Company Name: Eastman Kodak Co. (O'Leyar)
Public Availability Date: 01-30-1991
[INQUIRY LETTER 1]
EASTMAN KODAK COMPANY
343 STATE STREET
ROCHESTER, NEW YORK 14650-0208
TELEPHONE(716) 724-4368 December 18, 1990 Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549 Attention: Office of Chief Counsel
Room 3026 Re: Submission Pursuant to Rule 14a-8(d)
Proposal Submitted by George O'Leyar Dear Sir: The management of Eastman Kodak Company intends to omit from the Proxy Statement
for its 1991 Annual Meeting a shareholder proposal submitted by Mr. George
O'Leyar of 115 Minocqua Drive, Rochester, New York 14617. The correspondence received from Mr. O'Leyar, purporting to be a shareholder
proposal and supporting statement, is set forth in Exhibit 1. The Company believes that the proposal may be omitted from the Proxy Statement
for the 1991 Annual Meeting of Shareholders on the following grounds: 1. The proposal and supporting statement are so vague and indefinite that the
proposal may be omitted pursuant to Rule 14a-8(c)(3). On November 21, 1990, the Company received a letter from George O'Leyar,
purporting to be a shareholder proposal. This letter is attached as Exhibit 2.
On November 21, 1990, the Company wrote to Mr. O'Leyar requesting that he
clarify his proposal and limit his proposal in accordance with Rule 14a-8(b)(1)
to 500 words. A copy of this letter is attached as Exhibit 3. On December 13,
1990, the Company received from Mr. O'Leyar a facsimile transmission of a letter
dated November 19, 1990 which indicates that it is being "resubmitted December
13, 1990 per guidelines of the Legal Division". A copy of this second submission
is contained in Exhibit 1. It is difficult to tell what portions of the
proponent's letter are meant to be a resolution and what portions are meant to
be the supporting statement. The second paragraph of the proponent's letter states that he is submitting "to
the Board of Directors...a new resolution for the shareholders to vote upon.
That resolution being to provide new ways and means for employees to bring
inconsistencies of procedures within the Eastman Kodak Company to the attention
of the company managers." The Company believes that this statement is so vague
and indefinite that neither shareholders voting on the proposal nor the Company
would be able to determine with any reasonable certainty exactly what actions or
measures the Company would be required to take in the event the proposal were
implemented. The Staff has previously taken the position that such uncertainty
is a basis to exclude a proposal under Rule 14a-8(c)(3). (See Occidental
Petroleum Corporation, April 4, 1990, a copy of which is attached as Exhibit 4). 2. The proposal and supporting statement are so vague and indefinite that it is
beyond the registrant's power to effectuate and, therefore, the proposal may be
omitted pursuant to Rule 14a-8(c)(6). For the same reasons stated in number 1 above, the proposal may be omitted under
Rule 14a-8(c)(6). 3. The proposal relates to the redress of a personal grievance against the
Company and it is designed to further a personal interest of the proponent which
personal grievance and interest are not shared by the other security holders at
large and, therefore, the proposal may be omitted under Rule 14a-8(c)(4). The proponent states in the first paragraph that he is proposing "this
resolution subsequent to advisement of the inappropriate termination of his
employment." In the fourth paragraph the proponent states "As indicated, my
employment was terminated as a result of my medical problems. I found it
difficult to comprehend that in place of concern for my health there was only
intent to put me on final warning." These statements show that the proponent is
seeking to redress a personal grievance against the Company arising from his
termination of employment. The proposal is designed to further a personal
interest of the proponent and not one shared by other security holders at large. 4. The proposal concerns a matter relating to the ordinary business operations
of the Company and therefore, may be omitted under Rule 14a-8(c)(7). The proposal appears to relate to procedures for the communication of
information within the Company. Such procedures necessarily relate to the
day-to-day operations and flow of information among employees and between
employees and their managers. These procedures are an integral part of the
conduct of the ordinary business operations of the Company. A copy of this letter and its enclosures is being mailed to Mr. O'Leyar to
notify him that the Company intends to omit his proposal from the Proxy
Statement and Form of Proxy for its 1991 Annual Meeting, and to provide him with
the statement of the reasons why management deems such omission to be proper. In
accordance with Rule 14a-8(d), I am enclosing six copies of this letter and its
exhibits. Very truly yours, JPH:slc
Enc. cc: Mr. G. O'Leyar (Certified Mail Delivery) EXHIBIT 1 DEC - 13 - 90 THU 14:59 MCDSS ACCT PAY Fax Transmittal Memo 7672 To
Joyce Haag, Ass't to the Secretary Company
Legal Division, Eastman Kodak Company Location Fax
724-9448 Telephone Company The following is resubmitted per your request. No o' Pages Todays Date Time From
George C. O'Leyar Company
115 Minocque Dr. Location Original Text Illegible Charge Fax Telephone: 338-2772 Original Text Illegible
Disposition Destroy Return Original Text Illegible November 19, 1990 Board of Directors
Eastman Kodak Company Dear Sirs and Meadames: I am concerned for the well being of Eastman Kodak Company's future as a premier
company and propose this resolution subsequent to advisement of the
inappropriate termination of my employment. I submit to the Board of Directors as a shareowner in Eastman Kodak's Fund A in
good standing a new resolution for the shareholders to vote upon. That
resolution being to provide new ways and means for employees to bring
inconsistencies of procedures within the Eastman Kodak Company to the attention
of the company managers. At the present time there is no provision for full disclosure of in-house
difficulties to the proper level of management. There exists only total
confusion of who is responsible for the various areas of the company and for
interpretations of the company's fair practice guidelines. As a shareowner is good standing and also a loyal employee of 25 years, I find
that there are many obstacles put before an employee with legitimate concerns to
access the top managers of the company. As indicated, my employment was
terminated as a result of my medical problems. I found it difficult to
comprehend that in place of concern for my health there was only intent to put
me on final warning. Equipment, perks (film) and promotional opportunities are
not disseminated fairly to the employees. Even the Polaroid lawsuit is an
example of past mistake of less than quality purported by management as a
defense of Kodak's good name. There is a need for an independent, nonpartisan party to intercede for the
employee and bring order so people are not forced into the union configuration.
There is an insolence at the top that gives employees the message "THATS OUR
ANSWER. TAKE IT OR LEAVE IT". The open door policy is but a facade of good will. My introduction of a spokesman for difficult problems is an imperative missing
link in employee-employer relations. The acceptance of responsibility is not
taken by those in responsible positions. This can be for several reasons. They
may not be aware of all the facts, no one is aware of who is responsible and
everyone is trying to cover-up for this ineptness. Full page advertisements currently running hail Kodak's true colors. I would
like to see the time come when the true colors of Kodak film are synonymous with
the true colors of the Eastman Kodak Company. Sincerely, George O'Leyar
115 Minocque Drive
Rochester, New York 14617
TELEPHONE: 716-338-2772 Resubmitted December 13, 1990 per guidelines of the Legal Division EXHIBIT 2 November 19, 1990 Board of Directors
Eastman Kodak Company Dear Sirs and Mesdames; I am concerned for the well being of Eastman Kodak Company's future as a premier
company and propose this resolution subsequent to advisement of the
inappropriate termination of my employment. I submit to the Board of Directors as a shareowner in good standing a new
resolution for the Board of Directors to vote upon. The resolution being to
provide new ways and means for employees to bring inconsistencies of procedures
within the Eastman Kodak Company to the attention of the company managers. At the present time there is no provision for full disclosure of in-house
difficulties to the proper level of management. There exists only total
confusion of who is responsible for the various areas of the company and for
interpretations of the company's fair practice guidelines. As a shareholder of good standing, I presented my concerns at the annual
shareowners' meeting on May 9th to former CEO Chandler and current CEO Whitmore.
Their response was for me to provide Jack McCarthy with copies of my concern and
they would be sent onto the Board of Directors. I also requested that the
pertinent information of earlier communications of these concerns be sent along
to the Board of Directors for reinforcement. I was informed by Jack McCarthy's
office and Dick Lorbach that the CEO did not feel my concerns were pertinent. Let me assure you, Ladies and Gentlemen of the Board of Directors, Mr. Kay
Whitmore is well aware of the problems that I have expounded on as he was
Manager of Kodak Park. In communications with Mr. Bob Adams, he became aware of
on-going maltreatment of myself. I attempted to utilize the open door policy and
naively I though that the rules and regulations of the company as purported were
for the betterment of both the company and the employees. Prior to addressing the Board of Directors at the annual shareowners' meeting, I
brought this problem to an individual external member on the Board of Directors.
At first his office was receptive but it later became apparent that as a CEO
himself and a very good one to be sure, his office felt that the CEO of Eastman
Kodak was the best person to resolve my concerns, but that if I would like to
forward my concerns to him that I could. As a shareowner in good standing and also a loyal employee of 25 years, I find
that there are many obstacles put before an employee with legitimate concerns to
access the top managers of the company. There is an insolence at the top that
was illuminated at the annual shareowners' meeting. The message was THAT'S OUR
ANSWER. TAKE IT OR LEAVE IT. I found myself as both a shareowner in good
standing and a loyal employee in not-so-good standing with complications of
company politics and on-going health concerns wondering at these statements as
they reflected my view and the facts of my own personal problem and the problems
of my coworkers. Esteemed Members of the Board, as this is my first attempt to bring to you for
your review and approval, this resolution to be voted upon by the owners of the
millions of shares of Kodak stock, I will attempt to provide the logic of this
resolution. It is becoming very clear that the employees of Eastman Kodak have
had it with unfair practices. There are factions in Kodak that are treated
differently than others in other parts of the company. For example, some areas
are provided up to $30 in free film while the areas that are selling the film
are not getting the same perks. In other areas of Eastman Kodak there are
holiday parties provided for the employees with no charge to the employee of
that specific debt, while other departments' employees have to pay for their
parties. As we all know, there is no such thing as a free lunch. As an employee,
I found it to be unfair and as a shareowner of good standing I find it
troublesome. First, from the stand of return on equity and secondly from the
point of discrimination among the employees. I was lucky to work in a department whose policy was to provide its people with
approximately $30 worth of free film, while other departments and areas of Kodak
are not given the same benefits. Also, I would like to indicate that in this
division a Division Director was expounding on the Polaroid settlement in that a
division leader took it upon himself to send letters throughout the division
indicating his approval as he also was a witness in the case. He ended his
letter with a statement of deity. There are many employees that do not agree
that a settlement of $909 million is such a monumental feat. The fact that the
product was offered up front to Kodak and declined with the major lawsuit of
many years is considered some kind of victory. As a shareowner, I do not see
this to be the case and it becomes more and more clear that it is the guise of
upper management to purport to be defending Kodak's good name. It was in fact
trying to cover-up its past mistakes of less than quality management. To bring this statement in perspective as to how it is analogous to the
difficulties that I as a whistle blower in retaliation to the maltreatment that
I have received at Eastman Kodak Company is this. At the May 9th annual meeting,
I indicated that a potential of saving the company millions of dollars existed
and offered to help bring about this savings. I indicated that I had offered a
unit director this information and it had not been acted on. The truth of the
matter is that it was originally offered to this division director and later to
both my division director and unit director as a vehicle for me to work on as I
was having medical problems at the job I was working at due to a combination of
debilitating illnesses. There was a need for different equipment to alleviate some of my medical
problems which were never forth coming until a week or so before I was
unappropriately terminated. My termination was reasoned under the guise of being
away from work without proper permission between the dates of July 30th and
August 24th. I have more than a dozen doctors involved in my medical problems
and complications were ongoing as recent as an October 25, 1990 medical
appointment which verified my medical condition back to the middle of July. The
doctors in Kodak Park Medical B-2 were well aware of my medical problems. Dr.
Bryson indicated to me over the telephone that he needed a letter from my doctor
(or any doctor) indicating the need for me to be away from work. The reason he
needed this information was to verify my illness because supervision had me
listed as absent without permission. These medical complications were later
diagnosed during October. I find it difficult to comprehend that my immediate supervisor, a unit director,
and his superior, a division director were not as concerned that I was out sick
as much as they were intent to put me on final warning. The fact that Eastman
Kodak Medical did not send out attending physician reports to the many doctors
that were attending to me was irresponsible. There was inaccurate information
from Kodak Medical in relation to my interfacing with my attending physicians.
My doctors indicated that with my neck problem working on the computer would
cause me discomfort because no matter where I put the CRT, it would effect my
neck. I gave this information to Kodak Medical and the doctor from Kodak
indicated to me that his understanding was not the same as mine. The point in
this situation was that the lack of communication was not with me but with those
representing the Medical Department. In summary, my introduction of a spokesman for difficult problems is an
imperative missing link in employee-employer relations. The acceptance of
responsibility is not taken by those in responsible positions. This can be for
several reasons. They may not be aware of all the facts, no one is aware of who
is responsible and everyone is trying to cover up for this ineptness. In the November 19th issue of People Magazine in a full page advertisement there
is a statement about Kodak's true colors. I would like to see the time come when
the true colors of Kodak film are synonymous with the true colors of the Eastman
Kodak Company. Sincerely, George O'Leyar
115 Minocqua Drive
Rochester, New York 14617
TELEPHONE: 716-338-2772
[INQUIRY LETTER 2]
EASTMAN KODAK COMPANY
343 STATE STREET
ROCHESTER, NEW YORK 14650-0208
TELEPHONE(716) 724-4368 CERTIFIED MAIL RETURN RECEIPT REQUESTED November 21, 1990 Mr. George O'Leyar
115 Minocqua Drive
Rochester, New York 14617 Dear Mr. O'Leyar: We are in receipt of your letter to the Board of Directors of Eastman Kodak
Company dated November 19, 1990. Your letter states that you are submitting "to
the Board of Directors...a new resolution for the Board of Directors to vote
upon". Your letter also states that you are bringing to the Board "for your
review and approval, this resolution to be acted upon by the owners of the
millions of shares of Kodak stock...." If it is your intention to submit a
shareholder proposal for consideration at the 1991 annual meeting please be
advised that Regulation 14A under the Securities Exchange Act of 1934 provides
that a shareholder proposal and its supporting statement in the aggregate shall
not exceed 500 words. It is unclear from your letter which portions constitute a
resolution and which portions constitute a supporting statement. Taken as a
whole, your comments exceed 500 words. We are therefore by means of this letter
providing you the opportunity to reduce the length of your proposal and/or the
supporting statement so that you comply with the 500 word limit. You indicated in your letter that you are a shareholder of Eastman Kodak
Company. Please provide me with documentary support for such stock ownership,
including evidence of the date on which you purchased such shares. Please direct your response to the foregoing requests to my attention at the
following address: Eastman Kodak Company
Legal Department
343 State Street
Rochester, New York 14650-0208. Very truly yours, Joyce P. Haag JPH:slc cc: G. P. Van Graafeiland
[STAFF REPLY LETTER]
JAN 30 1991 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Eastman Kodak Company (the "Company")
Incoming letter dated December 18, 1990 The proposal relates to the Company providing a procedure for employees to
communicate with management. There appears to be some basis for your position that the proposal may be
omitted pursuant to rule 14a-8(c)(7) since it deals with a matter relating to
the conduct of the Company's ordinary business operations (i.e.,
labor-management relations, employee supervision and discipline and personnel
administration). Accordingly, this Division will not recommend enforcement
action to the Commission if the proposal is excluded from the Company's proxy
materials. In reaching a position, the staff has not found it necessary to
address the alternative bases for omission upon which the Company relies. Sincerely, John C. Brousseau
Special Counsel
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