Company Name: Guardian Technologies International, Inc.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20649-0402v DIVISION OF CORPORATION FINANCE November 22, 2004
William J. Donovan Re: Guardian Technologies International, Inc. Dear Mr. Donovan: This is in response to your letter dated November 18, 2004 concerning the shareholder proposals submitted to Guardian by Difference Engines Corporation. Our response is attached to the enclosed photocopy of your correspondence. By doing this, we avoid having to recite or summarize the facts set forth in the correspondence. Copies' of all of the correspondence also will be provided to the proponent. In connection with this matter, your attention is directed to the enclosure, which sets forth a brief discussion of the Division's informal procedures regarding shareholder proposals. Sincerely,
Jonathan A. Ingram Enclosures
cc: Walter Ludwig November 22, 2004
Response of the Office of Chief Counsel Re: Guardian Technologies International, Inc. The proposals relate to litigation. We note that it is unclear whether the submission includes proposals made under rule 14a-8 or proposals to be presented directly at the annual meeting, a matter we do not address. To the extent that the submission involves a rule 14a-8 issue, there appears to be some basis for your view that Guardian may exclude the submission under rule 14a-8(e)(2) because Guardian did not receive it a reasonable time before beginning to print and mail its proxy materials. Accordingly, we will not recommend enforcement action to the Commission if Guardian omits the submission from its proxy materials in reliance on rule 14a-8(e)(2). In reaching this position, we have not found it necessary to address the alternative basis for omission upon which Guardian relies. Sincerely,
Heather L. Maples
GUARDIAN November 18, 2004
By Hand Delivery
Re: Guardian Technologies International, Inc. Ladies and Gentlemen Guardian Technologies International, Inc., a Delaware corporation (the "Company"), is submitting this letter pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended (the "Act"), to inform the Securities and Exchange Commission (the "Commission") of its intention to exclude certain stockholder proposals (the "Proposals") of Difference Engines Corporation from its proxy statement and form of proxy for the Company's 2004 annual meeting of stockholders. The Company hereby requests the staff of the Commission not recommend any enforcement action be taken if the Company excludes the Proposals from its 2004 proxy materials for the reasons set forth below. A copy of the Proposals is attached hereto as Exhibit A and a copy of the Company's response letter to the proponent is attached hereto as Exhibit B which advised the proponent of the reasons the Proposals did not comply with the requirements of the Act. A copy of the Company's response letter was sent to Difference Engines Corporation by Federal Express, priority overnight delivery, on November 18, 2004. The Company believes that the Proposals may be omitted from the Company's proxy materials for its 2004 annual meeting because the Proposals were not submitted in a timely manner pursuant to Rule 14a-(8)(e)(2) under the Act. The proxy statement for the 2004 annual meeting was first released on November 1, 2004. The Company received the Proposals on November 17, 2004, seven days before the date of the Company's annual meeting, which has been scheduled for November 23, 2004.
21351 Ridgetop Circle, Suite 300 The Company did not hold an annual meeting during 2003. However, it conducted a special meeting on February 14, 2004, in lieu of its 2003 annual meeting. Pursuant to Rule 14a-8(e)(2) under the Act, the deadline for submitting a stockholder proposal for an annual meeting other than a regularly scheduled annual meeting is "a reasonable time before the company begins to print and mail its proxy materials." In accordance with Rule 14a-8(e)(1), the Company disclosed under Item 5 of its Quarterly Report on Form 10-QSB (File No. 0-28238) for the quarter ended June 30, 2004, that the deadline for submitting stockholder proposals for the Company's 2004 annual meeting (originally scheduled for November 17, 2004) was August 16, 2004. In view of the fact that the Proposals were received at the Company's principal executive offices on November 17, 2004, seven days before the date of the annual meeting, the Company believes that they were not submitted a reasonable time before the Company printed or mailed its proxy materials or otherwise on a timely basis in accordance with Rule 14a-8(e) and may be properly excluded from the Company's 2004 proxy materials. (See, e.g., Sara Lee Corporation, (October 29, 2004); and Walgreen Co.( October 8, 2004).) In addition to the foregoing, the Proposals may be excluded because the proponent does not meet the eligibility requirements of Rule 14a-8(b) with regard to the submission of proposals for the Company's 2004 annual meeting. Rule 14a-8(b) requires that the proponent has "continuously held at least $2,000 in market value, or 1%, of the company's securities entitled to be voted on the proposal at the meeting for at least one year by the date [the proponent] submit[s] the proposal." As stated by the staff of the Commission, there are several ways to determine whether a stockholder has owned the minimum amount of company securities entitled to be voted at a meeting of stockholders required under Rule 14a-8(b) and that, if the stockholder appears in the company's records as a registered holder, the company can verify the stockholder's eligibility independently. (See Division of Corporation Finance: Staff Legal Bulletin No. 14, Section C.1.c (July 13, 2001)). Based upon the Company's written records and the records of the Company's transfer agent, Difference Engines Corporation did not become a registered holder of the Company's common stock until December 19, 2003. Moreover, the proponent has not otherwise separately established its eligibility under Rule 14a-8(b) to submit a stockholder proposal for inclusion in Guardian's proxy materials for its 2004 annual meeting in the manner provided for in such rule by furnishing to the Company any written or other documentary evidence that it has owned securities of the Company continuously for the one year period. The staff of the Commission has stated that, in the event the stockholder is not a registered holder, the stockholder is responsible for proving his or her eligibility to submit a proposal to a company and "must submit an affirmative written statement from the record holder of his or her securities that specifically verifies that the shareholder owned the securities continuously for a period of one year as of the time of submitting the proposal." (Id.) Accordingly, the Company believes that Difference Engines Corporation has not satisfied the one year holding period eligibility requirement set forth in Rule 14a-8(b) with regard to the submission of a stockholder proposal for the Company's 2004 annual meeting. We note that the staff has consistently concluded that a company may exclude a proposal pursuant to Rule 14a-8(f) for failure by the proponent to comply with Rule 14a-8(b) (See, e.g., Transocean Inc. (March 7, 2003); and Lucent Technologies Inc. (October 29, 2004).) For the reasons discussed in this letter, the Company respectfully requests that the staff of the Commission concur that no enforcement action will be recommended to the Commission if the Company excludes the Proposals from its proxy materials for the Company's 2004 annual meeting of stockholders. Also, based on the foregoing, the Company respectfully requests that the staff of the Commission waive compliance with the 80-day requirement of Rule 14a-8(j)(1) under the Act. In accordance with Rule 14a-8(j) under the Act, six copies of this letter and its attachments are enclosed. In addition, we are forwarding a copy of this letter to the proponent. Please acknowledge receipt of this letter by date-stamping the attached acknowledgement copy of this letter and returning it to the undersigned in the self addressed pre-paid envelope provided. If you have any question regarding the foregoing or require any additional information, please feel free to contact the undersigned at (703) 654-6091. Our facsimile number is (703) 654-6005. Respectfully submitted,
William J. Donovan
DIVISION OF CORPORATION FINANCE The Division of Corporation Finance believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by the Company in support of its intention to exclude the proposals from the Company's proxy materials, as well as any information furnished by the proponent or the proponent's representative. Although Rule 14a-8(k) does not require any communications from shareholders to the Commission's staff, the staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure. It is important to note that the staff's and Commission's no-action responses to Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these no- action letters do not and cannot adjudicate the merits of a company's position with respect to the proposal. Only a court such as a U.S. District Court can decide whether a company is obligated to include shareholder proposals in its proxy materials. Accordingly a discretionary determination not to recommend or take Commission enforcement action, does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in court, should the management omit the proposal from the company's proxy material. |
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