Company Name: American Electric Power Co., Inc.
Public Availability Date: 01-20-1988
[INQUIRY LETTER 1]
American Electric Power
P.O. Box 16631
Columbus, OH 43216
TELEPHONE(614) 223-1000
November 09, 1987
1934 Act/Rule 14a-8
HAND DELIVERY
Securities and Exchange Commission
450 Fifth Street, N.W.
Attention: Filing Desk
Stop 1-4
Washington, D.C. 20549-1004
Attention: Cecilia D. Blye, Esquire
Special Counsel
Room 3033
Re: American Electric Power Company, Inc.
File No. 1-3525
Pursuant to Rule 14a-8(d) under the Securities Exchange Act of 1934, enclosed
herewith are six copies of two virtually identical proposals and four covering
letters received by American Electric Power Company, Inc. ("AEP"). The proposals
are intended to be submitted to a vote of AEP's shareholders at its 1988 Annual
Meeting of Shareholders, which is scheduled to be held on April 27, 1988, and to
be included in AEP's proxy material relating to the 1988 Annual Meeting. The
proposals, which seek the creation of a committee of the Board of Directors to
hold open hearings and report on the acid rain issue, are sponsored by the
Corporation of Roman Catholic Clergymen (Jesuits of the Maryland Province),
Sisters of the Good Shepherd-Province of New York, American Baptist Home Mission
Society and Detroit Province of the Society of Jesus. The Sisters of the Good
Shepherd indicated that they should be considered as "co-filing" the resolution
sponsored by the Maryland Province and did not include a copy of the proposal
with their letter.
The primary difference between the two proposals is the omission, by the Detroit
Province, of the fifth "whereas" clause appearing in the proposal submitted by
the Maryland Province and the American Baptist Home Mission Society. This
differences and the other minor typographical and punctuation differences seem
to be unintended oversights. Six additional copies of each proposal are enclosed
which have been marked to indicate these differences. Since the letter from the
Detroit Province of the Society of Jesus indicates that this organization is a
"co-sponsor" of the resolution submitted by the Maryland Province and, because
the proposals are almost identical, we are treating the proposals as a single
proposal with the more complete proposal furnished by the Maryland Province and
the American Baptist Home Mission Society as the intended submission (the "1988
Proposal"), both for purposes of this letter to the Securities and Exchange
Commission ("Commission") and for publication in AEP's proxy statement (if the
1988 Proposal may not be excluded).
This letter is to notify the Commission of AEP's intention to omit the 1988
Proposal from its proxy material for the 1988 Annual Meeting pursuant to Rule
14a-8(c)(12) because (i) it deals with substantially the same subject matter as
proposals which appeared in AEP's proxy material and which were voted on by the
shareholders at the Annual Meetings in 1987 (the "1987 Proposal"), 1986 (the
"1986 Proposal") and 1985 (the "1985 Proposal"), and (ii) the 1987 Proposal
received less than 10 percent of the total number of votes cast in regard
thereto (i.e., 9.411% of votes cast "For" (10,879,144 votes), 90.589% of votes
cast "Against" (104,718,551 votes), and 22,422,720 shares abstained). The 1986
Proposal and 1985 Proposal received 10.967% and 7.998% of the votes cast,
respectively. The 1987 Proposal, 1986 Proposal and 1985 Proposal appear on pages
11 and 12 of the 1987, 1986 and 1985 proxy statements (six copies enclosed
herewith), respectively.
The subject matter of all four proposals relates to acid rain, AEP's actions in
connection therewith, and the relationship between sulfur dioxide and nitrogen
oxide emissions and environmental harm allegedly caused by acid rain. Although
the 1987 Proposal, 1986 Proposal and 1985 Proposal each requested a report with
respect to AEP's involvement with the acid rain issue, and the 1988 Proposal
requests that AEP form a Board committee to investigate this issue, the Division
of Corporation Finance's determinations in United Technologies Corporation
(February 27, 1987), Upjohn Company (March 26, 1985) and American Home Products
Corporation (March 8, 1984) confirm that a so-called disclosure proposal may be
considered the same as a proposal to take substantive action for the purposes of
Rule 14a-8(c)(12). Furthermore, in General Electric Company (January 30, 1985),
a proposal seeking the formation of a committee of the Board of Directors to
review that company's military contracts on the basis of economic and social
responsibility was held by the Division of Corporation Finance to be the same as
earlier proposals requesting that the whole Board in one case, and an existing
Board committee in another case, develop appropriate ethical and economic
criteria therefor.
In 1983 the Commission amended Rule 14a-8(c)(12) to provide that a proposal may
be omitted if it "deals with substantially the same subject matter" as a prior
proposal. Historically, the Commission staff had interpreted the prior
provision, "substantially the same proposal," to mean a proposal which was
virtually identical (in form as well as substance) to a proposal previously
included in an issuer's proxy materials. The amendment was adopted according to
the Commission, "to signal a clean break from the strict interpretive position
applied to the existing provisions." Thereafter, judgments with respect to Rule
14a-8(c)(12) were to "be based upon a consideration of the substantive concerns
raised by a proposal rather than the specific language or actions proposed to
deal with those concerns." Release No. 34-20091 (August 16, 1983). In the
instant case, the substantive concerns raised by the 1988, 1987, 1986 and 1985
Proposals clearly are one and the same: AEP's involvement with the acid rain
issue.
The four acid rain proposals submitted to AEP "deal with substantially the same
subject matter" as specified in Rule 14a-8(c)(12). Formal and linguistic changes
in the proposals do not render their subject matter any less the same. The minor
variations are irrelevant, both from the standpoint of the proponents whose
central purpose has never changed (restricting sulfur dioxide and nitrogen oxide
emissions at AEP's generating plants), and from the standpoint of the
shareholders, who have consistently supported management's objections to these
proposals for the last three years. Moreover, the recommendation in the 1988
Proposal of a different means to accomplish an identical end does not remove it
from the application of Rule 14a-8(c)(12).
Knowing that a proposal concerning AEP's involvement with the acid rain issue
could not be included again in AEP's proxy statement, the proponents changed the
wording, without altering the substance, in an attempt to have it included. In
our opinion, this is a misuse of the shareholder proxy proposal procedures, and
it is therefore respectfully submitted that the 1988 Proposal may properly be
omitted from management's proxy material under Rule 14a-8(c)(12).
Pursuant to the provisions of Rule 14a-8(d), AEP has by letter of even date
herewith notified the proponents of its intention to omit their proposal from
its proxy material, and copies of this statement of reasons why management deems
such omission to be proper accompanied the respective letters of notification to
them.
If you desire any additional information, please telephone Thomas S. Ashford,
Esquire, at (614) 223-1628.
Very truly yours,
A. Joseph Dowd
AJD/lb
Enclosures
[INQUIRY LETTER 2]
THE MARYLAND PROVINCE OF THE SOCIETY OF JESUS
5704 ROLAND AVENUE
BALTIMORE, MARYLAND 21210-1399
TELEPHONE(301) 435-1833
Mr. W.S. White, Jr.
Chairman and Chief Executive Officer
American Electric Power Company
1Riverside Plaza
Columbus, OH 43216
Dear Mr. White,
The Corporation of Roman Catholic Clergymen (Jesuits of the Maryland Province)
is the beneficial owner of 100 shares of American Electric Power Company common
stock. Proof of ownership for a period longer than one year will be furnished in
a letter by Mr. J. Dorsey Brown, being sent under separate cover.
As you will see in the body of our resolution, we remain deeply concerned with
AEP's role in acid precipitation. We are hereby notifying you of our intention
to present this proposal for consideration and action by the stockholders at the
next annual meeting. We submit it for inclusion in the proxy statement in
accordance with rule 14a-8 of the general rules and regulations of the
Securities Exchange Act.
Sincerely,
James A. Devereux, S.J.
Provincial
Suzanne Geaney
Responsible Investment
Committee Chair
c: Securities Exchange Commission
AMERICAN ELECTRIC POWER
WHEREAS the dangers and negative impacts of acid rain are hotly debated by the
scientific and environmental communities and by industries and governments;
WHEREAS environmental experts claim that acid rain seriously threatens the
environment and human health due to its effects on lakes, forests, agricultural
land, and buildings;
WHEREAS on the other hand, the National Acid Precipitation Assessment Program's
interagency report, authorized by Congress, found that acid rain poses minimal
problems (specifically the report said that damage to lakes from acid rain is
limited; there is no damage to trees except possibly as a part of "multiple
stresses" at high altitudes; there are no demonstrated effects on human health,
buildings, other materials or corps);
WHEREAS critics of the National Acid Precipitation Assessment Program's report
sharply attacked the report's findings, charging that the report's premise was
based on an inaccurate definition of an acidified lake; ignored many studies
that demonstrate the contrary view with regard to lakes growing significantly
worse in coming decades; failed to consider the evidence that acid rain has an
effect on tree foliage; selectively eliminated some research and incorporated
some research of questionable value;
WHEREAS the National Academy of Science determined that the primary causes of
acid rain are sulfur dioxide (SO2) and nitrogen oxide (NO2) gases emitted by
electrical power plants, smelters and other industrial processors and vehicles;
WHEREAS our company seems not to have a clear opinion on the causes of acid
rain, as demonstrated by Mr. W.S. White's (Chairman of the Board's) report on
the 80th annual meeting: "More research will give us a better understanding of
the cause and effect relationships among sulfur and nitrogen emission,
long-distance transport and acid rain";
WHEREAS many shareholders of AEP continue to be concerned about acid rain in
general and in particular about the remedial costs rising as new legislation
faces Congress each year;
WHEREAS many shareholders remain unconvinced that our company is taking enough
measures now to curb contributions to acid rain as the SO2 and NO2 emissions at
many AEP plants continue to number among the top dirtiest in the nation, (EPA
ranking);
WHEREAS the proponents of this resolution believe the state of the debate
warrants the initiation of a special review process to gather more information
on the subject of acid rain and to prepare recommendations to the board;
THEREFORE BE IT RESOLVED that the shareholders request the Board of Directors to
create an ACID RAIN REVIEW COMMITTEE of the Board to initiate hearings on this
issue.
1.) The hearings shall be open to all shareholders and other interested persons;
AEP representatives; scientists; environmental advocates and experts; and
government agency representatives. Participants shall be invited to present
their findings on the causes of, dangers of and "cures" for the acid rain
problem.
2.) After the hearings the committee shall report any conclusions or
recommendations to the board and management. If any policy changes or decisions
result, the Board would report those to the shareholders.
[INQUIRY LETTER 3]
Society of Jesus
7303 West Seven Mile Road
Detroit, MI 48221
TELEPHONE(313) 861-7500
Mr. W.S. White
Chairman and Chief Executive Officer
American Electric Power
1Riverside Plaza
Columbus, OH 43216
Dear Mr. White:
The Detroit Province of the Society of Jesus is a shareholder in American
Electric Power. We have previously expressed our concerns about the need for our
company to address the problem of acid rain.
Our hope is that companies like American Electric Power would exercise
leadership in cutting emissions linked to acid rain. We are aware of the
directors' responses to past requests that the company map out productive
strategies to deal with the problem of emissions linked to acid rain. The
response of the company fails, in our view, to describe a purposeful strategy
commensurate with American Electric Power's contribution to the problem and its
ability to take leadership in solving it.
For these reasons we want to co-sponsor the enclosed resolution submitted by the
Maryland Province of the Society of Jesus.
The Detroit Province of the Society of Jesus owns 100 shares of stock in
American Electric Power. We will send you proof of beneficial ownership. We wish
to notify you formally of our intention to present the enclosed resolution for
consideration at our next stockholders' meeting. We hereby submit it for
inclusion in the proxy statement in accordance with Rule 14a-8 of the Security
and Exchange Act of 1934. If you should for any reason desire to oppose the
adoption of this proposal by the stockholders at the annual meeting, please
include in the company's proxy statement the attached statement of support of
the proposal as required by the same rules and regulations. We intend to be
present, in person or by proxy, at the annual shareholders' meeting.
Sincerely,
Howard J. Gray, S.J.
Provincial
hjg:ks
Encls.
[INQUIRY LETTER 4]
Good Shepherd Provincialate
31 Dorchester Place
Ithaca, New York Original Text Illegible
Mr. W. S. White, Jr.
Chairman & Chief Executive Officer
American Electric Power Company
1 Riverside Plaza
Columbus, Ohio 43216
Dear Mr. White:
The Sisters of the Good Shepherd, Province of New York, wish to co-file a
resolution sponsored by the Corporation of Roman Catholic Clergymen. The Sisters
would like to see American Electric Power Corporation create a review committee
to deal with the acid rain issue. Please include the Sisters' resolution in your
proxy statement in accordance with rule 14-a-8 of the general rules and
regulations of the Securities and Exchange Act of 1934.
The Sisters are beneficial owners of 100 shares of AEP common stock. These
shares have been held since November 3, 1986, and are currently on deposit in
"street" name at Fidelity Brokerage Services. Fidelity is sending the Sisters a
letter verifying ownership. I will forward that to you shortly.
Thank you for your assistance.
Sincerely,
Thomas F. Hansen, C.P.A.
Business Administrator
[INQUIRY LETTER 5]
American Baptist Churches, National Ministries
P.O. Box 851
Valley Forge, Pennsylvania 19482-0851
TELEPHONE(215) 768-2459
Mr. W. S. White, Jr.
Chairman of the Board
American Electric Power Company, Inc.
1 Riverside Plaza
Columbus, OH 43215
Dear Mr. White:
As you know from past correspondence and shareholder resolutions, we are
concerned about the effects of acid raid and the involvement of AEP in its
production. We firmly believe the company needs to do more to clean up its
operations.
Therefore, we wish to cosponsor the enclosed proposal previously submitted by
the Maryland Provice Jesuits to be presented at the next annual meeting of
shareholders. 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 Exchange Act of 1934.
The American Baptist Home Mission Society is the beneficial owner of 100 shares
of stock. Verification of ownership of these shares for more than one year is
enclosed.
We would welcome the opportunity to discuss with you at any time the issues
raised in the enclosed proposal.
If you should desire to oppose the adoption of this proposal, please send us
your statement of opposition as required by the SEC.
We would appreciate your sending to us as soon as possible the 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.
Sincerely,
J. Andy Smith, III, Director
Social and Ethical Responsibility in Investments
215/768-2459
JAS:bje
Enc.
cc: Securities and Exchange Commission
Suzanne Geany
[INQUIRY LETTER 6]
Saint Benedict The Moor Catholic Church
1625 East Twelfth Street
Winston-Salem, North Carolina 27101-1721
December 08, 1987
Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention: Cecilia D. Blye
Special Counsel
Room 3033
Re: Shareholder Proposal Submitted to American Electric Power Company
Dear Sir/Madam,
I have been asked by the Corporation of Roman Catholic Clergymen (Jesuits of the
Maryland Province), Sisters of the Good Shepherd-Province of New York, American
Baptist Home Mission Society and Detroit Province of the Society of Jesus (which
religious institutions are hereinafter referred to as the "Churches"), and who
are owners of shares of common stock of American Electric Power Company, Inc.
(hereinafter referred to as "AEP" or the "Company"), and who have jointly
submitted to AEP a shareholder proposal pursuant to Rule 14a-8, to respond to
the letter dated November 9, 1987, sent to the Securities and Exchange
Commission by the Company, in which AEP contends that the Churches' shareholder
proposal may be excluded from the Company's 1988 proxy statement.
I have reviewed the shareholder proposal, the letter from the Company, and rule
14a-8, and it is my conclusion that the Churches shareholder proposal must be
included in AEP's 1988 proxy statement and it is not excludable by virtue of
Rule 14a-8(c)(12).
The Churches proposal does not deal with substantially the same subject matter
as proposals that appeared in AEP's proxy material in earlier years. The
shareholder proposals that were submitted from 1985 - 1987 asked for a report to
shareholders by the Board of Directors concerning specific actions AEP was
taking regarding power plant emissions and influence legislation affecting power
plants. The purpose and subject of those shareholder resolutions was clearly the
disclosure of Company policy toward containing power plant emission and
lobbying. The current 1988 shareholders resolution does not request any such
action or disclosure by the Company.
The current 1988 shareholders proposal asks the Board of Directors to create an
Acid Rain Review Committee of the Board to initiate hearings on the issue and
report any conclusions and recommendations to the Board and management. This is
obviously not a disclosure proposal nor a proposal to take substantive action.
In fact the current proposal asks AEP to do what the Company has repeatedly said
is needed: more education and more research on the issue of acid rain. This 1988
shareholders resolution is aimed at assisting AEP in doing this in a public
manner that will serve the interests of the entire Company, including the
shareholders.
The Company rashly and incorrectly states that the Churches "central purpose has
never changed (restricting sulfur-dioxide and nitrogen oxide emissions at AEP's
generating plants)." (See second full paragraph of page 3 of AEP's letter dated
November 9, 1987.) The shareholder resolutions offered from 1985 - 87 requested
a disclosure of information from the Company. None of the resolutions requested
any restrictions of emissions on the part of AEP.
The current 1988 shareholders resolution asks for a public hearing on an issue
that the Company admits is confusing and in need of more information. This is a
far cry from the Company's assumption of the purpose of the Churches resolution.
The purpose of the 1988 shareholders resolution that is currently being
challenged by the Company is the public education of the Board of Directors,
management, and through them the shareholders, on the complexity of the acid
rain issue that clearly impacts the current and future financial health of the
Company and the shareholders investment.
In summary, the current 1988 shareholders resolution is not the same as previous
resolutions for the purpose of Rule 14a-8(c)(12). The previous resolutions were
disclosure proposals that requested specific information on power plant
emissions and Company lobbying activities. The current resolution requests
hearings on the issue of acid rain for the education of the Board and management
on the potential - consequences such an extraordinary environmental question has
for the Company.
I request then, that the Churches 1988 shareholders resolution be included in
the 1988 proxy material because Rule 14a-8(c)(12) does not apply in this
instance.
If you need any further information, please telephone the undersigned at (919)
725-9200.
Very truly yours,
Thomas P. Gaunt, S.J.
Jesuits of the Maryland Province
cc: A. Joseph Dowd
Suzanne Geaney
[STAFF REPLY LETTER]
January 20, 1988
RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE
Re: American Electric Power Company
Incoming letter dated November 9, 1987
The proposal relates to the Company appointing an Acid Rain Review Committee of
the Board of Directors to imitiate hearings on the acid rain issue.
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)(12), since it appears to
deal with substantially the same subject matters as proposal included in the
Company's 1987, 1986, and 1985 proxy materials. In this regard, you indicate
that the 1987 proposal received 9.411% of the votes cast, less than the 10%
required for resubmission under paragraph (c)(12) of Rule 14a-8. 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
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