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Turmoil at the SEC

According to the SEC, "Commissioner Roel C. Campos..announced that he intends to leave the Commission in a month's time and plans to return to the private sector. Currently serving his second term, Mr. Campos was first appointed by President George W. Bush and confirmed by the U.S. Senate as a Commissioner in August 2002." This follows the August 6, 2007 announcement that "Martin P. Dunn, Deputy Director of the Division of Corporation Finance, will leave the agency at the end of August to join O'Melveny & Myers LLP as a partner in its Washington D.C. office."

We believe Mr. Campos and Mr. Dunn may have been implicated in, or administratively responsible for, the leak of a draft proxy access proposal (SEC Proxy-Access Proposal Draws Fire from Investors. The Wall Street Journal. By JUDITH BURNS. July 11, 2007; Page D2). This leak led to concerns about the early and selective distribution of proposed public policies only to moneyed interest groups. We note that, at the last Open Meeting, Wednesday, July 25, 2007, Mr. Campos complained that he did not receive a copy of the second, revised shareholder access proposal until 11 pm on July 24th. This was done to insure confidentiality of the new proposal, released internally only after press publication deadlines had passed. The revised proposal was not leaked.

These changes mean that paths to an optimized shareholder access and proxy policy, while still present, are fewer in number. Thus, chances are greater now that the restrictive shareholder access proposal we discussed on July 20th will be adopted.

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