Company Name: Walt Disney Co. (Recon.)
Public Availability Date: January 5, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER] BY EMAIL and EXPRESS MAIL
November 24, 2006
Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: The Walt Disney Company Shareholder Proposal submitted by the Teachers'
Retirement System of the City of New York
To Whom It May Concern:
I write on behalf of the Teachers' Retirement System of the City of New York
(the "Teachers") in response to the letter faxed at 4 PM on November 22, 2006
(the "November 22 letter") from Mr. Ted Yu of the Staff of the Division of
Corporation Finance (the "Division"), which granted the October 18, 2006 letter
request sent to the U.S. Securities and Exchange Commission (the "Commission"),
by the firm of WilmerHale on behalf of The Walt Disney Company ("Disney" or "the
Company"). In that October 18 letter, the Company had contended that the
Teachers' shareholder proposal (the "Proposal") may be omitted from the
Company's 2007 proxy statement and form of proxy under Rule 14a-8(i)(7) under
the Securities Exchange Act of 1934. I learned of the Staff's November 22 letter
this morning.
The Teachers' response, below, had been prepared for mailing today, November 24.
While there is no set time for a response by a proponent to a company's request
for no-action relief, the Staff had not, in our experience, granted company
requests without affording the proponent a longer time to respond than the 35
days that elapsed between the Company's mailing of its October 18 letter and the
Staff's November 22 decision. Accordingly, we respectfully request that the
Division consider our submission on the merits, and that in light of the merits
of that submission, the Staff reconsider its November 22 letter, and deny the
Company's request for no-action relief.
I have reviewed the Proposal, as well as the October 18, 2006 letter. Based upon
that review, as well a review of Rule 14a-8(i)(7), it is my opinion that the
Proposal may not be omitted from the Company's 2007 Proxy Materials.
Accordingly, the Teachers respectfully request that the Division deny the relief
that Disney seeks.
I. The Teachers' Proposal
The Proposal consists of two whereas clauses followed by a resolution. Among
other things, the whereas clauses note that: (a) a number of educational groups,
including Teaching Tolerance(www.tolerance.org) and Educators for Social
Responsibility (www.esrnational.org) have drawn attention to Disney's use of
negative, racial, ethnic and gender stereotypes in its animated films and
associated products; (b) negative generalizations assigned to groups of people
by race, class, gender, religion, or country of origin in Disney products can
have a harmful impact on the development of both children and adults, and can
also foster negative impressions of U.S. cultural influences abroad. These
clauses are followed by a Resolved clause that states:
Therefore, be it resolved that shareholders request that management report on
steps the company is undertaking and will undertake, to avoid the use of
negative racial, ethnic and gender stereotypes in its products.
The report should include:
1. A statement of company policy regarding the portrayal of racial and ethnic
minorities, and women, in all phases of production, marketing and promotion, and
the procedures used to inform company personnel of this policy; and
2. A description of the process for ensuring non-racist, non-sexist depictions
and images in all its products, irrespective of the geographic market of the
product.
II. The Company's Opposition and the Fund's Response
In its letter of October 18, 2006, the Company requested that the Division not
recommend enforcement action to the Commission if the Company omits the Proposal
under SEC Rule 14a-8(i)(7) (relates to the conduct of the company's ordinary
business operations and does not involve significant social policy issues).
Pursuant to Rule 14a-8(g), the Company bears the burden of proving that this
exclusion applies. As detailed below, the Company has failed to meet its burden
and its request for "no-action" relief should accordingly be denied.
A. The Proposal is Non-Excludable Because the Avoidance of Discriminatory
Stereotypes Implicates a Social Policy Issue at the Very Core of the SEC's 1998
Release, and Does Not Micro-Manage Complex Business Issues.
The Teachers' Proposal, in seeking disclosure of Disney's current policy and
procedures on discriminatory stereotypes in its media, does not in any way raise
issues of "ordinary business." Indeed, discrimination is an issue of social
policy which the Commission itself has expressly recognized as a fully
appropriate subject for shareholder proposals. Under that Commission guidance,
Disney shareholders should be given the opportunity to ask their Company simply
to make public its existing policy and safeguards in that critical area.
The Commission's controlling guidance is found in Exchange Act Release No.
34-40018, "Amendments to Rules on Shareholder Proposals," (May 21, 1998) (the
"1998 Rules"). In that Release, the Commission formally adopted amendments to
Rule 14a-8 on shareholder proposals, among other items. The 1998 Rules reversed
the Division's prior Cracker Barrel position which had permitted companies to
exclude shareholder proposals relating to certain employment discrimination.
While the 1998 Rules were formally limited to proposals relating to such
discrimination, the Rules Release summarized the two principal considerations
that the Commission directed must be applied when determining whether any
proposal falls within the "ordinary business" exclusion:
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 the management of the workforce, such as the hiring,
promotion and termination of employees, decisions on production quality and
quantity, and the retention of suppliers. However proposals relating to such
matters but focusing on sufficiently significant social policy issues (e.g.,
significant discrimination matters) generally would not be considered to be
excludable, because the proposals would transcend the day-to-day business
matters and raise policy issues so significant that it would be appropriate for
a shareholder vote.
(Emphasis added.)
The Proposal here cannot be excluded, for it raises just such significant social
policy issues. It requests that the Company, one of the world's media leaders,
report on its policies and procedures for avoiding the use of negative and
damaging racial, ethnic and gender stereotypes in the highly influential media
products it disseminates worldwide, particularly to children. Thus, the action
the Proposal seeks is unlike any of the illustrative examples of day-to-day
business issues listed in the Release.
Even if the Proposal did somehow impact such business issues, the Proposal's
clear focus on a social policy issue that the Commission itself views as
significant would preclude its exclusion as ordinary business. As noted above,
the 1998 Rules provide just a single example of sufficiently significant social
policy issues: significant discrimination matters. That is the very issue here.
As the Proposal recites, the use of negative racial, ethnic and gender,
stereotypes in animated films and associated products can harm the development
of both children and adults and can contribute to negative impressions of U.S.
cultural influence abroad. Disney has been the subject of public controversy
regarding its use of just such stereotypes. For example, members of at least
three communities of CaribsSalybia in Dominica, Santa Rosa in Trinidad and a
community in St. Vincenthave protested the stereotyping of Caribs as murderous
cannibals. www.indiancountry.com. Similarly, members of the Arab community have
protested the stereotyping of Arab culture in the movie Aladdin. UPI (November
23, 2004); Arab Stereotypes and American Educators by Marvin Wingfield and
Bushra Karaman, American Arab Anti-Discrimination Committee (March, 1995). Also
controversial is the construction of gender identity for females in Disney's
animated films. Disney's view of female agency and empowerment is not merely
limitedit is overtly reactionary. See, e.g., The Little Mermaid and The Lion
King in which all the female characters are ultimately subordinate to males
The second consideration set forth in the 1998 Rules also precludes a finding
that avoiding discriminatory stereotypes is "ordinary business" :
The second consideration 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. 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.
1998 Rules, Id.
Discriminatory stereotyping is not a matter too complex for meaningful
shareholder participation. It in no way implicates the basis of the ordinary
business exclusion, i.e., the concept that management has special know-how as to
the intricacies of its day-to-day business and, therefore, is better placed to
exercise its judgment. To the contrary, when a company faces significant social
policy issues, such as avoiding harmful group stereotypes and discrimination,
management is in no better position than its shareholders to make judgments on
those issues. Thus, under the Commission's example and guidelines, shareholders
should be given the chance to vote on the Teachers' Proposal that Disney make
public how it deals with this serious issue.
We note that the Company, in its no-action request, argues that some prior Staff
no-action letters would support its position1. None of those letters, however,
calls for disclosure of company policy on racial and other discriminatory
stereotyping as the Teachers' Disney Proposal does. Beyond that, to the extent
that prior no-action letters would be in conflict with the 1998 Rules, we
respectfully submit that the Staff should give those prior letters no weight.
Recently, in American Federation of State, County & Municipal Employees,
Employees Pension Plan v. American International Group, Inc., 462 F.3d 121 (2d
Cir. 2006) (the "AIG" case), the Second Circuit accorded no weight to an SEC
interpretation of Rule 14a-8 that conflicted with the Release that the
Commission had issued when the Rule was last revised: "Because the
interpretation of Rule 14a-8(i)(8) that the SEC advances in its amicus
briefthat the election exclusion applies to proxy access bylaw
proposalsconflicts with the 1976 statement, it does not merit the usual
deference we would reserve for an agency's interpretation of its own
regulations." Id. at 129. The Court continued: "Accordingly, we deem it
appropriate to defer to the 1976 Statement, which represents the SEC's
interpretation of the election exclusion the last time the Rule was
substantively revised." Id. The AIG Court then decided the matter based upon the
Commission's initial 1976 guidance.
Here, it is would appear that the Staff may have issued prior no-action letters
inconsistent with the plain guidance contained in the 1998 Rules. Accordingly,
we submit that those post-1998 no-action letters cited by the Company regarding
"social policy" proposals purportedly analogous to the Proposal should be given
no weight. Rather, the 1998 Rules, and their express recognition that
significant discrimination issues are not "ordinary business," must be the
guidepost. By that guidance, the Teachers' Proposal may not be excluded.
We note that in any event, regarding reports, the post-1998 no-action letters
cited by the Company involve proposals distinguishable from the instant
Proposal. Unlike the Teachers' Proposal, none of the proposals sought disclosure
regarding the use of negative racial, ethnic and gender stereotypes by the
company, nor indeed, a report concerning any significant discrimination matter2.
Thus, none of them implicated the core public policy issue of discrimination
that was implicated in each of: (a) the 1998 Rules' reversal of the "Cracker
Barrel" position; (b) the one specific example the 1998 Rules gave in their
broader guidance of a policy issue that transcends purported ordinary business;
and (c) the Teachers' current Disney Proposal.
As the 1998 Rules provide no basis for excluding the Teachers' Proposal, the
Company has failed to carry its burden of proving that the Proposal may be
excluded under Rule 14a-8(i)(7).
Conclusion
For the reasons stated above, the Teachers respectfully submit that the
Company's request for "no-action" relief should be denied. Should you have any
questions or require any additional information, please contact me.
Thank you for your time and consideration.
Very truly yours,
/s/
Janice Silberstein
Associate General Counsel
cc: Meredith B. Cross, Esq.
WilmerHale, LLP
1875 Pennsylvania Avenue NW
Washington, DC 20006
-----FOOTNOTES-----
1 See General Electric Company (January 6, 2005); Federated Department Stores,
Inc. (March 27, 2002); Tootsie Roll Industries, Inc. (January 3, 2002); General
Electric Company (January 10, 2002); The Quaker Oats Co. (March 16, 1999).
2 See The Mead Corporation (January 31, 2001)(report regarding the extent of
potential liabilities for environmental damage caused by company's operations);
General Electric Company (January 27, 2000)(report regarding, inter alia, the
full content of television programs) Johnson Controls, Inc. (October 26, 1999)
(report regarding the disclosure of goodwill-net in company's financial
statements); Wal-Mart Stores, Inc. (March 15, 1999) (report regarding policies
to implement wage adjustments).
[INQUIRY LETTER]
December 6, 2006
By Hand Delivery
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C 20549
Re: The Walt Disney CompanyResponse to Proponent's Request for Reconsideration
of Staff No-Action Letter
Ladies and Gentlemen:
This letter is in response to the letter dated November 24, 2006 to you from
Janice Silberstein, Associate General Counsel of the Office of the Comptroller
of the City of New York on behalf of the Board of Trustees of the New York City
Teachers' Retirement System (the "Proponent"), a copy of which is attached
hereto as Exhibit A (the "November Letter"). In the November Letter, the
Proponent requests reconsideration of the no-action letter that the Staff issued
to our client, Disney, on November 22, 2006 (the "No-Action Letter").1 In
granting no-action relief, the Staff stated that "[t]here appears to be some
basis for your view that Disney may exclude the proposal under rule 14a-8(i)(7),
as relating to its ordinary business operations (i.e., the nature, presentation
and content of programming and film production)." Capitalized terms used herein
and not otherwise defined herein have the meanings set forth in our initial
letter dated October 18, 2006 (the "October Letter").
On behalf of our client, Disney, we hereby request that the Proponent's request
for reconsideration of the No-Action Letter be denied. The Staff's response, as
set forth in the No-Action Letter, is both clearly correct and entirely
consistent with the Commission's rules and releases, as well as the Staff's
previous no-action letters.
ANALYSIS
The Proposal requests a report on steps Disney is undertaking and will undertake
to avoid the use of negative racial, ethnic and gender stereotypes in its
products. The Proponent claims that the Staff erred in issuing the No-Action
Letter and that the Proposal may not be omitted because the Proposal raises
issues of social policy rather than ordinary business issues. The Proponent
attempts to characterize the Proposal as comparable to an employment
discrimination proposal, and, as a result, asserts that it must be included
under the Commission's statements in the 1998 Release. Further, the Proponent
tries to make the ruling of the United States Court of Appeals for the Second
Circuit in American Federation of State, County and Municipal Employees v.
American International Group, Inc., 462 F.3d 121 (2d Cir. 2006)(the "AIG
Decision"), relevant to the Proposal and the Staff's decision by claiming that
the No-Action Letter is inconsistent with the 1998 Release and, therefore, the
Staff's letters cited by us as precedent are irrelevant and the Staff is not
able to issue the response it issued. Each of these assertions is clearly
incorrect.
First, the Proponent asserts that the Proposal does not deal with the ordinary
business of the Company. In the October Letter we described the business of the
Company and noted that the Proponent's Proposal addresses the content of the
Company's filmed products and related consumer goods, which are the essence of
the Company's studio entertainment and consumer products businesses. The Staff's
prior letters cited in our October Letter demonstrate that the Staff has
repeatedly concurred that the nature, presentation and content of programming
and film production of the Company and other media companies falls within the
ordinary business exclusion.
Second, contrary to the Proponent's assertion, the matters addressed in the
Proposal do not rise to the level of the social policy issues that compel
inclusion of proposals that would otherwise be omitted under rule 14a-8(i)(7).
In the 1998 Release, the Commission indicated that proposals that deal with
ordinary business matters would not be excluded if they raised "sufficiently
significant social policy issues" (emphasis added). The Commission stated in the
1998 Release that there are no "bright-line" tests and that determination of
whether a policy issue rises to the level to overcome the ordinary business
exclusion is made on a case-by-case basis. The Company does not believe that a
proposal relating to how individuals or groups are portrayed in a media
company's programming is comparable to a proposal on employment discrimination
or other significant discrimination matters.
The Proponent's attempt to claim that its Proposal relates to "significant
discrimination matters" and, consequently, is subject to inclusion under the
Commission's language in the 1998 Release, totally mischaracterizes the
Proposal. In the Proposal and the November Letter, the Proponent takes issue
with how various groups are portrayed in the Company's products. For example,
one complaint in the materials cited by the Proponent relates to the color of
the animals in the animated film The Lion King, indicating that it presents
negative racial stereotypes, and another complaint noted in the November Letter
relates to the portrayal of female characters in the animated films The Little
Mermaid and The Lion King.2 The other examples noted by the Proponent raise
similar points about the depiction of racial, ethnic and other groups in the
Company's products. We believe that these matters are simply not comparable to
the discrimination issues the Commission addressed in the 1998 Release. In
granting the No-Action Letter, we believe it is clear that the Staff made the
appropriate reasoned distinction between the Proposal and proposals raising
significant discrimination matters as the Commission instructed it to do in the
1998 Release.
Numerous Staff no-action letters issued since the 1998 Release and cited in our
October Letter make clear that the Staff concurs that proposals concerning
racial, ethnic, religious or gender matters do not automatically require
inclusion under the significant discrimination matters analysis set out in the
1998 Release. The Proponent sought to distinguish these letters on the ground
that none of them calls for disclosure of company policy on racial and other
discriminatory stereotyping. However, our October letter cited numerous Staff
no-action letters that explicitly called for actions or reports of practices or
plans relating to racial, ethnic, religious or gender matters - the very matters
the Proponent addresses in its Proposal. The fact that these letters generally
did not use the word "stereotyping" with respect to the matters addressed does
not change the fact that they dealt with matters of racial, ethnic, religious or
gender depiction in the context of the ordinary business of creating content and
products.3
Finally, as the above analysis demonstrates, the AIG Decision has no bearing on
this matter, other than to establish even more clearly that the Staff's
No-Action Letter is appropriate. The AIG Decision dealt with the exclusion in
rule 14a-8(i)(8) for proposals relating to election for membership on a
company's board. The Second Circuit objected to Staff no-action positions that
it thought were inconsistent with a prior public Commission statement the last
time the rule was substantively revised, and reversed the Staff's position. The
Proponent's suggestion that the Staff's No-Action Letter is inconsistent with
the 1998 Release ignores the fact that the Commission's position in the 1998
Release was limited to matters of employment discrimination. The Commission
stated that its conclusion that some proposals relating to employment
discrimination would overcome the ordinary business exclusion "relates only to
employment-related proposals raising certain social policy issues. Reversal of
the [prior] position does not affect the Division's analysis of any other
category of proposals under the exclusion, such as proposals on general business
operations." While the Commission's discussion in the 1998 Release of social
policy issues in general is useful in framing analysis of such issues, it
clearly does not bind the Staff to a specific conclusion in this instance.
Indeed, to the extent the statements in the 1998 Release bear on this Proposal,
they support the Staff's conclusion in the No-Action Letter. The statements in
the 1998 Release are the most recent public Commission statements regarding
analysis of the ordinary business exclusion, and the Staff's letters need to be
consistent with those statements. As we demonstrate above, the Staff's
conclusion is consistent with the type of case-by-case analysis contemplated by
the 1998 Release and with the Staff's prior decisions on similar matters.
CONCLUSION
For the reasons set forth above and in our October Letter, the Company hereby
respectfully requests that the Staff deny the Proponent's request for
reconsideration. Please do not hesitate to call me at (202) 663-6644 or Roger
Patterson of Disney at (818) 560-6126 if you require additional information or
wish to discuss this submission further. Please acknowledge receipt of this
letter by stamping the enclosed additional copy of this letter and returning it
to me in the enclosed stamped, self-addressed envelope.
We request that you transmit your response by facsimile to the undersigned at
(202) 663-6363. Thank you for your attention to this matter.
Sincerely,
/s/
Meredith B. Cross
Attachment: Exhibit A
cc: Alan N. BravermanSenior Executive Vice President, General Counsel and
Secretary, The Walt Disney Company
Roger J. PattersonVice President, Counsel, The Walt Disney Company
Patrick DohertyOffice of the Comptroller of New York City
Janice SilbersteinOffice of the Comptroller of New York City
-----FOOTNOTES-----
1 The Proponent did not provide a letter to the Staff in response to our October
Letter before the Staff issued the No-Action Letter. Instead, the Proponent
indicated in the November Letter that it did not expect a staff response as soon
as it was made. The Proponent asks that the Staff "consider our submission on
the merits, and that in light of the merits of that submission, the Staff
reconsider its November 22 letter, and deny the Company's request for no-action
relief." Although the procedural posture is not entirely clear, we are assuming
the Staff is treating the November Letter as a request for reconsideration of
the No-Action Letter, and we are responding to the November Letter on that
basis.
2 The November Letter contains the wholly unsupported and inflammatory
accusation that the Company's "view of female agency and empowerment is not
merely limitedit is overtly reactionary," merely citing generally two movies
produced by the Company without any demonstration that these movies containedor
even were perceived by any meaningful number of viewers to containnegative
depictions of women or women's roles in society. In fact, as we noted in our
request, the Company shares the Proponent's goals of avoiding racist or sexist
depictions and images in its products and prides itself on the worldwide and
cross-cultural appeal of its creative products.
3 Our October Letter explains that a request for a report about an matter
excludable under the ordinary business exclusion does not change the analysis
under rule 14a-8(i)(7). See Exchange Act Release 34-20091 (Aug. 16. 1983) (the
Staff "will consider whether the subject matter of the special report ...
involves a matter of ordinary business" and "where it does, the proposal will be
excluded"). In accordance with this directive, the Staff consistently has
permitted exclusion of proposals seeking reports on various matters relating to
ordinary business, as demonstrated by the letters cited in our October Letter.
As the Commission has not reversed this publicly stated position, we would
expect the Staff to take the same position regarding reports at this time (as it
did in granting the No-Action Letter).
[INQUIRY LETTER]
BY EMAIL and EXPRESS MAIL
December 7, 2006
Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: The Walt Disney Company Shareholder Proposal submitted by the Teachers'
Retirement System of the City of New York
To Whom It May Concern:
I write on behalf of proponent, the Teachers' Retirement System of the City of
New York (the "Teachers"), in brief response to the December 6 letter from
counsel for The Walt Disney Company ("Disney" or "the Company"), which opposed
reconsideration of the "no-action" letter issued on November 22, 2006 by the
Staff of the Division of Corporation Finance.
The Teachers' Proposal asks that Disney disclose the existing policies upon
which that worldwide media leader relies to avoid the use of discriminatory
racial and other stereotypes in its media. While Disney claims in its December 6
letter (at p. 2) that the Proposal just relates prosaically to the "filmed
products and related consumer goods" at the core of its "studio entertainment
and consumer products businesses," Disney has recently taken a very different
position elsewhere as to the unusual influence of its media and its impact on
children. In publicly announcing a ban on the use of Disney characters to
promote junk food, Disney CEO Robert Iger proclaimed: "A company such as ours,
with the reach we have, has a responsibility because of how much we can
influence people's opinions and behavior." (quoted in "Disney Pulls its
Characters from Junk Food," Wall Street Journal, October 17, 2006, attached
hereto). Disney's media are no less influential in influencing young people's
opinions on racial, ethnic and gender stereotypes. Avoiding the use of such
unusually influential discriminatory stereotypes is not a matter of "ordinary
business" under Rule 14a-8(i)(7).
Both Disney's global influence and the historical experience of our nation make
nonsense of the Company's further assertion in its December 6 letter (at p. 2)
that "The Company does not believe that a proposal relating to how individuals
or groups are portrayed in a media company's programming is comparable to a
proposal on employment discrimination or other significant discrimination
matters." The Company's antiseptic language cannot cover up a very painful
historical truth: hurtful racial, ethnic and gender stereotypes are not merely
"how individuals or groups are portrayed in a media company's programming."
Rather, such stereotypes, whether of blacks, Asians, women, or any other group,
continue to the present day to fuel discrimination against those groups, whether
in employment, housing, or social relations. Indeed, recent studies have shown,
for example, that employers, in deciding whom to interview for employment, still
discriminate based on racial stereotypes, such as whether an applicant possesses
a "black" name. See Bertrand, M., and S. Mullainathan: "Are Emily and Greg More
Employable Than Lakisha and Jamal? A Field Experiment on Labor Market
Discrimination," American Economic Review, 94(4), pp. 991-1013 (2004). Thus,
under the very heart of the analysis in the Commission's 1998 Rules, the
Teachers' Disney Proposal does relate to "significant discrimination," a social
issue of crucial importance, and is not ordinary business.
The conclusion that the Proposal does not relate to ordinary business is highly
consistent not only with the Commission's 1998 rulemaking, but also with the
Staff's 2005 guidance as to what kinds of disclosures a proposal may ask a
company to make about its efforts to avoid injury to the public. As stated with
respect to the analogous areas of public health and the environment in Staff
Legal Bulletin 14C (June 28, 2005), "To the extent that a proposal and
supporting statement focus on the company minimizing or eliminating operations
that may adversely affect the environment or the public's health, we do not
concur with the company's view that there is a basis for it to exclude the
proposal under rule 14a-8(i)(7)." Here, too, Disney is being asked only to
disclose what steps it already takes to minimize or eliminate any injury to
children that could result from a use of discriminatory stereotypes in its
media.
Accordingly, and in light of AFSCME v. AIG, 462 F.3d 121 (2d Cir. 2006), we
respectfully submit that the Staff, upon reconsideration, should follow the
strong guidance offered by the 1998 Rules and SLB 14C, and deny Disney's request
for no-action relief with respect to the Teachers' Proposal.
Very truly yours,
/s/
Janice Silberstein
Associate General Counsel
cc: Meredith B. Cross, Esq.
WilmerHale, LLP
1875 Pennsylvania Avenue NW
Washington, DC 20006
[INQUIRY LETTER]
BY EMAIL and EXPRESS MAIL
December 14, 2006
Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: The Walt Disney Company Shareholder Proposal submitted by the Teachers'
Retirement System of the City of New York
To Whom It May Concern:
I write on behalf of proponent, the Teachers' Retirement System of the City of
New York (the "Teachers"), in further response to the December 6 letter from
counsel for The Walt Disney Company ("Disney" or "the Company"), which opposed
reconsideration of the "no-action" letter issued on November 22, 2006 by the
Staff of the Division of Corporation Finance.
We received yesterday Disney management's proposed statement, for possible
inclusion in its proxy materials as a response to the Teachers' Proposal (the
"Disney Statement"; attached to the hard copy of this letter). The Disney
Statement is notable for the extent to which it effectively admits the
significant social dimensions of Disney's portrayals of racial, ethnic and
gender images. The Disney Statement notes the "worldwide and cross-cultural
appeal of its creative products," repeatedly cites Company efforts to develop
"positive role models along racial, ethnic and gender lines", lists awards
Disney has received from social policy groups for such efforts, and states that
the Company "is sensitive to...complaints" on how groups are portrayed, and
monitors "whether the complaints reflect a more general concern." Given the
importance that Disney now says it ascribes to those social issues, and given
the negative "worldwide and cross-cultural" social effects if Disney nonetheless
failed to avoid discriminatory stereotypes, then the Teachers' Proposal most
definitely does raise a significant social policy concern when it asks Disney
simply to describe in detail for shareholders the steps the Company is taking to
avoid such harmful stereotypes.
Accordingly, we respectfully submit that upon reconsideration, Disney's request
for no-action relief with respect to the Teachers' Proposal should be denied.
Very truly yours,
/s/
Janice Silberstein
Associate General Counsel
cc: Meredith B. Cross, Esq.
WilmerHale, LLP
1875 Pennsylvania Avenue NW
Washington, DC 20006
[INQUIRY LETTER]
December 13, 2006
VIA OVERNIGHT COURIER AND TELECOPY
Patrick Doherty
Bureau of Asset Management
Office of the Comptroller of the City of New York
1 Centre Street
New York, NY 10007-2341
Dear Mr. Doherty:
In accordance with the requirements of Rule 14a-8 under the Securities Exchange
Act, I am enclosing an excerpt from the draft proxy statement for our 2007
annual meeting that contains your shareholder proposal and the response and
recommendation of the Company's Board of Directors we propose to include in the
proxy if the staff of the SEC withdraws its determination that we may exclude
the proposal from the proxy.
If the proposal is included in the proxy statement, we will be in touch with you
prior to the meeting to make arrangements for the presentation of your proposal.
If you will be represented at the meeting by someone else or need any other
assistance, please let me know.
Very truly yours,
/s/
Roger J. Patterson
Enclosure
cc: Alan N. Braverman
[APPENDIX]
The Office of the Comptroller of New York City, as custodian and trustee for the
New York City Teachers' Retirement System, has advised the Company that it
intends to present the following proposal for consideration at the annual
meeting:
Whereas, a number of educational groups, including Teaching Tolerance
(www.tolerance.org) and Educators for Social Responsibility
(www.esrnational.org), have drawn attention to Disney's use of negative racial,
ethnic and gender stereotypes in its animated films and associated products, and
Whereas, we believe that negative generalizations that are assigned to groups of
people by race, class, gender, religion, or country of origin in Disney products
can have a harmful impact on the development of both children and adults, and
can also help foster negative impressions of U.S. cultural influence abroad,
Therefore, be it resolved that shareholders request that management report on
steps the company is undertaking and will undertake, to avoid the use of
negative racial, ethnic and gender stereotypes in its products.
The report should include:
1. A statement of company policy regarding the portrayal of racial and ethnic
minorities, and women, in all phases of production, marketing and promotion, and
the procedures used to inform company personnel of this policy; and
2. A description of the process for ensuring non-racist, non-sexist depictions
and images in all its products, irrespective of the geographic market of the
product.
The Board of the Company recommends a vote "AGAINST" this proposal for the
following reasons:
The Board of Directors shares the objective of avoiding negative racial, ethnic
and gender stereotypes in the Company's products. Indeed, the Company prides
itself on the worldwide and cross-cultural appeal of its creative products.
The Company seeks to develop positive role models across racial, ethnic and
gender lines. The Company's feature animation films have included multi-cultural
heroes and heroines in productions such as Mulan, Lilo & Stitch and The
Incredibles. On the Disney Channel, programs such as The Cheetah Girls, That's
So Raven, Little Einsteins, Handy Manny and The Proud Family feature positive
role models across racial, ethnic and gender lines. The Disney Channel's
"Express Yourself" campaign features well-known Disney Channel characters
encouraging viewers to embrace and accept their differences. At ESPN, the
Company has won: programming awards from the National Association for
Multi-Ethnicity in Communications; the Arab-American Anti-Discrimination
Committee's award for Enhancing Tolerance; and several awards from American
Women in Radio and Television for women's programming. In broadcasting, the ABC
Network has won wide recognition for its efforts in promoting diversity
including: Image Awards from the NAACP; awards from the National Council of La
Raza for the fair, accurate, and balanced portrayals of Latinos; the Directors
Guild of America Diversity Award; and the Multicultural Motion Picture
Association Award for diverse network programming.
The Company recognizes that some viewers will inevitably take issue from time to
time with the portrayal of racial and ethnic groups and gender roles in its
products. The Company is sensitive to these complaints, and monitors them and
overall trends in perceptions of Company products to determine whether the
complaints reflect a more general concern. The Company believes that the number
of viewers who perceive negative depictions in current Company products is small
and that those perceptions are not generally shared.
In light of the Company's record of promoting positive role models across
racial, ethnic and gender lines in its current product offerings and the
generally positive perception of its products, the Board of Directors does not
believe that the report called for by the proposal would contribute meaningfully
to the Company's efforts in this area.
Accordingly, the Board recommends that you vote "AGAINST" this proposal, and
your proxy will be so voted if the proposal is presented unless you specify
otherwise.
[STAFF REPLY LETTER]
January 5, 2007
Janice Silberstein
Associate General Counsel
The City of New York
Office of the Comptroller
General Counsel
1 Centre Street, Room 602
New York, N.Y. 10007-2341
Re: The Walt Disney Company Incoming letter dated November 24, 2006
Dear Ms. Silberstein:
This is in response to your letters dated November 24, 2006, December 7, 2006,
and December 14, 2006 concerning the shareholder proposal submitted to Disney by
the New York City Teachers' Retirement System. On November 22, 2006, we issued
our response expressing our informal view that Disney could exclude the proposal
for its upcoming annual meeting. You have asked us to reconsider our position.
We also have received a letter from Disney dated December 6, 2006.
After reviewing the information contained in your letters, we find no basis to
reconsider our position.
Sincerely,
/s/
Martin P. Dunn
Deputy Director
cc: Meredith B. Cross
Wilmer Cutler Pickering Hale and Dorr LLP
1875 Pennsylvania Avenue NW
Washington, DC 20006
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