Thursday, December 15, 2005

 

Valuing A Shareholder

On November 21, 2005, Lois Wark, a retired Knight Ridder editor and a Knight Ridder shareholder, sent the following email to Polk Laffoon, Knight Ridder Vice President for Corporate Relations:

Dear Mr. Laffoon:

I am among a group of Knight Ridder alumni who intend to nominate candidates for the KR Board of Directors at the company's 2006 annual meeting. We have read your SEC Form 8-K filing and have the following questions:
• It would appear that the window for nominating a slate to the board is Feb. 14, 2006, to March 4, 2006, unless the annual meeting is postponed or a special meeting is called. Is that correct?
• How might the "rights of the holders of outstanding Preference Stock" affect our ability to nominate a slate?
• What constitutes "any shareholder entitled to vote for the election of directors"? Does this mean any shareholder of record on the date of the notice of filing nominations? On the date of the annual meeting?
• Is there a threshhold of stock ownership (number of shares, duration of shares held) that must be met in order to nominate candidates for the board?
• What documentation is required to be submitted with the nominations to satisfy the requirement of "shareholder entitled to vote for the election of directors"?
• May one nominator submit a full slate of names for all 10 director seats?
• Is there a form for submitting nominations?
• Are the nominees required to file a statement expressing willingness to run and serve?
• Can a group of shareholders, such as ourselves, get a list of all shareholders for mailings?
If it is not appropriate for you to answer these questions, would you please relay this letter to the appropriate corporate officer. We would appreciate an early response.

Cordially,
Lois Sutherland Wark
For Knight Ridder Alumni Group

When there had been no reply a week later, on Monday, November 28, Ms. Wark sent the letter to Mr. Laffoon by registered mail.

On Friday, December 2, Ms. Wark phoned Lee Ann Schlatter, Knight Ridder director of corporate communications. Ms. Schlatter said that nominations for director could be filed between Feb. 18 and March 4, 2006 if the annual meeting is held as scheduled on April 18, 2006, and deferred responses to other questions. Ms. Wark agreed to email to Ms. Schlatter a copy of her original query to Mr. Laffoon, and did so that day.

On Monday, December 5, Ms. Wark phoned Ms. Schlatter to verify that the email had arrived. Ms. Schlatter affirmed that it had, and deferred responses pending the return of Mr. Laffoon, who was out of town.

On Wednesday, December 7, Ms. Wark sent this email to Mr. Laffoon and Ms. Schlatter with additional questions:

To: Polk Laffoon IV, VP/Corporate Relations
and Lee Ann Schlatter, Director/Corporate Communications,
Knight Ridder Inc., San Jose, California

Re: Election of Directors

An additional question: How many directors are to be elected at the upcoming annual, or special, meeting of shareholders?

After reading Knight Ridder's articles of incorporation, by-laws and the amended by-laws filed with the Securities and Exchange Commission on Nov. 14, 2005 (Form 8-K, "Report of unscheduled material events or corporate changes"), it appears to us that the 10 board positions were divided into three "classes" with staggered tenures and that, having elected four directors in 2005, the shareholders would be asked to elect three new directors in 2006 and an additional three in 2007, all to three-year terms. That, of course, assumes that the number of directors remains at 10.

Is this correct? Are there any plans by the board to change the number of directors?

We ask because Knight Ridder has invited nominations of directors and it is unclear on the public record if that means all 10 current directors would be subject to a new election. Obviously there is a difference between nominating three and nominating 10 and we wish to be letter-perfect.

My thanks, once again, for your courtesy.

Sincerely,
Lois Sutherland Wark
for Knight Ridder Alumni Group

On Wednesday, Dec. 14, twenty-three days after her original inquiry, Ms. Wark received this email from Matthew Ng, Associate General Counsel of Knight Ridder:

Dear Ms. Wark,

Lee Ann Schlatter has forwarded your email inquiry about nominating directors to the Board of Knight-Ridder, Inc. to me for response. Most of your questions involve the provision of legal advice, which we are unable to provide to you. I can tell you that we do not have a prescribed form for nominating directors and that the company does not currently have any shares of Preferred Stock issued and outstanding. You will need to meet all applicable legal requirements in nominating and electing directors. While I cannot provide you with legal advice, I would suggest that some of your questions can be answered by looking at our Bylaws which are available on our website (http:// www.kri.com/investor/corpgov/bylaws.html)

Very truly yours,
Matthew Ng

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