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To: Ram Seetharaman who wrote (2939)	12/14/1999 5:28:00 PM
From: JustMy2Cents	Read Replies (3) \| Respond to of 3646

AMD, J.C. Penney, First Union Among Calpers Targets Sacramento, California, Dec. 14 (Bloomberg) - The California Public Employees' Retirement System is targeting Advanced Micro Devices Inc., J.C. Penney Co., First Union Corp., Rite Aid Corp. and 11 others in its annual drive to push companies in its portfolio to boost their lagging stock price. For each of the past 12 years, Calpers, the nation's largest public pension fund, has singled out about 10 U.S. companies of the 1,600 it owns to reform their board practices to increase shareholders' returns. The $155 billion pension fund's board has yet to approve the final list of targets. The list, which fund spokeswoman Patricia Macht said was released by mistake, was a report prepared by the staff based on preliminary internal discussions. ``We are disappointed to be included in the list,' said John Greenagel, a spokesman for AMD, whose shares have dropped 4.7 percent this year after jumping 50 percent last year -- the year after Calpers previously targeted the company. Calpers has filed shareholder proposals seeking changes at some of the companies, including First Union, the sixth-biggest U.S. bank. Calpers wants the bank chairman be an independent director. Edward Crutchfield, the chief executive, now doubles as chairman of the board. First Union's shares have tumbled 40.8 percent this year. A bank spokesman was unavailable for comment. Companies In addition to First Union, Calpers has filed proposals at AMD, Charter One Financial Inc., Crown Cork & Seal Co. and Phycor Inc. The proposals ask that boards have a majority of independent directors, or that the chairman be independent. Other companies on the list include Bob Evans Farms Inc., Dura Pharmaceuticals Inc., A.G. Edwards Inc., Intergraph Corp., International Flavors & Fragrances Inc., Lone Star Steakhouse & Saloon Inc., Parametric Technology Corp. and Winn-Dixie Stores Inc. The fund puts pressure on lagging companies to make changes to their boards, rather than just selling the shares, because the fund has found that activism can improve stock performance. The stocks of 53 companies targeted by the fund trailed the Standard & Poor's 500 Index by 75.2 percent in the five-year period before Calpers placed them on its lists, according to a study by Calpers' consultant Wilshire Associates Inc. The same stocks outperformed the index by 54.4 percent in the following five years, adding about $150 million annually to the fund. Meetings Calpers has met with about half the companies on the new list, including Bob Evans Farms. It asked the restaurant operator to name either an independent director to chair the board, or designate a lead outside director, among other suggestions. ``We take their observations seriously and we are in the process of evaluating them,' said Mary Cusick, a spokeswoman for the Columbus, Ohio-based company. Its shares have declined 39 percent this year, sliding after the company warned in October its earnings would fall short of analyst estimates. A.G. Edwards said it doesn't think it belongs on the list. The other companies either declined to comment, or could not be reached for comment. In the past, Calpers has withdrawn proposals if the companies agreed to make changes before the annual meeting. Calpers chooses companies to challenge based on its stock price and on a measure called economic value added, which looks at net operating profit minus a company's cost of capital. None of the companies have appeared on Calpers' recent lists, except for International Flavors & Fragrances and AMD, which were both targeted in 1998.