1. Mutual fund voting: mgmt, ISS or muse? James Cotter – Wake Business Alan Palmiter – Wake Law Randall Thomas – Vanderbilt Law Villanova Securities Symposium March 14, 2009

3. And now some numbers …

4. 28.9% (probably closer to 33%)

5. 72% / 48% which means 21-24% / 14-16%

6. 98% Source: Rothberg & Lilien, Mutual Fund Proxy Votes (Feb. 2005)

7. Now some jargon …

8. Rule 30b1-4 (2003) Forms N1-A, N-PX, 10Q

9. Rule 14a-9 (Rule 14a-8) Schedule 14A

10. Now some pictures …

13. Now some data …

14. Source: Corporate Library/AFSCME (2005)

17. Sources: The Corporate Library, Analysis of Fund Voting for 2004-2005 (Jan. 2006) ISS, 2005 Postseason Report: Corporate Governance at a Crossroads (Oct. 2005)

18. Sources: The Corporate Library, Analysis of Fund Voting for 2004-2005 (Jan. 2006) ISS, 2005 Postseason Report: Corporate Governance at a Crossroads (Oct. 2005)

19. Now our preliminary data … (on mutual fund voting)

20. Mutual funds vs. all shareholders (“for” votes) Management proposals Shareholder proposals Mutual funds91.8%30.5% All shareholders93.9%27.7%

21. MF voting on management proposals (excluding proposals to elect directors, approve auditors) Management For ISS For 83.0% 7,949 ISS Against 65.2% 1,513 No ISS Recommend 80.5% 41

22. MF voting on shareholder proposals Management Against ISS For 42.6% 1,493 ISS Against 9.3% 1,314 No ISS Recommend 43.5% 31

23. Interpreting the data …

24. MF voting on all proposals (excluding director elections, auditor approvals) Management For Management Against ISS For Against For Against ISS Against For Against For Against

25. MF voting on all proposals (excluding director elections, auditor approvals) Management For Management Against ISS For Against For Against ISS Against For Against For Against Follow Mgt + ISS

26. MF voting on all proposals (excluding director elections, auditor approvals) Management For Management Against ISS For Against For Against ISS Against For Against For Against Follow Mgt (despite ISS)

27. MF voting on all proposals (excluding director elections, auditor approvals) Management For Management Against ISS For Against For Against ISS Against For Against For Against Follow ISS (despite Mgt)

28. MF voting on all proposals (excluding director elections, auditor approvals) Management For Management Against ISS For Against For Against ISS Against For Against For Against Follow Muse (despite Mgt + ISS)

29. Vote w/ Mgmt + ISS63.5% Vote w/ Mgmt (despite ISS)15.0% Vote w/ ISS (despite Mgmt) 9.5% Vote w/ Muse (despite Mgmt + ISS)12.0% TOTAL 100% MF voting on all proposals (excluding director elections, auditor approvals)

30. Some specific results … (ISS influence generally)

31. Declassify board Majority voting Poison pill vote Separate chair-CEOTotals MGT + ISS45.6%19.6%16.8%27.1%31.0% MGT (not ISS) 18.6%44.0%33.4%46.8%32.1% ISS (not MGT) 28.3%33.5%44.4%20.8%31.3% Muse (not MGT or ISS) 7.6%2.9%5.4%5.2%5.7%

32. Declassify board Majority voting Poison pill vote Separate chair-CEOTotals MGT + ISS45.6%19.6%16.8%27.1%31.0% MGT (not ISS) 18.6%44.0%33.4%46.8%32.1% ISS (not MGT) 28.3%33.5%44.4%20.8%31.3% Muse (not MGT or ISS) 7.6%2.9%5.4%5.2%5.7%

33. Take away …

34. Mutual funds All Shs MGT + ISS63.5%31.0% MGT (not ISS) 15.0%32.1% ISS (not MGT) 9.5%31.3% Muse (not MGT or ISS) 12.0%5.7%

35. The end

36. Declassify board Management For Management Against ISS For 85.8% 217 60.4% 193 ISS Against -- 0 20.6% 2 No ISS Recommend 96.7% 2 60.2% 5

37. Majority voting for directors Management For Management Against ISS For 88.0% 50 43.8% 176 ISS Against 67.7% 10 21.1% 4 No ISS Recommend -- 0 -- 0

38. Submit poison pill to shareholder vote Management For Management Against ISS For 78.1% 13 57.7% 139 ISS Against 59.5% 5 25.4% 28 No ISS Recommend -- 0 60.8% 4

39. Separate chair and CEO Management For Management Against ISS For 83.2% 1 30.8% 113 ISS Against -- 0 16.2% 53 No ISS Recommend -- 0 27.7% 3