Company Name: Louisiana-Pacific Corp.
Public Availability Date: 03-12-1992Document Sections:
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[Inquiry Letter 1]
MILLER, NASH, WIENER, HAGER & CARLSEN
3500 U.S. BANCORP TOWER, III S.W. FIFTH AVENUE
PORTLAND, OREGON 97204-3699
TELEPHONE(503) 224-5858 December 16, 1991
Rule 14a-8(c)(1), (2), (3), (4), (6), and (8)
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Attention: Division of Corporation Finance
Subject: Stockholder Proposal Submitted to Louisiana-Pacific Corporation by
Vincent N. Icardo Ladies and Gentlemen:
Louisiana-Pacific Corporation, a Delaware corporation (the "Company"), has
received a letter dated December 4, 1991, from Vincent N. Icardo (the
"Proponent") requesting that the Company include a stockholder proposal (the
"Proposal") in the Company's proxy statement (the "Proxy Statement") for its
1992 annual meeting of stockholders pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934 (the "Exchange Act"). On behalf of the Company, we hereby notify you and the Proponent (by copy of
this letter and its enclosures) of the Company's intention to omit the Proposal
from the Proxy Statement for the reasons set forth below. Six copies of the following documents are submitted pursuant to Rule 14a-8(d):
(1) This letter stating the reasons why the Company deems omission of the
Proposal from the Proxy Statement to be proper; (2) Attachment A enclosing copies of the Company's Certificate of Incorporation
and Bylaws as currently in effect; (3) Attachment B enclosing copies of the provisions of the General Corporation
Law of the State of Delaware (the "DGCL") cited in this letter;
(4) Attachment C enclosing copies of numerous articles and press releases
describing a union corporate campaign, including proxy solicitations and
appearances at the Company's annual stockholders meetings, with which the
Proponent has been a long-term active associate; and (5) The Proposal and statement in support thereof received from the Proponent.
To the extent that the reasons for omission of the Proposal discussed herein are
based on matters of law, this letter constitutes our supporting opinion of
counsel. The Proposal, if approved, would amend the Company's Bylaws to provide that the
Board of Directors of the Company (the "Board") shall consist of a majority of
directors who are "independent" as defined in the Proposal. We believe that the
Proposal may be omitted from the Proxy Statement on the following grounds:
(1) The Proposal would cause the Company to violate Delaware law (Rule
14a-8(c)(2)), and is beyond the power of the Company to effectuate (Rule
14a-8(c)(6)); (2) If the Proposal is construed to require Board action to effect its adoption,
the Proposal is not a proper subject for action by the Company's stockholders
under Delaware law (Rule 14a-8(c)(1)); (3) The Proposal relates to an election to office (Rule 14a-8(c)(8));
(4) The Proposal is contrary to Rules 14a-5 and 14a-9 under the Exchange Act in
that the language of the Proposal is vague and misleading and the manner in
which it would be implemented is not specified (Rule 14a-8(c)(3)); and
(5) The Proposal relates to the redress of a personal claim or grievance against
the Company and to the furtherance of a personal interest of the Proponent not
shared with the Company's stockholders at large (Rule 14a-8(c)(4)).
The above grounds for omission of the Proposal are discussed more fully below.
Proposal Would Cause Company to Violate Delaware Law and is Beyond Company's
Power to Effectuate The first sentence of the Proposal reads:
"BE IT RESOLVED: That the By-Laws of Louisiana-Pacific Corporation ("Company")
be amended to provide that the Board of Directors shall consist of a majority of
independent directors." The Proposal thus clearly calls for stockholder approval of an amendment to the
Company's Bylaws. The Company's stockholders have the power to amend the Bylaws
without Board action pursuant to DGCL §109(a) and Article Tenth of the Company's
Certificate of Incorporation, which provides in pertinent part:
"(3)* * * The stockholders may adopt additional bylaws and may amend or repeal
bylaws whether or not adopted by them provided that the affirmative vote of the
holders of at least 75 percent of the Common Stock shall be required for any
such adoption of additional bylaws, amendment or repeal."
The proposed bylaw amendment contained in the Proposal is defective because it
would present an irreconcilable conflict between a strict quota requiring a
particular mathematical composition of the board of directors on the one hand,
and the effect of other legal requirements with respect to the election and
removal of directors, on the other hand. In any election of directors, there is no limit on the ability of stockholders
to nominate or vote for any particular individual because he or she may be
non-independent. In fact, the Proposal clearly contemplates that a number of
directors may be non-"independent." Under Delaware law, the nominees who receive
the greatest number of votes are elected. DGCL §216(3). If a particular election
resulted in the selection of a majority of non-independent directors, there
would be no basis to invalidate the election of any one of the non-independent
directors because each one would have been validly nominated and elected.
Likewise, there is a continuing possibility that the Board could lose its prior
status of having a majority of independent directors because a particular
director becomes non-independent during his or her term. For example, a director
may be employed by another corporation which has no relationship to the Company
at the time the director is elected but which becomes a significant customer of
the Company during the director's term. Thus, the Proposal could require the removal of one or more non-"independent"
directors in the event that the stockholders failed to elect the requisite
number of "independent" directors or if a previously "independent" director
ceased to qualify for that status even though such removal would be contrary to
Delaware law. DGCL §141(k)(i) provides that, unless the certificate of
incorporation provides otherwise, in the case of a corporation whose board is
classified (as is the Company's), stockholders may effect such removal only for
cause. Article Tenth of the Company's Certificate of Incorporation provides in
pertinent part: "(4) Any director or the entire board of directors of the Corporation may be
removed at any time, but only for cause and only by the affirmative vote of the
holders of at least 75 percent of the Common Stock." The Proposal, by mandating that a majority of the directors be "independent,"
may require the removal of an existing director other than for cause, contrary
to both DGCL §141(k)(i) and the Company's Certificate of Incorporation. DGCL
§109(b) provides that bylaws may contain any provision "not inconsistent with
law or the certificate of incorporation." Thus, adoption of the Proposal would
require the Company to violate Delaware law, and it may therefore be omitted
from the Proxy Statement pursuant to Rule 14a-8(c)(2). For the same reason, the
Proposal is beyond the power of the Company to effectuate and is properly
excludable pursuant to Rule 14a-8(c)(6). The Proposal also fails to provide the method for determining which
non-"independent" director or directors must be removed in order to bring the
Company into compliance with its provisions and is otherwise vague and
misleading as described in greater detail under the heading "Proposal is Vague
and Misleading." Because the Company is unable to determine any practical method
of implementing the Proposal, the Company is incapable of implementing the
Proposal, and it may properly be omitted from the Proxy Statement as beyond the
power of the Company to effectuate pursuant to Rule 14a-8(c)(6).
Proposal is Not Proper Subject for Action by Stockholders
As discussed above, the Proposal uses very straight-forward language resolving
"that the Bylaws of the Company be amended to provide * * *." Since the
stockholders have the power to amend the Bylaws, the Company believes adoption
of the Proposal would effect an amendment of the Bylaws without the need for
further action by the board of directors. It may be argued, however, that the
Proposal is merely a direction by the Company's stockholders that the Bylaws be
amended by the Board to give effect to the Proposal rather than an actual
amendment of the Bylaws. If the Proposal were so Construed, the Proposal may
properly be omitted from the Proxy Statement pursuant to Rule 14a-8(c)(1). The
note to Rule 14a-8(c)(1) states that "a proposal that mandates certain action by
the registrant's board of directors may not be a proper subject matter for
shareholder action" under the laws of certain states. DGCL §141(a) provides in
pertinent part: "The business and affairs of every corporation organized under this chapter
shall be managed by or under the direction of a board of directors, except as
may be otherwise provided in this chapter or in its certificate of
incorporation." Neither the DGCL nor the Company's Certificate of Incorporation limits the power
of the Board to manage and direct the affairs of the Company or requires that
that power be shared with the Company's stockholders. The mandatory language of the Proposal directing that the Company's Bylaws be
amended clearly invades the exclusive province of the Board to manage, or direct
the management of, the affairs of the Company. The Proposal therefore is not a
proper subject of action by the Company's stockholders under Delaware law.
Consequently, the Proposal may be omitted under Rule 14a-8(c)(1). The staff of
the Commission has confirmed the validity of this position on numerous
occasions. See, e.g., Waste Management, Inc. (March 8, 1991); Pinnacle West
Capital Corporation (March 11, 1991); Sears, Roebuck and Co. (March 4, 1991).
Proposal Relates to Election to Office
Upon approval and implementation of the Proposal, a majority of the Board would
be required to be "independent," as defined in the Proposal. Although, as
discussed below, the Proposal's definition of "independent" includes numerous
terms the meaning of which is unclear, it appears that as presently constituted,
the Board does not include a majority of independent directors.
Pursuant to Article II, Section 2 of the Company's Bylaws, the Board is divided
into three classes with staggered three-year terms. The members of Class I of
the Board, whose terms will expire at the 1992 annual meeting of stockholders,
include two officers or former officers of the Company and one director who
would apparently be "independent" under the Proposal. The remaining two classes
include three officers or former officers of the Company and two directors who
would apparently be "independent" under the Proposal. Thus, the Board appears to
currently include three independent directors and five non-independent directors
for purposes of implementation of the Proposal. It is presently anticipated that the current Class I directors will be nominated
for reelection at the 1992 annual meeting of stockholders. Two of these three
nominees clearly are not independent as defined in the Proposal. In order to
achieve a majority of independent directors on the Board pursuant to the
Proposal, each of the three nominees for election as Class I directors would
have to be independent, so that five (a majority) of the eight directors would
be independent. The Proposal, if approved at the 1992 annual stockholders
meeting, would, as submitted, take effect immediately, creating an apparent
invalidation of the anticipated reelection of two of the current members of
Class I. The Proposal thus relates to an election to office in that, if
implemented, it may disqualify some of the nominees for director at the 1992
annual meeting and may disqualify some of the incumbent directors whose terms
continue beyond the 1992 annual meeting. Consequently, the Proposal may be
omitted under Rule 14a-8(c)(8). This position previously has been confirmed by
the Commission staff. See, e.g., Tribune Company (March 7, 1991); Consolidated
Edison Company of New York, Inc. (February 15, 1991); Dominion Resources, Inc.
(February 15, 1991). Proposal is Vague and Misleading
Rule 14a-8(c)(3) permits omission of a stockholder proposal and any statement in
support thereof "if the proposal or the supporting statement is contrary to any
of the Commission's proxy rules and regulations, including Rule 14a-9, which
prohibits false or misleading statements in proxy soliciting materials * *
*."Rule 14a-5 also requires, in pertinent part, that "the information included
in the proxy statement shall be clearly presented * * *." In applying these
rules, the Commission has recognized that a stockholder proposal may be so
inherently vague and indefinite that the stockholders voting upon the proposal
would not be able to determine with any reasonable certainty the actions which
would be taken if the proposal were approved. Such a proposal is misleading
because the action ultimately taken to implement the proposal may be quite
different from the action envisioned by the stockholders voting upon the
proposal. See Argonaut Group, Inc. (January 25, 1991); Loews Corp. (January 25,
1991); Northrop Corporation (March 2, 1990). The Proposal is vague and indefinite, and therefore misleading, in at least the
following respects: (1) The Proposal neither specifies by whom the determination of independence is
to be made (i.e., by the stockholders, the Board or management) nor defines
numerous terms used in the Proposal's definition of "independence," the meaning
of which is subject to various interpretations, including: (a) "affiliate" (as defined in Rule 405 under the Securities Act of 1933 or in
the general sense of being associated or allied with); (b) "executive capacity" ("executive officer" as defined in Rule 3b-7 under the
Exchange Act, "officer" as defined in Rule 16a-1(f) under the Exchange Act or a
more expansive group of senior management); (c) "significant" (the type of relationship requiring disclosure pursuant to
Item 404(b) of Regulation S-K, "material" as defined in Rule 405 under the
Securities Act of 1933 or merely "meaningful"); and
(d) "relative" ("immediate family" as defined in Rule 16a-1(e) under the
Exchange Act or in Instruction 2 to Item 404(a) of Regulation S-K or other
family relationships more or less expansive). The Company's stockholders, in evaluating the merits of the Proposal, will thus
be unable to determine which of the Company's existing directors would be deemed
not to be "independent" under the Proposal. (2) The Proposal does not specify whether it is to be implemented by replacing
existing members of the Board and, if so, how the directors to be replaced are
to be selected, or by increasing the number of positions on the Board.
(3) The Proposal does not specify what action is to be taken if suitable
"independent" candidates are nominated for election to the Board but are not
elected by the stockholders. (4) The Proposal is unclear as to whether, if some or all of the nominees for a
class of directors are not "independent," one or more such nominees would have
to be disqualified from taking office in order to meet the Proposal's
requirement that a majority of the Board be "independent," despite having
received a plurality of the votes (and thus deemed to have been elected pursuant
to DGCL Section 216 and Article II, Section 2 of the Company's Bylaws).
(5) The Proposal provides no guidance as to the steps to be taken if a member of
the Board ceases to be "independent" following his or her election, causing the
independent majority requirement to no longer be met. (6) The Proposal provides no hint as to how it could be implemented in a manner
which would comply with Delaware law (see the discussion above under "Proposal
Would Cause Company to Violate Delaware Law and is Beyond Company's Power to
Effectuate"). As illustrated by the above examples, the Proposal is so vague and indefinite
that, if it were included in the Proxy Statement, the stockholders could not
reasonably be expected to know what they were voting for or against or what
effects adoption of the Proposal would have. Any action ultimately taken by the
Board in implementing the Proposal could be quite different from the type of
action envisioned by the stockholders in voting upon the Proposal. Consequently,
the Proposal and statement in support thereof may properly be omitted from the
Proxy Statement pursuant to Rule 14a-8(c)(3) because it would be misleading
under Rule 14a-9 and because it does not conform to the requirements of Rule
14a-5. Proposal is Related to Personal Grievance
On its face, the Proposal appears to be concerned with a topic of legitimate
stockholder interest (i.e., director independence) submitted by a long-time
stockholder of the Company, Vincent Icardo. However, an examination of the
background of the Proposal, as reflected in the materials included in Attachment
C, shows that the Proponent is acting solely as a representative of a
union-sponsored campaign directed against the Company. This campaign has as its
sole purpose the disruption and harassment of the Company and its management in
order to further the goals of the union, goals which are not shared by the
stockholders of the Company generally. The union campaign arose out of a strike against the Company's Western sawmills
in 1983. As a result of the strike, which included numerous acts of violence
against Company personnel and facilities, the Western Council of Lumber
Production and Industrial Workers, an affiliate of the United Brotherhood of
Carpenters (the "Union"), was decertified as a bargaining representative for the
Company's employees. The Union then commenced a so-called "corporate campaign"
against the Company directed by Edward Durkin, an employee of the Union.
The corporate campaign has included a boycott against the Company's products,
challenges to the granting of environmental permits to the Company, an extensive
publicity campaign directed against the Company, and appearances by Mr. Durkin
and other Union supporters at every annual stockholders meeting since 1984.
These appearances are clearly intended solely to garner publicity for the Union
and to harass Company officials and disrupt the meetings. The enclosed excerpt from a Wharton School report describes the appearance by
hundreds of Union supporters at the Company's 1984 stockholders meeting. The
Union's printed materials at the 1984 annual meeting featured the slogan
"Reckoning at Rocky Mount" with a cartoon depicting a physical assault against
the Company's chief executive officer (this at a time when strike-related
threats against Company officials were still fresh). The Wharton School report
concluded that the "union and its supporters were successful in `disrupting' the
meeting." The enclosed copy of the minutes of the Company's 1987 stockholders meeting
reveals another example of the Union's disruptive tactics at the Company's
stockholders meetings. At the 1987 meeting, the disruption caused by Mr. Durkin
and his supporters made impossible the orderly conduct of the meeting and the
chairman was forced to adjourn the meeting. Mr. Durkin has clearly stated the Union's goal in its campaign against the
Company. In the enclosed copy of a June 26, 1984, article from The Wall Street
Journal, Mr. Durkin is quoted as saying "This union is in this battle for the
long run. And we're going to bust this company." There can be little doubt that
this is an aspiration not shared by the Company's stockholders generally.
The Proponent's relationship to the Union campaign is equally clear. In the
early years of the campaign, the Union sponsored an independent proxy
solicitation by a group calling itself the "L-P Workers for Justice Committee."
The activities of this committee and its connection with the Union corporate
campaign are described in the enclosed Wharton School report, as well as in the
enclosed copy of a Union press release dated April 29, 1985. The enclosed form
of proxy solicited by the "L-P Workers for Justice Committee" in 1986 names Mr.
Icardo (who was previously employed by the Company at one of the struck
sawmills) as one of the proxies acting on behalf of the committee. At the
stockholders meeting, the committee was represented by Mr. Durkin.
In 1990, Mr. Icardo submitted a stockholder proposal which was included in the
Company's proxy statement. The proposal was presented at the meeting by Mr.
Durkin, who appeared as Mr. Icardo's agent. See enclosed letter dated May 2,
1990. The fact that the current Proposal is being submitted on behalf of the Union and
Mr. Durkin is clearly demonstrated by the fact that it is almost identical,
word-for-word, to a proposal submitted by the Carpenter's Pension Fund of
Southern California to another corporation last year, with respect to which Mr.
Durkin submitted a letter to the Commission staff responding to the
corporation's stated grounds for excluding the proposal. See Waste Management,
Inc. (March 8, 1991). In light of the long-standing, close association between the Proponent, Mr.
Durkin, and the Union campaign against the Company, it is clear that the
motivation behind the submission of the Proposal is the furtherance of the
Union's grievances against the Company, rather than concern for the interests of
stockholders generally. Consequently, the Proposal and related supporting
statement may properly be omitted from the Proxy Statement pursuant to Rule
14a-8(c)(4). Conclusion We respectfully request that the Commission staff confirm that the Proposal and
related supporting statement of the Proponent may properly be omitted from the
Company's proxy materials for its 1992 annual meeting of stockholders for the
reasons outlined above. If you have any questions or require further
information, please call the undersigned at (503) 224-5858.
Please acknowledge receipt of this letter and enclosures by stamping and
returning the enclosed postage prepaid self-addressed postcard.
Very truly yours, John J. DeMott
cc: Anton C. Kirchhof
Vincent N. Icardo SHAREHOLDER PROPOSAL
BE IT RESOLVED: That the By-Laws of Louisiana-Pacific Corporation ("Company") be
amended to provide that the Board of Directors shall consist of a majority of
independent directors. For these purposes, the definition of independent
director shall mean a director who: -- has not been employed by the Company or an affiliate in an executive
capacity; -- was not, and is not a member of a corporation or firm that is one of the
Company's paid advisers or consultants; -- is not employed by a significant customer or supplier;
-- has no personal services contract with the Company;
-- is not employed by a foundation or university that receives significant
grants or endowments from the Company; and, -- is not a relative of the management of the Company.
SUPPORTING STATEMENT The purpose of this proposal is to incorporate within the Board of Directors a
basic standard of independence that we believe will permit clear and objective
decisionmaking in the best long term interests of shareholders. A Board of
Directors must formulate corporate policies and monitor the activities of
management in implementing those policies. Given those functions, we believe
that it is in the best interest of all stockholders if at least a majority of
our representatives be independent. The benefits of such independence we think are well accepted. The New York Stock
Exchange, for instance, requires each of its listed companies to have at least
two members of the board of directors and all members of the audit committee who
meet New York Stock Exchange standards of independence. We also note studies
which reflect that a majority of directors of publicly held companies are not
employees of the companies on who boards they serve. This trend is supported by
The Business Roundtable in its publication Corporate Governance and American
Competitiveness, prepared by a committee of the Roundtable, which states, in
part, that Board of directors of large publicly-held public corporations should be composed
predominately of independent directors who do not hold management
responsibilities within the corporation... In order to underscore their
independence, non-management directors should not be dependent financially on
the companies on whose boards they serve. We urge you to VOTE FOR THIS PROPOSAL. It will be a constructive and supportive
statement by shareholders in favor of improved corporate governance.
[INQUIRY LETTER 2]
VINCENT N. ICARDO
P.O. BOX 135
TUOLUMNE, CA 95379 January 16, 1992 Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D. C. 20549 Subject: Shareholder Proposal Submitted to Louisiana-Pacific Corporation
Dear Sir or Madame: On December 16, 1991, an attorney for Louisiana-Pacific Corporation submitted a
letter to the Division of Corporation Finance requesting that the Commission
staff confirm that a shareholder proposal relating to the composition of its
board of directors be omitted from the Company's proxy materials. As the
proponent of the shareholder proposal in question, I urge the Commission staff
not concur with Louisiana-Pacific's arguments. Louisiana-Pacific's letter cites
the following grounds for omission of the independent director proposal
("Proposal"). (1) The Proposal, if implemented, would require the the registrant to violate
state law (Rule 14a-8(c)(2)); (2) The Proposal is beyond the Company's power to effectuate (Rule 14a-8(c)(6));
(3) The Proposal relates to an election to office (Rule 14a-8(c)(8));
(4) The Proposal is contrary to Rules 14a-5 and 14a-9 under the Exchange Act in
that the language of the Proposal is vague and misleading; and
(5) The Proposal relates to the redress of a personal claim or grievance against
the Company (Rule 14a-8(c)(4)). I would like to respond to these arguments against the Proposal, because I do
not believe they represent a proper basis for omitting the Proposal. The
arguments raised by Louisiana-Pacific parallel those raised last year by other
companies in response to receipt of the same proposal. The Commission staff did
not find any of these arguments to be a compelling basis for omitting the
proposal. However, I note that the staff suggested that to the extent the
proposal mandated the board of directors to undertake an act, the proposal could
be excluded. However, it was the staff's position that this defect could be
cured if the proposal was revised to take the form of a request or
recommendation. I would certainly be amenable to making a necessary text change
to restate the proposal in the form of a request or recommendation.
Further, the staff indicated in response to Waste Management's request for a
no-action letter relating to the same proposal, that a text change would be
necessary to cure a defect related to Rule 14a-8(c)(8). Again, I am certainly
willing to provide revised text to indicate that the by-law amendment would be
applied only to nominees for directors at meetings subsequent to the 1992 annual
meeting. I would also like to address Louisiana-Pacific's argument that the submission of
the Proposal is related to a personal grievance. I have been a record holder of
Louisiana-Pacific common stock for many years, dating back to my employment with
the Company. That employment ended when I was permanently replaced during the
course of a labor dispute in 1983. I along with fellow employees made a
considerable investment in Louisiana-Pacific stock which I retain to this day,
as it is an important part of my retirement security. Along with fellow Louisiana-Pacific employees and shareholders, I have
participated in several Company shareholder meetings. In 1984 and 1985, we urged
shareholder support for such issues as the adoption of a board of director
nominating committee and the removal of the chief executive officer from the
board's compensation committee. Along with other Louisianan-Pacific
shareholders, I've also called for an increase in the number of nonmanagement
directors. The Company's establishment of a nominating committee, the chief
executive officer's departure from the compensation committee and an increase in
the number of nonmanagement directors are the positive results of the
shareholder advocacy with which I have been associated. I firmly believe that
Louisiana-Pacific is a better company today because of these actions and I also
feel that the interests of all the Company's shareholders have been served.
In the last several years, I have continued to raise issues I think are
important to company shareholders. Given my limited resources, I have utilized
my rights as a shareholder to submit proposals that the Company is obligated to
communicate in its proxy materials to the shareholders for consideration. I have
also relied on assistance by Mr. Ed Durkin who helped me and other employee
shareholders formulate our shareholder advocacy activity. Mr. Durkin works with
United Brotherhood of Carpenters Union pension funds, a number of which are
active shareholder proposal proponents. I discuss with Mr. Durkin specific
issues to raise and he provides text of proposals such as the board composition
proposal that have been used by other shareholder advocates, including Carpenter
pension funds. While I continue as the sole advocate for many of these
proposals, I have continued to seek the assistance of Mr. Durkin primarily in
the area of issue formulation and technical assistance. The shareholder rights plan proposal I submitted last year and the board
composition proposal I've submitted this year are issues that are being
presentedto many corporations by both institutional and individual shareholders.
My interest in pursuing these actions is to make the Company more responsive to
the interests of its owners. I think these actions are good for the shareholders
and the Company generally. It is clear that the Company's management doesn't
like my actions. Each time I have attended a Company annual meeting or Mr.
Durkin has attended as my representative, the presentation of the shareholder
proposal has been conducted in a courteous and proper manner. I personally feel
that management has made it a practice to attempt to limit the discussion of
these substantive shareholder issues at the meeting. I hope you give close consideration to these matters I have raised. I am a long
term Louisiana-Pacific shareholder motivated by a desire to improve the workings
of the company in ways that will serve the interests of all the Company's
shareholders. Sincerely, Vincent N. Icardo
P.O. Box 135
Tuolumne, CA 95379 SEC - six copies cc: John J. DeMott,
Miller, Nash, Wiener, Hager & Carlsen
[STAFF REPLY LETTER]
MAR 12 1992 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Louisiana-Pacific Corporation (the "Company")
Incoming letter dated December 16, 1991 The proposal relates to amending the Company's by-laws to provide that the
majority of the Company's board of directors ("Board") be independent. The
proposal also contains a six element definition of an "independent director".
There appears to be some basis for your opinion that the proposal may be
excluded pursuant to Rule 14a-8(c)(1) as not a proper subject for action by
shareholders. While shareholders can institute by-law amendments under Delaware
law, in the instant proposal the proponent has not provided specific language
for such an amendment and accordingly a mandate to the Board would seem to be
present. If, however, the language of the proposal were revised in the form of a
request or recommendation that the Board take the steps necessary to amend the
by-laws to implement the proposal, it appears that the Rule 14a-8(c)(1) defect
may be cured (In the alternative the proponent may submit the specific by-law
language, provided the submitted language complies with all the necessary
provisions of the Delaware General Corporation Law and the Company's Articles of
Incorporation). If the proponent provides the Company with a proposal revised in
the manner indicated, within seven calendar days of receipt of this response,
the staff does not believe that Rule 14a-8(c)(1) may be relied upon as a basis
to omit the proposal from the Company's proxy materials. The Division is unable to concur in your opinion that the proposal may be
excluded under either Rules 14a-8(c)(2) or (c)(6). In arriving at this position,
the staff notes that the proposal does not appear to include the specific by-law
provision(s) that may be presented ultimately to shareholders for adoption if
the proposal were approved. Accordingly, the Board would be able to draft by-law
provision(s) in a manner to implement the purpose of the proposal consistent
with the Delaware General Corporation Law and the Company's Articles of
Incorporation. Under these circumstances, we do not believe that either Rule
14a-8(c)(2) or (c)(6) may be relied on as a basis to exclude the proposal from
the Company's proxy materials. There also appears to be some basis for your view that the proposal may be
excluded under Rule 14a-8(c)(8) to the extent that the implementation of the
proposed by-law amendment may disqualify nominees for directors at the upcoming
annual meeting. It appears, however, that this defect could be cured if the
proposal were revised so that the amendment applied only to nominees for
directors at meetings subsequent to the 1992 annual meeting. If the proponent
provides the Company with a proposal revised in the manner indicated, within
seven calendar days after receipt of this response, the staff does not believe
that Rule 14a-8(c)(8) may be relied on as a basis to omit the proposal from the
Company's proxy materials. The Division is unable to concur in your position that the proposal may be
excluded pursuant to Rule 14a-8(c)(3). Accordingly, the staff does not believe
that Rule 14a-8(c)(3) may be relied upon as a basis to omit the proposal from
the Company's proxy materials. Finally, the Division is unable to concur in your view as to the applicability
of Rule 14a-8(c)(4). On the basis of the facts presented, we are unable to
conclude that the proposal was submitted to redress a personal claim or
grievance of the proponent. Furthermore, noting the subject of the proposal, we
are unable to determine that the proposal was designed either to result in a
benefit, or to further an interest, that is unique to the proponent. Under these
circumstances, the staff does not believe that Rule 14a-8(c)(4) may be relied
upon as a basis to omit the proposal from the Company's proxy materials.
Sincerely, William H. Carter
Special Counsel
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