Company Name: Intel Corp.
Public Availability Date: March 5, 2004
Document Sections: INQUIRY LETTER
Unknown Section
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER [INQUIRY LETTER]
January 30, 2004 Direct Dial (202) 955-8671
Fax No. (202) 530-9569
Client No. C 42376-00006 VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Stockholder Proposal of John Chevedden Securities Exchange Act of 1934Rule
14a-8 Dear Ladies and Gentlemen: This letter is to inform you that it is the intention of our client, Intel
Corporation (the "Company"), to omit from its proxy statement and form of proxy
for the Company's 2004 Annual Meeting of Stockholders (collectively, the "2004
Proxy Materials") a stockholder proposal (the "Proposal") received from John
Chevedden and submitted on behalf of Nick Rossi (the "Proponent"). The Proposal
requests that the Company "seek shareholder approval for future golden parachute
severance pay for senior executives which provide benefits exceeding 200% of the
sum of the executive's base salary plus bonus." A copy of the Proposal is
attached hereto as Exhibit A. On behalf of our client, we hereby notify the Division of Corporation Finance of
the Company's intention to exclude the Proposal from its 2004 Proxy Materials on
the bases set forth below, and we respectfully request that the staff of the
Division (the "Staff") concur in our view that the Proposal is excludable
pursuant to: I. Rule 14a-8(e)(2), because the Proponent failed to submit the Proposal to the
Company's principal executive offices in a timely fashion; and
II. Rule 14a-8(i)(10), because the Company has substantially implemented the
Proposal. Moreover, the Company requests that the Staff waive the 80-day deadline in Rule
14a-8(j)(1) for good cause. Pursuant to Rule 14a-8(j), enclosed herewith are six
(6) copies of this letter and its attachments. Also in accordance with Rule
14a-8(j), a copy of this letter and its attachments is being mailed on this date
to the Proponent and Mr. Chevedden, informing them of the Company's intention to
omit the Proposal from the 2004 Proxy Materials. ANALYSIS
I. The Proposal May Be Excluded under Rule 14a-8(e)(2) Because the Proponent
Failed to Submit the Proposal to the Company's Principal Executive Offices in a
Timely Fashion. Under Rule 14a-8(e)(2), a proposal submitted with respect to a company's
regularly scheduled annual meeting must be received at the company's "principal
executive offices not less than 120 calendar days before the date of the
company's proxy statement released to shareholders in connection with the
previous year's annual meeting." Pursuant to Rule 14a-5(e), the Company
disclosed in its 2003 Proxy Materials the deadline for submitting shareowner
proposals as well as the method of submitting such proposals for the Company's
2004 Annual Meeting: 2004 Stockholder Proposals or Nominations. From time to time, Intel's
stockholders submit proposals that they believe should be voted on at the annual
meeting or nominate persons for election to the Board. Pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, some stockholder proposals may be
eligible for inclusion in Intel's 2004 proxy statement. Any such stockholder
proposals must be submitted to Intel's Corporate Secretary via e-mail at
corporate.secretary@intel.com, by fax to (408) 653-5661 or in writing at M/S
SC4-203, 2200 Mission College Blvd., Santa Clara, California 95052-8119. Failure
to deliver a proposal by one of these means may result in it not being deemed
timely received. Intel must receive all submissions no later than December 4,
2003. Intel strongly encourages any stockholder interested in submitting a
proposal to contact Intel's Corporate Secretary in advance of this deadline to
discuss any proposal he or she is considering, and stockholders may want to
consult knowledgeable counsel with regard to the detailed requirements of
applicable securities laws. Submitting a stockholder proposal does not guarantee
that Intel will include it in its proxy statement. The Corporate Governance
Committee reviews all stockholder proposals and makes recommendations to the
Board for action on such proposals. (emphasis added). The Company became aware of the Proposal on January 13, 2004, as the result of
conversations with a third-party who informed the Company that Mr. Chevedden had
publicly stated that he had submitted a proposal to the Company. Rachel Kosmal,
a Senior Attorney with the Company, immediately contacted Mr. Chevedden to
inquire whether he had submitted a proposal to the Company. During this
telephone conversation, Mr. Chevedden provided Ms. Kosmal with the facsimile
number to which the Proposal allegedly had been transmitted. Ms. Kosmal then
requested that Mr. Chevedden transmit to the Company the Proposal as well as
evidence of the timely submission of the Proposal. The Company subsequently
undertook an extensive effort to find any evidence that the Proposal had been
submitted to the Company in a timely fashion. As of the date of this letter, the
Company has been unable to locate a facsimile containing the Proposal or
otherwise verify that the Proposal was transmitted to the Company in a timely
fashion. Moreover, the facsimile number Mr. Chevedden stated that he used
transmits to a facsimile machine located in an engineering department at the
Company, not to the Company's principal executive offices (or even in the same
building as the Company's executive offices), and it is not the facsimile number
listed in the Company's 2003 Proxy Materials (408-653-5661) for transmitting any
stockholder proposals. In each of the past two years, Mr. Chevedden has
submitted stockholder proposals to the Company in accordance with the proxy
statement instructions. On January 16, 2004, as the result of Ms. Kosmal's telephone conversation with
Mr. Chevedden, the Company first received the Proposal. However, despite the
Company's request, this facsimile did not contain any evidence that the Proposal
had been transmitted to the Company on or before December 4, 2003, the deadline
for stockholder proposals. Instead, the Proposal contains only the following
handwritten statement: "Repeat of earlier fax." Accordingly, the Company has
never received any evidence that the Proposal was transmitted to the Company in
a timely fashion. Mr. Chevedden's January 16thfacsimile sets forth only the Proposal that was
allegedly submitted to the Company. As noted in Question C.1.c. in Staff Legal
Bulletin No. 14 (July 13, 2001) ("SLB No. 14"), "[i]n the event that the
shareholder is not the registered holder, the shareholder is responsible for
proving his or her eligibility to submit a proposal to the company." The
Proponent is not a record owner of the Company's securities, and the facsimile
was not accompanied by a statement of ownership stating 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 for at least one year by the
date the Proposal was submitted. Nor did the Proponent represent his intent to
hold these securities through the date of the Company's 2004 Annual Meeting of
Stockholders. Therefore, the Proposal also may be excluded under Rule 14a-8(b)
as the Proponent failed to substantiate ownership of the requisite amount of the
Company's securities and failed to represent his intent to hold the Company's
securities. This situation is substantially similar to facts involving Mr. Chevedden
considered by the Staff in 99 Cents Only Stores (avail. Apr. 24, 2002). There,
the company first learned of Mr. Chevedden's stockholder proposal after
receiving a facsimile from him asking if the company intended to include a
position in its proxy materials about a stockholder proposal "submitted
earlier." During a subsequent telephone call, Mr. Chevedden stated that the
proposal was submitted "some time in February." The company never received
either the proposal or any letter from the stockholder stating that he satisfied
Rule 14a-8's eligibility requirements. The Staff concurred that the company
could exclude this proposal under Rule 14a-8(e)(2) because the company "did not
receive the proposal before the deadline for submitting proposals." See also
Actuant Corporation (avail. Nov. 26, 2003) (granting no-action relief under Rule
14a-8(e)(2) for a late proposal submitted by Mr. Chevedden).
Mr. Chevedden has not provided any evidence that the Proposal was submitted
timely to the Company. Question C.3.d. in SLB No. 14 confirms that the proponent
is responsible for documenting timely delivery of a proposal: "A shareholder
should submit a proposal by a means that allows him or her to determine when the
proposal was received at the company's principal executive offices." As the
Company first received the Proposal on January 16, 2004, well after the December
4, 2003 deadline for stockholder proposals, we request that the Staff concur in
our view that the Company may properly exclude the Proposal from the 2004 Proxy
Materials pursuant to Rule 14a-8(e)(2) because the Proposal was not submitted in
a timely fashion. Moreover, even if Mr. Chevedden and the Proponent had provided evidence of
timely submission of the Proposal, we request that you concur in our view that
the Company may properly exclude the Proposal from its 2004 Proxy Materials
pursuant to Rule 14a-8(e)(2) because the Proposal was not submitted in a timely
fashion to the Company's "principal executive offices" as required by Rule
14a-8(e)(2). As discussed in Question C.3.c. in SLB No. 14, "[t]he proposal must
be received at the company's principal executive offices. Shareholders can find
this address in the company's proxy statement. If a shareholder sends a proposal
to any other location, even if it is to an agent of the company or to another
company location, this would not satisfy the requirement." The Company
explicitly and clearly described in the 2003 Proxy Materials how to submit
stockholder proposals to the Company. The Proponent's failure to submit the
Proposal to the Company's principal executive offices renders the Proposal
excludable under Rule 14a-8(e)(3). See Nabors Industries Inc. (avail. April 15,
2003) (granting no-action relief under Rule 14a-8(e)(2) where proposals were not
received at the company's principal executive offices but at other company
offices). II. The Proposal May Be Excluded under Rule 14a-8(i)(10) Because the Company Has
Substantially Implemented the Proposal. Rule 14a-8(i)(10) permits exclusion of a stockholder proposal "if the company
has already substantially implemented the proposal." According to the
Commission, this provision "is designed to avoid the possibility of shareholders
having to consider matters which have already been favorably acted upon by the
management." See Exchange Act Release No. 34-12598 (July 7, 1976). Furthermore,
a 1998 Release notes that this paragraph merely reflects the interpretation
adopted in Exchange Act Release No. 20091 (Aug. 16, 1983) under former Rule
14a-8(c)(10). Pursuant to the 1983 interpretation, the Staff has stated "a
determination that the company has substantially implemented the proposal
depends upon whether its particular policies, practices and procedures compare
favorably with the guidelines of the proposal." Texaco, Inc. (avail. Mar. 28,
1991). Consequently, a stockholder proposal does not have to be implemented
exactly as proposed; it merely needs to be "substantially implemented."
When a company can demonstrate that it already has taken actions to address each
element of a stockholder proposal, the Staff has concurred that the proposal has
been "substantially implemented" and may be excluded as moot. As discussed
below, the Company's Board of Directors (the "Board") adopted resolutions that
compare favorably with the Proposal, demonstrating that the Company has
substantially implemented the Proposal and rendering the Proposal moot.
The Proposal requests that the Company "seek shareholder approval for future
golden parachute severance pay for senior executives which provide benefits
exceeding 200% of the sum of the executive's base salary plus bonus." The
Proposal further states that "[f]uture golden parachutes include agreements
renewing, modifying or extending existing severance agreements or employment
agreements with severance provisions" and that "golden parachutes not be given
for a change in control or merger approved but not completed" as well as "for
executives who transfer to the successor company." As discussed in the Company's
2003 Proxy Materials (as excerpted below), the Company has adopted a policy to
seek stockholder approval for future severance agreements with senior executives
that provide benefits in an amount exceeding 2.99 times the executive's base
compensation (the "Golden Parachute Policy"): EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
All Intel employees, including executive officers, are employed at will by the
company and do not have employment agreements. From time to time, Intel has
implemented voluntary separation programs to encourage headcount reduction in
particular parts of the company, and these programs have offered separation
payments to departing employees. However, executive officers have not
historically been eligible for any of these programs, nor does the company
retain retiring executive officers following retirement on a part-time or
consultancy basis. In 2002, Intel received a request from a stockholder to adopt
a policy that, absent stockholder approval by vote, the company would not pay
severance to a departing executive officer in excess of 2.99 times that
officer's most recent annual salary and bonus. We have no practice of making
such payments, nor do we have any plans to do so in the future, and so,
following discussions, we agreed with the stockholder to adopt a policy that we
will seek stockholder approval for future severance agreements with senior
executives that provide benefits in an amount exceeding three times the
executive's base compensation. For this purpose, "future severance agreements"
means any such agreements that we may enter into after adoption of this policy
by the Board in February 2003, and includes employment agreements containing
severance provisions, retirement agreements, and agreements renewing, modifying
or extending such agreements, but does not include retirement plans, deferred
compensation plans, early retirement programs, or similar plans or programs
available to more than 50 employees on reasonably similar terms. "Senior
executive" means any of our top five most highly compensated employees in the
calendar year preceding termination of employment, and any executive listed in
the compensation table in our annual proxy statement in any of the five years
preceding termination of employment. "Benefits" include lump-sum cash payments
(including payments in lieu of medical and other benefits) and the estimated
present value of periodic retirement payments, fringe benefits and consulting
fees (including reimbursable expenses) to be paid to the executive. "Benefits"
does not include settlement of a legal obligation, such as a cash payment in
exchange for the surrender of vested stock options, or payments to settle
pending or threatened litigation. "Base compensation" shall be determined
consistent with federal regulations under Tax Code Section 280G, and generally
means the executive's average W-2 compensation over the five full calendar years
preceding termination of employment. The Board may in its discretion revise or
terminate this policy in the future, but will at that time publicly disclose any
such action on its part. The Golden Parachute Policy is substantially similar to the Proposal: both
concern stockholder approval of executive officer severance benefits exceeding a
specified threshold based on the officer's compensation. The main difference
between the Golden Parachute Policy and the Proposal is that the Proposal seeks
stockholder approval where the benefits exceed 200% of the compensation while
the Golden Parachute Policy agrees to seek stockholder approval where such
compensation exceeds 2.99 times (or 299%) such compensation. This variation will
not prevent the Golden Parachute Policy from substantially implementing the
Proposal as the goal of the Proposal, based on its plain language, is to obtain
stockholder approval of future golden parachute severance pay for executives.
Therefore, by adopting the Golden Parachute Policy, the Board of Directors has
addressed the goal of the Proposal. The Staff has viewed proposals as moot under
Rule 14a-8(i)(10) where a company took similar actions to substantially
implement a stockholder proposal. See, e.g., Hewlett-Packard Co. (avail. Dec.
24, 2003) (policy that the Board would submit any poison pill to a shareowner
vote, unless the Board, exercising its fiduciary duties under Delaware law,
determines that such a submission would not be in the interests of shareowners
under the circumstances substantially implements proposal seeking stockholder
approval of adoption or extension of poison pill); Masco Corporation (avail.
Mar. 29, 1999) (board policy substantially implemented proposal providing
specific qualifications for the company's outside directors even though the
board policy was more limited in scope). We believe that the adoption and implementation of the Golden Parachute Policy,
when compared to the actions that the Proposal specifically addresses,
demonstrate that the Company has substantially implemented the Proposal.
Specifically, the "particular policies, practices and procedures" of the Golden
Parachute Policy "compare favorably with the guidelines of the [Proposal]".
Texaco, Inc. (avail. Mar. 28, 1991). Accordingly, we believe that the Proposal
may be excluded under Rule 14a-8(i)(10). III. Waiver of 80-Day Requirement in Rule 14a-8(j)(1).
The Company intends to file its definitive 2004 Proxy Materials on or after
March 31, 2004. Rule 14a-8(j)(1) requires that, if a company "intends to exclude
a proposal from its proxy materials, it must file its reasons with the
Commission no later than 80 calendar days before it files its definitive proxy
statement and form of proxy with the Commission." However, consistent with Staff
precedent, we believe that the Company has good cause for the delayed submission
of this request. Accordingly, we respectfully request that the Staff waive the
80-day requirement set forth in Rule 14a-8(j)(1) so as to permit the Company to
file and mail definitive copies of the Proxy Materials as scheduled.
To meet the 80-day requirement contained in Rule 14a-8(j)(1), the Company would
have needed to file this letter by January 9, 2004. However, the Company did not
receive the Proposal until January 16, 2004. As discussed above, the
circumstances surrounding the Proposal are substantially similar to the facts in
99 Cents Only Stores (avail. Apr. 24, 2002), in which the Staff waived the
80-day requirement. Moreover, the Staff has consistently found "good cause" to
waive the 80-day requirement in Rule 14a-8(j)(1) where the procedural fault lies
with the stockholder submitting the proposal. See, e.g., Monsanto Company
(avail. Nov. 26, 2003) (proposal received by company fewer than 80 days prior to
the date company planned to file its definitive proxy material); International
Business Machines Corporation (avail. Mar. 6, 2003) (proposal filed with company
fewer than 80 days prior to the date company intended to file its proxy
materials); Lipid Sciences, Inc. (avail. May 2, 2002); Sepracor, Inc. (avail.
Mar. 27, 2002). Accordingly, we believe that the Company has "good cause" for its inability to
meet the 80-day requirement, and we respectfully request that the Staff waive
the 80-day requirement with respect to this letter. * * *
We would be happy to provide you with any additional information and answer any
questions that you may have regarding this subject. Should you disagree with the
conclusions set forth in this letter, we respectfully request the opportunity to
confer with you prior to the determination of the Staff's final position. Please
do not hesitate to call me at (202) 955-8671, or Rachel Kosmal at (408)
765-2283, if we can be of any further assistance in this matter.
Sincerely, /s/
Ronald O. Mueller Attachment
cc: Rachel Kosmal, Intel Corporation
John Chevedden [text illegible]Shareholder Voting Input on Golden Parachutes
RESOLVED: Shareholders recommend that our Board of Directors seek shareholder
approval for future golden parachute severance pay for senior executives which
provide benefits exceeding 200% of the sum of the executive's base salary plus
bonus. Future golden parachutes include agreements renewing, modifying or
extending existing severance agreements or employment agreements with severance
provisions. This includes that golden parachutes not be given for a change in control or
merger approved but not completed. Or for executives who transfer to the
successor company. Implementation is to be in accordance with applicable laws
and would be in accordance with existing severance agreements or employment
agreements that contain severance provisions. Because it may not always be practical to obtain prior shareholder approval, our
company would have the option under this proposal of seeking approval after the
material terms of the agreement were agreed upon. Nick Rossi, P.O. Box 249, Boonville, Calif. 95415 submitted this proposal.
In the view of certain institutional investors ...
Golden parachutes have the potential to:
1) Create the wrong incentives 2) Reward mis-management
A change in control can be more likely if our executives do not maximize
shareholder value. Golden parachutes can allow our executives to walk away with
millions of dollars even if shareholder value has suffered during their tenure.
54% Shareholder Support The 17 shareholder proposals voted on this topic in 2003 achieved an impressive
54% average supporting vote. The potential magnitude of golden parachutes for executives was highlighted in
the failed merger of Sprint (NYSE: FON) with MCI WorldCom. Investor and media
attention focused on the estimated $400 payout to Sprint Chairman William Esrey.
Almost $400 million would have come from the exercise of stock options that
vested when the deal was approved by Sprint's shareholders.
Another example of questionable golden parachutes is the $150 million parachute
payout to Northrop Grumman executives after the merger with Lockheed Martin
collapsed. Independent Support for Shareholder Input on Golden Parachutes
Institutional investors recommend companies seek shareholder approval golden
parachutes. For instance the California Public Employees Retirement System
(CalPERS) said, "shareholder proposals requesting submission of golden
parachutes to shareholder vote will always be supported." Also, the Council of
Institutional Investors www.cii.org favors shareholder approval if the golden
parachute exceeds 200% of a senior executive's annual base salary.
Shareholder Voting Input on Golden Parachutes
YES ON 3 Notes:
The above format is the format submitted and intended for publication.
Please advise if there is any typographical question.
The company is requested to assign a proposal number (represented by "3" above)
based on the chronological order in which proposals are submitted. The requested
designation of "3" or higher number allows for ratification of auditors to be
item 2. References: CalPERS Domestic Proxy Voting Guidelines, 4500 Golden Parachutes at
http://www.calpers-governance.org/principles/domestic/voting/page11.asp
Northrop to take $180 million merger charge, Wall Street Journal, March 26, 1998
IRRC Corporate Governance Bulletin, JuneSept. 2003
Council of Institutional Investors, Corporate Governance Policies, March 25,
2002 Please advise within 14 days if the company requests help to locate these or
other references. Nick Ross.
P.O. Box 249
Boonville, CA 95415 Mr. Andrew Grove
Chairman
Intel Corporation (INTC)
2200 Mission College Blvd.
Santa Clara, CA 95052
Phone: (408) 765-8080
Fax: (408) 765-9904 Dear Mr. Grove,
This Rule 14a-8 proposal is respectfully submitted for the next annual
shareholder meeting. This proposal is submitted in support of 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. 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/
cc: F. Thomas Dunlap, Jr.
Corporate Secretary
FX: 408/765-1859 [INQUIRY LETTER]
6 Copies 7th copy for date-stamp return
February 7, 2004 Via Airbill
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549 Preliminary Rebuttal to Gibson Dunn & Crutcher LLP No Action Request
Intel Corporation (INTC)
Golden Parachute Topic
Nick Rossi Ladies and Gentlemen:
This is in further support of the February 3, 2004 rebuttal letter.
The rule 14a-8 proposal was submitted to two fax numbers at the company:
10/20/03 10:55 408-765-9904 1:26 [minutes] 03 [pages]
10/20/03 10:58 408-765-1859 1:33 [minutes] 03 [pages]
Two records are provided as evidence of these faxes:
1. Fax confirmation record. 2. Copy from telephone bill.
The company's so-called "extensive effort" to locate the rule 14a-8 proposal
facsimile is totally without any supportnot even a vague description of who
might have been involved in the purported "extensive effort."
The company does not name even one person who used the particular fax machine at
the relevant date. This person may have been able to advise whether faxes
addressed to the Chairman are still received at this fax number and are then
forwarded to the Chairman. The company does not claim that the "engineering department" is on a different
campus than the "principal executive offices" or that the "engineering
department" is unlikely to be aware of the location of the "principal executive
offices" and the means to forward interoffice mail to these offices.
The company does not give a reason that the "engineering department" would
likely be challenged to forward a letter clearly addressed to the chairman of
the company and who is clearly identified on the submittal letter. From the
information given by the company this "engineering department" could be one of
the highest-level engineering offices in the company. Since the proposal was
faxed more than 40-days prior to the company's rule 14a-8 submittal deadline and
furthermore redundantly to two separate working company fax numbers, there was
more than ample time for the proposal to arrive at the Chairman's office even
had it been repeatedly misrouted. In FirstEnergy Corp. (March 3, 1999) the Chairman, no less, signed an affidavit
on his purported efforts to locate a rule 14a-8 proposal facsimile in regard to
a rule 14a-8(e)(2) claim. Yet FirstEnergy still did not receive concurrence on
its no action request. FirstEnergy Corp. (March 3, 1999)
A shareholder proposal, which requires shareholder approval of executive
severance benefits that exceed certain amounts, may not be omitted from the
company's proxy material under rule 14a-8(e)(2) or (c). The proposal also may
not be omitted from the company's proxy material under rule 14a-8(i)(2) if the
proponents, within seven calendar days after receiving the staff's response,
recast the proposal as indicated in the staff's response. The company makes an issue of the correct building, yet does not disclose which
building(s) the 2002 and 2003 proposals were received at. If the company is insistent on procedure as to specific fax machine then it
should have given the proponent a "procedural" notification per SLB 14 (within
14 days) that the proponent should fax the same proposal to a different fax
machine at the company. SLB 14 states:
6. What must a company do in order to exclude a proposal that fails to comply
with the eligibility or procedural requirements of the rule?
If a shareholder fails to follow the eligibility or procedural requirements of
rule 14a-8, the rule provides procedures for the company to follow if it wishes
to exclude the proposal. For example, rule 14a-8(f) provides that a company may
exclude a proposal from its proxy materials due to eligibility or procedural
defects if
within 14 calendar days of receiving the proposal, it provides the shareholder
with written notice of the defect(s), including the time frame for responding;
and
the shareholder fails to respond to this notice within 14 calendar days of
receiving the notice of the defect(s) or the shareholder timely responds but
does not cure the eligibility or procedural defect(s). The company clearly did not give a notice within 14-days.
The company exposition raises more questions than it answers.
First the company exposition is irrelevant because the purported status of one
company facsimile machine is not even claimed to apply to the relevant date that
the shareholder proposal was faxed to the company. The company claims the undersigned in two previous years submitted stockholder
proposals to apparently acceptable company fax numbers, yet the company does not
even state the fax numbers which were previously accepted or the respective
building location(s). To address another spurious company claim, the company failed to make any
request whatsoever for verification of stock ownership within 14-days of the
company confirmation of receipt of the third facsimile of the original proposal
(January 16, 2004 facsimile). Not substantially Implemented
This shareholder proposal is not restricted to only 5 senior executiveslike the
company policy. In fact the "$150 million parachute payout to Northrop Grumman
executives" example in the supporting statement was for 450 executives and
managers of Northrop Grumman. This is a 90-to-one contrast to the company
policy. The company fails to make the necessary and preposterous claim that the company,
with $205 billion market capitalization and 78,000 employees, is restricted to
only 5 senior executives. I do not believe the company has met its burden of proof obligation according to
rule 14a-8. For the above reasons this is to respectfully request non-concurrence with the
company no action request on each point. Sincerely,
/s/ John Chevedden
cc: Nick Rossi
Andrew Grove [INQUIRY LETTER]
6 Copies FX: 202-942-9525 February 3, 2004
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 0402
450 Fifth Street, NW
Washington, DC 20549 Preliminary Rebuttal to Gibson Dunn & Crutcher LLP No Action Request
Intel Corporation (INTC)
Golden Parachute Topic
Nick Rossi Ladies and Gentlemen:
This is a preliminary rebuttal to the no action request. Additional information
will follow. The rule 14a-8 proposal was submitted to two fax numbers at the company:
10/20/03 10:55 408-765-9904 1:26 [minutes] 03 [pages]
10/20/03 10:58 408-765-1859 1:33 [minutes] 03 [pages]
The so called "extensive effort" to locate the rule 14a-8 proposal facsimile is
totally without any supportnot even a vague description of who might have been
involved in the purported "extensive effort." In FirstEnergy Corp. (March 3, 1999) the Chairman, no less, signed an affidavit
on his purported efforts to locate a rule 14a-8 proposal facsimile in regard to
a rule 14a-8(e)(2) claim. Yet FirstEnergy still did not receive concurrence on
its no action request. FirstEnergy Corp. (March 3, 1999)
A shareholder proposal, which requires shareholder approval of executive
severance benefits that exceed certain amounts, may not be omitted from the
company's proxy material under rule 14a-8(e)(2) or (c). The proposal also may
not be omitted from the company's proxy material under rule 14a-8(i)(2) if the
proponents, within seven calendar days after receiving the staff's response,
recast the proposal as indicated in the staff's response. The company exposition ralses more questions than it answers.
First the company exposition is irrelevant because the status description of the
one company facsimile machine does not even claim to apply to the precise time
that the shareholder proposal was faxed to the company. The company claims the undersigned in two previous years submitted stockholder
proposals to apparently acceptable company fax numbers, yet the company does not
even state the fax numbers which were previously accepted.
To address another spurious company claim, the company failed to make any
request whatsoever for verification of stock ownership within 14-days of the
company confirmation of receipt of the third facsimile of the original proposal
(January 16, 2004 facsimile). Not substantially Implemented
This shareholder proposal is not restricted to 5 senior executives like the
purported company policy. In fact the "$150 million parachute payout to Northrop
Grumman executives" example in the supporting statement was to 450 executives
and managers of Northrop Grumman. This is a 90-to-one comparison to the company
policy. The company fails to make the necessary and preposterous claim that the company,
with $205 billion market capitalization and 78,000 employees, has only 5 senior
executives. I do not believe the company has met its burden of proof obligation according to
rule 14a-8. Further information and exhibits will follow. Sincerely,
/s/ John Chevedden
cc: Nick Rossi
Andrew Grove [STAFF REPLY LETTER]
March 5, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: Intel Corporation Incoming letter dated January 30, 2004
The proposal relates to golden parachutes.
There appears to be some basis for your view that Intel may exclude the proposal
under rule 14a-8(e)(2) because Intel did not receive the proposal before the
deadline for submitting proposals. We note in particular your representation
that Intel did not receive a proposal at its "principal executive offices"
before this deadline. Accordingly, we will not recommend enforcement action to
the Commission if Intel omits the proposal 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 Intel relies.
We note that Intel did not file its statement of objections to including the
proposal in its proxy materials at least 80 days before the date on which it
will file definitive proxy materials as required under rule 14a-8(j). Noting the
circumstances of the delay, we hereby waive the 80-day requirement.
Sincerely, /s/
Keir Devon Gumbs
Special Counsel
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