Company Name: Yahoo! Inc.
Public Availability Date: April 16, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
February 7, 2007
VIA COURIER
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, D.C. 20549
Re: Intention to Omit Stockholder Proposal Submitted by John C. Harrington
Ladies and Gentlemen:
Yahoo! Inc., a Delaware corporation ("Yahoo!" or the "Company"), hereby requests
confirmation that the staff (the "Staff") of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission") will not recommend
any enforcement action if, in reliance on certain provisions of Rule 14a-8 under
the Securities Exchange Act of 1934, as amended, the Company omits the enclosed
stockholder proposal (the "Proposal") and supporting statement (the "Supporting
Statement") submitted by John C. Harrington (the "Proponent") from the Company's
proxy materials for its 2007 Annual Meeting of Stockholders.
Pursuant to Rule 14a-8(j)(2), we have enclosed six (6) copies of this letter and
the related exhibits. A copy of this letter, together with the related exhibits,
is also being delivered to the Proponent informing him of the Company's
intention to omit the Proposal and the Supporting Statement from its proxy
materials.
The Proposal
On December 13, 2006, Yahoo! received a letter from the Proponent containing the
following proposal for inclusion in the Company's 2007 proxy statement:
"RESOLVED: to amend the corporate Bylaws, by inserting the following new Article
4.4:
Article 4.4
Board Committee on Human Rights
a. There is established a Board Committee on Human Rights, which is created and
authorized to review the implications of company policies, above and beyond
matters of legal compliance, for the human rights of individuals in the US and
worldwide.
b. The Board of Directors is authorized in its discretion consistent with these
Bylaws and applicable law to (1) select the members of the Board Committee on
Human Rights, (2) provide said committee with funds for operating expenses, (3)
adopt regulations or guidelines to govern said Committee's operations, (4)
empower said Committee to solicit public input and to issue periodic reports to
shareholders and the public, at reasonable expense and excluding confidential
information, on the Committee's activities, findings and recommendations, and
(5) adopt any other measures within the Board's discretion consistent with these
bylaws and applicable law.
c. Nothing herein shall restrict the power of the Board of Directors to manage
the business and affairs of the company. The Board Committee on Human Rights
shall not incur any costs to the company except as authorized by the Board of
Directors."
The Company also received a statement in support of the Proposal which, along
with the text of the Proposal, is attached hereto as Exhibit A.
As discussed more fully below, the Company believes that it may omit the
Proposal and Supporting Statement from its 2007 proxy materials for the
following reasons:
1. The Proposal and Supporting Statement are vague and indefinite, and the
Supporting Statement contains materially false and misleading statements, in
violation of Rule 14a-9, and to such extent, the Proposal and Supporting
Statement may be omitted pursuant to Rule 14a-8(i)(3);
2. The Proposal has already been substantially implemented by the Company, and
therefore may be omitted pursuant to Rule 14a-8(i)(10); and
3. The Proposal deals with a matter relating to the Company's ordinary business
operations, and therefore may be omitted pursuant to Rule 14a-8(i)(7).
Analysis
1. The Proposal and Supporting Statement are vague and indefinite, and the
Supporting Statement contains materially false and misleading statements, in
violation of Rule 14a-9. To such extent, the Company may exclude the Proposal
and Supporting Statement pursuant to Rule 14a-8(i)(3).
The Company believes that it may exclude the Proposal and Supporting Statement
from its proxy materials under Rule 14a-8(i)(3), which allows a company to
exclude from its proxy materials shareholder proposals that violate the
Securities and Exchange Commission's proxy rules, including the prohibition
contained in Rule 14a-9 against the use of materially false and misleading
statements.
A. The Proposal and Supporting Statement are vague and indefinite.
The Staff has consistently determined that vague and indefinite proposals are
materially misleading in violation of Rule 14a-9, and therefore may be excluded
under Rule 14a-8(i)(3). Under relevant Staff interpretations, a proposal is
vague and indefinite if "neither the stockholders 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." See Staff Legal Bulletin No. 14B (September 15, 2004);
Philadelphia Electric Company (July 30, 1992). Furthermore, the Staff has noted
that a proposal may be materially misleading as vague and indefinite where "any
action ultimately taken by the Company upon implementation [of the proposal]
could be significantly different from the actions envisioned by shareholders
voting on the proposal." Fuqua Industries, Inc. (March 12, 1991).
The Proposal seeks to amend the Company's bylaws to create a board committee to
"review the implications of company policies ... for the human rights of
individuals in the US and worldwide." The concept of "human rights" is
inherently broad and subject to multiple and differing interpretations. The
Proponent does not make any attempt in the text of the proposed bylaw itself to
define the concept or to specify which "human rights" are relevant. Instead, the
Proponent suggests in the Supporting Statement (which, importantly, would not be
part of the actual bylaw provision, if adopted) that the board committee "could
use the US Bill of Rights and the Universal Declaration of Human Rights as
nonbinding benchmarks or reference documents." However, these documents address
a wide variety of topics, many of which do not have any direct relevance to the
Company's business. For example, while the US Bill of Rights assures (among
other rights) free speech and freedom of the press, it also addresses such
topics as the establishment of religion, the right to bear arms, the right to be
free from unreasonable searches and seizures, the entitlement to "due process,"
and the rights of a criminal defendant to receive a jury trial and to be free
from cruel and unusual punishment. Moreover, the Universal Declaration of Human
Rights1 contains 30 articles and addresses matters ranging from the right to
life, liberty and security of person, to the presumption of innocence in a
criminal proceeding, to the right to travel, to the right to an education, to
the right of men and women to marry, to the right of persons to pursue
employment, to the right of persons to participate in the cultural life of the
community. None of these specific rights, nor any other provisions of these
referenced documents, are summarized, described or otherwise referenced in the
Proposal, thereby making it essentially impossible for the Company, its Board of
Directors or its stockholders, both now and in the future, to determine with any
degree of certainty which human rights must be addressed by the Board Committee
on Human Rights to comply with the proposed bylaw. It is also inevitable that
different stockholders will have different views on this question when casting
their votes, thereby creating further uncertainty for the Company and its Board
of Directors in terms of interpreting and implementing the intent of the
stockholders who vote in favor of the Proposal.
The Company believes that the subject Proposal is analogous to other proposals
that the Staff has determined may be excluded from proxy materials under Rule
14a-8(i)(3) on the basis that they are vague and indefinite, and therefore would
violate Rule 14a-9. For example, in The Kroger Co. (March 19, 2004), the Staff
determined that Kroger could omit on such grounds a proposal requesting that the
company prepare a sustainability report based on the Global Reporting
Initiative's sustainability reporting guidelines. See also Johnson & Johnson
(February 7, 2003) (company permitted to exclude as vague and indefinite a
proposal seeking a report on the company's progress concerning "the Glass
Ceiling Commission's" business recommendations); and Alcoa Inc. (December 24,
2002) (company permitted to exclude as vague and indefinite a proposal seeking
full implementation and monitoring of certain human rights standards by the
Company's international suppliers). As is the case with the subject Proposal,
each of the proposals involved in these specific cases included only a brief
reference to relevant guidelines or standards, and otherwise was devoid of any
description or background information that would provide stockholders with a
reasonable understanding of what they were being asked to consider, or the
company of what it was being asked to implement. This lack of certainty takes on
added significance in this context, as the Proponent is seeking much more than
just a report on the issue (as is in the case of some of the examples above)he
instead is seeking a binding amendment to the Company's bylaws. If the Proposal
is approved, the Company will have no clear basis for determining whether it is
in compliance with the bylaw provision, and the Company could potentially be
subjected to multiple challenges by stockholders seeking to enforce the bylaw
provision to advance their own views, standards or agendas.
The Company believes that (i) the inherent breadth and complexity of the "human
rights" concept, (ii) the ambiguity resulting from the absence of any background
information or other description or explanation in the subject Proposal, and
(iii) the greater need for clarity and certainty in the context of a mandatory
bylaw amendment (as compared to a report), all serve to distinguish this
situation from those in which the Staff has not concurred with the company's
position to exclude analogous proposals on the grounds of Rule 14a-8(i)(3).2
For the foregoing reasons, the Company believes that the Proposal and Supporting
Statement are vague and indefinite in violation of Rule 14a-9, thus warranting
exclusion of the Proposal and the Supporting Statement on the basis of Rule
14a-8(i)(3).
B. The Supporting Statement contains statements that are materially false and
misleading.
The Company believes that the Supporting Statement includes materially false and
misleading statements in violation of Rule 14a-9, as follows:
The Supporting Statement states that "Yahoo reportedly disclosed the identity
of a Chinese citizen who had published information critical of the Chinese
government on the internet; as a result of Yahoo's disclosure, the individual is
serving a 10 year jail sentence." This statement is misleading in that it omits
the material facts that (i) the Chinese government compelled Yahoo! China under
threat of criminal penalty to disclose user information connected to a user ID,
and (ii) Yahoo! China did not know the name, occupation or identity of the
person connected to the user ID in question. The Supporting Statement therefore
indirectly charges Yahoo! with improper conduct without factual foundation.
The Supporting Statement also cites a limited test by Reporters Without
Borders for the proposition that Yahoo! censors more terms in China than other
search engines. This statement is materially false and misleading because it
fails to mention that in 2006, when this "limited test" was conducted, the
Company had no direct operations in China. Yahoo! sold its Yahoo China!
business, which is the subject of this "limited test," to Alibaba.com
Corporation ("Alibaba") in 2005. Yahoo! owns a minority investment in Alibaba,
and does not have day-to-day management control over Alibaba or any of its
business units.3 Yahoo! believes it is materially misleading to attribute to
Yahoo! the actions of a company in which Yahoo! has a minority stake and that
Yahoo! does not control from a management perspective.
To the extent that the foregoing statements are materially false or misleading
in violation of Rule 14a-9, the Company believes that it may exclude them from
its proxy materials pursuant to Rule 14a-8(i)(3).
2. The Proposal has been substantially implemented, and therefore may be
excluded pursuant to Rule 14a-8(i)(10).
Rule 14a-8(i)(10) provides that a company may exclude a stockholder proposal if
"the company has already substantially implemented the proposal." In Exchange
Act Release No. 34-19135 (August 16, 1983), the Commission stated that a
proposal may be omitted if it has been "substantially implemented by the
issuer," though it has not been "fully effected." The Staff has further
determined that a company has substantially implemented a stockholder proposal
if the company's relevant policies, practices and procedures "compare favorably
with the guidelines of the proposal." Texaco, Inc. (March 28, 1991). Where
companies have implemented the essential objectives of the proposal or have had
policies, standards and procedures concerning the subject matter of the proposal
already in place, the Staff has consistently found that the proposal had been
substantially implemented and could be excluded under Rule 14a-8(i)(10). See,
e.g., ConAgra Foods, Inc. (June 20, 2005) (permitting exclusion of a proposal
requesting a sustainability report, including a company-wide review of related
company policies and practices, where the company already posted on its website
a report that addressed social, environmental and workplace policies);
Freeport-McMoRan Copper & Gold Inc. (March 5, 2003) (permitting exclusion of a
proposal requesting amendment of company's social and human rights policy and
subsequent reporting where the company revised its social and human rights
policy and the published an annual economic, social and environmental report);
The Talbots, Inc. (April 5, 2002) (permitting exclusion of a proposal requesting
implementation of a code of corporate conduct based on the United Nations
International Labour Organization standards where the company established, among
other things, standards for business practice, a labor law compliance program
and a code of conduct for suppliers); and The Gap, Inc. (March 16, 2001)
(permitting exclusion of a proposal requesting a report on child labor practices
of the company's suppliers where the company had an established code of vendor
conduct, monitored compliance, published information relating thereto and
discussed labor issues with shareholders).
While the Company maintains that the Proposal is inherently vague and indefinite
(for the reasons set forth in Section 1 of this letter), the Company
acknowledges the references in the Supporting Statement that appear to focus on
the issues of privacy and Internet censorship in foreign countries, particularly
China. To the extent that the Staff narrowly interprets the Proposal to be
limited to these areas of concern, the Company respectfully requests that the
Staff review the Proposal against the backdrop of actions that the Company has
already undertaken to preserve and advance the values of privacy and free
expression in the foreign countries in which it conducts business. For example,
over the last year, the Company has established a multi-disciplinary and
cross-functional team of Yahoo! employees worldwide to coordinate and support
the Company's efforts to address these issues on a global basis. The team, which
is subject to oversight by the Company's senior management, consists of Yahoo!
employees from a variety of disciplines and departments, including legal, public
and governmental relations, community affairs, global law enforcement and
compliance, security, emerging markets and international operations. Members of
the team consult regularly with Company officers and other personnel and respond
to internal and external requests for information and feedback on foreign laws
and Company practices and policies. Members of the team also frequently engage
and consult with outside experts, such as the U.S. Department of State and
various academic institutions (such as The Berkman Center on Internet & Society
at Harvard Law School), and collaborate with leaders and representatives of
other technology and communications companies to seek solutions to the free
expression and privacy challenges that these companies face when conducting
business internationally.
The Company's proactive engagement on these issues, and its efforts to solicit
input from others and inform the public of its progress, are further confirmed
in a number of recent announcements and public statements by or involving the
Company:
In February 2006, the Company issued a news release entitled "Yahoo! Our
Beliefs as a Global Internet Company." The release, a copy of which is enclosed
with this letter as Exhibit C, generally affirmed the Company's commitment to
ensure open access to information and communication on a global basis. In
furtherance of this commitment, the Company announced that it was undertaking
the following actions:
to work with industry, government, academia and others to explore policies to
guide industry practices in countries where content is treated more
restrictively than in the United States;
to continue to employ rigorous procedural protections under applicable laws in
response to government requests for information, maintaining the Company's
commitment to user privacy and compliance with the law;
where a government requests that the Company restrict search results, to do so
if required by applicable law, in a manner that impacts the results as narrowly
as possible, and with maximum transparency to the user; and
to engage in ongoing policy dialogue with governments with respect to the
nature of the Internet and the free flow of information.
Also in February 2006, the Company's Senior Vice President and General
Counsel, Michael Callahan, testified before the Congressional Subcommittee on
Africa, Global Human Rights and International Operations, and Asia and the
Pacific. In addition to affirming the Company's commitment to free expression
and the principles described in the Company's February 2006 press release
(described above), Mr. Callahan stated the Company's intention to be a leader in
the discussions between the U.S. companies and the U.S. government on these
issues, and urged the U.S. government to do all that it could do in working with
the Chinese government to help the Company "provide beneficial services to
Chinese citizens lawfully and in a way consistent with our shared values." A
transcript of Mr. Callahan's prepared testimony is enclosed with this letter as
Exhibit D.
In September 2006, Stanford University announced the creation of the Yahoo!
International Fellowship with a $1 million gift from Yahoo!. The goal of the
program is to bring experienced professional journalists to the university from
countries where social or political circumstances create unusual dangers for
journalists. In doing so, the program seeks to broaden the global debate on
these subjects, bring attention to cases where expression is stifled, and
eventually contribute to the creation of a freer press. A copy of the press
release announcing this fellowship is enclosed with this letter as Exhibit E.
In 2006, Yahoo! and other prominent communications and technology firms,
including Google, Microsoft and Vodafone, with the facilitation of Business for
Social Responsibility (BSR) and the Center for Democracy and Technology (CDT)
and with advice from the Berkman Center for Internet & Society at Harvard Law
School, initiated a series of dialogues with a broad group of human rights
organizations, technology leaders, socially responsible investors, and academic
groups to gain a fuller understanding of free expression and privacy as they
relate to the use of technology worldwide. These efforts led to the announcement
on January 18, 2007 that a consortium of these companies (including Yahoo!) and
other stakeholders described above had formally agreed to work together to seek
solutions to the free expression and privacy challenges faced by technology and
communications companies doing business internationally. The goal is to produce
and implement in 2007 a set of principles to guide company behavior when faced
with laws, regulations and policies that implicate human rights issues. A copy
of the January 18 announcement is enclosed with this letter as Exhibit F. We
have also enclosed with this letter as Exhibits G and H, respectively, copies of
related statements by Michael Samway, Vice President and Deputy General Counsel
of the Company, which are publicly available on the Company's corporate "blog"
at http://yodel.yahoo.com/2007/01/18/on-being-global/ and http://yodel.yahoo.com/2007/02/02/the-gift-of-giving/.
To the extent that the Proposal is narrowly interpreted to relate to privacy and
freedom of expression concerns, the Company believes that the foregoing actions
and announcements compare favorably with the guidelines of the Proposal, and
further confirm that the Company already has in place policies, standards and
procedures concerning the subject matter of the Proposal. For this reason,
Yahoo! believes that it has already substantially implemented the Proposal
within the meaning of Rule 14a-8(i)(10), and that the Company may therefore omit
the Proposal and Supporting statement from the Company's proxy materials.
3. The Proposal may be excluded pursuant to Rule
14a-8(i)(7) because it deals
with matters relating to the Company's ordinary business operations.
A company may exclude a stockholder proposal from the company's proxy materials
under Rule 14a-8(i)(7) if the proposal deals with a matter relating to the
company's ordinary business operations. In Release No. 34-40018 (May 21, 1998)
(which we will refer to in this letter as the "1998 Release"), the Staff
indicated that the underlying policy of the "ordinary business" exception 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 shareholders meeting." The Staff further stated in
the 1998 Release that this general policy rests on two central considerations.
The first is that "[c]ertain 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." The second consideration relates to
"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."
The Company believes that the Proposal is the type of matter that the "ordinary
business" exception in Rule 14a-8(i)(7) is intended to address. Notwithstanding
the provision in subparagraph c. of the Proposal (stating that "nothing herein
shall restrict the power of the Board of Directors to manage the business and
affairs of the company"), the Proposal seeks, through a bylaw amendment, to
interject stockholders into an aspect of the Company's business that is and, as
described in Section 2 of this letter, has been most appropriately handled by
Company management. The issue of how the Company should respond or alter its
services to comply with government regulations, including regulations in foreign
countries, is central to the Company's day-to-day business operations. As
detailed in Section 2 of this letter, the Company has already assigned to a
multi-disciplinary team of its executives and managers responsibility for making
decisions as to how best to conduct business in compliance with current
regulations, and how best to act or respond to effect change in the regulatory
framework to promote the Company's business objectives.4 The Company believes
that it would be impractical to allow stockholders to second guess the decision
to allocate these functions to the Company's management, or to provide
stockholders who may disagree with the Company's conclusions on the underlying
subject matter with the ability to file challenges seeking to enforce the bylaw
provision in a manner that is more supportive of their own preferred agenda.
Moreover, the issue of the Company's response to governmental regulation is
highly complex, and requires a detailed understanding of, among other things,
the Company's current and future business models and strategies, available
technology and the regulatory landscape. This complexity and the rapid evolution
of the public debate on these matters make it difficult for stockholders to make
an informed judgment, and therefore make it a poor topic for action by
stockholders at an annual meeting.
For the foregoing reasons, the Company believes that it may exclude the Proposal
and Supporting Statement from the Company's proxy materials in reliance on Rule
14a-8(i)(7).
Conclusion
For each of the reasons discussed above, the Company believes that it may
exclude the Proposal and Supporting Statement from its proxy materials for the
2007 Annual Meeting of Stockholders. If for any reason the Commission does not
agree with the Company's position, or it has questions or requires additional
information in support of the Company's position, we would appreciate an
opportunity to confer with the Commission's Staff prior to the issuance of a
formal response. Please call me at (408) 349-7131, or in my absence, Thomas J.
Leary, Esq., of O'Melveny & Myers LLP at (949) 823-7118.
Please acknowledge receipt of this letter and the enclosures by date stamping an
enclosed copy of this letter and returning the date-stamped copy to our
messenger.
Very truly yours,
/s/
Christina Lai
Senior Legal Director
Enclosures
cc: Mr. John C. Harrington
Michael J. Callahan, Senior Vice President and General Counsel, Yahoo! Inc.
Thomas J. Leary, Esq., O'Melveny & Myers LLP
-----FOOTNOTES-----
1 For the Staff's convenience, a copy of the Universal Declaration of Human
Rights is included with this letter as Exhibit B.
2 See, e.g., Revlon, Inc. (April 5, 2002); TJX Companies, Inc. (April 5, 2002);
PPG Industries, Inc. (January 22, 2001) (all proposals seeking action "based on"
specified International Labor Organization standards). See also Microsoft
Corporation (September 14, 2000) (proposal seeking action based on eleven
specific principles set forth in the proposal relating to human and labor
rights); and Cisco Systems, Inc. (August 31, 2005) (proposal requesting the
board to prepare a report to shareholders describing the progress toward
development and implementation of a human rights policy and the plan for
implementation with partners and resellers).
3 In July of 2006, Alibaba began including a notice to users at the foot of
search results pages on Yahoo! China indicating that certain results may not
appear due to restrictions under PRC law. Specifically, the following notice
appears on the Yahoo! China search page (quoting in pertinent part, and
translated into English): "All the search results of Yahoo originate from
relevant websites, part of which may not be shown according to the applicable
laws and regulations. Please click here to view the search results not shown
according to the Regulations on the Protection of the Right of Communication
through Information Network."
4 The Company believes that the existing framework instituted by management to
address the issues raised by the Proposal distinguish this circumstance from
other recent instances in which the Staff did not concur with the company's
position to exclude arguably similar proposals on the basis of Rule 14a-8(i)(7).
For example, in General Electric Company (January 28, 2005) (proposal seeking to
establish a board committee to review the company's business operations in Iran)
and American Express Company (February 23, 2006) (proposal to form a committee
to explore ways to implement an equal employment opportunity policy), neither of
the subject companies had previously taken steps to have management address the
underlying subject matter of the submitted proposal.
[INQUIRY LETTER]
December 13, 2006
Terry Semel, Chairman & CEO
Yahoo! Inc.
701 First Avenue
Sunnyvale, CA 94089
Dear Mr. Semel:
I am an investor in Yahoo! Inc. and currently hold 200 shares of Yahoo! Inc. As
the beneficial owner I am submitting the enclosed shareholder proposal for
inclusion in the 2007 proxy statement, in accordance with Rule 14a-8 of the
General Rules and Regulations of the Securities and Exchange Act of 1934 (the
"Act"). I am the beneficial owner, as defined in Rule 13d-3 of the Act, of at
least $2,000 in market value of Yahoo! Inc. common stock. I have held these
securities for more than one year as of the filing date and will continue to
hold at least the requisite number of shares for proxy resolutions through the
shareholders meeting. In this regard, I have enclosed a copy of Proof of
Ownership from Charles Schwab & Company. I or a representative will attend the
shareholders meeting to move the resolution as required.
I am concerned that our company is in need of oversight by a Board of Directors
Committee on Human Rights in an effort to insure that our company's worldwide
business operations do not violate human rights.
Sincerely,
/s/
John C. Harrington
mln
encl.
[APPENDIX]
Yahoo! Inc.
Amendment to Corporate Bylaws Establishing Board Committee on Human Rights
RESOLVED: To amend the corporate Bylaws, by inserting the following new Article
4.4:
Article 4.4
Board Committee on Human Rights
a. There is established a Board Committee on Human Rights, which is created and
authorized to review the implications of company policies, above and beyond
matters of legal compliance, for the human rights of individuals in the US and
worldwide.
b. The Board of Directors is authorized in its discretion consistent with these
Bylaws and applicable law to (1) select the members of the Board Committee on
Human Rights, (2) provide said committee with funds for operating expenses, (3)
adopt regulations or guidelines to govern said Committee's operations, (4)
empower said Committee to solicit public input and to issue periodic reports to
shareholders and the public, at reasonable expense and excluding confidential
information, on the Committee's activities, findings and recommendations, and
(5) adopt any other measures within the Board's discretion consistent with these
Bylaws and applicable law.
c. Nothing herein shall restrict the power of the Board of Directors to manage
the business and affairs of the company. The Board Committee on Human Rights
shall not incur any costs to the company except as authorized by the Board of
Directors.
SUPPORTING STATEMENT
The proposed Bylaw would establish a Board Committee on Human Rights which would
review and make policy recommendations regarding human rights issues raised by
the company's activities and policies. For example, Yahoo reportedly disclosed
the identity of a Chinese citizen who had published information critical of the
Chinese government on the internet; as a result of Yahoo's disclosure, the
individual is serving a 10 year jail sentence. Also, of the major internet
search engines operating in China, Yahoo censored more terms, according to a
limited test conducted by Reporters Without Borders. We believe the proposed
Board Committee on Human Rights could be an effective mechanism for addressing
the human rights implications of the company's activities and policies on issues
such as these, as they emerge anywhere in the world. In defining "human rights,"
proponents suggest that the committee could use the US Bill of Rights and the
Universal Declaration of Human Rights as nonbinding benchmarks or reference
documents.
[INQUIRY LETTER]
February 20, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal Submitted to Yahoo! On Behalf of Harrington Investments
Dear Sir/Madam:
Harrington Investments (the "Proponent") is a beneficial owner of common stock
of Yahoo! (the "Company") and has submitted a shareholder proposal (the
"Proposal") to the Company. We have been asked by the Proponent to respond to
the letter dated February 7, 2007, sent to the Securities and Exchange
Commission by the Company. In that letter, the Company contends that the
Proponent's Proposal may be excluded from the Company's 2007 proxy statement by
virtue of Rules 14a-8(i)(3), (i)(7) and (i)(10) as well as Rule 14a-9. We are
transmitting this letter via email and will also transmit 6 copies via overnight
mail.
We have reviewed the Proposal, as well as the letter sent by the Company, and
based upon the foregoing, as well as the relevant Rules, it is our opinion that
the Proposal must be included in the Company's 2007 proxy statement and that it
is not excludable by virtue of those Rules.
Summary
The resolution, which involves a mandatory Bylaw Amendment creating a Board
Committee on Human Rights, addresses a major public policy issue facing Yahoo!,
namely how it will ensure that its policies and practices do not compromise the
individual human rights of its customers. As an increasingly important policy
question for the Company, this does not represent excludible "ordinary
business." Furthermore, the resolution explicitly addresses issues beyond "legal
compliance" matters, thus avoiding the issue of ordinary business related to
legal compliance. The resolution is not excessively vague, but rather is written
at a level of detail that is appropriate for shareholder considerationneither
so detailed as to micromanage issues that are reserved to the Board or
management, nor so general that the shareholders would not know what they are
voting on. It also does not contain materially false or misleading statements.
The resolution has also not been substantially implemented, because it would
establish a board level committee on human rights which is fundamentally
different than management and employee actions. Finally, because the Company
filed its request two weeks after its deadline to do so, the Company has
forfeited its ability to exclude the Proposal.
The Proposal
The proposal in its entirety states:
RESOLVED: To amend the corporate Bylaws, by inserting the following new Article
4.4:
Article 4.4
Board Committee on Human Rights
a. There is established a Board Committee on Human Rights, which is created and
authorized to review the implications of company policies, above and beyond
matters of legal compliance, for the human rights of individuals in the US and
worldwide.
b. The Board of Directors is authorized in its discretion consistent with these
Bylaws and applicable law to (1) select the members of the Board Committee on
Human Rights, (2) provide said committee with funds for operating expenses, (3)
adopt regulations or guidelines to govern said Committee's operations, (4)
empower said Committee to solicit public input and to issue periodic reports to
shareholders and the public, at reasonable expense and excluding confidential
information, on the Committee's activities, findings and recommendations, and
(5) any other measures within the Board's discretion consistent with these
Bylaws and applicable law.
c. Nothing herein shall restrict the power of the Board of Directors to manage
the business and affairs of the company. The Board Committee on Human Rights
shall not incur any costs to the company except as authorized by the Board of
Directors.
SUPPORTING STATEMENT
The proposed Bylaw would establish a Board Committee on Human Rights which would
review and make policy recommendations regarding human rights issues raised by
the company's activities and policies. For example, Yahoo! reportedly disclosed
the identity of a Chinese citizen who had published writings critical of the
Chinese government on the internet; as a result of Yahoo's disclosure, the
individual is serving a 10 year jail sentence. Also, of the major internet
search engines operating in China, Yahoo censored more terms, according to a
limited test conducted by Reporters Without Borders. We believe the proposed
Board Committee on Human Rights could be an effective mechanism for addressing
the human rights implications of the company's activities and policies on issues
such as these, as they emerge anywhere in the world. In defining "human rights,"
proponents suggest that the committee could use the US Bill of Rights and the
Universal Declaration of Human Rights as nonbinding benchmark or reference
documents.
ANALYSIS
I. Rule 14a-8(j)Yahoo! failed to meet the deadline for filing a no-action
request with the Staff
Because the Company filed its request two weeks after the deadline, the Company
has forfeited its ability to exclude our Proposal. Rule 14a-8(j) states:
Question 10: What procedures must the company follow if it intends to exclude my
proposal?
(1) If the company intends to exclude a proposal from its proxy materials, it
must file its reasons with the Commission no later than 80 calendar days before
it files its definitive proxy statement and form of proxy with the Commission.
The company must simultaneously provide you with a copy of its submission. The
Commission staff may permit the company to make its submission later than 80
days before the company files its definitive proxy statement and form of proxy,
if the company demonstrates good cause for missing the deadline.
Last year, Yahoo! filed its Form DEF 14A (Definitive Proxy Statement) on April
14, 2006, the release date in 2006.1 Increasing the year by one, the day to
begin the calculation is April 14, 2007. Accordingly "day one" for purposes of
the calculation is April 13, 2007 and "day 80" is January 24, 2007. Therefore
the 80-day deadline is January 24, 2007 and a no-action request received after
that date would be untimely. Because the Company's request is dated February 7,
2007 it is untimely by two weeks and the Company has forfeited its ability to
exclude our Proposal.
The Company has not provided any explanation for being tardy and therefore has
not demonstrated any "good cause" for missing the deadline. We note that the
purpose of Rule 14a-8(j) is to afford the Staff and the Proponent enough time to
properly address no-action requests. In addition, time is of the essence so that
companies have sufficient time to print and deliver proxy materials and that
shareholders have enough time to consider the issues raised in the proposal
before they vote their proxies. For these important reasons, we believe that
there is no reasonable excuse for a two week delay and we respectfully request
that the Staff concur with our conclusion that the Company has forfeited its
ability to exclude our Proposal.
II. Rules 14a-8(i)(3) and 14a-9The Proposal is Not Vague or Indefinite, but
Rather Permits Shareholders and the Company to Determine With Reasonable
Certainty what Actions are Required
The Company contends that the Proposal is excludable because:
1. the phrase "human rights" is too broad and complex;
2. the Proposal lacks background information, description or explanation; and
3. mandatory bylaw amendments require a higher level of specificity
Addressing their first argument, there is nothing inherently vague or misleading
about the phrase "human rights" nor does it become vague in this context. In
fact, the Company appears to feel perfectly free to use the term in its public
statements. For example, in the Company's February 13, 2006 news release
entitled "Yahoo! Our Beliefs as a Global Internet Company," referred to on page
7 of the Company's letter, Yahoo! used the phrase "human rights" without any
definition, background information, description or explanation of what it meant.
Why would the Company have used the term if it actually believed that it would
have caused confusion or misunderstanding?
Furthermore, the common usage of the word as found in a dictionary indicates
that there is nothing inherently confusing about the term. For example, The
American Heritage Dictionary of the English Language Fourth Edition, 2000 at
page 855 defines "human rights" as "The basic rights and freedoms to which all
humans are entitled, often held to include the right of life and liberty,
freedom of thought and expression, and equality before the law." As this
definition indicates, there is common usage of the term which is sufficiently
specific so that shareholders and the Company can understand that the Proposal
is intended to address those rights.
With respect to the Company's second and third arguments, it is well established
that proposals are not required to formally define words, even in the context of
a highly debated term. In The Kroger Co. (April 12, 2000) the proposal called
for the company to adopt a policy of removing "genetically engineered" products
from its private label products, labeling and identifying products that may
contain a genetically engineered organism, and reporting to shareholders. The
company challenged the proposal on many grounds including the argument that the
term "genetically engineered" was not defined in the proposal and was the
subject of competing definitions. Despite the lack of a definition or even a
consensus on the meaning of the terms, the Staff rejected the lack of definition
argument and concluded that the proposal was permissible.
Kroger also argued, unsuccessfully, that because state law required that
labeling not be untrue, deceptive or misleading that if it labeled its products
as sought by the proposal it could be subject to potential liability due to the
fact that company did not have the basic information that might be required on
the label. Therefore, they reasoned, the phrase "genetically engineered" would
subject the company to litigation and liability.
In our Proposal, we are confronted with similar arguments. First, even in the
context of a heated debate about the meaning of the words "genetically
engineered", the Staff did not require a definition of the term, but allowed
common sense to guide shareholders. Similarly, we argue that common sense is
more than sufficient to allow shareholders and the Company to understand what is
contemplated by the phrase "human rights".
Second, there is no reason to conclude that the lack of definition concerning
the phrase "human rights" will make it unreasonably difficult for the Company,
its shareholders or even a court to determine if they are complying with the
bylaw if the shareholders choose to adopt it. Even in the Kroger context where
there were food labeling issues being litigated, it was not a sufficient
argument for exclusion. In this context, there is to our knowledge no current or
imminent threat of litigation on this matter either generally or regarding board
committee actions on human rights, and at its core, Yahoo!'s argument simply
seeks to confuse matters.
With respect to the cases cited by the Company to support its argument, they are
all readily distinguishable. In all three cases cited by the Company, the
shareholders were seeking implementation or reports based on a set of third
party standards that were either not sufficiently defined in the proposal or
were unknown to the company or its shareholders: The Kroger Co. (March 19, 2004)
(Global Reporting Initiative); Johnson & Johnson (February 7, 2003) (Glass
Ceiling Commission's recommendations); and Alcoa Inc. (December 24, 2002)
(International Labor Organization conventions). This distinction is critical
because there was no reason to assume that the shareholders in those cases were
familiar with the third party standards, let alone what the details encompass.
In contrast it is reasonable to conclude that shareholders have heard the phrase
"human rights" and have a reasonable understanding of that term that is
essentially consistent from shareholder to shareholder.
Furthermore, third party standards are invariably detailed and complex documents
that contain very carefully chosen words. To request that the company implement
those standards without giving a reasonably detailed explanation is to ask the
company to adopt those very carefully chosen words without knowing what they are
or understanding their significance. That is not the case here, because we are
seeking to establish a committee that will review the Company's practices with
respect to "human rights" - a widely understood concept that virtually all
shareholders will have knowledge of. There is no fine print elsewhere that is
being hidden from the Company or shareholders.
Finally, clearly inappropriate to discuss benchmarking examples in supporting
statements as opposed to resolve clauses. For example in Kroger (March 29,
2006), the proposal requested a "Sustainability Report" and in the supporting
statement recommended that the report be based on the Global Reporting
Initiative's (GRI) Sustainability Reporting Guidelines. In contrast, in Kroger
(March 19, 2004) the resolve clause of the proposal requested "that the company
prepare a sustainability report (at reasonable cost and omitting proprietary
information) based on the Global Reporting Initiative's sustainability reporting
guidelines." These cases demonstrate that it is acceptable to suggest the use of
third party benchmarks in the supporting statement, while they should be avoided
in the resolve clause. See also, Dean Foods Co. (March 25, 2005); Seaboard Corp.
(February 14, 2005); and Wendy's International (February 10, 2005) (permitted
proposal with reference to the GRI in supporting statement) in contrast with
RylandGroup (January 19, 2005); ConAgra (July 1, 2004); and Albertson's (March
5, 2004) (excluded proposal specifically requesting report based on the GRI). In
our case, the Proposal is most similar to Kroger (March 29, 2006) in that its
reference to the US Bill of Rights and the Universal Declaration of Human Rights
is a "suggestion" and is not an attempt to make those documents the specific
basis of the committee's definition.
We should also point out that it would be inappropriate for us to be more
specific in our choice of words. Shareholders are properly concerned with the
general direction and policy of the Company. The Board and management are
conversely in charge of implementing the details of the policy and executing it.
For that reason, the Board is entitled to a significant level of discretion with
which to determine how to implement and execute the policies. Accordingly, this
Proposal presents the Board with policy-level guidance while leaving the
particulars within their discretion. If we had been more specific, we would
surely have been accused of micro-managing the Company and improperly treading
upon the Board's or management's roles.
III. Rule 14a-8(i)(3)The Company's Additional Facts Should be Presented In Its
Statement of Opposition and the Proposal Does Not impugn the Company nor Does it
Mislead Shareholders
The Staff addressed Rule 14a-8(i)(3) issues in Staff Legal Bulletin 14B by
stating:
We believe that the staff's process of becoming involved in evaluating wording
changes to proposals and/or supporting statements has evolved well beyond its
original intent and resulted in an inappropriate extension of rule 14a-8(i)(3).
In addition, we believe the process is neither appropriate under nor consistent
with rule 14a-8(1)(2), which reads, "The company is not responsible for the
contents of [the shareholder proponent's] proposal or supporting statement."
Finally, we believe that current practice is not beneficial to participants in
the process and diverts resources away from analyzing core issues arising under
rule 14a-8.
Therefore, the Staff indicated that it would focus its Rule 14a-8(i)(3) review
on defamatory or character-impugning statements, inherently vague or misleading
statements, objectively false statements, and irrelevant statements.
Accordingly, in recognition that Yahoo! is not responsible for the contents of
our supporting statement and can more appropriately differ with our
representation of the facts in its statement of opposition, we believe the two
statements must remain in the Proposal.
First, the Company argues that the following statement falls within the
defamatory or character-impugning exclusion which prohibits "statements directly
or indirectly impugning character, integrity, or personal reputation, or
directly or indirectly make charges concerning improper, illegal, or immoral
conduct or association, without factual foundation":
Yahoo reportedly disclosed the identity of a Chinese citizen who had published
information critical of the Chinese government on the internet; as a result of
Yahoo's disclosure, the individual is serving a 10 year jail sentence.
Specifically, Yahoo! is not arguing that we have made the statement without a
factual foundationthey merely object that there are other facts that may change
shareholders' opinions. This makes their objection essentially an argument that
there are "factual assertions that, while not materially false or misleading,
may be disputed or countered". The Staff, in SLB 14B, made it clear that these
kinds of objections are not subject to a Rule 14a-8(i)(3) exclusion. Mindful of
the need to avoid fact-intensive inquiries, we would simply like to point out
that at least two reports support the content of the statement.2 These reports
enclosed as Appendix A, provide ample documentation that the Company provided
information linking Chinese dissident Shi Tao's personal email address and the
specific message he had posted criticizing the Chinese government, to the IP
address of his computer. This allowed Chinese officials to determine Shi Tao's
identity and successfully obtain a criminal verdict from a court in the Hunan
province. In short, the Company is seeking to counter these facts with
additional facts and such objections are most appropriately addressed in its
statement of opposition, where it is entitled to present its perspective on the
issue.
Second, the Company asserts that the supporting statement's reference to the
Reporters Without Borders' test is materially false and misleading because the
test was of Alibaba.com Corporation over which Yahoo! has a "minority
investment." We believe it is not materially misleading, because, as the Company
explained in its letter, Alibaba.com is operating Yahoo China! and therefore is
operating under Yahoo!'s brand. Consequently, regardless of the specific
provisions of the Yahoo!/Alibaba.com relationship, it appears, to the rest of
the world, that Yahoo China! is being operated with Yahoo!'s consent and
approval. If there is anything to be labeled materially false and misleading, it
would be the seemingly formalistic structures created by Yahoo! to screen
itself.
Furthermore, the Company also fails to point out that Yahoo!'s 40% stake in
Alibaba.com, China's largest e-commerce company, was purchased for $1 billion3,
making Yahoo! no small presence in China's developing internet industry.4 While
Yahoo! asserts that it does not exert day to day managerial control, the
Company's $1 billion stake in Alibaba.com surely gives it very substantial
influence over policies and practices at Alibaba.com. Consequently, we believe
it would be disingenuous to argue, as the Company apparently does, that it
cannot be held responsible for policies and practices at Alibaba.com.
Accordingly, we respectfully request the Staff not concur with the Company and
inform it that it must include the two supporting statements in its proxy
materials.
Finally, this objection from Yahoo! highlights one of the significant policy
issues raised in the Proposal: specifically, the practice of hiding behind
"independent" entities to avoid both U.S. jurisdiction and responsibility for
repressive policies and practices. For example Rep.
Christopher Smith (R) of New Jersey, the prior chairman of the House
Subcommittee on Africa, Global Human Rights and International Operations, has
discussed the possibility of requiring companies to locate e-mail servers
outside countries deemed repressive by the State Department. However, these
relationships create questions about whether Congress would have jurisdiction to
legislate such requirements.5
While not conceding the Company's argument that the Proposal is excessively
vague or materially false and misleading, we note that the SEC Staff may allow
proponents to amend a proposal where only minor changes are needed. (Staff Legal
Bulletin 14B: "We have had, however, a long-standing practice of issuing
no-action responses that permit shareholders to make revisions that are minor in
nature and do not alter the substance of the proposal." See also Adams Express
Company (Dec. 28, 2000) and SI Handling Systems, Inc. (May 5, 2000). If the
Staff finds merit in the arguments made by the Company, we respectfully request
the opportunity to discuss with the Staff and the Company various possible
modifications, such as adding or eliminating a word or two, which we believe
would eliminate any colorable arguments.
For example, we may be willing to revise the supporting statement to clarify
that the Reporters Without Borders test was a test of the Yahoo! affiliated
company Alibaba.com that operates Yahoo China! (or was a test of Alibaba.com in
which Yahoo! currently owns a 40% stake).
IV. Rule 14a-8(i)(10)The Company Has Not Substantially Implemented the Proposal
Because It Has Only Taken Action at the Employee and Managerial Level and Has
Not Created a Board Level Committee Responsible for Addressing Human Rights
Issues.
The Company next argues that 1) its formation of a "multi-disciplinary and
cross-functional team of Yahoo! employees" to address these issues; 2) Company
press releases, gifts, and dialogues; and 3) other actions by management
demonstrate that the Company has substantially implemented the Proposal. This
argument fails for the simple reason that not one of the actions taken by the
Company involves a board committee to address this issue.
Returning to the text of the Proposal, it is clear that it is not focused on
employee or management action. Rather the Proposal would establish "a Board
Committee on Human Rights" (emphasis added). This is due, in part, to the
fundamental importance of these issues and fact that we believe the Company
should address them at the highest level with the Board providing the review and
guidance for management and employees.
On a number of occasions the Staff has concurred that when a proposal is focused
on the creation of a board level committee, it is not sufficient for the company
to argue that employees and management are addressing the issue. For example, in
NYNEX Corporation (February 16, 1994), the permitted proposal requested the
company establish a four-member committee of its board of directors to evaluate
the impact of various health care proposals on the company. The company
unsuccessfully argued that it had substantially implemented the proposal because
it had already established a Committee on Benefits, which oversaw the
administration and effectiveness of all of the NYNEX employee benefits plans and
programs, including the medical programs. In addition, the company argued that
it was working to explore solutions to the specific issue of health care cost
containment through its collaboration with unions, research institutes and
business groups. In the case now before the Staff, the Company has not even
argued that an existing committee is responsible for these issues. Rather, as in
NYNEX, the Company has argued that it is taking other steps, at the
employee/management level, to address the issue, but not the essential step of
creating a board committee dedicated to the issue. As the proponent in NYNEX
rightfully pointed out, employee or management activities are no substitute for
steps taken by board members and consequently the Proposal has not been
substantially implemented. We respectfully request the Staff agree that
employee/management level activities are not a substitute for the creation of a
board level committee that makes members of the board responsible for these
issues. See also, NYNEX Corporation (February 18, 1994) (creation of a
"Facilities Closure and Relocation of Work Committee" composed of four outside
directors, two employee representatives and two representatives of affected
committees).
Similarly, in Associates First Capital Corporation (March 13, 2000), the
permitted proposal requested the company establish a committee of directors to
develop and enforce policies to ensure that "employees do not engage in
predatory lending practices." In that case, the company argued, unsuccessfully,
that comprehensive internal procedures developed and implemented at the
managerial level had substantially implemented the proposal. The proponent
successfully pointed out that the proposal did not request management action,
but instead focused on a board level review of the issue, and that consequently
the proposal had not been substantially implemented. Similarly, our Proposal
seeks a board level committee to review these issues and the Company has only
pointed to steps taken by Yahoo! employees and management. Consequently, the
Company has not substantially implemented the Proposal. See also, Conseco, Inc.
(April 15, 2001) (same).
With respect to the cases cited by the Company, we observe that they all
addressed the adoption or implementation of policies by a company. That is not
the case here. We are not seeking the implementation of a specific policy, i.e.
we do not make reference to a specific third party standard or put forth our own
specific policy. Rather we are seeking to create a board level structure, a
committee, to address these issues and elevate the discourse to a Board level
oversight/structure. By doing so there is not the opportunity for the Company to
argue that they have addressed the contents of the Proposal in alternative
fashions as was done in those cases.
In conclusion, we ask the Staff to concur with our analysis that employee and
management level actions and committees (or teams) do not constitute substantial
implementation of the Proposal. We believe that when a proposal focuses on the
formation of a board level committee, actions at any other level are
insufficient and accordingly Yahoo! has not met its burden of demonstrating that
it is entitled to exclude the Proposal.
V. Rule 14a-8(i)(7) - The Proposal Focuses On A Significant Social Policy Issue
(Human Rights) that Transcends the Ordinary Business (Compliance)
The Company argues that the Proposal focuses on the ordinary business of the
Company because (1) the Proposal focuses on how the Company should comply with
government regulations and (2) "the rapid evolution of the public debate on
these matters make it difficult for stockholders to make an informed judgment."
These arguments fail for many reasons. First, the Proposal expressly does not
focus on regulatory matters. As the Proposal states, the committee is "created
and authorized to review the implications of company policies, above and beyond
matters of legal compliance, for the human rights of individuals in the US and
worldwide." (emphasis added). As this clause makes clear, we do not intend the
committee to focus on US or foreign government regulations or regulatory
frameworks. Rather than focus on those "day-to-day" or "complex" matters over
which shareholders arguably would not be in a position to make an informed
judgment, this Proposal is focused on the significant policy issue of human
rights.
We observe in the Company's first paragraph of Section 3 that they have quoted
from Interpretive Release 34-40018 (May 21, 1998) ("1998 Release"), but have
conveniently ignored a critical portion of the 1998 Release. Specifically, that
proposals relating to such (ordinary business) 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.
Consequently, even if the Staff were to conclude that the Proposal focuses on
day-to-day matters such as regulatory matters, the question still remains if the
Company has met its burden of demonstrating that the Proposal does "not involve
any substantial policy or other considerations." Amalgamated Clothing and
Textile Workers Union v. Wal-Mart Stores, Inc., 821 F. Supp. 877, 891 (S.D.N.Y.
1993) quoting Exchange Act Release No. 12999, 41 Fed. Reg. 52,994, 52,998 (Dec.
3, 1976) ("1976 Interpretive Release") (emphasis added).
The importance of this rule has been explained this way:
In so far as the shareholder has contributed an asset of value to the corporate
venture, in so far as he has handed over his goods and property and money for
use and increase, he has not only the clear right, but more to the point,
perhaps, he has the stringent duty to exercise control over that asset for which
he must keep care, guard, guide, and in general be held seriously responsible.
As much as one may surrender the immediate disposition of (his) goods, he can
never shirk a supervisory and secondary duty (not just a right) to make sure
these goods are used justly, morally and beneficially.
Medical Committee for Human Rights v. SEC, 432 F. 2d. 659, 680-681 (1970),
vacated and dismissed as moot, 404 U.S. 402 (1972).
Therefore, a proposal cannot be excluded by Rule 14a-8(i)(7) if it focuses on
significant policy issues. As explained in Roosevelt v. E.I. DuPont de Nemours &
Company, 958 F. 2d 416 (DC Cir. 1992) a proposal may not be excluded if it has
"significant policy, economic or other implications". Id. at 426. Interpreting
that standard, the court spoke of actions which are "extraordinary, i.e., one
involving `fundamental business strategy' or `long term goals.'" Id. at 427.
In addition, it has also been pointed out that the 1976 Interpretive Release
explicitly recognizes "that all proposals could be seen as involving some aspect
of day-to-day business operations. That recognition underlays the Release's
statement that the SEC's determination of whether a company may exclude a
proposal should not depend on whether the proposal could be characterized as
involving some day-to-day business matter. Rather, the proposal may be excluded
only after the proposal is also found to raise no substantial policy
consideration." Amalgamated Clothing and Textile Workers Union at 891 (emphasis
added).
In light of this standard, it is abundantly clear that the Proposal, by focusing
on the implications of Company policies on the human rights of individuals in
the US and worldwide, is focusing on a significant policy issue that involves
fundamental business strategy and long term goals. The following provides
documentation of this fact:
The role of internet service providers operating in repressive governments has
drawn concern from many investors and financial analysts. For example, as of
February 2006 Reporters Without Borders has jointly filed, with Boston Common
Asset Management and Domini Social Investments, a "Joint Investor Statement on
Freedom of Expression and the Internet" 6. The Join Investor Statement is signed
by 24 investors representing around 24 billion dollars in assets, and states:
"As investors and research analysts, we recognize that our investment decisions
have an impact on human rights around the world. We are therefore committed to
using the tools at our disposal to uphold human rights world wide as outlined in
the United Nations Universal Declaration of Human Rights (UDHR), including
freedom of opinion and expression, freedom of assembly and association, and
security of persons.
The growth of the Internet offers considerable opportunities for global
broad-based wealth creation. Companies involved in providing Internet services
and technology are playing a leading role in building global communities and
sharing knowledge. We believe that government action to censor, monitor, isolate
and jail Internet users for exercising basic human rights outlined in the UDHR
threatens the ultimate realization of these benefits. We believe these actions
also present significant barriers to growth for Internet sector businesses,
which depend on a broadly connected, free Internet."
On February 15, 2006 the House of Representatives Subcommittee on Africa,
Global Human Rights and International Operations held a hearing entitled "The
Internet in China: A Tool For Freedom or Suppression?". U.S. Representative
Chris Smith (R-NJ), the then chair of the subcommittee, opened the hearing with
the following statement:
U.S. technology companies today are engaged in a similar sickening
collaboration, decapitating the voice of the dissidents. In 2005, Yahoo!'s
cooperation with Chinese secret police led to the imprisonment of
cyber-dissident Shi Tao. And this was not the first time. According to Reporters
Without Borders, Yahoo! also handed over data to Chinese authorities on another
of its users, Li Zhi. Li Zhi was sentenced on December 10, 2003, to 8 years in
prison for inciting subversion. His "crime" was criticizing in online discussion
groups and articles the well-known corruption of local officials.
He went on to state:
Yet for the sake of market share and profits, leading U.S. companies, like
Google, Yahoo!, Cisco, and Microsoft, have compromised both the integrity of
their product and their duties as responsible corporate citizens. They have,
indeed, aided and abetted the Chinese regime to prop up both of these pillars,
secret police and propaganda, propagating the message of the dictatorship
unabated and supporting the secret police in a myriad of ways, including
surveillance and invasion of privacy, in order to effectuate the massive
crackdown on its citizens.
http://commdocs.house.gov/committees/intlrel/hfa26075.000/hfa26075_0f.htm
Numerous non-governmental organizations have focused considerable attention on
the issue, with a specific focus on Yahoo!'s actions. See:
Amnesty International http://web.amnesty.org/pages/chn-310106-action-eng
Human Rights in China http://hrichina.org/public/contents/press?revision
id=27803&item_id=27801
Human Rights Watch http://www.hrw.org/press/2002/08/yahoo080902.htm
The Company itself provides ample evidence of how it is a significant policy
issue through the numerous steps it has taken at the employee and management
level. See Yahoo!'s Letter at pages 8 and 9.
Media reports (including business media) on this issue are abundant. A brief
list includes:
Congress's dilemma: When Yahoo in China's not Yahoo, G. Jeffrey MacDonald, The
Christian Science Monitor. February 14, 2006
http://www.csmonitor.com/2006/0214/p01s04-usfp.html
Yahoo, China, And Human Rights, Robert Marquand. CBS News. September 9, 2005.
http://www.cbsnews.com/stories/2005/09/09/tech/printable829504.shtml
Yahoo helped Chinese to prosecute journalist. Joseph Kahn. The New York Times.
September 8, 2005. http://www.iht.com/articles/2005/09/07/business/yahoo.php
Yahoo's China problem. Marc Gunther. Fortune Magazine. February 22, 2006.
http://money.cnn.com/2006/02/21/news/international/pluggedin fortune/
Which brings us to the Company's second argument that "the rapid evolution of
the public debate on these matters make it difficult for stockholders to make an
informed judgment." The fact that there is a "public debate on these matters"
is, in part, what makes this Proposal appropriate for shareholders to consider
and opine on. Whether that public debate evolves quickly or slowly is
irrelevant, because, by definition, it is a significant social policy issue and
therefore appropriate for stockholder consideration.
Accordingly, we respectfully request that the Staff conclude that the Proposal
is focused on a significant policy issue and does not seek to interfere with the
Company's ordinary business matters. As demonstrated above, the implication of
the Company's policies on individual human rights is an issue that has received
the attention of Congress, the media, the business press and the business
community. Consequently, we believe the Company has not met its burden of
demonstrating that the Proposal does not involve any issues that transcend the
day-to-day affairs of the Company.
CONCLUSION
In conclusion, we request the Staff to inform the Company that the SEC proxy
rules require denial of the Company's no-action request. As demonstrated above,
the Proposal is not excludable under any of the criteria of Rule 14a. We
respectfully request an opportunity to confer with SEC Staff in the event that
the Staff should decide to concur with the Company.
Please call Sanford Lewis at (413) 549-7333 with respect to any questions in
connection with this matter, or if the Staff wishes any further information.
Sincerely,
/s/
Sanford Lewis
Attorney at Law
/s/
Jonas Kron
Attorney at Law
cc:
Christina Lai
John Harrington
-----FOOTNOTES-----
1 Yahoo! has consistently filed its proxy materials in the first two weeks of
April. The prior three year's materials were filed, respectively, on April 4,
2005, April 9, 2004 and April 15, 2003. In due diligence on Monday February 12,
2007, Sanford Lewis spoke via telephone directly with Christina Lai, Yahoo!
Senior Legal Director and author of the no action request to inquire regarding
the intended date for the 2007 shareholder meeting and in order to assess the
necessary proxy filing date; she never called back to provide this information.
2 See Associated Press. "Yahoo in Hong Kong accused of aiding China", March 31,
2006 http://www.msnbc.msn.com/id/12099004/; and "Information supplied by Yahoo!
helped journalist Shi Tao get 10 years in prison", Reporters Without Borders
press release. September 6, 2006.
http://72.14.209.104/search?q=cache:J2RgBhqc-MMJ:www.rsf.org/article.php3%3Fid_article%3D14884+Yahoo&hl=en&ct=clnk&cd=1&gl=us&lr=la
ng_en
3 Nils Klawitter. "When the West helps China spy", Spiegel Online. September 17,
2005. http://www.spiegel.de/international/spiegel/0,1518,375965,00.html
4 In April 2006, Forbes magazine reported that Chinese users have surpassed
those in the United States in internet use, spending nearly two billion hours
online per week as compared to the 120 million hours online per week in the US.
Natalie Pace, "China surpasses US in internet use", Forbes Magazine, April 3,
2006. http://www.forbes.com/2006/03/31/china-internet-usage-cx nwp
0403china.html
5 G. Jeffrey MacDonald. "Congress's dilemma: When Yahoo in China's not Yahoo,"
The Christian Science Monitor. February 14, 2006
http://www.csmonitor.com/2006/0214/p01s04-usfp.html
6 "Joint investor statement on freedom of expression and the internet",
Reporters Without Borders press release,
http://72.14.209.104/search?q=cache:ceYzCaUsrmwJ:www.rsf.org/fonds-investissement-en.php3+Yahoo+%2B+%22shi+tao%22&hl=en&ct=clnk&cd=11&gl=us&lr=lang
en
[INQUIRY LETTER]
March 12, 2007
VIA COURIER
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, D.C. 20549
Re: Intention to Omit Stockholder Proposal Submitted by Mr. John C. Harrington
Ladies and Gentlemen:
This letter supplements the letter of February 7, 2007, relating to a proposal
(the "Proposal") and supporting statement (the "Supporting Statement") submitted
to Yahoo! Inc. ("Yahoo!" or the "Company") by Mr. John C. Harrington (the
"Proponent") for inclusion in the Company's proxy statement for its 2007 Annual
Meeting of Stockholders (the "2007 Proxy Statement"). In our February 7 letter,
we notified the Securities and Exchange Commission (the "Commission") and the
Proponent of the Company's intention to omit the Proposal and Supporting
Statement from the Company's 2007 Proxy Statement on the grounds set forth in
Rule 14a-8(i)(3), Rule 14a-8(i)(10) and Rule 14a-8(i)(7). We further requested
in our letter that the staff of the Division of Corporation Finance (the
"Staff") confirm that it will not recommend enforcement action to the Commission
if Yahoo! omits the Proposal and Supporting Statement from its 2007 Proxy
Statement
In an effort to rebut the arguments in our February 7 letter, Mr. Sanford Lewis
and Mr. Jonas Kron, counsel to the Proponent, have submitted a letter to the
Commission dated February 20, 2007 (the "Response Letter"). For the reasons
discussed in more detail below, Yahoo! believes that the Response Letter does
not persuasively rebut the Company's arguments set forth in our February 7
letter. Accordingly, Yahoo! reiterates its intention to omit the Proposal and
Supporting Statement from its 2007 Proxy Statement on the grounds set forth in
its February 7 letter, and hereby reaffirms its request that the Staff confirm
that it will not recommend any type of enforcement action to the Commission if
Yahoo! omits the Proposal and Supporting Statement from its 2007 Proxy
Statement.
In accordance with Rule 14a-8(j), we have enclosed for filing six copies of this
letter. We are also concurrently sending a copy of this letter to the Proponent,
as well as to Messrs. Lewis and Kron.
Yahoo!'s No-Action Request is Timely Under Rule 14a-8(j)
Mr. Lewis and Mr. Kron assert in their Response Letter that Yahoo! did not file
its no-action request with the Staff prior to the deadline imposed under Rule
14a-8(j). Yahoo! respectfully submits that Mr. Lewis and Mr. Kron are mistaken
in their interpretation of the 80-day advance filing requirement set forth in
Rule 14a-8(j), insofar as they suggest that the deadline relative to this year's
proxy filing is determined by reference to the filing or release date of last
year's proxy statement. In fact, the applicable deadline under Rule 14a-8(j) is
determined by reference to the filing date for this year's proxy statement.
Since the filing of its February 7 no-action request letter, Yahoo! has publicly
disclosed that its 2007 Annual Meeting of Stockholders will take place on June
12, 2007. Yahoo! is cognizant of the 80-day advance filing requirement contained
in Rule 14a-8(j), and further represents to the Staff that the Company does not
intend to file its definitive proxy statement with the Commission prior to the
expiration of the prescribed 80-day period.1
The Proposal and Supporting Statement are Vague and Indefinite
Mr. Lewis and Mr. Kron assert that shareholders will "have a reasonable
understanding of [human rights] that is essentially consistent from shareholder
to shareholder." The Company strongly disagrees with this statement, as well as
the suggestion that a "common sense" standard is appropriate or practical in the
context of a mandatory bylaw amendment. Accordingly, the Company reaffirms the
arguments on these points set forth in its February 7 letter.
In response to some of the specific points raised in Mr. Lewis' and Mr. Kron's
Response Letter:
The February 13, 2006 news release entitled "Yahoo! Our Beliefs as a Global
Internet Company" (which news release is attached as Exhibit C to the Company's
February 7 letter) references human rights in the context of freedom of speech
and expression, and users' rights to privacyi.e., areas that are relevant to
the Company's business. By contrast, the bylaw amendment contained in the
Proposal lacks any specific context or reference to provide stockholders and the
Company's directors with a clear indication of what matters are to be addressed
by the proposed Board Committee. (For the reasons set forth in the Company's
February 7 letter, the Company believes that the U.S. Bill of Rights and the
Universal Declaration of Human Rights, which the Proponent has suggested could
serve as potential benchmarks, are inherently broad and address issues beyond
the scope of activity of most public companies, and therefore fail to provide
sufficient direction.) We also believe that the definition in The American
Heritage Dictionary cited by Mr. Lewis and Mr. Kron further illustrates the
breadth of the concept and the prospect for differences of opinion among
individuals as to which human rights are to be considered relevant to the
Company and its business.
Mr. Lewis and Mr. Kron cite the Kroger Co. (April 12, 2000), which dealt with
"genetically engineered" foods, in support of their position that the Proposal
need not formally define the term "human rights." The Company respectfully
submits that the Kroger Co. proposal is distinguishable from the instant
Proposal, in that the term "genetically engineered" is a scientifically based
term, and as such is far less vague and open to interpretation than the term
"human rights." In a similar vein, the Company believes that The Kroger Co.
(March 19, 2004), Johnson & Johnson (February 7, 2003) and Alcoa Inc. (December
24, 2002) no-action letters cited by the Company in its February 7 letter
support the Company's position, as the proposals in these specific cases (each
of which the Staff determined could be omitted from the subject company's proxy
materials) included little or no detail to provide stockholders and directors
with a reasonable understanding of what they were being asked to consider or
implement. (In fact, the Company submits that the U.S. Bill of Rights and the
Universal Declaration of Human Rights, which the Proponent suggested could be
used as "benchmarks," but which are inherently broad and complex, would provide
even less direction to the Company than the third-party standards involved in
each of The Kroger Co., Johnson & Johnson and Alcoa Inc. would have provided to
the subject companies.)
The Company's reference in its February 7 letter to potential challenges by
stockholders seeking to enforce the bylaw amendment is not intended to confuse
matters, as Mr. Lewis and Mr. Kron suggest. To the contrary, the Company
believes that if the Proposal is approved at the Annual Meeting, the inherent
breadth and ambiguity of the Proposal's reference to "human rights" will
inevitably lead to differences of opinion among stockholders as to the substance
and scope of the Board Committee's review (even if determined in the permitted
exercise of the Board's discretion). Stockholders with differing or competing
views may "second guess" the Board's judgment, and may very well seek to enforce
the bylaw provision to advance their own personal agendas. This risk highlights
the need for greater certainty and clarity in the case of a mandatory bylaw
amendment.
For the reasons set forth above and in the Company's February 7 letter, the
Company continues to believe that the Proposal and Supporting Statement are
vague and indefinite in violation of Rule 14a-9, and therefore may be excluded
from the 2007 Proxy Statement on the basis of Rule 14a-8(i)(3).
The Supporting Statement Contains Statements that are False and Misleading
Mr. Lewis' and Mr. Kron's Response Letter mischaracterizes the Company's
arguments concerning the specified portions of the Supporting Statement. As set
forth in the Company's February 7 letter, the Company believes that the
referenced statements are materially misleading in that they omit material facts
in violation of Rule 14a-9specifically, that (i) the disclosure by Yahoo! China
was compelled under threat of criminal penalty, and that Yahoo! did not know the
name or identity of the person connected to the particular user ID; and (ii)
that Yahoo! does not control Alibaba.com from a management perspective.2 That
the press reports cited by Mr. Lewis and Mr. Kron in the Response Letter also
omit these material facts (or that the Company may highlight these facts in its
own opposing statement) does not exempt the Supporting Statement from scrutiny
under Rule 14a-9.
Therefore, the Company reaffirms the arguments in its February 7 letter with
respect to the materially false and misleading statements, and believes that
such statements may be excluded from the 2007 Proxy Statement on the basis of
Rule 14a-8(i)(3).3
The Proposal Has Been Substantially Implemented, and Relates to the Company's
Ordinary Business Operations
While the Company maintains that the Proposal is inherently vague and indefinite
(for the reasons set forth above and in the Company's February 7 letter), the
Company acknowledges the references in the Supporting Statement that appear to
focus on the issues of privacy and Internet censorship in foreign countries,
particularly China. Notwithstanding Mr. Lewis' and Mr. Kron's arguments in the
Response Letter, Yahoo! continues to believe that, to the extent that the Staff
narrowly interprets the Proposal as relating solely to these issues, the
Proposal has been substantially implemented and relates to the Company's
ordinary business operations within the meaning of Rule 14a-8(i)(10) and Rule
14a-8(i)(7), respectively.
1. Yahoo! has Substantially Implemented the Proposal.
As detailed in its February 7 letter, Yahoo! already has undertaken steps and
implemented several policies and procedures to address the privacy and Internet
censorship issues on a global basis, and believes that these actions and
policies compare favorably with the guidelines of the Proposal. With regard to
the Nynex Corporation and Associates First Capital Corporation no-action letters
cited by Mr. Lewis and Mr. Kron in support of their arguments, the Company
respectfully submits that the Staff's decisions in those circumstances may have
been driven principally by the Staff's conclusion that the actions previously
taken by each subject company failed to address adequately the substantive
topics raised in the respective proposal (as opposed to a determination by the
Staff that the composition of the previously-existing committee at each company
was insufficient to implement the subject proposal). Accordingly, for these
reasons and those set forth in the Company's February 7 letter, Yahoo! continues
to believe that it may omit the Proposal and Supporting Statement from the 2007
Proxy Statement on the basis of Rule 14a-8(i)(10).
2. The Proposal Relates to the Company's Ordinary Business Operations.
While the Proponent and its counsel seek to frame the privacy and Internet
censorship issues in terms of social policy, these issues cannot be separated
from the issue of governmental regulation, the response to which is central to
the day-to-day management of the Company's business. This conclusion is
supported by the fact that the Company has already assigned responsibility for
these matters to a multi-disciplinary team of its executives and managers, and
that these individuals routinely make decisions as to how the Company can best
conduct its business or effect change within existing regulatory frameworks.
Accordingly, the Company continues to believe, for the reasons set forth in its
December 7 letter, that it may omit the Proposal and Supporting Statement from
the 2007 Proxy Statement on the basis of Rule 14a-8(i)(7).
Conclusion
Notwithstanding the arguments presented in Mr. Lewis' and Mr. Kron's Response
Letter, the Company continues to believe that it may exclude the Proposal and
Supporting Statement from its 2007 Proxy Statement pursuant to Rule 14a-8(i)(3),
Rule 14a-8(i)(10) and Rule 14a-8(i)(7). If the Staff has any questions or
comments regarding this or any of our prior submissions, please call me at (408)
349-7131, or in my absence, Thomas J. Leary, Esq., of O'Melveny & Myers LLP at
(949) 823-7118. If the Staff concludes that the Proposal and Supporting
Statement should not be excluded from the 2007 Proxy Statement, we would
appreciate the opportunity of a conference prior to the issuance of a formal
response. In any case, when the Staff issues its formal response, we
respectfully ask that you send a copy of the response by facsimile to the
undersigned at (408) 349-3400, and to Tom Leary at O'Melveny & Myers LLP at
(949) 823-6994, and by facsimile, courier or U.S. Mail to the Proponent and Mr.
Lewis and Mr. Kron.
Please acknowledge receipt of this letter by date stamping an enclosed copy of
this letter and returning the date-stamped copy to our messenger.
Very truly yours,
/s/
Christina Lai
Senior Legal Director
cc: Mr. John C. Harrington
Sanford J. Lewis, Esq.
Jonas Kron, Esq.
Michael J. Callahan, Senior Vice President and General Counsel, Yahoo! Inc.
Thomas J. Leary, Esq., O'Melveny & Myers LLP
-----FOOTNOTES-----
1 During the telephone conversation between the undersigned and Mr. Lewis
(referenced in footnote 1 in the Response Letter), the undersigned acknowledged
the 80-day advance filing requirement, and informed Mr. Lewis that the Company
did not intend to file its definitive proxy statement until after the 80-day
period had elapsed.
2 Notwithstanding Mr. Lewis' and Mr. Kron's assertions to the contrary, Yahoo!'s
minority stake gives Yahoo! only limited influence over the day-to-day
operational policies and practices at Alibaba.com or any of Alibaba.com's
business units. Moreover, Yahoo! objects to Mr. Lewis' and Mr. Kron's
mischaracterization of the relationship between Yahoo! and Alibaba.com as being
in furtherance of a "practice of hiding behind `independent' entities" to avoid
regulatory scrutiny in the United States. This statement has no basis in fact.
3 The Company acknowledges the offer made by Mr. Lewis and Mr. Kron to revise
the Supporting Statement to cure the cited deficiencies. The Company has not
agreed to these proposed changes, and does not believe that it would be
appropriate under the circumstances and at this late date to allow the Proponent
the opportunity to make these changes.
[INQUIRY LETTER]
From: CFLETTERS
Sent: Wednesday, March 14, 2007 9:13 AM
To: *****
Cc: *****
Subject: FW: Proponent response: Harrington Investments resolution at Yahoo!
Creating Board Committee on Human Rights
Importance: High
Attachments: yahoosecondletter.pdf
-----Original Message-----
From: Sanford Lewis [mailto:strategiccounsel@mac.com]
Sent: Wednesday, March 14, 2007 10:09 AM
To: CFLETTERS
Cc: John Harrington
Subject: Proponent response: Harrington Investments resolution at Yahoo!
Creating Board Committee on Human Rights
Importance: High
Dear Sir or Madam,
Enclosed find proponent's response to Yahoo!'s second letter regarding its no
action request, on the resolution submitted by John Harrington to create a Board
Committee on Human Rights.
Six copies will follow via overnight mail.
Sincerely,
Sanford Lewis, Attorney
PO Box 231
Amherst, MA 01004-0231
413-549-7333 phone number
617 592-7328 mobile
781 207-7895 fax
[INQUIRY LETTER]
March 14, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal Submitted to Yahoo! On Behalf of Harrington Investments
- Second Proponent response
Dear Sir/Madam:
On behalf of Harrington Investments ("Proponent") this letter is a response to
Yahoo!'s ("the Company") second letter on this matter, dated March 12, 2007.
Pursuant to Rule 14a-8(k), enclosed are six copies of this letter. A copy of
this letter is being mailed concurrently to Yahoo!'s Senior Legal Director,
Christina Lai.
In short, we respectfully disagree with the arguments and conclusions found in
the Company's March 12\th/ letter and believe that there is nothing therein that
would lead the Staff to conclude that the Company has met its significant burden
of demonstrating that it is entitled to exclude the Proposal from its 2007 proxy
materials. Accordingly, we request the Staff refer to our letter of February 20,
2007 for our full analysis of these matters.1
It is necessary, however, to respond to a few items found in the Company's
letter. With respect to the issues of substantial implementation and ordinary
business, we observe that the Company has not taken this opportunity to
meaningfully address our analysis. Consequently, our discussion of these issues
remains, for all intents and purposes, unchallenged. Consequently, we
respectfully ask the Staff to concur with our conclusions and inform the Company
that the Staff does not agree with the Company's arguments.
Regarding the Company's arguments with respect to vagueness and misleading
statements it is evident that the Proposal should not be excluded on these
grounds. First, the Proposal complies with the rule because it is properly
written at a policy level of detail - to be more specific would be
micro-managing the Company. Second, the Staff has made it clear that it will not
referee factual assertions that the Company either disputes or counters. It is,
at the very least, a discourtesy to shareholders to claim they cannot understand
the term "human rights" or that they cannot use their own judgment to determine
the merits of our (or the Company's) statements. This Proposal is properly
addressed to the policy level concerns of shareholders and therefore should be
included in Yahoo! proxy materials.
For the reasons given above and in our letter of February 20, 2007 the
Proponent, respectfully requests that the Staff inform the Company that SEC
proxy rules require denial of Yahoo!'s no-action request. Please call Sanford
Lewis at (413) 549-7333 with respect to any questions in connection with this
matter, or if the Staff wishes any further information. Also, please send a
facsimile copy of the Staff's response to Sanford Lewis at (781) 207-7895.
Thank you for your consideration of this matter.
Sincerely,
/s/
Sanford Lewis
Attorney at Law
/s/
Jonas Kron
Attorney at Law
cc: John Harrington
Christina Lai, Senior Legal Director, Yahoo!
-----FOOTNOTES-----
1 With respect to the Rule 14a-8(j) deadline, we note that our analysis was
based on historical data - the only information available at the time. Clearly,
if the Company wishes to hold its annual meeting three weeks later than usual it
is so entitled.
[STAFF REPLY LETTER]
April 16, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Yahoo! Inc.
Incoming letter dated February 7, 2007
The proposal resolves to amend the bylaws to establish a board committee that
will review the implications of company policies, above and beyond matters of
legal compliance, for the human rights of individuals in the United States and
worldwide.
We are unable to concur in your view that Yahoo! may exclude the proposal or
portions of the supporting statement under rule 14a-8(i)(3). Accordingly, we do
not believe that Yahoo! may omit the proposal or portions of the supporting
statement from its proxy materials in reliance on rule 14a-8(i)(3).
We are unable to concur in your view that Yahoo! may exclude the proposal under
rule 14a-8(i)(7). Accordingly, we do not believe that Yahoo! may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(7).
We are unable to concur in your view that Yahoo! may exclude the proposal under
rule 14a-8(i)(10). Accordingly, we do not believe that Yahoo! may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(10).
Sincerely,
/s/
Gregory Belliston
Attorney-Adviser
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