From: Mace Meier [mace@bigballsincowtown.net]
Sent: Friday, January 17, 2003 12:30 AM
To: rule-comments@sec.gov
Subject: Petition for Rulemaking (4-461)

Let it be known that I, Mace Meier, of Lewisville Texas, wholehartedly
support swift and dramatic change to the current methods by which US
Corporations are allowed to place, and prevent, balloting options to
shareholders on corporate proxy statements.  I support Petition for
Rulemaking (SEC File No. 4-461).

This is my reasoning:

While there are Enron & Worldcom stories of corporate fraud, these stories
represent, in all likelihood, just a very small fraction of what common
stock holders have lost over the last 70+ years due to hand-picked BOD's and
a complete lack of any meaningful corporate governance.  The real theft
that's occurred in corporate amerika has been via stock option grants.  It's
absolute theft, plain and simple.   Legal, but on a moral level, it's theft.
And only allowed because there simply isn't any corporate governance in the
United States.

I followed the Level(3) Communications (LVLT) story very closely for years.
It's a complex story, and I actually fell in love with the potential of the
company.  Last summer, the company had what amounted to a proxy war, though
it wasn't funded.  The annual proxy statement sent to shareholders requested
that shareholders authorize an additional 50 million shares for the
company's "Out Perform Stock Option Plan", which basically multiplied each
option grant by 8 if the stock has outperfomed the S&P 500 by just 11% at
the time it was excercised.  For a company that had only 300 million shares
outstanding, another 50 millions shares represented pretty significant
dilution, especially when considering that the stock had gone from $132 to
$3.  (Why are shareholders rewarding this performance???)  Anyway, to make a
long story short, several hundred shareholders, communicating amongst each
other via the Yahoo! Message Boards, cussed and discussed options available
to fight this proxy.  Fund managers were contacted, letters were sent en
mass to BOD members and the outrage was made clear to management.  The
management must have been concerned, because, out of the blue, and for a
still unexplained reason, they postponed the date of the annual meeting of
shareholders with less than two weeks notice.  We voted NO on the proxy
statement, and if memory serves me correctly, the other 83% of the shares
that voted were in favor of the dilution.

It's not the vote that counts in corporate amerika...it's the ballot.  If
it's on the ballot, and it's recommeded by the BOD, it automatically passes.
Has an item that was recommended by the BOD ever failed to pass at any
public corporation?  I'm not aware of any.

As for me, I'm basically through with long term investments in publicly
traded corporate common stock, unless I stumble onto a management team that
I feel I can trust (ie. one that won't "grant" themselves the company).
I'll invest in corporations that pay out most of their earnings in
dividends.  And I still like corporate bonds.  But as for common stock, I'm
basically through.  I spent way too much time reading press releases, 10-Q
filings and listening to LVLT webcasts only to learn that the only people
that will really profit from any future success are the employess, via the
ridiculously dilutive stock option grants they've received.  I'm 33 years
old.  I'll be making a lot of investments from now til retirement.  This is
a pretty poor reflection of corporate governance in the United States.

As for the average investor...the masses...they're clueless.  They'll never
understand the truly dilutive effects of corporate stock options.  Most
people in the United States don't even own individual common stocks, and as
for those few small investors who do, they probably think the BOD
recommendations are in their best interest.  From what I've seen, BOD
recommendations typically ARE NOT in a shareholders best interest, as BOD's
are typically hand picked by management teams who's primary objective seems
to be granting themselves stock options.

As for fund managers looking out for shareholders, that's just plain silly.
Fund managers  make money by selling their mututal funds to corporate
pensions...not by starting proxy wars.

Sincerely,
Mace Meier