Company Name: GTE Corp.
Public Availability Date: 02-25-1993
[INQUIRY LETTER 1]
GTE Corporation
One Stamford Forum
Stamford, CT 06904
TELEPHONE(203) 965-2000 December 11, 1992 Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549 RE: GTE Corporation and Shareholder Proposal of
Evangelical Lutheran Church in America Ladies and Gentlemen: GTE Corporation (the "Corporation") has received a letter from the Evangelical
Lutheran Church in America (the "Proponent") indicating that they intend to
present a proposal relating to affirmative action at GTE's 1993 Annual Meeting
of Shareholders. The proposal and supporting statement (the "Proposal") read as
follows: WHEREAS, the purpose of affirmative action and equal employment opportunity is
to overcome the effects of past or present discriminatory practices, policies or
other barriers to equality in employment; WHEREAS, another affirmative action measure that corporations could utilize is
the development of an adopt-a-school program to guide and encourage minority and
disadvantaged youths to become college graduates; and corporations themselves
become the beneficiaries of such programs, as the talent pool is increased for a
changing economy; WHEREAS, We believe such endeavors promote non-discrimination, which should be
the cornerstone of a democratic capitalist nation; WHEREAS, as an influential company, we believe our company should be an
affirmative action leader. RESOLVED: That the shareholders request the Board of Directors to undertake the
following with respect to its equal employment opportunity and affirmative
action programs; 1. Establish a policy of reporting to shareholders on the Corporation's progress
with its equal employment opportunity and affirmative action programs by
providing the consolidated (numerical) EEO-1 report in each annual report,
commencing with the 1993 annual report, including any other information deemed
appropriate. 2. Upon request, provide shareholders with the numbers of women and racial
minority persons (divided by sex for each major racial minority group), who are
employed as editors, associate editors, writer-editors, staff correspondents,
sales managers, photographers, and artists, as well as in other upper-level
professional and managerial positions, e.g., national advertising manager. 3. Formulate an affirmative action program designed to guide and encourage
racial minority and disadvantaged elementary, junior and senior high school
students to attend and graduate from college, with reporting to shareholders on
such an initiative at appropriate intervals. Any proprietary information may be omitted and cost limited to a reasonable
amount. SUPPORTING STATEMENT As we move ever more quickly towards the 21st century, our nation still has a
legacy of racial, sex and other forms of discrimination. It is important that we
take initiatives to overcome these barriers to full equality. One such way is to
promote economic integration of our citizens. Encouraging minority and
disadvantaged young people to participate in our society builds a strong future
for our nation. Shareholders have the right to expect that their Company is
safeguarding their investments with initiatives for the future. The promotion of
equality is important for our Corporation and our nation. GROUNDS FOR OMISSION 1. Rule 14a-8(c)(7) The Corporation believes that the Proposal is excludable under Rule 14a-8(c)(7)
because it relates to the ordinary business operations of the Corporation. The
areas of equal employment and affirmative action are heavily regulated by
federal and state laws. Decisions related to the design, conduct and reporting
of programs related to equal employment and affirmative action are clearly
within the responsibilities of management and should not be part of the
shareholder proposal process. The report requested in Item 1 of the Proposal is
already publicly available. The Proposal requests that the information also be
presented in the Corporation's Annual Report. Management believes that the
manner in which information about affirmative action programs is communicated is
part of management's judgment relating to the ordinary business operations of
the Company. Items 1 and 2 of the Proposal do not require development of new programs but
request that specific reports relating to GTE's affirmative action programs be
made available to shareholders in a particular manner. The Commission has taken
the position that the subject matter of the report governs whether the proposal
relates to ordinary business matters (see Exchange Act Release No. 20091 (August
16, 1983)). The Staff found a similar proposal seeking disclosure of affirmative action data
excludable under Rule 14a-8(c)(7) in Walmart Stores (available April 10, 1992);
Walmart Stores (available April 10, 1991); and Capital Cities/ABC (available
April 4, 1991). Accordingly, it is the Corporation's position that it may
properly omit the proposal from its proxy materials pursuant to Rule
14a-8(c)(7). 2. Rule 14a-8(a)(4) The Corporation believes that the Proposal constitutes two separate proposals.
Items 1 and 2 of the Proposal require the Corporation to provide selected
information relating to equal employment and affirmative action with respect to
the Company's employees. Item 3 requests that the Board of Directors of the
Corporation formulate an affirmative action program "to guide and encourage
racial minority and disadvantaged elementary, junior and senior high school
students to attend and graduate from college, with reporting to shareholders on
such an initiative at appropriate intervals." It is the Corporation's position that Item 3 of the Proposal constitutes a
separate proposal because it does not deal with affirmative action programs for
employees. Instead it requires the establishment of a program and a report
unrelated to the Corporation's employees or its operations. The Commission has
determined that for purposes of Rule 14a-8(a)(4), substantively distinct
proposals, even if concerned with the same general subject matter, may not be
considered a single proposal. See Chicago Milwaukee Corporation (publicly
available April 29, 1988) Items relating to the conversion of preferred shares,
the use of proceeds from an asset sale to declare an optional dividend and use
of the remaining proceeds to buy back preferred shares found to constitute
distinct proposals; American Home Products Corporation (publicly available
February 13, 1986) proposals generally concerning annual meeting cast as one
proposal found to comprise more than one proposal; and Occidental Petroleum
Corporation (publicly available April 15, 1985) items presented as one proposal
generally relating to anti-takeover activities found to constitute four separate
proposals. Accordingly, the Corporation believes that the Proposal is in reality
two separate proposals and violates Rule 14a-8(a)(4). The Corporation has advised the Proponent of its view but has not yet received a
response. The fourteen days for the Proponent's response will expire on December
25, 1992. A copy of management's letter to the Proponent is included as
Attachment A to this letter. If the Proponent agrees to revise the Proposal to
eliminate either Items 1 and 2 or Item 3, we will notify the Commission and
withdraw the contention that the Proposal violates Rule 14a-8(a)(4). If the
Proponent does not agree to eliminate either Items 1 and 2 or Item 3 from its
Proposal, the Company believes that it may properly exclude the Proposal from
its 1993 proxy materials. CONCLUSION Based upon the foregoing, the Corporation respectfully requests that the Staff
confirm at its earliest convenience that it will not recommend any enforcement
if the Proposal is excluded from the Corporation's 1993 proxy materials. Pursuant to Rule 14a-8(d), six copies of this letter and six copies of the
Proponent's letter are enclosed. A copy of this letter is also being provided
today to the Proponent. If you have any questions or require further information, please call met at
(203) 965-2105. Very truly yours, Marianne Drost
Enclosures
cc Mr. Ed Crane, Director
Corporate Social Responsibility
Evangelical Lutheran Church in America
8765 West Higgins Road
Chicago, IL 80631-4190
[INQUIRY LETTER 2]
Evangelical Lutheran Church in America
8765 West Higgins Road
Chicago, Illinois 60631-4190 Ms. Marianne Drost
Corporate Secretary
GTE Corporation
One Stamford Forum
Stamford, CT 06904 Dear Ms. Drost: The Evangelical Lutheran Church in America believes that corporations can
strengthen our society by conducting strong affirmative action programs for
employee hiring and career development, as well as more aggressive programs
which motivate potential employees, and by making these efforts public so they
can serve as models for other corporations. As beneficial owner of 88,700 shares in GTE Corporation, through the ELCA Board
of Pensions, the Evangelical Lutheran Church in America (ELCA) is transmitting
to you herewith a shareholder proposal for inclusion in the proxy statement for
the next annual meeting of shareholders, pursuant to rule 14a-8 of the
Securities and Exchange Commission. A statement of proof of ownership will be
sent under separate cover. If you desire, a representative of the Evangelical Lutheran Church in America
(ELCA) would be prepared to discuss the substance of the proposal with
management, prior to your deadline for printing the proxy statement. A
representative of the ELCA will be present at the shareholder meeting to move
adoption of the proposal. Should management intend to recommend voting against
the proposal, we request that the supporting statement also be included in the
proxy printed material. Should you require any clarification of our action, or wish to make any
suggestions, please contact Ed Crane, director, Corporate Social Responsibility,
Evangelical Lutheran Church in America, 8765 W. Higgins Road, Chicago, IL
60631-4190, 312/380-2863. Sincerely, Ed Crane, Director
Corporate Social Responsibility EC:cm
Enclosures cc: ELCA Board of Pensions
Interfaith Center on Corporate Responsibility
Investor Responsibility Research Center AFFIRMATIVE ACTION/EQUAL EMPLOYMENT OPPORTUNITY
(COMPREHENSIVE) WHEREAS, the purpose of affirmative action and equal employment opportunity is
to overcome the effects of past or present discriminatory practices, policies or
other barriers to equality in employment; WHEREAS, another affirmative action measure that corporations could utilize is
the development of an adopt-a-school program to guide and encourage minority and
disadvantaged youths to become college graduates; and corporations themselves
become the beneficiaries of such programs, as the talent pool is increased for a
changing economy; WHEREAS, we believe such endeavors promote non-discrimination, which should be
the cornerstone of a democratic capitalist nation; WHEREAS, as an influential company, we believe our company should be an
affirmative action leader; RESOLVED, that the shareholders request the Board of Directors to undertake the
following with respect to its equal employment opportunity and affirmative
action programs; 1. Establish a policy of reporting to shareholders on the Corporation's progress
with its equal employment opportunity and affirmative action programs by
providing the consolidated (numerical) EEO-1 report in each annual report,
commencing with the 1993 annual report, including any other information deemed
appropriate; 2. Upon request, provide shareholders with the numbers of women and racial
minority persons (divided by sex for each major racial minority group), who are
employed as editors, associate editors, writer-editors, staff correspondents,
sales managers, photographers, and artists, as well as in other upper-level
professional and managerial positions, e.g., national advertising manager; 3. Formulate an affirmative action program designed to guide and encourage
racial minority and disadvantaged elementary, junior and senior high school
students to attend and graduate from college, with reporting to shareholders on
such an initiative at appropriate intervals. Any proprietary information may be omitted and cost limited to a reasonable
amount. SUPPORTING STATEMENT As we move ever more quickly towards the 21st century, our nation still has a
legacy of racial, sex and other forms of discrimination. It is important that we
take initiatives to overcome these barriers to full equality. One such way is to
promote economic integration of our citizens. Encouraging minority and
disadvantaged young people to participate in our society builds a strong future
for our nation. Shareholders have the right to expect that their Company is
safeguarding their investments with initiatives for the future. The promotion of
equality is important for our Corporation and our nation.
[INQUIRY LETTER 3]
GTE Corporation
One Stamford Forum
Stamford, CT 06904
TELEPHONE(203) 965-2000 Mr. Ed Crane, Director
Corporate Social Responsibility
Evangelical Lutheran Church in America
8765 West Higgins Road
Chicago, IL 80631-4190 Dear Mr. Crane: Re: Shareholder Proposal Relating to GTE Corporation's
Affirmative Action and Equal Employment Efforts You recently submitted a shareholder proposal to GTE Corporation ("GTE")
regarding the following: 1. Reporting on GTE's equal employment and affirmative action programs in its
1993 Annual Report; 2. Providing to shareholders, upon request, information about women and racial
minority persons in certain job classifications; and 3. Formulating and reporting on an affirmative action program to guide and
encourage primary and secondary school students to attend and graduate from
college. A copy of your proposal (the "Affirmative Action Proposal") is attached to this
letter. I tried to contact you by phone several times, but was not successful. It is
GTE's opinion that the Affirmative Action Proposal constitutes two separate
proposals: one relating to providing information with respect to affirmative
action programs and statistics for employee (Items 1 and 2 of the Affirmative
Action Proposal); and a second proposal relating to establishing and reporting
on a program to encourage students to attend and finish college. Rule 14a-8(a)(4) provides that each proponent may only submit one proposal. GTE
intends to file a request for a no action letter with the Securities and
Exchange Commission (the "SEC") seeking confirmation that the SEC will not
recommend an enforcement action if GTE excludes the Affirmative Action Proposal
from its 1993 proxy materials. One of the grounds supporting the request for a
no action letter is that the Affirmative Action Proposal violates Rule
14a-8(a)(4) (the "Rule") because it constitutes two separate proposals. Under
the Rule, if you agree to reduce the number of items you submit by December 25
(which is fourteen days of the date of this letter), GTE will advise the SEC and
withdraw its contention that the Affirmative Action Proposal violates the Rule. You should be aware that the SEC may or may not agree with GTE's position that
the Affirmative Action Proposal is two separate proposals. However, if the SEC
does agree with GTE's position after December 25 and you have not reduced the
number of items prior to that date, the Affirmative Action Proposal will not be
included in GTE's 1993 Proxy Statement. GTE intends to ask the SEC to consider excluding the Affirmative Action Proposal
on grounds other than the Rule. The SEC may or may not agree with GTE's position
that the Affirmative Action Proposal is excludable on these grounds. If the SEC
agrees with GTE that the Affirmative Action Proposal may be excludable on these
alternative grounds, the Affirmative Action proposal will not be included in
GTE's proxy materials. I look forward to hearing from you on this matter by December 25. Please call me
at 203-965-2105 if you have any questions or would like to discuss the issues
raised in this letter. Very truly yours, Marianne Drost MD:emd
Enclosures
[INQUIRY LETTER 4]
Evangelical Lutheran Church in America
8765 West Higgins Road
Chicago, Illinois 60631-4190 Ms. Marianne Drost
Secretary
GTE Corporation
One Stamford Forum
Stamford, CT 06904 Dear Ms. Drost: Thank you for your letter dated December 11, 1992, addressed to Mr. Ed Crane,
and your conversation of today with Marian Nickelson. I would like to verify that the Evangelical Lutheran Church in America agrees to
omit from its shareholder proposal, item #3, which reads as follows: "Formulate an affirmative action program designed to guide and encourage racial
minority and disadvantaged elementary, junior and senior high school students to
attend and graduate from college, with reporting to shareholders on such an
initiative at appropriate intervals. Any proprietary information may be omitted and cost limited to a reasonable
amount." With this change, the resolution stands. For further conversations, please
contact Marian Nickelson or Gary Brouse. Sincerely, Carmen Martinez
Corporate Social Responsibility cc: Marian Nickelson - ELCA/LOGA - (202/783-7507)
Gary Brouse - ICCR - (212/870-2316)
Carolyn Mathisen - IRRC
[INQUIRY LETTER 5]
GTE Corporation
One Stamford Forum
Stamford, CT 06904
TELEPHONE(203) 965-2000 December 22, 1992 Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549 RE: GTE Corporation and Shareholder Proposal of
the Evangelical Lutheran Church in America Ladies and Gentlemen: In a letter to the Commission dated December 11, 1991, GTE maintained that one
of the grounds upon which the above-captioned proposal was excludable from its
proxy statement was that the proposal violated Rule 14a-8(a)(4) because it was
actually two separate proposals. The proponents of the above-captioned shareholder proposal have agreed to
withdraw Item 3 of their proposal. That Item reads as follows: "Formulate an affirmative action program designed to guide and encourage racial
minority and disadvantaged elementary, junior and senior high school students to
attend and graduate from college, with reporting to shareholders on such an
initiative at appropriate intervals. Any proprietary information may be omitted and cost limited to a reasonable
amount." Accordingly, GTE withdraws its contention that the proposal is excludable
because it violates Rule 14a-8(a)(4). However, we still are of the opinion that the proposal as amended is excludable
under Rule 14a-8(c)(7) because it relates to the ordinary business operations of
the Corporation. A copy of the proponent's letter withdrawing Item 3 of their proposal is
attached hereto. Please call me if you have any questions. Very truly yours, Marianne Drost Enclosure
cc: Marian Nickelson
Carmen Martinez
Evangelical Lutheran Church in America
8765 West Higgins Road
Chicago, Illinois 60631-4190
[INQUIRY LETTER 6]
PAUL M. NEUHAUSER
3485 RICHARD CIRCLE, S.W.
IOWA CITY, IOWA 52240
TELEPHONE(319) 335-9076 January 27, 1993 Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Att: Amy Bowerman Fried
Office of the Chief Counsel
Division of Corporation Finance Re: Shareholder Proposal Submitted to GTE Corporation Dear Sir/Madam: I have been asked by the Evangelical Church in America (which Protestabt
religious institution is hereinafter referred to as the "Lutherans"), which is a
beneficial owner of 88,700 shares of common stock of GTE Corporation
(hereinafter referred to as "GTE" or the "Company"), and which has submitted a
shareholder proposal to GTE, to respond to the letter dated December 11, 1992,
sent to the Securities & Exchange Commission by the Company, in which GTE
contends that the Lutherans' shareholder proposal may be excluded from the
Company's 1993 proxy statement by virtue of Rule 14a-8(c)(7). As you are aware, the question of whether subparagraph (c)(7) of Rule 14a-8
provides grounds for excluding the Lutherans' shareholder proposal is presently
in litigation with respect to a virtually identical shareholder proposal.
Amalgamated Clothing and Textile Workers Union et al v. Wal-Mart Stores, Inc.
(Southern District of New York, 92-Civ-5517). The final briefs in that case were
submitted to Judge Wood on December 3, 1992, and she is aware that her decision
will likely affect shareholder proposals for the 1993 proxy season and of the
SEC Staff's timetable with respect thereto. We respectfully request that the
Staff delay as long as possible its reply to GTE's request in order that the
Staff may conform its advice to the law in the event that Judge Wood rules in
favor of the plaintiff. Very truly yours, Paul M. Neuhauser
Attorney at Law cc: Marianne Drost
Carman Martinez
Gary Brouse
Tim Smith
[STAFF REPLY LETTER]
FEB 25 1993 RESPONSE OF THE OFFICE OF THE CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: GTE Corporation (the "Company")
Incoming Letter dated December 14, 1992 The proposal requests that the Company undertake the following actions with
respect to its equal employment opportunity and affirmative action programs: (1)
include in its annual report to shareholders its progress with its equal
employment opportunity and affirmative action programs; (2) upon request by a
shareholder, disclose the number of women and racial minority persons who are
employed in specified positions; (3) formulate an affirmative action program
designed to guide and encourage racial minority and disadvantaged students to
attend and graduate from college, with reporting to shareholders on such an
initiative at appropriate intervals. There appears to be some basis for your view that the proposal may be omitted
pursuant to Rule 14a-8(c)(7). In this regard, the staff views the proposal as
principally directed at the Company's employment policies and practices which
are matters relating to the conduct of the company's ordinary business
operations. This Division would not recommend any enforcement action to the
Commission if the Company omits the proposal from its proxy materials. Sincerely, Amy Bowerman Freed
Special Counsel
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