Company Name: Coca-Cola Co.
Public Availability Date: December 22, 2004
Document Sections:
LETTER INQUIRY
STAFF REPLY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[LETTER INQUIRY]
December 7, 2004
Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
Mail Stop 4-2
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: The Coca-Cola Company/Exclusion From Proxy Materials of Share Owner
Proposals Submitted by Mary F. Morse
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended,
The Coca-Cola Company, a Delaware corporation (the "Company"), hereby notifies
the Securities and Exchange Commission (the "Commission") of the Company's
intention to exclude a share owner proposal (the "Proposal") submitted by Mary
F. Morse (the "Proponent") from its proxy materials for its 2005 Annual Meeting
of Share Owners (the "Annual Meeting"). The Company asks that the Division of
Corporation Finance (the "Staff") not recommend to the Commission that any
enforcement action be taken if the Company excludes the Proposal from its proxy
statement for the Annual Meeting for the reasons set forth below. The Company
intends to file its definitive proxy materials for the Annual Meeting with the
Commission on March 3, 2005. In accordance with Rule 14a-8(j), six copies of
this letter and its attachments are enclosed.
As more fully set forth below, we believe that the Proposal is excludable from
the Company's 2003 proxy materials for the following reasons: (a) the Proposal
may be excluded under Rule 14a-8(h)(3) because the Proponent failed to attend,
or send a duly qualified representative to attend the 2004 Annual Meeting of
Share Owners to present a prior proposal submitted to the Company; and (b) the
Proposal may be excluded under Rule 14a-8(i)(2) and Rule 14a-8(i)(3) because its
implementation would cause the Company to violate the federal proxy rules.
BACKGROUND
The Company received the Proponent's submission on August 27, 2004. A copy of
the Proponent's letter is attached hereto as Exhibit A.
THE PROPOSAL
The Proposal reads:
"Management and Directors return the word "AGAINST" to all voting cards for the
year 2005 meeting."
DISCUSSION
Rule 14a-8 generally requires public companies to include in their proxy
materials proposals submitted by shareholders that meet certain eligibility
requirements and comply with certain procedures governing the submission of
their proposals. However, Rule 14a-8 also provides that certain types of
proposals are outside the scope of the rule and therefore need not be included
in the company's proxy material.
Rule 14a-8(h)(3)
The Proposal may be excluded under Rule 14a-8(h)(3), which provides that where a
proponent of a share owner proposal, or a duly qualified representative of the
proponent, fails to attend the share owner meeting to present the proposal,
without good cause, a company is permitted to exclude all proposals submitted by
that proponent for any meeting held in the following two calendar years. The
Proponent submitted a share owner proposal to the Company which was included in
the Company's proxy materials for its 2004 Annual Meeting of Share Owners. The
meeting was held in Wilmington, Delaware on April 21, 2004. Neither the
Proponent nor her duly qualified representative was present at the meeting to
introduce the proposal. The Proponent has not provided the Company with any
explanation to account for her failure to be present or her failure to send a
duly qualified representative to 2004 Annual Meeting of Share Owners. As a
result, the Company believes that the Proposal may be excluded from the
Company's proxy materials for the Annual Meeting. Additionally, the Company is
of the opinion that any shareholder proposal received from the Proponent or any
affiliated entity or person may also be excluded from the proxy materials for
the Company's 2006 Annual Meeting of Share Owners.
The Staff has previously allowed other companies to exclude share owner
proposals in reliance on Rule 14a-8(h)(3) because of a proponent's failure to
appear or send a representative to an annual meeting to present a proposal
absent good cause. See, e.g., Poore Brothers, Inc. (Feb. 18, 2004); Service
Corporation International (Feb. 6, 2004); Exxon Mobil Corporation (Jan. 26,
2004); Wm. Wrigley Jr. Company (Dec. 5, 2003); Avaya, Inc. (Nov. 14, 2003); NCR
Corporation (Jan. 2, 2003); Mattel, Inc. (Mar. 22, 2002); Eastman Kodak Company
(Dec. 20, 2001). In the past, the Staff has ruled that financial strain
associated with attending the annual meeting and the brief amount of time
allotted for a proponent to introduce the proposal at the annual meeting did not
constitute "good cause" for failure to appear. See, e.g., NRC Corporation (Jan.
2, 2003) (the Staff stated that the proponent did not state a "good cause" for
failure to appear when the proponent explained that he believed it was "a
Penalty to spend airfare, lodging, and meals to attend any distant meeting").
We anticipate that the Proponent may offer health related issues an excuse to
explain her non-attendance at the 2004 Annual Meeting as she has already stated
in her letter attached hereto as Exhibit A, that she will be unable to
personally attend the 2005 Annual Meeting to present her most recent Proposal
due to having suffered from a mild heart attack in 2003. If the Proponent does
in fact offer this as an excuse to explain her failure to attend the 2004 Annual
Meeting to present her previous proposal, the Company requests the Staff to
rule, as it has in the past, that such an excuse does not constitute "good
cause" for failure to attend or send a representative under Rule 14a-8(h)(3).
See J.C. Penney Company, Inc. (Feb. 13, 2004) (the Staff ruled that the
proponent's explanation that he did not attend the annual meeting due to spinal,
cervical, and neurological ailments which prevent him from traveling did not
constitute a statement of "good cause").
Rules 14a-8(i)(2) and 14a-8(i)(3)
The Mary F. Morse Family Trust, of which the Proponent serves as trustee, filed
substantially similar proposals for inclusion in the Company's proxy materials
for the 2002 Annual Meeting of Share Owners and the 2003 Annual Meeting of Share
Owners. A copy of the proposal submitted for the 2002 Annual Meeting of Share
Owners is attached hereto as Exhibit B. The Staff permitted the Company to
exclude such proposal from its proxy materials in reliance on Rule 14a-8(i)(2).
See The Coca-Cola Co. (Feb. 6, 2002) (implementation of the proposal would
result in Coca-Cola's proxy materials being false and misleading under Rule
14a-9). A copy of the Staff's letter is attached hereto as Exhibit C. In the
interest of conserving paper, I have not attached copies of the correspondence
referenced in the Staff's letter. A copy of the proposal submitted for the 2003
Annual Meeting of Share Owners is attached hereto as Exhibit D. The Staff
permitted the Company to exclude such proposal from its proxy materials in
reliance on Rule 14a-8(i)(2). See The Coca-Cola Co. (Jan. 3, 2003)
(implementation of the proposal would result in Coca-Cola's proxy materials
being false and misleading under Rule 14a-9). A copy of the Staff's letter is
attached hereto as Exhibit E. In the interest of conserving paper, I have not
attached copies of the correspondence referenced in the Staff's letter.
The Proposal again requests the Company to make the same changes to its proxy
format as requested in the prior proposals. For the reasons outlined in the
letter to the Commission from the law firm of Hogan & Hartson L.L.P., dated
December 14, 2001, on behalf of the Company, the Company continues to believe
that the Proposal may be excluded from the Company's proxy materials. A copy of
the Hogan & Hartson letter is attached hereto as Exhibit F with the permission
of Hogan & Hartson. The Hogan & Hartson letter addresses matters of Delaware
law. Attached hereto as Exhibit G is the opinion of Morris, Nichols Arsht &
Tunnel, dated December 13, 2001, as to certain matters of Delaware law addressed
in the Hogan & Hartson letter. Morris, Nichols Arsht & Tunnel has given the
Company permission to submit such opinion to the Commission.
I am admitted to practice law in the State of Delaware and I am of the opinion
that, since the date of the Morris, Nichols, Arsht & Tunnel opinion, no changes
have occurred in Delaware law that would change the opinion expressed by Morris,
Nichols, Arsht & Tunnel. Additionally, the Staff's response to the Company in
2002 and 2003 notes that the Company's governing instruments did not opt out of
the plurality voting that is otherwise specified by Delaware law. See The
Coca-Cola Co. (Feb. 6, 2002); The Coca-Cola Co. (Jan. 3, 2003). I also certify
to the Commission that I am familiar with the Company's governing instruments
and that such governing instruments do not opt out of the plurality voting that
is otherwise specified by Delaware law.
CONCLUSION
For the foregoing reason, the Company has determined to exclude the Proposal
from the Company's proxy materials for the Annual Meeting.
If you have any questions regarding this matter or require additional
information, please feel free to call the undersigned at (404) 676-2671.
Very truly yours,
/s/
Parth S. Munshi
Counsel, Transactions & Securities
cc: Mary F. Morse
Enclosures: 6 copies of this letter, with exhibits
[STAFF REPLY LETTER]
August 23, 2004
CocaCola Company
PO Box 1734 NAT
Atlanta, GA 30301-1734
PROPOSAL
I, Mary F.Morse, of 212 Highland Ave., Moorestown, NJ 08057-2717, propose that
Management and Directors return the word "Against" to all voting cards for the
Year 2005 meeting.
REASONS: As you vote, keep in mind that "Against" was removed from most all
proxy ballots about 1975, but ONLY in the vote for DIRECTORS BOX, Most major
companies register in DE, MD, NJ, NY, and VA with the explanation that
shareowners might be "confused" that they would be voting "Against", when they
have no right to if voting under "Plurality" Rules adopted by those States and
Corporate Registrants therein. Under this system, any nominee can be elected
with even one vote "For" if that many are listed as available for the number of
directors requested.
You are denied "The Right of Dissent", a violation of the Constitution, and/or
The Bill of Rights. Insist on a return to Democracy, not a power grab. Example:
In year 2003 the CEO of ExxonMobil took out $28 million as a result of this
process. Since Management nominates the Directors, might this not come under a
"conflict of interest" interpretation? These are YOUR assets being diverted for
Management's gain.
Ford Motor Company agreed to return "Against" two years ago, showing the
American Way spirit as a fine U.S. Corporation.
Voting out company nominated directors by the shareowners, your say has an
effect on rejecting Directors who defy your wishes to reduce Management's
outlandish remuneration, which has direct effect on retaining assets not
actually earned by their position. Keep in mind that the Product or services,
and its Advertising and Acceptance are the source of income, not just the ones
in top positions. A fair stated salary and minimal perks are sufficient to
maintain a good lifestyle, not an exorbitant one that they desire.
Thank you All for accepting this as good advice for the proper conduct of the
Company.
Mary F. Morse, Trustee
/s/
[INQUIRY LETTER]
Mrs. Mary F. Morse, Trustee
212 Highland Avenue
Moorestown, NJ 08057-2717
December 10, 2004
Ph: 856 235 1711
Securities & Exchange Commission
Division of Corporate Finance
Office of the Chief Counsel
450 Fifth Street, N.W.
Washington, DC 20549
Re: CocaCola deletion request.
Ladies and Gentlemen:
Again we have repetitious claims with burdensome exhibit material objecting to a
properly presented Proposal.
Claiming my "non-attendance" explanation at a prior meeting unacceptable is
telling the S.E.C. what to do. Poor health is a legitimate reason for
non-attendance, plus my previous proof that the Rule is strictly to favor
Corporate Entities in that only the attendee shareowners hear orally a
previously written Proposal. There is no gain to the Proponent.
Page 3 Rules 14a-8[i][2] and 14a-8[i][3] [Exhibit Material presented]
Presentation of my copy dated August 23, 2004, Received August 27, 2004 giving
reason as an exhibit, and then a petition dated December 7, 2004 stating on
lines 9-10 that I had not done so is false and misleading.
Lines 14,15,16 state: "In the interest of conserving paper, etc." is improper in
that a copy of my company addressed envelope, 7 blank [EXHIBIT] sheets, copies
of prior Proposals, prior "opinions", S.E.C. responses for prior years, copies
of S.E.C, Rules sent previously for a total of 58 sheets do not constitute
"interest of conserving paper".
"Plurality" voting guarantees election of Directors nominated by Management.
I refer you to my prior messages and request to honor the Constitution and The
Bill of Rights and return "The Right of Dissent" to the vote for Directors by
placing the word "Against" as a choice. States rights do not supercede Federal
rights.
Sincerely,
Mary F. Morse, Trustee
/s/
Material prepared and presented by my husband, Robert, as I do not type nor use
a computer.
6 copies to S.E.C.
1 copy to CocaCola
[STAFF REPLY LETTER]
December 22, 2004
Response of the Office of Chief Counsel Division of Corporation Finance
Re: The Coca-Cola Company Incoming letter dated December 7, 2004
The proposal requests that the board make a particular revision to its proxy
materials.
There appears to be some basis for your view that Coca-Cola may exclude the
proposal under rule 14a-8(h)(3). We note your representation that Coca-Cola
included the proponent's proposal in its proxy statement for its 2004 annual
meeting, but that neither the proponent nor her representative appeared to
present the proposal at this meeting. Moreover, the proponent has not stated a
"good cause" for the failure to appear. Under the circumstances, we will not
recommend enforcement action to the Commission if Coca-Cola omits the proposal
from its proxy materials in reliance on rule 14a-8(h)(3). In reaching this
position, we have not found it necessary to address the alternative bases for
omission upon which Coca-Cola relies.
Sincerely,
/s/
Heather L. Maples
Special Counsel
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