Proposal revision submitted to Oregon Steel on February 27, 2004 by shareowner Mark Latham:


WHEREAS many shareowners lack the time and expertise to make the best voting decisions, yet prefer not to always follow directors’ recommendations, because of possible conflicts of interest;

WHEREAS shareowners have a common interest in obtaining sound independent advice, but often insufficient private interest to justify paying for it individually (the “free-rider” problem);

THEREFORE BE IT RESOLVED that Oregon Steel Mills, Inc. shareowners request the Board of Directors to hire a proxy advisory firm for one year, to be chosen by shareowner vote.  Shareowners request the Board to take all necessary steps to enact this resolution in time to hold the vote at the year-2005 shareowner meeting, with the following features:

·   To insulate advisor selection from influence by the Corporation's management, any proxy advisory firm could put itself on the ballot by paying an entry fee, declaring the price (no more than $8000) for advisory services for the coming year, and providing the address of a website describing their proposed services and qualifications.

·   The winning candidate would be paid its declared price by the Corporation, and make advice freely available to all Corporation shareowners for the subsequent year, on all matters put to shareowner vote except director elections.  (Advice on director elections is excluded to satisfy SEC rule 14a-8(i)(8).)

·   Performance of the advisory firm would not be policed by the Corporation's management, but rather by gain or loss of the advisor’s reputation and future business.

·   Brief summary advice could be included in the Corporation proxy, with references to a website and/or a toll-free phone number for more detail.

·   The decision of whether to hire proxy advisory firms in later years would be left open.

Supporting Statement:

The proxy advisor would be paid with Corporation funds to give shareowners an independent professional opinion.  Independence would be further enhanced by having shareowners choose the proxy advisor.  This could also increase competition in the proxy advisory business, because new entrants could earn fees on a company-by-company basis, without covering thousands of companies.

Wall Street Journal (July 26, 2001) article “After This Deal, Is Anyone Left to Give Advice?”: “…Proxy Monitor Inc. has agreed to buy Institutional Shareholder Services… A monopoly of shareholder advice doesn’t sit well with some.”

San Francisco Chronicle (May 18, 2003) article “Battle of the Ballot”: “State Street out-sources its proxy voting operation to Institutional Shareholder Services.”

Example of lack of time and expertise: : “I tried to read the proxy statement, but I still don't understand whether the change is shareholder friendly or not.”

Mistrust of boards: Harris Poll, September 2003, at : “Support for corporate management nominees is also mixed with majorities of shareholders having withheld support from a management nominee.”

The conflicts of interest among managers, directors and shareowners are described in Robert Monks and Nell Minow’s 1996 book Watching the Watchers, along with shareowners’ “free rider” and “rational ignorance” problems.

Articles discussing the company-pay system for proxy advice are on the Corporate Monitoring website  at