(Links added to proponent response below.)

The Board of Directors Recommends that You Vote Against this Proposal for the Reasons Set Forth Below:

In our proxy statements, the Board of Directors provides Visteon’s stockholders with voting recommendations and information on which to make voting decisions based on the Board’s knowledge of the company and its strategic plans as well as input from management and outside advisers. The proposal described above requests that the Board study and report on the feasibility of enabling stockholders to imitate an unspecified institutional investor’s voting decisions1 through the proxy process. For the following reasons, we do not believe that there is sufficient usefulness to stockholders to justify the time or expense of conducting the requested study and report. Further, we believe, as a matter of law, that the rules and regulations which govern proxy matters would likely preclude ever utilizing the mechanism which we are being requested to study.2

As noted in the proposal itself, various institutional investors publish their voting decisions on the Internet more than a week before the company’s voting deadline. The proposal even lists the specific websites where stockholders can easily access those voting decisions. Besides these websites, there are dozens of other sources with research data, analyses, and other information regarding the company to assist the stockholders in making their voting decisions. We believe that stockholders typically want to read and understand the relevant information before making their voting decisions. Accordingly, for those stockholders who may be inclined to imitate any or all of the voting decisions of a particular institutional investor, we suggest the most convenient and appropriate means would be to simply access the relevant website and then complete the proxy as recommended by that preferred investor. This process is simple, expedient, and would give the stockholder any additional background it may need or want to make an informed decision. Given this very convenient means that already exists to be able to imitate an institutional investor’s voting, we believe incurring company time and expense to study the issue cannot be justified.3

Because of its direct involvement in the oversight of the company, the Board of Directors believes it is in the best position to make informed recommendations to the company’s stockholders with respect to the matters to be voted on. That being said, to the extent any stockholder wishes to vote its shares in line with a particular institutional investor, there already exists a very convenient means of doing so that does not require further diversion of corporate resources.

For these Reasons, the Board of Directors Recommends that You Vote Against this Proposal.


1. The Board study and report could (and should) consider offering more than one choice of institutional investor to imitate.  The most convenient way to offer this voting mechanism to shareowners is via the worldwide web.  These ideas are explained in the working paper Vote Your Stock.

2. Lawyers hired by Visteon management (and paid with shareowners' money) made these arguments for omitting this proposal from the proxy in their January 7, 2004 letter to the SEC:
- "The Proposal violates Delaware law and therefore may be omitted under Rule 14a-8(i)(2)."
- "The Proposal violates the proxy rules and therefore may be excluded under Rule 14a-8(i)(3)."

However, the SEC Division of Corporation Finance, Office of Chief Counsel found those arguments unpersuasive.  In their February 19, 2004 response letter:
- "We are unable to concur in your view that Visteon may exclude the proposal under rule 14a-8(i)(2)."
- "We are unable to concur in your view that Visteon may exclude the entire proposal under rule 14a-8(i)(3)."
That is why the proposal is now in the Visteon proxy.

3. For many shareowners, especially individual investors, the degree of convenience matters a great deal.  Individual investors are not legally required to vote their stock, so many of them don't bother.  And most who do vote, simply follow the Board's conveniently displayed recommendations.  This proposal would help level that biased playing field.


Response written by Mark Latham on April 2, 2004.