Subject: File No. S7-10-09
From: David Moore
Affiliation: Managing Member, Marathon Financial Ventures, LP

October 6, 2009

THIS IS CRITICAL:

IF THE PROXY ACCESS RULES ARE TO HAVE ANY TEETH, THEY MUST SUPERSEDE (OR NEGATE) CERTAIN BYLAWS THAT MANY COMPANIES HAVE REGARDING DIRECTOR ELECTIONS.

For example, there is a publicly-traded bank based in Orange County, California that I'll refer to as "PPB." PPB's bylaws state (I'm paraphrasing) that EVEN IF A MAJORITY OF SHAREHOLDERS VOTE FOR A DIRECTOR NOT NOMINATED BY MANAGEMENT, THAT NOMINEE WILL NOT BE ALLOWED ON THE BOARD UNLESS A MAJORITY OF SITTING DIRECTORS ALSO VOTE IN FAVOR OF THE NOMINEE. Consequently, 51% of PPB's shareholders can vote in favor of a nominee, but that nominee will not become a director unless four of PPB's seven sitting directors ALSO vote in favor of the nominee. Obviously, this is a highly successful strategy employed by the board to nullify any election-related actions by shareholders - even a MAJORITY of shareholders - that the board might find disagreeable. Consequently, even if the Proxy Access Rules pass, they won't have much effect, as many companies will just change their bylaws to those similar to PPB's in order to thwart the shareholders' efforts.

Therefore, it's CRITICAL that the Proxy Access Rules contain some verbiage that states that these new rules supersede any bylaws that conflict with the notion that nominees that receive votes from 51% of the common shareholders will be on the board.