Company Name: Union Pacific Corp.
Public Availability Date: 02-05-1993
[INQUIRY LETTER 1]
Union Pacific Corporation
Martin Tower, Eighth and Eaton Avenues
Bethlehem, PA 18018
TELEPHONE(215) 861-3200 December 01, 1992 HAND DELIVERY Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Shareholder Proposal of Melvin E. Horton Gentlemen: Union Pacific Corporation ("Union Pacific" or the "Company") has received from
Melvin E. Horton, one of its shareholders, a letter dated November 5, 1992
transmitting a proposal for inclusion in the Company's proxy materials for the
1993 annual shareholders' meeting. It is the Company's intention to omit Mr.
Horton's proposal from its proxy materials, in accordance with Rule 14a-8 under
the Securities Exchange Act of 1934, as amended. Accordingly, I have enclosed
herewith for filing with the Securities and Exchange Commission (the
"Commission") six copies of (1) Mr. Horton's November 5, 1992 letter including
his proposal and supporting statement (attached hereto) and (2) this letter
which constitutes the Company's statement of reasons for omitting Mr. Horton's
proposal. A copy of this letter is also being concurrently sent to Mr. Horton. The proposal submitted by Mr. Horton recommends that the Company's Board of
Directors adopt a program under which charitable contributions would be made to
certain IRS-qualified organizations designated by individual shareholders in
amounts equal to each such shareholder's pro rata holding of Union Pacific
common stock. The Company would be permitted to make contributions without
shareholder direction only (1) pursuant to a matching gifts program available to
employees and directors or (2) if the contributions are determined to directly
benefit the Company or its subsidiaries in amounts roughly commensurate with the
cost of such contributions. The Company believes that Mr. Horton's proposal is excludable from the 1992
proxy materials under Rule 14a-8(c)(7), which permits the omission of a proposal
dealing with a matter that is related to the conduct of ordinary business
operations. Charitable contributions are generally made by Union Pacific in
order to provide some benefit to the communities receiving services from the
Company or its subsidiaries. The return or benefits received by the Company from
such contributions are generally manifested in the form of good will and
improved patronage. Since the determination of the recipients and amounts of
charitable contributions are associated with the service areas and businesses of
Union Pacific, such matters clearly relate to the Company's ordinary business
operations. The Company recognizes that the Commission Staff has traditionally taken the
view that charitable contributions relate to important policy issues which go
beyond ordinary business operations. See, e.g., The Quaker Oats Co. (August 4,
1987); West Point-Pepperell, Inc., 1980 CCH Dec. "XD076,377 (October 2, 1979);
Marriott Corp., 1976-1977 CCH Dec. "XD080,804 (September 17, 1976). Indeed, the
Staff reached such a conclusion in connection with a virtually identical
proposal submitted by Mr. Horton for consideration at the Company's 1990 annual
meeting. See Union Pacific Corporation (February 12, 1990). Recently, however, the Staff has reversed its traditional approach with respect
to proposals of this type. For example, in Pacific Telesis Group (February 20,
1992), a shareholder proposal requested that corporate contributions be made to
the Planned Parenthood of America to fund teenage pregnancy prevention and
educational programs including abortion counseling. In concluding that the
proposal related to the conduct of ordinary business operations, the Staff
described the reversal of its position as follows: "There appears to be some basis for your view that the proposal may be excluded
from the Company's proxy materials pursuant to Rule 14a-8(c)(7) as dealing with
a matter relating to the conduct of the ordinary business operations of the
registrant (i.e., the determination to commence contributions to a particular
charity). This position represents a reconsideration of earlier letters relating
to shareholder proposals which requested issuers to commence contributions to a
particular charity. The Division believes the staff position taken in earlier
letters on this subject were in error. Under the circumstances, the Division
will not recommend enforcement action to the Commission if the Company omits the
proposal from its proxy materials." (emphasis added) The Staff's revised position is further illustrated by SCEcorp (February 20,
1992) in which a proposal requiring contributions to charities involved with the
protection of wildlife affected by the registrant's operations, was excluded as
dealing with ordinary business operations. Similarly, the Staff has supported
exclusion of a proposal recommending that no money be given to advocacy or
service organizations that support, counsel or perform abortions. See, e.g.,
Bristol-Myers Squibb Co. (March 10, 1992); American Express Co. (February 28,
1992); U.S. West, Inc. (February 25, 1992); Wal-Mart Stores, Inc. (February 10,
1992). Although these latter letters focused on the fact that the proposal
affected certain employee benefits (i.e., medical plans and matching gift
programs) as well as charitable donations by the registrant, the Staff did not
give the proponent an opportunity to limit the proposal solely to charitable
contributions as it had in the past. See e.g. Union Pacific Corporation
(February 12, 1990). If the Staff continued to view charitable giving as a
matter beyond ordinary business operations, presumably it would have indicated
that the proponent could avoid omission by excluding employee benefits from the
proposal in question. In view of the foregoing, the Company believes that the proposal submitted by
Mr. Horton is properly excludable under Rule 14a-8(c)(7). The Company,
therefore, respectfully requests that the Commission Staff confirm that it will
not recommend enforcement proceedings if Union Pacific omits Mr. Horton's
proposal from its 1993 proxy materials. Respectfully submitted, CWvB/JEJ:nr CC: Mr. Melvin E. Horton (w/Enclosure)
Certified Mail
Return Receipt Requested
[INQUIRY LETTER 2]
Melvin E. Horton
P.O. Box 3486
Omaha, NE 68103 SECRETARY
UNION PACIFIC CORPORATION
MARTIN TOWER
EIGHT AND EATON AVENUES
BETHLEHEM, PA 18018 DEAR SECRETARY: AS AN OWNER AND HOLDER OF 167 SHARES ACQUIRED ON VARIOUS DATES PRIOR TO MAY 9,
1986; I SUBMIT THE ENCLOSED PROPOSAL AND SUPPORTING STATEMENT FOR INCLUSION IN
THE COMPANY'S PROXY STATEMENT AND FORM OF PROXY RELATING TO THE 1993 ANNUAL
MEETING OF STOCKHOLDERS. SINCERELY, MELVIN E. HORTON JR. RESOLVED: THAT THE SHAREHOLDERS RECOMMEND THAT THE BOARD OF DIRECTORS TO MAKE
AVAILABLE TO SHAREHOLDERS A SHAREHOLDER-DESIGNATED CHARITABLE CONTRIBUTIONS
PROGRAM CONTAINING THE FOLLOWING: 1. EACH SHAREHOLDER ON A BASIS PROPORTIONAL TO THE NUMBER OF SHARES THAT HE OWNS
WILL BE ABLE TO DESIGNATE RECIPIENTS OF CHARITABLE CONTRIBUTIONS BY OUR COMPANY. 2. THE BOARD OF DIRECTORS WILL DESIGNATE THE PER SHARE CONTRIBUTION AMOUNT. 3. CONTRIBUTIONS ONLY TO IRS-QUALIFYING CHARITIES OR IRS-APPROVED PRIVATE
FOUNDATIONS. 4. THE CURRENT MATCHING GIFTS PROGRAM OFFERED TO DIRECTORS, OFFICERS AND
EMPLOYEES OF THE CORPORATION AND EACH SUBSIDIARY COMPANY, UNDER WHICH
CONTRIBUTIONS BY PARTICIPANTS TO CERTAIN ELIGIBLE INSTITUTIONS ARE MATCHED BY
THE COMPANY ON EITHER A DOLLAR-FOR-DOLLAR OR TWO-TO-ONE BASIS WOULD NOT BE
ELIMINATED UNLESS RECOMMENDED BY BOARD OF DIRECTORS. 5. ONLY SHAREHOLDER-DESIGNATED CONTRIBUTIONS AND MATCHING GIFTS PROGRAM
CONTRIBUTIONS WILL BE MADE BY THE CORPORATION AND EACH SUBSIDIARY COMPANY EXCEPT
DONATIONS CONSIDERED TO BENEFIT THE CORPORATION OR SUBSIDIARY COMPANY DIRECTLY
IN AN AMOUNT ROUGHLY COMMENSURATE WITH THE COST OF THE DONATION. REASONS: THIS PROPOSAL, IF ADOPTED, WOULD REQUIRE THAT ALL CHARITABLE
CONTRIBUTIONS EXCEPT MATCHING GIFTS PROGRAM AND THOSE CONSIDERED TO BENEFIT THE
CORPORATION OR SUBSIDIARY COMPANY DIRECTLY IN AN AMOUNT ROUGHLY COMMENSURATE
WITH THE COST OF THE DONATION WOULD BE SHAREHOLDER-DESIGNATED.
[STAFF REPLY LETTER]
05 FEB 1993 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Union Pacific Corporation
Incoming letter dated December 1, 1992 The proposal relates to a recommendation that the Company's Board of Directors
adopt a program pursuant to which all charitable contributions made by the
Company, except those deemed to benefit the Company or its subsidiary directly
in proportion to the amount of the contribution, would be designated by the
shareholders in proportion to their shareholdings. The staff is unable to concur in your opinion that the proposal and supporting
statement may be omitted under Rule 14a-8(c)(7). In this regard, it is the
staff's view that a decision regarding the allocation of Company funds, the
amount of which has been determined by the Board, among charitable donees, would
appear to deal with a matter of basic corporate policy which is extraordinary in
nature and beyond the Company's ordinary business operations. According, we do
not believe that Rule 14a-8(c)(7) may serve as a basis upon which to exclude the
proposal from the Company's proxy materials. Sincerely, Amy Bowerman Freed
Special Counsel
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