Company Name: Great Plains Energy Inc.
Public Availability Date: December 12, 2007
Document Sections:
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
November 7, 2007
VIA FEDERAL EXPRESS
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Great Plains Energy Incorporated: Omission of Shareholder Proposal Submitted
by Conrad Gebhart
Ladies and Gentlemen:
On behalf of Great Plains Energy Incorporated (the "Company" or "Great Plains"),
I enclose, pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), five additional copies of this letter, along
with six copies of a shareholder proposal by Conrad Gebhart (the "Proponent"),
for inclusion in the Company's proxy materials for the 2008 Annual Meeting of
Shareholders. The proposal and supporting statement are collectively referred to
as the "Proposal."
I respectfully request that the staff of the Division of Corporation Finance
(the "Staff") confirm that it will not recommend any enforcement action to the
Securities and Exchange Commission (the "SEC") if the Company omits the Proposal
from its 2008 proxy materials. I am sending a copy of this letter to Mr. Conrad
as formal notice of the Company's intention to exclude the Proposal from its
2008 proxy materials.
The Proposal and Proponent Communications
The Proposal reads:
WHEREAS in an environment of energy independence and alternative energy power
development nuclear power generation necessitates a continuing review of needs
within transmission line grids.
WHEREAS nuclear power generation applications are under current reports
increasingly being submitted to the Nuclear Regulatory Commission and Public
Service commissions.
WHEREAS the area of the old Oregon, Missouri, InterUrban (ELECTRIC) is along the
current MO., Hwy. Route "T" (minor collector), and excavations onto firm
limestone foundations have been accomplished by MoDOT leaving by their foresight
a gradient to 18,000-20,000 acre watershed for gravity flow water resources, in
the UTM location of N. 39 Degrees 57.939 W. 95 Degrees 10.575 we hereby as major
shareholders in Great Plains Power ask this shareholder resolution be added to
the next general stockholder's meeting.
See Exhibit A.
On September 20, 2007, shortly before receipt of the Proposal, the Company
received the following e-mail from the Proponent:
Hell-o;
Can shareholder's resolutions be sent to KCPL asking to apply to the NRC in
resurgence of applications to the NRC for nuclear power plant development?
Having been a GXP shareholder in MissouriGXP's expansion into the networkwe
have a mile of frontage road on Missouri State Hwy T, network transmission lines
and most all of the area has been leveled on limestone bedrock, with water
reserves close to the Missouri River, and a change in elevation for gravity flow
water resources. All these resources are located at elevation 836 ft, N 39deg
57.939, W 95deg 10,575. We think mile long frontages, gravity flow water points,
stable lime foundations, existing transmission lines would do well in a regular
nuclear engineering and resurgence of American energy independence with NRC
applications for nuclear energy can be feasible. Are shareholder resolution
submissions accepted on a regular basis for KCPL expansion into nuclear power
energy independence generation?
Warmest cordialities;
Conrad Gebhart
See Exhibit B (emphasis added).
The Company responded by e-mail on September 24, 2007, as follows:
Mr. Gebhart -
Shareholders wishing to have a proposal included in the proxy statement for the
Great Plains Energy Annual Meeting in 2008 must submit a written proposal to the
Corporate Secretary by November 21, 2007. Securities and Exchange Commission
("SEC") rules set standards for shareholder proposal requirements to be included
in a proxy statement, including that each shareholder may submit no more than
one proposal for a shareholder meeting.
To be eligible to bring a proposal for inclusion in the Proxy Statement, you:
must have continuously held at least $2,000 in market value or 1% of our
common stock for at least one (1) year as of the date the proposal is submitted
to us; and
intend to continue ownership of the shares through the date of the Annual
Meeting.
To be in proper written form, your proposal must set forth as to the matter you
propose to bring before the Annual Meeting:
a brief description (no more than 500 words in length) of the business to be
brought before the shareholder meeting and the reasons for conducting the
business at the shareholder meeting;
your name and record address;
the class or series and number of shares of our stock that you own
beneficially or of record, including proof of ownership and length of ownership
by written statement from the "record" holder of the securities or a copy of the
proof of ownership filed with the SEC and a written statement of your intent to
continue ownership of the shares through the date of the Annual Shareholders
Meeting;
a description of all arrangements or understandings between you and any other
person or persons (including their names) in connection with your proposal, and
any material interest of you in such proposal; and
your representation that you intend to appear in person or by a qualified
representative at the Annual Meeting to bring such business before the meeting.
KCP&L Legal Dept.
See Exhibit C.
Description of the Company
The Company is a holding company and does not own or operate any significant
assets other than the stock of its subsidiaries. Its two operating subsidiaries
are Kansas City Power & Light Company ("KCP&L"), on integrated regulated
electric utility, and Strategic Energy, L.L.C. ("Strategic Energy"), which
provides competitive electricity supply services in certain electricity markets
that offer retail choice. KCP&L owns and operates electric generation,
transmission or distribution facilities; Strategic Energy does not.
Reasons for Excluding the Proposal
Great Plains believes that the Proposal may properly be excluded from its 2008
proxy materials because, among other grounds for exclusion: (i) the Proponent
has not demonstrated his eligibility to submit the Proposal, (ii) the Proposal
is materially misleading and does not clearly request a course of action, (iii)
the Proposal is tailored to further a personal interest and (iv) the Proposal
relates to the ordinary business operations of the Company.
I. The Proponent Has Not Demonstrated Eligibility to Submit the Proposal.
Rule 14a-8(b) requires proponents to satisfy certain eligibility requirements in
order to submit a proposal for inclusion in a company's proxy materials for a
shareholder meeting. Rule 14a-8(b)(1) requires a proponent to be a security
holder and to 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 on the date the proponent submits the proposal. Rule
14a-8(b)(2) provides that the proponent bears the burden of demonstrating
compliance with the eligibility requirements in Rule 14a-8(b)(1).
Proponent submitted the Proposal to the Company via e-mail on September 30,
2007. The Proposal stated the Proponent is a "major shareholder[s] in Great
Plains Power." However, the Proposal did not address whether Proponent meets the
eligibility requirements in Rule 14a-8(b)(1) for Great Plains Energy. See
Exhibit A.
Because the name of the Proponent did not appear in the Company's records as a
shareholder of record, the Company sent a timely notice by e-mail to him on
October 11, 2007, requesting verification of the Proponent's eligibility.1 See
Exhibit D. The Company received no electronic indication that the email was not
delivered to Proponent's email address.
In the notice, the Company requested information from the record holder of the
Proponent's shares of Great Plains common stock in order to verify that the
Proponent continuously held the required amount of Great Plains Energy common
stock for at least one year as of September 30, 2007, the date the Proposal was
submitted to the Company. The Company attached a copy of Rule 14a-8 to the
notice and notified the Proponent of the requirement to respond within 14 days
from the date he received the October 11, 2007 e-mail. See Exhibit D.
To date, the Company has not received a response. Accordingly, the Proposal is
excludable under Rule 14a-8(f).
II. The Proposal is Materially Misleading and Does Not Clearly Request a Course
of Action.
Rule 14a-8(i)(3) permits the Company to exclude a proposal that is contrary to
any of the proxy rules, including rule 14a-9, which prohibits materially false
or misleading statements. Further, rule 14a-8(a)(1) provides that the "proposal
should state as clearly as possible the course of action that ... the company
should follow." The Proposal fails to meet both of these requirements.
While the Proposal contains three "Whereas" paragraphs, it lacks any statement
of what course of action the Proponent proposes. The Commission previously has
determined that a proposal could be omitted if it was "so inherently vague and
indefinite that neither the shareholders voting on the proposal, nor the Company
in implementing the proposal (if adopted), would be able to determine with any
reasonable certainty exactly what actions or measures the proposal requires."
Philadelphia Electric Company (July 30, 1992) 1992 WL 186643. See also, Staff
Bulletin 14C (June 28, 2005).
Without a requested course of action, there can be no proposal and therefore
nothing for shareholders to approve or disapprove. The Proposal is therefore so
vague and indefinite that neither the stockholders voting on the proposal (if
included in the proxy materials), nor the Company in implementing the proposal
(if adopted), would be able to determine with any reasonable certainty exactly
what actions or measures the Proposal requires.
The Company's October 11, 2007 letter to the Proponent informed him that it was
unable to determine what notion, if any, he is seeking and asked him to "clarify
what specific action [he is] asking the Company to take." The letter reminded
the Proponent that the Proposal and any accompanying supporting statement may
not exceed 500 words. See Exhibit D. No response or additional clarification has
been received to date.
While the Company believes the Proponent's Proposal should be excluded because
it lacks a clearly stated course of action, the Company assumes, for the
purposes of this process, that the Proposal requests the construction of a
nuclear generating plant at the location referenced therein. The Company's
remaining arguments are based upon that assumption.
III. The Proposal is Tailored to Further a Personal Interest.
Rule 14a-8(i)(4) provides that a company may omit a proposal if it is designed
to result in a benefit to the proponent, or to further a personal interest,
which is not shared by the other shareholders at large. The Company believes the
Proposal should be excluded because it is believed to call for the development
of a nuclear generating plant to land owned by the Proponent, in violation of
Rule 14a-8(i)(4).
The Commission has stated that Rule 14a-8(i)(4) is designed to "insure that the
security holder proposal process [is] not abused by proponents attempting to
achieve personal ends that are not necessarily in the common interest of the
issuer's shareholders generally." Exchange Act Release 34-20091 (August 16,
1983). As set forth above, the Proposal and accompanying e-mail communications
lead the Company to reasonably believe Proponent's request is for the
development of nuclear power generation on or near the land which land he owns.
The Proposal is therefore designed to further a personal interest of the
Proponent, which other stockholders of the Company at large do not share.
Accordingly, the Proposal may be excluded under Rule 14a-8(i)(4).
VI. The Proposal Relates to the Ordinary Business Operations of the Company.
Rule 14a-8(i)(7) provides that a company may omit a proposal if it "deals with a
matter relating to the company's ordinary business operations." The Commission
has defined "ordinary business" as referring to matters that are not necessarily
"ordinary" in the common meaning of the word, and is rooted in the corporate law
concept providing management with flexibility in directing certain core matters
involving the company's business and operations. Exchange Act Release No.
34-40018.
Further, the Commission has provided additional insight into the principal
considerations in the Division's application, under the Commission's oversight,
of the "ordinary business" exclusion, as follows:
The general underlying policy of this exclusion is consistent with the policy of
most state corporate laws: to confine the resolution of ordinary business
problems to management and the board of directors, since it is impracticable for
shareholders to decide how to solve such problems at an annual shareholders
meeting.
The policy underlying the ordinary business exclusion rests on two central
considerations. The first relates to the subject matter of the proposal. 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 shareholder oversight. Examples include ... decisions on production
quality and quantity.
The second consideration relates to the degree to which the proposal seeks to
"micromanage" the company by probing too deeply into matters of a complex nature
upon which shareholders, as a group, would not be in a position to make an
informed judgment. This consideration may come into play in a number of
circumstances, such as where the proposal involves intricate detail, or seeks to
impose specific time-frames or methods for implementing complex policies.
Id.
In our judgment, the Proposal fits squarely within the category of proposals
that the Commission intended to permit registrants to exclude under Rule
14a-8(i)(7) because the Proposal clearly falls within the purview of ordinary
business operations. The Proposal requests the development of nuclear generating
plant in the "area of the old Oregon, Missouri ... along the current MO., Hwy.
Route "T"." It is well established that proposals such as this, which seek to
specify the location of utility facilities, fundamentally relate to ordinary
business operations and, therefore, are excludable under Rule 14a-8(i)(7). See,
e.g., Northern States Power, (February 11, 1998) 1998 WL 68940, (the decision as
to the specific location of a company's power lines is a matter relating to the
conduct of the company's ordinary business operations.); Long Island Lighting
Co. (February 19, 1980) 1980 WL 17890, (the positioning of power lines was a
matter relating to the conduct of the ordinary business operations of the
issuer.).
The Company recognizes that in certain situations the Staff has taken the
position that nuclear power proposals may invoke broad social policies and are,
therefore, outside the scope of the ordinary business exclusion. However, not
all proposals relating to nuclear power involve broad policy issues and at least
one such proposal relating to mere operation of a nuclear facility has been
excluded as relating to ordinary business operations. See, e.g., Carolina Power
& Light Co. (March 8, 1990) 1990 WL 286179 (specific and detailed data about
nuclear plant operations related to ordinary business operations).
While the Proposal is apparently in favor of nuclear power, its purpose is not
to present any social question; rather, the Proposal apparently proposes that a
nuclear power plant be constructed at a specific location. We believe that the
Proposal falls squarely within the Northern States Power and Long Island
Lighting Co. line of no-action letters regarding location of facilities, and
thus is properly excludable pursuant to Rule 14a-8(i)(7).
Conclusion
For the reasons given above, we respectfully request that the Staff not
recommend any enforcement action from the Commission if the Company omits the
Proposal from its 2008 proxy materials. If the Staff disagrees with the
Company's conclusion to omit the Proposal, we request the opportunity to confer
with the Staff prior to the final determination of the Staff's position. We very
much appreciate a response from the Staff on this no-action request as soon as
practicable. If you have any questions or require additional information
concerning this matter, please call me at (816)556-2608.
Very truly yours,
/s/
Mark G. English
General Counsel and Assistant Secretary
Enclosures
cc: Mr. Conrad Gebhart (via e-mail w/encl.)
-----FOOTNOTES-----
1 The Proponent did not provide his address and the only means of communication
known to the Company is his e-mail address. Further, the Company is unaware of
any authority or guidance holding that notices to proponents cannot be sent by
email. Rule 14a-8 requires only that the notice must be "received" by the
proponent. The Company also notes that in Sky Financial Group, Inc. (December
20, 2004) 2004 WL 2977545, the company's Rule 14a-8 notices to the proponent
were sent by email.
[APPENDIX]
From: CG Gebhart [mailto;damark@msn.com]
Sent: Sunday, September 30, 2007 5:18 PM
To: Comments; shannon.kusilek@modot.mo.gov; darby.logan@modot.mo.gov;
dnamark@msn.com
Subject: GXP (kcpl) SHAREHOLDER RESOLUTION
To: P.I.O.
WHEREAS in an environment of energy independence and alternative energy power
development nuclear power generation necessitates a continuing review of needs
within transmission line grids.
WHEREAS nuclear power generation applications are under current reports
increasingly being submitted to the Nuclear Regulatory Commission and Public
Service commissions.
WHEREAS the area of the old Oregon, Missouri, InterUrban (ELECTRIC) is along the
current MO., Hwy. Route "T" (minor collector), and excavations onto firm
limestone foundations have been accomplished by MoDOT leaving by their foresight
a gradient to 18,000-20,000 acre watershed for gravity flow water resources, in
the UTM location of N. 39 Degrees 57.939 W. 95 Degrees 10.575 we hereby as major
shareholders in Great Plains Power ask this shareholder resolution be added to
the next general stockholder's meeting. Warm cordialities, C G GEBHART
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EXHIBIT A
[STAFF REPLY LETTER]
December 12, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Great Plains Energy Incorporated Incoming letter dated November 7, 2007
The submission relates to "nuclear power generation."
To the extent the submission involves a rule 14a-8 issue, there appears to be
some basis for your view that Great Plains may exclude the proposal under rule
14a-8(f). We note that the proponent appears not to have responded to Great
Plains' request for documentary support indicating that the proponent has
satisfied the minimum ownership requirement for the one-year period required by
rule 14a-8(b). Accordingly, we will not recommend enforcement action to the
Commission if Great Plains 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
Great Plains relies.
Sincerely,
/s/
Ted Yu
Special Counsel
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