Company Name: Raytheon Co.
Public Availability Date: January 19, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
By FedEx
December 9, 2005
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, D.C. 20549
Re: Raytheon CompanyFile No. 1-13699 Statement of Reasons for Omission of
Shareholder Proposal Pursuant to Rule 14a-8(i)(7)
Ladies and Gentlemen:
We are filing this letter because Raytheon Company, a Delaware corporation
("Raytheon" or the "Company"), received a shareholder proposal (the "Proposal"),
which is attached to this letter as Exhibit A, from John H. Fullerton (the
"Proponent"), that the Proponent wishes to have included in Raytheon's proxy
materials for its 2006 annual meeting of shareholders (the "2006 Proxy
Materials").
The Proposal states as follows:
"Resolved: that the Directors vote to require that the annual shareholder
meeting of Raytheon Company be held each year within twenty-five miles of
Raytheon Company Global Headquarters in Waltham, MA.
Discussion: Holding the annual shareholder annual meeting within twenty-five
miles of Headquarters will save the Company the significant travel and living
expense of Company executives, staff and directors that is associated with their
traveling to a distant location for the meeting as well as saving the loss of
time and focus on Company business that is a consequence of modern day travel.
A meeting location at or near Headquarters will be convenient for many
shareholders. Personal observation at several Raytheon shareholder annual
meetings clearly indicates that attendance by shareholders is very small when
the meetings take place far from Global Headquarters."
Raytheon proposes to omit the Proposal and its supporting text because it is
excludable under Rule 14a-8(i)(7), since it deals with a matter relating to the
conduct of the ordinary business operations of the Company.
Accordingly, we submit this statement of reasons for exclusion of the Proposal
from the 2006 Proxy Materials pursuant to Rule 14a-8(j) promulgated under the
Securities Exchange Act of 1934, as amended, and hereby request that the Staff
of the Division of Corporate Finance (the "Staff") confirm that it will not
recommend enforcement action against Raytheon should it omit the Proposal from
the 2006 Proxy Materials. Pursuant to Rule 14a-8(j)(2), filed herewith are six
copies of this letter and the Proposal. In addition, pursuant to Rule
14a-8(j)(1), Raytheon is notifying the Proponent of its intention to omit the
Proposal from the 2006 Proxy and we have provided a copy of this submission to
the Proponent.
Rule 14a-8(i)(7): Ordinary Business Operations
Under Rule 14a-8(i)(7), a proposal is excludable from a company's proxy
materials if it deals with a matter relating to the conduct of the ordinary
business operations of the company. The Proposal relates to the location of
Raytheon's annual meeting, and is a matter that falls within the scope of
Raytheon's ordinary business operations. Whether or not to hold the annual
meeting at Raytheon's headquarters is clearly a decision that falls within the
scope of the authority held by Raytheon's Board of Directors and management.
On numerous occasions, and on a consistent basis, the Staff has taken the
position that the determination of the location of a company's shareholder
meeting is a matter relating to the conduct of the company's ordinary business
operations, and therefore may be excluded from the company's proxy materials.
See J.P. Morgan Chase & Co. (February 5, 2003)(requesting that the company's
annual shareholder meeting be held at least every second year in New York City);
Verizon Communications Inc. (January 9, 2003)(requesting that the company's
annual shareholder meeting be held at least every other year in New York City
and its immediate environs and that any such meeting be easily accessible by
public transportation); Verizon Communications Inc. (February 25,
2002)(requesting that the board be restricted to holding its annual meeting in
the former NYNEX and Bell Atlantic territories); Edison International Southern
California Edison Company (January 30, 2001)(requesting that all annual meetings
of shareholders be held within the Southern California Edison Co. service
territory); PG&E Corporation (January 12, 2001)(requesting that all annual
meetings be held at the company headquarters city of San Francisco in at least 2
out of every 3 years).
It is well-settled under Delaware law that a board of directors may determine
the location of a company's annual shareholders meeting. Raytheon's By-Laws
provide that the Board may designate the place of the annual meeting. In
practice, Raytheon management recommends to the Board of Directors the location
of the annual meeting. The Board considers all factors it deems relevant in its
determination, including cost and resources, then approves the location, date
and other logistical information with respect to the meeting.
The Raytheon Board wishes to maintain the flexibility afforded to it under
Delaware law and the By-Laws to determine on a yearly basis the location of its
annual shareholders meeting. In past years, the annual meeting has been held at
various Raytheon U.S. facilities within and outside of Massachusetts in order to
give attendees an opportunity to experience the Company's different locations
and operations. When Raytheon's corporate headquarters were located in
Lexington, Massachusetts, there were numerous annual meetings held in its
on-site employee cafeteria. The Company moved its corporate headquarters to
Waltham, Massachusetts in late 2003. Since that time, the annual meeting has
been held at a hotel in Washington, D.C. because the corporate headquarters
facility does not contain a meeting space adequate to hold all attendees.
Raytheon believes that holding the meeting in Washington, D.C. is logical given
the large number of customers located there. Given that Raytheon is a global
company, it has shareholders located all over the world.
By limiting the location of the annual shareholder meeting to Raytheon's
headquarters, as recommended in the Proposal, the Proponent seeks to impose a
rigid requirement upon Raytheon in a situation where Raytheon would be better
served by a focused analysis by its management team and an ultimate decision by
its Board of Directors with regard to where the meeting should be held.
Therefore, we believe the Proposal seeks to intrude upon Raytheon's ordinary
business operations.
For the foregoing reasons, we believe that the Proposal may be omitted from
Raytheon's 2006 Proxy Materials. Accordingly, we request the concurrence of the
Staff that it will not recommend enforcement action against Raytheon, should it
omit the Proposal from the 2006 Proxy Materials.
If you have any questions regarding this matter or require any additional
information, please contact the undersigned at 781-522-3036 or John W. Kapples
at 781-522-3038. If the Staff disagrees with any of the conclusions set forth
above, please contact the undersigned prior to the issuance of a written
response. Please be advised that Raytheon intends to mail its definitive proxy
materials to shareholders around March 20, 2006, and that it will therefore be
sending these materials to a financial printer not later than March 6, 2006.
Very truly yours,
/s/
Jane E. Freedman
cc: Jay B. Stephens, Senior Vice President and General Counsel
John W. Kapples, Vice President and Corporate Secretary
John H. Fullerton
[INQUIRY LETTER]
August 29, 2005
John W. Kapples, Secretary
Raytheon Company
Global Headquarters
870 Winter Street
Waltham, MA 02451-1449
RE: Proxy Proposal for 2006 Annual Meeting
This shareholder proposal is submitted by John H. Fullerton, 24 Cortland Lane,
Lynnfield, MA 01940, owner of 200* shares of Raytheon Company.
Resolved: that the Directors vote to require that the annual shareholder meeting
of Raytheon Company be held each year within twenty-five miles of Raytheon
Company Global Headquarters in Waltham, MA.
Discussion: Holding the annual shareholder annual meeting within twenty-five
miles of Headquarters will save the company the significant travel and living
expense of company executives, staff and directors that is associated with their
traveling to a distant location for the meeting as well as saving the loss of
time and focus on company business that is a consequence of modern day travel.
A meeting location at or near Headquarters will be convenient for many
shareholders. Personal observation at several Raytheon shareholder annual
meetings clearly indicates that attendance by shareholders is very small when
the meetings take place far from Global Headquarters.
Statement: I intend to continue to own these 200 shares at least until after the
next Annual Shareholders Meeting.
John H. Fullerton
-----FOOTNOTES-----
* Raytheon shares held in brokerage account.
[INQUIRY LETTER]
December 21, 2005
Office of the Chief Counsel
Division of Corporate Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Subject: Raytheon CompanyFile No. 1-1369 Statement of Reasons for Omission of
Shareholder Proposal Pursuant to Rule 14a-8(i)(7)
Ladies and Gentlemen:
The Raytheon Company ("Raytheon" or the "Company") has sent you a letter dated
December 9, 2005, referencing the above noted subject. In that letter they quote
a shareholder proposal (the "Proposal") I have made, and they say they "propose
to omit the Proposal and its supporting text because it is excludable under Rule
14a-8(i)(7), since it deals with a matter relating to the conduct of ordinary
business operations of the Company." Additionally Raytheon states that they
"request that the Staff of the Division of Corporate Finance (the "Staff")
confirm that it will not recommend enforcement action against Raytheon should it
omit the Proposal from the 2006 Proxy Materials."
Raytheon asserts that "On numerous occasions, and on a consistent basis, the
Staff has taken the position that the determination of the location of a
company's shareholder meeting is a matter relating to the conduct of the
company's ordinary business operations." If that assertion is true, then in my
view, as a shareholder, the Staff should reexamine the matter and change the
position it has taken in the past. The determination of the location of the
annual shareholder meeting is not "an ordinary business operation." The meeting
is a one time, annual event whose location is of vital importance to the
shareholders and they should have the right to vote to impose restrictions on
the location of the meeting if they so choose.
Raytheon, in its letter to you, recounts some of the recent history regarding
the location of the annual stockholder meeting and makes argument in support of
their past choices and desire to do as they please in the future. These
arguments do not relate to whether or not the stockholders should be allowed to
vote on proposals regarding the location of the meeting. Those arguments
properly belong in the Proxy Materials where the Company can urge the
stockholders to vote against the Proposal.
Raytheon's view that the location relates to "ordinary business operations" and
their arguments in support of their recent choices betray Raytheon's
misconceptions of the function of the annual stockholder meeting. For example
they report in their letter to you that since 2003 "the annual meeting has been
held at a hotel in Washington, DC" and that "holding the meeting in Washington,
DC, is logical given the number of customers located there." The meeting is not
a "trade show" or a promotional event at which the Company's wares are put on
display for the benefit of "customers." Rather it is a meeting for the
stockholders at which the Company recounts the successes and shortcomings of the
past year and presents its fundamental business plans and goals for the coming
year. It is also the occasion when the stockholdersread "owners" vote on the
choice of Directors to represent them in the coming year and when they have the
opportunity to put question to Company management.
Although the Proposal clearly states that the annual meeting be held "within
twenty-five miles of Raytheon Company Global Headquarters", in its letter to you
Raytheon misrepresents the Proposal when they say they moved the meeting to a
hotel in Washington, DC, "because its corporate headquarters facility does not
contain a meeting space adequate to hold all attendees." They further
misrepresent the Proposal when they say "By limiting the location of the annual
stockholder meeting to Raytheon's headquarters, as recommended by the Proposal."
The twenty-five mile radius includes all of Boston and its western suburbs,
where there are numerous hotels and meeting centers with more than adequate
space and facilities for the annual meeting.
Raytheon says nothing about the inconvenience to the stockholders by holding the
meeting in Washington as evidenced by the diminution of the number of
stockholders that have appeared at the Washington meetings.
I urge you to view this matter as vital to the personal interests of the
stockholders and to take a position that will allow them to express their view
on this matter to the Raytheon Board.
If you have any question regarding this matter or require any additional
information, please contact the undersigned at the address given above or by
email at fullerton9@aol.com, with copy to Raytheon in either case. Raytheon's
invitation for a telephone conversation with them alone seems inappropriate as
compared with a documented request with copy to me.
Very truly yours,
/s/
John H. Fullerton
Cc: Jane E. Freedman
Senior Counsel
Raytheon Company
[STAFF REPLY LETTER]
January 19, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Raytheon Company Incoming letter dated December 9, 2005
The proposal relates to the location of Raytheon's annual meetings.
There appears to be some basis for your view that Raytheon may exclude the
proposal under rule 14a-8(i)(7), as relating to the company's ordinary business
operations (i.e., the location of Raytheon's annual meetings). Accordingly, we
will not recommend enforcement action to the Commission if Raytheon omits the
proposal from its proxy materials in reliance on rule 14a-8(i)(7).
Sincerely,
/s/
Mark F. Vilardo
Special Counsel
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