Company Name: MONY Group Inc.
Public Availability Date: March 1, 2004Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
STAFF REPLY LETTER [INQUIRY LETTER]
February 11, 2004 Securities and Exchange Commission
Office of Chief Counsel
Division of Corporate Finance
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549 Omission Of Shareholder Proposal
Ladies and Gentlemen: The MONY Group Inc. ("MONY"), a Delaware corporation (the "Company"), hereby
respectfully requests that the Staff of the Division of Corporate Finance (the
"Staff") of the Securities and Exchange Commission (the "Commission") concur
with its view that the Company may exclude from its proxy solicitation materials
relating to its 2004 Annual Meeting of Shareholders (the "Proxy Materials") a
proposal and a supporting statement (the "Proposal") received from Longleaf
Partners Small-Cap Fund (the "Proponent") on December 8, 2003.
The Company currently does not plan to hold an Annual Meeting of Shareholders as
a Special Meeting to vote on the Company's merger with AXA Financial, Inc. is
scheduled for February 24, 2004. In the event that the merger is not
consummated, the Company would then schedule an Annual Meeting and would expect
to file definitive Proxy Materials with the Commission no sooner than May 3,
2004, and to begin mailing shortly thereafter. The Proposal is attached hereto
as Exhibit A. Pursuant to Rule 14a-8(j), a copy of this letter and the exhibit
are being mailed concurrently to the Proponent to advise Proponent of the
Company's intent to exclude the Proposal. In addition, pursuant to Rule
14a-8(j), six copies of this letter and the attached exhibit are enclosed for
filing with the Commission. I. The Proposal.
The proposal submitted by the Proponent reads as follows:
"To adopt a recommendation that the Board of Directors promptly evaluate the
performance of the Company's Chief Executive Officer and its President and Chief
Operating Officer, especially in light of the recent shareholder vote against
the AXA transaction and senior management's conflicts of interest with respect
to such transaction, so that the Board can make an informed decision whether
either or both of such persons should be replaced as officers of the Company."
Michael I. Roth is the Chief Executive Officer of the Company and the Chairman
of the Board of Directors and Samuel J. Foti is the President and Chief
Operating Officer of the Company and a member of the Board of Directors. Mr.
Roth and Mr. Foti are referred to herein together as the "Executives."
II. Reason For Omission Of The ProposalRule 14a-8(i)(7).
The Company believes that it may properly omit the Proposal from its Proxy
Materials pursuant to Rule 14a-8(i)(7) as it relates to the ordinary business
operations of the Company. Rule 14a-8(i)(7) and its predecessor Rule 14a-8(c)(7) permit the exclusion of a
shareholder proposal if the proposal relates to the conduct of a company's
ordinary business operations. The Staff has consistently held that proposals
relating to the dismissal, termination or hiring of executive officers,
including the chief executive officer, are matters that are more appropriately
addressed by the Board of Directors and may be omitted pursuant to Rule
14a-8(i)(7), because they relate to ordinary business operations. Walt Disney
Company (December 16, 2002); Wachovia Corporation (February 17, 2002); Merrill
Lynch & Co. (February 8, 2002); Spartan Motors, Inc. (March 13, 2001); Wisconsin
Energy Corporation (January 30, 2001); and U.S. Bancorp (February 27, 2000). As
the Proposal seeks an investigation into and the possible replacement of the
Executives, MONY believes the Proposal relates to MONY's ordinary business
operations and may be excluded from its 2004 Proxy materials pursuant to Rule
14a-8(i)(7). In Walt Disney Company (December 16, 2002), the Staff concluded that a proposal
to recommend and request that the board of directors consider removing the chief
executive officer from the company's employment and terminating his contract was
excludable under Rule 14a-8(i)(7) as it related to the termination, hiring or
promotion of employees. In Wachovia Corporation (February 17, 2002), the Staff
concluded that a proposal requesting that the board of directors seek and hire a
competent CEO may be excluded as ordinary business as it related to the
termination, hiring or promotion of employees. In Merrill Lynch (February 8,
2002), the Staff determined that a shareholder proposal requesting the chief
executive officer's resignation may be excluded pursuant to Rule 14a-8(i)(7) as
it related to the company's ordinary business of termination, hiring or
promotion of employees. In Spartan Motors, Inc. (March 13, 2001), the Staff held
that a shareholder proposal to remove the chief executive officer was excludable
under Rule 14a-8(i)(7) as it related to the termination, hiring or promotion of
employees. In Wisconsin Energy Corporation (January 30, 2001), the Staff
concluded that a proposal relating to a vote of no confidence in management and
requesting that the directors seek the resignation of the CEO and president of
the company may be excluded under Rule 14a-8(i)(7) as it related to the
company's ordinary business of termination, hiring or promotion of employees. In
U.S. Bancorp (February 27, 2000), the Staff held that a shareholder proposal to
remove the officers and directors from office may be excluded under Rule
14a-8(i)(7) as it related to the company's ordinary business of termination,
hiring or promotion of employees. See also Middle South Utilities, Inc. (January
25, 1988) (shareholder proposal to replace chairman of the board and president
excluded under Rule 14a-8(c)(7) as ordinary business as it related to the
decision to alter or terminate the duties of executive personnel) and
Continental Illinois Corporation (February 24, 1983) (shareholder proposal that
recommended that the chairman of the board and the president be terminated as
employees excluded under Rule 14a-8(c)(7) as ordinary business as it related to
the employment of executive personnel). Because the Proposal relates, like the
proposals referred to above, to the conduct of the Company's ordinary business
operations, in recommending an investigation into and a possible replacement of
the Executives, it may be properly omitted pursuant to Rule 14a-8(i)(7).
III. Conclusion. Based upon the foregoing, the Company respectfully requests that the Staff not
recommend any enforcement action if the Proposal is omitted from the Proxy
Materials. If the Staff has any questions with respect to the foregoing, or if for any
reason the Staff does not agree that the Company may omit the Proposal from its
Proxy Materials, please contact the undersigned at (212) 708-2232. Please
acknowledge receipt of this letter on the additional enclosed copy and return it
to the undersigned in the enclosed envelope. Very truly yours,
/s/ Daniel J. Gallagher
Enclosures cc: G. Staley Cates w/enclosures [APPENDIX 1]
EXHIBIT A to No Action Request Letter December 4, 2003
VIA CERTIFIED MAIL and HAND DELIVERY
Mr. Bart R. Schwartz
Senior Vice President and General Counsel
The MONY Group Inc.
1740 Broadway
New York, NY 10019 Dear Mr. Schwartz:
Southeastern Asset Management, Inc. ("Southeastern") is investment adviser to
Longleaf Partners Small-Cap Fund ("Longleaf"), an investment company that owns
2,089,600 shares of the common stock of The MONY Group Inc. ("MONY"), or 4.3% of
MONY. Longleaf has owned more than 1% of MONY for over a year, and intends to
continue to hold more than 1% through the 2004 annual meeting. A representative
of Longleaf intends to appear at the annual meeting to present this proposal.
As a result of Longleaf's exercise of its appraisal rights in early November
with respect to the proposed transaction with AXA, Longleaf's shares are no
longer held in book entry under the record name "Cede & Co," but in physical
form in the name of "Longleaf Partners Small-Cap Fund" at the following address:
The Depository Trust Company, New York Window, Acct: State Street, NV02, 55
Water Street, Plaza Level3\rd/ Floor, New York, New York 10041. Longleaf hereby
requests that you include in MONY's Proxy Statement regarding the 2004 annual
meeting the proposal attached as Exhibit A. As we have stated publicly, we believe that AXA's $31 bid for MONY far
understates the company's worth, and we will be voting against the transaction.
If shareholders vote against the AXA transaction, we believe the best course
would be for MONY's Board of Directors (the "Board") to hire new management
better able to unlock the company's value. Our shareholder proposal is thus a
recommendation that the Board evaluate the performance of certain key executives
so that they can make an informed decision whether any or all of such persons
should be replaced. The proposal assumes that shareholders do not vote in favor
of the AXA transaction and that the 2004 annual meeting is held subsequent to
the special meeting to consider the AXA transaction. Also, the proposal is to be
presented at the 2004 annual meeting and not at the special meeting.
If you have any questions or comments regarding this proposal, please direct
them to Morris Kramer or Richard Grossman at Skadden, Arps, Slate, Meagher &
Flom LLP at 212-735-3000. Sincerely,
/s/ G. Staley Cates
Co-Portfolio Manager and Trustee
Longleaf Partners Small-Cap Fund
Southeastern Asset Management, Inc. [APPENDIX 2]
Exhibit A PROPOSAL FOR AGENDA ITEM IN 2004 ANNUAL MEETING PROXY STATEMENT
To adopt a recommendation that the Board of Directors promptly evaluate the
performance of the Company's Chief Executive Officer and its President and Chief
Operating Officer, especially in light of the recent shareholder vote against
the AXA transaction and senior management's conflicts of interest with respect
to such transaction, so that the Board can make an informed decision whether
either or both of such persons should be replaced as officers of the Company.
Supporting Statement: Longleaf Partners Small-Cap Fund (the "Fund"), a registered investment company,
owns 2,089,600 shares of the common stock of The MONY Group Inc. ("MONY"), or
approximately 4.3% of the Company. The Fund and its adviser, Southeastern Asset
Management, Inc. ("Southeastern"), generally have productive, supportive
relationships with management teams. In the case of MONY, however, the Fund has
painfully endured years of underperformance and mismanagement, which culminated
in September of 2003, when MONY's management negotiated a terrible deal for
shareholders and a wonderful deal for themselves. This management team's
handling of the proposed AXA transaction confirmed our belief which had been
demonstrated so amply over the years beforethat management has operated this
Company with a view to enriching itself, at the expense of shareholders.
The Fund believes that the shareholders' vote against the AXA transaction should
have sent a clear "wake up call" to the Board that shareholders of MONY will act
to protect their interests. In that regard, the Fund believes that shareholder
interests will best be served by having the Board take a hard look at current
management. The Fund believes that one of the most important responsibilities of
a board of directors of a public company is to select a well-qualified senior
management team and that the current Board should live up to that
responsibility. Existing management has had five years to make progress with the
Company, and the failed AXA transaction is the best they could do. Their
performance has led to lower credit ratings and has jeopardized the company's
ability to raise capital, while executive compensation has increased. The Fund
is confident that the Board can find a far superior, shareholder-oriented
management team to unlock the value of MONY. Southeastern and the Fund would
welcome the opportunity to work in partnership with MONY's Board to find the
right team for the job. Please join Southeastern and the Fund in supporting this recommendation that the
Board take prompt action to evaluate the performance of and, if appropriate,
replace certain senior executives of the Company.
[STAFF REPLY LETTER]
March 1, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: The MONY Group Inc. Incoming letter dated February 11, 2004
The proposal recommends the board promptly conduct an investigation into and a
possible replacement of MONY's Chief Executive Officer and its President and
Chief Operating Officer. There appears to be some basis for your view that MONY may exclude the proposal
under rule 14a-8(i)(7), as relating to MONY's ordinary business operations,
(i.e., the termination or evaluation of employees). Accordingly, we will not
recommend enforcement action to the Commission if MONY omits the proposal from
its proxy materials in reliance on rule 14a-8(i)(7). Sincerely,
/s/ Song P. Brandon
Attorney-Advisor
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