April 4, 2007

SACRAMENTO, CA – The California State Teachers’ Retirement System has seen both near- and long-term improvements in governance efforts and stock performance of those companies previously placed on its “Workplan” list. Of the five companies identified as poor performers in October 2005, four have made significant changes to their governance, leading to increased board independence, improved accountability to shareholders and positive gains in the market. CalSTRS continues to engage UnumProvident, headquartered in Chattanooga, TN, on its performance and corporate governance issues.

“The era of shareholders as ‘silent partners’ is over,” said Jack Ehnes, CalSTRS chief executive officer. “Public corporations must recognize their shareholders as an integral part of their success, not merely as a limitless source of capital. Our experience proves that companies open to the process of active engagement are those committed to retaining their competitive edge over the long haul.”

The publicly held companies were placed on the pension system’s Workplan list due to consistently disappointing returns and stagnant corporate governance practices. CalSTRS worked closely and cooperatively with Compuware Corporation, Sirius Satellite Radio, Level 3 Communications and Solectron Corporation throughout 2006 with the expectation that they show improvement.

“The long-term success of these companies is important to us,” said Christopher J. Ailman, CalSTRS chief investment officer. “We believe that active engagement at the very least opens a dialogue of new ideas for management and the board, at its best, effects change that makes these companies stronger and healthier for all shareholders.”

Compuware Corporation, headquartered in Detroit, MI, amended the company’s shareholder rights plan which was put up for ratification by a vote of the shareholders, passing with more than 75 percent of shareholders voting in favor of the new, shareholder-friendly plan.

The board of directors at Sirius Satellite Radio, headquartered in New York, NY, moved toward greater transparency and accountability to shareholders by creating a Nominating and Corporate Governance committee, comprised entirely of independent directors.

Since first identified as a Workplan company in 2005, Level 3 Communications, Inc., headquartered in Broomfield, CO, made continuous improvements in corporate governance and made strategic changes that led to substantial improvement in market value. The improvement prompted Bear Stearns to upgrade Level 3 stock from a Sell to a Buy and moved the company to a reduced engagement profile with CalSTRS.

Solectron Corporation, headquartered in Milpitas, CA, was engaged primarily to align executive compensation with performance. Reflecting a major shift in compensation philosophy, the chief executive officer’s salary dropped from $6.9 million in 2005 to $1.6 million in 2006 due to disappointing performance relative to industry peers. CalSTRS has also asked that Solectron’s long-term poison pill, adopted without shareholder approval five years ago, be placed up for a shareholder vote or redemption.

CalSTRS will announce its 2007 Workplan company list this summer.

With a $159 billion investment portfolio, the California State Teachers’ Retirement System is the second-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s 800,000 public school educators and their families.