Company Name: First Hartford Corp.
Public Availability Date: November 14, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
October 19, 2006
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Attention: Office of Disclosure and Review Division of Investment Management
Re: First Hartford Corporation - Omission of Shareholder Proposal in Proxy
Material Pursuant to Rule 14a-8 of the Securities and Exchange Act of 1934
Ladies and Gentlemen:
As counsel to First Hartford Corporation (the "Corporation"), whose principal
activities are to purchase, develop, own, manage and distribute real estate
through its subsidiaries, we are writing to seek confirmation that the Staff
(the "Staff") of the Securities and Exchange Commission will not recommend
enforcement action if the Corporation omits from its proxy statement and form of
proxy for its 2006 Annual Meeting of Stockholders (the "Proxy Materials") the
stockholder proposal and supporting statement (together, the "Proposal")
submitted to the Corporation in a letter from Mr. Richard E. Kaplan, Echo Bridge
Office Park, 381 Elliot Street Suite 100L, Newton, MA 02464-1130 on October 10,
2006. Pursuant to Rule 14a-8(j)(2) under the Securities Exchange Act of 1934
(the "1934 Act"), enclosed are six copies of each of the following:
1. this letter;
2. Mr. Kaplan's letter, which contains the Proposal (attached as Exhibit A).
Grounds For Excluding the Proposal Pursuant to Rule 14a-8
The Corporation filed its definitive Proxy Materials October 16, 2006 has
omitted the Proposal pursuant to Rule 14a-8 due to lack of timeliness of the
Proposal.
Rule 14a-8(e)(2) under the Exchange Act establishes the deadline by which
stockholder proposals must be submitted for a company's regular scheduled annual
stockholder's meeting. The Rule states that a 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."
The Corporation's proxy statement for its 2005 annual stockholder's meeting was
filed on October 27, 2005 and mailed to shareholders of record on or about
October 28, 20051. Accordingly, the deadline for timely receipt of stockholder
proposals for inclusion in the Corporation's Proxy Materials was July 31, 2006.
This deadline was included in the proxy statement for the Corporation's 2006
annual stockholder's meeting. The Corporation received Mr. Kaplan's proposal on
October 10, 2006, 71 days after the July 31 deadline. In previous no-action
letters, the Commission has strictly defined the timeliness requirements to Rule
14a-8, even in situations where a proposal was received by a company within a
few days after the applicable deadline.2 Consequently, we are of the opinion
that the Proposal may be omitted by the Corporation from the Proxy Materials.
In addition, the Corporation hereby also requests that the Staff waive the
80-day requirement of Rule 14a-8(j)(1). To comply with this requirement, the
Corporation would have had to file its no-action request by August 7, 2006.
However, the Proposal was submitted on October 10, 2006 which was after the
80-day requirement. This request was filed as soon as practicable. The Staff has
previously exercised its waiver of authority in similar circumstances.
In accordance with Rule 14a-8(j) under the 1934 Act, the Corporation is
contemporaneously notifying Mr. Kaplan, by copy of this letter, of its intention
to omit the Proposal from the Corporation's Proxy Materials.
Request
On behalf of the Corporation, we hereby respectfully request that the Staff
express its intention not to recommend enforcement action if the Proposal is
excluded from the Corporation's Proxy Materials for the reasons set forth above.
If the Staff disagrees with the Corporation's conclusions regarding omission of
the Proposal, or if any additional submissions are desired in support of the
Corporation's position, we would appreciate an opportunity to speak to you by
telephone prior to the issuance of the Staff's Rule 14a-8(j) response. If you
have any questions regarding this request, or need any additional information,
please telephone the undersigned at (212) 940-8513.
Please acknowledge receipt of this letter and the enclosed materials by stamping
the enclosed copy of this letter and returning it to us in the pre-paid and
addressed envelope provided herein.
Very truly yours,
/s/
Murray D. Schwartz
-----FOOTNOTES-----
1 The 2006 Annual Meeting is scheduled to be held within 30 days of the
anniversary of the annual stockholder's meeting, which was held on November 30,
2005.
2 See Bull & Bear U.S. Government Securities Fund, Inc. (available October 8,
1998)(stockholder proposal received eighteen days after deadline may be
omitted); Bristol-Myers Squibb Company (available February 5, 1998) (stockholder
proposal received three days after deadline may be omitted); Peco Energy Company
(available December 29, 1994) (stockholder proposal received one day after
deadline may be omitted); Lockheed Corporation (available February 6, 1991)
(stockholder proposal received one day after deadline may be omitted);
Knight-Ridder, Inc. (available December 26, 1990) (stockholder proposal received
one day after deadline may be omitted).
[INQUIRY LETTER]
CERTIFIED MAIL. RRR
October 10, 2006
Stuart I. Greenwald, Secretary
First Hartford Corporation
P.O. Box 1270
149 Colonial Road
Manchester, Connecticut 06045-1270
Dear Mr. Greenwald:
Enclosed pursuant to SEC Rule 14a-8 is a shareholder proposal, including
supporting statement, which I am submitting for inclusion in the Company's proxy
statement for the first annual or special shareholder meeting for which this
proposal is timely.
I have continuously held as registered owner at least $2,000 in market value of
the First Hartford Corporation Common Stock for more than the past 10 years, and
intend to continue to hold those shares through the date of the shareholder
meeting for which my proposal is submitted.
Very truly yours,
/s/
Richard E. Kaplan
REKms
Enc.
[APPENDIX]
Kaplan Shareholder Proposal
October 10, 2006
"Resolved, to amend the By-Laws by adding to Article IV:
Section 7. Independent Directors. At all times a majority of the Board of
Directors, and of any committees, shall be Independent Directors; and no action
of the Board, or of any committee, shall be valid unless approved by the
affirmative vote of a majority of the Independent Directors. A Director is not
Independent if within the preceding 5 years he has had any nontrivial
relationship with the Company, other than service as a director. Relationships
(business, social or family) with the following persons are considered
relationships with the Company: (a) any officer or management employee of the
Company or its affiliates, (b) any person owning beneficially 5% or more of the
equity interests in the Company or any of its affiliates, or (c) family members
or affiliates, of the foregoing. Independent Directors must be free from any
appearance of predisposition toward the interests of management. A director
elected by the Board cannot be considered an Independent Director until elected
by the shareholders. Any Independent Director who ceases to qualify as such
shall automatically cease to be a director. This Section cannot be amended by
the Board of Directors.
Reasons:
The First Hartford Board consists entirely of insider management: Neil Ellis,
President of the Company, and two subordinates who sit idly by while Ellis has
treated the Company as his own private bank. Money has been loaned back and
forth between the Company and other entities in the Ellis empire, sometimes
without interest. Ellis also has transferred properties from the Company to
other entities in his empire without Board approval. Because Ellis sets all
salaries, including his own, none of the directors can stand up to Ellis to
protect shareholder interests or demand accountability.
Has self-dealing by Ellis been fair to the shareholders? There has been no
review by any independent third party and no scrutiny. In many cases, the
transactions are not adequately documented nor have they been approved by the
Ellis-dominated board.
Most recently, under pressure from my lawsuits, Ellis paid the shareholders a
dividend of 10 cents per share, a total of around $300,000, which would have
been progress had Ellis not also treated himself and his subordinate directors
to supersized bonuses. These bonuses were more than twice the dividend to
shareholders and more than the Company's income.
Over the past few years, Ellis has wasted over $1,000,000 of shareholder money
resisting efforts to obtain disclosure of his self-dealing. Regardless, the
Federal Court in Massachusetts still found that his inadequate disclosures
violated the securities laws. Do we really want Ellis spending so much of our
money to hide relevant facts from us?
This Company needs a board with a majority of independent directors to protect
shareholder interests. The vast majority of public companies have a majority of
independent directors. This proposal will move the Company into the corporate
mainstream and provide much needed accountability.
Please vote FOR the proposal."
[STAFF REPLY LETTER]
November 14, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: First Hartford Corporation Incoming letter dated October 19, 2006
The proposal relates to director independence.
There appears to be some basis for your view that First Hartford Corporation may
exclude the proposal under rule 14a-8(e)(2) because First Hartford Corporation
received it after the deadline for submitting proposals. We note in particular
your representation that First Hartford Corporation did not receive the proposal
until this deadline. Accordingly, we will not recommend enforcement action to
the Commission if First Hartford Corporation omits the proposal from its proxy
materials in reliance on rule 14a-8(e)(2).
We note that First Hartford Corporation did not file its statement of objections
to including the proposal in its proxy materials at least 80 calendar days
before the date on which it filed definitive proxy materials as required by rule
14a-8(j). Noting the circumstances of the delay, we grant First Hartford
Corporation's request that the 80-day requirement be waived.
Sincerely,
/s/
Ted Yu
Special Counsel
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