chairman and CEO.
2.2 Elect Director Neil E. Rasmussen ---
Withhold
2.3 Elect Director Ervin F. Lyon --- Withhold
2.4 Elect Director James D. Gerson --- Withhold
2.5 Elect Director John G. Kassakian --- For
2.6 Elect Director John F. Keane, Sr. --- For
2.7 Elect Director Ellen B. Richstone --- For
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/11/05 - A AmeriGroup Corp. *AGP* 03073T102 03/28/05 1,320
1 Elect Directors For For Mgmt
1.1 Elect Director Richard D. Shirk --- For
The director nominees meet our guidelines.
1.2 Elect Director Jeffrey B. Child --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
3 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
16.12%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe AmeriGroup Corp. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
02/16/05 - A Ameritrade Holdings Corp. *AMTD* 03074K100 12/20/04 13,840
1 Elect Directors For Split Mgmt
1.1 Elect Director J. Joe Ricketts --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominee Dan
W. Cook III, and WITHHOLD votes from insider J.
Joe Ricketts for lack of a two-thirds majority
independent board, and for serving as a
non-independent board chairman.
1.2 Elect Director Dan W. Cook III --- For
2 Ratify Auditors For Against Mgmt
We do not support this item. In this instance, the
non-auditing consulting fees are more than 25 percent of
total fees paid. As such, we will vote against the
company's auditor. We believe the integrity of the
auditor's relationship with the company is compromised
when a firm is paid excessive consulting fees on top of
those paid for auditing services. This arrangement has the
potential to open the auditor process to a wide range of
conflicts of interest.
3 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not support this request.
04/26/05 - A AMETEK, Inc. *AME* 031100100 03/11/05 4,890
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Sheldon S. Gordon ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
WITHHOLD votes from insider Frank S. Hermance and
affiliated outsiders Sheldon S. Gordon and David
P. Steinmann for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Sheldon S. Gordon for standing as an
affiliated outsider on key board committees, and
from Frank S. Hermance for serving as both
chairman and CEO.
1.2 Elect Director Frank S. Hermance ---
Withhold
1.3 Elect Director David P. Steinmann ---
Withhold
2 Amend Omnibus Stock Plan For Against Mgmt
Although the potential Voting Power Dilution (VPD) for all
incentive plans of 9.10% meets our guidelines, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe AMETEK, Inc. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
04/21/05 - A Apple Computer, Inc. *AAPL* 037833100 03/01/05 10,390
1 Elect Directors For For Mgmt
1.1 Elect Director Fred D. Anderson --- For
The director nominees meet our guidelines.
1.2 Elect Director William V. Campbell --- For
1.3 Elect Director Millard S. Drexler --- For
1.4 Elect Director Albert A. Gore, Jr. --- For
1.5 Elect Director Steven P. Jobs --- For
1.6 Elect Director Arthur D. Levinson --- For
1.7 Elect Director Jerome B. York --- For
2 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit exceeds
our guidelines for executive incentive programs. As such,
this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
16.58%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Apple Computer, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against
overuse. We however, commend the company for
expressly forbidding the repricing of stock options under
the plan and for committing to an average burn rate of 2.5
percent of shares outstanding from fiscal 2005 to fiscal
2007 (see Additional Notes under Plan Features).
4 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
5 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
6 Performance- Based/Indexed Options Against For ShrHoldr
Conclusion: PVS supports the use of indexed,
premium-priced, and performance-vested options, which
encourage executives to outperform rivals and the market
as a whole rather than being rewarded for any rise in the
share price, which can occur if empirical performance
measures are not incorporated into the structure of the
options. We recognize that the company awards time-based
restricted stock. However, while the Compensation
Committee does take into account the company's overall
performance as well as individual performance when setting
compensation, it does not appear that the stock options
and restricted stock awards are tied to specific
performance measures. These awards are subject to
time-based vesting, rather than performance-vesting. PVS
favors the use of equity grants whose grant or vesting are
directly tied to the attainment of disclosed performance
criteria and the associated hurdle rates. Given the
principle of pay for performance (and the potential for
excessive pay untied to results inherent in fixed-price
stock options), we believe this is a worthy proposal which
sends management a clear message on the responsible and
proper use of equity compensation in conjunction with
performance.
01/27/05 - A Ashland Inc. *ASH* 044204105 11/22/04 3,680
1 Elect Directors For Split Mgmt
1.1 Elect Director Bernadine P. Healy, M.D. ---
For
We will vote FOR the director nominees with the
exception of insider James J. O'Brien, from whom
we will WITHHOLD votes for serving as chairman
and CEO.
1.2 Elect Director Kathleen Ligocki --- For
1.3 Elect Director James J. O'Brien --- Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/26/05 - A Bausch & Lomb Inc. *BOL* 071707103 03/01/05 4,740
1 Elect Directors For Split Mgmt
1.1 Elect Director Paul A. Friedman --- For
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of affiliated outsider William
H. Waltrip, from whom we will WITHHOLD votes for
lack of a two-thirds majority independent board
and for standing as an affiliated outsider on the
Compensation and Nominating committees.
1.2 Elect Director Jonathan S. Linen --- For
1.3 Elect Director William H. Waltrip ---
Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
3A Declassify the Board of Directors For For Mgmt
PVS commends management for submitting this
proposal, which demonstrates a commitment to
shareholders' interests.
3B Reduce Supermajority Vote Requirement For For
Mgmt Requiring approval by more than a simple
majority of voting shares may entrench management
by preventing actions that may benefit
shareholders.
3C Authorize Board to Fill Vacancies For For Mgmt
This is a housekeeping item that removes a
provision from the charter which is not required
to be in the charter, while keeping a similar
provision in the bylaws.
3D Remove Supermajority Vote Requirement for For For Mgmt
Removal of Directors
Requiring approval by more than a simple majority
of voting shares may entrench management by
preventing actions that may benefit shareholders.
3E Remove Supermajority Vote Requirement for For For Mgmt
Amendments
Requiring approval by more than a simple majority
of voting shares may entrench management by
preventing actions that may benefit shareholders.
06/30/05 - A Bed Bath & Beyond Inc. *BBBY* 075896100 05/05/05 12,010
1 Elect Directors For Split Mgmt
1.1 Elect Director Leonard Feinstein ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider Leonard Feinstein and affiliated
outsider Robert Kaplan, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Robert Kaplan for serving as a
non-independent board chairman.
1.2 Elect Director Robert Kaplan --- Withhold
1.3 Elect Director Dean S. Adler --- For
1.4 Elect Director Jordan Heller --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
3 Adopt ILO-based Code of Conduct Against For ShrHoldr
We will support this proposal based on the lack of
disclosure on company policies related to workplace human
rights standards.
4 Review/Limit Executive Compensation Against For ShrHoldr
Given that the company does not maintain the specific
mechanisms required by PVS to promote long-term value for
shareholders, we believe that support for this non-binding
proposal sends a strong message to the board to require
executives to have a long-term stake in the company.
Therefore, executives are committed to promote the
long-term value for shareholders.
5 Declassify the Board of Directors Against For ShrHoldr
The ability to elect directors is the single most
important use of the shareholder franchise, and all
directors should be accountable on an annual basis. A
classified board can entrench management and effectively
preclude most takeover bids or proxy contests. Board
classification forces dissidents and would-be acquirers to
negotiate with the incumbent board, which has the
authority to decide on offers without a shareholder vote.
05/11/05 - A Benchmark Electronics, Inc. *BHE* 08160H101 03/31/05 8,120
1 Elect Directors For Split Mgmt
1.1 Elect Director Donald E. Nigbor --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Steven A. Barton, Cary T. Fu, Donald
E. Nigbor and affiliated outsiders Peter G.
Dorflinger and John C. Custer, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Peter G. Dorflinger and John C. Custer for
standing as affiliated outsiders on key board
committees, and from Donald E. Nigbor for serving
as a non-independent board chairman.
1.2 Elect Director Cary T. Fu --- Withhold
1.3 Elect Director Steven A. Barton --- Withhold
1.4 Elect Director John W. Cox --- For
1.5 Elect Director John C. Custer --- Withhold
1.6 Elect Director Peter G. Dorflinger ---
Withhold
1.7 Elect Director Laura W. Lang --- For
1.8 Elect Director Bernee D.L. Strom --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
09/18/04 - A Biomet, Inc. *BMET* 090613100 07/21/04 6,210
1 Elect Directors For Withhold Mgmt
1.1 Elect Director M. Ray Harroff --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of L. Gene Tanner, Charles E.
Niemier, Jerry L. Miller and M. Ray Harroff, from
whom we will WITHHOLD votes for lack of a
two-thirds majority independent board. We will
also WITHHOLD votes from Jerry L. Miller, L. Gene
Tanner and M. Ray Harroff for serving as
affiliated outsiders on key board committees.
1.2 Elect Director Jerry L. Miller --- Withhold
1.3 Elect Director Charles E. Niemier ---
Withhold
1.4 Elect Director L. Gene Tanner --- Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/20/05 - A C. R. Bard, Inc. *BCR* 067383109 02/28/05 7,920
1 Elect Directors For Split Mgmt
1.1 Elect Director T. Kevin Dunnigan ---
Withhold
We will vote FOR the director nominees with the
exception of affiliated outsider T. Kevin
Dunnigan from whom we will WITHHOLD votes for
serving as a non-independent on the Audit
Committee.
1.2 Elect Director Gail K. Naughton, Ph.D. ---
For
1.3 Elect Director John H. Weiland --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Adopt ILO based Code of Conduct Against For ShrHoldr
In this case, C. R. Bard, Inc. does not appear to have an
established, formal code of conduct that specifically
references certain issues related to workplace human
rights. We also note that many multinational companies
have established such codes or standards and have posted
them on their websites. PVS believes that formal workplace
labor rights policies can help companies avoid
high-profile public issues, thus managing reputation risk
and mitigating the potential for exposure to costly fines
or litigation. Although the company has not been involved
in any recent, significant human rights controversies, PVS
believes that the adoption of a code of conduct that
substantially addresses workplace human rights will not be
prohibitively costly or unduly burdensome for the company.
In our opinion, full endorsement of the ILO principles
should help to minimize controversies which may lead to
financial liability while at the same time strengthening
the company's public commitment to uphold the highest
labor standards for its global operations. As such, we
believe this shareholder proposal warrants support.
05/11/05 - A CDW Corp. *CDWC* 12512N105 03/18/05 6,860
1 Elect Directors For Split Mgmt
1.1 Elect Director Michelle L. Collins --- For
We will vote FOR the director nominees with the
exception of John A. Edwardson, from whom we will
WITHHOLD votes for serving as both chairman and
CEO.
1.2 Elect Director Casey G. Cowell --- For
1.3 Elect Director John A. Edwardson ---
Withhold
1.4 Elect Director Daniel S. Goldin --- For
1.5 Elect Director Donald P. Jacobs --- For
1.6 Elect Director Stephan A. James --- For
1.7 Elect Director Michael P. Krasny --- For
1.8 Elect Director Terry L. Lengfelder --- For
1.9 Elect Director Susan D. Wellington --- For
1.10 Elect Director Brian E. Williams --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
3 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
06/15/05 - A Celgene Corp. *CELG* 151020104 04/28/05 4,340
1 Elect Directors For Split Mgmt
1.1 Elect Director John W. Jackson --- Withhold
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insider John W. Jackson, Sol J. Barer, Ph.D.,
Robert J. Hugin, and affiliated outsiders Frank T. Cary,
Richard C.E. Morgan, and Walter L. Robb, Ph.D., from whom
we will WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes from Frank
T. Cary, Richard C.E. Morgan, and Walter L. Robb, Ph.D.
for standing as an affiliated outsider on key board
committees, and from John W. Jackson for serving as both
chairman and CEO.
1.2 Elect Director Sol J. Barer, Ph.D. ---
Withhold
1.3 Elect Director Robert J. Hugin --- Withhold
1.4 Elect Director Jack L. Bowman --- For
1.5 Elect Director Frank T. Cary --- Withhold
1.6 Elect Director Michael D. Casey --- For
1.7 Elect Director Arthur Hull Hayes, Jr., M.D.
--- For
1.8 Elect Director Gilla Kaplan, Ph.D. --- For
1.9 Elect Director Richard C.E. Morgan ---
Withhold
1.10 Elect Director Walter L. Robb, Ph.D. ---
Withhold
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for this incentive plan is
14.41%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Celgene Corp. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
3 Amend Non-Employee Director Stock Option For Against Mgmt
Plan
We do not support this plan. The company's
potential Voting Power Dilution (VPD) for this
incentive plan is 12.68%, which exceeds our
guidelines. Proposals that add to a company's VPD
can potentially dilute the voting interests of
common shareholders. In addition, the company
does not fully expense its stock options. Given
their current accounting treatment of not being
charged as an expense against earnings, stock
options have been the ultimate tax dodge for
companies wishing to lavishly compensate
employees. Misused stock options can give
executives perverse incentives to inflate their
company's earnings or make irresponsibly
optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan.
Numerous companies have chosen to acknowledge the
distortion to reported earnings caused by the
non-expensing of options and have elected to
expense options going forward. We believe Celgene
Corp. should follow suit, to better reflect the
company's true earnings and provide additional
discipline against overuse.
4 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/26/05 - A Centene Corp. *CNC* 15135B101 03/04/05 5,370
1 Elect Directors For Split Mgmt
1.1 Elect Director Michael F. Neidorff ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR director nominee John R. Roberts and
WITHHOLD votes from insider Michael F. Neidorff
for lack of a two-thirds majority independent
board and for serving as both chairman and CEO.
1.2 Elect Director John R. Roberts --- For
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, the company's
three-year average burn rate of 6.39% is higher than its
four-digit GICS peer group burn rate of 5.2%, and
therefore fails to meet our guidelines. Secondly, the plan
allows for the repricing of underwater stock options
without shareholder approval. We believe repricing reduces
the incentive value of the plan by undermining the concept
that stock options are intended to be a long-term
incentive. Thirdly, the company's potential Voting Power
Dilution (VPD) for all incentive plans is 20.26%, which
exceeds our guidelines. Proposals that add to a company's
VPD can potentially dilute the voting interests of common
shareholders. Finally, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives perverse
incentives to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan. Numerous
companies have chosen to acknowledge the distortion to
reported earnings caused by the non-expensing of options
and have elected to expense options going forward. We
believe Centene Corp. should follow suit, to better
reflect the company's true earnings and provide additional
discipline against overuse.
10/20/04 - S Charles River Laboratories 159864107 09/13/04 6,020
International, Inc. *CRL*
1 Approve Merger Agreement For For Mgmt
Conclusion: The success of the proposed transaction is
highly dependent upon successful integration. We note that
Charles River has a successful acquisition track record,
which lessens the risk of unsuccessful integration.
Although the offer is on the high-end based on four of the
aforementioned six analyses performed by CSFB, the
proposed deal has the potential to create an industry
leader in the drug development industry. Given the
potential benefits to shareholders and management's M&A
track record, we believe the proposed transaction warrants
shareholder support.
2 Adjourn Meeting For Against Mgmt
Once their votes have been cast, there is no
justification for spending more money to continue
pressing shareholders for more votes. We do not
support this request.
10/27/04 - A CheckFree Corp. *CKFR* 162813109 09/13/04 10,070
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Peter J. Kight --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will WITHHOLD votes from Jeffrey M.
Wilkins and Peter J. Kight for lack of a
two-thirds majority independent board. We will
also WITHHOLD votes from Audit Committee member
Jeffrey M. Wilkins for neglecting to include
auditor ratification on the ballot, and for
serving as an affiliated outsider on the Audit
and Nominating committees. In addition, we will
WITHHOLD votes from Peter J. Kight for serving as
both chairman and CEO, and from Lewis C. Levin
for poor attendance.
1.2 Elect Director Lewis C. Levin --- Withhold
1.3 Elect Director Jeffrey M. Wilkins ---
Withhold
06/21/05 - A Chico *CHS* 168615102 04/25/05 18,520
1 Elect Directors For Split Mgmt
1.1 Elect Director Marvin J. Gralnick ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider Marvin J. Gralnick and affiliated
outsider John W. Burden, III, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from John W. Burden, III for standing as an
affiliated outsider on key board committees, and
from Marvin J. Gralnick for serving as a
non-independent board chairman.
1.2 Elect Director John W. Burden, III ---
Withhold
1.3 Elect Director Stewart P. Mitchell --- For
1.4 Elect Director David F. Walker --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/05/05 - A Citrix Systems, Inc. *CTXS* 177376100 03/15/05 12,520
1 Elect Directors For Split Mgmt
1.1 Elect Director Murray J. Demo --- For
We will vote FOR director nominee Murray J. Demo,
and WITHHOLD votes from John W. White for failure
to take sufficient action to address the
expensing of options proposal, in accordance with
the desires of shareholders.
1.2 Elect Director John W. White --- Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
21.78%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Citrix Systems, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
3 Approve Qualified Employee Stock Purchase For Against Mgmt
Plan
Despite the reasonable offering period, PVS does
not support this proposal because the large
number of shares that would be reserved would
cause excessive voting power dilution.
4 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/04/05 - A City National Corp. *CYN* 178566105 03/15/05 2,830
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard L. Bloch --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR director nominee Robert H. Tuttle and
WITHHOLD votes from insider Bram Goldsmith and
affiliated outsiders Richard L. Bloch and Kenneth
Ziffren for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Richard L. Bloch and Kenneth Ziffren for
standing as affiliated outsiders on key board
committees, and from Bram Goldsmith for serving
as a non-independent board chairman.
1.2 Elect Director Bram Goldsmith --- Withhold
1.3 Elect Director Robert H. Tuttle --- For
1.4 Elect Director Kenneth Ziffren --- Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
05/16/05 - A CNET Networks, Inc. *CNET* 12613R104 03/18/05 25,300
1 Elect Director Betsey Nelson For For Mgmt
The director nominee Betsey Nelson meets our
guidelines.
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
11/03/04 - A Coach, Inc. *COH* 189754104 09/15/04 9,750
1 Elect Directors For Split Mgmt
1.1 Elect Director Joseph Ellis --- For
We will vote FOR the director nominees with the
exception of Audit Committee members Gary
Loveman, Irene Miller, Michael Murphy and Sally
Frame Kasaks, from whom we will WITHHOLD votes
for neglecting to include auditor ratification on
the proxy ballot. In addition, we will WITHHOLD
votes from Lew Frankfort for serving as both
chairman and CEO.
1.2 Elect Director Lew Frankfort --- Withhold
1.3 Elect Director Sally Frame Kasaks ---
Withhold
1.4 Elect Director Gary Loveman --- Withhold
1.5 Elect Director Irene Miller --- Withhold
1.6 Elect Director Keith Monda --- For
1.7 Elect Director Michael Murphy --- Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.96% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Coach, Inc. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
06/03/05 - A COGENT INC *COGT* 19239Y108 04/19/05 10,260
1 Elect Directors For Split Mgmt
1.1 Elect Director Ming Hsieh --- Withhold
We will vote FOR the directors with the
exceptions of insider Ming Hsieh and independent
outsider John P. Stenbit. We will WITHHOLD votes
from Ming Hsieh for serving as chairman and CEO
and from John P. Stenbit for poor attendance.
1.2 Elect Director John C. Bolger --- For
1.3 Elect Director John P. Stenbit --- Withhold
1.4 Elect Director Kenneth R. Thornton --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
06/14/05 - A Cognizant Technology Solutions Corp. 192446102 04/18/05 9,490
*CTSH*
1 Elect Directors For For Mgmt
1.1 Elect Director Robert W. Howe --- For
The director nominees meet our guidelines.
1.2 Elect Director Robert E. Weissman --- For
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for this incentive plan is
14.25%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Cognizant Technology
Solutions Corp. should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
06/23/05 - A/S Cognos Inc. *CSN.* 19244C109 04/26/05 3,430
1 Elect Directors For For Mgmt
1.1 Elect Director Robert G. Ashe --- For
The director nominees meet our guidelines.
1.2 Elect Director John E. Caldwell --- For
1.3 Elect Director Paul D. Damp --- For
1.4 Elect Director Pierre Y. Ducros --- For
1.5 Elect Director Robert W. Korthals --- For
1.6 Elect Director John J. Rando --- For
1.7 Elect Director Bill V. Russell --- For
1.8 Elect Director James M. Tory --- For
1.9 Elect Director Renato Zambonini --- For
2 Approve Ernst & Young LLP as Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Amend 2003 Stock Option Plan For Against Mgmt
We do not support this plan. This plan has an NSO share
exercise price that is less than full market value. We
oppose plans that reflect an exercise price less than full
fair market value as it offers poor incentive for
management and employees to build shareholder value. The
company's potential Voting Power Dilution (VPD) for all
incentive plans is 12.27% which exceeds our guidelines.
Proposals that add to a company's VPD can potentially
dilute the voting interests of common shareholders.
4 Amend Restricted Share Unit Plan For For Mgmt
The circular also notes that the company is considering
adding performance vesting provisions to the existing time
vesting provisions already included in the RSUP. We note
that while nonemployee directors are eligible participants
under this plan, they do not appear to have received any
RSU grants since the RSUP was adopted in 2002. Rather new
directors receive a one-time grant of 5,000 deferred share
units upon their initial election or appointment to the
the board. The annual retainer for nonemployee directors
consists of $50,000 to be paid as deferred share units and
$25,000 cash, which can also be paid out as cash. PVS does
not oppose the RSUP as the provisions are reasonable, and
the size of the plan is relatively conservative; three
million shares represents 3.3 percent of outstanding
shares and the shares are not issued from treasury but
purchased on the open market.
5 Amend Employee Stock Purchase Plan For For Mgmt
We note that this plan has broad participation including
executive officers. The company also has a stock option
plan for all employees and a Restricted Share Unit Plan
for employees, officers and directors. Given the number of
shares remaining available for purchase, dilution under
this plan is limited to 2.1 percent of outstanding shares
on a non-diluted basis, which is within our guidelines for
such plans. This plan is administered by non-executive
directors, who are not eligible to participate in this
plan. The effective purchase price discount is ten percent
and employee contributions are limited to five percent of
their annual target salary. PVS does not oppose the ESPP
as the number of shares reserved is relatively
conservative, the offering period is reasonable, and there
are limitations on participation.
05/25/05 - A Community Health Systems, Inc. *CYH* 203668108 03/31/05 8,070
1 Elect Directors For For Mgmt
1.1 Elect Director Dale F. Frey --- For
The director nominees meet our guidelines.
1.2 Elect Director John A. Fry --- For
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.17%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Community Health
Systems, Inc. should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
4 Expense Stock Options Against For ShrHoldr
We support this proposal.
06/16/05 - A Comverse Technology, Inc. *CMVT* 205862402 04/25/05 18,360
1 Elect Directors For Split Mgmt
1.1 Elect Director Kobi Alexander --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Kobi Alexander, Itsik Danziger,
William F. Sorin, and affiliated outsiders John
H. Friedman and Sam Oolie, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from John H. Friedman and Sam Oolie for standing
as affiliated outsiders on key board committees,
and from Kobi Alexander for serving as both
chairman and CEO.
1.2 Elect Director Raz Alon --- For
1.3 Elect Director Itsik Danziger --- Withhold
1.4 Elect Director John H. Friedman --- Withhold
1.5 Elect Director Ron Hiram --- For
1.6 Elect Director Sam Oolie --- Withhold
1.7 Elect Director William F. Sorin --- Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for this incentive plan is
12.43%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Comverse Technology,
Inc. should follow suit, to better reflect the company's
true earnings and provide additional discipline against
overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
07/01/04 - A Cost Plus, Inc. *CPWM* 221485105 05/07/04 10
1 Elect Directors For Split Mgmt
1.1 Elect Director Murray H. Dashe --- Withhold
We will vote FOR the director nominees with the
exception of Thomas D. Willardson, from whom we
will WITHHOLD votes for serving as an affiliated
outsider on key board committees, and from Murray
H. Dashe for serving as both chairman and CEO.
1.2 Elect Director Joseph H. Coulombe --- For
1.3 Elect Director Barry J. Feld --- For
1.4 Elect Director Danny W. Gurr --- For
1.5 Elect Director Kim D. Robbins --- For
1.6 Elect Director Fredric M. Roberts --- For
1.7 Elect Director Thomas D. Willardson ---
Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, this plan has an NSO
share exercise price that is less than full market value.
We oppose plans that reflect an exercise price less than
full fair market value as it offers poor incentive for
management and employees to build shareholder value.
Secondly, the company's potential Voting Power Dilution
(VPD) for this incentive plan is 13.11%, which exceeds our
guidelines. Proposals that add to a company's VPD can
potentially dilute the voting interests of common
shareholders. Finally, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives perverse
incentives to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan. Numerous
companies have chosen to acknowledge the distortion to
reported earnings caused by the non-expensing of options
and have elected to expense options going forward. We
believe Cost Plus, Inc. should follow suit, to better
reflect the company's true earnings and provide additional
discipline against overuse.
3 Amend Non-Employee Director Stock Option For Against Mgmt
Plan
Although the potential Voting Power Dilution
(VPD) for this incentive plan of 9.90% meets our
guidelines, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense
against earnings, stock options have been the
ultimate tax dodge for companies wishing to
lavishly compensate employees. Misused stock
options can give executives perverse incentives
to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to
keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to
acknowledge the distortion to reported earnings
caused by the non-expensing of options and have
elected to expense options going forward. We
believe Cost Plus, Inc. should follow suit, to
better reflect the company's true earnings and
provide additional discipline against overuse.
4 Ratify Auditors For For Mgmt
We support this item. The non-audit consulting
fees are less than 25 percent of total fees paid.
As such, we will vote for the company's auditor.
05/19/05 - A Cymer, Inc. *CYMI* 232572107 03/31/05 10,340
1 Elect Directors For Split Mgmt
1.1 Elect Director Charles J. Abbe --- For
The director nominees do not meet our guidelines. We will
WITHHOLD votes from Edward H. Braun, William G. Oldman,
Ph.D., Young K. Sohn, Jon D. Tompkins, Michael R. Gaulke,
Charles J. Abbe, and Robert P. Akins for failing to remove
a dead-hand, slow-hand, or similar feature in the
company's poison pill. We will also WITHHOLD votes from
Peter J. Simone for standing as an affiliated outsider on
key board committees, and from Robert P. Akins for serving
as both chairman and CEO.
1.2 Elect Director Robert P. Akins --- Withhold
1.3 Elect Director Edward H. Braun --- For
1.4 Elect Director Michael R. Gaulke --- For
1.5 Elect Director William G. Oldham --- For
1.6 Elect Director Peter J. Simone --- Withhold
1.7 Elect Director Young K. Sohn --- For
1.8 Elect Director Jon D. Tompkins --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
17.10%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Cymer, Inc. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest.
05/23/05 - A DADE BEHRING HLDGS INC *DADE* 23342J206 03/31/05 3,360
1 Elect Directors For For Mgmt
1.1 Elect Director Richard W. Roedel --- For
The director nominees meet our guidelines. Note
that we will not be withholding votes from audit
committee members Samuel K. Skinner and Richard
W. Roedel as they are new director nominees.
1.2 Elect Director Samuel K. Skinner --- For
2 Increase Authorized Preferred and Common For Against Mgmt
Stock
This is a bundled proposal. Because the number of
additional authorized common shares sought in
this proposal exceeds our guidelines, we will not
support the proportional increase in preferred
stock. As a policy, we will not support increases
in authorized common shares of this magnitude,
unless the company has offered a specific and
reasonable purpose for the additional shares. In
this case, the company has not offered a specific
reason for the share increase. Large increases in
authorized common stock may be used for
anti-takeover devices or to fund undesirable
increases in executive stock options without
shareholder approval.
04/20/05 - A Doral Financial Corp. *DRL* 25811P100 03/09/05 4,400
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard F. Bonini ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Salomon Levis, Zoila Levis and
affiliated outsiders Richard F. Bonini, Edgar M.
Cullman, Jr., and John L. Ernst, from whom we
will WITHHOLD votes for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from Edgar M. Cullman, Jr. and John L.
Ernst for standing as affiliated outsiders on key
board committees and from Salomon Levis for
serving as both chairman and CEO.
1.2 Elect Director Edgar M. Cullman, Jr. ---
Withhold
1.3 Elect Director John L. Ernst --- Withhold
1.4 Elect Director Peter A. Hoffman --- For
1.5 Elect Director Efraim Kier --- For
1.6 Elect Director Salomon Levis --- Withhold
1.7 Elect Director Zoila Levis --- Withhold
1.8 Elect Director Harold D. Vicente --- For
1.9 Elect Director John B. Hughes --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
06/22/05 - A DreamWorks Animation SKG, Inc. 26153C103 04/25/05 5,980
1 Elect Directors For Split Mgmt
1.1 Elect Director Jeffrey Katzenberg ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders David Geffen, Paul G. Allen, Roger A.
Enrico and Jeffrey Katzenberg, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board, and for standing on key board
committees. We will also WITHHOLD votes from
Roger A. Enrico for serving as a non-independent
board chairman, from Margaret C. Whitman for
serving on an excessive number of boards, and
from Nathan Myhrvold for poor board and committee
meeting attendance.
1.2 Elect Director Roger A. Enrico --- Withhold
1.3 Elect Director Paul G. Allen --- Withhold
1.4 Elect Director Lewis W. Coleman --- For
1.5 Elect Director David Geffen --- Withhold
1.6 Elect Director Mellody Hobson --- For
1.7 Elect Director Nathan Myhrvold --- Withhold
1.8 Elect Director Howard Schultz --- For
1.9 Elect Director Margaret C. Whitman ---
Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
07/29/04 - A Electronic Arts Inc. *ERTS* 285512109 06/08/04 4,570
1 Elect Directors For Split Mgmt
1.1 Elect Director M. Richard Asher --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of Lawrence F. Probst III,
Timothy Mott, William J. Byron and M. Richard
Asher, from whom we will WITHHOLD votes for lack
of a two-thirds majority independent board. We
will also WITHHOLD votes from M. Richard Asher
for serving as an affiliated outsider on the
Audit and Compensation committees, and from
William J. Byron for serving as an affiliated
outsider on the Compensation Committee. In
addition, we will WITHHOLD votes from Lawrence F.
Probst III for serving as both chairman and CEO.
1.2 Elect Director William J. Byron --- Withhold
1.3 Elect Director Leonard S. Coleman --- For
1.4 Elect Director Gary M. Kusin --- For
1.5 Elect Director Gregory B. Maffei --- For
1.6 Elect Director Timothy Mott --- Withhold
1.7 Elect Director Robert W. Pittman --- For
1.8 Elect Director Lawrence F. Probst III ---
Withhold
1.9 Elect Director Linda J. Srere --- For
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
17.19% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Electronic Arts, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
3 Amend Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
4 Amend Articles to Consolidate Common Stock For For Mgmt
Given the fact that the company ceased operating EA.com as
a separate business unit and integrated its online games
business into its overall software business, we believe
that the elimination of the Class B common stock, which
was intended to track the performance of the company's
online games division, is appropriate.
5 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
6 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this item. The
non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
05/03/05 - A Ensco International, Inc. *ESV* 26874Q100 03/14/05 910
1 Elect Directors For Split Mgmt
1.1 Elect Director Morton H. Meyerson ---
Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR Joel V. Staff, but
WITHHOLD votes from Morton H. Meyerson for lack
of a two-thirds majority independent board and
for standing as a non-independent on key board
committees.
1.2 Elect Director Joel V. Staff --- For
2 Eliminate Class of Preferred Stock For For Mgmt
Because this is merely a housecleaning amendment,
we believe that it warrants shareholder support.
3 Amend Stock Ownership Limitations For For Mgmt
Because this is merely a housecleaning amendment,
we believe that it warrants shareholder support.
4 Amend Articles For For Mgmt
Because this is merely a housecleaning amendment,
we believe that it warrants shareholder support.
5 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
6 Approve Omnibus Stock Plan For Against Mgmt
Although the potential Voting Power Dilution (VPD) for all
incentive plans of 9.12% meets our guidelines, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Ensco International
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
7 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/04/05 - A Expeditors International Of 302130109 03/10/05 3,790
Washington, Inc. *EXPD*
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Peter J. Rose --- Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
WITHHOLD votes from insiders Peter J. Rose, James
L.K. Wang, R. Jordan Gates, and affiliated
outsiders James J. Casey, Dan P. Kourkoumelis,
and John W. Meisenbach for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from James J. Casey, Dan P. Kourkoumelis,
and John W. Meisenbach for standing as affiliated
outsiders on key board committees, from Peter J.
Rose for serving as both chairman and CEO, from
James J. Casey for serving as a non-independent
board chairman, and from the entire Audit
Committee for neglecting to include auditor
ratification on the proxy ballot.
1.2 Elect Director James L.K. Wang --- Withhold
1.3 Elect Director R. Jordan Gates --- Withhold
1.4 Elect Director James J. Casey --- Withhold
1.5 Elect Director Dan P. Kourkoumelis ---
Withhold
1.6 Elect Director Michael J. Malone ---
Withhold
1.7 Elect Director John W. Meisenbach ---
Withhold
2 Approve Stock Option Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
11.13%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Expeditors International
Of Washington, Inc. should follow suit, to better reflect
the company's true earnings and provide additional
discipline against overuse.
3 Ratification of Auditors be Submitted to Against For ShrHoldr
Shareholders
PVS feels strongly that shareholders should be
provided the opportunity to ratify the selection
of the audit firm, even though it is not a legal
requirement. PVS believes that auditor
ratification should be included on the proxy
ballot and withholds votes from Audit Committee
members when the ratification of auditors is not
on the proxy.
02/24/05 - A F5 Networks, Inc. *FFIV* 315616102 12/17/04 8,540
1 Elect Directors For For Mgmt
1.1 Elect Director Rich Malone --- For
The director nominees meet our guidelines.
1.2 Elect Director A. Gary Ames --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
20.24% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe F5 Networks, Inc. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
08/02/04 - A Fisher Scientific International Inc. 338032204 05/14/04 8,330
*FSH*
1 Issue Shares in Connection with an For For Mgmt
Acquisition
Conclusion: At the core of this transaction is
the strategic overlap between the companies, and
the potential for enhanced growth, product
development and cost efficiencies as a combined
company. Given the strategic rationale, the fair
value and the favorable market reaction, PVS will
support this transaction.
2 Elect Directors For Split Mgmt
2.1 Elect Director Michael D. Dingman ---
Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR director nominee Charles
A. Sanders, but WITHHOLD votes from affiliated
outsider Michael D. Dingman for lack of a
two-thirds majority independent board, and for
serving as an affiliated outsider on key board
committees.
2.2 Elect Director Charles A. Sanders M.D. ---
For
3 Ratify Auditors For Against Mgmt
We do not support this item. In this instance, the
non-auditing consulting fees are more than 25 percent of
total fees paid. As such, we will vote against the
company's auditor. We believe the integrity of the
auditor's relationship with the company is compromised
when a firm is paid excessive consulting fees on top of
those paid for auditing services. This arrangement has the
potential to open the auditor process to a wide range of
conflicts of interest.
4 Adjourn Meeting For Against Mgmt
In this case, shareholders already have enough information
to make an informed voting decision. Once their votes have
been cast, there is no justification for spending more
money to continue pressing shareholders for more votes. As
such, PVS will not support this request.
05/06/05 - A Fisher Scientific International Inc. 338032204 03/22/05 8,330
*FSH*
1 Elect Directors For Split Mgmt
1.1 Elect Director Rosanne F. Coppola --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider Paul M. Meister, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board.
1.2 Elect Director Bruce L. Koepfgen --- For
1.3 Elect Director Paul M. Meister --- Withhold
1.4 Elect Director W. Clayton Stephens --- For
1.5 Elect Director Richard W. Vieser --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
13.72%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Fisher Scientific
International Inc. should follow suit, to better reflect
the company's true earnings and provide additional
discipline against overuse.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
04/26/05 - A Fortune Brands, Inc. *FO* 349631101 02/25/05 660
1 Elect Directors For Split Mgmt
1.1 Elect Director Thomas C. Hays --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of affiliated outsiders Gordon R. Lohman and
Thomas C. Hays, from whom we will WITHHOLD votes
for lack of a two-thirds majority independent
board. We will also WITHHOLD votes from Gordon R.
Lohman for standing as an affiliated outsider on
key board committees.
1.2 Elect Director Pierre E. Leroy --- For
1.3 Elect Director Gordon R. Lohman --- Withhold
1.4 Elect Director J. Christopher Reyes --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Approve Non-Employee Director Stock Option For Against Mgmt
Plan
We do not support this plan. The company's
potential Voting Power Dilution (VPD) for all
incentive plans is 11.91%, which exceeds our
guidelines. Proposals that add to a company's VPD
can potentially dilute the voting interests of
common shareholders.
05/26/05 - A Genzyme Corp. *GENZ* 372917104 03/31/05 7,500
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Robert J. Carpenter ---
Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will WITHHOLD votes from all director
nominees for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Charles L. Cooney for standing as a
non-independent on key board committees.
1.2 Elect Director Charles L. Cooney ---
Withhold
2 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
3 Amend Stock Option Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
15.65% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Genzyme Corp. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
4 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
5 Declassify the Board of Directors Against For ShrHoldr
PVS supports shareholder proposals calling for the repeal
of a company's classified board structure and for the
annual election of all directors under a single slate. The
ability to elect directors is the single most important
use of the shareholder franchise, and we firmly believe
all directors should be accountable on an annual basis. A
classified board can entrench management and effectively
preclude most takeover bids or proxy contests. Board
classification forces dissidents and would-be acquirers to
negotiate with the incumbent board, which has the
authority to decide on offers without a shareholder vote.
Managers generally believe that staggered boards provide
continuity, but empirical evidence has suggested that such
a structure is not in shareholders' best interests from a
financial perspective. We, therefore, support the
declassification of a company's board.
05/03/05 - A Getty Images, Inc. *GYI* 374276103 03/11/05 1,690
1 Elect Directors For Split Mgmt
1.1 Elect Director Christopher H. Sporborg ---
For
We will vote FOR director nominee Christopher H.
Sporborg, and WITHHOLD votes from Mark H. Getty,
for serving as a non-independent board chairman.
1.2 Elect Director Mark H. Getty --- Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
10.69%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Getty Images, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
09/21/04 - A Global Payments, Inc. *GPN* 37940X102 08/06/04 6,390
1 Elect Directors For Split Mgmt
1.1 Elect Director Charles G. Betty --- Withhold
We will vote FOR the director nominees with the
exception of Audit Committee member Charles G.
Betty, from whom we will WITHHOLD votes for
neglecting to include auditor ratification on the
proxy ballot.
1.2 Elect Director Edwin H. Burba, Jr. --- For
1.3 Elect Director Raymond L. Killian --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, this plan has an NSO
exercise price that is less than full market value. We
oppose plans that reflect an exercise price less than full
fair market value as it offers poor incentive for
management and employees to build shareholder value.
Secondly, the company's potential Voting Power Dilution
(VPD) for all incentive plans is 20.35% which exceeds our
guidelines. Proposals that add to a company's VPD can
potentially dilute the voting interests of common
shareholders. Finally, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives an incentive to
inflate their company's earnings or make irresponsibly
optimistic forecasts in order to keep stock prices high
and their paychecks gargantuan. Numerous companies have
chosen to acknowledge the distortion to reported earnings
caused by the non-expensing of options and have elected to
expense options going forward. We believe Global Payments,
Inc. should follow suit, to better reflect the company's
true earnings and provide additional discipline against
overuse.
05/11/05 - A Grant Prideco Inc *GRP* 38821G101 03/23/05 13,700
1 Elect Directors For Split Mgmt
1.1 Elect Director David J. Butters --- Withhold
We will vote FOR the director nominees with the
exception of Audit Committee members David J.
Butters, Harold E. Layman, and Sheldon B. Lubar,
from whom we will WITHHOLD votes for neglecting
to include auditor ratification on the proxy
ballot. We will also WITHHOLD votes from Michael
McShane for serving as both chairman and CEO, and
from David A. Trice for serving on an excessive
number of boards.
1.2 Elect Director Eliot M. Fried --- For
1.3 Elect Director Dennis R. Hendrix --- For
1.4 Elect Director Harold E. Layman --- Withhold
1.5 Elect Director Sheldon B. Lubar --- Withhold
1.6 Elect Director Michael McShane --- Withhold
1.7 Elect Director Robert K. Moses, Jr. --- For
1.8 Elect Director Joseph E. Reid --- For
1.9 Elect Director David A. Trice --- Withhold
11/10/04 - A Harman International Industries, Inc. 413086109 09/13/04 2,910
*HAR*
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Bernard A. Girod --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will WITHHOLD votes from insider
Bernard A. Girod for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from Audit Committee member Ann McLaughlin
Korologos for neglecting to include auditor
ratification on the ballot.
1.2 Elect Director Ann Korologos --- Withhold
05/19/05 - A Host Marriott Corp. *HMT* 44107P104 03/30/05 15,570
1 Elect Directors For Split Mgmt
1.1 Elect Director Robert M. Baylis --- For
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insiders Christopher J.
Nassetta and Richard E. Marriott, and affiliated
outsiders Ann McLaughlin Korologos and Terence C.
Golden from whom we will WITHHOLD votes for lack
of a two-thirds majority independent board. We
will also WITHHOLD votes from Richard E. Marriott
for serving as a non-independent board chairman,
and from Terence C. Golden and Ann McLaughlin
Korologos for standing as non-independents on key
board committees.
1.2 Elect Director Terence C. Golden ---
Withhold
1.3 Elect Director Ann McLaughlin Korologos ---
Withhold
1.4 Elect Director Richard E. Marriott ---
Withhold
1.5 Elect Director Judith A. McHale --- For
1.6 Elect Director John B. Morse, Jr. --- For
1.7 Elect Director Christopher J. Nassetta ---
Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Require a Majority Vote for the Election of Against For ShrHoldr
Directors
PVS views the debate over the current director
election system as useful and timely. A variety
of reform measures should be considered. We
believe it is important to have a discussion over
the merits and flaws of the current director
election system in the U.S. The arguments against
a majority vote requirement raise serious issues.
Therefore, we support the majority vote principle
but we believe that boards should have wide
latitude in designing a workable standard. If
this proposal were presented as a binding agenda
item, we would carefully consider the
ramifications of implementation. If a company
were to receive majority shareholder support on
this proposal, we would look to the company to
create a workable model for its own election
system. In supporting this precatory proposal, we
advocate that the director election system give
full effect to the shareholder franchise. Perhaps
with support for this proposal, coupled with
continued debate on election reforms, the
director election system can evolve to the next
level.
07/15/04 - A IVAX Corp. *IVX* 465823102 05/24/04 7,200
1 Elect Directors For Split Mgmt
1.1 Elect Director Betty G. Amos --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insiders Jane Hsiao,
Phillip Frost and Neil Flanzraich, and affiliated
outsiders Richard C. Pfenniger, Jack Fishman,
Ernst Biekert and Mark Andrews, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Richard C. Pfenniger, Jack Fishman, Ernst
Biekert and Mark Andrews for serving as
affiliated outsiders on key board committees,
from Phillip Frost for serving as both chairman
and CEO, and from the entire Audit Committee for
neglecting to include auditor ratification on the
ballot. In addition, we will WITHHOLD votes from
Bertram Pitt, Richard C. Pfenniger, Jr., David A.
Lieberman, Jane Hsiao, Phillip Frost, Neil
Flanzraich, Jack Fishman, Ernst Biekert, Mark
Andrews and Betty G. Amos for failing to remove a
dead-hand, slow-hand, or similar feature in the
company's poison pill.
1.2 Elect Director Mark Andrews --- Withhold
1.3 Elect Director Ernst Biekert, Ph.D. ---
Withhold
1.4 Elect Director Paul L. Cejas --- For
1.5 Elect Director Jack Fishman, Ph.D. ---
Withhold
1.6 Elect Director Neil Flanzraich --- Withhold
1.7 Elect Director Phillip Frost, M.D. ---
Withhold
1.8 Elect Director Bruce W. Greer --- For
1.9 Elect Director Jane Hsiao, Ph.D. ---
Withhold
1.10 Elect Director David A. Lieberman ---
Withhold
1.11 Elect Director Richard C. Pfenniger, Jr.
--- Withhold
1.12 Elect Director Bertram Pitt, M.D. ---
Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
26.00%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe IVAX Corp. should follow
suit, to better reflect the company's true earnings and
provide additional discipline against overuse.
05/19/05 - A IXIA *XXIA* 45071R109 03/24/05 7,510
1 Elect Directors For Split Mgmt
1.1 Elect Director Jean-Claude Asscher ---
Withhold
We will vote FOR the director nominees with the
exception of independent outsider Jean-Claude
Asscher from whom we will WITHHOLD votes for poor
attendance.
1.2 Elect Director Massoud Entekhabi --- For
1.3 Elect Director Errol Ginsberg --- For
1.4 Elect Director Jon F. Rager --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
11/16/04 - A JDS Uniphase Corp. *JDSU* 46612J101 09/15/04 55,810
1 Elect Directors For For Mgmt
1.1 Elect Director Bruce D. Day --- For
The director nominees meet our guidelines.
1.2 Elect Director Martin A. Kaplan --- For
1.3 Elect Director Kevin J. Kennedy, Ph.D. ---
For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/23/05 - A Jefferies Group, Inc *JEF* 472319102 04/04/05 3,680
1 Elect Directors For Withhold Mgmt
1.1 Elect Director W. Patrick Campbell ---
Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
WITHHOLD votes from insiders Richard B. Handler,
John C. Shaw, Jr. and affiliated outsiders Frank
J. Macchiarola and Richard G. Dooley for lack of
a two-thirds majority independent board. We will
also WITHHOLD votes from Frank J. Macchiarola and
Richard G. Dooley for standing as affiliated
outsiders on key board committees, from Richard
B. Handler for serving as both chairman and CEO,
and from the entire Audit Committee for
neglecting to include auditor ratification on the
proxy ballot.
1.2 Elect Director Richard G. Dooley ---
Withhold
1.3 Elect Director Richard B. Handler ---
Withhold
1.4 Elect Director Frank J. Macchiarola ---
Withhold
1.5 Elect Director John C. Shaw, Jr. ---
Withhold
05/24/05 - A Kinetic Concepts, Inc. *KCI* 49460W208 04/22/05 2,850
1 Elect Directors For For Mgmt
1.1 Elect Director James R. Leininger, M.D. ---
For
The director nominees meet our guidelines.
1.2 Elect Director Dennert O. Ware --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest. In
addition, the company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/18/05 - A Laboratory Corporation of America 50540R409 03/31/05 5,170
Holdings *LH*
1 Elect Directors For Split Mgmt
1.1 Elect Director Thomas P. Mac Mahon ---
Withhold
We will vote FOR the director nominees with the
exception of Thomas P. Mac Mahon, from whom we
will WITHHOLD votes for serving as both chairman
and CEO.
1.2 Elect Director Jean-Luc Belingard --- For
1.3 Elect Director Wendy E. Lane --- For
1.4 Elect Director Robert E. Mittelstaedt, Jr.
--- For
1.5 Elect Director Arthur H. Rubenstein, MBBCh
--- For
1.6 Elect Director Andrew G. Wallace, M.D. ---
For
1.7 Elect Director M. Keith Weikel, Ph.D. ---
For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
11/04/04 - A Lam Research Corp. *LRCX* 512807108 09/10/04 16,530
1 Elect Directors For Withhold Mgmt
1.1 Elect Director James W. Bagley --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will WITHHOLD votes from Grant M.
Inman, Jack R. Harris, David G. Arscott and James
W. Bagley for lack of a two-thirds majority
independent board, and for failing to remove a
dead-hand, slow-hand, or similar feature in the
company's poison pill. We will also WITHHOLD
votes from independent outsiders Robert M.
Berdahl and Richard J. Elkus, Jr. for failing to
remove a dead-hand, slow-hand, or similar feature
in the company's poison pill. In addition, we
will WITHHOLD votes from David G. Arscott and
Grant M. Inman for serving as affiliated
outsiders on key board committees, and from James
W. Bagley for serving as both chairman and CEO.
1.2 Elect Director David G. Arscott --- Withhold
1.3 Elect Director Robert M. Berdahl ---
Withhold
1.4 Elect Director Richard J. Elkus, Jr. ---
Withhold
1.5 Elect Director Jack R. Harris --- Withhold
1.6 Elect Director Grant M. Inman --- Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
07/20/04 - A Legg Mason, Inc. *LM* 524901105 05/21/04 3,340
1 Elect Directors For Split Mgmt
1.1 Elect Director Harold L. Adams --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of Raymond A. Mason, James W.
Brinkley and Harold L. Adam, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. In addition, we will WITHHOLD
votes from Raymond A. Mason for serving as both
chairman and CEO.
1.2 Elect Director James W. Brinkley ---
Withhold
1.3 Elect Director Raymond A. Mason --- Withhold
1.4 Elect Director Margaret Milner Richardson
--- For
1.5 Elect Director Kurt L. Schmoke --- For
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, this plan has an NSO
exercise price that is less than full market value. We
oppose plans that reflect an exercise price less than full
fair market value as it offers poor incentive for
management and employees to build shareholder value.
Secondly, the company's potential Voting Power Dilution
(VPD) for all incentive plans is 18.35% which exceeds our
guidelines. Proposals that add to a company's VPD can
potentially dilute the voting interests of common
shareholders. Finally, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives an incentive to
inflate their company's earnings or make irresponsibly
optimistic forecasts in order to keep stock prices high
and their paychecks gargantuan. Numerous companies have
chosen to acknowledge the distortion to reported earnings
caused by the non-expensing of options and have elected to
expense options going forward. We believe Legg Mason, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
3 Amend Non-Employee Director Stock Option For For Mgmt
Plan
This proposal does not seek to authorize an
increase in the number of shares available for
issuance under the plan. The proposed amendment
aims to revise the automatic grant formula for
nonemployee directors by reducing the number of
options granted, clarifying such formula in the
case of a stock split or other similar
transaction, and reducing the term of the options
granted under such formula. PVS will vote FOR
this proposal since these amendments are
effectively improvements the plan.
11/30/04 - S Lyondell Chemical Co. *LYO* 552078107 10/14/04 5,600
1 Approve Merger Agreement For For Mgmt
Conclusion: Based on the fairness opinion, the potential
strategic synergies, and growth opportunities, we believe
the merger agreement warrants shareholder support.
2 Increase Authorized Common Stock For For Mgmt
This proposal falls within our allowable
guidelines for issuances of common stock.
Therefore, we will support this item.
3 Amend Omnibus Stock Plan For For Mgmt
We support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive
plans is 9.50%, which falls within our
guidelines.
05/05/05 - A Lyondell Chemical Co. *LYO* 552078107 03/10/05 11,050
1 Elect Directors For Split Mgmt
1.1 Elect Director Carol A. Anderson --- For
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insider Dan F. Smith and affiliated outsiders
Dr. Ray R. Irani, Stephen F. Hinchliffe, Jr., Stephen I.
Chazen and Dr. William T. Butler, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes from
Stephen F. Hinchliffe, Jr. and Dr. William T. Butler for
standing as affiliated outsiders on key board committees,
from Dr. William T. Butler for serving as a
non-independent board chairman, and from Dr. Ray R. Irani
for poor board and committee meeting attendance.
1.2 Elect Director Dr. William T. Butler ---
Withhold
1.3 Elect Director Stephen I. Chazen ---
Withhold
1.4 Elect Director Worley H. Clark, Jr. --- For
1.5 Elect Director Travis Engen --- For
1.6 Elect Director Stephen F. Hinchliffe, Jr.
--- Withhold
1.7 Elect Director Danny W. Huff --- For
1.8 Elect Director Dr. Ray R. Irani --- Withhold
1.9 Elect Director David J. Lesar --- For
1.10 Elect Director David J.P. Meachin --- For
1.11 Elect Director Dan F. Smith --- Withhold
1.12 Elect Director Dr. William R. Spivey --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/10/05 - A Manor Care, Inc. *HCR* 564055101 03/18/05 5,190
1 Elect Directors For Split Mgmt
1.1 Elect Director Mary Taylor Behrens --- For
We will vote FOR the director nominees with the
exception of Audit Committee members John T.
Schwieters and Joseph F. Damico, from whom we
will WITHHOLD votes for neglecting to include
auditor ratification on the proxy ballot.
1.2 Elect Director Joseph F. Damico --- Withhold
1.3 Elect Director John T. Schwieters ---
Withhold
1.4 Elect Director Gail R. Wilensky --- For
2 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit exceeds
our guidelines for executive incentive programs. As such,
this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
05/06/05 - A Marriott International Inc. (New) 571903202 03/15/05 9,000
*MAR*
1 Elect Directors For Split Mgmt
1.1 Elect Director J.W. Marriott, Jr. ---
Withhold
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insiders William J. Shaw and J.W. Marriott,
Jr., from whom we will WITHHOLD votes for lack of a
two-thirds majority independent board. We will also
WITHHOLD votes from J.W. Marriott, Jr. for serving as both
chairman and CEO.
1.2 Elect Director Debra L. Lee --- For
1.3 Elect Director George Munoz --- For
1.4 Elect Director William J. Shaw --- Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
18.77%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Marriott International
Inc. should follow suit, to better reflect the company's
true earnings and provide additional discipline against
overuse.
4 Declassify the Board of Directors Against For ShrHoldr
The ability to elect directors is the single most
important use of the shareholder franchise, and all
directors should be accountable on an annual basis. A
classified board can entrench management and effectively
preclude most takeover bids or proxy contests. Board
classification forces dissidents and would-be acquirers to
negotiate with the incumbent board, which has the
authority to decide on offers without a shareholder vote.
PVS will support this proposal.
5 Require a Majority Vote for the Election of Against For ShrHoldr
Directors
PVS views the debate over the current director
election system as useful and timely. A variety
of reform measures should be considered. We
believe it is important to have a discussion over
the merits and flaws of the current director
election system in the U.S. The arguments against
a majority vote requirement raise serious issues.
Therefore, we support the majority vote principle
but we believe that boards should have wide
latitude in designing a workable standard. If
this proposal were presented as a binding agenda
item, we would carefully consider the
ramifications of implementation. If a company
were to receive majority shareholder support on
this proposal, we would look to the company to
create a workable model for its own election
system. In supporting this precatory proposal, we
advocate that the director election system give
full effect to the shareholder franchise. Perhaps
with support for this proposal, coupled with
continued debate on election reforms, the
director election system can evolve to the next
level.
06/10/05 - A Marvell Technology Group Ltd *MRVL* G5876H105 04/15/05 9,020
Meeting for Holders of ADRs
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Kuo Wei 'Herbert' Chang ---
Withhold
We will withhold votes from Kuo Wei (Herbert)
Chang for poor attendance.
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Recent accounting scandals underscore the need to ensure
auditor independence in the face of selling consulting
services to audit clients. The outside auditing process is
the backbone upon which the financial health of a company
is measured. To maintain the integrity of the auditing
process, the independence of an outside auditor is
absolutely essential for rendering objective opinions upon
which investors then rely.We support this item. The
non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
07/28/04 - A McKesson Corp. *MCK* 58155Q103 06/01/04 4,840
1 Elect Directors For Split Mgmt
1.1 Elect Director John H. Hammergren ---
Withhold
We will vote FOR the director nominees with the
exception of John H. Hammergren, from whom we
will WITHHOLD votes for serving as both chairman
and CEO.
1.2 Elect Director Robert W. Matschullat --- For
1.3 Elect Director M. Christine Jacobs --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/31/05 - A MEDCO Health Solutions Inc *MHS* 58405U102 04/04/05 6,130
1 Elect Directors For For Mgmt
1.1 Elect Director John L. Cassis --- For
The director nominees meet our guidelines.
1.2 Elect Director Michael Goldstein --- For
1.3 Elect Director Blenda J. Wilson --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Approve Omnibus Stock Plan For For Mgmt
The proposal is designed to keep the plan in
compliance with Section 162 (m) of the Internal
Revenue Code so as to preserve the tax
deductibility.
4 Approve Qualified Employee Stock Purchase For For Mgmt
Plan
PVS approves the proposed amendment of the plan
because the dilution from the remaining shares
available under the plan is reasonable.
5 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
05/19/05 - A Mercury Interactive Corp. *MERQ* 589405109 03/22/05 6,950
1 Elect Directors For Split Mgmt
1.1 Elect Director Amnon Landan --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insiders Anthony Zingale
and Amnon Landan, and affiliated outsiders Yair
Shamir and Igal Kohavi from whom we will WITHHOLD
votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Amnon Landan for serving as both chairman
and CEO, and from Yair Shamir and Igal Kohavi for
standing as non-independents on key board
committees.
1.2 Elect Director Brad Boston --- For
1.3 Elect Director Igal Kohavi --- Withhold
1.4 Elect Director Clyde Ostler --- For
1.5 Elect Director Yair Shamir --- Withhold
1.6 Elect Director Giora Yaron --- For
1.7 Elect Director Anthony Zingale --- Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
05/10/05 - A MGI Pharma, Inc. *MOGN* 552880106 03/14/05 6,030
1 Elect Directors For Split Mgmt
1.1 Elect Director Andrew J. Ferrara --- For
We will vote FOR the director nominees with the
exception of affiliated outsider Hugh E. Miller,
from whom we will WITHHOLD votes for standing on
key board committees, and for serving as a
non-independent board chairman.
1.2 Elect Director Edward W. Mehrer --- For
1.3 Elect Director Hugh E. Miller --- Withhold
1.4 Elect Director Leon O. Moulder, Jr. --- For
1.5 Elect Director David B. Sharrock --- For
1.6 Elect Director Waneta C. Tuttle, Ph.D. ---
For
1.7 Elect Director Arthur L. Weaver, M.D. ---
For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/03/05 - A MGM Mirage *MGM* 552953101 03/14/05 5,490
1 Elect Directors For Split Mgmt
1.1 Elect Director James D. Aljian --- Withhold
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insiders James D. Aljian, Robert H. Baldwin,
Gary N. Jacobs, Kirk Kerkorian, J. Terrence Lanni, James
J. Murren, John T. Redmond, and affiliated outsiders Terry
N. Christensen, Willie D. Davis, Alexander M. Haig, Jr.,
Daniel M. Wade, and Alex Yemenidjian from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board and for failure to establish in
independent Nominating Committee. We will also WITHHOLD
votes from Willie D. Davis, for standing as an affiliated
outsider on key board committees, from J. Terrence Lanni
for serving as both chairman and CEO, from Willie D. Davis
for sitting on an excessive number of boards, and from
Robert H. Baldwin for poor board meeting attendance.
1.2 Elect Director Robert H. Baldwin ---
Withhold
1.3 Elect Director Terry N. Christensen ---
Withhold
1.4 Elect Director Willie D. Davis --- Withhold
1.5 Elect Director Alexander M. Haig, Jr. ---
Withhold
1.6 Elect Director Alexis M. Herman --- For
1.7 Elect Director Roland Hernandez --- For
1.8 Elect Director Gary N. Jacobs --- Withhold
1.9 Elect Director Kirk Kerkorian --- Withhold
1.10 Elect Director J. Terrence Lanni ---
Withhold
1.11 Elect Director George J. Mason --- For
1.12 Elect Director James J. Murren --- Withhold
1.13 Elect Director Ronald M. Popeil --- For
1.14 Elect Director John T. Redmond --- Withhold
1.15 Elect Director Daniel M. Wade --- Withhold
1.16 Elect Director Melvin B. Wolzinger --- For
1.17 Elect Director Alex Yemenidjian --- Withhold
2 Increase Authorized Common Stock For For Mgmt
While the number of additional authorized common shares
sought in this proposal exceeds our guidelines, this
increase is sought for a specific purpose, that of a
2-for-1 stock split. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, we
believe this is a reasonable request.
3 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, the company's
potential Voting Power Dilution (VPD) for all incentive
plans is 16.56%, which exceeds our guidelines. Proposals
that add to a company's VPD can potentially dilute the
voting interests of common shareholders. Secondly, the
company's three-year average burn rate of 3.88% is higher
than its four-digit GICS peer group burn rate of 3.48%,
and therefore fails to meet our guidelines. Finally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe MGM Mirage should follow
suit, to better reflect the company's true earnings and
provide additional discipline against overuse.
4 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
08/20/04 - A Microchip Technology, Inc. *MCHP* 595017104 06/25/04 9,870
1 Elect Directors For Split Mgmt
1.1 Elect Director Steve Sanghi --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of Albert J. Hugo-Martinez and
Steve Sanghi, from whom we will WITHHOLD votes
for lack of a two-thirds majority independent
board. We will also WITHHOLD votes from Audit
Committee members Matthew W. Chapman and Wade F.
Meyercord for neglecting to include auditor
ratification on the ballot. In addition, we will
WITHHOLD votes from Steve Sanghi for serving as
both chairman and CEO, and from Albert J.
Hugo-Martinez for serving as an affiliated
outsider on the Audit, Compensation and
Nominating committees.
1.2 Elect Director Albert J. Hugo-Martinez ---
Withhold
1.3 Elect Director L.B. Day --- For
1.4 Elect Director Matthew W. Chapman ---
Withhold
1.5 Elect Director Wade F. Meyercord ---
Withhold
2 Amend Employee Stock Purchase Plan For For Mgmt
PVS approves of this item because the plan complies with
Section 423 of the Internal Revenue Code, the number of
shares being added is relatively conservative, the
offering period is reasonable, and there are limitations
on participation.
3 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
15.76% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Microchip Technology,
Inc. should follow suit, to better reflect the company's
true earnings and provide additional discipline against
overuse.
06/16/05 - A Monster Worldwide, Inc. *MNST* 611742107 05/04/05 15,080
1 Elect Directors For Split Mgmt
1.1 Elect Director Andrew J. McKelvey ---
Withhold
We will vote FOR the director nominees with the
exception of insider Andrew J. McKelvey from whom
we will WITHHOLD votes for serving as both
chairman and CEO. We will also WITHHOLD votes
from Audit Committee members Michael Kaufman,
Ronald J. Kramer and John Gaulding for neglecting
to include auditor ratification on the proxy
ballot.
1.2 Elect Director George R. Eisele --- For
1.3 Elect Director John Gaulding --- Withhold
1.4 Elect Director Michael Kaufman --- Withhold
1.5 Elect Director Ronald J. Kramer --- Withhold
1.6 Elect Director David A. Stein --- For
1.7 Elect Director John Swann --- For
2 Amend Non-Employee Director Omnibus Stock For For Mgmt
Plan
In determining whether or not this proposal
warrants shareholder support, PVS evaluated the
cost of the proposed director grants versus the
cost of the current director grants. According to
our calculations, the proposed automatic
restricted stock grants to nonemployee directors
are marginally less costly (0.01% per director)
than the current automatic option grants. As
such, PVS supports this proposal.
04/27/05 - A NII Holdings, Inc. *NIHD* 62913F201 03/24/05 4,370
1 Elect Directors For For Mgmt
1.1 Elect Director Neal P. Goldman --- For
The director nominees meet our guidelines.
1.2 Elect Director Charles M. Herington --- For
1.3 Elect Director John W. Risner --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/24/05 - A Nordstrom, Inc. *JWN* 655664100 03/16/05 3,350
1 Elect Directors For Split Mgmt
1.1 Elect Director Phyllis J. Campbell --- For
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insiders Bruce A. Nordstrom, Blake W.
Nordstrom and affiliated outsiders Alfred E. Osborne, Jr.
and John N. Nordstrom, from whom we will WITHHOLD votes
for lack of a two-thirds majority independent board. We
will also WITHHOLD votes from Alfred E. Osborne, Jr. for
standing as an affiliated outsider on key board
committees, and from Bruce A. Nordstrom for serving as a
non-independent board chairman.
1.2 Elect Director Enrique Hernandez, Jr. ---
For
1.3 Elect Director Jeanne P. Jackson --- For
1.4 Elect Director Robert G. Miller --- For
1.5 Elect Director Blake W. Nordstrom ---
Withhold
1.6 Elect Director Bruce A. Nordstrom ---
Withhold
1.7 Elect Director John N. Nordstrom ---
Withhold
1.8 Elect Director Alfred E. Osborne, Jr.,
Ph.D. --- Withhold
1.9 Elect Director Alison A. Winter --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
04/19/05 - A Northern Trust Corp. *NTRS* 665859104 02/28/05 5,950
1 Elect Directors For Split Mgmt
1.1 Elect Director Duane L. Burnham --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider William A. Osborn and affiliated
outsiders Robert A. Helman, Arthur L. Kelly,
Harold B. Smith, and William D. Smithburg, from
whom we will WITHHOLD votes for lack of a
two-thirds majority independent board. We will
also WITHHOLD votes from Arthur L. Kelly, Harold
B. Smith, and William D. Smithburg for standing
as affiliated outsiders on key board committees,
from John W. Rowe for serving on an excessive
number of boards, and from William A. Osborn for
serving as both chairman and CEO.
1.2 Elect Director Susan Crown --- For
1.3 Elect Director Robert A. Helman --- Withhold
1.4 Elect Director Dipak C. Jain --- For
1.5 Elect Director Arthur L. Kelly --- Withhold
1.6 Elect Director Robert C. McCormack --- For
1.7 Elect Director Edward J. Mooney --- For
1.8 Elect Director William A. Osborn ---
Withhold
1.9 Elect Director John W. Rowe --- Withhold
1.10 Elect Director Harold B. Smith --- Withhold
1.11 Elect Director William D. Smithburg ---
Withhold
1.12 Elect Director Charles A. Tribbett III ---
For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/29/05 - A Novellus Systems, Inc. *NVLS* 670008101 03/01/05 7,470
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard S. Hill --- Withhold
We will vote FOR the director nominees with the
exception of independent outsiders Delbert A.
Whitaker, William R. Spivey, Yoshio Nishi, J.
David Litster and Youssef A. EL-Mansey from whom
we will WITHHOLD votes for the disconnect between
company's stock performance and the CEO's
compensation. We will also WITHHOLD votes from
insider Richard S. Hill for serving as both
chairman and CEO, and from affiliated outsider
Glen G. Possley for standing as a non-independent
on the Audit Committee.
1.2 Elect Director Neil R. Bonke --- For
1.3 Elect Director Youssef A. EL-Mansey ---
Withhold
1.4 Elect Director J. David Litster --- Withhold
1.5 Elect Director Yoshio Nishi --- Withhold
1.6 Elect Director Glen G. Possley --- Withhold
1.7 Elect Director Ann D. Rhoads --- For
1.8 Elect Director William R. Spivey ---
Withhold
1.9 Elect Director Delbert A. Whitaker ---
Withhold
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, the company's
potential Voting Power Dilution (VPD) for all incentive
plans is 19.54% which exceeds our guidelines. Proposals
that add to a company's VPD can potentially dilute the
voting interests of common shareholders. Secondly, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Novellus Systems should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
Finally, the company fails our pay for performance policy.
Specifically, the company has sustained negative stock
performance for the one and three fiscal years and the CEO
received an increase in total direct compensation.
Stock-based compensation is the driver of the disconnect
between pay and performance and therefore PVS will vote
AGAINST the proposed equity plan since the CEO is eligible
to participate in the plan. Please refer to a full
write-up under Item 1.1 for the pay for performance policy.
3 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
4 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
08/19/04 - A Nvidia Corporation *NVDA* 67066G104 06/30/04 14,380
1 Elect Directors For Split Mgmt
1.1 Elect Director James C. Gaither --- For
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of Jen-Hsun Huang, from whom
we will WITHHOLD votes for lack of a two-thirds
majority independent board.
1.2 Elect Director Jen-Hsun Huang --- Withhold
1.3 Elect Director A. Brooke Seawell --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/26/05 - A Overstock.com, Inc. *OSTK* 690370101 03/10/05 4,140
1 Elect Director Allison H. Abraham For For Mgmt
We will vote FOR director nominee Allison H. Abraham.
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.73%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Overstock.com, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/06/05 - A P.F. Chang *PFCB* 69333Y108 03/14/05 4,010
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard L. Federico ---
Withhold
We will vote FOR the director nominees with the
exception of Richard L. Federico, from whom we
will WITHHOLD votes for serving as both chairman
and CEO.
1.2 Elect Director R. Michael Welborn --- For
1.3 Elect Director James G. Shennan, Jr. --- For
1.4 Elect Director F. Lane Cardwell, Jr. --- For
1.5 Elect Director Kenneth J. Wessels --- For
1.6 Elect Director M. Ann Rhoades --- For
1.7 Elect Director Lesley H. Howe --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
05/19/05 - A PacifiCare Health Systems, Inc. *PHS* 695112102 03/31/05 5,360
1 Elect Directors For Split Mgmt
1.1 Elect Director Aida Alvarez --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider Howard G. Phanstiel and affiliated
outsiders Terry O. Hartshorn, Warren E. Pinckert
II, David A. Reed, and Lloyd E. Ross, from whom
we will WITHHOLD votes for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from Terry O. Hartshorn, Warren E. Pinckert
II, David A. Reed, and Lloyd E. Ross for standing
as affiliated outsiders on key board committees,
from Howard G. Phanstiel for serving as both
chairman and CEO, and from the entire Audit
Committee for neglecting to include auditor
ratification on the proxy ballot.
1.2 Elect Director Bradley C. Call --- Withhold
1.3 Elect Director Terry O. Hartshorn ---
Withhold
1.4 Elect Director Dominic Ng --- For
1.5 Elect Director Howard G. Phanstiel ---
Withhold
1.6 Elect Director Warren E. Pinckert II ---
Withhold
1.7 Elect Director David A. Reed --- Withhold
1.8 Elect Director Charles R. Rinehart ---
Withhold
1.9 Elect Director Linda Rosenstock --- For
1.10 Elect Director Lloyd E. Ross --- Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.01%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
05/06/05 - A Peabody Energy Corp. *BTU* 704549104 03/15/05 1,760
1 Elect Directors For Split Mgmt
1.1 Elect Director B.R. Brown --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of affiliated outsider James R. Schlesinger, from
whom we will WITHHOLD votes for lack of a
two-thirds majority independent board and for
standing as an affiliated outsider on key board
committees.
1.2 Elect Director Henry Givens, Jr., Ph.D. ---
For
1.3 Elect Director James R. Schlesinger ---
Withhold
1.4 Elect Director Sandra Van Trease --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
4 Require Two Thirds Majority of Independent Against For ShrHoldr
Directors on the Board.
5 Declassify the Board of Directors Against For ShrHoldr
PVS supports shareholder proposals calling for the repeal
of a company's classified board structure and for the
annual election of all directors under a single slate. The
ability to elect directors is the single most important
use of the shareholder franchise, and we firmly believe
all directors should be accountable on an annual basis. A
classified board can entrench management and effectively
preclude most takeover bids or proxy contests. Board
classification forces dissidents and would-be acquirers to
negotiate with the incumbent board, which has the
authority to decide on offers without a shareholder vote.
Managers generally believe that staggered boards provide
continuity, but empirical evidence has suggested that such
a structure is not in shareholders' best interests from a
financial perspective. We, therefore, support the
declassification of a company's board.
6 Require a Majority Vote for the Election of Against For ShrHoldr
Directors
04/29/05 - A Pentair, Inc. *PNR* 709631105 03/01/05 7,920
1 Elect Directors For Split Mgmt
1.1 Elect Director Richard J. Cathcart --- For
We will vote FOR the directors with the exception
of Augusto Meozzi, Barbara B. Grogan, and Ronald
L. Merriman, from whom we will WITHHOLD votes for
adopting a poison pill without seeking
shareholder approval.
1.2 Elect Director Barbara B. Grogan ---
Withhold
1.3 Elect Director Augusto Meozzi --- Withhold
1.4 Elect Director Ronald L. Merriman ---
Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest.
05/25/05 - A PMC-Sierra, Inc. *PMCS* 69344F106 03/31/05 34,220
1 Elect Directors For Split Mgmt
1.1 Elect Director Robert Bailey --- Withhold
We will vote FOR the director nominees with the
exception of affiliated outsider James Diller,
Sr., from whom we will WITHHOLD votes for
standing on key board committees. We will also
WITHHOLD votes from Robert Bailey for serving as
both chairman and CEO, and from the entire
Compensation Committee for executive compensation
practices that are inconsistent with shareholders
best interests.
1.2 Elect Director Richard Belluzo --- For
1.3 Elect Director James Diller, Sr --- Withhold
1.4 Elect Director Jonathan Judge --- Withhold
1.5 Elect Director William Kurtz --- For
1.6 Elect Director Frank Marshall --- For
1.7 Elect Director Lewis Wilks --- Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
04/26/05 - A Praxair, Inc. *PX* 74005P104 03/01/05 4,060
1 Elect Directors For For Mgmt
1.1 Elect Director Jose Alves --- For
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the independent director
nominees.
1.2 Elect Director Ira D. Hall --- For
1.3 Elect Director Raymond W. Leboeuf --- For
1.4 Elect Director Wayne T. Smith --- For
1.5 Elect Director Robert L. Wood --- For
2 Amend Non-Employee Director Stock Option For Against Mgmt
Plan
We do not support this plan. The company's
potential Voting Power Dilution (VPD) for all
incentive plans is 11.87% which exceeds our
guidelines. Proposals that add to a company's VPD
can potentially dilute the voting interests of
common shareholders. In addition, the company
does not fully expense its stock options. Given
their current accounting treatment of not being
charged as an expense against earnings, stock
options have been the ultimate tax dodge for
companies wishing to lavishly compensate
employees. Misused stock options can give
executives perverse incentives to inflate their
company's earnings or make irresponsibly
optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan.
Numerous companies have chosen to acknowledge the
distortion to reported earnings caused by the
non-expensing of options and have elected to
expense options going forward. We believe
Praxair, Inc. should follow suit, to better
reflect the company's true earnings and provide
additional discipline against overuse.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
05/17/05 - A Questar Corp. *STR* 748356102 03/21/05 6,110
1 Elect Directors For Split Mgmt
1.1 Elect Director Phillips S. Baker, Jr. ---
For
We will vote FOR the director nominees with the
exception of Audit Committee members James A.
Harmon and L. Richard Flury, from whom we will
WITHHOLD votes for neglecting to include auditor
ratification on the proxy ballot.
1.2 Elect Director L. Richard Flury --- Withhold
1.3 Elect Director James A. Harmon --- Withhold
1.4 Elect Director M.W. Scoggins --- For
2 Approve Executive Incentive Bonus Plan For For Mgmt
We will support this item.
05/18/05 - A Range Resources Corporation *RRC* 75281A109 04/01/05 11,620
1 Elect Directors For Split Mgmt
1.1 Elect Director Robert E. Aikman --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Jeffrey L. Ventura, John H. Pinkerton
and affiliated outsiders Allen Finkelson and
Robert E. Aikman, from whom we will WITHHOLD
votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Allen Finkelson and Robert E. Aikman for
standing as affiliated outsiders on key board
committees.
1.2 Elect Director Charles L. Blackburn --- For
1.3 Elect Director Anthony V. Dub --- For
1.4 Elect Director V. Richard Eales --- For
1.5 Elect Director Allen Finkelson --- Withhold
1.6 Elect Director Jonathan S. Linker --- For
1.7 Elect Director Kevin S. McCarthy --- For
1.8 Elect Director John H. Pinkerton ---
Withhold
1.9 Elect Director Jeffrey L. Ventura ---
Withhold
2 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
3 Amend Director & Officer For For Mgmt
Indemnification/Liability Provisions
This proposal is designed to provide consistency
and clarity to the company's governance
provisions regarding director and officer
indemnification. We believe that, in the long
run, providing the company with the appropriate
flexibility is in shareholders' best interests.
4 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. Although the potential Voting
Power Dilution (VPD) for this incentive plan of 9.38%
meets our guidelines, the plan has a share exercise price
that is less than full market value. We oppose plans that
reflect an exercise price less than full fair market value
as it offers poor incentive for management and employees
to build shareholder value. In addition, the company's
three year average burn rate of 3.01 percent is higher
than its four-digit GICS peer group of 2.61 percent.
Therefore, the company has failed PVS's three-year average
burn rate policy. Finally, the company does not fully
expense its stock options. Given their current accounting
treatment of not being charged as an expense against
earnings, stock options have been the ultimate tax dodge
for companies wishing to lavishly compensate employees.
Misused stock options can give executives perverse
incentives to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan. Numerous
companies have chosen to acknowledge the distortion to
reported earnings caused by the non-expensing of options
and have elected to expense options going forward. We
believe Range Resources Corporation should follow suit, to
better reflect the company's true earnings and provide
additional discipline against overuse.
5 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, this plan has a
share exercise price that is less than full market value.
We oppose plans that reflect an exercise price less than
full fair market value as it offers poor incentive for
management and employees to build shareholder value. The
plan allows for the repricing of underwater stock options
without shareholder approval. Secondly, the company's
three year average burn rate of 3.01 percent is higher
than its four-digit GICS peer group of 2.61 percent.
Therefore, the company has failed PVS's three-year average
burn rate policy. Thirdly, the company's potential Voting
Power Dilution (VPD) for this incentive plan is 10.13%
which exceeds our guidelines. Proposals that add to a
company's VPD can potentially dilute the voting interests
of common shareholders. Finally, the company does not
fully expense its stock options. Given their current
accounting treatment of not being charged as an expense
against earnings, stock options have been the ultimate tax
dodge for companies wishing to lavishly compensate
employees. Misused stock options can give executives
perverse incentives to inflate their company's earnings or
make irresponsibly optimistic forecasts in order to keep
stock prices high and their paychecks gargantuan. Numerous
companies have chosen to acknowledge the distortion to
reported earnings caused by the non-expensing of options
and have elected to expense options going forward. We
believe Range Resources Corporation should follow suit, to
better reflect the company's true earnings and provide
additional discipline against overuse.
6 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
07/12/04 - A Research In Motion Ltd *RIM* 760975102 06/10/04 5,300
Management Proposals
1 Elect Michael Lazaridis, James Balsillie, For For Mgmt
Douglas Fregin, Kendall Cork, James Estill,
John Richardson, Douglas Wright as Directors
2 Approve Ernst & Young LLP as Auditors and For For Mgmt
Authorize Board to Fix Remuneration of
Auditors
Shareholder Proposals
3 Make Greater Effort to Locate Women for Against For ShrHoldr
Board Nomination and Senior Officer
Positions
05/03/05 - A Robert Half International Inc. *RHI* 770323103 03/11/05 12,210
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Andrew S. Berwick, Jr. ---
Withhold
The director nominees do not meet our guidelines. The
composition of the board does not meet our standard for
board and committee independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will WITHHOLD votes from all director nominees
for lack of a two-thirds majority independent board. We
will also WITHHOLD votes from Harold M. Messmer, Jr. for
serving as both chairman and CEO, and from J. Stephen
Schaub, Edward W. Gibbons, Frederick P. Furth and Andrew
S. Berwick, Jr. for standing as non-independents on key
board committees.
1.2 Elect Director Frederick P. Furth ---
Withhold
1.3 Elect Director Edward W. Gibbons ---
Withhold
1.4 Elect Director Harold M. Messmer, Jr. ---
Withhold
1.5 Elect Director Thomas J. Ryan --- Withhold
1.6 Elect Director J. Stephen Schaub ---
Withhold
1.7 Elect Director M. Keith Waddell --- Withhold
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
18.86% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Robert Half
International should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
3 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit exceeds
our guidelines for executive incentive programs. As such,
this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
4 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
02/02/05 - A Rockwell Automation Inc *ROK* 773903109 12/06/04 8,460
1 Elect Directors For Split Mgmt
1.1 Elect Director Bruce M. Rockwell ---
Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR Kenneth F. Yontz but will
WITHHOLD votes from affiliated outsiders Joseph
F. Toot, Jr. and Bruce M. Rockwell for lack of a
two-thirds majority independent board and for
serving as affiliated outsiders on key board
committees.
1.2 Elect Director Joseph F. Toot, Jr. ---
Withhold
1.3 Elect Director Kenneth F. Yontz --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
06/06/05 - A Roper Industries, Inc. *ROP* 776696106 04/15/05 6,550
1 Elect Directors For Split Mgmt
1.1 Elect Director Donald G. Calder --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Donald G. Calder and Derrick N. Key,
from whom we will WITHHOLD votes for lack of a
two-thirds majority independent board.
1.2 Elect Director Derrick N. Key --- Withhold
1.3 Elect Director Christopher Wright --- For
2 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
3 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not support this request.
10/05/04 - A Ruby Tuesday, Inc. *RI* 781182100 08/10/04 8,020
1 Elect Directors For Withhold Mgmt
1.1 Elect Director John B. McKinnon --- Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insider Samuel E. Beall,
III and affiliated outsider John B. McKinnon,
from whom we will WITHHOLD votes for lack of a
two-thirds majority independent board. We will
also WITHHOLD votes from Mr. Beal for serving as
both chairman and CEO, and from Mr. McKinnon for
standing as an affiliated outsider on key board
committees.
1.2 Elect Director Samuel E. Beall, III ---
Withhold
2 Approve Executive Incentive Bonus Plan For For Mgmt
This plan falls within our guidelines. The performance
measures included under the plan are appropriate for the
company given its line of business, long-term strategic
objectives, and industry-specific measures for assessing
market competitiveness. Additionally, the plan's
individual award limit meets our guidelines for executive
incentive programs. Moreover, preservation of the full
deductibility of all compensation paid reduces the
company's corporate tax obligation.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this item. The
non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
4 Report on Genetically Modified Organisms Against For ShrHoldr
(GMO)
In this case, we believe that the proponents
raise valid concerns regarding genetically
engineered foods. The resolution requests that
the company prepare a report identifying GE
company products and a contingency plan for
sourcing non-GE foods should circumstances so
require. We believe that this report is crucial
in addressing shareholder concerns regarding the
use and safety of GE foods. Thus, approval of
this proposal should increase public goodwill and
may mitigate financial costs to the company from
product shifts and potential recalls that may
arise from the usage of genetically engineered
foods in the future. While we understand the
company's concerns about the difficulty in
determining the existence of GE products in its
supply chain, we believe that the proponents'
concerns are justified. We are sympathetic with
the proponents concerns regarding their
unforeseen public acceptability, and we support
reporting on company GE products and detailing a
plan should GE products become unacceptable in
certain markets. We feel that support for this
reporting request goes hand-in-hand with
management's stated commitment to and interest in
consumer and food safety. Ruby Tuesday itself
states that "the Company has food safety as its
highest priority and cares about and actively
supports its customers' interest in food safety."
We feel that support for this labeling request
goes hand-in-hand with management's stated
commitment to food safety and its active support
for its customers' interest in food safety. Given
that the requested report would provide better
understanding of the company's products and
ensure company's commitment to address
shareholders' concerns regarding this issue, we
support this proposal.
02/28/05 - A Sanmina-SCI Corp. *SANM* 800907107 01/03/05 46,860
1 Elect Directors For Split Mgmt
1.1 Elect Director Neil R. Bonke --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insiders Jure Sola, Randy
W. Furr and affiliated outsiders A. Eugene Sapp,
Jr. and Mario M. Rosati, from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Mario M. Rosati for standing as an
affiliated outsider on the Nominating Committee,
from Jure Sola for serving as both chairman and
CEO, and from the entire Compensation Committee
for egregious executive compensation practices.
1.2 Elect Director Alain Couder --- For
1.3 Elect Director Randy W. Furr --- Withhold
1.4 Elect Director Mario M. Rosati --- Withhold
1.5 Elect Director A. Eugene Sapp, Jr. ---
Withhold
1.6 Elect Director Wayne Shortridge --- Withhold
1.7 Elect Director Peter J. Simone --- For
1.8 Elect Director Jure Sola --- Withhold
1.9 Elect Director Jacquelyn M. Ward ---
Withhold
2 Ratify Auditors For Against Mgmt
We do not support this item. In this instance, the
non-auditing consulting fees are more than 25 percent of
total fees paid. As such, we will vote against the
company's auditor. We believe the integrity of the
auditor's relationship with the company is compromised
when a firm is paid excessive consulting fees on top of
those paid for auditing services. This arrangement has the
potential to open the auditor process to a wide range of
conflicts of interest.
06/14/05 - A Scientific Games Corporation *SGMS* 80874P109 05/19/05 11,430
1 Elect Directors For Split Mgmt
1.1 Elect Director A. Lorne Weil --- Withhold
We will vote FOR the director nominees with the
exception of affiliated outsider Sir Brian G.
Wolfson, from whom we will WITHHOLD votes for
standing on key board committees. We will also
WITHHOLD votes from A. Lorne Weil for serving as
both chairman and CEO, and from Howard Gittis for
serving on an excessive number of boards.
1.2 Elect Director Peter A. Cohen --- For
1.3 Elect Director Colin J. O'Brien --- For
1.4 Elect Director Ronald O. Perelman --- For
1.5 Elect Director Howard Gittis --- Withhold
1.6 Elect Director Barry F. Schwartz --- For
1.7 Elect Director Eric M. Turner --- For
1.8 Elect Director Sir Brian G. Wolfson ---
Withhold
1.9 Elect Director Joseph R. Wright, Jr. --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
12.18%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Scientific Games
Corporation should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
05/25/05 - A SEI Investment Company *SEIC* 784117103 04/05/05 6,110
1 Elect Directors For Split Mgmt
1.1 Elect Director Sarah W. Blumenstein --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of affiliated outsider Henry H. Porter, Jr., from
whom we will WITHHOLD votes for lack of a
two-thirds majority independent board, for
standing as an affiliated outsider on key board
committees, and for failure to establish an
independent Nominating Committee.
1.2 Elect Director Kathryn M. McCarthy --- For
1.3 Elect Director Henry H. Porter, Jr. ---
Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/19/05 - A Sepracor Inc. *SEPR* 817315104 04/01/05 5,340
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Timothy J. Barberich ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
WITHHOLD votes from insider Timothy J. Barberich,
for lack of a two-thirds majority independent
board and for serving as both chairman and CEO.
2 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
12.17%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Sepracor Inc. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
05/25/05 - A Sirius Satellite Radio, Inc. *SIRI* 82966U103 04/04/05 33,280
1 Elect Directors For Split Mgmt
1.1 Elect Director Leon D. Black --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Joseph P. Clayton, Mel Karmazin and
affiliated outsider Lawrence F. Gilberti, from
whom we will WITHHOLD votes for lack of a
two-thirds majority independent board and for
failure to establish an independent Nominating
Committee. We will also WITHHOLD votes from
Lawrence F. Gilberti for standing as an
affiliated outsider on key board committees, from
Joseph P. Clayton for serving as a
non-independent board chairman, and from Audit
Committee members James P. Holden, James F.
Mooney, and Lawrence F. Gilberti for neglecting
to include auditor ratification on the proxy
ballot.
1.2 Elect Director Joseph P. Clayton ---
Withhold
1.3 Elect Director Lawrence F. Gilberti ---
Withhold
1.4 Elect Director James P. Holden --- Withhold
1.5 Elect Director Mel Karmazin --- Withhold
1.6 Elect Director Warren N. Lieberfarb --- For
1.7 Elect Director Michael J. McGuiness --- For
1.8 Elect Director James F. Mooney --- Withhold
05/18/05 - A Southwest Airlines Co. *LUV* 844741108 03/23/05 15,700
1 Elect Directors For Split Mgmt
1.1 Elect Director Colleen C. Barrett ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR director nominee John T. Montford, and
WITHHOLD votes from insiders Gary C. Kelly and
Colleen C. Barrett for lack of a two-thirds
majority independent board.
1.2 Elect Director Gary C. Kelly --- Withhold
1.3 Elect Director John T. Montford --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
04/21/05 - A Sovereign Bancorp, Inc. *SOV* 845905108 03/01/05 9,760
1 Elect Directors For Split Mgmt
1.1 Elect Director P. Michael Ehlerman --- For
We will vote FOR the director nominees with the
exception of insider Jay S. Sidhu from whom we
will WITHHOLD votes for serving as both chairman
and CEO.
1.2 Elect Director Marian L. Heard --- For
1.3 Elect Director Jay S. Sidhu --- Withhold
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The company has
retained the same audit firm in excess of seven years. We
believe mandatory auditor rotation is an effective
mechanism for mitigating the potential risks borne by
long-term auditor-client relationships, and is a safeguard
against improper audits. PVS does not support the
ratification of an auditor if their tenure at a company
exceeds seven years.
05/05/05 - A Starwood Hotels & Resorts Worldwide, 85590A203 03/17/05 4,960
Inc. *HOT*
1 Elect Directors For Split Mgmt
1.1 Elect Director Charlene Barshefsky ---
Withhold
We will vote FOR Steven J. Heyer, but WITHHOLD votes from
Kneeland C. Youngblood, Daniel W. Yih, Eric Hippeau, Barry
S. Sternlicht, Thomas O. Ryder, Jean-Marc Chapus, Steven
Quazzo, Charlene Barshefsky and Bruce W. Duncan for
failure to implement the majority supported stock option
expensing shareholder proposal. We will also WITHHOLD
votes from Barry S. Sternlicht for serving as a
non-independent board chairman, and from Eric Hippeau for
questions surrounding his role on Global Crossing's board.
1.2 Elect Director Jean-Marc Chapus --- Withhold
1.3 Elect Director Bruce W. Duncan --- Withhold
1.4 Elect Director Steven J. Heyer --- For
1.5 Elect Director Eric Hippeau --- Withhold
1.6 Elect Director Steven Quazzo --- Withhold
1.7 Elect Director Thomas O. Ryder --- Withhold
1.8 Elect Director Barry S. Sternlicht ---
Withhold
1.9 Elect Director Daniel W. Yih --- Withhold
1.10 Elect Director Kneeland C. Youngblood ---
Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Recent accounting scandals underscore the need to ensure
auditor independence in the face of selling consulting
services to audit clients. The outside auditing process is
the backbone upon which the financial health of a company
is measured. To maintain the integrity of the auditing
process, the independence of an outside auditor is
absolutely essential for rendering objective opinions upon
which investors then rely. We support this item.
The non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
3 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit greatly
exceeds our guidelines for executive incentive programs.
As such, this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
4 Provide for Confidential Voting Against For ShrHoldr
This clause is critical in adopting a confidential voting
policy, as the stakes of a proxy contest are high. Such a
clause levels the playing field in all aspects of voting.
However, in this case, we believe that shareholders would
be better served with a confidential policy and that the
benefits far outweigh any risks.
5 Expense Stock Options Against For ShrHoldr
PVS supports the general principle motivating this
non-binding proposal. In the wake of financial reporting
problems and excessive executive compensation at companies
like Enron Corp., Worldcom Inc., and Tyco International
Ltd., we agree with the growing investor consensus that
companies should expense the costs associated with stock
options in order to increase the accuracy of their
financial statements. Since the expensing of options
lowers earnings, most companies have elected not to do so.
Instead, most companies have opted to disclose option
values only in the footnotes to their annual reports.
We note that SFAS 123 (R) will require
that most public companies expense employee stock
options at fair market value. According to an
Apr. 14, 2005 letter from the SEC, mandatory
option expensing will be delayed by six months
from its initial implementation date of June 15
2005. Until then, the absence of an accepted
methodology with which to value the contingent
cost of stock options will allow companies like
Starwood Hotels & Resorts to keep the cost of
stock options off the income statement. However,
given the fact that stock options have become an
integral component of compensation, their value
cannot be ignored and treated as "no-cost"
compensation. Given that (1) many companies use
stock options as a significant component of
overall compensation, (2) the exercise of options
result in a transfer of shareholder value, and
(3) the contingent cost of options reduces
earnings, we believe that options should be
expensed along with all other forms of
compensation to better reflect the company's true
earnings and provide additional discipline
against overuse.
05/18/05 - PC Station Casinos, Inc. *STN* 857689103 03/24/05 4,250
Management Proposals (WHITE CARD)
1 Elect Directors For DoNotVote Mgmt
2 Approve Omnibus Stock Plan For DoNotVote Mgmt
3 Ratify Auditors For DoNotVote Mgmt
4 Reduce Supermajority Vote Requirement Against DoNotVote ShrHoldr
5 Declassify the Board of Directors Against DoNotVote ShrHoldr
6 Submit Shareholder Rights Plan (Poison Against DoNotVote ShrHoldr
Pill) to Shareholder Vote
Dissident Proxy (BLUE CARD)
1 Elect Directors (Opposition Slate) None For Mgmt
1.1 Elect Directors Frank J. Fertitta III ---
For
Although the company's performance has positive
one-, three- and five-year total shareholder
returns, its CEO's compensation has increased 208
percent from the previous year. Frank J. Fertitta
III received $19.3 million in total direct
compensation in 2004 versus peer median
compensation of $1.9 million (GICS peer group
2530 Hotels, Restaurants & Leisure). The increase
over the previous year is mainly due to a $14.3
million time-based restricted stock grant, which
vests ratably over 10 years. The grant was made
under the Stock Compensation Program. The
Compensation Committee's Report does not disclose
the underlying rationale for this grant. PVS
believes that there should be strong linkage
between the company's performance and
compensation at the senior executive level. PVS
also favors the use of equity grants whose grant
or vesting are directly tied to the attainment of
pre-established criteria. At this time, PVS will
vote FOR all director nominees, but advocates for
more transparent disclosure on executive
compensation. We will continue to monitor
executive compensation in relation to total
shareholders' returns.
1.2 Elect Director Lee S. Isgur --- For
2 Approve Omnibus Stock Plan None Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
12.61% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Station Casinos should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
3 Ratify Auditors None For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this item. The
non-audit consulting fees are less than 25 percent of
total fees paid. As such, we will vote for the company's
auditor.
4 Reduce Supermajority Vote Requirement For For ShrHoldr
PVS discussion: PVS generally supports a simple majority
vote to effect changes in a company's corporate governance
or to engage in major transactions. Requiring a higher
voting threshold could permit management to entrench
itself by blocking amendments that are in shareholders'
best interests. PVS supports this proposal.
5 Declassify the Board of Directors For For ShrHoldr
PVS supports shareholder proposals calling for the repeal
of a company's classified board structure and for the
annual election of all directors under a single slate. The
ability to elect directors is the single most important
use of the shareholder franchise, and we firmly believe
all directors should be accountable on an annual basis. A
classified board can entrench management and effectively
preclude most takeover bids or proxy contests. Board
classification forces dissidents and would-be acquirers to
negotiate with the incumbent board, which has the
authority to decide on offers without a shareholder vote.
Managers generally believe that staggered boards provide
continuity, but empirical evidence has suggested that such
a structure is not in shareholders' best interests from a
financial perspective. We, therefore, support the
declassification of a company's board.
6 Submit Shareholder Rights Plan (Poison For For ShrHoldr
Pill) to Shareholder Vote
Because poison pills greatly alter the balance of
power between shareholders and management,
shareholders should be allowed to make their own
evaluation of such plans. Ideally, a pill should
include a two- to three-year sunset provision, a
reasonable flip-in (20 percent or higher), and a
chewable feature allowing shareholders to redeem
the pill in the event of a takeover offer.
04/21/05 - A SVB FINANCIAL GROUP *SIVB* 827064106 02/28/05 4,260
1 Elect Directors For Split Mgmt
1.1 Elect Director Eric A. Benhamou --- For
We will vote FOR the director nominees with the
exception of James R. Porter and Larry W.
Sonsini, from whom we will WITHHOLD votes for
standing as affiliated outsiders on key board
committees. We will also WITHHOLD votes from G.
Felda Hardymon for poor board and committee
meeting attendance.
1.2 Elect Director David M. Clapper --- For
1.3 Elect Director Roger F. Dunbar --- For
1.4 Elect Director Joel P. Friedman --- For
1.5 Elect Director G. Felda Hardymon ---
Withhold
1.6 Elect Director Alex W. 'Pete' Hart --- For
1.7 Elect Director C. Richard Kramlich --- For
1.8 Elect Director James R. Porter --- Withhold
1.9 Elect Director Michaela K. Rodeno --- For
1.10 Elect Director Larry W. Sonsini --- Withhold
1.11 Elect Director Kenneth P. Wilcox --- For
2 Change Company Name For For Mgmt
We generally approve a company's change of name as it has,
in most instances, strong strategic justification from
business standpoint.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. Firstly, the company's
three-year average burn rate of 5.20% is higher than its
four-digit GICS peer group burn rate of 2.61%, and
therefore fails to meet our guidelines. Secondly, the
company's potential Voting Power Dilution (VPD) for all
incentive plans is 18.21%, which exceeds our guidelines.
Proposals that add to a company's VPD can potentially
dilute the voting interests of common shareholders.
Finally, the company does not fully expense its stock
options. Given their current accounting treatment of not
being charged as an expense against earnings, stock
options have been the ultimate tax dodge for companies
wishing to lavishly compensate employees. Misused stock
options can give executives perverse incentives to inflate
their company's earnings or make irresponsibly optimistic
forecasts in order to keep stock prices high and their
paychecks gargantuan. Numerous companies have chosen to
acknowledge the distortion to reported earnings caused by
the non-expensing of options and have elected to expense
options going forward. We believe Silicon Valley
Bancshares should follow suit, to better reflect the
company's true earnings and provide additional discipline
against overuse.
4 Approve Stock Award to Executive For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit has the
potential to exceed our guidelines for cash and stock
based executive incentive programs due to its open-ended,
unlimited nature. In years with substantial base salary
increases, the individual award limit parameters
prescribed by the plan would not keep payouts to
executives within our $2 million individual award limit.
As such, this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
5 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
04/26/05 - A T. Rowe Price Group, Inc. *TROW* 74144T108 02/25/05 7,310
1 Elect Directors For Split Mgmt
1.1 Elect Director Edward C. Bernard ---
Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insider Brian C. Rogers,
George A. Roche, James S. Riepe, Edward C.
Bernard and James A.C. Kennedy from whom we will
WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from George A. Roche for serving as both chairman
and CEO.
1.2 Elect Director James T. Brady --- For
1.3 Elect Director J. Alfred Broaddus, Jr. ---
For
1.4 Elect Director Donald B. Hebb, Jr. --- For
1.5 Elect Director James A.C. Kennedy ---
Withhold
1.6 Elect Director James S. Riepe --- Withhold
1.7 Elect Director George A. Roche --- Withhold
1.8 Elect Director Brian C. Rogers --- Withhold
1.9 Elect Director Dr. Alfred Sommer --- For
1.10 Elect Director Dwight S. Taylor --- For
1.11 Elect Director Anne Marie Whittemore --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not support this request.
09/23/04 - A Tektronix, Inc. *TEK* 879131100 07/19/04 5,330
1 Elect Directors For Withhold Mgmt
1.1 Elect Director David N. Campbell ---
Withhold
We will WITHHOLD votes from Audit Committee
members David N. Campbell and Merrill A. McPeak
for neglecting to include auditor ratification on
the ballot. In addition, we will WITHHOLD votes
from Richard H. Wills for serving as both
chairman and CEO.
1.2 Elect Director Merrill A. Mcpeak ---
Withhold
1.3 Elect Director Richard H. Wills --- Withhold
04/28/05 - A The AES Corp. *AES* 00130H105 03/03/05 9,270
1 Elect Directors For For Mgmt
1.1 Elect Director Richard Darman --- For
The director nominees meet our guidelines.
1.2 Elect Director Paul T. Hanrahan --- For
1.3 Elect Director Kristina M. Johnson --- For
1.4 Elect Director John A. Koskinen --- For
1.5 Elect Director Philip Lader --- For
1.6 Elect DirectorJohn H. McArthur --- For
1.7 Elect Director Sandra O. Moose --- For
1.8 Elect Director Philip A. Odeen --- For
1.9 Elect Director Charles O. Rossotti --- For
1.10 Elect Director Sven Sandstrom --- For
1.11 Elect Director Roger W. Sant --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
04/07/05 - A The Bear Stearns Companies Inc. *BSC* 073902108 02/23/05 1,560
1 Elect Directors For Split Mgmt
1.1 Elect Director James E. Cayne --- Withhold
The composition of the board does not meet our standard
for board independence. A two-thirds majority of
independent directors on a board is a direct way to assure
that shareholder interests will be properly represented on
a board. We will vote FOR the director nominees with the
exception of insiders James E. Cayne, Alan C. Greenberg,
Alan D. Schwartz, Warren J. Spector and affiliated
outsiders Carl D. Glickman, Donald J. Harrington, Frank T.
Nickell, Frederic V. Salerno, and Vincent Tese from whom
we will WITHHOLD votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes from Carl
D. Glickman, Donald J. Harrington, Frank T. Nickell,
Frederic V. Salerno, and Vincent Tese for standing as
affiliated outsiders on key board committees, and from
James E. Cayne for serving as both chairman and CEO.
1.2 Elect Director Henry S. Bienen --- For
1.3 Elect Director Carl D. Glickman --- Withhold
1.4 Elect Director Alan C. Greenberg ---
Withhold
1.5 Elect Director Donald J. Harrington ---
Withhold
1.6 Elect Director Frank T. Nickell --- Withhold
1.7 Elect Director Paul A. Novelly --- For
1.8 Elect Director Frederic V. Salerno ---
Withhold
1.9 Elect Director Alan D. Schwartz --- Withhold
1.10 Elect Director Warren J. Spector ---
Withhold
1.11 Elect Director Vincent Tese --- Withhold
1.12 Elect Director Wesley S. Williams Jr. ---
For
2 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link stock
grants and cash bonuses with clearly defined performance
criteria, the plan's potential annual individual award
limit exceeds our guidelines for stock-based executive
incentive programs. In years where there are substantial
operating cash flows, the individual award limit
parameters prescribed by the plan would not keep payouts
to executives within our $2 million individual award
limit. As such, this plan has the potential to negatively
impact shareholder value beyond a reasonable level.
Therefore, we do not support this item.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
11/17/04 - A The Clorox Company *CLX* 189054109 09/20/04 5,170
1 Elect Directors For Split Mgmt
1.1 Elect Director Daniel Boggan, Jr. ---
Withhold
We will vote FOR the director nominees with the
exceptions Lary R. Scott for serving as an
affiliated outsider on the Audit and Compensation
committees, and from Daniel Boggan, Jr. for
serving as an affiliated outsider on the
Nominating Committee.
1.2 Elect Director Tully M. Friedman --- For
1.3 Elect Director Christoph Henkel --- For
1.4 Elect Director William R. Johnson --- For
1.5 Elect Director Gerald E. Johnston --- For
1.6 Elect Director Robert W. Matschullat --- For
1.7 Elect Director Gary G. Michael --- For
1.8 Elect Director Klaus Morwind --- For
1.9 Elect Director Jan L. Murley --- For
1.10 Elect Director Lary R. Scott --- Withhold
1.11 Elect Director Michael E. Shannon --- For
2 Approve Outside Director Stock For For Mgmt
Awards/Options in Lieu of Cash
This plan does not result in shareholder wealth
transfer, it merely alters the medium through
which directors are paid by allowing them to
receive stock units in lieu of cash compensation.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
11/16/04 - S The Cooper Companies, Inc. *COO* 216648402 10/04/04 2,330
1 Approve Merger Agreement For For Mgmt
Conclusion: Based on the market premium, the fairness
opinion, and the potential strategic synergies, we believe
the merger agreement warrants shareholder support.
03/22/05 - A The Cooper Companies, Inc. *COO* 216648402 02/03/05 3,730
1 Elect Directors For Split Mgmt
1.1 Elect Director A. Thomas Bender --- Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insiders Robert S. Weiss, A. Thomas Bender and
affiliated outsiders Allan E Rubenstein, Steven
Rosenberg, Donald Press, Michael H. Kalkstein and
John D. Fruth, from whom we will WITHHOLD votes
for lack of a two-thirds majority independent
board. We will also WITHHOLD votes from Allan E
Rubenstein, Steven Rosenberg, Donald Press and
Michael H. Kalkstein for standing as affiliated
outsiders on key board committees, and from A.
Thomas Bender for serving as both chairman and
CEO.
1.2 Elect Director Edgar J. Cummins --- For
1.3 Elect Director John D. Fruth --- Withhold
1.4 Elect Director Michael H. Kalkstein ---
Withhold
1.5 Elect Director Moses Marx --- For
1.6 Elect Director Donald Press --- Withhold
1.7 Elect Director Steven Rosenberg --- Withhold
1.8 Elect Director Allan E Rubenstein M.D. ---
Withhold
1.9 Elect Director Robert S. Weiss --- Withhold
1.10 Elect Director Stanley Zinberg, M.D. --- For
2 Ratify Auditors For For Mgmt
We support this item. The non-audit consulting
fees are less than 25 percent of total fees paid.
As such, we will vote for the company's auditor.
3 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
04/19/05 - A The Hershey Co *HSY* 427866108 02/22/05 2,950
1 Elect Directors For Split Mgmt
1.1 Elect Director J.A. Boscia --- For
We will vote FOR the director nominees with the
exception of Mackey J. McDonald, Richard H. Lenny
and Bonnie G. Hill. We will WITHHOLD votes from
Mr. McDonald for serving on an excessive number
of boards, from Mr. Lenny for serving as both
chairman and CEO, and from Ms. Hill for standing
as an affiliated outsider on the Compensation and
Nominating committees.
1.2 Elect Director R.H. Campbell --- For
1.3 Elect Director R.F. Cavanaugh --- For
1.4 Elect Director G.P. Coughlan --- For
1.5 Elect Director H. Edelman --- For
1.6 Elect Director B.G. Hill --- Withhold
1.7 Elect Director R.H. Lenny --- Withhold
1.8 Elect Director M.J. McDonald --- Withhold
1.9 Elect Director M.J. Toulantis --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. The non-audit
consulting fees are less than 25 percent of total fees
paid. As such, we will vote for the company's auditor.
3 Increase Authorized Common Stock For Against Mgmt
The number of additional authorized common shares sought
in this proposal exceeds our guidelines. As a policy, PVS
will not support increases in authorized common shares of
this magnitude, unless the company has offered a specific
and reasonable purpose for the additional shares. In this
case, the company has not offered a specific reason for
the share increase. Large increases in authorized common
stock may be used for anti-takeover devices or to fund
undesirable increases in executive stock options without
shareholder approval. In addition, this proposal is
bundled with an increase in supervoting stock. As such, we
will vote AGAINST this item.
4 Change Company Name For For Mgmt
We generally approve a company's change of name as it has,
in most instances, strong strategic justification from
business standpoint. Because it is unlikely that the name
change would have a negative financial impact on the
company, we will support the proposal.
05/23/05 - A The Warnaco Group, Inc. *WRNC* 934390402 04/01/05 6,480
1 Elect Directors For For Mgmt
1.1 Elect Director David A. Bell --- For
The director nominees meet our guidelines.
1.2 Elect Director Robert A. Bowman --- For
1.3 Elect Director Richard Karl Goeltz --- For
1.4 Elect Director Joseph R. Gromek --- For
1.5 Elect Director Sheila A. Hopkins --- For
1.6 Elect Director Charles R. Perrin --- For
1.7 Elect Director Cheryl Nido Turpin --- For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
12.68% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
04/21/05 - A TIBCO Software, Inc. *TIBX* 88632Q103 02/22/05 30,690
1 Elect Directors For Split Mgmt
1.1 Elect Director Vivek Y. Ranadive ---
Withhold
We will vote FOR the director nominees with the
exception of Vivek Y. Ranadive, from whom we will
WITHHOLD votes for serving as both chairman and
CEO.
1.2 Elect Director Bernard Bourigeaud --- For
1.3 Elect Director Eric Dunn --- For
1.4 Elect Director Naren Gupta --- For
1.5 Elect Director Peter Job --- For
1.6 Elect Director Philip K. Wood --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the company has retained the
same audit firm in excess of seven years. We believe
mandatory auditor rotation is an effective mechanism for
mitigating the potential risks borne by long-term
auditor-client relationships, and is a safeguard against
improper audits. PVS does not support the ratification of
an auditor if their tenure at a company exceeds seven
years.
05/24/05 - A Triad Hospitals, Inc. *TRI* 89579K109 04/08/05 3,800
1 Elect Directors For For Mgmt
1.1 Elect Director Michael J. Parsons --- For
The director nominees meet our guidelines.
1.2 Elect Director Thomas G. Loeffler, Esq. ---
For
1.3 Elect Director Uwe E. Reinhardt, Ph.D. ---
For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.41% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. Additionally, the
company does not fully expense its stock options. Given
their current accounting treatment of not being charged as
an expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Triad Hospitals, should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
4 Amend Qualified Employee Stock Purchase Plan For For Mgmt
PVS generally supports broad-based employee stock purchase
plans as a means of linking shareholder interests with
those of company employees. This plan qualifies as an
employee stock purchase plan under Section 423 of the
Internal Revenue Code. This plan has a reasonable employee
purchasing cap and contains a predetermined offering
period. As such, this ESPP meets our guidelines.
09/24/04 - S UCBH Holdings, Inc. *UCBH* 90262T308 08/31/04 5,670
1 Amend Stock Option Plan For Against Mgmt
We do not support this plan. The company's
potential Voting Power Dilution (VPD) for all
incentive plans is 16.23% which exceeds our
guidelines. Proposals that add to a company's VPD
can potentially dilute the voting interests of
common shareholders. In addition, the company
does not fully expense its stock options. Given
their current accounting treatment of not being
charged as an expense against earnings, stock
options have been the ultimate tax dodge for
companies wishing to lavishly compensate
employees. Misused stock options can give
executives an incentive to inflate their
company's earnings or make irresponsibly
optimistic forecasts in order to keep stock
prices high and their paychecks gargantuan.
Numerous companies have chosen to acknowledge the
distortion to reported earnings caused by the
non-expensing of options and have elected to
expense options going forward. We believe UCBH
Holdings, Inc. should follow suit, to better
reflect the company's true earnings and provide
additional discipline against overuse.
05/19/05 - A UCBH Holdings, Inc. *UCBH* 90262T308 03/31/05 6,510
1 Elect Directors For For Mgmt
1.1 Elect Director Li-Lin Ko --- For
The director nominees meet our guidelines.
1.2 Elect Director Richard Li-Chung Wang --- For
1.3 Elect Director Dennis Wu --- For
2 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest.
04/29/05 - A/S Ultra Petroleum Corp. *UPL* 903914109 03/14/05 3,370
1 Elect Director Michael D. Watford For Against Mgmt
We will vote FOR the director nominees with the
exception of Michael D. Watford, from whom we
will WITHHOLD votes for serving as chairman and
CEO.
2 Elect Director William C. Helton For For Mgmt
3 Elect Director James E. Nielson For For Mgmt
4 Elect Director Robert E. Rigney For For Mgmt
5 Elect Director James C. Roe For For Mgmt
6 Approve KPMG LLP as Auditors and Authorize For For Mgmt
Board to Fix Remuneration of Auditors
The ratification of auditors is no longer a
routine item. Accounting scandals at companies
underscore the need to ensure auditor
independence in the face of selling consulting
services to audit clients. The outside auditing
process is the backbone upon which the financial
health of a company is measured. To maintain the
integrity of the auditing process, the
independence of an outside auditor is absolutely
essential for rendering objective opinions upon
which investors then rely. We support this item.
The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote
for the company's auditor.
7 Approve 2:1 Stock Split For For Mgmt
On April 8, 2005, the company's shares closed trading on
the American Stock Exchange at US$49.21 per share. As of
the record date, there were 75,985,968 common shares
issued and outstanding. The proposed stock split will not
result in any dilution of current shareholder value as the
new shares created will all be given to existing
shareholders. Shareholders will own twice the number of
shares they held before the split, and each share will
have half the value it had before the split. The overall
value of the holdings is therefore unaffected. The
effective date and time of the stock split will be
determined by the board. The board has also reserved the
right to abandon the stock split even if approved by the
shareholders. Stock splits, while not immediately adding
to shareholder value, serve to keep the share price of a
company low, increasing market liquidity and expanding the
potential capital base.
8 Approve 2005 Stock Incentive Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
16.65% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders.
9 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not support this request.
05/24/05 - A Urban Outfitters, Inc. *URBN* 917047102 03/28/05 5,850
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Richard A. Hayne --- Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
WITHHOLD votes from insiders Glen T. Senk,
Richard A. Hayne and affiliated outsiders Joel S.
Lawson, III, Harry S. Cherken, Jr. and Scott A.
Belair, from whom we will WITHHOLD votes for lack
of a two-thirds majority independent board. We
will also WITHHOLD votes from Joel S. Lawson,
III, Harry S. Cherken, Jr. and Scott A. Belair
for standing as affiliated outsiders on key board
committees, from Richard A. Hayne for serving as
a non-independent board chairman, and from the
entire Audit Committee for neglecting to include
auditor ratification on the proxy ballot.
1.2 Elect Director Scott A. Belair --- Withhold
1.3 Elect Director Harry S. Cherken, Jr. ---
Withhold
1.4 Elect Director Joel S. Lawson III ---
Withhold
1.5 Elect Director Glen T. Senk --- Withhold
1.6 Elect Director Robert H. Strouse ---
Withhold
2 Amend Omnibus Stock Plan For Against Mgmt
Though we commend the company on its effort to link stock
grants with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for stock-based executive incentive programs.
As such, this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
3 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
06/13/05 - A Uti Worldwide Inc. *UTIW* G87210103 05/18/05 2,430
Meeting for Holders of ADR's
1 Elect Directors For For Mgmt
1.1 Elect Director Leon J. Level --- For
We will vote FOR the director nominees.
1.2 Elect Director J. Simon Stubbings --- For
2 TO RATIFY THE APPOINTMENT OF DELOITTE & For For Mgmt
TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS OF THE COMPANY.
The ratification of auditors is no longer a
routine item. Accounting scandals at companies
underscore the need to ensure auditor
independence in the face of selling consulting
services to audit clients. The outside auditing
process is the backbone upon which the financial
health of a company is measured. To maintain the
integrity of the auditing process, the
independence of an outside auditor is absolutely
essential for rendering objective opinions upon
which investors then rely. We support this item.
The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote
for the company's auditor.
05/26/05 - A VeriSign Inc *VRSN* 92343E102 03/28/05 17,650
1 Elect Directors For Split Mgmt
1.1 Elect Director Scott G. Kriens --- For
We will vote FOR the director nominees with the
exception of Stratton D. Sclavos from whom we
will WITHHOLD votes for serving as both chairman
and CEO.
1.2 Elect Director Len J. Lauer --- For
1.3 Elect Director Stratton D. Sclavos ---
Withhold
2 Amend Non-Employee Director Stock Option For Against Mgmt
Plan
We do not support this plan. Firstly, the company
has repriced underwater stock options in the
past. We believe repricing reduces the incentive
value of the plan by undermining the concept that
stock options are intended to be a long-term
incentive. Secondly, the company's potential
Voting Power Dilution (VPD) for all incentive
plans is 27.22%, which exceeds our guidelines.
Proposals that add to a company's VPD can
potentially dilute the voting interests of common
shareholders. Finally, the company does not fully
expense its stock options. Given their current
accounting treatment of not being charged as an
expense against earnings, stock options have been
the ultimate tax dodge for companies wishing to
lavishly compensate employees. Misused stock
options can give executives perverse incentives
to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to
keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to
acknowledge the distortion to reported earnings
caused by the non-expensing of options and have
elected to expense options going forward. We
believe VeriSign Inc should follow suit, to
better reflect the company's true earnings and
provide additional discipline against overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/04/05 - A Waters Corp. *WAT* 941848103 03/15/05 4,930
1 Elect Directors For Split Mgmt
1.1 Elect Director Joshua Bekenstein ---
Withhold
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider Douglas A. Berthiaume and affiliated
outsiders Joshua Bekenstein, Edward Conard, and
Thomas P. Salice, from whom we will WITHHOLD
votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Joshua Bekenstein, Edward Conard, and Thomas
P. Salice for standing as affiliated outsiders on
key board committees, from Douglas A. Berthiaume
for serving as both chairman and CEO, and from
Audit Committee members Edward Conard, William J.
Miller, and Thomas P. Salice for neglecting to
include auditor ratification on the proxy ballot.
1.2 Elect Director Michael J. Berendt, Ph. D.
--- For
1.3 Elect Director Douglas A. Berthiaume ---
Withhold
1.4 Elect Director Edward Conard --- Withhold
1.5 Elect Director Laurie H. Glimcher --- For
1.6 Elect Director William J. Miller ---
Withhold
1.7 Elect Director Thomas P. Salice --- Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Amend Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
13.13%, which exceeds our guidelines. Proposals that add
to a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe Waters Corp. should
follow suit, to better reflect the company's true earnings
and provide additional discipline against overuse.
4 Approve Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
5 Other Business For Against Mgmt
As we cannot know the content of these issues, we
do not support this request.
05/10/05 - A Wellpoint Inc *WLP* 94973V107 03/18/05 5,680
1 Elect Directors For For Mgmt
1.1 Elect Director William H.T. Bush --- For
The director nominees meet our guidelines.
1.2 Elect Director Warren Y. Jobe --- For
1.3 Elect Director William G. Mays --- For
1.4 Elect Director Senator Donald W. Riegle,
Jr. --- For
1.5 Elect Director William J. Ryan --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Performance- Based/Indexed Options Against For ShrHoldr
Conclusion PVS supports the use of indexed,
premium-priced, and performance-vested options, which
encourage executives to outperform rivals and the market
as a whole rather than being rewarded for any rise in the
share price, which can occur if empirical performance
measures are not incorporated into the structure of the
options. The proposal requests for a significant portion
of future stock option grants to senior executives be
performance-based, which we do not believe is unduly
restrictive. This method of compensation
demonstrates a strong commitment to the actual promotion
of shareholder value rather than simply management
enrichment. Given the principle of pay for performance
(and the potential for excessive pay untied to results
inherent in fixed-price stock options), and the fact that
the company does not grant awards as performance-based
awards, we believe this is a worthy proposal which sends
management a clear message on the responsible and proper
use of equity compensation in conjunction with performance.
04/04/05 - A Whole Foods Market, Inc. *WFMI* 966837106 02/04/05 2,510
1 Elect Directors For Split Mgmt
1.1 Elect Director David W. Dupree --- For
We will vote FOR the director nominees with the
exception of John P. Mackey, from whom we will
WITHHOLD votes for serving as both chairman and
CEO.
1.2 Elect Director Gabrielle E. Greene --- For
1.3 Elect Director John P. Mackey --- Withhold
1.4 Elect Director Linda A. Mason --- For
1.5 Elect Director Morris J. Siegel --- For
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
3 Increase Authorized Common Stock For Against Mgmt
We do not support this plan. The number of additional
authorized common shares sought in this proposal exceeds
our guidelines. As a policy, PVS will not support
increases in authorized common shares of this magnitude,
unless the company has offered a specific and reasonable
purpose for the additional shares. In this case, the
company has not offered a specific reason for the share
increase. Large increases in authorized common stock may
be used for anti-takeover devices or to fund undesirable
increases in executive stock options without shareholder
approval.
4 Amend Stock Option Plan For Against Mgmt
We do not support this plan. Firstly, the company's
potential Voting Power Dilution (VPD) for all incentive
plans is 20.26% which exceeds our guidelines. Proposals
that add to a company's VPD can potentially dilute the
voting interests of common shareholders. Secondly, the
company's three-year average burn rate of 3.65 percent is
higher than its four-digit GICS peer group burn rate of
3.48 percent, and therefore fails to meet our guidelines.
Finally, the company does not fully expense its stock
options. Given their current accounting treatment of not
being charged as an expense against earnings, stock
options have been the ultimate tax dodge for companies
wishing to lavishly compensate employees. Misused stock
options can give executives perverse incentives to inflate
their company's earnings or make irresponsibly optimistic
forecasts in order to keep stock prices high and their
paychecks gargantuan. Numerous companies have chosen to
acknowledge the distortion to reported earnings caused by
the non-expensing of options and have elected to expense
options going forward. We believe Whole Foods Market, Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
5 Label Genetically Modified Ingredients Against For ShrHoldr
We are sympathetic with the proponent's concerns regarding
the unforeseen health impact, and we support reporting on
the effects and labeling of all GE-based products. We feel
that support for this labeling request goes hand-in-hand
with management's stated commitment to consumer safety and
safe products. Based on the potential benefits of a
proactive labeling policy and decreased exposure to
protest, litigation, and recalls, we feel that it is in
the best interests of shareholders to address consumer
concerns about possible dangers associated with GE
products. As labeling is one aspect of this process, we
support this proposal.
6 Submit Shareholder Rights Plan (Poison Against For ShrHoldr
Pill) to Shareholder Vote
Because poison pills greatly alter the balance of
power between shareholders and management,
shareholders should be allowed to make their own
evaluation of such plans.
05/18/05 - A Williams-Sonoma, Inc. *WSM* 969904101 03/22/05 7,110
1 Elect Directors For Split Mgmt
1.1 Elect Director W. Howard Lester --- Withhold
We will vote FOR the director nominees with the
exception of W. Howard Lester, from whom we will
WITHHOLD votes for serving as a non-independent
board chairman.
1.2 Elect Director Edward A. Mueller --- For
1.3 Elect Director Sanjiv Ahuja --- For
1.4 Elect Director Adrian D.P. Bellamy --- For
1.5 Elect Director Patrick J. Connolly --- For
1.6 Elect Director Adrian T. Dillon --- For
1.7 Elect Director Jeanne P. Jackson --- For
1.8 Elect Director Michael R. Lynch --- For
1.9 Elect Director Richard T. Robertson --- For
2 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses with clearly defined performance criteria, the
plan's annual individual award limit exceeds our
guidelines for executive incentive programs. As such, this
plan has the potential to negatively impact shareholder
value beyond a reasonable level. Therefore, we do not
support this item.
3 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support
this item. In this instance, the non-auditing consulting
fees are more than 25 percent of total fees paid. As such,
we will vote against the company's auditor. We believe the
integrity of the auditor's relationship with the company
is compromised when a firm is paid excessive consulting
fees on top of those paid for auditing services. This
arrangement has the potential to open the auditor process
to a wide range of conflicts of interest. In addition, the
company has retained the same audit firm in excess of
seven years. We believe mandatory auditor rotation is an
effective mechanism for mitigating the potential risks
borne by long-term auditor-client relationships, and is a
safeguard against improper audits. PVS does not support
the ratification of an auditor if their tenure at a
company exceeds seven years.
12/09/04 - A WMS Industries Inc. *WMS* 929297109 10/20/04 7,810
1 Elect Directors For Split Mgmt
1.1 Elect Director Louis J. Nicastro ---
Withhold
The composition of the board does not meet our standard
for board and committee independence. A two-thirds
majority of independent directors on a board is a direct
way to assure that shareholder interests will be properly
represented on a board. We will vote FOR the director
nominees with the exceptions of Ira S. Sheinfeld, Harvey
Reich, Neil D. Nicastro, William C. Bartholomay, Harold H.
Bach, Jr., Norman J. Menell, Brian R. Gamache and Louis J.
Nicastro, from whom we will WITHHOLD votes for lack of a
two-thirds majority independent board. We will also
WITHHOLD votes from William C. Bartholomay for serving as
an affiliated outsider on the Audit & Ethics,
Compensation, and Nominating & Corporate Governance
committees, from Harold H. Bach, Jr. for serving as an
affiliated outsider on the Audit and Ethics Committee, and
from Norman J. Menell for serving as an affiliated
outsider on the Nominating & Corporate Governance
Committee. In addition, we will WITHHOLD votes from Louis
J. Nicastro for serving as a non-independent board
chairman.
1.2 Elect Director Brian R. Gamache --- Withhold
1.3 Elect Director Norman J. Menell --- Withhold
1.4 Elect Director Harold H. Bach, Jr. ---
Withhold
1.5 Elect Director William C. Bartholomay ---
Withhold
1.6 Elect Director Neil D. Nicastro --- Withhold
1.7 Elect Director Harvey Reich --- Withhold
1.8 Elect Director Ira S. Sheinfeld --- Withhold
1.9 Elect Director William J. Vareschi, Jr ---
For
2 Approve Omnibus Stock Plan For Against Mgmt
We do not support this plan. The company's potential
Voting Power Dilution (VPD) for all incentive plans is
14.91% which exceeds our guidelines. Proposals that add to
a company's VPD can potentially dilute the voting
interests of common shareholders. In addition, the company
does not fully expense its stock options. Given their
current accounting treatment of not being charged as an
expense against earnings, stock options have been the
ultimate tax dodge for companies wishing to lavishly
compensate employees. Misused stock options can give
executives perverse incentives to inflate their company's
earnings or make irresponsibly optimistic forecasts in
order to keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to acknowledge
the distortion to reported earnings caused by the
non-expensing of options and have elected to expense
options going forward. We believe WMS Industries Inc.
should follow suit, to better reflect the company's true
earnings and provide additional discipline against overuse.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/02/05 - A Wynn Resorts Ltd *WYNN* 983134107 03/31/05 3,700
1 Elect Directors For Split Mgmt
1.1 Elect Director Kazuo Okada --- Withhold
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of affiliated outsider Kazuo
Okada from whom we will WITHHOLD votes for lack
of a two-thirds majority independent board.
1.2 Elect Director Robert J. Miller --- For
1.3 Elect Director Kiril Sokoloff --- For
1.4 Elect Director Allan Zeman --- For
2 Amend Executive Incentive Bonus Plan For Against Mgmt
Though we commend the company on its effort to link cash
bonuses and stock grants with clearly defined performance
criteria, the plan's annual individual award limit exceeds
our guidelines for executive incentive programs. As such,
this plan has the potential to negatively impact
shareholder value beyond a reasonable level. Therefore, we
do not support this item.
3 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
11/16/04 - S XTO Energy Inc *XTO* 98385X106 09/30/04 9,335
1 Approve Omnibus Stock Plan For Against Mgmt
Although the potential Voting Power Dilution
(VPD) for all incentive plans of 7.98% meets our
guidelines, the company does not fully expense
its stock options. Given their current accounting
treatment of not being charged as an expense
against earnings, stock options have been the
ultimate tax dodge for companies wishing to
lavishly compensate employees. Misused stock
options can give executives perverse incentives
to inflate their company's earnings or make
irresponsibly optimistic forecasts in order to
keep stock prices high and their paychecks
gargantuan. Numerous companies have chosen to
acknowledge the distortion to reported earnings
caused by the non-expensing of options and have
elected to expense options going forward. We
believe XTO Energy should follow suit, to better
reflect the company's true earnings and provide
additional discipline against overuse.
05/17/05 - A XTO Energy Inc *XTO* 98385X106 03/31/05 8,316
1 Elect Directors For Withhold Mgmt
1.1 Elect Director Herbert D. Simons ---
Withhold
The director nominees do not meet our guidelines.
The composition of the board does not meet our
standard for board and committee independence. A
two-thirds majority of independent directors on a
board is a direct way to assure that shareholder
interests will be properly represented on a
board. We will vote FOR the director nominees
with the exception of insider Keith A. Hutton and
affiliated outsider Jack P. Randall from whom we
will WITHHOLD votes for lack of a two-thirds
majority independent board. We will also WITHHOLD
votes from audit committee members William A.
Adams, III and Herbert D. Simons for neglecting
to include auditor ratification on the proxy
ballot.
1.2 Elect Director William A. Adams, III ---
Withhold
1.3 Elect Director Keith A. Hutton --- Withhold
1.4 Elect Director Jack P. Randall --- Withhold
05/19/05 - A Yellow Roadway Corp. *YELL* 985577105 03/31/05 5,120
1 Elect Directors For Split Mgmt
1.1 Elect Director Cassandra C. Carr --- For
The composition of the board does not meet our
standard for board independence. A two-thirds
majority of independent directors on a board is a
direct way to assure that shareholder interests
will be properly represented on a board. We will
vote FOR the director nominees with the exception
of insider William D. Zollars and affiliated
outsiders Howard M. Dean, John C. McKelvey, and
William L. Trubeck, from whom we will WITHHOLD
votes for lack of a two-thirds majority
independent board. We will also WITHHOLD votes
from Howard M. Dean, John C. McKelvey, and
William L. Trubeck for standing as affiliated
outsiders on key board committees, and from
William D. Zollars for serving as both chairman
and CEO.
1.2 Elect Director Howard M. Dean --- Withhold
1.3 Elect Director Frank P. Doyle --- For
1.4 Elect Director John F. Fiedler --- For
1.5 Elect Director Dennis E. Foster --- For
1.6 Elect Director John C. McKelvey --- Withhold
1.7 Elect Director Phillip J. Meek --- For
1.8 Elect Director William L. Trubeck ---
Withhold
1.9 Elect Director Carl W. Vogt --- For
1.10 Elect Director William D. Zollars ---
Withhold
2 Ratify Auditors For For Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We support this
item. The non-audit consulting fees are less than 25
percent of total fees paid. As such, we will vote for the
company's auditor.
05/19/05 - A Yum Brands, Inc. *YUM* 988498101 03/21/05 10,780
1 Declassify the Board of Directors For For Mgmt
PVS commends management for submitting this
proposal, which demonstrates a commitment to
shareholders' interests.
2 Elect Directors For Split Mgmt
2.1 Elect Director David W. Dorman --- For
We will vote FOR the director nominees with the
exception of David C. Novak, from whom we will
WITHHOLD votes for serving as both chairman and
CEO. We will also WITHHOLD votes from Thomas M.
Ryan for serving on an excessive number of
boards.
2.2 Elect Director Massimo Ferragamo --- For
2.3 Elect Director J. David Grissom --- For
2.4 Elect Director Bonnie Hill --- For
2.5 Elect Director Robert Holland, Jr. --- For
2.6 Elect Director Kenneth G. Langone --- For
2.7 Elect Director Jonathan S. Linen --- For
2.8 Elect Director David C. Novak --- Withhold
2.9 Elect Director Andrall E. Pearson --- For
2.10 Elect Director Thomas M. Ryan --- Withhold
2.11 Elect Director Jackie Trujillo --- For
2.12 Elect Director Robert J. Ulrich --- For
3 Elect Directors David W. Dorman, Massimo For Against Mgmt
Ferragamo, Thomas M. Ryan, Robert Ulrich
and Jonathan Linen
We will vote FOR the director nominees with the
exception of Thomas M. Ryan, from whom we will
WITHHOLD votes for serving on an excessive number
of boards. Since the ballot does not allow for
vote recommendations on individual directors, we
will WITHHOLD votes from the entire slate of
director nominees on Item 3.
4 Ratify Auditors For Against Mgmt
The ratification of auditors is no longer a routine item.
Accounting scandals at companies underscore the need to
ensure auditor independence in the face of selling
consulting services to audit clients. The outside auditing
process is the backbone upon which the financial health of
a company is measured. To maintain the integrity of the
auditing process, the independence of an outside auditor
is absolutely essential for rendering objective opinions
upon which investors then rely. We do not support this
item. The company has retained the same audit firm in
excess of seven years. We believe mandatory auditor
rotation is an effective mechanism for mitigating the
potential risks borne by long-term auditor-client
relationships, and is a safeguard against improper audits.
PVS does not support the ratification of an auditor if
their tenure at a company exceeds seven years.
5 Sustainability Report Against For ShrHoldr
We believe that preparation of this report will provide
shareholders with a more complete view of the company's
sustainability issues, as such, we will support this
proposal.
6 Prepare a Diversity Report Against For ShrHoldr
Regarding the recent class action lawsuit in California
regarding accessibility for handicapped or elderly
customers, PVS does question the feasibility and
appropriateness of asking the company to provide detailed
information on this ongoing litigation outside of its
discussion of legal activity in company filings. However,
we believe that the preparation of the requested report
will further strengthen the company's diversity efforts
and reporting and makes sense for preserving shareholder
value by helping to insulate the company from potentially
adverse litigation and public relations backlash, as such,
we support this request.
7 Adopt MacBride Principles Against For ShrHoldr
Based on the fact that the implementation of the MacBride
Principles would reinforce the company's commitment to
creating a workplace free of discrimination, we support
this proposal as an appropriate obligation for the company
to undertake.
8 Report on Genetically Modified Organisms Against For ShrHoldr
(GMO)
While we understand the company's claim that it
is in compliance with all applicable regulations
regarding food safety, we believe that the
proponents' concerns are justified. We are
sympathetic with the proponents concerns
regarding their unforeseen public acceptability,
and we support reporting on company GE products
and detailing a plan should GE products become
unacceptable in certain markets. We feel that
support for this reporting request goes
hand-in-hand with management's stated commitment
to and interest in consumer and food safety.
Given that the requested report would provide
better understanding of the company's products
and ensure company's commitment to address
shareholders' concerns regarding this issue, we
will support this proposal.
9 Report on Animal Welfare Standards Against For ShrHoldr
In the case of Yum Brands, the company appears to be
taking reasonable steps to support animal welfare in its
supplier relationships. PVS notes that the company has
detailed discussion on this topic on its website,
including its Guiding Principles, which outline the
company's policy and certain audit, monitoring, or
compliance procedures that evaluate supplier adherence to
these guidelines. However, this proposal requests that the
company produce a report regarding adherence to policies
on animal cruelty, the company has already supplied some
of this information on its website. PVS feels that the
company can at reasonable cost, and with the exclsuion of
any propriety information, produce the report as requested
in this proposal. As such, we will support this proposal.
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
(Registrant) Principal Partners MidCap Growth Fund, Inc.
-------------------------------------------------------------------
By (Signature and Title) /s/ Ralph C. Eucher
-------------------------------------------------------
Ralph C. Eucher
President and Chief Executive Officer
Date August 30, 2005
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