Archives: News

Management
Board of Directors
Board of Executives
Members
The New York Stock Exchange, Inc.
11 Wall Street New York, NY
10005

 

Dear Ladies and Gentlemen:

 

Historically, individual Members of the New York Stock Exchange (“NYSE”) have not been a concern of the NYSE’s management. Traditionally, the focus has been on trading entities, listed companies and regulators. Individual owners of the NYSE were simply not a factor, as they were thought of as benign retirees or beneficiaries of estates who merely rented out their floor access privileges to traders. Trading Members were generally compliant in their ownership role, given the potential impact of management on their daily lives.In the rather static world which existed in the pre Grasso/Specialist problem era, owners were relatively content to trust management to act in their best interests as well as the interests of all of the constituencies involved at the NYSE.

 

What existed then was the de facto separation of ownership from management at the NYSE. Separation by boards of directors and their managements from the owners of an entity has never served any organization well. The problems experienced by the NYSE in 2003 were, in part, symptoms of that lack of accountability. The irony in all of the events of that period is the fact that one of the groups who suffered the most has also been the most penalized – the individual owners of the NYSE. For example, as a result of abuse stemming from the lack of accountability to owners, the owners were officially disenfranchised in a “take it or leave it” ultimatum wherein they were deprived of direct representation on the NYSE’s board of directors. Yes, we all know about the importance of optics, but we also know that every time democracy has been curtailed, the excuse has been some greater responsibility during a period of crisis. To complete this irony, the current structuring of the NYSE’s governance model is a flagrant violation of the spirit and intent of Sarbanes–Oxley legislation, yet the NYSE demands compliance with Sarbanes-Oxley from all of its listed companies. Over the past few years, corporate America has witnessed a rising up of shareholder activism. Patronizing, arrogant and distant boards and managements are no longer being tolerated. Shareholders are not asking for a day-to-day role, however, they are demanding progress in their interests, accountability, visibility and clearly articulated visions and plans for the companies in which they have ownership. This movement has also been sanctioned by legislators and regulators of all political stripes. The NYSE is now faced with external challenges and some would suggest that these be dealt with first, before considering strategy, vision and accountability. America has, throughout its history, dealt with severe internal and external threats without curtailing the democratic process. No less should be expected of the NYSE.

 

The point to this discussion is the clear desire on the part of a large portion of the NYSE’s ownership to move to a “for profit” basis, as well as a more traditional governance model. The reasons are clear and irrefutable – accountability, responsiveness, efficiency, growth, the ability to act as a consolidator, the ability to attract and keep top management talent, access to capital, participation in the overall profits of the NYSE and, in the future, the strength which comes from a wide ownership base. For example, thousands of letters from shareholders re. NMS would serve us better than the mere handful which have been sent. One could go on in support of the incredible possibilities for the NYSE through following this inevitable course of action. Fear and insecurity, however, are always barriers to progress. Regrettably, these emotions are being capitalized on in the current discussion, yet every objection raised to date pales against logic and the broader longterm interests of the NYSE. One obstacle appears to be the lack of understanding of the current position of stock exchanges. They are no longer icons or regulated utilities with a quasi-monopoly for the exclusive use of Members. Exchanges are in the business of providing;

 

1) price discovery
2) liquidity and
3) information.

 

They function in a highly competitive world, both domestically and internationally. Exchanges are being consolidated on a world scale and many are seeking to create their own currency, for acquisitions or growth, by moving to “for profit”, converting memberships into shares and then becoming publicly held. This movement is well underway, with exceptional properties already being consolidated. Many lesser exchanges now have market capitalizations well in excess of the NYSE. To cloak our lack of progress in terms of our national role is simply invalid. The SEC has already indicated an openness in regard to ownership. Throughout all these events, there is an array of excuses based upon developing a plan, external challenges, regulatory concerns, timing issues, no growth possibilities, optics etc.

 

It should also be noted that a “plan” for a “not for profit” entity would probably be inappropriate for a “for profit” entity: One is essentially static and narrow, the other more dynamic and outward looking. What comes first is a framework for reference, then a plan is developed. One thought to consider would be the fact that if a new board of directors and their management took charge of a public corporation and had not, after a year or more in place, articulated a vision for that company, there would be significant criticism arising. There has been much talk about patience and what has been accomplished to date. Many of us recognize these points but there has also been much not said and swept aside. The indication that our board does not wish to tolerate a coherent shareholder base, expecting accountability, was made clear when, at our last meeting in December, corporate ownership of seats was quietly dropped, despite two earlier-stated commitments in that regard. It was only discussed upon specific questioning by one of our Members.

 

The issues are clear. The owners want the NYSE’s board of directors to accept the reality that we are in business. We, as an organization, and all of our constituencies, must justify our existence on a business basis, that is, providing value. I believe, with the excellent management skills which have been assembled, we can do this. As an aside, the hybrid proposal holds significant possibilities and may turn out to be our competitive edge. We must, however, recognize that we are not a protected species. We have to compete and grow and there is only one basis on which to achieve those ends. Anyone in a first year business course can tell you that “not for profit” entities cannot compete over time with “for profit” organizations. We really do not have any choice in this matter. The good old or bad old days are gone. This desire, on the part of owners, to have the NYSE function in a “for profit” mode is not based upon short-term or self-interest by anyone, as some detractors would claim. At every meeting and in every discussion, the long-term interests of the NYSE have been paramount, as well as the interests of all of its stakeholders. Many of the large body wishing to move in this direction are highly experienced business people with a clear grasp of the issues facing the NYSE. I believe that despite all the rhetoric, letters and ‘wallnbroad’ postings our board of directors will only respond to hard numbers. For this reason I have decided to join with Robert Shaw, Charles Urstadt and many others to form a group of NYSE owners (The Exchange Members’ Association, Inc.) to move forward in this regard. We would gladly work with and co-operate with any group, association or individual who shares this vision for the long term interests of the NYSE. Should you wish to discuss this further, please feel free to contact me at the telephone number listed below or 1-800-387-0859 or E-mail me at tcaldwell@caldwellsecurities.com. Robert Shaw can be reached at Tel: 772-288-3495 or Fax: 772-221-3546 or poisonblue@adelphia.net. Charles Urstadt can be reached at Tel: 203-863-8200 or Fax: 203-861-6755 or jiarossi@ubproperties.com.

 

Best wishes,

 

Thomas S. Caldwell

 

Member/Lessor

TXS Venture:URB

 

Toronto, Ontario – November 11, 2004 – Urbana Corporation (TSX Venture: URB) is pleased to announce that it has received a non-interest-bearing loan of $1,494,936 from Caldwell Financial Ltd. maturing on December 31, 2010 with a right to Urbana for earlier prepayment without penalty. The parties agree that if the loan is not prepaid within eighteen months, they may fix an interest charge.

 

Urbana is currently focusing its mineral exploration efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

This press release has not been reviewed by the TSX Venture Exchange.

TXS Venture:URB

 

Toronto, Ontario – November 3, 2004 – Urbana Corporation (TSX Venture: URB) announced today that it has repaid a demand loan in the amount of $500,000 provided to the Corporation in November 2002 by Caldwell Financial Ltd. (“CFL”). The Corporation also announced today that CFL converted a $500,000 non-interest bearing convertible note (the “Note”) into units at a conversion rate of $0.30 per unit. Each unit is comprised of one common share and one warrant to purchase a common share of the Corporation at $0.30 per common share. CFL has exercised all of its warrants for cash consideration of $500,000. As a result of the conversion of the Note and the exercise of the Warrants, the Corporation has issued 3,333,332 common shares to CFL.

 

Prior to this transaction, in addition to the Note, CFL owned 100,000 common shares of the Corporation.

 

On a fully-diluted basis, after the conversion of the Note and the exercise of the warrants, CFL beneficially owns 3,433,332 common shares representing approximately 39.8% of the total outstanding common shares of the Corporation.

 

The transaction to issue the Note was previously approved by the Corporation’s minority shareholders and by the TSX Venture Exchange.

 

Urbana Corporation is a mineral exploration company currently focusing its efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

TXS Venture:URB

 

Toronto, Ontario – September 16, 2004 – Urbana Corporation (TSX Venture: URB) announces that its wholly-owned U.S. subsidiary, Urbana America Inc., has leased its third New York Stock Exchange Seat, which was purchased on August 27, 2004 for $1,150,000 (U.S.). The seat has been leased for $120,000 (U.S.) per year under a four month, extendable lease.Urbana Corporation also wishes to advise participants in the company’s recent private placement that the shares purchased are now free to trade in the public market.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

 

This press release has not been reviewed by the TSX Venture Exchange.

Caldwell Asset Management Inc.

 

Independent Investment Managers
September 8, 2004
Management
Board of Directors
Board of Executives
Members
The New York Stock Exchange, Inc.
11 Wall Street
New York, NY
10005

 

Dear Ladies and Gentlemen:

 

The management of the New York Stock Exchange (“NYSE”) is to be commended for their handling of the challenges we have all faced this year. Dealing with pressing regulatory and competitive issues, while traveling a learning curve, is not an easy task. Clearly, priorities had to be established as we moved from damage control to business stabilization and now strategic planning and implementation. I believe most of our Members recognize this sequence despite their current angst regarding Seat prices and leases. The purpose of this note is to follow up on my previous correspondence dated January 21, 2004. In that letter, I noted our two-fold role as a business and as a selfregulated organization (“SRO”). Given the challenges we faced, heavy emphasis had to be placed initially on the SRO function. Our Board of Directors and governance structure reflect that emphasis.

 

As we move forward we must begin to think of the business and wider corporate functioning of the NYSE. Part of a broadened focus may well include examining the current governance structure, which is currently more suited to a simple regulated entity with a monopoly or near-monopoly market position. To illustrate, the primary requirement for being a Director of the NYSE is that one has no financial interest in the organization. Little or no direct securities trading experience appears also to be a nomination preference. I suggest that the NYSE would have some trouble listing the shares of a company with similar constraints.

 

It is important for the NYSE to have a strong SRO function, either in tandem with or separated from our organization. If we are able to maintain this function under our broad corporate umbrella, that would be a positive. The current Board of Directors and our present governance model would be ideal for this critical adjunct of the NYSE. Mr. Richard Ketchum is also clearly a positive force in this regard.

 

My basic point is that the demands of our business may well require a business Board of Directors in the traditional sense. We are in a very competitive business. We have no defacto monopoly and our market position is not unassailable. We must compete for listings and trading volume. An international market beckons us and our capital must be built up for expansion and upgrades. We must also attract and retain highly skilled staff and management. In addition to the above we will continually be faced with brutal price and function competition.

 

To face the future we must also position ourselves to acquire other trading properties, either domestic or international. Either the NYSE has to recognize that it is now in a wider business or the SRO function will not have much to regulate. The growth and merging of large exchanges in Asia, Europe and here in North America can, in the future, have an impact on our relative position. Given America’s current dominance in financial services worldwide, a narrow focus at the NYSE can have a broad negative impact on both the financial sector and our economy at large.

 

America has lost its dominance in other economic sectors and the NYSE is a central feature in this broad economic contest. We must build on its recognized expertise in order to remain a world financial player. Our position is far more fragile than many regulators and legislators may recognize. In summary, a smart, tough, efficient and yes, profitable NYSE is what is required. Our first step in this quest must be a change from a Not For Profit Corporation (“NFPC”) to a For Profit Corporation. Our NFPC status has been detrimental to the NYSE on several fronts. Organizations of all types suffer from entropy or run-down over time. They lose their “edge”. That happened at the NYSE. Without the discipline of strong growth and results on the bottom line many NFPCs do not prepare for the challenges of the future. A clear example is shown in other exchanges that shifted their status to “For Profit” and then did an IPO. Dramatic efficiencies emerged.

 

We need to attract bright people, build capital and protect, then build market share. These are real goals requiring real assets. We are no longer simply a utility for the financial industry. Since we as an organization already pay taxes, our current status does not seem rational. Lacking a profit discipline in the past, good financial results were not as productively used as they could have been. It appears that, within our proposed hybrid trading model, a greater proportion of trading will be processed electronically. This is an expensive proposition to put in place, yet it can be very profitable to the NYSE, when fully functioning. This new initiative is simply the beginning of our on-going future capital needs. The above part also brings us to our current ownership structure. Members, whether they be floor traders, specialist, retirees or investors are constrained, in their sharing in the overall rewards of this business, to Seat leases and/or floor trading profits. This may be a declining proportion of our business in the future. Logically and legally it is not reasonable for business owners to be limited to benefiting from only one aspect of an enterprise. As we progress with broader products and trading alternatives, the revenue generators of the NYSE and hopefully their profitability must also benefit the owners of our business.

 

That fact speaks directly to the greater appropriateness of a share ownership structure over that of a Seat or Membership. True, this means lease payments may accrue to the NYSE, yet this could be offset in whole or in part through dividends from a broader revenue base. Initially, however, it may require a split share solution with one class allowing for floor access and leases such as at the Chicago Mercantile Exchange. I personally believe this should be a transitory situation if adopted. Specialists and floor brokers would be able to offset floor access or lease payments with dividends if a one class of share structure were adopted. This structuring would allow participation in the broader revenue base (floor plus electronic) of the NYSE. Shareholders would have the ability to diversify their investments through partial sales and specialists or floor brokers could redeploy capital to more productive uses within their businesses.

 

Many of our owners are retirees who in effect are dependent on one share (a Membership) and its sole income stream (a lease). They would be able to participate in a wider income base or diversify in a more prudent manner. Another advantage of a share structure versus Membership is that the anachronistic constraint of personal ownership could be removed and corporations would then be able to hold shares directly. At some point a limit of say 10% might be advisable, in order to assure the NYSE’s independence. The above comments and broad suggestions lead directly toward an IPO. As Mr. Thain has noted, there needs to be an understanding of and improvement in our business model and revenue generators. This has not been a particular priority in the past. Changing our NFPC status can reap significant benefits, as many public exchanges have clearly illustrated.

 

What is really required, however, is the will to move the NYSE into the current millennium. The benefits of a publicly traded NYSE are myriad. Without belaboring the point, it is important that all of our customers are able to own part of this great organization. A broader ownership base, solid governance, best price, greatest liquidity and outstanding management should be our goals. As we become a widely owned business in our own right the NYSE will be seen as less of a club and more as what it really is – America’s leading financial institution. I personally am of the opinion that our management is fast approaching the point where we must move on these matters. As stated in one of the great self-help programs: “Half measures will avail us nothing”. I would like to thank the management for their commitment and efforts over this difficult year and hope we can now proceed with the new “building phase” of the NYSE.

 

Yours truly,

 

Thomas S. Caldwell

 

Chairman

TXS Venture:URB

 

Toronto, Ontario – August 27, 2004 – Urbana Corporation (TSX Venture: URB) is pleased to announce its wholly-owned subsidiary, Urbana America Inc., has purchased a third seat on the New York Stock Exchange.

 

Management of Urbana Corporation views this purchase, through its nominee, as a long-term investment with both income and capital gains potential.

 

This purchase by Urbana Corporation, in conjunction with its continuing mineral exploration activities, illustrates our company’s long-term balance between investment and natural resource activities. The purchase price for the New York Stock Exchange Seat was $1.15 Million (U.S.).

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

 

This press release has not been reviewed by the TSX Venture Exchange.

TXS Venture:URB

 

Toronto, Ontario – July 28, 2004 – Urbana Corporation (TSX Venture: URB) is pleased to announce its wholly-owned subsidiary, Urbana America Inc., has purchased a second seat on the New York Stock Exchange. Management of Urbana Corporation views this purchase, through its nominee, as a long-term investment with both income and capital gains potential. This purchase by Urbana Corporation, in conjunction with its continuing mineral exploration activities, illustrates our company’s long-term balance between investment and natural resource activities. The purchase price for the New York Stock Exchange Seat was $1.65 Million (U.S.). This seat has been leased for $160,000(U.S.) per year under a 1 year lease.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

 

This press release has not been reviewed by the TSX Venture Exchange.

TXS Venture:URB

 

Toronto, Ontario – May 14, 2004 – Urbana Corporation (“Urbana”) (TSX Venture: URB) is pleased to announce the completion of private placement equity financing of its securities to accredited investors. 3,000,000 common shares of Urbana were issued today at a purchase price of $1.00 per common share for total proceeds of $3,000,000. No commissions were paid to any agent or underwriter in connection with the private placement. The common shares issued today may not be sold, transferred or traded before September 15, 2004.

 

The proceeds of the offering are expected to be used for general corporate purposes and it is management’s intention to finance the purchase of an additional seat on the New York Stock Exchange. In addition, proceeds will be used to supplement Urbana’s investment program and to develop its gold prospect holdings in Urban Township, Quebec.

 

Urbana is currently focusing its mineral exploration efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

 

This press release has not been reviewed by the TSX Venture Exchange.

TXS Venture:URB

 

Toronto, Ontario – April 5, 2004 – Urbana Corporation (“Urbana”) (TSX Venture: URB) is pleased to announce a proposed private placement equity financing of its securities to accredited investors. A maximum of 3,000,000 common shares of Urbana will be issued at a purchase price of $1.00 per common share. Urbana currently expects that the private placement will be completed by May 14, 2004. No commissions will be paid to any agent or underwriter in connection with the private placement.

 

The proceeds of the offering are expected to be used for general corporate purposes and it is management’s intention to finance the purchase of an additional seat on the New York Stock Exchange. In addition, proceeds will be used to supplement Urbana’s investment program and to develop its gold prospect holdings in Urban Township, Quebec.

 

The private placement is subject to the approval of the TSX Venture Exchange.

 

Urbana is currently focusing its mineral exploration efforts on its 72 claim holding in Urban Township, Quebec.

 

Please contact Thomas S. Caldwell at 416-595-9106 for further information.

 

This press release has not been reviewed by the TSX Venture Exchange.