Company Name: North Fork Bancorporation, Inc.
Public Availability Date: 03-25-1992
[INQUIRY LETTER 1]
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK 10022-3897
TELEPHONE(212) 735-3000 December 30, 1991 Securities and Exchange Commission
450 Fifth Avenue, N.W.
Judiciary Plaza
Washington, D.C. 20549 Re: North Fork Bancorporation, Inc. -- Omission of Stockholder Proposal From
Proxy Materials Ladies and Gentlemen: In connection with its 1992 Annual Meeting of Stockholders (the "Annual
Meeting"), North Fork Bancorporation, Inc. (the "Company") has received from one
of its stockholders, Mr. Edward Carrera, a proposal and statement in support
thereof (together, the "Proposal"), for inclusion in the Company's proxy
statement and form of proxy for such meeting (the "Proxy Statement"). The
Proposal seeks to set the total number of directors of the Company at a maximum
of seven. A copy of the Proposal is attached as Exhibit A to this letter. On behalf of the Company, this firm, as counsel, hereby notifies you that for
the reasons described below, the Company intends to omit the Proposal from the
Proxy Statement, and the Company hereby requests that the staff (the "Staff") of
the Division of Corporation Finance of the Securities and Exchange Commission
(the "Commission") confirm that the Staff will not recommend any enforcement
action to the Commission as a result of such omission. Pursuant to Rule 14a-8(d)
of the Securities Exchange Act of 1934, as amended, we have enclosed six copies
of the Proposal and this letter. * * * The Company's Certificate of Incorporation (the "Charter") provides that there
shall be not less than three members of the Board of Directors, and such number
may be changed from time to time by action of the stockholders or by action of
the Board. Further, the Charter provides that the directors shall be divided
into three classes, as nearly equal in number as possible, with each class
serving a three-year term and one class elected annually. The Company's By-laws
provide that the Board shall consist of five or more members, and that such
number may be changed from time to time by vote of the total number of directors
then in office. Presently, the number of Directors is fixed by resolution of the
Board of Directors at 18 and is divided evenly into three classes. The class
that comes up for election at the Annual Meeting has one vacancy. We understand
from the Company that the five directors whose term expires at the Annual
Meeting will be nominated by the Board of Directors for reelection along with a
nominee appointed by the Board of fill the vacancy. The relevant sections of the
Charter and By-laws are attached as Exhibits B and C, respectively, to this
letter. 1. Rule 14a-8(c)(2): Proposals, If Implemented, Which Require the Company to
Violate State Law. The Proposal may be omitted pursuant to Rule 14a-8(c)(2),
which allows for the exclusion of a shareholder's proposal which, if
implemented, would require the Company "to violate any state law." With respect to the removal of directors, section 141(k)(1) of the Delaware
General Corporation Law (the "DGCL") provides that "unless the certificate of
incorporation otherwise provides in the case of a corporation whose board is
classified. . . shareholders may effect such removal only for cause." The
Charter provides for a classified board, but does not provide for removal of
directors by shareholders for any reason other than for cause. Thus, directors
of the Company may only be removed for cause. The Proposal, if adopted, would require reducing the number of directors of the
Company by at least 11, from 18 to a maximum of seven. Due to the classified
board provision of the Charter, only six board seats will come up for election
at the Annual Meeting. In order to effectuate the Proposal, therefore, a number
of directors whose terms do not expire at the Annual Meeting would be required
to be removed from office. No cause for removal of any of the directors has been
shown or even asserted. The Proposal would require removing directors from a
classified board without cause and therefore its adoption is prohibited by
Section 141(k)(1) of the DGCL. We are of the opinion, therefore, that the
Company may omit the Proposal pursuant to Rule 14a-8(c)(2). A copy of Section
141(k) of the DGCL is attached as Exhibit D to this letter. 2. Rule 14a-8(c)(8): Proposals Relating to Election to Office. The Proposal may
be omitted pursuant to Rule 14a-8(c)(8), which allows for the exclusion of a
shareholder's proposal which "relates to an election to office." As discussed above, in order to effectuate the Proposal, the number of directors
would have to be reduced by at least 11 and directors from more than one class
would be required to be removed. However, as the discussion of Staff positions
below indicates, this application of the Proposal "relates to an election to
office" which contravenes Rule 14a-8(c)(8). A similar proposal was reviewed by the Staff in Tylan Corporation (September 25,
1987). The proponent was, among other things, seeking to reduce the size of
Tylan's board. The company argued, and the Commission agreed, that because the
proposal would affect the nominees to be proposed by the company's board to be
elected at the upcoming annual meeting of shareholders, it related to an
election to office and thus, was excludable under Rule 14a-8(c)(8). Similarly,
in Brown Group, Inc. (November 22, 1977), the proponent was seeking to abolish
the company's staggered board system and to have an annual election for the
board of directors. The Commission agreed that the proposal could properly be
omitted under Rule 14a-8(c)(8) on the grounds that the "proposal, if adopted,
would disqualify certain directors previously elected from completing their
terms on the board and would affect the number of nominees to the board at the
1978 annual meeting in contravention of Rule 14a-8(c)(8). . . ." The Proposal
goes even further than the proposal in Brown Group in that the directors in
Brown Group whose terms would have been shortened by that proposal could have
stood for reelection at the annual election, whereas pursuant to the Proposal,
the Company's directors would not have such an opportunity. See also, Dravo
Corporation (February 4, 1983) ("the proposal, if adopted, would disqualify
directors previously elected from completing their terms in contravention of
Rule 14a-8(c)(8)"), and Englhard Corp. (March 1, 1983) ("the proposal, if
adopted, would. . . affect the number of nominees to the board at the 1983
annual meeting in contravention of Rule 14a-8(c)(8)"). Based on the foregoing, we are of the opinion that the Company may omit the
Proposal pursuant to Rule 14a-8(c)(8). 3. Rule 14a-8(c)(3): Proposals Which Are Misleading. The Proposal may be omitted
pursuant to Rule 14a-8(c)(3), which allows for the exclusion of a shareholder's
proposal which 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." As drafted, the Proposal is vague in that it fails to set forth a plan or means
for effectuating the reduction in number of members of the Board of Directors,
and it fails to specify the time at which the desired change is to be fully
effectuated. Further, the Proposal is misleading in that, although it does not
so state, the effect of the Proposal, if implemented, would be to undermine the
Company's staggered board by causing the removal of directors prior to the
expiration of their term. The omission of vague or misleading shareholder
proposals from proxy soliciting materials is a well-established principle. In
Chicago Milwaukee Corporation (February 14, 1978), the proponent was seeking to
abolish the company's staggered board system and to have an annual election for
the board of directors. The Staff concluded that the proposal could be properly
omitted from the proxy materials pursuant to rule 14a-8(c)(3) on the grounds
that the proposal "may be misleading because it fails to set forth means for
effectuating the proposal for the change in the method for electing directors,
such as by amendment of the Company's Certificate of Incorporation and By-Laws
and because it fails to specify the time at which the desired change is to be
fully effected." See also, Engelhard Corporation (March 1, 1983). We are of the
opinion, therefore, that the Company may omit the Proposal pursuant to Rule
14a-8(c)(3). * * * For the reasons set forth in this letter, we have concluded that the Proposal
may, pursuant to Rule 14a-(8)(c), be properly omitted from the Company's Proxy
Statement. Copies of the "No-Action" letters mentioned herein are attached
collectively as Exhibit E to this letter. Please advise us whether the Staff
concurs with our conclusion. If you have any questions or require any additional information concerning this
matter, please do not hesitate to contact the undersigned at (212) 735-2642 or
Richard G. Norden at (212) 735-4169. Very truly yours, William S. Rubenstein cc: Edward Carrera
[INQUIRY LETTER 2]
EDWARD CARRERA
P.O. BOX 396
MT. SINAI, NEW YORK 11766 Frank A. Anderson, Secretary
North Fork Bancorporation, Inc.
9025 Route 25
Mattituck, NY 11952 Dear Mr. Anderson: I am a holder of 23,000 shares of common stock of North Fork Bancorporation, and
as such I am the record owner of more than $1,000.00 in market value securities
entitled to vote at the meeting of stockholders. Furthermore, I have held these
securities for more than one (1) year having acquired them over a period of time
beginning December 1985 to May 1990. Pursuant to the By-Laws of the Corporation, I hereby submit the following
proposal for consideration at the 1992 annual meeting of stockholders: The total number of directors of the Corporation be set at a maximum number of
seven (7). In conjunction with the foregoing proposal, I also submit the following
accompanying proxy statement: The By-Laws of the Corporation provide that the Board of Directors shall consist
of at least five members and that the total number of directors may be fixed by
resolution of the stockholders. Presently, the Board of Directors consists of
sixteen (16) members. Based on the negative performance of the bank over the
past two (2) years I assert that the continued existence of a sixteen member
Board of Directors is both unwarranted and financially irresponsible. The Bank
could easily continue to perform at its current level with a Board consisting of
seven (7) members. Moreover, I suggest that the Bank may even perform more
efficiently. I urge you, as a fellow stockholder with a financial interest in
the Corporation, to attend the annual meeting of stockholders and vote FOR the
proposal to set the maximum number of directors at seven (7). I request that this proposal be included with the proxy materials distributed to
the stockholders for the 1992 annual meeting of stockholders pursuant to Rule
14a-8 of the Securities Exchange Act of 1934. Furthermore, I submit this proposal and accompanying proxy statement in reliance
on the proxy materials sent to me each of the past four (4) years. In specific,
I rely on the Corporation's declaration that the maximum number of directors of
the Corporation may be set by resolution of the stockholders. Presently I assume
that the proxy materials so sent to me were and are in compliance with Rule
14a-9 of the Securities Exchange Act of 1934 pertaining to False or Misleading
Statements. I respectfully request your acknowledgement of receipt of this request and any
response thereto. Very truly yours, Edward Carrera cc: Securities Exchange Commission
[STAFF REPLY LETTER]
25 MAR 1992 RESPONSE OF THE OFFICE OF THE CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: North Fork Bancorporation, Inc. (the "Company")
Incoming letter dated December 30, 1991 The proposal would amend the Company's bylaws to provide that the total number
of directors comprising the board be seven. The Division is unable to conclude that the proposal may be omitted pursuant to
rule 14a-8(c)(2). Based on the information provided, the staff is unable to
concur with the opinion of counsel indicating that, to implement the proposal,
the Company would be required to remove directors and that removal under these
circumstances would violate applicable state corporate law. Cf. Roven. v. Cotter
547 A.2d 603 (Del. Ch. 1988). Under the circumstances, the staff is unable to
conclude that the Company has met its burden of demonstrating that omission of
the proposal is proper. Accordingly, we do not believe that rule 14a-8(c)(2) may
be relied on as a basis to exclude the proposal from the Company's proxy
materials. The appears to be some basis for your view that the proposal may be excluded
pursuant to rule 14a-8(c)(3) as vague and indefinite and, therefore, potentially
misleading. It appears, however, that this defect could be cured if the proposal
was revised as a request or recommendation that the Company's governing
instruments be amended to reduce the number of directors to seven. Assuming that
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 the proposal would be false and misleading within the
meaning of rule 14a-9 and, accordingly, that rule 14a-8(c)(3) may be relied upon
as a basis to omit the proposal. In this regard, the staff notes that under the
revised proposal, the Company's Board would be responsible for implementing and
administering the composition of the Board in a manner consistent all
requirements including those under applicable state law. 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 submitting the proposal to a
vote may affect nominees for election at the Company's upcoming shareholders'
annual meeting. It appears, however, that this defect could be cured if the
proposal was revised so that the bylaw amendment applied only to directors
elected subsequent to the upcoming shareholders' meeting. Assuming 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 the Company may rely on rule 14a-8(c)(8) as a basis to omit the proposal
from its proxy materials. Sincerely, John C. Brousseau
Special Counsel
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