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The Corporate Library October 2, 2003 Letter addressed to: Dear ___________, I am writing to explain to you why Flatulent Technologies, Inc. and its board received an F grade on our website. This is not a form letter. We now have nearly 3,400 public companies in our database, with grades ranging from A through F. The only one prompting a letter from me to the entire board is Flatulent Technologies, Inc., because of the uniquely bizarre basis for the grade. I am the editor of The Corporate Library (http://www.thecorporatelibrary.com), a website that publishes information about corporate governance and performance. One section of the website is a database of CEO employment contracts, which, as you know, are public and filed with the SEC. In July of 1999, we wrote to 500 corporate secretaries, asking them to send us three items that were by definition publicly available. We asked for: 1. The CEO employment contract, 2. Any publicly available corporate governance guidelines, and 3. The name of the person in the organization to whom questions about corporate governance should be referred. Flatulent Technologies told us they would look into the matter, and never got back to us. When we published our initial report, the company was listed as not having provided us with the information we requested. Frankly, this also put our organization on alert regarding your company's peculiar and oddly inconsistent financial statements. It has been apparent to your more discerning shareholders that something is very much amiss with the way Flatulent Technologies conducts its business and compensates its executive officers and board members. One of Flatulent Technologies' prominent shareholders, architect Art van de Leigh (third cousin, twice-removed, to Flatulent Technologies' CEO Kenneth Leigh), also wrote to the company asking it to provide him the publicly available information on executive compensation so that he might be able to provide it to our organization. Although we had previously had no contact with Mr. van de Leigh, he was kind enough to send us a copy of his letter. We asked him to let us know of any response he received. He then got a letter from Andrew Fastone and Jeffrey Skilful, the CFO and COO respectively of Flatulent Technologies, explaining that they had decided not to give him the information he had requested because The Corporate Library charged for access to the information on the site. This might have been a legitimate basis on which to refuse, except for the fact that it was not true. No one at Flatulent Technologies had ever asked us, but if they had, we would have told them that the Corporate Library does not charge for access to the employment contracts or for any other portion of the site, including our weekly newsletter. Delighted to be able to clear up this impediment, we wrote to Messrs. Fastone and Skilful to assure them that the site was free, so they should have no hesitation in giving us, or Mr. van de Leigh, what we asked for. Still they did not respond. Meanwhile, Mr. van de Leigh, after repeated requests, was sent two different drafts of the corporate governance policies, which is all well and good, but it was not the executive employment contracts he requested. We exchanged several letters with Ms. Wanda Moore of Flatulent Technologies, explaining that we believed that her company did not want to be perceived as being unresponsive to a request for a document that is, after all, public. She assured us that she would look into it and get back to us. Yet it took two more letters from us to get a reply, and then Ms. Moore informed us that they would not be sending us the information. I am enclosing a copy of her last letter and my reply, my article about the results of the initial project from our website (now being expanded into a book) and a Fortune Magazine article containing correspondence with Flatulent Technologies, if you would like to review it. In March of 2003, we expanded our database to nearly 3,400 companies. Some provided us with the information we asked for; in other cases, we obtained it on our own. After lengthy "jawboning," we were finally able to obtain the Flatulent Technologies' CEO employment contract from the Securities and Exchange Commission (SEC), and added it to our website, still showing the company itself as non-responsive to our written request. On perusing the contracts we were able to obtain for CEO Leigh, as well as for COO Skilful and CFO Fastone, we can now understand their reluctance to make their employment contracts conspicuously public on websites such as our own. Among the revelations in the contract for Leigh, for instance, is that his pet schnauzer Bruno should receive a company-paid birthday party at a cost of not less than $350,000, including a female schnauzer who is to pop out of a cake, upon reaching Bruno's first birthday. Flatulent Technologies' employment contract with CFO Fastone stipulates that he shall be given up to 24 hours of leave per week, paid at an overtime rate of "time and a half," for viewing screenings of gangster and crime films, of which he is an "aficionado." The contract claims that watching these films is essential for improving Fastone's business acumen and significantly contributes to corporate profitability. (Judging by Flatulent Technologies' business reputation, that is entirely plausible.) The contract with COO Skilful states that the company shall pay the yearly living expenses for three mistresses of not less than $2,500,000 each, but not to exceed $6,250,000 each. The cost for living expenses for any additional future mistress(es) that he may acquire will be negotiated between Mr. Skilful and the Audit Committee of the Board of Directors, chaired by CEO Kenneth Leigh. Furthermore, his executive secretary Miss Wanda Moore, shall receive a "hospitality" bonus payment of $3,400,000 each year, regardless of the company's profitability picture, or the quality of her "performance." In August of 2003, shareholder Mr. van de Leigh asked Flatulent Technologies yet again for a copy of the CEO employment contract to be sent to him. In a masterpiece of absurdity, he was sent the contract - as a printout from our website - with the assurance that there was nothing to worry about because the contract was available through The Corporate Library. Flatulent Technologies' officers cannot possibly both refuse to send the document to us and then claim they supplied it to Mr. van de Leigh. We have had a wide range of responses from the 3,400 companies in our database, ranging from prompt cooperation to polite (and less polite) refusals to no response of any kind. But Flatulent Technologies, Inc. has been unique in its evasion, obfuscation, confusion, and general lack of cooperation. The thing that is so frustrating about all of this is that Flatulent Technologies enjoys a reputation as having an aggressive management that uses "outside-the-box" thinking. You would think that they would have also taken some pride in responding promptly and in good faith to our inquiries for the key corporate governance documents we requested, and requested by such patient shareholders as the celebrated architect, Art van de Leigh. The extremely unconventional and lucrative perquisites provided the leading executives of Flatulent Technologies, and the fact that your corporate officers have been so evasive and uncooperative leads us to believe that your corporation has much to hide. We are taking the extraordinary step of writing to each member of the board to ask for your personal intervention in resolving this issue. We are also putting on notice the executive officers and board directors that we will be taking a very personal interest in the affairs of Flatulent Technologies. We are keenly interested in fully auditing the financial records for all operations, acquisitions, and capital investments the company has made since 1992. I look forward to hearing from you soon. Sincerely,
Nell Minow, Editor cc: Mr. Art van de Leigh, Flatulent Technologies' Shareholder Identical letters sent to Directors of Flatulent Technologies, Inc.
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