Company Name: United Technologies Corp.
Public Availability Date: 02-19-1993
[INQUIRY LETTER 1]
United Technologies
United Technologies Building
Hartford, Connecticut 06101
TELEPHONE(203) 728-7000 December 18, 1992 Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549 Attn: Office of Chief Counsel
Division of Corporation Finance Re: Shareholder Proposal Ladies and Gentlemen: On behalf of United Technologies Corporation (the "Company"), and in accordance
with Rule 14a-8(d) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), enclosed are: (i) Exhibit A -- A proposal and related statement in support thereof (the
"Proposal") submitted by the Sisters of Charity of Saint Vincent de Paul of New
York (the "Proponent") for inclusion in the proxy statement with respect to the
1993 Annual Meeting of Shareholders (the "1993 Proxy Statement"); and (ii) This statement which sets forth the reason why the Proposal may be omitted
from the 1993 Proxy Statement. The Proposal requests that the Board of Directors of the Company alter the
Company's employment practices in Northern Ireland. The Company believes the Proposal may be omitted from the 1993 Proxy Statement
because, pursuant to Rule 14a-8(c)(11) under the Exchange Act, it is
substantially duplicative of a proposal previously submitted to the registrant
by another proponent, which proposal may be included in the registrant's proxy
material for the meeting. On November 9, 1992, the Company received a proposal from the Minnesota State
Board of Investment (the "First Proposal") that is almost identical to the
Proposal submitted by the Proponent. Under Rule 14a-8(c)(11), the Company is not
required to include duplicative proposals in its annual proxy statement. In the
case of duplicative proposals, Rule 14a-8(c)(11) requires the Company to include
the one received first in time. Thus, if either of the letters is to be included
in the 1993 Proxy Statement and form of proxy, it should be the First Proposal,
as it was received before the Proposal, which was not received by the Company
until November 16, 1992. The First Proposal is the subject of a separate letter to the Securities and
Exchange Commission (the "Commission") requesting the Commission not to
recommend any enforcement action if the Company omits it. The basis for omission
is set forth in that letter, a copy of which is attached hereto as Exhibit B. It
applies equally to this Proposal. The Company believes that both proposals may
be omitted on the grounds discussed in that letter, and if the Commission
accepts our no action request with respect to the First Proposal, the Company
plans to exclude the Proposal from the 1993 Proxy Statement. However, if the
Commission rejects our no action request, the Company will include the First
Proposal in the 1993 Proxy Statement and, accordingly, the Proposal may be
omitted under Rule 14a-8(c)(11). Based on the foregoing, we hereby respectfully request that the Staff not
recommend any enforcement action if the Proposal is omitted from the 1993 Proxy
Statement. Should the Staff disagree with our conclusions, we would appreciate
an opportunity to confer with the Staff concerning these matters prior to the
issuance of its written response. In accordance with Rule 14a-8(d), five additional copies of this letter and the
exhibits hereto are being filed with the Commission, and a copy of this letter
is being forwarded to the Proponent as formal notice of the Company's intention
to omit the Proposal from the 1993 Proxy Statement. Should the Staff have any questions or comments regarding this filing, please
contact the undersigned at (203) 728-7800. Please acknowledge receipt of this filing by date-stamping the enclosed
additional copy of this letter and returning it in the enclosed pre-addressed,
stamped envelope. Very truly yours, Lawrence R. Purtell cc: Sister Kathleen Gilbride
[INQUIRY LETTER 2]
United Technologies
United Technologies Building
Hartford, Connecticut 06101
TELEPHONE(203) 728-7000 December 18, 1992 Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549 Attn: Office of Chief Counsel
Division of Corporation Finance Re: Shareholder Proposal Ladies and Gentlemen: On behalf of United Technologies Corporation (the "Company"), and in accordance
with Rule 14a-8(d) promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), enclosed are: (i) Exhibit A -- A proposal and related statement in support thereof (the
"Proposal") which has been submitted by the Minnesota State Board of Investment
(the "Proponent") for inclusion in the proxy statement with respect to the 1993
Annual Meeting of Shareholders (the "1993 Proxy Statement"); and (ii) This statement which sets forth the reasons why the Proposal may be omitted
from the 1993 Proxy Statement. The Proposal requests that the Board of Directors of the Company alter the
Company's employment practices in Northern Ireland. The Company intends to omit
the Proposal from the 1993 Proxy Statement for the following reasons: 1. The Proposal contains language that is false or misleading (Rule
14a-8(c)(3)). Rule 14a-8(c)(3) of the proxy rules and regulations of the Securities and
Exchange Commission (the "Commission") provides that an issuer may omit a
proposal and any statement in support thereof from its proxy statement and form
of proxy ""XADi"XBDf 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 and misleading statements in proxy soliciting materials." The Proponent's second supporting statement states that ". . . the United States
District Court ruled in NYCERS v. American Brands, 634 F. Supp. 1382 (S.D.N.Y.,
May 12, 1986) that 'all nine of the MacBride principles could be legally
implemented by management in its Northern Ireland facility.'" Without any
factual background regarding the context in which the Court made this statement,
the Company believes this statement is misleading. In American Brands, the Court
considered and ruled on a motion for preliminary injunction to require American
Brands to include a shareholder proposal in its proxy solicitation materials. In
granting plaintiff's motion for preliminary injunction, the Court stated that
(1) absent a preliminary injunction, the proponent would be irreparably harmed
if barred from communicating its proposal to those shareholders not attending
the upcoming shareholder meeting and (2) the proponent had made a strong showing
of the likelihood of success on the merits upon a full trial. There is a significant difference between the granting of a preliminary
injunction and a ruling on the merits upon a full trial. Stockholders reading
the Proponent's supporting statement would be led to believe that the proponent
in American Brands was successful on the merits upon a full trial. This
statement gives the MacBride principles a misleading imprimatur of legality and
authority. Furthermore, the reference in the quotation to "its Northern Ireland facility"
may be misinterpreted by stockholders to be a reference to the Company's
Northern Ireland facility. In a recent letter, the Commission ruled that a
proposal and supporting statement identical to the proposal and supporting
statement in the case at hand was false or misleading in contravention of Rule
14a-9 and that "the second supporting statement should be revised to reflect
that the court was ruling on a preliminary injunction and that the facility
referred to was not "XADthe registrant's"XBD facility." The Black and Decker
Corporation (March 6, 1992). Accordingly, the Company intends to omit this supporting statement unless the
Proponent revises the statement to reflect that the American Brands court was
ruling on a preliminary injunction and that the facility referenced in the quote
was not the Company's facility. 2. The Proposal deals with a matter relating to the ordinary business operations
of the Company (Rule 14a-8(c)(7)). Under Rule 14a-8(c)(7), a proposal may be omitted if it deals with a matter
relating to the ordinary business operations of the registrant. In 1976, the
Commission issued a release stating that the ordinary business exclusion
available under Rule 14a-8(c)(7) would no longer apply to proposals having
"significant policy, economic or other "XADmajor"XBD implications." Release No.
34-12999 (November 22, 1976). This approach was broadly followed by the
Commission until Cracker Barrel Old Country Store, Inc. (October 13, 1992). In
Cracker Barrel, the Commission reconsidered the policy set forth in the 1976
release and ruled that proposals regarding general employment matters may be
excluded under Rule 14a-8(c)(7) notwithstanding the fact that they also may give
rise to significant social issues. The Commission noted that its prior special
treatment of shareholder proposals involving social issues had "effectively
nullif"XADied"XBD the application of the ordinary business exclusion to
employment related proposals." As was the case in Cracker Barrel, the Proposal submitted for inclusion in the
1993 Proxy Statement calls for a change in the Company's hiring policies to
prevent employment discrimination. Under the ruling in Cracker Barrel, the
Proposal may be omitted from the 1993 Proxy Statement because it relates to the
conduct of the ordinary business operations of the Company. Based on the foregoing, we hereby respectfully request that the Staff not
recommend any enforcement action if the Proposal is omitted from the 1993 Proxy
Statement. Should the Staff disagree with our conclusions, we would appreciate
an opportunity to confer with the Staff concerning these matters prior to the
issuance of its written response. In accordance with Rule 14a-8(d), five additional copies of this letter and the
exhibits hereto are being filed with the Commission, and a copy of this letter
is being forwarded to the Proponent as formal notice of the Company's intention
to omit the Proposal from the 1993 Proxy Statement. Should the Staff have any questions or comments regarding this filing, please
contact the undersigned at (203) 728-7800. Please acknowledge receipt of this filing by date-stamping the enclosed
additional copy of this letter and returning it in the enclosed pre-addressed,
stamped envelope. Very truly yours, Lawrence R. Purtell cc: Howard Bicker United Technologies WHEREAS, United Technologies Corporation operates two wholly-owned subsidiaries
in Northern Ireland: United Technologies Automotive (U.K.), and Otis Elevator
PLC Ltd., WHEREAS, employment discrimination in Northern Ireland has been cited by the
International Commission of Jurists as being one of the major causes of the
conflict in that country; WHEREAS, Dr. Sean MacBride, founder of Amnesty International and Nobel Peace
laureate, has proposed several equal opportunity employment principles to serve
as guidelines for corporations in Northern Ireland. These include: 1. Increasing the representation of individuals from underrepresented religious
groups in the workforce including managerial, supervisory, administrative,
clerical and technical jobs. 2. Adequate security for the protection of minority employees both at the
workplace and while traveling to and from work. 3. The banning of provocative religious or political emblems from the workplace. 4. All job openings should be publicly advertised and special recruitment
efforts should be made to attract applicants from underrepresented religious
groups. 5. Layoff, recall, and termination procedures should not in practice, favor
particular religious groupings. 6. The abolition of job reservations, apprenticeship restrictions, and
differential employment criteria, which discriminate on the basis of religion or
ethnic origin. 7. The development of training programs that will prepare substantial numbers of
current minority employees for skilled jobs, including the expansion of existing
programs and the creation of new programs to train, upgrade, and improve the
skills of minority employees. 8. The establishment of procedures to assess, identify and actively recruit
minority employees with potential for further advancement. 9. The appointment of a senior management staff member to oversee the company's
affirmative action efforts and the setting up of timetables to carry out
affirmative action principles. RESOLVED, Shareholders request the Board of Directors to: 1. Make all possible lawful efforts to implement and/or increase activity on
each of the nine MacBride Principles. SUPPORTING STATEMENT -- Continued discrimination and worsening employment opportunities have been
cited as contributing to support for a violent solution to Northern Ireland's
problems. -- In May 1986, the United States District Court ruled in NYCERS v. American
Brands, 634 F. Supp. 1382 (S.D.N.Y., May 12, 1986) that "all nine of the
MacBride Principles could be legally implemented by management in its Northern
Ireland facility." -- An endorsement of the MacBride Principles by United Technologies will
demonstrate its concern for human rights and equality of opportunity in its
international operations. Please vote your proxy FOR these concerns.
[INQUIRY LETTER 3]
Paul M. Neuhauser
3485 Richard Circle, S.W.
Iowa City, Iowa 52240
TELEPHONE(319) 335-9076 January 28, 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 United Technologies Corporation Dear Sir/Madam: I have been asked by the Sisters of Charity of Saint Vincent de Paul of New York
(which Roman Catholic religious institution is hereinafter referred to as the
"Sisters"), which is a beneficial owner of shares of common stock of United
Technologies Corporation (hereinafter referred to as "UT" or the "Company"), and
who, together with the Minnesota State Board of Investment, the New York City
Fire Department Pension Fund and the New York City Police Pension Fund, has
jointly submitted a shareholder proposal to UT, to respond to the letter dated
December 18, 1992, sent to the Securities & Exchange Commission by the Company,
in which UT contends that the Sisters' shareholder proposal may be excluded from
the Company's 1993 proxy statement by virtue of various subparagraphs of Rule
14a-8(c). I have reviewed the Sisters' shareholder proposal, as well as the aforesaid
letter sent on behalf of the Company, and based upon the foregoing, as well as
upon a review of Rule 14a-8, it is my opinion that the Sisters' shareholder
proposal must be included in UT's 1993 proxy statement and that it is not
excludable by virtue of any of the cited subparagraphs of Rule 14a-8(c). The New York City Fire Department Pension Fund and the New York City Police
Pension Fund have responded to the Company's arguments with respect to
subparagraphs (c)(3) and (c)(7). This letter will deal exclusively with the
Company's contention that the Sisters' shareholder proposal may be excluded by
virtue of Rule 14a-8(c)(11). The sole question is a factual one, namely: are the Sisters co-sponsors of the
shareholder proposal with the three public pension plans? If the Sisters are, in
fact, co-sponsors, then Rule 14a-8(c)(11) is wholly inapplicable since there is
but one proposal to be placed on the proxy statement. In this connection, it
should be noted that the reason why subparagraph (c)(11) was placed in the Rule
was to prevent shareholders from having to vote on multiple, similar proposals.
Obviously, if there is but one proposal, sponsored by four proponents, only one
proposal will be placed in the proxy statement and the policies underlying
(c)(11) cannot be violated. Since the underlying policies are not violated by
co-sponsorship, there is no conceivable policy reason to be overly technical or
bureaucratic in deciding whether a given set of words is sufficient to manifest
an intent to co-sponsor a shareholder proposal. We believe that the Sisters are co-sponsors because they intended to be
cosponsors, and manifested that intent to the Company. In their letter to the
Company, the Sisters explicitly and unambiguously stated their intent to
co-sponsor the proposal by telling UT that they were notifying UT "of our
intention to co-file the enclosed proposal". (See Exhibit A to this latter.) It
is therefore apparent that only one shareholder proposal has been submitted to
UT and the reason for enacting subparagraph (c)(11) does not extend to the
present case. Since the reason underlying the rule does not extend to the
present fact situation, there is no necessity to stretch the rule to apply it to
the Sisters' shareholder proposal. The fact that the Sisters did not mention
with whom they were co-sponsoring the proposal is irrelevant. The Company could
not have been uncertain with regard to the matter, since the Sisters'
shareholder proposal was virtually identical with the texts submitted by
Minnesota. Since the Sisters made their intent manifest, and since the Company
could not possibly have had the slightest doubt as to what that intent actually
was, there is no conceivable reason to apply subparagraph (c)(11). Had the
situation been ambiguous, and the company unsure whether it had to include each
of two separate proposals in its proxy statement, some justification for
applying subparagraph (c)(11) might exist. But in the instant situation, the
picture was totally unambiguous and the only conceivable interpretation was that
the Sisters were the co-sponsors, with the three public pension plans, of a
single shareholder proposal and that only one form of proposal would appear on
the proxy statement. We are strengthened in this view by the fact that the Company has also stated to
the SEC that it intends to include only the Minnesota proposal, but not the New
York City Funds' proposal, despite the fact that the covering letter from
Minnesota assets that Minnesota intends to co-sponsor the proposal with the New
York City funds (See Exhibit B, attached to this letter). What conceivable
policy reason could there be to permit the Company to treat Minnesota as the
sole sponsor and to prohibit the New York City Funds and the Sisters from being
co-sponsors of the same proposal? We submit that Rule 14a-8(c)(11) was intended
solely to prevent multiple but similar proposals from appearing on the proxy
statement, not to permit the issuer to pick and choose whom it will recognize
from among the various co-sponsors. If, pursuant to Rule 14a-8(b)(2), a
shareholder inquires of the company who the sponsor is, that shareholder is
entitled to true and accurate information, not to the misinformation which would
be given if the issuer is permitted to pick and choose whom it will recognize
from among the co-sponsors of the proposal. In conclusion, we request the Staff to inform the Company that the SEC proxy
rules require denial of the Company's no-action request. We would appreciate
your telephoning the undersigned at 319-335-9076 with respect to any questions
in connection with this matter or if the staff wishes any further information. Very truly yours, Paul M. Neuhauser
Attorney at Law cc: Lawrence R. Purtell, Esq.
Sister Regina Murphy
Tim Smith
[INQUIRY LETTER 4]
Sisters of Charity
Mount St. Vincent-On-Hudson, 6301 Riverdale Avenue
Bronz, NY 10471
TELEPHONE(212) 549-9200 CERTIFIED MAIL
RETURN RECEIPT REQUESTED Robert F. Daniell
United Technologies Corporation
United Technologies Building
Hartford, Connecticut 06101 Dear Mr. Daniell: The Sisters of Charity have long been concerned about employment in Northern
Ireland. The Sisters of Charity of Saint Vincent de Paul of New York are beneficial
owners of the stock of United Technologies, which we have held for at least one
year. Verification of that ownership is enclosed. I am authorized to notify you of our intention to co-file the enclosed proposal
and present it for consideration and action by the stockholders at the next
annual meeting. I hereby submit it for inclusion in the proxy statement in
accordance with Rule 14a-8 of the general rules and regulations of the
Securities and Exchange Act of 1934. If you should, for any reason desire to oppose the adoption of this proposal by
the stockholders kindly include in the corporation's proxy material the attached
statement of security holder submitted in support of the proposal as required by
the aforesaid rules and regulations. Sincerely, Sister Kathleen Gilbride
(Corporate Responsibility Coordinator) Enclosures
[INQUIRY LETTER 5]
Minnesota State Board of Investment
Suite 105, MEA Bldg, 55 Sherbome Avenue
St. Paul, MN 55155
TELEPHONE(612) 296-3328 Mr. L. A. Purtell
Corporate Secretary
United Technologies
United Technologies Building
Hartford, CT 06101 Dear Mr Purtell The Minnesota State Board of Investment (MSBI), which manages approximately $18
billion in public fund assets has been directed by the Legislature of the State
of Minnesota to establish a policy concerning its investment in companies doing
business in Northern Ireland. In part, the legislation directs the MSBI to
determine whether corporations have taken action to eliminate religious or
ethnic discrimination in Northern Ireland. The Minnesota State Board of Investment has asked me to notify you of our
intention to cosponsor the enclosed proposal with the New York City Employees'
Retirement Fund for consideration and approval of stockholders at the next
annual meeting. I submit it to you in accordance with the general rules and
regulations under Rule 14a-8 of the Securities Exchange Act of 1934 and ask that
our name be included in your proxy statements. The enclosed letter from State Street Bank and Trust Company of Boston asserts
the Board's ownership for more than a year of your outstanding shares. Sincerely, Howard J. Bicker
Executive Director HB/cn Enclosure
[INQUIRY LETTER 6]
The City of New York Office of the Comptroller
Municipal Building
New York, N.Y. 10007-2341
TELEPHONE(212) 669-7778 January 12, 1993 William E. Morley, Esq.
Chief Counsel
Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: United Technologies -- New York City Fire Department Pension Fund and New
York City Police Pension Fund Shareholder Proposal on the MacBride Principles Dear Mr. Morley: I am writing on behalf of the New York City Fire Department Pension Fund and the
New York City Police Pension Fund ("New York Pension Funds"), in response to the
December 18, 1992 letter from Lawrence R. Purtell, Secretary and Associate
General Counsel to United Technologies Corporation ("United Technologies" or
"the Company"), requesting permission to omit the New York Pension Funds'
shareholder proposal on the MacBride Principles from the Company's proxy
materials for its 1993 Annual Meeting. United Technologies believes that the
proposal may be omitted under Rule 14a-8(c)(11), (c)(3) and (c)(7). As Deputy
Counsel to the New York City Comptroller, it is my opinion that the proposal may
not be omitted by United Technologies because the New York Pension Funds intend
to be a sponsor of the Minnesota State Board of Investment proposal, which was
submitted prior to the New York Pension Funds' proposal; the proposal is not
false or misleading; and it does not relate to a matter of ordinary business. The New York Pension Funds' Proposal May Not be Omitted Based on Rule
14a-8(c)(11) The Company represents that it received a proposal from the Minnesota Board of
Investment that is almost identical to the New York Pension Funds' proposal,
prior to receiving the New York Pension Funds' proposal. If this is true, and the Minnesota proposal is included in the Company's proxy
materials, the New York City Pension Funds would like to be considered to be
co-sponsors of the Minnesota proposal. The New York Pension Funds' Proposal Does Not Contain Language Which is False
and Misleading under Rule 14a-8(c)(3) We do not believe that the second clause of the supporting statement of the
proposal is false or misleading, but would be willing to revise it to read as
follows: --In May, 1986, a United States District Court, ruling on the legality of the
MacBride Principles under the Fair Employment (Northern Ireland) Act of 1976,
granted a preliminary injunction requiring that American Brands include a
MacBride Principles shareholder proposal in its proxy materials, stating that
"all nine of the MacBride Principles could be legally implemented by management
in its Northern Ireland facility." NYCERS v. American Brands, 634 F. Supp. 1382
(S.D.N.Y., May 12, 1986). The Proposal Does Not Deal with a Matter of "Ordinary Business" and May Not Be
Omitted under Rule 14a-8(c)(7) A shareholder proposal requesting a company to implement the MacBride Principles
does not deal with a matter of "ordinary business." The Securities and Exchange
Commission has given content to the term "ordinary business" by declaring that
Rule 14a-8(c)(7) is not available to exclude proposals which raise important
policy matters, but only may be used if the issue raised by the proponent is
"mundane in nature". Thus, in promulgating the present version of Rule
14a-8(c)(7), the Commission stated in Release 34-12999 (November 22, 1976) that
proposals "which have significant policy, economic or other implications
inherent in them" will not be excluded by Rule 14a-8(c)(7) and that the Rule
would only restrict those "proposals that deal with truly 'ordinary" business
matters. . . that are mundane in nature and do not involve any substantial
policy or other consideration." Subsequent amendments to Rule 14a-8 were not
intended to alter this interpretation of what constitutes "ordinary business."
See Release 34-20091 (August 16, 1983). The issue of human rights in Northern Ireland which is dealt with in the City's
proposal is an important one and United Technologies' response to it has
"significant policy. . . implications inherent in "XADit"XBD" and is not
"mundane in nature". Thus, the City's proposal is not excludable by Rule
14a-8(c)(7). SEC staff rulings in TRW (January 28, 1986), United Technologies
(March 10, 1987) and Boeing Company (February 8, 1989), rejected those
companies' arguments concerning the applicability of this section to shareholder
proposals relating to the MacBride Principles and other Northern Ireland
anti-discrimination issues. In addition, we believe that the MacBride Proposal has significant economic
implications inherent in it which take it out of the category of "ordinary
business." For example, thirteen states have statutes which affect these states'
investments in companies which have operations in Northern Ireland but which
have not implemented the MacBride Principles. And, a number of states and
municipalities, including New York State, New York City, Cleveland and Rochester
have laws which limit contracts with companies which have operations in Northern
Ireland but which not have implemented the MacBride Principles. These laws could
have a serious economic impact on companies, including United Technologies,
which have not agreed to implement the MacBride Principles. Over the past three years, twenty-two corporations in the New York City pension
portfolios with operations in Northern Ireland have agreed to implement the
MacBride Principles, and to cooperate with the monitoring programs of the
Investor Responsibility Research Center, a Washington, D.C. based not-for-profit
research center. The Company believes that the SEC staff's determination in Cracker Barrel Old
Country Store, Inc. (October 13, 1992) permits the Company to omit the New York
Pension Funds' proposal. But the Cracker Barrel determination should not govern
your determination as to United Technologies, when there are several SEC staff
determinations directly on point, as discussed above. Just over a year ago, SEC Commissioner Richard Roberts stated: While I am inclined to believe that social or political public policy issues, no
matter how attractive the cause, should not be proper subjects for shareholder
proposals, the more relevant point is that the Commission's staff should not be
in the business of deciding which social or political public policy issues are
to be included in, or omitted from, a particular registrant's proxy materials.
Judgments on those issues are, in my view, better left to Congress. (emphasis
added) Remarks of Richard Y. Roberts, Commissioner of the SEC, before the American
Society of Corporate Secretaries -- New York Chapter, October 5, 1991, p. 12. In
other words, Commissioner Roberts believes that Congress, not the Commission
staff, should make the decision whether social or political public policy issues
are to be included in a registrant's proxy materials. Until Congress acts, we
urge the SEC staff to follow its previous determinations concerning proposals
involving equal employment opportunity in Northern Ireland and not to follow the
Cracker Barrel determination in this case. Conclusion Accordingly, it is my opinion, as Deputy Counsel to New York City Comptroller
Elizabeth Holtzman, that the New York City Pension Funds' proposal does not
violate SEC Rule 14a-8, and therefore should be included in United Technologies'
proxy materials for its 1993 annual meeting. Very truly yours, Sue Ellen Dodell
Deputy Counsel utni.sed cc: Lawrence R. Purtell
[STAFF REPLY LETTER]
FEB 19 1993 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: United Technologies Company (the "Company")
Incoming letter dated December 18, 1992 The proposal requests that the board of directors implement and/or increase
activity on each of the nine MacBride Principles. The Company contends that the proposal is excludable pursuant to Rule
14a-8(c)(7). As a general rule, the staff views proposals directed at a
company's employment policies and practices with respect to its non-executive
workforce to be uniquely matters relating to the conduct of the company's
ordinary business operations. Examples of the categories of proposals that have
been deemed to be excludable on this basis are: employee health benefits,
general compensation issues not focused on senior executives, management of the
workplace, employee supervision, labor-management relations, employee hiring and
firing, conditions of the employment and employee training and motivation. Notwithstanding the general view that employment matters concerning the
workforce of the company are excludable as matters involving the conduct of
day-to-day business, exceptions have been made in some cases where a proponent
based an employment related proposal on "social policy" concerns. In recent
years, however, the line between includable and excludable employment-related
proposals based on social policy considerations has become increasingly
difficult to draw. The distinctions recognized by the staff are characterized by
many as tenuous, without substance and effectively nullifying the application of
the ordinary business exclusion to employment related proposals. The Division has reconsidered the application of Rule 14a-8(c)(7) to
employment-related proposals in light of these concerns and the staff's
experience with these proposals in recent years. As a result, the Division has
determined that the fact that a shareholder proposal concerning a company's
employment policies and practices for the general workforce is tied to a social
issue will no longer be viewed as removing the proposal from the realm of
ordinary business operations of the registrant. Rather, determinations with
respect to any such proposals are properly governed by the employment-based
nature of the proposal. This is to be distinguished from proposals relating to the compensation of
senior executives and directors. The Commission continues to regard issues
affecting CEO and other senior executive and director compensation as unique
decisions affecting the nature of the relationships among shareholders, those
who run the corporation on their behalf and the directors who are responsible
for overseeing management performance. Consequently, unlike proposals relating
to the rank and file workforce, proposals concerning senior executive and
director compensation are viewed by the Commission as inherently outside the
scope of normal or routine practices in the running of the company's operations. Accordingly, it is the Division's view that the instant proposal maybe excluded
from the Company's proxy material in reliance upon Rule 14a-8(c)(7). In reaching
a position, the staff has not found it necessary to address the alternative
bases for omission upon which the Company relies. Sincerely, Amy Bowerman Freed
Special Counsel
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