Company Name: RTI Int'l. Metals, Inc.
Public Availability Date: January 13, 2004
Document Sections:INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER [INQUIRY LETTER]
December 12, 2003 VIA FEDERAL EXPRESS
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Omission of the Shareholder Proposal of Daniel A. Bruno, C.F.A. Submitted
for Inclusion in the 2004 Proxy Statement of RTI International Metals, Inc.
Dear Ladies and Gentlemen: Buchanan Ingersoll PC acts as counsel to RTI International Metals, Inc., an Ohio
corporation (the "Company"). On behalf of the Company, we request confirmation
that the staff of the Division of Corporation Finance (the "Staff") of the
Securities and Exchange Commission will not recommend enforcement action if, in
reliance upon certain provisions of Rule 14a-8 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Company excludes the proposal (the
"Proposal") submitted by shareholder Daniel A. Bruno, C.F.A. (the "Proponent")
from the Company's proxy statement (the "Proxy") to be distributed in connection
with the Company's 2004 annual meeting of shareholders (the "Annual Meeting").
Pursuant to Rule 14a-8(j), enclosed are six copies of this letter, the Proposal
and the other attachments hereto. It is our opinion, as counsel to the Company, that the Proposal may be excluded
from the Proxy for the reasons stated below: 1. The Proposal may be omitted under Rule 14a-8(f)(1) as the Proponent has
failed to prove, as required by Rule 14a-8(b)(1) and (2), that he has
continuously held at least 1% or $2,000 in market value of securities entitled
to be voted on the Proposal at the Annual Meeting for at least one year prior to
submitting the Proposal. The Proponent has failed to comply with Rule 14a-8(b). The Proposal was
submitted by letter dated October 18, 2003 (attached hereto as Exhibit A) and
was received by the Company on October 21, 2003. As required by Rule
14a-8(f)(1), the Company gave notice of deficiency by letter dated October 28,
2003 (attached hereto as Exhibit B) (the "Notice of Deficiency"), within the
time period required by the Rule. The Notice of Deficiency informed the
Proponent that the Proposal was procedurally deficient because he failed to
provide sufficient proof that he is the record holder of at least $2,000 in
market value or 1% of the Company's securities entitled to vote on the Proposal.
In addition, he failed to indicate that he intends to continue to hold the
securities through the date of the Annual Meeting. The Proponent has not previously filed Schedules 13D or 13G, is not a reporting
person under Section 16(a) of the Exchange Act and, based on the records of the
Company's transfer agent, is not a registered holder of Company securities. The
Company informed the Proponent in the Notice of Deficiency that he must provide
a written statement from the record holder establishing his eligibility and that
he must provide his own written statement as to his intention to continue to
hold the securities through the date of the Annual Meeting. The Company also
informed the Proponent that to cure the defects, he must respond within fourteen
(14) calendar days from receipt of the Notice of Deficiency.
The Proponent responded in writing by letter dated November 4, 2003 (attached
hereto as Exhibit C) (the "Response Letter") received by the Company on November
10, 2003. The Response Letter does not adequately cure the eligibility
deficiencies.1 The Proponent did indicate his intention to hold Company
securities through the date of the Annual Meeting by stating in the Response
Letter, "[w]ith this letter I am stating that it is my intention to continue a
shareholder for the long term, and certainly beyond one year," thereby
satisfying part of Rule 14a-8(b)(2). However, the Proponent did not submit
adequate verification that he is a record holder of the Company's securities;
rather, he attached to the Response Letter a photocopy of a monthly account
statement. Such documentation is insufficient proof of ownership of Company
securities. Rule 14a-8 together with the Staff's guidance set forth in Staff Legal Bulletin
No. 14 (July 13, 2001) make it clear that a shareholder's monthly brokerage or
investment statement does not sufficiently demonstrate continuous ownership of
Company securities to satisfy Rule 14a-8(b)(2)(i). The Proponent did not provide
to the Company the required affirmative written statement from the record holder
verifying that the Proponent has continuously owned Company securities for one
year as of the submission of the Proposal. Therefore, the Proponent did not cure
this procedural deficiency. We acknowledge that, in some instances, the Staff has extended the time period
for a shareholder to correct a procedural defect in a proposal beyond the
fourteen (14) days provided in Rule 14a-8(f)(1) in circumstances where the
issuer's response contained inadequate information as to how the shareholder may
remedy the particular procedural deficiencies. See Sysco Corporation (Publicly
available August 10, 2001); General Motors Corp. (Publicly available April 3,
2001) (extending the correction period because the issuer's notice did not
sufficiently describe the documentation required under Rule 14a-8(b)). We do not
believe that an extension of the response period is warranted in this case
because the Notice of Deficiency adequately explained that the Proponent was
required to provide an affirmative statement from the record holder of the
securities by stating, "you must establish your eligibility by submitting to us
a written statement from the record holder verifying that, at the time you
submitted your proposal, you continuously held the requisite securities for at
least one year." The Notice of Deficiency provided the Proponent with all
relevant information in a timely manner, as called for under Rule 14a-8 and
included a copy of the Rule. Furthermore, the Proponent is familiar with the technical requirements necessary
to submit a shareholder proposal, as the Proponent submitted a deficient
proposal to the Company for inclusion in the 1999 proxy materials due to, among
other things, insufficient proof of stock ownership. RTI International Metals,
Inc. (Publicly available March 3, 1999). Both in 1998 and in the instant case,
the Company satisfactorily explained in its written response to the Proponent
the eligibility requirements of Rule 14a-8(b). The Proponent, having received a timely and adequate notice of deficiency from
the Company, did not submit sufficient verification of his ownership of Company
securities. The Proponent has failed to comply with Rule 14a-8 (b)(1) and (2),
and therefore, the Proposal is properly excludable by the Company pursuant to
Rule 14a-8(f). See, e.g., Oracle Corporation (Publicly available July 18, 2003);
The McGraw-Hill Companies, Inc. (Publicly available January 3, 2003); RTI
International Metals, Inc. (Publicly available March 3, 1999); Sierra Health
Services, Inc. (Publicly available April 3, 2002); Anthracite Capital, Inc.
(Publicly available March 29, 2002). 2. The Proposal may be omitted under Rule 14a-8(c) because two proposals were
submitted. Rule 14a-8(c) states that a shareholder may not submit more than one proposal
for consideration at a shareholders' meeting. The Proponent failed to comply
with the single proposal requirement of Rule 14a-8(c) by submitting two
proposals for inclusion in the Proxy. The Proposal of October 18, 2003 contains
two separate proposals, as noted below. The Proposal states that the following
are resolutions for consideration: "1) Management should actively, with the help of its bankers, consider and act
upon the attributes of merging wit hanother [sic] titanium company in order to
minimize competition and realize synergies which could be substantial." (the
"First Proposal"). "Secondly, failing to to [sic] move ahead successfully on the initial proposal,
liquidation or [illegible] considered shopping the sale of the company in its
entirety." (the "Second Proposal"). We read the Proposal to consist of two proposals, each separate from one
another; the success of the Second Proposal being contingent on the failure of
the First Proposal. Rule 14a-8(c) states that a shareholder may submit only one
proposal, and the Company notified the Proponent that the Proposal was deficient
because it contained two separate proposals. In addition, as notified by the
Company in the Notice of Deficiency the Proponent did not cure such defect in
the Response Letter. The Response Letter does not submit one proposal for
shareholder consideration; rather, both proposals are restated and the defect is
not cured.2 Moreover, in the Response Letter, the Proponent refers to the
foregoing as "[m]y proposals." By his own words, the Proponent acknowledges that
he has submitted more than one proposal for consideration by the Company.
The Proponent did not revise or rewrite either of the proposals in his Response
Letter to the Company, nor did he eliminate one of the two proposals previously
submitted; instead, the Proponent reiterated the subjects of his proposals by
stating "[m]y proposals seek to have management investigate actively a
combination/merger with a competitor... If this route is not productive, then it
would behoove management and the board to shop RTI..." Essentially, the
Proponent left the proposals unchanged. Though the Staff may deem multiple proposals to be one proposal if such
proposals relate to a single, specific concept, the Staff has also previously
taken the position that substantially distinct multiple proposals will not be
considered as a single proposal. Citigroup Inc. (Publicly available February 26,
2002). The First and Second Proposals relate to two distinct and separate
concepts, and should be considered by the Staff to be multiple proposals.
The First Proposal relates to a merger between the Company and a competitor of
the Company within the metals industry. The Second Proposal, on the other hand,
relates to the Company liquidating its assets or being sold to another company
with the purpose of going out of existence. Although each may be considered a
"fundamental transaction," the First Proposal suggests that the Company would
remain in existence as a viable and functioning business following the
occurrence of a merger transaction. However, the language in the Second Proposal
connotes that the Company could not remain viable on its own (after the failure
to enter into a business combination with a competitor) and, consequently, would
have to consider liquidation and winding up the Company as the final option
available. The Company submits that the Proponent viewed each proposal in a
different light, with the First Proposal allowing for the viability of the
Company, and the Second Proposal recommending that the Company cease operations.
In addition, as worded by the Proponent, the Second Proposal would only be
discussed upon the failure of the First Proposal. The Proposal contains two alternative proposals that do not satisfy the Rule
14a-8(c) requirement that only one proposal may be submitted from a shareholder.
Centra Software, Inc. (Publicly available March 31, 2003) (two proposals, each
relating to amending the company's bylaws, were excluded for violation of the
single proposal rule); Ford Motor Company (Publicly available April 4, 2003)
(proponent submitted 18 proposals that did not relate to a single concept). The
Proponent did not cure the defect within the applicable time, responding to the
Company with only a reiteration of both proposals. Therefore, based on this
procedural defect above, the Company may exclude the Proposal from the Proxy.
3. The Proposal may be omitted under Rule 14a-8(i)(3) because the Proposal is so
vague that it could be misleading to other Company shareholders.
Rule 14a-8(i)(3) states that a proposal may be omitted from the proxy materials
if it violates the proxy rules, including Rule 14a-9, prohibiting materially
false or misleading statements from inclusion. The Proposal contains
inconsistencies and mistakes with respect to both grammar and syntax, and is
confusing at best. Taken separately, each Proposal is vague.
The Staff has previously determined to take no action against an issuer for the
exclusion of a shareholder proposal under Rule 14a-8(i)(3) because (a) the
shareholders could not determine with reasonable certainty the measures the
Company would take if the proposal was approved, and (b) the resultant action by
the Company would be taken without guidance as to the intention of the
shareholder when they approved the proposal. See PG&E Corporation (Publicly
available March 1, 2002) and no-action letters cited therein.
(a) The shareholders cannot determine with reasonable certainty the measures
that the Company would take if the Proposal was approved. The First Proposal, though stating the potential benefits for the Company that
may be derived as a result of the Company entering into a merger with a
competitor as proposed, the First Proposal does not state how the merger is to
be effected, i.e., whether it is the Proponent's intention that the Company
remain in existence after the merger. The Second Proposal, seemingly contingent on the Company not merging as
recommended in the First Proposal, suggests that the Company liquidate or put
itself up for sale. Not only does the Proponent not put forth any rationale for
this proposal, but the suggestion itself contains alternatives (liquidation or
"shopping the sale"). This proposal is not only unintelligible, but too vague
for shareholders to make when voting because the Second Proposal sets forth
alternatives and contains no details as to how the Company would implement
either alternative. Moreover, because the Proposal consists of two separate
proposals (the First and Second Proposal), it would be impossible for the
Company to know which of the two proposals the shareholders had approved. If the
Proposal were to be included in the Proxy, the Company shareholders may approve
the Proposal yet not know how it would be implemented. Abbott Laboratories
(Publicly available February 18, 2003). (b) Resultant action by the Company would be made without guidance from
shareholders because of the unclear language in the proposals, and therefore,
any such action could be in contravention of the intention of shareholders when
they voted. If the Company were required to implement the Proposal upon shareholder
approval, the Company's actions may be in contravention of the shareholders'
intentions because the Proposal was so vague that the shareholders' intentions
cannot be derived from the wording of the Proposal. The Company cannot derive
even the intention of the Proponent from the wording of the Proposal, so any
actions that the Company would take might contradict the desired result that the
shareholders approved. Therefore, the Proposal is too vague for both the
shareholders and the Company to act on it adequately. In addition, the entire Proposal contains a multitude of misspellings, dropped
letters, syntax errors, and parts of it are even illegible. Proposals are
usually contained in the form of resolutions to be adopted by the shareholders
as they are presented by each proponent. The Proponent's Proposal is not fit for
submission to the Company shareholders because the language presented is
unclear. Shareholders voting on the proposal could not with reasonable certainty
determine the actions or measures needed to be taken in the event that the
proposals were implemented, and the Company cannot act without the guidance of
the shareholders in regard to a matter on which they had voted. PG&E Corporation
(Publicly available March 1, 2002) (Proposal relating to votes to effect merger
was incomprehensible); IDACORP, Inc. (Publicly available January 9, 2001).
4. The Proposal may be omitted under Rule 14a-8(i)(2) because it would require
the Company to violate federal antitrust laws. The Proposal may be excluded from the Proxy pursuant to Rule 14a-8(i)(2) because
if the Company implemented the Proposal, the Company may violate federal
antitrust laws, specifically, Section 7 of the Clayton Act.
In the First Proposal, the Proponent recommends that the Company merge with
another titanium company "in order to minimize competition." The First Proposal
is in direct conflict with the federal antitrust laws, which seek to promote
competitive behavior in the market by preventing a variety of restraints of
trade from occurring. Section 7 of the Clayton Act states:
No person engaged in commerce or in any activity affecting commerce shall
acquire, directly or indirectly, the whole or any part of the stock or other
share capital and no person subject to the jurisdiction of the Federal Trade
Commission shall acquire the whole or any part of the assets of another person
engaged also in commerce or in any activity affecting commerce, where in any
line of commerce or in any activity affecting commerce in any section of the
country, the effect of such acquisition may be substantially to lessen
competition, or to tend to create a monopoly. 15 U.S.C. §18 (emphasis added). Therefore, a merger may not take place for the
specific purpose of lessening competition in the market, but rather, a merger
may occur if the effect is enhancement of market efficiency.
The Staff has previously permitted the exclusion of shareholder proposals under
Rule 14a-8(i)(2), though in the antitrust context the issue has not arisen. See
Citigroup Inc. (Publicly available January 2, 2003), Entergy Corporation
(Publicly available January 2, 2003) and Coca-Cola Corporation (Publicly
available February 6, 2002) (exclusion of shareholder proposals under Rule
14a-8(i)(2) because proposals would require companies to violate federal proxy
rules). Due to the fact that the Proponent requests that the Company violate
federal antitrust laws through implementation of the First Proposal, which is
apparent from its face, the Proposal is properly excludable from the Proxy under
Rule 14a-8(i)(2). The Company presently intends to file its definitive Proxy for the 2004 Annual
Meeting on or about March 15, 2003. The Company respectfully requests that the
Staff confirm its intention to not recommend enforcement action if the Proposal
is excluded from the Proxy for the reasons set forth above. In the event that
the Staff disagrees with the Company's views regarding the omission of the
Proposal, We respectfully request the opportunity to confer with the Staff prior
to the issuance of its response. Please acknowledge receipt of this letter by date stamping the enclosed copy of
this letter and returning it to my attention in the enclosed, self-addressed and
pre-paid envelope. By copy of this letter, with exhibits, we are notifying the
Proponent of the Company's intention to omit the Proposal.
Should you have any questions, please do not hesitate to contact me at the
number above or Chad Whalen of my office at 412-562-1023. Very truly yours,
/s/ Richard D. Rose
Enclosure cc: Dawne S. Hickton, Esq.
Chad Whalen, Esq.
Daniel A. Bruno, C.F.A. (via certified mail) -----FOOTNOTES-----
1 Additionally, the Proponent sent to the Company another letter dated November
28, 2003, attached hereto as Exhibit D. In the November 28 letter, the Proponent
made no attempt to cure any deficiencies, but rather indicated his displeasure
with the Company's Notice of Deficiency and suggested that the Company merge
with Titanium Metals Corp. 2 We consider the Proponent's Proposal of October 18, 2003 to be the only
proposals submitted by the Proponent for inclusion in the Proxy, due to the fact
that the Response Letter of November 4, 2003 and the Proponent's letter dated
November 28, 2003 did not include any revisions to or redrafts of the First
and/or Second Proposals. [APPENDIX]
Rule 14a-8Proposals of Security Holders This section addresses when a company must include a shareholder's proposal in
its proxy statement and identify the proposal in its form of proxy when the
company holds an annual or special meeting of shareholders. In summary, in order
to have your shareholder proposal included on a company's proxy card, and
included along with any supporting statement in its proxy statement, you must be
eligible and follow certain procedures. Under a few specific circumstances, the
company is permitted to exclude your proposal, but only after submitting its
reasons to the Commission. We structured this section in a question-and- answer
format so that it is easier to understand. The references to "you" are to a
shareholder seeking to submit the proposal. (a) Question 1: What is a proposal?
A shareholder proposal is your recommendation or requirement that the company
and/or its board of directors take action, which you intend to present at a
meeting of the company's shareholders. Your proposal should state as clearly as
possible the course of action that you believe the company should follow. If
your proposal is placed on the company's proxy card, the company must also
provide in the form of proxy means for shareholders to specify by boxes a choice
between approval or disapproval, or abstention. Unless otherwise indicated, the
word "proposal" as used in this section refers both to your proposal, and to
your corresponding statement in support of your proposal (if any).
(b) Question 2: Who is eligible to submit a proposal, and how do I demonstrate
to the company that I am eligible? (1) In order to be eligible to submit a proposal, you must have continuously
held at least $2,000 in market value, or 1%, of the company's securities
entitled to be voted on the proposal at the meeting for at least one year by the
date you submit the proposal. You must continue to hold those securities through
the date of the meeting. (2) If you are the registered holder of your securities, which means that your
name appears in the company's records as a shareholder, the company can verify
your eligibility on its own, although you will still have to provide the company
with a written statement that you intend to continue to hold the securities
through the date of the meeting of shareholders. However, if like many
shareholders you are not a registered holder, the company likely does not know
that you are a shareholder, or how many shares you own. In this case, at the
time you submit your proposal, you must prove your eligibility to the company in
one of two ways: (i) The first way is to submit to the company a written statement from the
"record" holder of your securities (usually a broker or bank) verifying that; at
the time you submitted your proposal, you continuously held the securities for
at least one year. You must also include your own written statement that you
intend to continue to hold the securities through the date of the meeting of
shareholders; or (ii) The second way to prove ownership applies only if you have filed a Schedule
13D, Schedule 13G, Form 3, Form 4 and/or Form 5, or amendments to those
documents or updated forms, reflecting your ownership of the shares as of or
before the date on which the one-year eligibility period begins. If you have
filed one of these documents with the SEC, you may demonstrate your eligibility
by submitting to the company: (A) A copy of the schedule and/or form, and any subsequent amendments reporting
a change in your ownership level; (B) Your written statement that you continuously held the required number of
shares for the one-year period as of the date of the statement; and
(C) Your written statement that you intend to continue ownership of the shares
through the date of the company's annual or special meeting.
(c) Question 3: How many proposals may I submit?
Each shareholder may submit no more than one proposal to a company for a
particular shareholders' meeting. (d) Question 4: How long can my proposal be?
The proposal, including any accompanying supporting statement, may not exceed
500 words. (e) Question 5: What is the deadline for submitting a proposal?
(1) If you are submitting your proposal for the company's annual meeting, you
can in most cases find the deadline in last year's proxy statement. However, if
the company did not hold an annual meeting last year, or has changed the date of
its meeting for this year more than 30 days from last year's meeting, you can
usually find the deadline in one of the company's quarterly reports on Form 10-
Q or 10-QSB, or in shareholder reports of investment companies under Rule 30d-1
of the Investment Company Act of 1940. [Editor's note: This section was
redesignated as Rule 30e-1. See 66 FR 3734, 3759, Jan. 16, 2001.] In order to
avoid controversy, shareholders should submit their proposals by means,
including electronic means, that permit them to prove the date of delivery.
(2) The deadline is calculated in the following manner if the proposal is
submitted for a regularly scheduled annual meeting. The proposal 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. However, if the company
did not hold an annual meeting the previous year, or if the date of this year's
annual meeting has been changed by more than 30 days from the date of the
previous year's meeting, then the deadline is a reasonable time before the
company begins to print and mail its proxy materials. (3) If you are submitting your proposal for a meeting of shareholders other than
a regularly scheduled annual meeting, the deadline is a reasonable time before
the company begins to print and mail its proxy materials. (f) Question 6: What if I fail to follow one of the eligibility or procedural
requirements explained in answers to Questions 1 through 4 of this section?
(1) The company may exclude your proposal, but only after it has notified you of
the problem, and you have failed adequately to correct it. Within 14 calendar
days of receiving your proposal, the company must notify you in writing of any
procedural or eligibility deficiencies, as well as of the time frame for your
response. Your response must be postmarked, or transmitted electronically, no
later than 14 days from the date you received the company's notification A
company need not provide you such notice of a deficiency if the deficiency
cannot be remedied, such as if you fail to submit a proposal by the company's
properly determined deadline. If the company intends to exclude the proposal, it
will later have to make a submission under Rule 14a-8 and provide you with a
copy under Question 10 below, Rule 14a-8(j). (2) If you fail in your promise to hold the required number of securities
through the date of the meeting of shareholders, then the company will be
permitted to exclude all of your proposals from its proxy materials for any
meeting held in the following two calendar years. (g) Question 7: Who has the burden of persuading the Commission or its staff
that my proposal can be excluded? Except as otherwise noted, the burden is on the company to demonstrate that it
is entitled to exclude a proposal. (h) Question 8: Must I appear personally at the shareholders' meeting to present
the proposal? (1) Either you, or your representative who is qualified under state law to
present the proposal on your behalf, must attend the meeting to present the
proposal. Whether you attend the meeting yourself or send a qualified
representative to the meeting in your place, you should make sure that you, or
your representative, follow the proper state law procedures for attending the
meeting and/or presenting your proposal. (2) If the company holds it shareholder meeting in whole or in part via
electronic media, and the company permits you or your representative to present
your proposal via such media, then you may appear through electronic media
rather than traveling to the meeting to appear in person. (3) If you or your qualified representative fail to appear and present the
proposal, without good cause, the company will be permitted to exclude all of
your proposals from its proxy materials for any meetings held in the following
two calendar years. (i) Question 9: If I have complied with the procedural requirements, on what
other bases may a company rely to exclude my proposal? (1) Improper under state law: If the proposal is not a proper subject for action
by shareholders under the laws of the jurisdiction of the company's
organization; Note to paragraph (i)(1): Depending on the subject matter, some proposals are
not considered proper under state law if they would be binding on the company if
approved by shareholders. In our experience, most proposals that are cast as
recommendations or requests that the board of directors take specified action
are proper under state law. Accordingly, we will assume that a proposal drafted
as a recommendation or suggestion is proper unless the company demonstrates
otherwise. (2) Violation of law: If the proposal would, if implemented, cause the company
to violate any state, federal, or foreign law to which it is subject;
Note to paragraph (i)(2): Note to paragraph (i)(2): We will not apply this basis
for exclusion to permit exclusion of a proposal on grounds that it would violate
foreign law if compliance with the foreign law could result in a violation of
any state or federal law. (3) Violation of proxy rules: If the proposal or supporting statement is
contrary to any of the Commission's proxy rules, including Rule 14a-9, which
prohibits materially false or misleading statements in proxy soliciting
materials; (4) Personal grievance; special interest: If the proposal relates to the redress
of a personal claim or grievance against the company or any other person, or if
it is designed to result in a benefit to you, or to further a personal interest,
which is not shared by the other shareholders at large; (5) Relevance: If the proposal relates to operations which account for less than
5 percent of the company's total assets at the end of its most recent fiscal
year, and for less than 5 percent of its net earning sand gross sales for its
most recent fiscal year, and is not otherwise significantly related to the
company's business; (6) Absence of power/authority: If the company would lack the power or authority
to implement the proposal; (7) Management functions: If the proposal deals with a matter relating to the
company's ordinary business operations; (8) Relates to election: If the proposal relates to an election for membership
on the company's board of directors or analogous governing body;
(9) Conflicts with company's proposal: If the proposal directly conflicts with
one of the company's own proposals to be submitted to shareholders at the same
meeting. Note to paragraph (i)(9): A company's submission to the Commission under this
section should specify the points of conflict with the company's proposal.
(10) Substantially implemented: If the company has already substantially
implemented the proposal; (11) Duplication: If the proposal substantially duplicates another proposal
previously submitted to the company by another proponent that will be included
in the company's proxy materials for the same meeting; (12) Resubmissions: If the proposal deals with substantially the same subject
matter as another proposal or proposals that has or have been previously
included in the company's proxy materials within the preceding 5 calendar years,
a company may exclude it from its proxy materials for any meeting held within 3
calendar years of the last time it was included if the proposal received:
(i) Less than 3% of the vote if proposed once within the preceding 5 calendar
years; (ii) Less than 6% of the vote on its last submission to shareholders if proposed
twice previously within the preceding 5 calendar years; or
(iii) Less than 10% of the vote on its last submission to shareholders if
proposed three times or more previously within the preceding 5 calendar years;
and (13) Specific amount of dividends: If the proposal relates to specific amounts
of cash or stock dividends. (j) Question 10: What procedures must the company follow if it intends to
exclude my proposal? (1) If the 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.
The company must simultaneously provide you with a copy of its submission. The
Commission staff may permit the company to make its submission later than 80
days before the company files its definitive proxy statement and form of proxy,
if the company demonstrates good cause for missing the deadline.
(2) The company must file six paper copies of the following:
(i) The proposal; (ii) An explanation of why the company believes that it may exclude the
proposal, which should, if possible, refer to the most recent applicable
authority, such as prior Division letters issued under the rule; and
(iii) A supporting opinion of counsel when such reasons are based on matters of
state or foreign law. (k) Question 11: May I submit my own statement to the Commission responding to
the company's arguments? Yes, you may submit a response, but it is not required. You should try to submit
any response to us, with a copy to the company, as soon as possible after the
company makes its submission. This way, the Commission staff will have time to consider fully your submission
before it issues its response. You should submit six paper copies of your
response. (1) Question 12: If the company includes my shareholder proposal in its proxy
materials, what information about me must it include along with the proposal
itself? (1) The company's proxy statement must include your name and address, as well as
the number of the company's voting securities that you hold. However, instead of
providing that information, the company may instead include a statement that it
will provide the information to shareholders promptly upon receiving an oral or
written request. (2) The company is not responsible for the contents of your proposal or
supporting statement. (m) Question 13: What can I do if the company includes in its proxy statement
reasons why it believes shareholders should not vote in favor of my proposal,
and I disagree with some of its statements? (1) The company may elect to include in its proxy statement reasons why it
believes shareholders should vote against your proposal. The company is allowed
to make arguments reflecting its own point of view, just as you may express your
own point of view in your proposal's supporting statement.
(2) However, if you believe that the company's opposition to your proposal
contains materially false or misleading statements that may violate our anti-
fraud rule, Rule 14a-9, you should promptly send to the Commission staff and the
company a letter explaining the reasons for your view, along with a copy of the
company's statements opposing your proposal. To the extent possible, your letter
should include specific factual information demonstrating the inaccuracy of the
company's claims. Time permitting, you may wish to try to work out your
differences with the company by yourself before contacting the Commission staff.
(3) We require the company to send you a copy of its statements opposing your
proposal before it mails its proxy materials, so that you may bring to our
attention any materially false or misleading statements, under the following
timeframes: (i) If our no-action response requires that you make revisions to your proposal
or supporting statement as a condition to requiring the company to include it in
its proxy materials, then the company must provide you with a copy of its
opposition statements no later than 5 calendar days after the company receives a
copy of your revised proposal; or (ii) In all other cases, the company must provide you with a copy of its
opposition statements no later than 30 calendar days before its files definitive
copies of its proxy statement and form of proxy under Rule 14a-6.
* * *
[STAFF REPLY LETTER]
January 13, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: RTI International Metals, Inc.
Incoming letter dated December 12, 2003
The proposal relates to a merger or the liquidation of RTI.
There appears to be some basis for your view that RTI may exclude the proposal
under rule 14a-8(f). We note that the proponent failed to supply, within 14 days
of receipt of RTI's request, documentary support sufficiently evidencing that he
satisfied the minimum ownership requirement for the one-year period as of the
date that he submitted the proposal as required by rule 14a-8(b). Accordingly,
we will not recommend enforcement action to the Commission if RTI omits the
proposal from its proxy materials in reliance on rules 14a-8(b) and 14a-8(f). In
reaching this position, we have not found it necessary to address the
alternative bases for omission upon which RTI relies. Sincerely,
/s/ Lesli L. Sheppard-Warren
Attorney-Advisor
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