Pittsburg, CA. 94565 USA
November 25, 2014
Sohu.com Inc.
Level 18, Sohu.com Media Plaza,
Block 3, No. 2
Kexueyuan South Road, Haidian District
Beijing 100190, People’s Republic of China
Dear Mr. xxxx:
Enclosed
please find my shareholder proposal for inclusion in our proxy materials for
the 2015 annual meeting of shareholders and a letter of my Sohu.com shares for
more than $2000 value for longer than one year. I will continuously hold these shares
until the 2015 annual meeting of shareholders.
Should you have any
questions, please contact me at zhao.cpri@gmail.com
or 1-925-643-xxxx (phone/fax).
Yours
truly,
Jing
Zhao
Shareholder Proposal Recommending
Declassification of the Board of Directors
RESOLVED:
shareholders of Sohu.com Inc. recommend the Board of Directors take all
necessary steps (other than any steps that must be taken by shareholders) to
eliminate the classification of the Board of Directors and to elect all
directors on an annual basis after the annual meeting in 2015. Implementation
of this proposal should not prevent any director elected prior to and at the
annual meeting held in 2015 from completing the term for which such director
was elected.
SUPPORTING
STATEMENT
Our
Board is divided into two classes. This caused many corporate governance
problems. For example, only one (out of six) directors attended our last annual
meeting of shareholders, mainly because four directors’ term expires at the
2015 annual meeting. Since 83.3% directors did not attend annul meeting of
shareholders, shareholders wonder how many meetings the Board ever held
annually? The Board has continuously refused or is unable to communicate with
shareholders on any issue to improve corporate governance.
According
to the Harvard Law School Shareholder Rights Project (http://srp.law.harvard.edu/Template-Proposal.pdf),
declassification of the board would enable shareholders to register their views
on the performance of all directors at each annual meeting. Having directors
stand for elections annually makes directors accountable to shareholders, and
could thereby contribute to improving performance and increasing company’s
value. Over the past decade many S&P 500 companies have declassified their
board of directors; the number of S&P 500 companies with classified boards
declined by more than 50%; and the average percentage of votes cast in favor of
shareholder proposals to declassify the boards of S&P 500 companies during
the period January 2010 - June 2011 exceeded 75%. The significant shareholder
support for proposals to declassify boards is consistent with empirical studies
reporting that classified boards could be associated with lower company
valuation and worse corporate decision making.
This
proposal is the same as the shareholder proposal advised by the above Harvard
Project to Best Buy Co., Inc. in 2012. Best Buy’s Board moved from a neutral
position to a recommendation that the shareholders approve the proposal
recommending declassification of the Board and reissued their statement: “The
Board supports the Proposal as an additional demonstration of its commitment to
strong corporate governance practices. It believes that all directors – with no
exceptions – should be subject to approval by the shareholders on an annual
basis.” More than 98% voted for the proposal.
Especially concerning
that our company operates out of the United States, please vote for this
proposal to make our directors accountable to shareholders. |