Company Name: Time Warner, Inc.
Public Availability Date: February 13, 2004
Document Sections: INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER [INQUIRY LETTER]
December 31, 2003 VIA OVERNIGHT MAIL Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549 Re: Time Warner Inc. - Proposal Submitted by the AFSCME Employees Pension Plan
Ladies and Gentlemen: This letter respectfully requests that the staff of the Division of Corporation
Finance (the "Staff") of the Securities and Exchange Commission (the "SEC")
advise Time Warner Inc. (the "Company") that it will not recommend any
enforcement action to the SEC if the Company omits from its proxy statement and
proxy to be filed and distributed in connection with its 2004 annual meeting of
stockholders (the "Proxy Materials") the proposal (the "Proposal") it received
from the AFSCME Employees Pension Plan (the "Proponent"). The Proposal calls
upon the Company's board of directors to prepare an annual report disclosing,
among other things, "the actions taken by the Board and all committees thereof
in the prior year," including agenda items on which a vote was taken or deferred
and, for items on which a vote was not unanimous, the identity of directors not
voting with the majority. The Company does not intend to include the Proposal in its Proxy Materials
pursuant to (i) Rule 14a-8(i)(7) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), because it relates to the Company's ordinary
business operations and (ii) Rule 14a-8(i)(10) under the Exchange Act because it
has been substantially implemented and, therefore, is moot.
Pursuant to Rule 14a-8(j) under the Exchange Act, we are enclosing six copies of
each of this letter and the Proposal (Exhibit A). By copy of this letter, the
Company hereby notifies the Proponent as required by Rule 14a-8(j) of its
intention to exclude the Proposal from its Proxy Materials.
Grounds for Omission A. The Proposal relates to the Company's ordinary business operations and,
therefore, may be omitted from the Company's Proxy Materials pursuant to Rule
14a-8(i)(7). Rule 14a-8(i)(7) under the Exchange Act permits the exclusion from the Company's
Proxy Materials of stockholder proposals relating to its "ordinary business
operations." Similarly, proposals requesting reports or studies may also be
omitted from the Company's Proxy Materials if the subject of the requested
report or study covers a matter related to the Company's ordinary business
operations. See SEC Release No. 34-20091 (August 16, 1983) ("Henceforth, the
staff will consider whether the subject matter of the special report or the
committee involves a matter of ordinary business; where it does, the proposal
will be excludable under Rule 14a-8(c)(7)"). The Proposal seeks an annual report
of every action taken or deferred by the Company's board of directors and all of
its committees; the actual votes cast in favor or against each action; and, for
items on which a vote was not unanimous, the names of the dissenting directors
or committee members. This requested report - covering all votes taken, or
deferred, by the board and its committees - involves the Company's ordinary
business operations and, therefore, is not an appropriate subject matter for a
stockholder proposal. The Company's business and affairs are managed by its board of directors and
committees. See DGCL §141(a). In this capacity, the Company's board and
committees consider myriad recurring and ordinary matters (such as an annual
budget, officer appointments, material contracts, securities offerings,
acquisitions and asset dispositions) that are part of the day-to-day management
of the Company's operations. In addition, they consider actions on a wide range
of subject matters, such as operational strategy, customer relations and
employee compensation, that the Staff has consistently found relate to ordinary
business operations. See, The Allstate Corp. (February 19, 2002) (operational
strategy is related to ordinary business operations); Mattel, Inc. (April 1,
2002) (general employee compensation is related to ordinary business
operations); Verizon Communications, Inc. (January 9, 2003) (customer relations
are related to ordinary business operations). See also, Telular Corp. (December
5, 2003) (the analysis of non-extraordinary transactions is related to ordinary
business operations); Xcel Energy Inc. (April 1, 2003) (the evaluation of
company risks and benefits is related to ordinary business operations); ResMed,
Inc. (September 2, 2002) (the selection of accounting methods is related to
ordinary business operations). If the Proposal sought a report of board action
with respect to any one of the above items, it would be properly excludable from
the Company's Proxy Materials. Instead, the requested report seeks information
on all actions of the Company's board and committees, without regard to the
subject matter. The Company submits that the breadth of the Proposal clearly
covers many aspects of the Company's ordinary business operations and,
therefore, it is excludable under Rule 14a-8(i)(7). This conclusion is
consistent with the Staff's stated rationale for the ordinary business
exclusion, which is to "confine the resolution of ordinary business problems to
management and the board of directors." SEC Release No. 34-40018 (May 21, 1998).
Further, the determination as to which matters should be presented or deferred
at meetings of a board of directors and its committees is a central function of
a company's board of directors and management and, thus, is itself inherently
part of its ordinary business operations. The Company respectfully submits that
if its board of directors is to effectively manage the Company's business and
affairs, it must be afforded the flexibility to set meeting agendas and defer
votes on individual items without the potential complications of stockholder
review. Indeed, such decisions are inextricably linked to the substance of the
matters being considered. This connection is illustrated by the potential impact
on a company's business operations if it were required to disclose publicly the
consideration or deferral of matters by its board. For example, the disclosure
of a decision to defer a vote on a proposed transaction could jeopardize
negotiations on that transaction or similar transactions (and, potentially, the
stockholder value associated with them). Likewise, the disclosure of a
non-unanimous vote regarding a material contract could give advantage to
interested parties or a company's competitors who, for their own gain, might
seek to drive a wedge among the company's directors. These situations
demonstrate just how closely the information sought by the Proposal is related
to a company's management of its ordinary business operations. The Proposal also
could have the unintended effect of influencing the nature and content of
meeting agendas. The drafters of such agendas would need to be mindful of the
considerable complications and risk of harm from the availability of this
information to competitors and those having business with the company. The
effect of these additional considerations on a company's current board and
committee practices could impact how and when matters are considered and result
in a curtailing of board and committee votes until a unanimous vote is certain.
Such a scenario is not only contrary to a company's and its stockholders' best
interests, but it is further evidence that the placement and treatment of items
on meeting agendas are part of a company's ordinary business operations.
As noted above, the policy behind the ordinary business exclusion is to confine
the resolution of ordinary business problems to management and the board of
directors. SEC Release No. 34-40018 (May 21, 1998). The Staff has noted that one
central consideration underlying the exclusion's application is "the degree to
which the proposal seeks to `micromanage' the company by probing too deeply into
matters of a complex nature upon which stockholders, as a group, would not be in
a position to make an informed judgment." Id. The Company respectfully submits
that the Proposal directly seeks to micro-manage the Company by requesting
information about all matters considered by its board of directors and
committees. The Proposal could, as a practical matter, lead to active
stockholder oversight of large parts of the Company's ordinary business
operations. See Id. ("Certain tasks are so fundamental to management's ability
to run a company on a day-to-day basis that they could not, as a practical
matter, be subject to direct stockholder oversight."). Providing the requested
report also presents the significant risk of stockholder confusion or
misinterpretation of board actions because many matters raised at board and
committee meetings require detailed knowledge and familiarity with a company's
operations, history and business environment not generally possessed by its
average stockholder. Directors therefore receive detailed briefing materials and
presentations regarding matters considered by a company's board and committees,
which supplement their already existing knowledge of the company and its
business environment. Moreover, the determinations as to the timing of the
consideration of matters require additional understanding of those subjects. The
Company respectfully submits that its stockholders as a group would not be in a
position to make an informed judgment about the plethora of matters upon which
its board and committees act in the course of a year, nor an informed judgment
on the timing of the board's and committees' consideration of such matters or
the votes cast by individual directors. Consequently, the Company further
respectfully submits that the Proposal is appropriately omitted from the
Company's Proxy Materials pursuant to Rule 14a-8(i)(7) based on its propensity
to result in micro-management by the stockholders. The Staff has previously indicated that, when applying the ordinary business
operations exclusion, it will consider whether the proposal in question raises
significant "social policy issues." See SEC Release No. 34-40018. See also,
American Electric Power Co. (January 27, 2003) (proposal that each director
expend a minimum of twenty hours each month of the year to attend and prepare
for formal monthly board meetings); The Allstate Corp. (February 19, 2002)
(proposal that the company cease operations in Mississippi); Public Service Co.
of Colorado (March 19, 1997) (proposal that the board of directors seek new
management leadership). The Company believes that the Proposal does not advance
any significant positive social policy issues. While the Proponent argues that
the requested report will increase director accountability to stockholders, it
is well established that directors have a fiduciary duty to vote in furtherance
of what they believe to be the best interests of the corporation and its
stockholders. This point is not subject to public debate, and the Proponent is
not suggesting that the Company's directors be held to a different standard.
Moreover, the current disclosure requirements governing actions by a board of a
directors strike an important balance between providing stockholders with access
to board action, on the one hand, and preserving management's flexibility to
conduct its ordinary business operations, on the other hand. The Company is
subject to the disclosure requirements of the Delaware General Corporation Law
(the "DGCL") and the applicable rules and regulations of the SEC and the New
York Stock Exchange (the "NYSE"). In certain circumstances, several of which are
described in Section B below, these rules and regulations require the Company to
disclose information with respect to actions by its board of directors. In other
circumstances, the disclosure of board action is left to the discretion of the
company. Where disclosure of this information is not mandatory, the applicable
legislative or rulemaking bodies have determined that either such disclosure is
not in the public interest, or else a competing interest warrants that the
company exercise its judgment as part of its ordinary business operations. In
other words, these bodies have effectively placed such decisions, as well as the
subject matter of the Proposal, within a company's ordinary business operations.
Finally, the Company respectfully submits that the Staff's discussion in its
recent release of comments regarding, and revisions to, the SEC's proposed rules
on communications between security holders and boards of directors is relevant
to the Staff's consideration of the Proposal's exclusion under the ordinary
business rule. See Release No. 33-8340 (November 24, 2003). In the final rules,
the Staff chose not to require companies to describe how security holders can
communicate directly with individual directors. This modification from the SEC's
proposed rules responded to the numerous commentators who noted that such
requirement would be inappropriate because "named directors could then be
targeted for inappropriate correspondence." The Staff also decided not to
require companies to describe any material action taken by boards as a result of
security holder communications, citing the numerous difficulties in implementing
such a requirement. The Company believes that these same complications are presented by the
Proposal. The requirement that the Company disclose the names of directors who
did not vote in accord with the majority could expose these individuals to
inappropriate correspondence. Also, the Company's board could face significant
difficulties responding to the multitude of public questions and objections that
would inevitably follow the Company's release of the requested report. The
Company respectfully submits that the Staff's reasons for revising its new
disclosure requirements also support the exclusion of the Proposal from the
Company's Proxy Materials under Rule 14a-8(i)(7). For all of the reasons discussed above, the Company respectfully submits that
the Proposal is excludable from its Proxy Materials pursuant to Rule
14a-8(i)(7). B. Certain of the information called for by the Proposal is already available to
stockholders under the statutes, rules and regulations of the State of Delaware,
the SEC and the NYSE and, therefore, the Proposal is excludable from the
Company's Proxy Materials under Rule 14a-8(i)(10). Rule 14a-8(i)(10) allows the Company to exclude a shareholder proposal from its
Proxy Materials if it has already "substantially implemented" the proposal. See
SEC Release No. 34-20091 (August 16, 1983); Puerto Rican Cement Co., Inc. (March
25, 2002); Niagara Mohawk Power Corp. (February 16, 1995). The Proposal calls
upon the Company to make available for inspection certain information about its
board and committee meetings. However, a mechanism for obtaining this
information, in appropriate instances, is already provided for under the laws of
the Company's state of incorporation. Additionally, the rules and regulations
promulgated by both the SEC and the NYSE require the Company to disclose certain
material information, which would include certain aspects of its board and
committee meetings and votes. The Company therefore believes that the Proposal
is properly excludable as substantially implemented under Rule 14a-8(i)(10)
because these statutes, rules and regulations already provide for the
disclosure, in carefully considered circumstances, of the information that the
Proponent seeks. The Company is a Delaware corporation. Section 220 of the DGCL gives
stockholders the right, upon satisfaction of certain procedural requirements and
for a "proper purpose," to inspect the books and records of the Company. Section
220 defines a "proper purpose" as one "reasonably related to such person's
interest as a stockholder." This important safeguard allows management to
protect the Company, and its stockholders as a class, from improper or unlawful
inspections. The Delaware courts have established that the agendas and voting records of the
Company's board and committee meetings are part of its "books and records." See
e.g., Martha Stewart Living Omnimedia, Inc. v. Stewart, 833 A.2d 961 (Del. Ch.
2003); Freund v. Lucent Technologies, Inc., 2003 Del. Ch. LEXIS 3 (Del. Ch.
2003); Security First Corp. v. U.S. Die Casting and Development Co., 687 A.2d
563 (Del. 1997). Therefore, the Company already is obligated to make this
information available to stockholders who comply with the requirements of
Section 220. In this sense, the Proponent is seeking information that it already
has a right to receive upon compliance with Section 220. Additionally, both the SEC and the NYSE regulate disclosure by companies to
ensure that stockholders and potential investors have sufficient information to
make informed decisions about such companies. The rules and regulations
promulgated by the SEC require the disclosure of material information, which
includes board and committee actions, in circumstances determined by the SEC to
merit disclosure in the interests of investors. For example, in connection with
certain business combination transactions, the SEC rules require a company's
board to disclose to stockholders the reasons for its approval of the
transaction. See Item 1012 of Regulation M-A; Item 4(a)(2) of Form S-4.
Additionally, the SEC proxy rules require that a company disclose certain
actions by its Audit and Compensation Committees. See Item 7 of Regulation 14-A;
Item 306 of Regulation S-K. The NYSE rules further require listed companies to
"release quickly to the public any news or information which might reasonably be
expected to materially affect the market for its securities." See Rule 202.05.
Finally, the Company is in the process of implementing the SEC's new disclosure
standards with regard to security holders' communications with board members as
set forth in the Release. The Company complies with all applicable disclosure
rules, including where such disclosure rules require the disclosure of
information that would be presented in the report mandated by the Proposal.
The SEC and NYSE rules require the Company to disclose material information to
its stockholders. To the extent these rules do not require disclosure of
information covered by the Proposal, the applicable rulemaking bodies have
determined that either such disclosure is left to the discretion of the board of
directors as part of its ordinary business operations, or a compelling reason
(e.g. confidentiality) warrants that it should not be provided. In such
circumstances, the Company's stockholders still have access to the information
requested by the Proposal provided they comply with the requirements of Section
220 of the DGCL. The Proponent does not assert that the Company has failed to
comply with regulatory disclosure requirements, or that it has denied proper
Section 220 requests. Rather, the Proponent appears to seek the requested
information in spite of the Company's disclosure obligations and its inspection
rights under Delaware law. The Company respectfully submits that the rules
promulgated by the SEC and NYSE, combined with Section 220 of the DGCL, render
substantially implemented the access to the information that the Proposal seeks.
To the extent the Proposal seeks access to information that would not otherwise
be provided to stockholders in compliance with the disclosure and access rules
described above, it can only be an attempt to circumvent such rules. As such,
the Proposal is properly excludable under Rule 14a-8(i)(10) as having been
substantially implemented by existing statutes, rules and regulations.
* * * * * For the foregoing reasons, the Company respectfully requests that the Staff
confirm that it would not recommend enforcement action if the Company omits the
Proposal from its Proxy Materials. If you have any questions or if the Staff is
unable to concur with our conclusions without additional information or
discussions, we respectfully request the opportunity to confer with members of
the Staff prior to issuance of any written response to this letter. Please do
not hesitate to call the undersigned at (212) 484-7350. Please acknowledge receipt of this letter and its attachments by date-stamping
the enclosed copy of the first page of this letter and returning it in the
self-addressed stamped envelope provided for your convenience.
Very truly yours, /s/
Susan A. Waxenberg
Assistant General Counsel and Assistant Secretary cc: Gerald McEntee, Chairman and Charles Jurgonis
AFSCME Employees Pension Plan
1625 L Street, N.W.
Washington, D.C. 20036 [APPENDIX]
EXHIBIT A RESOLVED, that the stockholders of Time Warner, Inc. ("Time Warner") ask the
Board of Directors (the "Board") to prepare and make available to stockholders
on an annual basis a separate report (the "Report") regarding the actions taken
by the Board and all committees thereof (each, a "Committee") in the prior year.
The Report should be prepared at reasonable cost and should omit confidential
and proprietary information. Specifically, the Report should disclose:
(a) the agenda items on which the Board and each Committee voted;
(b) the agenda items on which a Board or Committee vote was deferred, along with
a general statement of the reason for the deferral; and (c) the existence of any non-unanimous Board or Committee vote, identifying the
director or directors whose votes were not in accord with the majority.
SUPPORTING STATEMENT In recent years, increased attention has been focused on the need for corporate
boards of directors to be accountable to stockholders and to advance stockholder
interests. To that end, the Securities and Exchange Commission has proposed
rules which would give stockholders the right to nominate director candidates on
company proxy statements, under certain circumstances. Corporate governance
ratings services evaluate the performance of boards as a whole, relying on data
regarding board composition, company governance practices and other factors.
It is still difficult, however, for stockholders to evaluate the effectiveness
of individual directors. Very rarely, a director will indicate publicly that he
or she disagrees with a board decision, but in the vast majority of cases
stockholders have no way of knowing about dissent within a board. In our
opinion, the paucity of public information on the board's agenda items and votes
thereon prevents stockholders from making full use of their rights to withhold
votes from individual directors, select directors for replacement with a "short
slate" advanced through a stockholder's separate proxy materials, and, if the
SEC's proposed rules take effect, target directors for challenge in the
company's own proxy materials. We believe there are compelling reasons that Time Warner stockholders might want
to learn more about the ways in which individual company directors are
representing stockholder interests. Time Warner's performance has been dismal
since the merger with AOL. The company posted an operating loss of $39.875
billion in 2002. According to Time Warner's most recent proxy statement, $100
invested in Time Warner stock on January 12, 2001, the first day of trading
following the AOL merger, would have been worth only $27 on December 31, 2002,
while the same amount invested in an index of peer group companies would have
been worth $64. In a November 24, 2003 Reuters story, an S&P analyst
characterized Time Warner as "confronted with a lot of different challenges both
with operating progress and shareholder communication."
We urge stockholders to vote for this proposal! [INQUIRY LETTER]
February 2, 2004 Pension Committee
GERALD W. McENTEE
WILLIAM LUCY
EDWARD J. KELLER
KATHY J. SACKMAN
HENRY C. SCHEFF
Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, NW
Washington, DC 20549 Re: Shareholder proposal of AFSCME Employees Pension Plan; no-action request by
Time Warner Inc. Dear Sir/Madam: Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the AFSCME
Employees Pension Plan (the "Plan"), submitted to Time Warner Inc. ("Time
Warner" or the "Company") a stockholder proposal (the "Proposal") asking the
Company's board of directors (the "Board") to disclose to stockholders the
actions taken by the Board and its committees, agenda items on which votes were
taken, agenda items on which action was deferred and the existence of any
non-unanimous votes. In a letter to the Commission dated December 31, 2003. Time Warner stated that
it intends to omit the Proposal from its proxy materials being prepared for the
2004 annual meeting of stockholders. Time Warner contends that it is entitled to
exclude the Proposal in reliance on Rule 14a-8(i)(7) because the Proposal deals
with the Company's ordinary business operations. and Rule 14a-8(i)(10), because
Delaware law and existing disclosure requirements have resulted in the Proposal
being substantially implemented. Ordinary Business Operations
Time Warner urges that the Proposal deals with the Company's ordinary business
operations because its Board is responsible for many activities, such as
budgeting, officer appointments, material contracts, securities offerings,
acquisitions and asset dispositions, that are part of the day-to-day management
of the Company's operations. Time Warner further contends that decisions
regarding which matters should be presented at a board meeting are inherently
part of a company's ordinary business operations and that the Proposal could
lead to micromanagement of this function by stockholders. The purpose of the Proposal is to provide Time Warner stockholders with more
detailed and nuanced information relating to how vigorously Time Warner
directors are representing stockholder interests. The data requested in the
Proposal would shed light on the nature of the Board's activities, beyond those
required by law or regulation. For example, the disclosure sought in the
Proposal would help stockholders understand the extent to which the Board takes
formal action on such key matters as strategic planning and management
succession. It would also assist stockholders in evaluating the effectiveness of
key committees by, for example, illuminating the process by which compensation
performance benchmarks are chosen. Such matters meriting formal action by the Board or a committee thereof are far
from the day-to-day management issues to which the ordinary business exclusion
is addressed. As Time Warner points out, in formulating and interpreting the
ordinary business exclusion, the Commission has been concerned with whether a
proposal "prob[es] too deeply into matters of a complex nature upon which
stockholders, as a group, would not be in a position to make an informed
judgment." Unlike the day-to-day matters such as customer service, non-executive
compensation, accounting and risk assessment dealt with in the no-action letters
cited by Time Warner, stockholders are well-positioned to understand and
evaluate information regarding the activities and deliberations of the Board.
Commission rules already require disclosure of data concerning Board or
committee activities in certain contextsmaterial transactions, executive
compensation and auditor independence, to name a fewand there is no reason to
believe that stockholders are confused or misled by this information.
Time Warner argues that disclosing the data sought in the Proposal could
polarize the Company's Board, result in gamesmanship of the process by which
items are considered by the Board or a committee, and jeopardize negotiations on
a transaction. As an initial matter, the Proposal permits Time Warner to omit
confidential or proprietary information from the report; because the Proposal is
non-binding, Time Warner's Board has significant latitude in defining the scope
of this exception. Accordingly, consideration of pending (and theretofore
undisclosed) transactions could be omitted from the report. Moreover, although
the Plan is mindful of the importance of striking an appropriate balance between
the needs of stockholders and boards, the potential deleterious effects of a
proposal are not grounds for exclusion under Rule 14a-8(i)(7).
Time Warner also relies on the Commission's failure in recent rulemaking to
require companies to describe how stockholders can communicate directly with
individual directors. Specifically, Time Warner urges that the same
considerationsthat "named directors could then be targeted for inappropriate
correspondence" should inform whether Time Warner is allowed to omit the
Proposal. The identification of directors who dissented on a matter voted on by
the Board or a committee is a far cry from providing a means for stockholders to
contact those directors. Indeed, no new contact or other personal information
about directors would be provided if Time Warner implemented the Proposal; it is
thus not likely that the Proposal would spawn intrusive communications from
stockholders. Substantial Implementation
Time Warner contends that the Proposal has already been substantially
implemented, and this is excludable under Rule 14a-8(i)(10). Time Warner's
reliance on this basis is curious, since its arguments in support of omission
under the ordinary business exclusion focus on the potentially disastrous
consequences flowing from the Proposal's implementation. Time Warner first urges that the Proposal has been substantially implemented
because section 220 of the Delaware General Corporation Law ("DGCL") gives
stockholders the right, under certain circumstances, to obtain corporate "books
and records," including minutes of board and committee meetings. Time Warner
further points to disclosure requirements imposed by the Commission and the New
York Stock Exchange relating to such matters as business combinations, actions
by audit and compensation committeescommunications between stockholders and
corporate boards, and other material events. Taken as a whole, these mechanisms, while providing important information to
stockholders, fall significantly short of satisfying the elements of the
Proposal. Stockholders' rights under section 220 of the DGCL are not
self-executing, as their right to receive information pursuant to the Proposal
would be; rather, a stockholder must submit a demand letter and, if the company
refuses the request or fails to respond, must litigate the issue of the
stockholder's entitlement to the requested materials at substantial expense to
the stockholder. Likewise, the disclosure required of companies under rules of
the Commission and NYSE listing standards does not include the full panoply of
matters voted on and deferred, nor does it require disclosure of non-unanimous
votes. Accordingly, the Proposal has not been substantially implemented.
* * * * To conclude, Time Warner has not met its burden of establishing that it is
entitled to rely on Rule 14a-8(i)(7) or (i)(10) to exclude the Proposal from its
proxy materials. Please do not hesitate to contact me on (202) 429-1007 if you
have any questions or need anything further. Very truly yours,
/s/ Charles Jurgonis
Plan Secretary cc: Susan Waxenberg
Assistant General Counsel and Assistant Secretary
Time Warner Inc.
[STAFF REPLY LETTER]
February 13, 2004 Response of the Office of Chief Counsel Division of Corporation Finance
Re: Time Warner Inc. Incoming letter dated December 31, 2003
The proposal requests that the board of directors prepare a report to
stockholders on an annual basis regarding the actions taken by the board and all
committees thereof in the prior year, disclosing the agenda items on which the
board and each committee voted; the agenda items on which a board or committee
vote was deferred, along with a general statement of the reason for the
deferral; and the existence of any non-unanimous board or committee vote,
identifying the director or directors whose votes were not in accord with the
majority. There appears to be some basis for your view that Time Warner may exclude the
proposal under rule 14a-8(i)(7), as relating to Time Warner's ordinary business
operations (i.e., reporting on board actions related to Time Warner's ordinary
business operations). Accordingly, we will not recommend enforcement action to
the Commission if Time Warner omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(7). In reaching this position, we have not found it
necessary to address the alternative basis for omission upon which Time Warner
relies. Sincerely, /s/
Attorney-Advisor
Daniel Greenspan
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