Late last year, the SEC adopted new rules requiring companies to disclose specific information about the process for nominating directors and communicating with directors.

Regarding director communications, companies must disclose whether they have a process for communicating with directors, and if not, why. Companies must also describe the process, including whether the communications are screened and, if so, how.

Most Common Processes

Though the rule has been effective for less than two weeks (compliance date was January 1, 2004), we decided to scour through recent filings to see how companies are making the required disclosures.

According to the Compliance Week survey, the process most often utilized by companies is a "written" method. In those cases, shareholders are usually directed to write the corporate secretary, who in turn directs the communication to the proper director or committee.

A smaller number of companies also utilize electronic processes through which shareholders can email directors at a special email address. For example, $4.3 billion telecom company Avaya established bdofdirectors@avaya.com for shareholders to reach the lead director or entire board.

No Process

In almost all cases, those companies disclosing they had no director commmunication procedures stated that they are simply working on it.

Though some added a preface stating that the lines of communication are always open — "We believe our responsiveness to stockholder communications to the Board has been excellent," says $4 billion Qualcomm — formal procedures in almost all cases are in the works.

That is, except for one company.

CW's survey of filings found only one firm that was not planning on implementing a director communication procedure. The company: tiny Homecom Communications. "We are a very small company, and we do not believe it is necessary to have a special procedure," the company's latest filing read. Instead, the company recommends shareholders contact the CFO.

The Filings

We've included a sampling of companies that do — and do not — have a process for communicating with directors. As usual, our goal is to help issuers understand how their peers are complying with new regulations in an atmosphere where few "comps" exist.

And as is the case as our recent analysis of internal control and non-audit service approval disclosures, we've highlighed key items in red, and have provided links to original filings.

Company

Date

Description

Qualcomm Inc. (Page 16)

Jan. 9

NO PROCESS

—

"Historically, the Company has not adopted a formal process for stockholder communications with the Board. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe our responsiveness to stockholder communications to the Board has been excellent. Nevertheless, during the upcoming year the Governance Committee will give full consideration to the adoption of a formal process for stockholder communications with the Board and, if adopted, publish it promptly and post it to the Company's website."

Avaya Inc. (Page 18)

Jan. 9

ONLINE, WRITTEN PROCESS

—

"Any shareholder who desires to contact Avaya’s Lead Director or the other members of the Board of Directors may do so electronically by sending an email to

the following address: bdofdirectors@avaya.com. Alternatively, a shareholder can contact the Lead Director or the other members of the Board by writing to:

Board of Directors, Avaya Inc., 211 Mt. Airy Road, Room 3C429, Basking Ridge, N.J. 07920. Communications received electronically or in writing are

distributed to the Lead Director or the other members of the Board as appropriate depending on the facts and circumstances outlined in the communication

received. For example, if any complaints regarding accounting, internal accounting controls and auditing matters are received, then they will be forwarded by the

Secretary to the Chairman of the Audit Committee for review."

Homecom Communications Inc. (Page 85)

Jan. 8

NO PROCESS

—

"The Board of Directors does not provide a process for stockholders to send communications to the Board of Directors, but the Company's Chief Financial Officer, who is also one of our directors, can be contacted at the location identified under the heading "Contact Information" at page 4 of this Proxy Statement. We are a very small company, and we do not believe it is necessary to have a special procedure for stockholders to contact the Board of Directors when some of our directors are so easily accessible already."

Jacobs Engineering Group Inc. (Page 13)

Jan. 8

WRITTEN PROCESS; HOTLINE

—

"Shareholders and employees who desire to communicate with the Company's independent directors may do so either by writing directly and confidentially using an envelope marked confidential to Presiding Directors, c/o Corporate Secretary, Jacobs Engineering Group Inc., 1111 South Arroyo Parkway, Pasadena, California, U.S.A., 91105 or by sending an email to Presiding.Director@Jacobs.com. You may also communicate confidentially or anonymously through use of the Company's Integrity Hotline: 1 (877) 522-6272.

"All communications required by law or regulation to be relayed to the Board of Directors are relayed immediately after receipt. Any communications received from security holders of the Company by management which have not also been sent directly to the Board of Directors will be processed as follows: (i) if the security holder specifically requests that the communication be sent to the Board, the communication will then be promptly relayed to the Board; and (ii) if the security holder does not request that the communication be sent to the Board, then management will promptly relay to the Board all communications that the management of the Company, using its best business judgment, determines should be relayed to the Board."

BCSB Bankcorp Inc. (Page 10)

Jan. 7

WRITTEN PROCESS

—

"The Board of Directors maintains a process for stockholders to communicate with the Board of Directors. Stockholders wishing to communicate with the Board of Directors should send any communication to Corporate Secretary, BCSB Bankcorp, Inc., 4111 E. Joppa Road, Suite 300, Baltimore, Maryland 21236. Any such communication must state the number of shares beneficially owned by the stockholder making the communication. The Corporate Secretary will forward such communication to the full Board of Directors or to any individual director or directors to whom the communication is director unless the communication is unduly hostile, threatening, illegal or similarly inappropriate, in which case the Corporate Secretary has the authority to discard the communication or take appropriate legal action regarding the communication."

SUNAIR Electronics (Page 21)

Jan. 5

WRITTEN PROCESS

—

The Board provides a process for stockholders to send communications to the Board or any of the Directors. Stockholders may send written communications to the Board or any the Directors c/o Secretary, Sunair Electronics, Inc., 3005 S.W. Third Avenue, Fort Lauderdale, Florida 33315. All communications will be compiled by the Secretary of the Company and submitted to the Board or the individual Directors on a periodic basis. It is the Company's policy that the Directors who are up for election at the Annual Meeting attend the Annual Meeting. All of the nominees up for election at the 2002 Annual Meeting of Stockholders attended the 2002 Annual Meeting of Stockholders.

UGI Corp. (Page 19)

Jan. 5

NO PROCESS

—

The Company is considering the establishment of procedures by which Shareholders can send communications to the Board of Directors or to the non-management directors as a group. The Company will post those procedures on its website upon their adoption.

Plexus Corp (Page 9)

Jan. 2

NO FORMAL PROCESS

—

"Although Plexus as not to date developed formal processes by which shareholders may communicate directly to directors, it believes that the informal process, in which any communication sent to the board in care of the Chief Executive Officer, corporate Secretary or another corporate officer is forwarded to the board, has served the board's and its shareholders' needs. There is no screening process, and all shareholder communications which are received by officers for the board's attention are forwarded to the board. In view of recently adopted SEC disclosure requirements relating to this issue, the Nominating and Corporate Governance Committee may consider development of more specific procedures. Until any other procedures are developed and posted on Plexus' corporate website, any communications to the board of directors should be sent to it in care of Plexus' corporate Secretary."

Authentidate Holding Corp. (Page 43)

Dec. 31, '03

WRITTEN PROCESS

—

"Shareholders may contact the Board of Directors or a specified individual director by writing to the secretary of the company at Authentidate Holding Corp., 2165 Technology Drive, Schenectady, New York 12308. Our corporate secretary will relay all such communications to the Board of Directors, or individual members, as appropriate.

Ingles Markets Inc. (Page 13)

Dec. 31, '03

PHONE, MAIL, EMAIL PROCESSES

—

The Company maintains contact information, both telephone and email, on its website under the heading "Contact Information". By following the Contact Information link, a stockholder will be given access to the Company's telephone number and mailing address as well as a link for providing email correspondence to Investor Relations. Communications sent to Investor Relations and specifically marked as a communication for the Board will be forwarded to the Board or specific members of the Board as directed in the stockholder communication. In addition, communications received via telephone for the Board are forwarded to the Board by an officer of the Company.

Fedders Corp. (Page 10)

Dec. 23, '03

PHONE, WRITTEN PROCESS

—

Stockholders are generally afforded access to the Board of Directors through the Secretary of the Company who can be reached by calling the Company's executive offices at (908) 604-8686 or by writing to the Secretary c/o Fedders Corporation, P.O. Box 813, 505 Martinsville Road, Liberty Corner, New Jersey 07938. The Secretary will see to it that each stockholder communication is relayed to the appropriate Board member(s). It is also Fedders' policy to require each member of the Board of Directors to attend each annual meeting of stockholders and each director is expected to attend each annual meeting unless excused by the Chairman. At last year's annual meeting, eight of the nine directors were present at the meeting.

Data aggregated from public filings and press releases

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