Board Inclusiveness

Whereas: Employees, customers, and stockholders have a greater diversity of backgrounds than ever before in our nation's history. We believe that the Boards of Directors of major corporations should be drawn from the broadest pool of talent and expertise. We also believe that Board diversity enhances business performance by enabling a company to respond effectively to the needs of customers worldwide.

As investors in American Power Conversion Corporation (APCC), we believe that supporting diversity should be reflected from entry-level jobs to our Board. At the moment our Board is composed of all white men.

If we are to be prepared for the 21st Century, we must learn how to compete in an increasingly diverse global marketplace, by promoting and selecting the best qualified people regardless of race, gender or physical challenge. Sun Oil's CEO Robert Campbell stated (Wall Street Journal, 8/12/96): "Often what a woman or minority person can bring to the board is some perspective a company has not had before---adding some modern-day reality to the deliberation process. Those perspectives are of great value, and often missing from an all-white, male gathering. They can also be inspirational to the company's diverse workforce."

A growing proportion of stockholders attach value to board inclusiveness, since the board is responsible for representing shareholder interests. The Teachers Insurance and Annuity Association and College Retirement Equities Fund (TIAA-CREF), the largest U.S. institutional investor, has issued a set of corporate governance guidelines which include a call for "diversity of directors by experience, sex, age, and race."

This year, in response to the corporate scandals of the preceding year, the stock exchanges, the SEC, and the U.S. Congress have taken actions which embrace many of the corporate governance initiatives that have been promoted by concerned shareholders over the past decade. Both the NASDAQ and the NYSE have raised the bar for board and committee independence.

As companies seek new board members to meet these new independence standards there is also an opportunity to enhance diversity on the board. This is an opportunity for American Power Conversion to increase the independence of the board, create nominating, compensation and audit committees comprised entirely of independent directors, as while doing so, move beyond a all white male board.

RESOLVED: The Shareholders of APCC request that:

1. The Board of Directors make a greater effort to locate qualified women and persons of color as candidates for nomination to the board.

2. The Board issue a public statement committing the company to a policy of board inclusiveness, with a program of steps to be taken and a timeline during which the company is expected to move in that direction.

3. The company provide to shareholders, at reasonable expense, a report by September 2003, which includes a description of:

a. Efforts to encourage diversified representation on the board
b. Criteria for board qualification
c. The process of selecting board nominees, and board committee members

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