Company Name: Union Pacific Corp.
Public Availability Date: February 21, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
[INQUIRY LETTER]
December 29, 2006
Direct Dial (202) 955-8671
Fax No. (202) 530-9569
Client No. C 93154-00014
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal of the International Brotherhood of Teamsters Exchange
Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that our client, Union Pacific Corporation (the
"Company"), intends to omit from its proxy statement and form of proxy for its
2007 Annual Shareholders Meeting (collectively, the "2007 Proxy Materials") a
shareholder proposal and statements in support thereof (the "Proposal") received
from the International Brotherhood of Teamsters (the "Proponent").
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and its attachments;
filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before the Company files
its definitive 2007 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponent.
Rule 14a-8(k) provides that shareholder proponents are required to send
companies a copy of any correspondence that the proponents elect to submit to
the Commission or the staff of the Division of Corporation Finance (the
"Staff"). Accordingly, we are taking this opportunity to inform the Proponent
that if it elects to submit additional correspondence to the Commission or the
Staff with respect to this Proposal, a copy of that correspondence should
concurrently be furnished to the undersigned on behalf of the Company pursuant
to Rule 14a-8(k).
BASIS FOR EXCLUSION
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2007 Proxy Materials pursuant to Rule
14a-8(i)(7) because the Proposal pertains to matters of ordinary business
operations (management of security and safety programs and the assessment of
risks and liabilities arising from outside factors).
THE PROPOSAL
The Proposal requests that the Company provide information in its 2008 proxy
statement "relevant to the Company's efforts to both safeguard the security of
their operations and minimize material financial risk arising from a terrorist
attack and/or other homeland security incidents." A copy of the Proposal, as
well as related correspondence from the Proponent, is attached to this letter as
Exhibit A.
ANALYSIS
The Proposal May Be Excluded Under Rule 14a-8(i)(7)
Because the Proposal Pertains to Matters of Ordinary Business Operations.
The Proposal properly may be omitted pursuant to Rule 14a-8(i)(7) because the
Proposal seeks an evaluation and report on the risks and liabilities of ordinary
Company operations and seeks information about the Company's efforts to
safeguard operations and minimize the financial risk from specified types of
external factors. Rule 14a-8(i)(7) permits the omission of shareholder proposals
dealing with matters relating to a company's "ordinary business" operations.
According to the Commission's Release accompanying the 1998 amendments to Rule
14a-8, the underlying policy of the ordinary business exclusion is "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 meeting." Exchange Act Release No. 40018 (May 21,
1998) (the "1998 Release"). In the 1998 Release, the Commission further
explained that the term "ordinary business" refers to matters that are not
necessarily "ordinary" in the common meaning of the word, but that the term "is
rooted in the corporate law concept of providing management with flexibility in
directing certain core matters involving the company's business and operations."
1
The Commission also has stated that a proposal requesting the dissemination of a
report may be excludable under Rule 14a-8(i)(7) if the substance of the report
is within the ordinary business of the issuer. See Exchange Act Release No.
20091 (August 16, 1983). This same standard applies with respect to shareholder
proposals requesting that information be included in a company's filings with
the Commission. See Johnson Controls, Inc. (avail. Oct. 26, 1999).
A. The Proposal Is Excludable Because It Seeks a Report on the Company's Overall
Safety Programs.
The Company is the largest railroad in North America and serves twenty-three
states. The Vision Statement of the Company states that the safety of the public
and its employees is the Company's top priority. The Company devotes
considerable resources towards efforts to avoid, prepare for, and minimize any
impact from a wide variety of external events and circumstances that might, for
example, cause derailments or reduce the overall safety of the railroad. The
types of safety and security efforts encompassed by the Proposal thus constitute
a central, but routine, aspect of the Company's business to minimize any
financial or other risks that might arise from a variety of external factors,
both of the type referred to in the Proposal and from other events - such as
severe weather conditions, earthquakes and floods - that are beyond the control
of the Company.
The Proposal is similar to many other shareholder proposals that the Staff has
concurred can be omitted under Rule 14a-8(i)(7) because they seek reports or
information about a company's safety and security initiatives. In CNF
Transportation, Inc. (avail. Jan. 26, 1998), the Staff concurred in omitting a
proposal requesting that the board of directors develop and publish a safety
policy accompanied by a report analyzing the long-term impact of the policy on
the company's competitiveness and shareholder value. In fact, the Staff has
recognized on numerous occasions that a corporation's safety operations with
regard to external factors constitute a matter of ordinary business. Likewise,
in AMR Corp. (avail. April 2, 1987), the Staff concluded that a proposal
requesting that the board of directors review and issue a report regarding the
safety of the company's airline operations was excludable as a matter relating
to ordinary business operations. See also E.I. du Pont de Nemours and Co.
(avail. Nov. 27, 1992) (proposal excluded as ordinary business when it relates
to "the safety of the Company's aviation operations").
Because the implementation of safety precautions and protocols is one of the
core matters involving the Company's railroad operations, in a manner similar to
the introduction of employee training and the employment of certain rail
scheduling techniques, these actions are best viewed as a core and indispensable
aspect of the business operations. Thus the Proposal, like the shareholder
proposals at issue in the letters cited above, requires management to provide
safety and financial information that relates exclusively to ordinary business
activities appropriately managed by directors and officers. The introduction of
shareholder micromanagement into the central and ordinary business activity of
the Company, as contemplated by the Proposal, runs contrary to the precedent
cited above.
B. The Proposal Is Excludable Because It Seeks an Evaluation and Report on the
Risks and Liabilities of Ordinary Business Operations.
It is well established that a proposal seeking an internal assessment or
evaluation of the risks related to a company's operations does not raise a
policy issue, but instead delves into the minutiae and details of the company's
ordinary business. Thus, in numerous cases, the Staff has concurred that a
company could exclude a proposal that requested the company to report on its
initiatives to manage the risk from external factors that could affect the
company's business or operations. For example, in The Chubb Corp. (avail. Jan.
25, 2004), the proposal requested the company to prepare a report providing an
assessment of Chubb's strategies to address the impacts of climate change on its
business. The Staff concurred that this proposal was excludable under Rule
14a-8(i)(7) because it related to Chubb's ordinary business operations. See also
Wachovia Corp. (avail. Feb. 10, 2006) (Staff concurred that the company could
exclude a proposal requesting a report on the effect on Wachovia's business
strategy of the challenges posed by global climate change). Likewise, in Pfizer
Inc. (avail. Jan. 24, 2006), the proposal requested the company to report on the
economic effects of certain pandemics and on the company's initiatives to date.
Because the requested report involved an internal assessment and evaluation of
risks affecting the company's business, the Staff concurred that the proposal
was excludable. See also ConocoPhillips (avail. Feb. 1, 2006) (proposal
requesting report on effect of pandemics and initiatives to date excludable);
Texas Instruments Inc. (avail. Jan. 28, 2005) (same). To similar effect, in The
Ryland Group, Inc. (avail Feb. 13, 2006), the Staff concurred that the company
could exclude a proposal requesting the company to assess its response to rising
regulatory, competitive and public pressure to increase energy efficiency.
In each of these precedents, the reports or assessments requested in the
proposals related to the company's assessment of the risks to its business of
some external event or situation and to the company's initiatives in response to
the event or situation. In the present case, the Proposal likewise relates to
the Company's initiatives (its efforts to safeguard security of its operations)
with regard to external circumstances and an evaluation of those matters with
respect to their impact on the financial well-being of the Company. Although the
Proposal focuses on a particular type of risk - that arising from a possible
terrorist attack and/or other homeland security incident - the Proposal remains
a request for a report on how the Company is assessing and managing a day-to-day
aspect of its operations. Because the Proposal here calls for information about
the possible impact of external events and the Company's evaluation of and
initiatives to respond to such risks, the Staff's precedent supports the
conclusion that the Proposal implicates ordinary business matters within the
meaning of Rule 14a-8(i)(7).
The Proposal also implicated the Company's ordinary business because it seeks a
report on the Company's initiatives to assess and minimize financial risks. The
Staff has consistently concurred that proposals seeking a report on financial
risks to a company are excludable. In Cinergy Corp. (avail. Feb. 5, 2003), the
Staff concurred that the company could exclude a proposal that requested a
report disclosing the economic risks associated with past, present and future
aspects of the company's operations, noting that the proposal related to an
"evaluation of risks and benefits" of the company's operations. See also Dow
Chemical Co. (avail. Feb. 23, 2005) (Staff concurred with exclusion of a
proposal requesting a report on the impact that outstanding Bhopal issues, if
not addressed by the company, may pose on the company's reputation, finances and
business); Williamette Industries, Inc. (avail. Mar. 20, 2001) (proposal
requesting a report on the company's environmental problems and initiatives to
resolve them, including financial exposure arising from environmental issues,
excludable as involving an "evaluation of risk").
This Proposal is clearly distinguishable from other proposals that request a
company to provide information about inherently dangerous operations. In
Carolina Power and Light Co. (avail. Feb. 23, 1989), the Staff did not concur
that the company could exclude a proposal requesting a report on incidents,
errors, and shutdowns of nuclear power operations. Similarly, in Duke Energy
Ohio, Inc. (avail. Feb. 22, 1982), the Staff did not concur that a proposal to
establish an independent panel to investigate a quality assurance program at a
nuclear power plant was excludable as a matter relating to the company's
ordinary business. In Du Pont de Nemours and Co. (avail. Feb. 24, 2006), the
Staff did not concur with exclusion of a proposal regarding the preparation of a
report on potential chemical releases resulting from company's general
operations.
In contrast to the proposals in Carolina Power and Light Co., Duke Energy Ohio,
Inc., and Du Pont de Nemours and Co., which focused on the inherent dangers of a
company's activities, the Proposal at issue here focuses on the Company's
response to a possible external event and in particular on the financial risk
that might arise. As the Company states in the Risk Factor section of its
periodic filings with the Commission, there are a variety of risks that could
impact the financial well-being of the Company, and terrorism-related losses
represent only one of them. Moreover, the possibility of a terrorist attack
and/or other homeland security incident is not inherent in or unique to the
Company's business, as many types of businesses could be financially impacted by
such incidents. Thus, because the Proposal necessarily seeks a report on the
Company's internal assessment of and initiatives in response to possible
external risks to the Company, and does not seek company action to address
inherently dangerous business operations, and because the Proposal focuses on
financial risks incident to the Company's day-to-day business operations, the
precedent supports the conclusion that the Proposal implicates ordinary business
matters within the meaning of Rule 14a-8(i)(7).
C. Regardless of Whether the Proposal Touches Upon Significant Social Issues,
the Focus of the Proposal Addresses Ordinary Business Matters.
While the Staff has concluded that certain proposals implicate significant
social policy issues and thus do not relate to a company's ordinary business
operations, the Staff also has consistently concurred that simply touching upon
a policy issue does not prevent exclusion of a proposal, where the context
otherwise relates to a company's ordinary business operations. For example, in
Newmont Mining Corp. (avail. Feb. 4, 2004), because the proposal clearly
requested a report on an aspect of the company's ordinary business operations -
i.e., the financial risks and environmental liabilities associated with its
operations - it was not necessary for the Staff to consider whether other
aspects of the proposal implicated significant policy issues. Likewise, in
General Electric Co. (avail. Feb. 3, 2005), the Staff concurred that a proposal
relating to "the elimination of jobs within the Company and/or the relocation of
U.S.-based jobs by the Company to foreign countries" was excludable under Rule
14a-8-(i)(7) as relating to "management of the workforce" even though the
proposal also related to offshore relocation of jobs. Compare General Electric
Co. (avail. Feb. 3, 2004) (proposal addressing the offshore relocation of jobs
was not excludable under Rule 14a-8(i)(7)).
The Staff has also concurred that a proposal addressing a number of issues is
excludable when some of the issues implicate a company's ordinary business
operations. For example, in General Electric Co. (avail. Feb. 10, 2000), the
Staff concurred that GE could exclude a proposal requesting that it (i)
discontinue an accounting technique, (ii) not use funds from the GE Pension
Trust to determine executive compensation, and (iii) use funds from the trust
only as intended. The Staff concurred that the entire proposal was excludable
under Rule 14a-8(i)(7) because a portion of the proposal related to ordinary
business matters - i.e., the choice of accounting methods. Similarly, in
Medallion Financial Corp. (avail. May 11, 2004), in reviewing a proposal
requesting that the company engage an investment bank to evaluate alternatives
to enhance shareholder value, the Staff stated, "[w]e note that the proposal
appears to relate to both extraordinary transactions and non-extraordinary
transactions. Accordingly, we will not recommend enforcement action to the
Commission if Medallion omits the proposal from its proxy materials in reliance
on 14a-8(i)(7)." See also Wal-Mart Stores, Inc. (avail. Mar. 15, 1999) (proposal
requesting a report to ensure that the company did not purchase goods from
suppliers using, among other things, forced labor, convict labor and child labor
was excludable in its entirety because the proposal also requested that the
report address ordinary business matters).
Under these precedents, the Proposal is excludable regardless of whether or not
the issue of potential terrorism attacks and homeland security considerations
raise significant policy issues. Because portions of the Proposal relate to the
Company's ordinary business operations, the Proposal may be excluded in its
entirety under Rule 14a-8(i)(7).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2007
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
In addition, the Company agrees to promptly forward to the Proponent any
response from the Staff to this no-action request that the Staff transmits by
facsimile to the Company only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8671 or James J. Theisen, Jr., Assistant General Counsel
and Assistant Secretary of the Company, at (402) 544-6765.
Sincerely,
/s/
Ronald O. Mueller
ROM/sbas
Enclosures
cc: James J. Theisen, Jr., Union Pacific Corporation Noa Oren, International
Brotherhood of Teamsters
-----FOOTNOTES-----
1 The 1998 Release stated that two central considerations underlie this policy.
First, that "[c]ertain tasks are so fundamental to management's ability to run a
company on a day-to-day basis" that they are not proper subjects for shareholder
proposals. The Commission stated that the other policy underlying Rule
14a-8(i)(7) is "the degree to which the proposal seeks to micro-manage 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."
[INQUIRY LETTER]
November 9, 2006
BY FAX: 402-501-2144
BY UPS NEXT DAY
Ms. Barbara W. Schaefer
Corporate Secretary
Union Pacifio Corporation
1400 Douglas Street, MC 10015
Omaha, NE 68179
Dear Ms. Schaefer:
I hereby submit the following resolution on behalf of the International
Brotherhood of Teamsters General Fund, in accordance with SEC Rule 14a-8, to be
presented at the Company's 2007 Annual Meeting.
The General Fund has owned 40,000 shares of Union Pacific Corporation
continuously for at least one year and intends to continue to own at least this
amount through the date of the annual meeting. Enclosed is relevant proof of
ownership.
Any written communication should be sent to the above address via U.S. Postal
Service, UPS, or DHL, as the Teamsters have a policy of accepting only Union
delivery. If you have any questions about this proposal, please direct them to
Noa Oren of the Capital Strategies Department, at (202) 624-8990.
Sincerely,
/s/
C. Thomas Keegel
General Secretary-Treasurer
CTK/lm
Enclosures
[APPENDIX]
RESOLVED: That the shareholders of Union Pacific Corporation ("Company") hereby
request that the Board of Directors make available, omitting proprietary
information and at reasonable cost in their annual proxy statement by the 2008
annual meeting, information relevant to the Company's efforts to both safeguard
the security of their operations and minimize material financial risk arising
from a terrorist attack and/or other homeland security incidents.
SUPPORTING STATEMENT: It is imperative that shareholders be allowed to evaluate
the steps our Company has taken to minimize financial risk arising from a
terrorist attack or other homeland security incident.
The United States Naval Research Laboratory reported that one 90-ton tank car
carrying chlorine, if targeted by an exploaive device, could create a toxic
cloud 40 miles long and 10 miles wide, which could kill 100,000 people in 30
minutes. The risk of an attack of this magnitude is not insignificant according
to the Federal Bureatt of Investigation, which issued a warning in 2002 about
potential terrorist attacks on the union's railroads.
The train bombings in London in 2005 and Madrid in 2004, where hundreds of
people died and thousands were injured, highlight the vulnerability of railways
as prime targets for terrorist attacks. According to an Instrat briefing1,
Merrill Lynch analysts indicated that they thought the insured losses of the
London 2005 bombings could approach those of the Madrid train bombings in 2004,
which totaled approximately [pound]60 million. The briefing also indicated that
Risk Management Services had already revealed initial estimates of direct
insured property loss between $30-$40 million.
Still, rail workers throughout our Company report that Union Pacific has failed
to implement significant security improvements to deter or respond to a
terrorist attack on the U.S. rail network, which could potentially devastatc our
Company.
While other rail companies, such as Candian Pacific Railway's have disclosed
extensive detail of both security actions taken to protect their infrastructure
and personnel and their cost, our Company makes no mention in their 10-K of the
Company's efforts to Improve security operations in order to tackle the threat
to the railroad in high risk areas like Los Angeles, Houston, Chicago, Portland,
Seattle, Dallas and Phoenix.2 These disclosures are particularly important in
light of our Company's history of accidents, which led Federal regulators to
call for increasing safety checks in 2004 after hazardous materials were
released in [text illegible]plume of toxic fumes killing four people and causing
others to suffer badly burned lungs in San Antonio, Texas.3
The lack of such information prevents shareholders from being able to make
decisions based on the facts. To proteet our investments, our Company and our
employees, we urge you to support diselosure of security measures at Union
Pacific Corporation.
We urge shareholders to vote FOR this proposal.
-----FOOTNOTES-----
1 Instrat Brieling, Guy Carpenter and Company (July 14, 2005).
2 New Strategies to Protect America by [text illegible] Timothy Olson.
3 Federal Regulators Seek Additional Safety [text illegible] After [text
illegible] Pacific Accidents by Suzanne Gamboa (Assoclated Press), 11/17/2004.
[INQUIRY LETTER]
January 18, 2007
Securities and Exchange Commission
Office of the Chief Counsel
Division of Corporation Finance
100 F Street, NE
Washington, D.C. 20549
Dear Sir or Madam:
By letter dated December 29, 2006 (the "No-Action Request"), Union Pacific
Corporation ("Union Pacific" or the "Company") asked that the Office of the
Chief Counsel of the Division of Corporation Finance (the "Staff") confirm that
it will not recommend enforcement action if the Company omits a shareholder
proposal (the "Proposal") submitted pursuant to the Commission's Rule 14a-8 by
the Teamster General Fund (the "Fund") from the Company's proxy materials to be
sent to shareholders in connection with the 2007 annual meeting of shareholders
(the "2007 Annual Meeting").
The Proposal requests that the Company report annually in its proxy on the
Company's efforts to safeguard security of operations and minimize material
financial risk arising from a terrorist attack and/or other homeland security
incidents.
The Company contends that it is entitled to exclude the Proposal in reliance on
Rule 14a-8(i)(7), arguing that the Proposal deals with matters relating to the
Company's ordinary business operations.
Homeland security as it pertains to the transportation industry's operations is
an important policy issue for Union Pacific and its peers. As the Company's
Office of Chief Counsel duly notes, "The Company devotes considerable resources
towards efforts to avoid, prepare for, and minimize any impact from a wide
variety of external events and circumstances that might, for example, cause
derailments or reduce the overall safety of the railroad." However, security
efforts undertaken specifically to protect the Company and minimize financial
risk from a homeland incident in the Proposal are clearly differentiated from
the ordinary business security measures cited below. We believe that the
strategy the Company adopts to pursue these efforts is a broad matter of policy
that shareholders should have the opportunity to evaluate in order to protect
their investments. Union Pacific's request for no-action relief should
accordingly be denied.
In requesting no-action relief the Company cites several precedents, including
precedents from the transportation-industry, for no-action that are
substantively different from our Proposal.
In the Company's letter, Section A refers to CNF Transportation, Inc. (avail.
Jan. 26, 1998), AMR Corp. (avail. April 2, 1987), and E.I. du Pont de Nemours
and Co. (avail. Nov. 27, 1992) where the Staff upheld the exclusion of proposals
requesting that management adopt a new safety-related policy or review ordinary
business safety operations and report on it. These examples are not applicable
to our Proposal, which does not request that management adopt a specific safety
policy or review ordinary business safety operations and report on it. Rather,
our Proposal requests information about what security measures the Company is
undertaking and the potential impact on shareholder investments in terms of
possible terrorist incidents, which is not the focus of the proposals cited
above.
In the Company's letter, Section B cites a number of cases including The Chubb
Corp. (avail. Jan. 25, 2004), Wachovia Corp. (avail. Feb. 10, 2006), Pfizer Inc.
(avail. Jan. 24, 2006), ConocoPhillips (avail. Feb. 1, 2006), Texas Instruments
Inc. (avail. Jan. 28, 2005), and The Ryland Group, Inc. (avail. Feb. 13, 2006)
where the Staff honored the request for no-action concerning reports on
initiatives to manage risk from external factors that could affect the Company's
business or operations. In these cases cited by the Company's Office of Chief
Counsel, the companies would not face possibly significant financial liability
stemming from the external factors that are invoked, that is. climate change,
global pandemics and energy efficiency, which is substantively different from a
potential terrorist incident where an affected community and its members could
sue for personal damages arising from negligence in the Company's security
preparations. Section B also cites Cinergy Corp. (avail. Feb. 5, 2003), Dow
Chemical Co. (avail. Feb. 23, 2005), and Williamette Industries, Inc. (avail.
Mar. 20, 2001) in support of excluding our Proposal on the basis that the Staff
honored the no-action request because financial risks to a company are
excludable. In Cinergy these cases in the proposals asked the company to
evaluate risks and benefits of the company's operations, which is different from
our Proposal, which does not seek to direct the Company to evaluate current
business activities.
Indeed, although the Company contends that the Fund's Proposal seeks to gain
oversight of managers and their decisions, we believe that this is a misreading
of our Proposal. The Proposal asks that the Board of Directors report to
shareholders on security efforts and their financial implications, that is,
asking the Directors of the Company's board to oversee management's security
efforts, which, we believe, is part of their duty to protect the interests of
shareholders.
The Staff has ruled in the past under rule 14a-8(i)(7) that it would not permit
E.I. du Pont de Nemours and Company (avail. Feb. 24, 2006), Carolina Power and
Light Co. (avail. Feb. 23, 1989), and Duke Energy Ohio, Inc. (avail. Feb. 22,
1982) to exclude a proposal requesting that the Board prepare a report on the
implications of a policy for reducing potential harm and the number of people in
danger from potential catastrophic releases by increasing the inherent security
of their facilities. While the Company contends that these cases are clearly
distinguishable from the Proposal because they relate to inherently dangerous
operations, the Fund respectfully disagrees since Union Pacific does transport
hazardous materials that could be released in the event of a homeland security
incident.
In the Company's letter, Section C refers to a number of examples, including
General Electric Co. (avail. Feb. 3, 2005), Newmont Mining Corp. (avail. Feb. 4,
2004), General Electric Co. (avail. Feb. 3, 2004), General Electric Co. (avail.
Feb. 10, 2000), Medallion Financial Corp. (avail. May 11, 2004), and WalMart
Stores, Inc. (avail. Mar. 15, 1999), to justify omission of the Proposal because
the Staff has concurred that a proposal addressing a number of issues is
excludable when some of the issues implicate a company's ordinary business
operations. These cases are different from the Fund's Proposal because they seek
to either dictate a company's ordinary business operations or request very broad
reports of ordinary business operations. The Proposal, by contrast, seeks a
report on security operations and material financial risk arising specifically
from a terrorist attack, which is a narrow subject that encompasses a broad
question of policy about public safety.
The security measures that the Company adopts and enforces to improve its
homeland security preparedness will have a tremendous financial impact on
shareholders as well as the communities in which it operates. The Staff found in
ExxonMobil (avail. March 18, 2005), that a report of the impacts of
environmental policy that would have similarly wide repercussions on surrounding
communities was a broad question of policy, and not a matter of ordinary
business.
Based on the foregoing analysis the Fund respectfully requests that the Division
take action to enforce inclusion of its proposal in Union Pacific Corporation's
2007 Proxy Materials.
The Fund is pleased to be of assistance to the Staff on this matter. If you have
any questions or need additional information, please do not hesitate to contact
Noa Oren, IBT Projects Manager, at (202) 624-8990.
Sincerely,
/s/
C. Thomas Keegel
General Secretary-Treasurer
CTM/no
[STAFF REPLY LETTER]
February 21, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Union Pacific Corporation Incoming letter dated December 29, 2006
The proposal requests that the board make available in its annual proxy
statement information relevant to the company's efforts to safeguard the
security of their operations and minimize material financial risk arising form a
terrorist attack and/or other homeland security incidents.
There appears to be some basis for your view that
Union Pacific may exclude the proposal under rule 14a-8(i)(7), as relating to
Union Pacific's ordinary business operations (i.e., evaluation of risk).
Accordingly, we will not recommend enforcement action to the Commission if Union
Pacific omits the proposal from its proxy materials in reliance on rule
14a-8(i)(7).
Sincerely,
/s/
Rebekah J. Toton
Attorney-Adviser
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