No-Act: Kerr-McGee 3.15.04

Company Name: Kerr-McGee Corp.
Public Availability Date: March 15, 2004

Document Sections:

INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER

[INQUIRY LETTER]

January 6, 2004

BY HAND DELIVERY

Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Kerr-McGee CorporationShareholder Proposal of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund

Ladies and Gentlemen:

This letter is to inform you of the intention of our client, Kerr-McGee Corporation ("Kerr-McGee" or the "Company"), to omit from its proxy statement and form of proxy for its 2004 Annual Meeting of Stockholders (collectively, the "Proxy Materials") a shareholder proposal (the "Proposal") and statement in support thereof (the "Supporting Statement") received from Mr. Kenneth B. Sylvester, on behalf of Mr. William C. Thompson, Jr., Comptroller of the City of New York and custodian and trustee of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund (the "Proponent"). The Proposal and Supporting Statement, which the Proponent delivered to the Company by letter dated December 4, 2003, are attached hereto as Exhibit A.

As required in Rule 14a-8(j) under the Securities Exchange Act of 1934 (the "Exchange Act"), we are enclosing six (6) copies of this letter and its attachment. Also, we are mailing a copy of this letter and its attachment on this date to the Proponent, informing it of the Company's intention to omit the Proposal and Supporting Statement from the Proxy Materials. The Company expects to file its definitive Proxy Materials on or after March 26, 2004. Accordingly, as provided in Rule 14a-8(j), this letter is being submitted to the Securities and Exchange Commission (the "Commission") no less than 80 calendar days before the Company files its definitive Proxy Materials with the Commission.

THE PROPOSAL

The Proposal states:

WHEREAS, the board of directors is meant to be an independent body elected by shareholders and charged by law with the duty and authority to formulate and direct corporate policies, and

WHEREAS, in 2002, the Board of Directors of the New York Stock Exchange, recognizing the need to improve corporate governance, proposed a listing standard to empower non-management directors as a more effective check on management, and to facilitate direct communications between shareholders and the non-management directors; and

WHEREAS, in an August 8, 2003, release pertaining, in part, to disclosure of companies' procedures for shareholder communications with the directors, the Securities and Exchange Commission stated that "Providing security holders with disclosure about the process for communicating with board members would improve the transparency of board operations, as well as security holder understanding of the companies in which they invest;"

WHEREAS, a January 1994 study entitled: Improving Communications Between Corporations and Shareholders: Overall Findings and Recommendations, prepared on behalf the New Foundations Working Group, New Foundations Center for Business and Government, John F. Kennedy School of Government, Harvard University, recommended several mechanisms for direct communications between directors and shareholders. Among the recommendations were:

Regular meetings with groups of shareholders and selected board members

Meetings between large shareholders and the full board of directors

WHEREAS, we believe that the creation of a means for direct communications on corporate governance matters between shareholders and the non-management directors would benefit the company through constructive discussions of perspectives, enhanced understanding, valuable feedback, and the fostering of meaningful links between directors and the shareholders by whom they are elected;

NOW, THEREFORE, BE IT RESOLVED: that the shareholders request the board of directors to establish an Office of the Board of Directors to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders, based on the standard proposed by the New York Stock Exchange Board of Directors. The office shall report directly to a committee of the non-management directors.

SUMMARY OF REASONS FOR EXCLUSION

We believe that the Company may properly exclude the Proposal and the Supporting Statement from the Proxy Materials pursuant to the following rules:

I. Rule 14a-8(i)(7), because the Proposal deals with matters relating to the Company's ordinary business operations;

II. Rule 14a-8(i)(10), because the Company has already substantially implemented the Proposal; and

III. Rule 14a-8(i)(3), because the Proposal and Supporting Statement are false and misleading in violation of the proxy rules.

On behalf of our client, we hereby respectfully request that the staff of the Division of Corporation Finance (the "Staff") concur in our view that the Proposal and Supporting Statement may be excluded from the Proxy Materials on these bases, as discussed in greater detail below.

EXPLANATION OF REASONS FOR EXCLUSION

I. The Proposal deals with matters relating to the Company's ordinary business operations. Accordingly, the Company may exclude the Proposal pursuant to Rule 14-8(i)(7).

The Proposal may be properly omitted pursuant to Rule 14a-8(i)(7) because the Proposal encompasses matters relating to the Company's ordinary business operations. Specifically, the Proposal seeks the establishment of an Office of the Board of Directors "to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders" and requests that the Office of the Board of Directors "report directly to a committee of the non-management directors."

Rule 14a-8(i)(7) permits the omission of shareholder proposals dealing with matters relating to the Company's "ordinary business" operations. According to the Commission's release accompanying 1998 amendments to Rule 14a-8, the underlying policy of the ordinary business exclusion is "to confine the resolution of ordinary business problems to management and the board of directors, since it is impracticable for shareholders to decide how to solve such problems at an annual meeting." See Release No. 34-40018 (May 21, 1998) (the "1998 Release"). As noted in the 1998 Release, there are two central considerations that guide the determination of whether a proposal relates to a company's ordinary business operations. The first consideration is the subject matter of the proposal. The 1998 Release contemplated that "certain tasks are so fundamental to management's ability to run a company on a day-to-day basis" that they are not proper subjects for shareholder proposals. The second consideration set forth in the 1998 Release is "the degree to which the proposal seeks to `micro-manage' the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed decision."

A. The Proposal requests that the Company comply with a New York Stock Exchange listing standard.

In essence, the Proposal requests that the Company establish an Office of the Board of Directors to comply with a listing standard of the New York Stock Exchange (the "NYSE") requiring companies to disclose a method for interested parties to communicate with non-management directors. As discussed below, the Staff has frequently concluded that proposals relating to compliance with rules and regulations involve ordinary business and therefore are properly excludable under Rule 14a-8-(i)(7).

On November 4, 2003, the Commission approved the changes proposed by the NYSE to the NYSE Listed Company Manual, including the standard discussed in the Proposal, Section 303A.03 (stating that "[i]n order that interested parties may be able to make their concerns known to the non-management directors, a company must disclose a method for such parties to communicate directly with the presiding director or with the non-management directors as a group"). See Release 34-48745 (Nov. 4, 2003). The Company, as a company with securities listed on the NYSE, must comply with the corporate governance standards of Section 303A, including the required disclosure of a method for interested parties to communicate directly with non-management directors, by no later than the date of its 2004 Annual Meeting of Stockholders. Commentary to NYSE Listed Company Manual, Section 303A.00. The listing standard does not, however, require subject companies to implement or establish any specific means or method for interested parties to communicate with management directors. Instead, the NYSE Listed Company Manual contemplates that companies may implement the standard in a number of ways, noting: "[c]ompanies may, if they wish, utilize for this purpose the same procedures they have established to comply with the requirement of Rule 10A-3(b)(3) under the Exchange Act..." Commentary to NYSE Listed Company Manual, Section 303A.00. The Company's compliance with this listing requirement and the manner in which the Company implements the listing requirement are part of the Company's day-to-day business operations.1

The Staff has consistently declined to recommend enforcement action when a company omits a proposal relating to such company's compliance with rules, regulations or other requirements. In Seaboard Corporation (Mar. 3, 2003), the Staff granted no-action relief to a company seeking to exclude a proposal requesting that the board of directors review the company's policies regarding the use of antibiotics in its facilities and those of its suppliers and prepare a report based on certain matters raised in the proposal. In relying on Rule 14a-8(i)(7), Seaboard Corporation noted that federal, state and local authorities regulated its use of antibiotics and that compliance with such regulations constituted a part of the day-to-day business of the company. See also Hormel Foods Corporation (Nov. 19, 2002) (allowing a company to exclude an identical proposal on the same basis). In numerous other instances, the Staff has also concluded that proposals related to compliance with government statutes and regulations involve ordinary business and therefore are excludable under Rule 14a-8(i)(7). See, e.g., Willamette Industries, Inc. (Mar. 20, 2001) (proposal requesting the compilation of an annual report detailing the company's environmental compliance, individual compliance responsibility and financial impact of compliance could be omitted in reliance on Rule 14a-8(i)(7) because the subject of the report "(i.e., evaluation of risk)" related to ordinary business); Allstate Corporation (Feb. 16, 1999) (allowing the exclusion of a proposal requesting the creation of an independent committee to prepare a report on alleged illegal activity by the company); and Duke Power Company (Feb. 1, 1988) (concluding that a proposal requiring company to prepare a report detailing its environmental protection and pollution control activities was excludable as relating to ordinary business activities).

The Proposal requests the implementation of a specific meansthe establishment of an Office of the Board of Directorsto enable the Company to comply with a listing standard to which it is subject. The Staff has frequently stated that compliance with applicable laws, rules and regulations constitutes the ordinary business of a corporation. Therefore, the method utilized by the Company to comply with the NYSE listing standard referenced in the Proposal relates to ordinary business. As a result, we believe that the Proposal is properly excludable under Rule 14a-8(i)(7).

B. The Proposal does not limit the nature of communications to other than ordinary business.

The Proposal indicates that its main objective is to promote communication on corporate governance matters between the Company's non-management directors and its stockholders. As more fully explained below, there is strong precedent that the Proposal is excludable under Rule 14a-8(i)(7) because it does not limit the nature of communications to other than ordinary business.

The Staff recently explained this distinction in its report entitled "Review of the Proxy Process Regarding the Nomination and Election of Directors" (the "Proxy Process Report"). See http://www.sec.gov/news/studies/proxyreport.pdf (July 15, 2003). Commenting on proposals similar to the Proposal here, the Proxy Process Report cited the Advanced Fibre Communications (Mar. 10, 2003) and PeopleSoft, Inc. (Mar. 14, 2003) letters as instances in which the Staff "granted no-action positions regarding exclusion of proposals as ordinary business because the proposals "did not limit the nature of the communications to other than ordinary business." Proxy Process Report at note 55.2 In two subsequent letters, the Staff has continued to apply this bright-line standard in allowing companies to exclude identical proposals requesting the establishment of an Office of the Board of Directors to enable direct communications between stockholders and non-management directors. See CheckFree Corporation (Sept. 8, 2003) (allowing the company to exclude the proposal as relating to its "ordinary business operations (i.e. procedures for enabling shareholder communications on matters relating to ordinary business)") and Comverse Technology (Sept. 8, 2003) (reaching the same conclusion for an identical proposal). Each of these four proposals were sponsored by the Proponent.

The Proposal here is extremely similar to the shareholder proposals submitted by the Proponent to Advanced Fibre Communications, PeopleSoft, CheckFree Corporation and Comverse Technology. In an attempt to distinguish the Proposal from such proposals, the Proponent has added a single phrase to the "resolved" clausethe Proposal requests the establishment of an Office of the Board of Directors to enable direct communications on corporate governance matters between stockholders and non-management directors.

Restricting direct communications to "corporate governance matters" does not, however, sufficiently limit the nature of the communications to other than ordinary business. Any actions of the board of directors, the governing body of the corporation, must necessarily constitute "corporate governance matters." Such actions or "corporate governance matters" can include the following: the approval of equity or cash compensation plans for general employees, the development of a code of ethics for the corporation and the implementation of a share repurchase program. The Staff has found proposals regarding each of the foregoing issues to be excludable under Rule 14a-8(i)(7) as ordinary business operations. See Staff Legal Bulletin No. 14A, published on July 12, 2002 ("SLB 14A") (noting the Staff's agreement that companies "may exclude proposals that relate to general employee compensation matters in reliance on Rule 14a-8(i)(7)"); see also Lucent Technologies Inc. (Nov. 26, 2003) (allowing company to exclude, pursuant to Rule 14a-8(i)(7), a proposal restricting pay increases to "management"), Costco Wholesale Corporation (Dec. 11, 2003) (permitting company to exclude, under Rule 14a-8(i)(7), a proposal requesting the development of a corporate code of ethics) and Medstone International, Inc. (May 1, 2003) (allowing company to exclude, in reliance on Rule 14a-8(i)(7), a proposal mandating a share repurchase program). As such, the restriction on communications to "corporate governance matters" is insufficient to satisfy the standard utilized by the Staffthat the proposal limit the nature of communications to other than ordinary business.

Strengthening this conclusion are the Proponent's letters to the Staff regarding the Proponent's proposals to CheckFree Corporation and Comverse Technology, Inc. In each, the Proponent acknowledged that the proposal submitted to the company "relate[d] only to communications on matters of corporate governance." Thus, the addition of the phrase "on corporate governance matters" is not a substantive change that distinguishes the Proposal here from the proposals the Staff found excludable in the CheckFree Corporation and the Comverse Technology letters.

The Staff's position in the Kroger, Advanced Fibre Communications, PeopleSoft, CheckFree Corporation and Comverse Technology letters is supported by prior precedent. Specifically, the Staff has taken the position that, where part of a shareholder proposal relates to ordinary business, the proposal may be excluded in its entirety even though it may address matters outside the scope of ordinary business. See, e.g., E*Trade Group, Inc. (Oct. 31, 2000) (granting no-action relief to exclude an entire proposal where two out of four of the mechanisms suggested therein implicated ordinary business matters) and Associated Estates Realty Corp. (Mar. 23, 2000) (granting no-action relief for a proposal relating to both officer compensation and the adoption of a business plan to increase shareholder value as it related to the disposition of non-core businesses and assets, an ordinary business matter). See also ConAgra Foods, Inc. (Jul. 19, 2002); M&F Worldwide Corp. (Mar. 29, 2000); The Warnaco Group, Inc. (Mar. 12, 1999); Wal-Mart Stores, Inc. (Mar. 15, 1999); Kmart Corporation (Mar. 12, 1999) and Z-Seven Fund, Inc. (Nov. 3, 1999).

For these reasons, we believe the Proposal is properly excludable under Rule 14a-8(i)(7).

II. The Company has already substantially implemented the Proposal. Accordingly, the Company may exclude the Proposal pursuant to Rule 14a-8(i)(10).

The Company may exclude the Proposal under Rule 14a-8(i)(10) because the Company has already substantially implemented the Proposal. "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. (March 28, 1991). As discussed below, the Company already maintains several avenues of communication between the Board of Directors and the Company's stockholders. Additionally, under recently approved amendments to the listing standards of the NYSE, on which the Company's securities are traded, the Company must comply with the listing standard discussed in the Proposal by no later than the date of the Company's 2004 Annual Meeting of Stockholders.

The Company's stockholders currently may communicate both directly and indirectly with the non-management members of the Company's Board of Directors in a variety of ways, including via a toll-free hotline administered by the Company, via the Company's corporate secretary and at the Annual Meeting of Stockholders. Stockholders also may write non-management members of the Board of Directors in care of the Company using the Company's corporate address, which may be obtained from the Company's corporate website. Thus, as requested by the Proposal, the Company already "enables direct communications on corporate governance matters."

Even if the Staff determines that the Company has not yet substantially implemented the Proposal, the Company will necessarily implement the Proposal by the time of its 2004 Annual Meeting of Stockholders through the Company's compliance with listing standards imposed by the NYSE. The Proposal requests the establishment of "an Office of the Board of Directors to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders, based on the standard proposed by the New York Stock Exchange Board of Directors." (emphasis added). As discussed in the preceding section, the Commission has approved the changes proposed by the NYSE to the NYSE Listed Company Manual, including the standard discussed in the Proposal. See Release 34-48745 (Nov. 4, 2003). Thus, the Company must comply with the corporate governance standards of Section 303A by no later than the date of its 2004 Annual Meeting of Stockholders and must "disclose a method for such parties to communicate directly with the presiding director or with the non-management directors as a group" in accordance with the requirements of Section 303A.03. Such compliance with the NYSE requirement will necessarily cause the Company to implement substantially the Proposal's request "to enable direct communications... between non-management directors and shareholders, based upon the standard proposed by the New York Stock Exchange's Board of Directors." Further, Proponent, in defending a nearly identical proposal in Comverse Technology, acknowledged that "if the NYSE Rules were binding on [Comverse Technology, Inc.], there would be no need for the [p]roposal." In this case, the NYSE listing standard discussed in the Proposal is binding on the Company, and, in the Proponent's own words, there is "no need for the Proposal" because the Company will implement the listing standard prior to its 2004 Annual Meeting of Stockholders.

In light of the foregoing, we believe that it is clear that the Company's existing policies, practices and procedures with respect to stockholder communications are consistent with the program described in the Proposal, and the Company has substantially implemented it. See Cisco Systems, Inc. (August 11, 2003) and Texaco, Inc. (March 28, 1991). In the alternative, the Proposal is moot because the Company is required by the listing standards of the NYSE to implement substantially the Proposal by no later than the date of its 2004 Annual Meeting of Stockholders. Accordingly, we believe the Proposal may properly be excluded from the Company's Proxy Materials pursuant to Rule 14a-8(i)(10).

III. The Proposal and Supporting Statement contain materially false and misleading statements. Accordingly, the Company may exclude the Proposal and the Supporting Statement pursuant to Rule 14a-8(i)(3).

The Company may exclude the Proposal and Supporting Statement in their entirety under Rule 14a-8(i)(3) because the Proposal and Supporting Statement contain numerous false and misleading statements. Pursuant to Rule 14a-8(i)(3), a company may exclude a shareholder proposal if the proposal or supporting statement would violate any of the Commission's proxy rules, including Rule 14a-9, which prohibits materially false or misleading statements in proxy soliciting materials. The Staff has allowed companies to exclude portions of proposals that contain false or misleading statements, cast a proponent's opinion as a statement of fact or fail to document assertions of fact appropriately. See Dillard's, Inc. (March 10, 2003) and Fluor Corporation (March 10, 2003). In addition, the Staff has consistently taken the position that vague and indefinite shareholder proposals are also excludable under Rule 14-8(i)(3) as inherently misleading. See, e.g., General Electric Company (February 5, 2003) (permitting exclusion of a proposal requesting that the board of directors seek shareholder approval for compensation of senior executives and board members where the company argued that "neither the share owners nor the Company's Board would be able to determine what action or measures would be taken if the proposal were implemented") and The Proctor & Gamble Company (October 25, 2002) (permitting omission of a proposal requesting that the board of directors create a specific type of fund as vague and indefinite where the company argued that neither the shareholders nor the company would know how to implement the proposal). A proposal is sufficiently vague, indefinite and misleading to justify exclusion where "neither the shareholders voting on the proposal, nor the company in implementing the proposal (if adopted), would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires." Philadelphia Electric Co. (July 30, 1992) (permitting the exclusion of a proposal that related to the election of a committee of small shareholders because it was vague and indefinite). Staff Legal Bulletin No. 14, published on July 13, 2001 ("SLB 14") states that "when a proposal and supporting statement will require detailed and extensive editing in order to bring them into compliance with proxy rules, [the Staff] may find it appropriate for companies to exclude the entire proposal, supporting statement, or both, as materially false or misleading."

As discussed below, the Proposal and Supporting Statement contain false and misleading statements that will require significant editing to comply with proxy rules. Thus, in accordance with SLB 14, we believe that the Company may exclude the Proposal and Supporting Statement in their entirety. In the alternative, if the Staff is unable to concur in our conclusion that the Proposal and Supporting Statement may be excluded in their entirety because of the numerous false and misleading statements, we respectfully request that the Staff recommend exclusion and/or revision of the statements discussed below.

Specifically, the Company finds the following portions of the Proposal and Supporting Statement to be objectionable:

(A) The ProposalFinal Paragraph; and

(B) Supporting StatementFirst, Second and Third Sentences.

A. The Proposal is false and misleading because it suggests that establishing an "Office of the Board of Directors" is required under the "standard proposed by the New York Stock Exchange Board of Directors," that the NYSE standard has not been approved and that compliance with the NYSE standard is optional.

The Proposal incorrectly suggests that establishing an "Office of the Board of Directors" is required in order to implement Section 303A.03 of the NYSE Listed Company Manual. Such references must be revised under Rule 14a-8(i)(3) in order to prevent the Proposal from being false and misleading. The Proposal specifically requests that "the board of directors ... establish an Office of the Board of Directors to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders, based on the standard proposed by the New York Stock Exchange Board of Directors" (emphasis added). This statement strongly suggests that establishing an Office of the Board of Directors is "based on the standard proposed by" the NYSE and, therefore, required under such standards. In fact, Section 303A.03 provides that "a company must disclose a method for such parties to communicate directly with the presiding director or with the non-management directors as a group" (emphasis added). NYSE Listed Company Manual, Section 303A.03. Further, if the stockholders did adopt the Proposal, it is unclear how the Company could implement the Proposal, which requests the establishment of an Office of the Board of Directors based on an NYSE listing standardan NYSE listing standard that does not even mention such an office.

Additionally, the Proposal requests that the board of directors base the implementation of the Proposal on the "standard proposed by the New York Stock Exchange Board of Directors." The fact that the Proposal references the "standard proposed by" the NYSE implies that the Commission has not yet approved the "proposed" standard and that the NYSE has not adopted the proposed change to the NYSE Listed Company Manual. In fact, as discussed in greater detail in the previous sections, both of these implications are falsethe Commission has approved the NYSE proposed rule change and the NYSE has revised the NYSE Listed Company Manual accordingly. See Release 34-48745 (Nov. 4, 2003) and NYSE Listed Company Manual, Section 303A.00. The Proposal is further misleading to stockholders of the Company because it fails to mention that, as a company with securities listed on the NYSE, the Company must implement the approved standard. A stockholder of the Company, in reviewing the Proposal and deciding how to vote, could interpret the Proposal as a request by the stockholders to implement an optional standard, which, for reasons previously discussed, is untrue.

We request the Staff's agreement that the Proposal may be excluded unless it is revised to eliminate false and misleading suggestions that (i) the "standard" set forth in the NYSE Listed Company Manual requires the establishment of an Office of the Board of Directors, (ii) the Commission has not approved the "proposed standard," (iii) the NYSE has not implemented the standard and (iv) the Company's compliance with such standard is optional.

B. The first, second and third sentences of the Supporting Statement are false and misleading, cast the Proponent's opinion as a statement of fact or fail to document assertions of fact appropriately.

The first three sentences of the supporting statement are false and misleading in violation of the Commission's proxy rules. The first sentence states that investor confidence "has been deeply shaken by corporate malfeasance at companies, such as Enron and WorldCom." This sentence is false and misleading for at least two reasons. First, it casts the Proponent's opinionthat investor confidence "has been deeply shaken" as a statement of fact. The Staff often allows companies to exclude portions of proposals containing such opinions cast as facts unless the proponent revises the proposal to correct such misleading statements. See, e.g., Fluor Corporation, (Mar. 10, 2003), Hewlett-Packard Company (Dec. 27, 2002), Tyco International Ltd. (Dec. 16, 2002) and AmSouth Bancorporation (Feb. 17, 2002). Alternatively, the Proponent has failed to document the source of this information. The second misleading aspect of the sentence is the implication of the sentencethat the Company is in some way connected to the repugnant corporate malfeasance of either Enron or WorldCom.

The second sentence, which provides "[s]hareholders have suffered loss of their investments estimated in the billions of dollars, and many investors have withdrawn from the market," is also misleading in a number of respects. It makes no attempt to clarify which stockholders have lost money or during which period the alleged loss occurred. Moreover, the sentence, to the extent it is attempting to imply some connection to the Company, is false on its face. Lastly, the sentence provides no citation of authority to substantiate either the claim as to lost investments or the assertion that "many investors have withdrawn from the market." While one could presumably speculate that the sentence is true as to some stockholders, it is hardly likely to be true for all. The Staff has frequently required proponents to revise unsubstantiated claims in a proposal or supporting statement. See, e.g., Dillard's, Inc. (Mar. 10, 2003), Fluor Corporation, (Mar. 10, 2003), Hewlett-Packard Company (Dec. 27, 2002), Tyco International Ltd. (Dec. 16, 2002) and AmSouth Bancorporation (Feb. 17, 2002).

Finally, the third sentence is misleading because it implies that the confidence of the Company's stockholders in the Company is eroding. The third sentence states, in relevant part, "we are concerned about the potential negative impact of the continuing erosion of investor confidence on the long-term interests of the Company and the shareholders." The sentence implies that the Company has experienced and is currently experiencing an erosion of stockholder confidence, but the statement provides no proof of such erosion of confidence. As previously noted, the Staff has often allowed companies to exclude proposals containing such undocumented facts unless the proponent substantiated such claims. See, e.g., Dillard's, Inc. (Mar. 10, 2003); Fluor Corporation, (Mar. 10, 2003); Hewlett-Packard Company (Dec. 27, 2002); Tyco International Ltd. (Dec. 16, 2002); and AmSouth Bancorporation (Feb. 17, 2002).

In light of the foregoing, we believe that the false and misleading, vague and indefinite statements contained in the Proposal and Supporting Statement require detailed and extensive editing in order to bring them into compliance with proxy rules such that the Company may properly exclude the entire Proposal and Supporting Statement under Rule 14a-8(i)(3).

* * * *

For the foregoing reasons, we believe that the Proposal may be omitted from the Proxy Materials and respectfully request that the Staff confirm that it will not recommend any enforcement action if the Proposal and the Supporting Statement or portions thereof are excluded. The Company anticipates that its Proxy Materials will be finalized for filing on or about March 26, 2004. Accordingly, your prompt review of this matter would be greatly appreciated. Should you have any questions regarding this matter, please do not hesitate to contact the undersigned at (202) 662-5128.

Very truly yours,

/s/

David B.H. Martin

Attachment

cc: Mr. Gregory F. Pilcher
Mr. Kenneth B. Sylvester, Assistant Comptroller for Pension Policy

-----FOOTNOTES-----

1 We further note that this is the first year in which the Company is subject to the new listing standards. As such, the Company has not yet had the opportunity to select a method for interested parties to communicate with non-management directors, and the Company's stockholders have not had the corresponding opportunity to evaluate any action the Company may take with respect to implementing such standard.

2 In contrast, in The Kroger Co. (Apr. 11, 2003), the Staff denied a no-action request to exclude a shareholder proposal seeking the creation of a shareholder committee to communicate with the Kroger board about the subject matter of shareholder proposals approved but not implemented by the company. In a footnote to the Proxy Process Report, the Staff noted that "the Division did not grant a no-action position to Kroger regarding exclusion of the proposal under the ordinary business exclusion, as the proposal limited the nature of the communications to other than ordinary business" (emphasis added).

[INQUIRY LETTER]

December 4, 2003

Mr. Gregory Pilcher
Sr. VP, General Counsel and Secretary
Kerr-McGee Corporation
123 Robert S. Kerr Avenue
Oklahoma City, OK 73125

Dear Mr. Pilcher:

I write to you on behalf of the Comptroller of the City of New York, William C. Thompson, Jr. The Comptroller is the custodian and a trustee of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund, and the New York City Fire Department Pension Fund (the "Systems"). The Systems' boards of trustees have authorized the Comptroller to inform you of their intention to present the enclosed proposal for the consideration and approval of stockholders at the next annual meeting of Kerr-McGee Corporation.

Recent reports of corporate wrongdoing and corporate governance failures have severely undermined public confidence in the equity markets, and have resulted in the loss to investors of hundreds of millions of dollars. Recognizing the urgent need to restore investor confidence in the stock markets, the United States Congress passed the Sarbanes-Oxley Act of 2002; the Securities and Exchange Commission (SEC) adopted a rule: Disclosure Regarding Nominating Committee Functions and Communications between Security Holders and Boards of Directors, and recently approved final corporate governance rules of the New York Stock Exchange (NYSE). We are pleased that the NYSE corporate governance rules include a requirement that companies must disclose a method for interested parties to communicate directly with the presiding director of executives sessions or with non-management directors as a group.

The Systems believe that the creation of a means for direct communications between shareholders and the non-management directors would benefit the company through constructive discussions of perspectives, enhanced understanding, valuable feedback, and the fostering of meaningful links between directors and the shareholders.

Therefore, we offer the enclosed proposal for shareholders to consider and approve at the next annual meeting of the company. It is submitted to you in accordance with Rule 14a-8 of the Securities Exchange Act of 1934, and I ask that it be included in the company's proxy statement.

Letters from Citibank, certifying the systems' ownership of shares of Kerr-McGee Corporation common stock, are enclosed. Each system intends to continue to hold at least $2,000 worth of these securities through the date of the next annual meeting.

We would be happy to discuss this initiative with you. Should the board of directors decide to endorse its provisions as company policy, the Systems will withdraw the proposal from consideration at the annual meeting. If you have any questions on this matter, please feel free to contact me at (212) 669-2013.

Very truly yours,

/s/

Kenneth B. Sylvester

Enclosures

[APPENDIX]

SHAREHOLDER PROPOSAL CREATION OF A FORMAL MECHANISM FOR DIALOGUE BETWEEN INDEPENDENT DIRECTORS AND SHAREHOLDERS

Submitted on behalf of the New York City Pension Funds by William C. Thompson, Jr., Comptroller of the City of New York.

WHEREAS, the board of directors is meant to be an independent body elected by shareholders and charged by law with the duty and authority to formulate and direct corporate policies, and

WHEREAS, a January 1994 study entitled: Improving Communications Between Corporations and Shareholders: Overall Findings and Recommendations, prepared on behalf the New Foundations Working Group, John F. Kennedy School of Government, Harvard University, recommended several mechanisms for direct communications between directors and shareholders. Among the recommendations were:

Regular meetings with groups of shareholders and selected board members

Meetings between large shareholders and the full board of directors

STATEMENT OF SUPPORT

The confidence of investors in the U.S. capital markets has been deeply shaken by corporate malfeasance at companies, such as Enron and World Com. Shareholders have suffered loss of their investments estimated in the billions of dollars, and many investors have withdrawn from the stock markets. As long-term institutional investors, we are concerned about the potential negative impact of the continuing erosion of investor confidence on the long-term interests of the company and the shareholders. This proposal is intended to improve investor confidence by improving director and shareholder communications on corporate governance matters, and strengthening the relationship between the Board of Directors and the shareholders.

[INQUIRY LETTER]

January 29, 2004

BY FAX AND EXPRESS MAIL

Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Kerr-McGee Corporation; Shareholder Proposal submitted by the New York City Pension Funds

To Whom It May Concern:

I write on behalf of the New York City Pension Funds (the "Funds"), in formal response to the January 6, 2004 letter sent to the Securities and Exchange Commission (the "Commission") by the firm of Covington & Burling on behalf of Kerr-McGee Corporation (the "Company"). In that letter, the Company contends that the Funds' shareholder proposal relating to direct shareholder communications with independent directors of the Company (the "Proposal") may be omitted from the Company's 2004 proxy statement and form of proxy under Rule 14a-8 under the Securities Exchange Act of 1934. I have reviewed the Proposal, as well as January 6, 2004 letter. Based upon that review, as well as a review of Rule 14a-8, it is my opinion that the Proposal may not be omitted from the Company's 2004 Proxy Materials. Accordingly, the Funds respectfully request that the Commission deny the relief that the Company seeks.

I. The Proposal

The Proposal begins by accurately summarizing listing standards that had been proposed by the New York Stock Exchange ("NYSE") as to the role of independent directors, and shareholder communications with them. It then references a 1994 academic study on the subject, and mentions briefly the policy issues supporting direct shareholder communications with non-management directors. The `resolved' clause consists of one item:

NOW, THEREFORE, BE IT RESOLVED: that the shareholders request the Board of Directors to establish an Office of the Board of Directors to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders, based upon the applicable standard adopted by the New York Stock Exchange Board of Directors. The office shall report directly to a committee of the non-management directors.

(Emphasis added).

The Funds' Proposal is thus focused on facilitating shareholder communications with independent directors on matters strictly limited to corporate governance. Indeed, the requested `Office of the Board of Directors' could properly decline to forward communications from shareholders that dealt instead with day-to-day business matters.

II. The Company's Opposition and the Funds' Response

In its letter of January 6, 2004, the Company requested that the Staff of the Division of Corporation Finance (the "Staff") not recommend enforcement action to the Commission if the Company omits the Proposal under: Rule 14a-8(i)(7) (ordinary business); Rule 14a-8(i)(10) (substantially implemented); and Rule 14a-8(i)(3) (violative of proxy rules). Pursuant to Rule 14a-8(g), the Company bears the burden of proving that one or more of these exclusions apply. As detailed below, the Company has failed to meet that burden with respect to any of these exclusions and its request for no-action relief should accordingly be denied.

A. The Proposal Is Not Excludable as Ordinary Business

The Funds have previously presented to the Division their view that the SEC's Releases and recent public policy developments make it clear that companies cannot exclude, as "ordinary business" under Rule 14a-8(i)(7), the Funds' proposals that there be direct communications with independent directors. The important role of such communications in improving corporate governance was most recently highlighted by the Commission in its November 24, 2003 Final Rule: "Disclosure Regarding Nominating Committee Functions and Communications between Security Holders and Boards of Directors," Release No. 34-48825.

But rather than repeat those arguments at length, we instead emphasize that here, the Funds' current form of Proposal, in the heart of the Resolved clause, expressly limits the shareholder communications to those "on corporate governance matters." We understand that the absence of such an express limitation in the Resolved clause has, in the view of Division Staff, been the crucial element in their prior decisions to issue no-action letters during 2003 with respect to the Funds' shareholder communication proposals in PeopleSoft, Advanced Fiber Communications, Comverse Technology and CheckFree. The Funds have respectfully differed with the Staff's determinations in those matters, and have appealed them. Nonetheless, the Funds specifically amended the Resolved clause in the current Proposal to accommodate the Staff's previously expressed concerns.

We note that subsequent to the PeopleSoft and Advanced Fiber Communications no-action letters, the Staff did decline to issue a no-action letter in Kroger Co. (April 11, 2003. The Kroger proposal related to shareholder communications with independent directors as to shareholder proposals that had obtained the vote of a majority of shareholders, but upon which the Board had not acted. Subsequently, the Staff's July 15, 2003 Report, "Review of the Proxy Process Regarding the Nomination and Election of Directors," drew a distinction that while the Kroger proposal was limited to matters of corporate governance, the Advanced Fiber and PeopleSoft proposals "did not limit the nature of the communications to other than ordinary business." Id. at p. 25, fn. 53, 55. With the limitation to "corporate governance matters" now manifest on the face of the Proposal's Resolved clause, the same result as in Kroger should obtain here, regardless of the outcome of the pending appeals.

Nor is it ordinary business for the Funds to suggest a means by which the NYSE's new listing standards as to shareholder communications may best be implemented. The Company drops into a footnote in its letter the critical admission that "the Company has not yet had the opportunity to select a method for interested parties to communicate with non-management directors ..." (pp. 4-5, fn. 1). That being the case, a non-binding suggestion as to how the Board, starting from a blank slate, might implement a brand new corporate governance requirement, cannot possibly interfere with the Board's prerogative to manage ordinary business of the Company. None of the no-action letters cited by the Company involved a corporate governance measure.

The Funds' Proposal is not ordinary business, and the Company's arguments under 14a-8(i)(7) should be rejected.

B. The Proposal has not been substantially implemented by the Company.

The Company's claim that it has "substantially implemented" direct communications with the independent directors is not based upon a single action the Company has taken. Rather, it is based upon no more than the intention that the Company will implement something, as yet unknown, in the future. The Company cites no case standing for the proposition that having so far done nothing whatsoever to implement a proposal is the same as having "substantially implemented" the proposal.

As the Company has not implemented the Proposal, substantially or otherwise, in any way, the Company's argument under 14a-8(i)(10) fails.

C. The Proposal and Statement in Support are not false and misleading.

The Proposal on its face rebuts the Company's claims that it is falsely states that an Office of the Board of Directors is required under the NYSE Rules. The Proposal only asks that such an office be set up based on the "standard proposed" by the NYSE Board. The Company does not-deny that the NYSE's original proposal suggested such an Office. As such, the statement is true; indeed, the simple addition of the word "originally" would wholly moot the Company's objection. The Company's next contention, that the Proposal is false in referring to that standard as "proposed," cannot stand, as the Company had just finished arguing that an Office of the Board of Directors was merely proposed and not adopted.

Finally, the Company strains good faith in its assertion that the Proposal is false in stating that such scandals as Enron and WorldCom scandals shook shareholders' confidence or cost them billions. The Company also lacks any basis for asserting that the Proposal blames the Company for Enron or WorldCom or claims that confidence in the Company is eroding. There is no such statement or suggestion anywhere in the Proposal.

The Proposal and Statement in Support are not misleading, and the Proposal may not be omitted under Rule 14a-8(i)(3).

III. Conclusion

For the reasons set forth herein, the Funds respectfully submit that the Company's request for "no-action" relief should be denied. Should you have any questions or require any additional information, please do not hesitate to contact me at the number listed above.

Thank you for your consideration.

Sincerely,

/s/

Richard S. Simon
Deputy General Counsel

Cc: David B.H. Martin, Esq.
Covington & Burling

[INQUIRY LETTER]

February 10, 2004

BY HAND DELIVERY

Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Ladies and Gentlemen:

On behalf of Kerr-McGee Corporation ("Kerr-McGee" or the "Company"), we hereby supplement our earlier letter dated January 6, 2004 relating to a shareholder proposal (the "Proposal") and statement in support thereof (the "Supporting Statement") received from Mr. Kenneth R. Sylvester, on behalf of Mr. William C. Thompson, Jr., Comptroller of the City of New York and custodian and trustee of the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund (the "Proponent"). In that letter, we requested confirmation that the staff (the "Staff") of the U.S. Securities and Exchange Commission would not recommend enforcement action if, in reliance upon Rule 14a-8(i), the Company omitted the Proposal from its proxy statement and form of proxy for its 2004 Annual Meeting of Stockholders (collectively, the "Proxy Materials"). By letter to the Staff dated January 29, 2004 (the "Proponent's Letter"), the Proponent responded to our January 6, 2004 letter. This letter responds to the Proponent's Letter.

DISCUSSION

I. The Company has already substantially implemented the Proposal. Accordingly, the Company may exclude the proposal pursuant to Rule 14a-8(i)(10).

Summary

The Proposal requests that the Company's Board of Directors (the "Board") "establish an Office of the Board of Directors to enable direct communications on corporate governance matters, including meetings, between non-management directors and shareholders, based upon the applicable standard proposed1 by the New York Stock Exchange Board of Directors." The Proposal further requests that the office report directly to a committee of non-management directors. The Company has enabled direct communications by its stockholders through its use of a toll-free hotline and its Corporate Secretary's office for such purpose. The Company's means of enabling such communications is the exact method suggested by the "NYSE Listed Company Manual Section 303A Corporate Governance Listing Standards Frequently Asked Questions" (the "303A Report")2, dated as of January 29, 2004, which the NYSE issued to aid compliance with the standard requested by the Proposal. Thus, the Company has "enabled direct communications on corporate governance matters" between "non-management directors and shareholders, based upon the applicable standard proposed" and adopted "by the New York Stock Exchange Board of Directors." Additionally, the Company's Corporate Secretary reports directly to the Board, including the non-management directors, on all legitimate communications, including all communications concerning corporate governance matters, intended for the Board. In light of the fact that the Company has already implemented substantial measures to facilitate stockholder communications consistent with the recommendations of the Proposal, it is unclear what additional steps the Company could take to implement the Proposal, other than possibly adding "Office of the Board" to the Corporate Secretary's titles.

Discussion

Release No. 34-20091 (Aug. 16, 1983) (the "1983 Release") provides that a proposal may be excluded pursuant to Rule 14a-8(i)(10) in circumstances where it has been "substantially implemented by the issuer." The 1983 Release also provides that Rule 14a-8(i)(10) does not require the proposal to have been "fully effected." In determining whether a proposal has been substantially implemented, the company's policies, practices and procedures should "compare favorably with the guidelines of the proposal" and there is no need to have a precise implementation of the proposal. See Texaco, Inc. (Mar. 28, 1991); Cisco Systems, Inc. (Aug. 11, 2003). The Staff will consider a proposal to be substantially implemented under Rule 14a-8(i)(10) in cases where a company has already established procedures that relate to the subject matter of the proposal or in cases where the company has implemented the essential objectives of the proposal. See The Talbots Inc. (Apr. 5, 2002) (permitting the exclusion of a proposal that required the establishment of a code of corporate conduct regarding human rights because the company had an existing Standard for Business Practice and Code of Conduct); The Gap, Inc. (Mar. 16, 2001) (permitting the exclusion of a proposal that requested a report on child labor practices of the company's vendors because the company had already established a code of vendor conduct, monitored vendor compliance and published the related information); Kmart Corporation (Feb. 23, 2000); Nordstrom, Inc. (Feb. 8, 1995).

The Company's means of enabling direct communications to non-management directors complies with the standard proposed, and adopted, by the NYSE. Further, the use of the Corporate Secretary's office, which the Company implemented prior to the NYSE's issuance of the 303A Report, is a suggested method of the 303A Reportwhich the NYSE published to assist listed companies in complying with the new listing standardfor complying with the very standard suggested by the Proposal. The 303A Report specifically states that "[a]ny employee (including the Corporate Secretary or General Counsel) of the listed company can act as an agent for the non-management directors of the board in facilitating direct communications to the board." Thus, the NYSE has suggested using the very means utilized by the Company in implementing the new listing standards.4

As previously noted, the Company's policies, practices and procedures should "compare favorably with the guidelines of the proposal" for the Proposal to be properly excludable under Rule 14a-8(i)(10). Texaco, Inc. (Mar. 28, 1991). The Company's policies, practices and procedures have far exceeded this standard; in fact, the Company has already implemented virtually every aspect of the Proposal. First, the Board has created, in substance, the "Office of the Board" requested by the Proposal through its use of the Corporate Secretary's office for the purposes discussed in the Proposal. Second, the Company designated the Corporate Secretary's office and the toll-free hotline as methods to enable direct communications between the stockholders and non-management directors on corporate governance matters. Third, the NYSE has suggested utilizing the Corporate Secretary's office to implement the "standard proposed" and adopted "by the New York Stock Exchange Board of Directors." Finally, communications received via the toll-free hotline and via the Corporate Secretary's office are delivered to the Board, including the non-management directors. Thus, the Company's use of the Corporate Secretary's office and the toll-free hotline compare very favorably with the guidelines of the Proposal. As such, the Company has substantially implemented the Proposal, and the Company may exclude the Proposal pursuant to Rule 14a-8(i)(10).

II. The Proposal deals with matters relating to the Company's ordinary business operations. Accordingly, the Company may exclude the Proposal pursuant to Rule 14a-8(i)(7).

Rather than repeat the arguments from our January 6, 2004 letter, we will instead focus on specific points raised in the Proponent's Letter. As the Proponent acknowledges, the Staff has repeatedly allowed companies to exclude proposals almost identical to the Proposal. See Advanced Fibre Communications (Mar. 10, 2003), PeopleSoft, Inc. (Mar. 14, 2003), CheckFree Corporation (Sept. 8, 2003) and Comverse Technology (Sept. 8, 2003). In the Proponent's Letter, the Proponent attempts to distinguish the Proposal from the Advanced Fibre Communications, PeopleSoft, CheckFree and Comverse Technology proposals by the Proposal's express limitation on shareholder communications to "corporate governance matters." Proponent then cites the Staff's July 15, 2003 Report, "Review of the Proxy Process Regarding the Nomination and Election of Directors" (the "Proxy Process Report") for the proposition that proposals relating to shareholder communications, if limited to corporate governance matters, are not excludable as ordinary business. Specifically, Proponent states that the Proxy Process Report "drew a distinction that while the Kroger5 proposal was limited to matters of corporate governance, the Advanced Fiber [sic] and PeopleSoft proposals `did not limit the nature of the communications to other than ordinary business.'" The Proxy Process Report did not, however, draw the distinction noted by the Proponent. In fact, the Proxy Process Report merely stated that the Kroger proposal "limited the nature of the communications to other than ordinary business matters," and that the Advanced Fibre Communications and PeopleSoft proposals "did not limit the communications to other than ordinary business matters. See Proxy Process Report at p. 25, fn. 53, 55. The Proxy Process Report did not discuss the "corporate governance" limitation cited by the Proponent. As such, the Proposal's inclusion of the phrase "on corporate governance matters" does not dictate that "the same result as in Kroger should obtain here." Proponent's Letter, p. 3.

Additionally, the Proponent argues that "a non-binding suggestion as to how the Board, starting from a blank slate, might implement a brand new corporate governance requirement, cannot possibly interfere with the Board's prerogative to manage ordinary business of the Company." The "ordinary business" basis for excluding a shareholder proposal does not have an exception that requires a company to include a shareholder proposal that relates to "brand new" ordinary business. Thus, Proponent's "blank slate" argument is irrelevant to the Company's argument that the Proposal relates to ordinary business. In the alternative, if the Staff believes that a company's inaction with respect to the subject matter of a proposal is relevant for the purposes of the "ordinary business" basis for exclusion, the Company is not "starting from a blank slate." As discussed in the preceding section, the Company has taken several steps to comply with the new listing standards of the New York Stock Exchange (the "NYSE").

* * * *

For the foregoing reasons and the reasons set forth in our letter dated January 6, 2004, we believe that the Proposal may be omitted from the Proxy Materials and respectfully request that the Staff confirm that it will not recommend any enforcement action if the Proposal and the Supporting Statement or portions thereof are excluded. Should you have any questions regarding this matter, please do not hesitate to contact the undersigned at (202) 662-5128.

Very truly yours,

/s/

David B.H. Martin

Attachment

cc: Mr. Gregory F. Pilcher, General Counsel, Kerr-McGee Corporation

Mr. Richard S. Simon, Deputy General Counsel, The City of New York Office of the Comptroller

Mr. Kenneth B. Sylvester, Assistant Comptroller for Pension Policy, The City of New York Office of the Comptroller

-----FOOTNOTES-----

1 In Proponent's Letter, Proponent states that the Proposal requests that the Office of the Board be based on "the applicable standard adopted by the New York Stock Exchange Board of Directors." Proponent's Letter, p. 2 (emphasis added). The Proposal actually requests that the Office of the Board be based on "the applicable standard proposed by the New York Stock Exchange Board of Directors" (emphasis added).

2 See http://www.nyse.com/pdfs/section303Afaqs.

3 The Board formally decided to use the Corporate Secretary's office as another means of communications in January 2004, but the Board had already planned to add the office as receptor for written communications before receiving the Proposal.

4 As discussed in our previous letter, Proponent has already conceded, in defending Proponent's proposal in Comverse Technology, that "if the NYSE Rules were binding on [Comverse Technology, Inc.], there would be no reason for the [p]roposal." Unlike Comverse Technology, the Company is a NYSE-listed company, and, therefore, the NYSE listing standards are binding upon the Company. The wisdom of Proponent's concession in Comverse Technology is evident from the fact that, as a NYSE-listed company, the Company was required to and did implement the NYSE standard discussed in the Proposal, substantially implementing the Proposal in the process.

5 In The Kroger Co. (Apr. 11, 2003), the Staff denied a no-action request to exclude a shareholder proposal seeking the creation of a shareholder committee to communicate with the Kroger board about the subject matter of shareholder proposals approved but not implemented by the company.

[STAFF REPLY LETTER]

March 15, 2004

Response of the Office of Chief Counsel Division of Corporation Finance
Re: Kerr-McGee Corporation Incoming letter dated January 6, 2004

The proposal requests that the board of directors establish an Office of the Board of Directors to enable direct communications "on corporate governance matters," including meetings, between non-management directors and shareholders.

We are unable to concur in your view that Kerr-McGee may exclude the entire proposal under rule 14a-8(i)(3). There appears to be some basis for your view, however, that portions of the proposal and supporting statement may be materially false or misleading under rule 14a-9. In our view, proponent must:

delete the phrase "based on the standard proposed by the New York Stock Exchange Board of Directors";

recast the sentence that begins "The confidence of investors ..." and ends "... Enron and World Com" as the proponents' opinion; and

provide a citation to a specific source for the sentence that begins "Shareholders have suffered loss ..." and ends "... from the stock markets."

Accordingly, unless the proponent provides Kerr-McGee 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 Kerr-McGee omits only these portions of the proposal and supporting statement from its proxy materials in reliance on rule 14a-8(i)(3).

We are unable to concur in your view that Kerr-McGee may exclude the proposal under rule 14a-8(i)(7). Accordingly, we do not believe that Kerr-McGee may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(7).

We are unable to concur in your view that Kerr-McGee may exclude the proposal under rule 14a-8(i)(10). Accordingly, we do not believe that Kerr-McGee may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(10).

Sincerely,

/s/

Grace K. Lee
Special Counsel

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Company Name: Kerr-McGee Corp. Public Availability Date: March 15, 2004

[INQUIRY LETTER]

[INQUIRY LETTER]

[APPENDIX]

[INQUIRY LETTER]

[INQUIRY LETTER]

Company Name: Kerr-McGee Corp.
Public Availability Date: March 15, 2004