October 5, 2005

Sacramento, CA – The California State Teachers’ Retirement System has placed five companies on its Workplan of poor corporate performers. The publicly held companies within the pension system’s $133 billion fund have consistently produced disappointing returns and have fallen short of accepted corporate governance practices. CalSTRS will work closely and cooperatively with these companies with the expectation that they show improvement.

“As a long-term investor, we cannot trade away our disappointment in poor performers. We have an obligation to California’s educators to engage these companies and work toward rehabilitating the health of portfolio assets,” said Jack Ehnes, Chief Executive Officer of CalSTRS. “We believe this long-term approach as coach and partner with our Workplan companies over time adds value not only to the companies but also to our portfolio.”

The current Workplan companies are:

• Compuware Corp. – Detroit, MI
• Level 3 Communications, Inc. – Broomfield, CO
• Sirius Satellite Radio, Inc. – New York, NY
• Solectron Corp. – Milpitas, CA
• UnumProvident Corp. – Chattanooga, TN

They were selected based on poor financial performance, compared to market benchmarks and peer groups, for one-, three- and five-year periods. Additional considerations involve corporate governance issues.

Corporate governance concerns include executive compensation packages or activities such as amending bylaws and changing the board size without shareholder approval or diluting the company’s stock value to discourage a hostile takeover.

CalSTRS will engage these companies on a long-term basis to discuss ways to build a stronger, more valuable company. Those ways include suggesting improvements in governance practices, such as increased board independence, or in business decisions, such as dropping takeover defenses or unproductive parts of the company.

“We want to work with them and motivate them so that they are stronger companies, and their shareholders are rewarded. In the end, these Workplan businesses must ask themselves if their current practices are preventing their shareholders from getting returns,” said Christopher J. Ailman, Chief Investment Officer of CalSTRS.

The named companies are drawn from the large passive portfolios within CalSTRS’ domestic equity investment portfolio. The passive domestic equity portfolio makes up 70 percent of the domestic equity allocation of the fund. Companies held in those accounts do not trade on events or market news, but follow the “buy and hold” philosophy of investing.

Established by law in 1913, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s educators from kindergarten through community college, serving more than 755,000 members and their families.