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Coleman Stipanovich
Governor Jeb Bush
10/15/2005 8:11:14 PM
Re: Movie Gallery Incorporated

Mr. Stipanovich;
Does the following blue excerpt [below] from your response indicate that I'm wasting my time and that
moral issues aren't a concern or detriment to our children. I would think that would take precedent
over any benefits derived for FRS retirees. Surely most retirees have children/grandchildren and
concerns for their future. I hope the SBA and the ainvestment managersa will make aa rare
exceptiona, and divest it'self of amoral investments. Some things put in these young minds are often
not erased.
A Concerned Grandmother
Arletta

E mail:
The SBA receives numerous and sincere requests from people who want the FRS pension fund to
divest of stocks for various reasons. The requests generally have to do with socially responsible
investing issues (e.g., environmental, labor standards, diversity and equality, tobacco, alcohol, military/
government, etc.) that are important to various constituency groups. Over the past three decades,
SBA Trustees have addressed the divestiture issue on many occasions and have consistently arrived
at the same conclusion, with rare exception. Only once in SBA's 30 year history of managing pension
assets, the Trustees temporarily mandated that the pension fund divest of a specific industry sector of
stocks due to extenuating circumstances. Likewise, only once has the Florida legislature passed a
law temporarily prohibiting investments in stocks of companies doing business in a particular country.
----- Original Message ----Froma Coleman Stipanovich
Toa
Senta Thursdaya October 13a 2005 6:37 PM
Subjecta Movie Gallery Incorporated

Dear Arletta
Your email concerning Movie Gallery has been forwarded to me for review and response. As
Executive Director of the State Board of Administration (SBA) of Florida, I am responsible for
directing investment policy and investment functions for the Florida Retirement System (FRS). We
appreciate your concern and sincere objection to the SBA's ownership of Movie Gallery stock. As
fiduciaries of the FRS pension plan, the Trustees, Executive Director and professional investment
staff are legally required to act solely in the best interest of the beneficiaries. Our investment

managers have full discretion to make investment decisions, and we trust them to consider these
issues to the extent they affect our invested assets, and therefore, the FRS beneficiaries' retirement.
The SBA receives numerous and sincere requests from people who want the FRS pension fund to
divest of stocks for various reasons. The requests generally have to do with socially responsible
investing issues (e.g., environmental, labor standards, diversity and equality, tobacco, alcohol,
military/government, etc.) that are important to various constituency groups. Over the past three
decades, SBA Trustees have addressed the divestiture issue on many occasions and have
consistently arrived at the same conclusion, with rare exception. Only once in SBA's 30 year history
of managing pension assets, the Trustees temporarily mandated that the pension fund divest of a
specific industry sector of stocks due to extenuating circumstances. Likewise, only once has the
Florida legislature passed a law temporarily prohibiting investments in stocks of companies doing
business in a particular country.
The SBA does not currently have any policies and practices that restrict our investment activities in
any individual company or country, except for the statutory prohibition on investments in Cuba, which
conforms with federal law. In sum, divesting of public company stocks limits investment
opportunities and impacts investment returns, which is problematic for fiduciaries. The SBA takes its
fiduciary responsibility very seriously, particularly when it has to do with the divestiture issue.
We appreciate you taking the time to express your concern regarding Movie Gallery. The outpouring
of concern is being taken seriously. We will continue to direct our investment managers to take into
consideration all potential factors in making prudent investment decisions on behalf of the FRS
participants and beneficiaries.
Sincerely,
Coleman Stipanovich
Executive Director
State Board of Administration
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