2 Editorial, "The Need for Activism," Pensions and Investments , December 24, 1990.
3 Cite to Fortune Magazine
4 Julia Flynn Silver with Laura Zinn and John Finotta, "Are the Lights Dimming for Ed Brennan?" Business Week , February 11, 1991, p. 56.
5 "Update: Sears, Roebuck & Co." Asset Analysis Focus , February 28, 1991.
6 Associated Press, May 8, 1991. See "Maverick Pursuing Seat on Sears Board," Bridgeport Post , May 9, 1991.
7 Julia Flynn Silver with Laura Zinn and John Finotta, "Are the Lights Dimming for Ed Brennan?" Business Week , February 11, 1991, p. 56.
8 Julia Flynn Silver with Laura Zinn and John Finotta, "Are the Lights Dimming for Ed Brennan?" Business Week , February 11, 1991, p. 56.
9 The rules we refer to here are those promulgated under Section 14 of the 1934 Act (15 USCA Sec. 78a-78hh-2, the Securities Exchange Act of 1934), and apply to those companies that have a class of securities listed on a national securities exchange and a class of securities held by 500 or more security holders and have total assets in excess of $ 5 million.
10 The best discussion of this issue is in the discussion of the "nonneutral fiduciary" in Daniel Fischel and John H. Langbein, "ERISA's Fundamental Contradiction: The Exclusive Benefit Rule," University of Chicago Law Review, 55(4), Fall 1988.
11 Unocal, supra.
12 While Sears asserted that the primary purpose was to raise the proportion of outside directors (all three shifted directors were employees), they also admitted that the step was taken as a mechanism to keep me off the board. One Sears executive, insisting on anonymity, said: "That's the real motivation of today's announcement - to keep Monks out."
13 See, for example, Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del. 1985)
14 Stanley C. Vance, Corporate Leadership: Boards, Directors and Strategy , McGraw Hill, 1983, p.50.
15 Korn/Ferry International, Board of Directors Twentieth Annual Study, 1993. According to Vance (ibid.), a sampling of over 1000 directors in 1963 found that 59.3 percent were insiders.
16 Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc. 506 A. 2d 173, 181 (Del. 1986)
17 The theory here was that since not every shareholder would receive the SEC-approved version of my explanation of what my intentions were, any public statement by me might confuse some shareholder who would then not have the approved proxy materials to set the record straight. During this period I gave one speech about my candidacy, to the Council of Institutional Investors, and, based on the advice of my lawyer, I did not begin to speek until I made sure that every person in the room had been given a copy of my by then approved proxy statement, so that I would not be in violation of this rule. While it was unlikely that the SEC would have proceeded against me, as this was clearly an unintended consequence of the rules, as we have already seen, Sears did not hesitate to go to court to attack me, and we simply could not afford to take the risk.
18 Exchange Act Release No. 31326 (Oct.16, 1992), 57 Fed. Reg. 48276
19For an extensive discussion of this issue, see James E. Heard and Howard D. Sherman, Conflicts of Interest in the Proxy Voting System, Investor Responsibility Research Center, Washington, D.C., 1987.
20 See, for example, Letter of Alan D. Lebowitz, Deputy Assistant Secretary, Department of Labor, February 23, 1988.
21This is the standard under ERISA.
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