Company Name: UGI Corp.
Public Availability Date: December 18, 2003Document Sections: INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
STATE REPLY LETTER [INQUIRY LETTER]
October 14, 2003 By Hand Delivery Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549 Re: UGI Corporation: Omission of Shareholder Proposal Submitted by Nick Rossi
Ladies and Gentlemen: On behalf of UGI Corporation (the "Company" or "UGI"), we respectfully request
that the staff of the Division of Corporation Finance (the "Staff") concur that
it will not recommend any enforcement action to the Securities and Exchange
Commission (the "SEC") if the Company omits from its 2004 proxy materials a
shareholder proposal and statement of support submitted by Mr. Nick Rossi (the
"Proponent") for inclusion in the Company's 2004 proxy materials. Mr. Rossi has
appointed Mr. John Chevedden to be his representative for all issues pertaining
to the Proposal. The proposal and supporting statement are collectively referred
to as the "Proposal." We have enclosed pursuant to Rule 14a-8(j) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), five additional copies of this letter,
along with the Proposal. We are sending a copy of this letter to the Proponent
as formal notice of UGI's intention to exclude the Proposal from its proxy
materials. "3Shareholder Opportunity to Vote Regarding a Poison Pill Shareholders recommend a bylaw subjecting to a shareholder vote, the adoption or
extension of any current or future poison pill. This topic won a 60% average yes-vote at 50 companies in 2002 according to the
Investor Responsibility Research Center. Nick Rossi. P.O. Box 249, Boonville, Calif. 95415, submits this proposal. With more than 10 years experience with published shareholder proposals I
believe it is prudent to have a shareholder vote on any poison pill because
poison pills can harm shareholder value. A poison pill can give our board veto power over a bid for our stock that may be
in our best interest. Eliminating the poison pill is a way of ensuring that management faces the same
accountability that other workers do. There are often reasons that hostile
takeovers should fail. But anti-democratic schemes to flood the market with
diluted stock are not one of them. Source: The Motley Fool. The key negative of poison pills is that they can preserve the interests of
management deadwood instead of protecting investors. Source: Morningstar.com.
Poison pills are akin to the argument of a dictator who says, "Give up more of
your freedom and I'll take care of you," said T.J. Dermot Dunphy, CEO of Sealed
Air for more than 25 years. Since the 1980s Fidelity, a mutual fund giant with $800 billion invested, has
withheld votes for directors at companies that have approved poison pills, Wall
Street Journal, June 12, 2002. Beware of substitutes: I believe that any bylaw or policy on the poison pill,
which could allow the board to forego a shareholder vote requirement, would not
be a substitute for implementing this proposal. Council of Institutional Investors Recommendation The Council of Institutional Investors www.cii.org, an organization of 130
pension funds investing $2 trillion, called for shareholder approval of poison
pills. In recent years, companies have redeemed their pill or have provided for
a shareholder vote. I believe that our company should follow suit and allow
shareholders a vote on this key issue. Yes on 3 Shareholder Opportunity to Vote Regarding a Poison Pill" It is our opinion that this Proposal is excludable for the following reason: The
Proposal violates the proxy rules, including Rule 14a-9, because it includes
materially false and misleading statements and assertions that lack factual
support and citation. Therefore, the Proposal may be excluded pursuant to Rule
14a-8(i)(3) under the Exchange Act. A shareholder proposal that is materially false or misleading may be omitted
from a registrant's proxy materials under Rules 14a-8(i)(3) and 14a-9, which
prohibit the use of proxy materials containing any materially false or
misleading statements. A shareholder proposal may violate Rule 14a-9and, thus,
Rule 14a-8(i)(3)if it contains language which is materially false or
misleading. As you likely are well aware, Mr. Chevedden, either in his own name or through
nominal proponents, has submitted numerous shareholder proposals to various
companies each year for the past several years, resulting in numerous no-action
requests. Yet, despite his familiarity with the requirements of Rule 14a-8, Mr.
Chevedden persists in resubmitting in his proposals statements and assertions
which the Staff has previously ruled are false and misleading and, therefore,
excludable under Rule 14a-8(i)(3). With respect to Mr. Chevedden's shareholder
rights plan proposals, there are numerous recent no-action requests submitted by
various companies where the Staff required Mr. Chevedden or the Proponent to
revise various statements to provide additional factual support or citations or
otherwise conform them to the Staff's specifications, or delete them as false
and misleading. See, e.g., AMR Corporation (April 4, 2003); Moody's Corporation
(February 18, 2003); Kimberly-Clark Corporation (January 27, 2003); The
ServiceMaster Company (January 23, 2003); Weyerhaeuser Company (January 16,
2003); Genuine Parts Company (January 15, 2003); UST Inc. (December 26, 2002);
and Hewlett-Packard Company (December 17, 2002). We believe that the Staff should permit the Company to omit the Proposal for
this reason alone. As Marty Dunn, Deputy Director of the SEC's Division of
Corporation Finance, stated at the beginning of the 2003 proxy season: I think there's a category of proponents that tend to put in way too many
unsupported broad statements. And then we have to deal with them every time,
even though we said before that this doesn't have support or provides support or
cast it as an opinionand every time we have to reinvent the wheel. I think that
takes too much time.... [Last year,] [w]e had told everybody that if there were
a lot of problems within the (i)(3) area relating to a proposalrather than
requiring revisions at each sentencewe would allow the entire proposal to be
excluded. We didn't follow through on that last year because we didn't think it
was fair on such short notice to do that to proponents. Now, folks who
repeatedly abuse this will find out that we don't think it's the best use of
everybody's time. Transcript of R.R. Donnelley & Sons Company Teleconference, "Shareholder
Proposals: What to Expect in the 2003 Proxy Season," November 12, 2002, at 2
(emphasis added) (copy enclosed). Even without the history described above, the Proposal is so replete with
statements and assertions that are false and misleading that we believe that the
Company may omit the entire Proposal from the Company's 2004 proxy materials
pursuant to Rule 14a-8(i)(3). The Staff has indicated that, "when a proposal and
supporting statement will require detailed and extensive editing in order to
bring them into compliance with the proxy rules," the Staff may find it
appropriate to grant relief without providing the proponent a chance to make
revisions to the proposal and supporting statement. Division of Corporation
Finance: Staff Legal Bulletin No. 14 (July 13, 2001). We urge the Staff to
provide such relief here. See, e.g., The Swiss HelvetiaFund. Inc. (April 3,
2001) (proposal excluded in its entirety under Rule 14a-8(i)(3)); and General
Magic, Inc. (May 1, 2000) (same). This relief is especially warranted where, as
here, Mr. Chevedden and the Proponent are experienced in submitting shareholder
proposals under Rule 14a-8. See, e.g., Genuine Parts Company (January 15, 2003);
Hewlett-Packard Company (December 17, 2002); General Motors Corporation (April
3, 2002); Sabre Holding Corporation (March 18, 2002); and Raytheon Company
(March 13, 2002) (each of which was in reference to shareholder rights plan
proposals submitted by Mr. Chevedden or the Proponent and each of which required
the removal or revision of materially misleading statements). While we consider there to be strong support to exclude the proposal in its
entirety under Rule 14a-8(i)(3), in the alternative, if the Staff determines
that it must depart from its position in Staff Legal Bulletin No. 14, we
respectfully request that the Proposal be substantially revised under Rule
14a-8(i)(3) to exclude the specific statements identified below. The following are examples of statements and assertions in the Proposal that are
false and misleading within the meaning of Rules 14a-8(i)(3) and 14a-9:
The Proponent's initial statement addresses what "shareholders" in general
"recommend." First, this language is false and misleading because it suggests
that UGI's shareholders could directly effect a change in the Company's bylaws,
when, in fact, the shareholders can only recommend that the board of directors
initiate such a change. Section 8.07(a) of UGI's bylaws provides that "[t]he
shareholders shall have the power to amend or repeal these bylaws, or to adopt
new bylaws, only with the approval of the board of directors. A direction by the
board that a shareholder proposal with respect to the bylaws shall be submitted
to the shareholders for action thereon, or the sufferance by the board that such
a proposal shall be so submitted, shall not constitute approval by the board of
directors of the amendment, repeal or new bylaws." Second, because it is the
Proponent alone who is presenting the Proposal, not the shareholders, any
statements that cannot be properly attributed to others should be set forth
solely as his belief. Therefore, this language is false and misleading under
Rules 14a-8(i)(3) and 14a-9. Finally, because the Proposal is imprecise as to how such bylaw amendment would
be instituted, the Proposal fails to make it clear whether it is precatory in
nature. Insofar as the vague Proposal may be interpreted to be mandatory rather
than precatory, it may be excluded under Rule 14a-8(i)(1) because, in our
opinion, it would not be a proper subject for action by shareholders under
Pennsylvania law. See, e.g., PPL Corporation (February 19, 2002) (permitting
exclusion of a shareholder proposal regarding director compensation under Rule
14a-8(i)(1) as not a proper subject for shareholder action under Pennsylvania
law, unless the proponent revised the proposal); and Sl Handling Systems, Inc.
(May 8, 2000) (permitting exclusion of a shareholder proposal to amend articles
of incorporation under Rule 14a-8(i)(1) as not a proper subject for shareholder
action under Pennsylvania law, unless the proponent revised the proposal).
The Proponent states that "[t]his topic won a 60% average yes-vote at 50
companies in 2002 according to the Investor Responsibility Research Center."
This statement is misleading for a number of reasons: First, without a citation
to a specific publication by the Investor Responsibility Research Center to
permit shareholders to review the proposition in context, the reference is
misleading and should be omitted in its entirety from UGI's proxy materials. See
Staff Legal Bulletin No. 14 (the Staff notes that "shareholders should avoid
making unsupported assertions of fact ... [and] should provide factual support
for statements in the proposal and supporting statement or phrase statements as
their opinion where appropriate"). Second, it is unclear from the Proponent's statement whether he is taking into
account all companies at which a shareholder rights plan proposal was voted on,
or whether he is only considering those companies at which such a proposal
received a majority of the votes cast. Furthermore, if the Proponent is only
considering those companies at which such a proposal received a majority of the
votes cast, it is unclear whether the cited statistics take into account whether
the proposal passed according to the respective company's vote requirements. The
Proposal is thus inherently false and misleading because we are unable to
determine how the Proponent decided which companies to consider in making his
statement. In fact, our independent research of IRRC reports indicates that, of
the 50 poison pill proposals that were tracked by IRRC in 2002, only 36 received
majority votes and passed. See IRRC Corporate Governance Series 2003 Background
Report E: Poison Pills, Maria Carmen S. Pinnell, Esq., February 2003 (relevant
pages attached). Finally, it is unclear whether the percentage set forth by the
Proponent is based solely on the number of yes/no votes cast, or takes into
account the effect of abstentions where appropriate. With respect to the particular statement at issue, the Staff has consistently
permitted companies to omit in their entirety similar statements made in other
proposals submitted by Mr. Chevedden, or for which he served as proxy for
another shareholder, unless such proposals were revised in the manner specified
by the Staff. See, e.g., Moody's Corporation (February 18, 2003) (permitting
omission of statement in the Proponent's shareholder rights plan proposal, which
stated that "[t]his topic won an average 60% yes-vote at 50 companies in 2002"
unless the Proponent could provide a specific source for that sentence);
Kimberly-Clark Corporation (January 27, 2003) (same); The ServiceMaster Company
(January 23, 2003) (same); Weyerhaeuser Company (January 16, 2003) (same);
Genuine Parts Company (January 15, 2003) (same); and UST Inc. (December 26,
2002) (same). Yet, in the instant Proposal, the Proponent reasserts the same
type of statement that the Staff has previously found to be false and
misleading.
The Proponent states that "[a] poison pill can give our board veto power over
a bid for our stock that may be in our best interest." Under Pennsylvania law,
the board of directors has a fiduciary duty to act in the best interests of the
company. See 15 Pa.C.S.A. Section 521(a). See, e.g., In re Main, Inc., 239 B.R.
281 (Bkrtcy.E.D.Pa. 1999), supp. 242 B.R. 574, aff'd in part. vacated in part
2000 WL 1796417. Subsection(b) of the Notes to Rule 14a-9 states, by way of
example, that misleading materials include "[m]aterial which directly or
indirectly impugns character, integrity or personal reputation, or directly or
indirectly makes charges concerning improper, illegal or immoral conduct or
associations, without factual foundation." To imply that the board might
abdicate its fiduciary duties by "vetoing" a bid that is in the shareholders'
best interests disregards the extensive statutory, regulatory and common law
limits on the board's authority and implies without any factual basis that the
board would not properly discharge its fiduciary duties. As such, the
Proponent's statement is false and misleading under Rules 14a-8(i)(3) and 14a-9.
The Proponent cites The Motley Fool as the source for the assertion
"[e]liminating the poison pill is a way of ensuring that management faces the
same accountability that other workers do. There are often reasons that hostile
takeovers should fail. But anti-democratic schemes to flood the market with
diluted stock are not one of them." Although we have located "The Motley Fool"
URL, http://www.fool.com, we have been unable to locate any information on that
website that would support the Proponent's statement. Rather, upon entering the
website, we were presented with a vast array of information about various topics
of interest to investors as well as a search engine, a review of which failed to
uncover information in support of the Proponent's statement. Without a specific
citation and further factual foundation, the Proponent's statement is false and
misleading under Rules 14a-8(i)(3) and 14a-9. Because a specific cite is required, the Proponent likely will need to reference
a website address to provide support for the proposition. The Staff has noted
that, although website addresses are not per se excludable, "a website address
could be subject to exclusion if it refers readers to information that may be
materially false or misleading, irrelevant to the subject matter of the proposal
or otherwise in contravention of the proxy rules." Staff Legal Bulletin No. 14.
References to website addresses often can be misleading, given that a website
(particularly a third-party website, such as the one cited in the Proposal)
cannot be regulated for content and is always subject to change without notice.
Indeed, false or misleading statements could be incorporated into the website
after the date on which the proxy is mailed to UGI shareholders.
The Proponent cites Morningstar.com for the proposition that "[t]he key
negative of poison pills is that they can preserve the interests of management
deadwood instead of protecting investors." The Proponent's inclusion of such URL
may be considered false and misleading under Rules 14a-8(i)(3) and 14a-9. As
discussed above, the Staff has noted that "a website address could be subject to
exclusion if it refers readers to information that may be materially false or
misleading, irrelevant to the subject matter of the proposal or otherwise in
contravention of the proxy rules." Staff Legal Bulletin No. 14. References to
third-party website addresses such as Morningstar.com can be misleading, because
such websites cannot be regulated for content and are subject to change without
notice. Additionally, false or misleading statements could beincorporated into
the website after the date on which the proxy is mailed to UGI shareholders. Moreover, entering the URL http://www.morningstar.com brings up the home page,
which is replete with information that is unrelated to the Proposal and does not
reference any article or study supporting the Proposal. Shareholders who visit
the website might not be able to determine which of the numerous pages within
the website contain information that would support the Proponent's statement
and, in searching for such information, would be exposed to an enormous amount
of irrelevant data in the process. A proper citation is required in order to
permit shareholders to conduct an independent review of the statement in
context. Without a proper citation, the reference to the proposition is
misleading and should be omitted in its entirety from UGI's proxy materials. There are several recent no-action letters in which the Staff has required the
Proponent to delete or revise a citation to a website address. See, e.g.,
Moody's Corporation (February 18, 2003) (requiring revision to website address
to provide a citation to a specific source); Kimberly-Clark Corporation (January
27, 2003) (same); The ServiceMaster Company (January 23, 2003) (same);
Weyerhaeuser Company (January 16, 2003) (same); Genuine Parts Company (January
15, 2003) (same); and Hewlett-Packard Company (December 17, 2002) (same).
We note that the following statement by the Proponent, attributed to T.J.
Dermot Dunphy, also lacks factual foundation, thereby violating Rules
14a-8(i)(3) and 14a-9: "Give up more of your freedom and I'll take care of you."
The Proponent provides no context, citation, or other form of factual foundation
to support his assertions. As such, the statements are similarly false and
misleading and may be omitted under Rules 14a-8(i)(3) and 14a-9.
The Proponent's inclusion of the URL "www.cii.org" is also false and
misleading under Rules 14a-8(i)(3) and 14a-9. As noted above, in Staff Legal
Bulletin No. 14, the Staff has indicated that "a website address could be
subject to exclusion if it refers readers to information that may be materially
false or misleading, irrelevant to the subject matter of the proposal or
otherwise in contravention of the proxy rules." As previously discussed,
references to third-party website addresses often can be misleading because they
cannot be regulated for content and are always subject to change without notice.
Further, entering the URL cited above brings up the "Welcome" page of a website
about the Council. While the Council maintains other pages (some of which may be
accessed through the Council's "Welcome" page) that may contain information that
is potentially relevant to the Proposal, the "Welcome" page does not. Indeed, there are several recent no-action letters that have required Mr.
Chevedden or the instant Proponent to delete or revise a citation to a website
address, including "www.cii.org," the very website cited in the instant
Proposal. See, e.g., Moody'sCorporation (February 18, 2003) (noting that the
website address "www.cii.org" may be omitted unless the Proponent provided a
citation to a specific source); Kimberly-Clark Corporation (January 27, 2003)
(same); The ServiceMaster Company (January 23, 2003) (same); Weyerhaeuser
Company (January 16, 2003) (same); Genuine Parts Company (January 15, 2003)
(same); Hewlett-Packard Company (December 17, 2002) (same); and AMR Corporation
(April 3, 2002) (same). Once again, the Proponent has included language in the
instant Proposal that the Staff has repeatedly asked him to revise or delete.
Accordingly, the website address in the Proposal may be omitted under Rule
14a-8(i)(3).
The Proponent's inclusion of the sentence, "[i]n recent years, companies have
redeemed their pill or have provided for a shareholder vote" is misleading. The
Proponent cites no support for this proposition, and presenting such an
unsupported statement may lead shareholders to place undue reliance on such
statement, thereby materially misleading them. Because the Proponent cites no
particular number of companies or examples of companies that have taken this
action, it is misleading to shareholders because it implies, without providing
any support, that a large number of companies have taken this action or that
there exists a trend in companies doing so. Accordingly, the statement "[i]n
recent years, companies have redeemed their pill or have provided for a
shareholder vote" should be omitted, or alternatively, the Proponent should
identify, with supporting documentation, the exact number of relevant companies
and the source for that information. * * * We would very much appreciate a response from the Staff on this no-action
request as soon as practicable, and in all cases no later than November 4, 2003,
so that the Company can meet its timetable in preparing its proxy materials. If
you have any questions or require additional information concerning this matter,
please call me at (202) 739-5741. Thank you. Very truly yours, /s/ Catherine L. Ziobro Enclosures c: Margaret Calabrese, Managing Counsel and Corporate Secretary (w/ encls.) John Chevedden (w/ encls.) [APPENDIX]
3Shareholder Opportunity to Vote Regarding a Poison Pill Shareholders recommend a bylaw subjecting to a shareholder vote, the adoption or
extension of any current or future poison pill. This topic won a 60% average yes-vote at 50 companies in 2002 according to the
Investor Responsibility Research Center. Nick Rossi, P.O Box 249, Boonville, Calif. 95415, submits this proposal. With more than 10 years experience with published shareholder proposals I
believe it is prudent to have a shareholder vote on any poison pill because
poison pills can harm shareholder value. A poison pill can give our board veto power over a bid for our stock that may be
in our best interest. Eliminating the poison pill is a way of ensuring that management faces the same
accountability that other workers do. There are often reasons that hostile
takeovers should fail. But anti-democratic schemes to flood the market with
diluted stock are not one of them. Source: The Motley Fool. The key negative of poison pills is that thy can preserve the interests of
management deadwood instead of protecting investors. Source: Moringstar.com. Poison pills are akin to the argument of a dictator who says, "Give up more of
your freedom and I'll take care of you," said T.J. Dermot Dunphy, CEO of Sealed
Air for more than 25 years. Since the 1980s Fidelity, a mutual fund giant with $800 billion invested, has
withheld votes for directors at companies that have approved poison pills, Wall
Street Journal, June 12, 2002. Beware of substitutes: I believe that any bylaw or policy on the poison pill,
which could allow the board to forego a shareholder vote requirement, would not
be a substitute for implementing this proposal. Council of Institutional Investors Recommendation The Council of Institutional Investors www.cii.org, an organization of 130
pension funds investing $2 trillion, called for shareholder approval of poison
pills. In recent years, companies have redeemed their pill or have provided for
a shareholder vote. I believe that our company should follow suit and allow
shareholders a vote on this key issue. Yes on 3 Shareholder Opportunity to Vote Regarding a Poison Pill The above format includes the emphasis intended. Please advise if the company needs further information on this proposal or the
sources. Please advise if there is any typographical question. Please advise whether the company intends to modify or make omissions to this
submitted format in publication. The company is requested to assign a proposal number (represented by "3" above)
based on the chronological order that proposals are submitted. [INQUIRY LETTER]
Nick Ross, P.O. Box 249 Boonville, CA 95415 Mr. Lon Greenberg Chairman UGI Corporation (UGI) 460 North Gulph Road King of Prussia, PA 19406 Phone: (610) 337-1000 Fax: (610) 992-3259 Dear Mr. Greenberg, This Rule 14a-8 proposal is respectfully submitted for the next annual
shareholder meeting. This proposal is submitted to support the long-term
performance of our company. Rule 14a-8 requirements are intended to be met
including ownership of the required stock value until after the date of the
applicable shareholder meeting. This submitted format, with the
shareholder-supplied emphasis, is intended to be used for definitive proxy
publication. This is the proxy for Mr. John Chevedden and/or his designee to act
on my behalf in shareholder matters, including this shareholder proposal for the
forthcoming shareholder meeting before, during and after the forthcoming
shareholder meeting. Please direct all future communication to Mr. John
Chevedden at: 2215 Nelson Ave., No. 205 Redondo Beach, CA 90278 PH: 310/371-7872 Your consideration and the consideration of the Board of Directors is
appreciated. Sincerely, /s/ Aug 25-03 cc: Brendan P. Bovaird Corporate Secretary FX: 610/992-3258 [INQUIRY LETTER]
October 24, 2003 Via Airbill 6 Copies 7th copy for date-stamp return Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission Mail Stop 0402 450 Fifth Street, NW Washington, DC 20549 UGI Corporation (UGI) Response to Morgan Lewis No Action Request Letter Nick Rossi Ladies and Gentlemen: This is in response to the Morgan Lewis October 14, 2003 no action request. I believe that the company could have avoided this formal process by simply
accepting the shareholder offer submitted with the proposal: "Please advise if
the company needs further information on this proposal or the sources." Supporting material is included for six proposal sentences marked to correspond
with the numbers on the attached supporting material. These exhibits could have
been forwarded to the company prior to October 14, 2003. "Resolved:" is implicit in the first sentence of the proposal: "Shareholders
recommend a bylaw subjecting to a shareholder vote, the adoption or extension of
any current or future poison pill." This is an established text format for a
precatory proposal. "Shareholders" is appropriate since more than one
shareholder will likely vote for this proposal. The subject of the proposal is
an established topic that experienced directors could be expected to know how to
implement. "Shareholders recommend" is clearly precatory. The enclosed Investor Responsibly Research Center table with 2002 voting results
supports the "60% average yes-vote at 50 companies in 2002." This report
indicates that no proposal results on this topic are pending. This "60%"
statement was challenged and not excluded from a number of rule 14a-8 proposals
in 2003. It is fair to caution that less than adequate director performance is possible.
A prudent shareholder should be alert for evidence of less than adequate
director performance. Contrary to the company claim, the existence of extensive
laws will not automatically preclude a violation of such laws. The company complaints on accessing supporting information is challenged by the
use of the Google search engine. Simply by inserting "motley fool poison pill"
in Googlethe first article accessed supports the text of this shareholder
proposal attributed to the Motley Fool. I believe that the company effort to deny shareholder access to relevant and
respected shareholder-focused websites is misplaced. I do not believe that the
rule 14a-8 was intended to hinder shareholders access to investment-related
information. Division of Corporation Finance: Staff Legal Bulletin No. 14 F. Other questions that arise under rule 14a-8 1. May a reference to a website address in the proposal or supporting statement
be subject to exclusion under the rule? Yes. In some circumstances, we may concur in a company's view that it may
exclude a website address under rule 14a-8(i)(3) because information contained
on the website may be materially false or misleading, irrelevant to the subject
matter of the proposal or otherwise in contravention of the proxy rules.
Companies seeking to exclude a website address under rule 14a-8(i)(3) should
specifically indicate why they believe information contained on the particular
website is materially false or misleading, irrelevant to the subject matter of
the proposal or otherwise in contravention of the proxy rules. The above requirement states "specifically indicate." The company has not
provided one example of "false or misleading" material from any website.
Speculation of possibility is not the same as "specifically indicate." I believe
that each cited website is "regulated" by professional editorial oversight. The
company argues for exclusion of website addresses yet cites numerous cases where
website addresses were held not excludable. I do not believe the company has met its burden of proving its allegations. I believe that it would be helpful for the company to submit its management
position statement at this time to evaluate whether the company plans to use the
same standard of support for its own text. For the above reasons this is to respectfully request that the Office of Chief
Counsel not agree with the company no action request on each point. Sincerely, /s/ John Chevedden cc: Nick Rossi Lon Greenberg, UGI Corporation [STATE REPLY LETTER]
December 18, 2003 Response of the Office of Chief Counsel Division of Corporation Finance Re: UGI Corporation Incoming letter dated October 14, 2003 The proposal recommends "a bylaw subjecting to a shareholder vote, the adoption
or extension of any current or future poison pills." We are unable to concur in your view that UGI may exclude the proposal under
rule 14a-8(i)(1). Accordingly, we do not believe that UGI may omit the proposal
from its proxy materials in reliance on rule 14a-8(i)(1). We are unable to concur in your view that UGI may omit the entire proposal under
rule 14a-8(i)(3). There appears to be some basis for your view, however, that
portions of the proposal's supporting statement may be materially false or
misleading under rule 14a-9. In our view, the proponent must:
provide a citation to a specific source for the sentence that begins "This
topic won..." and ends "... according to the Investor Responsibility Research
Center";
delete the sentence that begins "A poison pill can..." and ends "... may be in
our best interest";
provide a citation to a specific source for the discussion that begins
"Eliminating the poison pill..." and ends "... diluted stock are not one of
them";
revise the sentences attributed to Morningstar.com to directly quote the
sentence from the source;
revise the sentences attributed to T.J. Dermot Dunphy to clearly identify
which sentences are direct quotes;
revise the reference to www.cii.org to provide a citation to a specific
source; and
provide a citation to a specific source for the sentence that begins "In
recent years...," and ends "... for a shareholder vote." Accordingly, unless the proponent provides UGI with a proposal and supporting
statement revised in this manner, within seven calendar days after receiving
this letter, we will not recommend enforcement action to the Commission if UGI
omits only these portions of the supporting statement from its proxy materials
in reliance on rule 14a-8(i)(3). Sincerely, /s/ Keir Devon Gumbs Special Counsel
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