Company Name: Firestone Tire & Rubber Co.
Public Availability Date: 12-08-1987
[INQUIRY LETTER 1]
THE FIRESTONE TIRE & RUBBER COMPANY
1200 FIRESTONE PARKWAY
AKRON, OHIO 44317
October 13, 1987 Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549 Attention: Office of Chief Counsel
Division of Corporation Finance Re: The Firestone Tire & Rubber Company 1988 Annual Stockholders' Meeting -
Shareholder Proposal Submitted by The Ministers and Missionaries Benefit Board
of the American Baptists Churches Gentlemen: The 1988 Annual Stockholders' Meeting (the "Annual Meeting") of The Firestone
Tire & Rubber Company ("Firestone") is scheduled for March 22, 1988. By letter
dated September 9, 1987, The Ministers and Missionaries Benefit Board of the
American Baptists Churches (the "MMB Board") submitted a proposal for inclusion
in the proxy materials relating to the Annual Meeting. The MMB Board's proposal
seeks to have the Firestone Board of Directors establish the following policy: "Firestone Tire & Rubber Company will take immediate steps to terminate all
economic relationships with South Africa, specifically; terminating licensing,
management or franchise agreements and servicing of products." The MMB Board by letter dated August 21, 1987, also submitted a shareholder
proposal which was withdrawn in the September 9, 1987 letter. Accordingly,
Firestone will omit from its proxy materials relating to the Annual Meeting the
shareholder proposal submitted under cover of the August 21, 1987 letter. Firestone submits this letter pursuant to Rule 14a-8(d) to request your
concurrence that the MMB Board's proposal submitted by letter dated September 9,
1987 may be omitted from Firestone's 1988 proxy materials pursuant to the
provisions of Rule 14a-8(c)(2). In May 1987, Firestone sold its entire remaining minority interest in Firestone
South Africa (Pty.) Ltd. ("FSA"), a South African corporation, to a wholly-owned
subsidiary of Federale Volksbeleggings Beperk ("Federale"). Federale is a large
South African corporation in which Firestone owns no shares. Firestone does not
otherwise have any interest in or control of Federale or any of its
subsidiaries. By agreement, Federale is obligated to change the name of FSA to a
name which does not include "Firestone" on or before November 18, 1987. Firestone has four long-term agreements with FSA covering technical services,
trademark licenses, distribution and export sales. The four agreements have at
least four or more years to run. The agreements may be terminated only for cause
or, upon the giving of notice, at the end of the initial term or any succeeding
term, except one agreement which may be terminated with or without cause upon 60
days written notice. Each of the four agreements was made under, and is to be
construed in accordance with Ohio law. The MMB Board's proposal, if adopted, would require the Firestone Board of
Directors to terminate all economic relationships with South Africa, including
the four agreements. In general, an agreement cannot be terminated unilaterally
by one party absent some specific provision of the agreement or breach by the
other party. The MMB Board's proposal, if adopted, would mandate that Firestone
breach its four agreements with FSA. The breach of these agreements by
Firestone, an Ohio corporation, would violate Ohio law and give raise to one or
more causes of action for damages and/or specific performance by the
non-breaching party. See, e.g. 17 O Jur 3d, Contracts §1; 18 O Jur 3d, Contracts
§262; Akron v. Lynn Realty, Inc., 62 O. L. Abs. 103, 106 N.E. 2d 325 (1951);
Advertisers Exchange v. Bleich, 40 O. L. Abs. 212, 57 N.E. 2d 91 (1943); Fuchs
v. Stage Co., 135 O. St. 509, 21 N.E. 2d 669, 14 O (1939); and Van Canfort v.
Realty Co., 13 O. L. Abs. 499 (1932). Rule 14a-8(c)(2) permits exclusion of a proposal which would require an issuer
to violate state law. As is set forth in the preceding paragraph, the MMB Board
proposal by its terms requires the breach by Firestone of existing contracts
with FSA. The staff has recognized that a shareholder proposal to require the
cancellation of "golden parachute" employment contracts would have violated
state law as a breach of contract and, therefore, was excludable pursuant to
Rule 14a-8(c)(2). Brunswick Corporation, January 31, 1983. See also Mobil
Corporation, February 20, 1985, Occidental Petroleum Corporation, March 18,
1976, and Texaco Inc., December 20, 1985. For these reasons we submit that the
MMB Board's proposal should be excluded from Firestone's 1988 proxy materials to
avoid the anomalous result of shareholders being asked to vote to violate Ohio
law, i.e. the intentional breach of an Ohio contract. Enclosed are six copies of the proposal, supporting statement and letter of
September 9, 1987 received from the MMB Board, together with six copies of this
letter. If you desire additional information on Firestone's reasons for omitting the
above referenced proposal, please telephone Mr. Randall D. Luke (216) 379-7458
or the undersigned (216) 379-6024. For the reasons set forth, it is the opinion of the undersigned that omission of
the MMB Board's proposal from Firestone's 1988 proxy materials is proper. We
would appreciate receiving a written expression of your views concerning
Firestone's intention to omit the MMB Board's proposal and supporting statement
from the 1988 proxy soliciting materials as soon as possible. Very truly yours, Jane P. Nerison
Senior Counsel w:/njp/r7100611/b
Enclosures cc: The Ministers and Missionaries Benefit Board of the American Baptist
Churches - with attachments 475 Riverside Drive
New York, NY 10115
Attention: Ms. Cheryl H. Wade
Assistant Treasurer
[INQUIRY LETTER 2]
THE MINISTERS AND MISSIONARIES BENEFIT BOARD OF THE AMERICAN BAPTIST CHURCHES
475 Riverside Drive
New York, New York 10115
TELEPHONE(319) 335-9076 Mr. Randall Luke
Firestone Tire & Rubber Company
1200 Firestone Parkway
Akron, Ohio 44317 Dear Mr. Luke: As we agreed in our telephone conversation of September 9, 1987, I am authorized
to withdraw the resolution on South Africa which I submitted to you with an
accompanying letter on August 21, 1987. While I do appreciate your position, American Baptist Churches, U.S.A., has a
continuing commitment to change in the apartheid system in South Africa.
Therefore, we do consider this to be an extraordinary situation where
extraordinary responses are necessary. Therefore, I am enclosing a copy of a shareholder proposal for consideration and
action by the stockholders at the next annual meeting. I hereby submit it for
inclusion in the proxy statement in accordance with rule 14a-8 of the general
rules and regulations of the Securities and Exchange Act of 1934. The Ministers and Missionaries Benefit Board of American Baptist Churches is the
owner of 18,500 shares of stock. Verification of ownership of these shares for
more than one year is already in your hands. We would appreciate your sending to us, as soon as possible, date, place and
time of your 1988 annual shareholders meeting. If the time and place are not yet
set, please inform us of the date. Again, I appreciate the opportunity to talk to you about our concerns. The South
African situation is one requiring our continued attention. Sincerely, Cheryl H. Wade
Assistant Treasurer CHW:cj
Area Code 212/870-3060
Enclosure cc: Securities and Exchange Commission SHAREHOLDER PROPOSAL FOR COMPANIES IN SOUTH AFRICA Whereas the South African government has persistently blocked peaceful channels
for blacks to request changes in apartheid: --Africans cannot vote in national elections. --The government has refused to negotiate with recognized black leaders. --Large public meetings are forbidden and thousands of people have been arrested
for participating in such meetings. --Individual leaders are "banned" without trial and it is a crime to quote them
or meet with them. Whereas the Nationalist Government following the elections in May 1987 has
intensified the enforcement of key apartheid laws: Whereas the African National Congress has been outlawed and its leaders arrested
and the government is repeating this pattern with the United Democratic Front
and other nonparliamentary opposition groups; Whereas the South African government has turned increasingly to violence against
blacks. Hundreds of school-children have been shot and the government has
forcefully removed over 3,000,000 blacks from their homes and relocated them; Whereas over 2,000 people had been killed as of July 1986 when the South African
government declared a state of emergency, with extreme press censorship and
martial law, resulting in arrests of over 30,000 people including 10,000
children; Whereas by July 1987 over 100 U.S. corporations, including Firestone Tire &
Rubber Company, had already ended direct investment in South Africa, and some,
like Eastman Kodak, have severed all economic ties; Whereas we believe that severance of all international economic ties to South
Africa increasingly isolates the country and brings pressure on the white
government to end apartheid; Whereas Archbishop Desmond Tutu, Dr. Allan Boesak, the Reverend Beyers Naude and
other South African religious leaders and the South African Council of Churches
and the South African Catholic Bishops Conference have called for international
economic sanctions to hasten the end of apartheid Whereas Dr. Leon Sullivan, recognizing that the Principles he authored had
failed to bring an end to apartheid, now calls for all U.S. companies to end
economic relationships with South Africa; Whereas because of mounting public opinion companies continuing to have ties to
South Africa are becoming the object of selective buying campaigns and consumer
boycotts and stand to lose sales and suffer further in their public image unless
they sever all relationships with South Africa; Whereas that shareholders request the Board to establish the following policy; Firestone Tire & Rubber Company will take immediate steps to terminate all
economic relationships with South Africa, specifically; terminating licensing,
management or franchise agreements and servicing of products. The Ministers and Missionaries Benefit Board of American Baptist Churches
9/9/87
[INQUIRY LETTER 3]
PAUL M. NEUHAUSER
914 HIGHWOOD STREET
IOWA CITY, IOWA 52240 November 17, 1987 319-335-9076 Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Att: Cecilia D. Blye
Office of the Chief Counsel
Division of Corporation Finance Re: Shareholder Proposal Submitted to The Firestone Tire and Rubber Company Dear Sir/Madam: I have been asked by The Ministers and Missionaries Benefit Board of the
American Baptist Churches (hereinafter referred to as the "Baptist Church"), the
beneficial owners of 18,500 shares of common stock of The Firestone Tire and
Rubber Company (hereinafter referred to as "Firestone" or the "Company"), which
has submitted a shareholder proposal to Firestone, to respond to the letter
dated October 13, 1987, sent to the Securities & Exchange Commission by the
Company, in which Firestone contends that the Baptist Church's shareholder
proposal may be excluded from the Company's 1988 proxy statement by virtue of
Rule 14a-8(c)(2). I have reviewed the shareholder proposal, as well as the aforesaid letter from
the Company, and based upon the foregoing, as well as upon a review of Rule
14a-8, it is my opinion the Baptist Church's shareholder proposal must be
included in Firestone's 1988 proxy statement and that it is not excludable by
virtue of Rule 14a-8(c)(2). We do not believe that any reasonable shareholder would read the proposal in the
manner suggested by the Company. Although the proposal requests Firestone to
"terminate" various agreements, it does not require that Firestone terminate
such agreements in a manner which would violate state law. Rather, the proposal,
if read reasonably, requests Firestone to terminate all such contracts at the
earliest feasible time. Thus, in the case of one of the contracts, which the
company concedes is terminable at will upon the giving of 60 days notice, the
Baptist Church's proposal would request that such notice be given forthworth. In
the case of the other contracts, the reasonable reading of the proposal is that
Firestone should not renew them when they expire. Such a reading of the
proposal, which we believe to be the natural and reasonable one, would not cause
the proposal to violate Rule 14a-8(c)(2). If the staff were to disagree with us, and agree with the Company's
interpretation of the proposal, namely that it calls on the Company to breach
its contracts (despite the fact that such a request that is nowhere made in the
proposal), we would, of course, be willing to amend the proposal to make even
more explicit what was intended, namely that Firestone should terminate all such
contracts at the earliest feasible time, by ending at once those which are
terminable at will, and by not renewing the others at the earliest date that
such non-renewal is permitted under the contract. Such an amendment, which would
conform the proposal to its original intent, would, of course, obviate the
Company's objection. In conclusion, we request that the staff inform the Company that the SEC proxy
rules require denial of the Company's no-action request. We would appreciate
your telephoning the undersigned at 319-355-9076 with respect to any questions
in connection with this matter or if the staff wishes any further information. Very truly yours, Paul M. Neuhauser
Attorney at Law cc: Jane P. Nerison
Rev. Andy Smith
Cheryl H. Wade
Tim Smith
[STAFF REPLY LETTER]
DEC 08 1987 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: The Firestone Tire & Rubber Company (the "Company")
Incoming letter dated October 13, 1987 The proposal relates to the Company immediately terminating all economic
relationships with South Africa. There appears to be some basis for your opinion that the proposal may be omitted
from the Company's proxy material under Rule 14a-8(c)(2). Under the
circumstances, this Division will not recommend any enforcement action to the
Commission if the Company omits the subject proposal from its proxy material. Sincerely, Cecilia D. Blye
Special Counsel
|
