Company Name: Boeing Co.
Public Availability Date: February 20, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 21, 2007
VIA OVERNIGHT COURIER
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 Proposals Submitted by John Chevedden on Behalf of Himself, and
as "Proxy" for Ray T. Chevedden, Thomas Finnegan and David Watt, for Inclusion
in The Boeing Company 2008 Proxy Statement
Dear Sir or Madam:
The Boeing Company ("Boeing" or the "Company") received four proposals
(collectively, the "Proposals") involving John Chevedden either directly or as
"proxy" for certain shareholders for inclusion in the proxy statement to be
distributed to the Company's shareholders in connection with its 2008 Annual
Meeting (the "2008 Proxy Statement"). On November 16, 2007, Boeing received a
proposal from John Chevedden, dated November 16, 2007, regarding the adoption of
cumulative voting (the "John Chevedden Proposal"). On November 17, 2007, Boeing
received a proposal purportedly from Thomas Finnegan, dated October 22, 2007,
concerning the independent lead director (the "Finnegan Proposal"). On November
5, 2007, Boeing received a proposal purportedly from Ray T. Chevedden, dated
November 4, 2007, regarding a shareholder advisory vote on executive pay (the
"Ray Chevedden Proposal"). On November 17, 2007, Boeing received a proposal
purportedly from David Watt, dated October 24, 2007, pertaining to performance
based stock options (the "Watt Proposal"). Each of the Proposals submitted by
Messrs. Finnegan, Ray Chevedden and Watt (the "Nominal Proponents") was
accompanied by a cover letter reciting that it was "the proxy for John Chevedden
and/or his designee to act on [the nominal proponent's] behalf regarding this
Rule 14a-8 proposal for the forthcoming shareholder meeting before, during and
after the forthcoming shareholder meeting." The "proxy" cover letter further
instructs the Company to direct all future communication regarding the Proposals
submitted by the Nominal Proponents to John Chevedden.
We believe John Chevedden is in fact the actual proponent of each proposal,
based on, among other facts, the presence of virtually identical cover letters
for each Nominal Proponent designating Mr. Chevedden as his "proxy" and Mr.
Chevedden's assumption of control over all future communications and actions
regarding the Proposals submitted by the Nominal Proponents. Accordingly, in
Part I, we have set forth the grounds that we believe allow Boeing to omit the
Proposals from the 2008 Proxy Statement and form of proxy (the "2008 Proxy
Materials") due to violation of the one proposal per shareholder limit set forth
in Commission Rule ("Rule") 14a-8(c) under the Securities Exchange Act of 1934,
as amended. Notwithstanding our position regarding omission of the Proposals
under Rule 14a-8(c), we further believe that the John Chevedden Proposal is
deficient on substantive grounds under provisions set forth in Rule 14a-8(i), as
we describe in Part II.
We hereby request that the staff of the Division of Corporation Finance (the
"Staff") confirm that it will not recommend any enforcement action to the
Securities and Exchange Commission (the "Commission") if, in reliance on certain
provisions of Rule 14a-8, Boeing excludes the Proposals from the 2008 Proxy
Materials.
In accordance with Rule 14a-8(j), on behalf of Boeing, the undersigned hereby
files six copies of this letter and each of the letters submitting the
Proposals.1 The Company presently intends to file its definitive 2008 Proxy
Materials on March 14, 2008, or as soon as possible thereafter. Accordingly,
pursuant to Rule 14a-8(j), this letter is being submitted not less than 80
calendar days before the Company will file its definitive 2008 Proxy Statement
with the Commission.
As noted above, each of the cover letters instructs the Company to direct all
future communication regarding the Proposals submitted by the Nominal Proponents
to John Chevedden. Accordingly, a copy of this letter, with copies of all
enclosures, is being simultaneously sent by overnight courier to Mr. Chevedden
in accordance with Rule 14a-8(j), advising him of the Company's intention to
omit the Proposals from the 2008 Proxy Materials. Please fax any response by the
Staff to this letter to my attention at (312) 544-2829. We hereby agree to
promptly forward to Mr. Chevedden any Staff response to this no-action request
that the Staff transmits to us by facsimile.
Reasons the Proposals May Be Omitted From the 2008 Proxy Materials
I. Boeing May Exclude the Proposals From the 2008 Proxy Materials Pursuant to
Rule 14a-8(c) Because John Chevedden Has Submitted More Than One Proposal
Rule 14a-8(c) provides that a shareholder may submit no more than one proposal
per meeting of shareholders.2 There was no limit on the number of proposals a
proponent could submit prior to 1976. Then in that year, the Commission limited
proponents to two proposals per year because the Commission believed that
several proponents "exceeded the bounds of reasonableness ... by submitting
excessive numbers of proposals to issuers." Exchange Act Release No. 34-12999
("Release No. 34-12999") (Nov. 22, 1976). In 1983, as part of an effort "to
reduce issuer costs and to improve the readability of proxy statements," the
Commission further restricted proponents to a single proposal per year. Exchange
Act Release No. 34-20091 (Aug. 16, 1983).
John Chevedden has established a pattern of submitting multiple proposals,
ostensibly as a "proxy" for one or more shareholders of the target company. This
year Mr. Chevedden has continued this practice by submitting four proposals to
Boeing. In accordance with the requirements of Rule 14a-8(f), on November 28,
2007, the Company's Assistant Corporate Secretary and Counsel sent Mr. Chevedden
four letters, attached as Exhibits E through H, advising him that each of the
Proposals violated Rule 14a-8(c) and asking him to notify the Company as to
which of the Proposals he wished to withdraw.3 Mr. Chevedden did not provide a
response to correct the deficiency within the time frame specified in the
letters and by Rule 14a-8(f). Accordingly, the Company believes the Proposals
may be excluded pursuant to Rule 14a-8(f) because they were submitted in
violation of Rule 14a-8(c).
We acknowledge that on prior occasions the Staff has expressed the view that
John Chevedden's submissions to Boeing and other companies are not excludable
under Rule 14a-8(c). See, e.g., AT&T Inc., SEC No-Action Letter, 2007 WL 224975
(Jan. 18, 2007); The Boeing Co., SEC No-Action Letter, 2004 WL 257686 (Feb. 6,
2004). However, because we believe that Mr. Chevedden continues to attempt to
circumvent the purpose and intent of Rule 14a-8(c), we respectfully request that
the Staff reconsider its prior position.
A. John Chevedden Is the Architect and Author of the Submissions of the Nominal
Proponents
It is evident that John Chevedden does all, or substantially all, of the work to
draft, submit and support the Proposals. Each proposal submitted is accompanied
by Mr. Chevedden's standard form cover letter referring generically only to
"[t]his Rule 14a-8 proposal." As noted above, this standard form cover letter
gives Mr. Chevedden the authority to act on the Nominal Proponent's behalf
before, during and after the meeting and instructs the target company to direct
all future communication regarding the proposal to Mr. Chevedden.
All of the Proposals are virtually identical in format, font and style and are
easily identified as having been submitted by John Chevedden. Additionally,
throughout the supporting statements, the Proposals use similar language and the
same style of citation to The Corporate Library. Each proposal includes in its
title the same proposal number, "3," and ends with the phrase "Yes on 3." Each
proposal is followed by a "Notes" section that is identical, with the exception
of an introductory statement that names Mr. Chevedden or a Nominal Proponent as
sponsor of the proposal. In addition, it is evident from viewing the Proposals
that they are substantially the same as the proposals submitted to other target
companies by Mr. Chevedden through various nominal proponents. The logical
conclusion is that the Proposals are not the Nominal Proponents' but rather
proposals written and submitted by Mr. Chevedden.
On at least one occasion, the Staff has granted relief in the manner the Company
is requesting. See TRW Inc., SEC No-Action Letter, 2001 WL 62910 (Jan. 24, 2001)
("TRW") (proposal excludable based on the shareholder's acknowledgment that he
had been solicited by John Chevedden to serve as a nominal proponent and that
Mr. Chevedden in fact had drafted the proposal). The type of relief granted in
TRW was short-lived, however, because Mr. Chevedden immediately took steps to
preclude the target company from contacting the nominal proponent in order to
develop a TRW-type no-action letter. After TRW, Mr. Chevedden stopped including
the nominal proponent's telephone number in the "proxy" cover letter, and, as
discussed below, we understand that he has instructed nominal proponents not to
speak with the target companies. Moreover, any revisions to past proposals have
come directly from Mr. Chevedden, and he alone apparently decides whether a
proposal may be withdrawn in the face of target company concessions. See, e.g.,
Comcast Corp., SEC No-Action Letter, 2007 WL 316373 (Jan. 29, 2007) (Mr.
Chevedden withdrew a proposal for which Lucy M. Kessler was the nominal
proponent); Apache Corp., SEC No-Action Letter, 2007 WL 162258 (Jan. 12, 2007)
(same); Washington Mutual, Inc., SEC No-Action Letter, 2007 WL 162257 (Jan. 12,
2007) (same). Finally, all communications with the Staff come directly from Mr.
Chevedden. See, e.g., Exxon Mobil Corp., SEC No-Action Letter, 2007 WL 846607
(Mar. 19, 2007) (Mr. Chevedden responded to the target company's no-action
letter that sought to exclude a proposal for which Emil Rossi was the nominal
proponent); The Boeing Co., SEC No-Action Letter, 2006 WL 3761320 (Mar. 15,
2006) (Mr. Chevedden responded to the Company's no-action letter that sought to
exclude a proposal for which Ray T. Chevedden was the nominal proponent); Sempra
Energy, SEC No-Action Letter, 2006 WL 328304 (Jan. 27, 2006) (Mr. Chevedden
responded to the target company's no-action letter that sought to exclude a
proposal for which Chris Rossi was the nominal proponent). In sum, there can be
little doubt that it is Mr. Chevedden, not his nominal proponents, who is the
true proponent of the various proposals.
B. Mr. Chevedden in Most Cases Apparently Has No Prior or Substantial
Relationship With the Nominal Proponents Other Than the One Established to
Enable Him to Submit Multiple Proposals
We believe that John Chevedden typically has no prior or substantial
relationship with the shareholders whom he professes to represent other than
their service as his nominal proponents. In 2002, "RR Donnelley Financial ...
reported what many companies targeted by Mr. Chevedden have long suspected:
`John Chevedden trolls the [Internet's] message boards seeking shareholders to
make him his agent so that he is eligible to submit shareholder proposals to
certain companies.'" The Boeing Co., SEC No-Action Letter, 2002 WL 464046 (Mar.
2, 2002). This practice was substantiated when TRW uncovered information that
one of its shareholders who had appointed Mr. Chevedden as his proxy "became
acquainted with Mr. Chevedden, and subsequently sponsored the proposal, after
responding to Mr. Chevedden's inquiry on the internet for TRW stockholders
willing to sponsor a shareholder resolution." TRW Inc., SEC No-Action Letter,
2001 WL 62910 (Jan. 24, 2001).
Our own conversations during the 2001 proxy season with the Company's
shareholders appointing John Chevedden as "proxy" uncovered a similar instance.
See The Boeing Co., SEC No-Action Letter, 2001 WL 203954 (Feb. 20, 2001)
(excludable on other grounds). That year, Mr. Chevedden used the names of two
nominal proponents, despite their limited prior relationship and the fact that
he had not spent any time discussing the proposal with them. See id. Just a year
later, both General Motors and Mattel discovered that Mr. Chevedden had
apparently submitted a proposal ostensibly on behalf of Bernard and Naomi
Schlossman without their awareness or authorization. When Mr. and Mrs.
Schlossman were informed, they withdrew those proposals, as well as others that
Mr. Chevedden had submitted in their names that year, and said the Mr. Chevedden
could no longer submit shareholder proposals on their behalf. General Motors
Corp., SEC No-Action Letter, 2002 WL 500243 (Mar. 10, 2002); Mattel, Inc., SEC
No-Action Letter, 2002 WL 448457 (Feb. 13, 2002); see also Southwest Airlines
Co., SEC No-Action Letter, 2002 WL 32167722 (Feb. 25, 2002); The Boeing Co., SEC
No-Action Letter, 2002 WL 356717 (Feb. 7, 2002); PG&E Corp., SEC No-Action
Letter, 2002 WL 32081584 (Feb. 6, 2002); Edison Int'l, SEC No-Action Letter,
2002 WL 318260 (Feb. 1, 2002).
Since the 2002 proxy season, John Chevedden's efforts to prevent contact with
his nominal proponents have prevented the Company from learning whether the
Nominal Proponents this year were solicited by Mr. Chevedden to submit the
proposals in their names. Nonetheless, there can be little doubt, based on his
past practices, that Mr. Chevedden's primary relationship with the Nominal
Proponents is for the purpose of advancing his own agenda through his practice
of submitting multiple proposals through nominal proponents to certain target
companies.
C. Mr. Chevedden Has Employed the Same Tactics to Evade the One Proposal Per
Shareholder Rule by Submitting Multiple Proposals to Boeing Year After Year
Both the Staff and Boeing are aware of John Chevedden's repeated practice of
submitting multiple proposals under the pretext that they are from other company
shareholders in direct violation of Rule 14a-8(c). As demonstrated in the charts
below, John Chevedden has continually abused the one proposal per shareholder
rule by submitting multiple proposals to Boeing. |[NCCDEF] |[UCA1]
|[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT]
|[ST]|[LC5]|[RS6]|[TN1,4]|[QC]Proposals Submitted to Boeing by John Chevedden
and His Various Nominal Proponents|[EL](2001 to 2008 Proxy Statements)
|[ST]|[ST]|[LC5]|[TU204;4] |[ST]|[LC3]|[RS6]|[TN1,4]|[QC]2008 Proposals
Submitted to Boeing by John Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2]
|[TA]Proposal|[QC] |[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC]
|[ST]|[LC3]|[TU204;4] |[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Cumulative voting |[TA]John
Chevedden |[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4] |[TA]Independent lead
director |[TA]Thomas Finnegan |[TA]John Chevedden |[ST]|[LC5]|[RS6]3.|[RS4]
|[TA]Performance based stock options |[TA]David Watt |[TA]John Chevedden
|[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Shareholder say on executive pay |[TA]Ray T.
Chevedden |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET] |[NCCDEF] |[UCA1]
|[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2007 Proposals Submitted to Boeing by John
Chevedden |[ST]|[LC3]|[TU204;4] |[ST]|[LC5]|[RS2] |[TA]Proposal|[QC]
|[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC3]|[RS6]1.|[RS4] |[TA]Shareholder vote on any current or future poison
pill |[TA]John Chevedden |[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4]
|[TA]Separate roles of CEO and chairman |[TA]Thomas Finnegan |[TA]John Chevedden
|[ST]|[LC5]|[RS6]3.|[RS4] |[TA]Shareholder vote on advisory management
resolution to approve compensation committee report |[TA]Ray T. Chevedden
|[TA]John Chevedden |[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Performance based stock
options |[TA]David Watt |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET]
|[NCCDEF] |[UCA1] |[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT]
|[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2006 Proposals Submitted to
Boeing by John Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2]
|[TA]Proposal|[QC] |[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC]
|[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Independent board chairman
|[TA]John Chevedden |[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4]
|[TA]Shareholder rights plan |[TA]Ray T. Chevedden |[TA]John Chevedden
|[ST]|[LC5]|[RS6]3.|[RS4] |[TA]Majority vote for director elections |[TA]David
Watt |[TA]John Chevedden |[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Annual election of
directors |[TA]Thomas Finnegan |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET]
|[NCCDEF] |[UCA1] |[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT]
|[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2005 Proposals Submitted to
Boeing by John Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2]
|[TA]Proposal|[QC] |[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC]
|[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Shareholder vote on current
or future poison pill by bylaw or charter |[TA]John Chevedden |[TA]John
Chevedden |[ST]|[LC5]|[RS6]2.|[RS4] |[TA]Shareholder vote on advisory management
resolution to approve compensation committee report |[TA]Ray T. Chevedden
|[TA]John Chevedden |[ST]|[LC5]|[RS6]3.|[RS4] |[TA]Performance based stock
options and disclosure of performance goals |[TA]David Watt |[TA]John Chevedden
|[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Separate roles of CEO and chairman |[TA]Thomas
Finnegan |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET] |[NCCDEF] |[UCA1]
|[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2004 Proposals Submitted to Boeing by John
Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2] |[TA]Proposal|[QC]
|[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Independent board chairman |[TA]John Chevedden
|[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4] |[TA]Annual election of directors
|[TA]Ray T. & Veronica G. Chevedden Residual Trust |[TA]John Chevedden
|[ST]|[LC5]|[RS6]3.|[RS4] |[TA]Shareholder vote on poison pills |[TA]James
Janopaul-Naylor |[TA]John Chevedden |[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Retention of
stock obtained through stock options |[TA]David Watt |[TA]John Chevedden
|[ST]|[LC5]|[RS6]5.|[RS4] |[TA]Shareholder vote on golden parachutes |[TA]Thomas
Finnegan |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET] |[NCCDEF] |[UCA1]
|[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2003 Proposals Submitted to Boeing by John
Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2] |[TA]Proposal|[QC]
|[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Independent board chairman |[TA]John Chevedden
|[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4] |[TA]Shareholder vote on poison
pills |[TA]James Janopaul-Naylor |[TA]John Chevedden |[ST]|[LC5]|[RS6]3.|[RS4]
|[TA]Annual election of directors |[TA]Ray T. & Veronica G. Chevedden Family
Trust |[TA]John Chevedden |[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Shareholder vote on
golden parachutes |[TA]Thomas Finnegan |[TA]John Chevedden
|[ST]|[LC5]|[RS6]5.|[RS4] |[TA]Performance based stock options |[TA]David Watt
|[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET] |[NCCDEF] |[UCA1]
|[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT] |[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2002
Proposals Submitted to Boeing by John Chevedden |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS2] |[TA]Proposal|[QC] |[TA]Nominal Proponent|[QC]
|[TA]Proponent|[QC] |[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Shareholder vote on golden
parachutes |[TA]Thomas Finnegan |[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4]
|[TA]Annual election of directors |[TA]Ray T. Chevedden |[TA]John Chevedden
|[ST]|[LC5]|[RS6]3.|[RS4] |[TA]Performance based stock options |[TA]Bernard and
Naomi Schlossman |[TA]John Chevedden |[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Independent
director nomination |[TA]John Gilbert |[TA]John Chevedden
|[ST]|[LC5]|[RS6]5.|[RS4] |[TA]Shareholder vote on poison pills |[TA]James
Janopaul-Naylor |[TA]John Chevedden |[ST]|[LC5]|[TU204;4] |[ET] |[NCCDEF]
|[UCA1] |[TDC6,M'3.',QL,VU] |[TCC4,MP1,QL,VU;;] |[XT] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]|[TN1,4]|[QC]2001 Proposals Submitted to Boeing by John
Chevedden |[ST]|[LC5]|[TU204;4] |[ST]|[LC5]|[RS2] |[TA]Proposal|[QC]
|[TA]Nominal Proponent|[QC] |[TA]Proponent|[QC] |[ST]|[LC5]|[TU204;4]
|[ST]|[LC5]|[RS6]1.|[RS4] |[TA]Annual election of directors |[TA]Ray T.
Chevedden |[TA]John Chevedden |[ST]|[LC5]|[RS6]2.|[RS4] |[TA]Shareholder vote on
poison pills |[TA]John Gilbert |[TA]John Chevedden |[ST]|[LC5]|[RS6]3.|[RS4]
|[TA]Independent directors |[TA]John Gilbert |[TA]John Chevedden
|[ST]|[LC5]|[RS6]4.|[RS4] |[TA]Equalizing elections |[TA]Bernard and Naomi
Schlossman |[TA]John Chevedden |[ST]|[LC5]|[RS6]5.|[RS4] |[TA]Limiting stock
dilution |[TA]Thomas Finnegan |[TA]John Chevedden |[ST]|[LC5]|[RS6]6.|[RS4]
|[TA]Shareholder vote on audit committee members |[TA]Charles Miller |[TA]John
Chevedden |[ST]|[LC5]|[TU204;4] |[ET]
The commonality of each of the above proposals is that John Chevedden is the
actual proponent, even if the nominal proponent may vary. As contemplated in
Release No. 34-12999, such use of other shareholders of the Company to violate
Rule 14a-8(c) provides sufficient reason for Boeing to omit the Proposals from
the 2008 Proxy Materials because Mr. Chevedden has, in effect, circumvented the
intent of the Commission to prevent excessive submissions of proposals to target
companies by one person and thereby clearly thwarted the Commission's purpose in
adopting the one proposal per shareholder ruleto reduce issuer costs and
improve the readability of proxy statements.
D. John Chevedden's Use of Nominal Proponents Is Not Unique to Boeing
John Chevedden is a seasoned and persistent shareholder proponent. Since his
first known submission to Hughes Aircraft Company in 1994, see General Motors
Corp., SEC No-Action Letter, 1995 WL 62855 (Feb. 15, 1995) (proposal deemed
excludable as a personal grievance), Mr. Chevedden has submitted or been closely
associated with multiple proposals to many companies. Many of Mr. Chevedden's
proposals are submitted in his own name, but the majority of his proposals have
been submitted with him as "proxy" for other shareholders of the target company:
of the 572 known proposals submitted by Mr. Chevedden or his known nominal
proponents during the 2004 to 2007 proxy seasons, only 103 were submitted in his
own name.4 Based on our research regarding proposals submitted by Mr. Chevedden
and those shareholders associated with him, including the Nominal Proponents and
others, we believe that during the 2007 proxy season Mr. Chevedden, with his
known nominal proponents, engaged in the following multiple proposal
submissions:
Four proposals were submitted to each of five companies (Citigroup Inc.,
General Motors, Home Depot, JPMorgan Chase and Boeing);
Three proposals were submitted to each of ten companies (AT&T, Bank of
America, Borders Group, Electronic Data Systems, Exxon Mobile Corp., Ford Motor
Co., Hewlett-Packard, Honeywell International, Schering-Plough and The
Interpublic Group of Companies); and
Two proposals were submitted to each of 14 companies (3M, Allegheny Energy,
Bristol-Myers Squibb, Colgate-Palmolive, Motorola, Northrop Grumman, Pfizer,
PG&E, Raytheon, Sempra Energy, The McGraw-Hill Companies, Time Warner, Verizon
Communications and Wyeth).
Clearly, Mr. Chevedden's use of various purported proponents to submit multiple
proposals to a single company is not limited to Boeing, which magnifies the harm
caused by his abuse of the one proposal per shareholder rule.
As the Staff is no doubt aware, management of and responses to these proposals
represent an enormous investment of time and resources by each of the target
companies. Each target company must, among other things, determine whether the
shareholder for whom John Chevedden is acting as "proxy" is eligible to submit a
proposal, correspond with Mr. Chevedden regarding the inevitable procedural and
substantive defects in his proposals,5 evaluate, usually with the assistance of
legal counsel, whether the company will oppose the proposals, draft and file
no-action letters, draft and file rebuttal letters in response to Mr.
Chevedden's responses to no-action letter requests and draft opposition
statements in the event that his proposals are not excludable. All told, the
foregoing activities represent an enormous expenditure of time, personnel and
money to respond to an individual who often is not even a shareholder of the
target company.6
E. John Chevedden, Not the Nominal Proponents, Takes Credit in the Publicity
Surrounding the Proposals
It is John Chevedden, and not the purported proponents, who consistently takes
credit for the proposals in the publicity surrounding them. For example, Mr.
Chevedden was credited last proxy season for introducing both a proposal
regarding an advisory vote on executive pay and a proposal on performance based
stock options to Boeing. Discontent in Air on Execs' Pay at Boeing, Chi. Trib.,
May 1, 2007. These proposals had purportedly been submitted by David Watt and
Ray Chevedden. The same article stated that Mr. Chevedden "vowed to press the
measures again next year." Id. As Mr. Chevedden promised, both proposals have
again been proposed to Boeing this year, and they were again introduced by the
same two Nominal Proponents, David Watt and Ray Chevedden.
John Chevedden's practice of taking credit for proposals submitted to Boeing by
using the nominal proponents sheds light on the Proposals. For example, in 2005,
Mr. Finnegan nominally introduced a proposal to the Company to separate the role
of chief executive officer and chairman. However, Mr. Chevedden took full credit
for the submission. Boeing Picks 3M Chief as New CEO, St. Louis Post-Dispatch,
July 1, 2005 ("Chevedden said he filed a shareholder proposal to separate the
chairman and executive duties."). This year, a similar proposal involving the
independent lead director was submitted to Boeing, listing Thomas Finnegan as
the nominal proponent and naming Mr. Chevedden as "proxy." There can be little
doubt that Mr. Chevedden is the true proponent of the Finnegan Proposal.
John Chevedden has similarly taken credit for proposals submitted to other
companies nominally by shareholders other than himself. For example, Mr.
Chevedden took credit for a proposal submitted to Bank of America during the
2007 proxy season that had been submitted in Ray Chevedden's name. Investor:
BofA Agrees to Meet If Shareholders Ask, The Charlotte Observer, Jan. 31, 2007.
Mr. Chevedden also took credit for a proposal last year concerning performance
based compensation submitted to Electronic Data Systems under William Steiner's
name. Citi, EDS Reject Pay Proposals, CFO Magazine, Apr. 18, 2007. In
RiskMetrics Group's U.S. Midseason Review for the 2007 proxy season, Mr.
Chevedden was further credited as "proponent" of a proposal to end dual-class
stock structures submitted by the Ray and Veronica Chevedden Trust to the Ford
Motor Company. U.S. Midseason Review, RiskMetrics Group, May 18, 2007. That same
year, Mr. Chevedden had submitted two other proposals to Ford, one in his own
name and one "on behalf of" Jack Leeds. Ford Motor Co., Form DEF 14A, at 73-80
(Apr. 5, 2007). As evidenced by these articles, Mr. Chevedden takes credit for
numerous proposals, even when they are submitted by one of his nominal
proponents.
We also note that John Chevedden's purported submission of multiple proposals as
"proxy" for other shareholders puts the Company in a difficult position as to
how to disclose to its shareholders the identity of the true proponent. Mr.
Chevedden would have us name the shareholders for whom he acts as "proxy."
However, in view of his exclusive control over the drafting, negotiation,
revision and no-action letter process incident to the Proposals, we believe it
would be false and misleading for the Company to name anyone but Mr. Chevedden
as the proponent of the Proposals. Were the Company to do otherwise, its proxy
statement would falsely suggest that each of the proposals at issue was
submitted by a different individual, when in fact they were all submitted and
written under Mr. Chevedden's direction and control.
John Chevedden's attempts to submit multiple shareholder proposals under the
guise of "proxy" for other shareholders are a clear abuse of the plain wording
and intent of Rule 14a-8(c). Given the nature and magnitude of the abuse of
process at issue here, we respectfully ask the Staff to permit the Company to
omit all of the Proposals from the 2008 Proxy Materials.
II. The John Chevedden Proposal May Be Excluded Due to Substantive Deficiencies
Under the Provisions of Rule 14a-8(i)
The John Chevedden Proposal
The John Chevedden Proposal relates to cumulative voting and states, in relevant
part:
RESOLVED: Cumulative Voting. Shareholders recommend that our Board adopt
cumulative voting. Cumulative voting means that each shareholder may cast as
many votes as equal to number of shares held, multiplied by the number of
directors to be elected. A shareholder may cast all such cumulated votes for a
single candidate or split votes between multiple candidates, as that shareholder
sees fit. Under cumulative voting shareholders can withhold votes from certain
nominees in order to cast multiple votes for others.
Summary of Basis for Exclusion
We believe that Boeing may properly exclude the John Chevedden Proposal from the
2008 Proxy Materials:
Pursuant to Rule 14a-8(i)(2), because it would cause the Company to violate
the laws of Delaware, which is the Company's jurisdiction of incorporation; and
Pursuant to Rule 14a-8(i)(6), because the Company lacks the power to implement
the John Chevedden Proposal.
A. The John Chevedden Proposal May Be Omitted Because It Would, if Implemented,
Cause the Company to Violate Delaware Law
The John Chevedden Proposal may be omitted from the 2008 Proxy Materials
pursuant to Rule 14a-8(i)(2) because, if implemented, it would cause the Company
to violate Delaware law.7 As more fully described in the opinion of the Delaware
law firm of Richards, Layton & Finger, P.A. (the "Delaware Law Opinion"),
attached to this letter as Exhibit K, implementation of the John Chevedden
Proposal would cause the Company's Board of Directors (the "Board") to violate
the Delaware General Corporation Law (the "DGCL") by unilaterally adopting an
amendment to the Company's Amended and Restated Certificate of Incorporation
(the "Certificate"), which under the DGCL requires both board and shareholder
action.
Section 214 of the DGCL provides that a Delaware corporation may provide the
corporation's shareholders with cumulative voting rights, as follows:
The certificate of incorporation of any corporation may provide that at all
elections of directors of the corporation, or at elections held under specified
circumstances, each holder of stock or of any class or classes or of a series or
series thereof shall be entitled to as many votes as shall equal the number of
votes which (except for such provision as to cumulative voting) such holder
would be entitled to cast for the election of directors with respect to such
holder's shares of stock multiplied by the number of directors to be elected by
such holder, and that such holder may cast all of such votes for a single
director or may distribute them among the number to be voted for, or for any 2
or more of them as such holder may see fit.
Cumulative voting is so fundamental to the voting rights of shares of a Delaware
corporation that the Delaware legislature has seen fit to require that
cumulative voting rights be provided for in the corporation's certificate of
incorporation, either when initially adopted or by means of an amendment of the
certificate of incorporation. Here, the Certificate not only does not provide
for cumulative voting but expressly prohibits itArticle Ninth, Section (h) of
the Certificate provides that the right to cumulate votes shall not exist with
respect to director elections. Consequently, the adoption of cumulative voting
would require an amendment to the Certificate. A copy of the Certificate is
attached to this letter as Exhibit L.
As explained more fully in the Delaware Law Opinion, Delaware law requires board
and shareholder approval to amend the Certificate. Pursuant to Section 242 of
the DGCL, in order for the Company to amend the Certificate, the Board must
adopt a resolution setting forth the amendment proposed, declare the
advisability of the amendment and call a meeting at which the shareholders
affirmatively vote in favor of the amendment in accordance with Section 242. See
Stroud v. Grace, 606 A.2d 75, 93 (Del. 1992). A company's board cannot evade
this joint approval requirement by attempting to amend the certificate of
incorporation without seeking shareholder approval.8
The John Chevedden Proposal is not consistent with the DGCL because an amendment
to the Certificate may not be effected solely by the Board but must be approved
by the shareholders. The Staff has granted relief for other proposals that
require an amendment to the certificate of incorporation in order to be
implemented and that request such an amendment through unilateral action by the
board. In Burlington Resources Inc., SEC No-Action Letter, 2003 WL 354930 (Feb.
7, 2003), a shareholder submitted a proposal requesting the board of directors
to amend the corporation's certificate of incorporation to give shareholders the
right to take action by written consent and to call special meetings. However,
under the DGCL, the board of directors could not unilaterally amend the
corporation's certificate of incorporation absent the subsequent approval by the
corporation's shareholders. In Burlington Resources, any attempt by the board of
directors to implement the proposal through a unilateral amendment to the
company's certificate of incorporation would have resulted in a violation of the
DGCL, and the proposal was therefore excludable under Rules 14a-8(i)(2) and
14a-8(i)(6). See also Xerox Corp., SEC No-Action Letter, 2004 WL 351809 (Feb.
23, 2004) (Staff granted the corporation's no-action request to exclude a
proposal that the board amend the certificate of incorporation to provide
shareholders the right to act by written consent and to call special meetings
pursuant to Rules 14a-8(i)(2) and 14a-8(i)(6) because the board could not
unilaterally adopt such an amendment under New York law).9 Unlike in Wal-Mart
Stores, Inc., SEC No Action Letter, 2007 WL 846606 (Mar. 20, 2007), the John
Chevedden Proposal does not request that the board "take all the steps in their
power," to adopt cumulative voting; instead, it requests that the Board "adopt"
cumulative voting, which it cannot do under Delaware law.
Based on the foregoing, the John Chevedden Proposal, if implemented, would cause
the Company to violate Delaware law and may, therefore, properly be excluded
under Rule 14a-8(i)(2).
B. The John Chevedden Proposal May Be Omitted Because the Company Lacks the
Power To Implement It
The John Chevedden Proposal may also be omitted from the 2008 Proxy Materials
pursuant to Rule 14a-8(i)(6) because the Company lacks the authority to
implement it.10 As described more fully in the Delaware Law Opinion, there is no
action the Board can lawfully take to implement the John Chevedden Proposal.
The Staff has consistently stated that, if implementing a shareholder proposal
would result in the violation of law, the proposal may be excluded pursuant to
Rule 14a-8(i)(6) as beyond the power and authority of a company. See, e.g.,
Burlington Resources Inc., SEC No-Action Letter, 2003 WL 354930 (Feb. 7, 2003)
(proposal to require the board of directors to amend the certificate of
incorporation without subsequent shareholder approval excluded as beyond the
power and authority of the company to implement because implementation would
violate Delaware law); Xerox Corp., SEC No-Action Letter, 2004 WL 351809 (Feb.
23, 2004) (proposal to require the board of directors to amend the certificate
of incorporation without subsequent shareholder approval excluded as beyond the
power and authority of the company to implement because implementation would
violate New York law).
Here, the Board does not have the power and authority to unilaterally amend the
Certificate to remove the restrictions on cumulative voting and adopt cumulative
voting for director elections. In accordance with the DGCL and the Certificate,
an amendment to the Certificate to effect the John Chevedden Proposal may only
be implemented after the Board has adopted the amendment, declared it advisable
and then submitted it to the shareholders for adoption. The Board has no power
or authority to effect the John Chevedden Proposal absent the requisite
shareholder vote, and the John Chevedden Proposal may be properly excluded from
the Proxy Materials.
C. John Chevedden Should Not Be Permitted to Revise the John Chevedden Proposal
Although the Company recognizes that the Staff will, on occasion, permit
proponents to revise their proposals to correct problems that are "minor in
nature and do not alter the substance of the proposal," 11 the Company asks that
the Staff not grant John Chevedden an opportunity to return to the drawing board
to correct the fundamental flaws in the John Chevedden Proposal. The John
Chevedden Proposal is fundamentally flawed because it fails to recognize that an
amendment to the Certificate to remove the prohibitions on cumulative voting and
adopt cumulative voting for director elections cannot be implemented by the
Board alone and that therefore such an amendment would be invalid. This
deficiency in the John Chevedden Proposal is far from "minor in nature" and
would require Mr. Chevedden to significantly change the John Chevedden Proposal
to make it comply with Rule 14a-8.
John Chevedden had ample time to draft a resolution that complies with the proxy
rules before the 120-day deadline set forth in Rule 14a-8(e) expired. In fact,
Mr. Chevedden has demonstrated that he knows how to craft a proposal to request
board action to initiate a process to amend a company's certificate of
incorporation when the board cannot take such action unilaterally. Mr. Chevedden
(as proxy for nominal proponent John J. Gilbert) submitted a proposal for
inclusion in the Company's 2000 Proxy Statement requesting that the Board "take
the necessary steps" to adopt cumulative voting. The Boeing Company, SEC
No-Action Letter, 2000 WL 286281 (Mar. 6, 2000).12
More recently, John Chevedden has shown that he is well aware from experience
with other companies that calling on directors to "take all the steps in their
power" or "take the necessary steps" to implement a proposal that ultimately
calls for an amendment to the certificate of incorporation will save his
proposal from exclusion under Rules 14a-8(i)(2) and 14a-8(i)(6). Mr. Chevedden
himself argued the efficacy of the "take the necessary steps" language in his
rebuttal to a Baxter International Inc. no-action letter request. Baxter Int'l.
Inc., SEC No-Action Letter, 2005 WL 267911 (Jan. 31, 2005). In Baxter Int'l, Mr.
Chevedden (as proxy for nominal proponent Charles Miller) submitted a proposal
urging the Baxter directors to "take the necessary steps" to adopt a bylaw
providing for the annual election of directors. Because the proposed bylaw would
conflict with the company's certificate of incorporation, implementation of the
proposal would ultimately require an amendment to the certificate of
incorporation. Mr. Chevedden argued that his proposal did not foreclose the
possibility that the Baxter directors could first propose to the shareholders an
amendment to the certificate of incorporation before adoption of the proposed
bylaw. See Letterfrom J. Chevedden to the Staff dated Jan. 7, 2005 ("The company
argument is incomplete by failing to address the company's power to set in
motion and to complete the amendment of its certificate of incorporation to
accommodate annual election of each director.").
In this instance, however, John Chevedden chose not to draft the John Chevedden
Proposal with the appropriate language, making this situation different from
Wal-Mart Stores, Inc., SEC No Action Letter, 2007 WL 846606 (Mar. 20, 2007),
where the Staff noted that the "proposal recommends that the board `take all the
steps in their power' to adopt cumulative voting." Mr. Chevedden did not include
this or similar language in the John Chevedden Proposal.
Neither the Company nor the Staff should be forced to serve as legal editor for
Mr. Chevedden. Because the changes required to comply with Rule 14-8 would
entail a significant revision that substantively alters the John Chevedden
Proposal, the Company requests that the Staff agree that the John Chevedden
Proposal should be omitted from the 2008 Proxy Materials entirely. See Northrop
Grumman Corp., SEC No-Action Letter, 2007 WL 817461 (Mar. 13, 2007) (requesting
that the Staff not allow Mr. Chevedden and a co-proponent to revise a proposal
requesting a bylaw amendment when the amended bylaw would conflict with the
certificate of incorporation and the proposal lacked "necessary steps" or
similar language).
D. A Portion of the John Chevedden Proposal Is Excludable Under Rules
14a-8(i)(3) and 14a-9 Because It Is Materially False and Misleading
A portion of the Proposal is properly excludable under Rules 14a-8(i)(3) and
14a- 9 because it contains materially false and misleading statements.
Rule 14a-8(i)(3) permits a company to exclude portions of a shareholder proposal
or supporting statement from its proxy statement if such portions are contrary
to any of the Commission's proxy rules, including Rule 14a-9, which prohibits
materially false or misleading statements in proxy soliciting materials. In our
view, the Proposal contains one such statement, as follows:
The Council of Institutional Investors www.cii.org has recommended adoption of
this proposal topic.
This statement is materially false and materially misleading. The Council of
Institutional Investors ("CII") does not publicly provide any recommendation
relating to this proposal topic. Further, Company counsel contacted a
representative from CII, who telephonically confirmed on December 17, 2007 that
CII does not have a specific policy or "stand" relating to cumulative voting.
This portion of the supporting statement is materially misleading because there
is a substantial likelihood that a reasonable shareholder could rely upon this
statement in determining how to vote his or her shares. CII describes itself as
"the premier U.S. shareowner-rights organization," made up of 130 public, labor
and corporate pension funds with assets exceeding $3 trillion. As a result,
shareholders will be substantially likely to view any recommendation by CII as
material to their determinations on how to vote on the John Chevedden Proposal.
Accordingly, this statement is materially misleading to our shareholders.
Staff Legal Bulletin No. 14B (Sept. 15, 2004) provides: "reliance on Rule
14a-8(i)(3) to exclude or modify a statement may be appropriate where ... the
company demonstrates objectively that a factual statement is materially false or
misleading." Here, the John Chevedden Proposal contains a factual statement that
is materially false and materially misleading to shareholders. Therefore, the
statement is properly excludable under Rules 14a-8(i)(3) and 14a-9.
* * * *
For the foregoing reasons, we believe the Proposals in their entirety or a
portion of the John Chevedden Proposal may be omitted from the 2008 Proxy
Materials and respectfully request that the Staff confirm that it will not
recommend any enforcement action if the Proposals are excluded.
Should you have any questions regarding any aspect of this matter or require any
additional information, please call me at (312) 544-2802.
Please acknowledge receipt of this letter and its enclosures by stamping the
enclosed copy of this letter and returning it to me in the enclosed envelope.
Very truly yours,
/s/
Michael F. Lohr Corporate Secretary
enclosures
cc: John Chevedden
-----FOOTNOTES-----
1 A copy of each of the Proposals and their supporting statements is attached to
this letter as Exhibit A (the John Chevedden Proposal), Exhibit B (the Finnegan
Proposal), Exhibit C (the Ray Chevedden Proposal) and Exhibit D (the Watt
Proposal).
2 See 17 C.F.R. 240.14a-8(c) (providing that "[e]ach shareholder may submit no
more than one proposal to a company for a particular shareholders' meeting").
3 Additional correspondence with Mr. Chevedden and David Watt is attached as
Exhibits I and J, respectively.
4 The numbers cited in this letter regarding the known proposals submitted by
Mr. Chevedden and his known proponents are derived from our analysis of the data
found at http://www.iss.corporateservices.com under: "RiskMetrics Group:
Governance Analytics: Shareholder Proponent Data."
5 For example, John Chevedden consistently fails to submit the required proof of
ownership in his initial submissions. This year, for example, his failure to
provide the required proof of ownership made it necessary for the Company to
send Mr. Chevedden procedural defect letters regarding two of the four
Proposals. See Exhibits E and H. For the John Chevedden Proposal, in particular,
the Company also had to send two follow-up emails before Mr. Chevedden provided
adequate proof of ownership. See Exhibit E.
6 In Baxter Int'l Inc., SEC No-Action Letter, 2006 WL 488509 (Feb. 26, 2006),
for example, John Chevedden submitted proposals and was named as "proxy" for
William Steiner and Charles Miller, the purported proponents, despite the fact
that Mr. Chevedden did not own stock in the company.
7 See 17 C.F.R. 240.14a-8(i)(2) (permitting a company to exclude a proposal
that would, if implemented, "cause the company to violate any state, federal, or
foreign law to which it is subject").
8 Similarly, a board cannot evade this joint approval requirement by amending
the bylaws to provide for a rule contrary to the certificate of incorporation.
Indeed, Delaware law expressly prohibits adoption of bylaws that contradict a
corporation's certificate of incorporation. See 8 Del. Code 109(b) ("The bylaws
may contain any provision, not inconsistent with law or with the certificate of
incorporation, relating to the business of the corporation, the conduct of its
affairs, and its rights or powers or the rights or powers of its stockholders,
directors, officers or employees.") (Emphasis added).
9 The Company recognizes that in 2002 the Staff denied Hartmarx Corporation
no-action relief on a proposal that would have ultimately required an amendment
to the company's certificate of incorporation and that would, counsel argued,
violate Delaware law because the board could not amend the certificate
unilaterally. Hartmarx Corporation, SEC No-Action Letter, 2002 WL 171267 (Jan.
16, 2002). The Company notes, however, that the Hartmarx no-action request does
not appear to have been supported by an opinion from members of the Delaware
bar. In contrast, the Company's request is supported by an opinion prepared by
members of the Delaware bar who are licensed, and actively practice, in
Delaware. Because its request is based on an opinion of Delaware counsel, the
Company believes that the Staff should grant it no-action relief in accordance
with the authority cited above (see Burlington Resources and Xerox, supra)
rather than deny such relief on the basis of Hartmarx. See Division of
Corporation Finance: Staff Legal Bulletin No. 14 (July 13, 2001) (noting that,
in assessing how much weight to afford an opinion of counsel, the Staff
considers whether counsel is licensed to practice in the jurisdiction whose law
is at issue in the opinion).
10 See 17 C.F.R. 240.14a-8(i)(6) (permitting a company to exclude a proposal if
"the company would lack the power or authority to implement" such proposal).
11 Division of Corporation Finance: Staff Legal Bulletin No. 14B (Sept. 15,
2004).
12 In addition, most of the proposals that John Chevedden has submitted (either
on his own or as proxy for a nominal proponent) to the Company over the years,
including those that have not required amendments to the Certificate, have
contained broad "take the necessary steps" or similar language. See, e.g., The
Boeing Company, SEC No-Action Letter, 2006 WL 659549 (Mar. 14, 2006) (proposal
requesting that the Board "take the necessary steps, in the most expeditious
manner possible, to adopt annual election of each director"); The Boeing
Company, SEC No-Action Letter, 2004 WL 316985 (Feb. 11, 2004) (proposal
requesting that the Board "take the necessary steps so that each director is
elected annually"); and The Boeing Company, SEC No-Action Letter, 2001 WL 122000
(Feb. 07, 2001) (proposal requesting that the Board "take all necessary steps to
adopt annual election of all directors as corporate policy.").
[APPENDIX 1]
EXHIBIT A
Mr. W. James McNerney
Chairman
The Boeing Company (BA)
100 N. Riverside
Chicago, IL 60606
PII: 312-544-2000
FX: 312 544-2082
Rule 14a-8 Proposal
Dear Mr. McNcrncy,
This Rule 14a-8 proposal is respectfully submitted in support of the long-term
performance of our company. This proposal is submitted for the next annual
shareholder meeting. Rule 14a-8 requirements are intended to be met including
the continuous ownership of the required stock value until after the date of the
respective shareholder meeting and presentation of the proposal at the annual
meeting. This submitted format, with the shareholder-supplied emphasis, is
intended to be used for definitive proxy publication.
In the interest of company cost savings and improving the efficiency of the rule
14a-8 process please communicate via email to olmsted7p (at) earthlink.net.
Your consideration and the consideration of the Board of Directors is
appreciated in support of the long-term performance of our company. Please
acknowledge receipt of this proposal promptly by email.
Sincerely,
/s/
John Chevedden
Date November 16, 2007
cc: James C. Johnson
Corporate Secretary
PH: 312-544-2803
FX: 312-544-2829
Mark Pacioni
PH: 312-544-2821
FX: 312-544-2084
[APPENDIX 2]
[BA: Rule 14a-8 Proposal, November 16, 2007] 3Cumulative Voting
RESOLVED: Cumulative Voting. Shareholders recommend that our Board adopt
cumulative voting. Cumulative voting means that each shareholder may cast as
many votes as equal to number of shares held, multiplied by the number of
directors to be elected. A shareholder may cast all such cumulated votes for a
single candidate or split votes between multiple candidates, as that shareholder
sees fit. Under cumulative voting shareholders can withhold votes from certain
nominees in order to cast multiple votes for others.
Cumulative voting won 54%-support at Aetna and 56%-support at Alaska Air in
2005. It also received 55%-support at GM in 2006. The Council of Institutional
Investors www.cii.org has recommended adoption of this proposal topic. CalPERS
has also recommend a yes-vote for proposals on this topic.
Cumulative voting encourages management to maximize shareholder value by making
it easier for a would-be acquirer to gain board representation. Cumulative
voting also allows a significant group of shareholders to elect a director of
its choicesafeguarding minority shareholder interests and bringing independent
perspectives to Board decisions. Most importantly cumulative voting encourages
management to maximize shareholder value by making it easier for a would-be
acquirer to gain board representation.
The merits of this proposal should also be considered in the context of our
company's overall corporate governance structure and individual director
performance. For instance in 2007 the following structure and performance issues
were reported:
The Corporate Library (TCL) http://www.thecorporatelibrary.com. an independent
investment research firm, rated our company:
"D" in Overall Board Effectiveness.
"Very High Concern" in CEO pay - $19 million.
"High Governance Risk Assessment."
We did not have an Independent Board Chainnan - Independence concern.
Plus our Lead Director, Mr. Duberstein, worked as a lobbyist and served on two
boards rated "D" by The Corporate Library:
ConocoPhilips (COP)
Mack-CaliReality (CLI)
The Chair of our Nomination Committee, Ms. Ridgeway also served on two D-rated
boards:
3M (MMM), the former employer of our CEO Emerson Electric (EMR)
Our CEO came directly from 3M with a board rated "F" by The Corporate Library
during his tenure.
Boeing director, Mr. Liddy also served on the 3M board in 2007.
Mr. Duberstein and Ms. Ridgeway each held 5 board seats - Over-extension
concern.
Additionally:
Mr. Biggs was designated as an "Accelerated Vesting" director by The Corporate
Library due to his involvement with a board that sped up the vesting of stock
options in order to avoid recognizing the related cost.
Mr. Bryson, who was on our executive pay and nominating committees, received
the most withheld votes from us in 2007.
We had no shareholder right to:
1) Cumulative voting.
2) Act by written consent.
The above concerns shows there is room for improvement and reinforces the reason
to take one step forward now and encourage our board to respond positively to
this proposal:
Notes:
John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, Calif. sponsors this
proposal.
The above format is requested for publication without re-editing, re-formatting
or elimination of text, including beginning and concluding text, unless prior
agreement is reached. It is respectfully requested that this proposal be
proofread before it is published in the definitive proxy to ensure that the
integrity of the submitted format is replicated in the proxy materials. Please
advise if there is any typographical question.
Please note that the title of the proposal is part of the argument in favor of
the proposal. In the interest of clarity and to avoid confusion the title of
this and each other ballot item is requested to be consistent throughout all the
proxy materials.
The company is requested to assign a proposal number (represented by "3" above)
based on the chronological order in which proposals are submitted. The requested
designation of "3" or higher number allows for ratification of auditors to be
item 2.
This proposal is believed to conform with Staff Legal Bulletin No. 14B (CF),
September 15, 2004 including:
Accordingly, going forward, we believe that it would not be appropriate for
companies to exclude supporting statement language and/or an entire proposal in
reliance on rule 14a-8(i)(3) in the following circumstances:
the company objects to factual assertions because they are not supported;
the company objects to factual assertions that, while not materially false or
misleading, may be disputed or countered;
the company objects to factual assertions because those assertions may be
interpreted by shareholders in a manner that is unfavorable to the company, its
directors, or its officers; and/or
the company objects to statements because they represent the opinion of the
shareholder proponent or a referenced source, but the statements are not
identified specifically as such.
See also: Sun Microsystems, Inc. (July 21, 2005).
Stock will be held until after the annual meeting and the proposal will be
presented at the annual meeting.
Please acknowledge this proposal promptly by email and advise the most
convenient fax number and email address to forward a broker letter, if needed,
to the Corporate Secretary's office.
[INQUIRY LETTER]
January 1, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 1 The Boeing Company (BA)
Shareholder Position on One No-Action Request regarding 4 Rule 14a-8 proposals
by 4 proponents
1) Cumulative Voting John Chevedden
2) Independent Lead Director Thomas Finnegan
3) Shareholder Say on Executive Pay Ray T. Chevedden
4) Performance Based Stock Options David Watt
Ladies and Gentlemen:
One of the flaws of the December 21, 2007 no action request is that it has only
one purported precedent, a 2001 case regarding TRW. Although the company refers
to many other shareholder proposals it is a complete failure at finding the
combined circumstances of the unique TRW case ever occurring again. Yet from the
tone of the company letter the company falsely implies that the unique TRW case
happens regularly.
The company also fails to mention that it had four unsuccessful no action
requests in 2004 that cited the TRW case:
Boeing Co. 0223200420 02/11/2004
Boeing Co. 0217200426 02/06/2004
Boeing Co. 0217200439 02/06/2004
Boeing Co. 0223200448 02/06/2004
And the company fails to mention the number of times it cited the TRW case in
its pre-2004 no action requests that filed to obtain concurrence.
The company does not explain why it now files only one no action request
regarding four proposals, each with a separate proponent after it submitted four
separate no action requests in 2004. This new practice creates the impression
that the company is seeking to exclude one proposalfor instance the one
proposal to which it devotes the most attention to in its letter.
According to the company argument rule 14a-8 proposals have only negative
consequences. The company fails to acknowledge the shareholder proposals that it
has adopted (after resisting mightily for years) and how adoption has improved
the company's corporate governance rating.
The company fails to mention its take-no-prisoners approach to rule 14a-8
proposals. The company fails to note the number of its no action requests since
1998 that failed to obtain concurrence. And the company does not list the number
of separate failed grounds in each of its no action requests that did not obtain
concurrence.
Also the company fails to note that the cost of shareholder proposals will
decrease because the company will now be able to vastly limit the number of
paper proxies mailed. As an example of the purported excessive cost of rule
14a-8 proposals the company cites the cost of "two follow-up emails."
The company no action request is at least materially incomplete and/or
misleading. The company does not provide a copy of the response of the
undersigned to the unfounded company requested to withdraw proposals. The
company has an obligation to provide a copy of this response.
Regarding the argument on taking credit, the company does not cite one
definitive proxy that incorrectly identified the proponent of a rule 14a-8
proposal. The company does not cite proxy advisory services that incorrectly
misidentify proponents on a regular basiseven though many companies try to hide
the identity of proponents. The company fails to provide the quotes from some
articles purportedly regarding taking credit. On other purported articles no
surrounding text is provided to clarify the quote.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons it is respectfully requested that concurrence not be granted
to the company. It is also respectfully requested that the shareholder have the
last opportunity to submit material in support of including this proposalsince
the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[INQUIRY LETTER]
January 2, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 2 The Boeing Company (BA)
Shareholder Position on One No-Action Request regarding 4 Rule 14a-8 proposals
by 4 proponents
1) Cumulative Voting John Chevedden
2) Independent Lead Director Thomas Finnegan
3) Shareholder Say on Executive Pay Ray T. Chevedden
4) Performance Based Stock Options David Watt
Ladies and Gentlemen:
The following Safeway Inc. (March 10, 2005) is a precedent regarding the company
December 21, 2007 no action request. In Safeway Inc. (March 10, 2005) the staff
did not concur that Safeway could exclude these two proposals under rule
14a-8(c):
1) Nick Rossi proposal to be submitted in the 2005 Safeway proxy material
2) Nick Rossi custodian for Katrina Wubbolding proposal to be submitted in the
2005 Safeway proxy materials
This is the text of the Staff Reply Letter (bold added):
March 10, 2005
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Safeway Inc.
Incoming letter dated January 17, 2005
The first proposal relates to the sale of Safeway. The second proposal requests
that the board of directors take the necessary steps to amend Safeway's
governance documents to provide that beginning in fiscal 2006, at least 50
percent of the nominees to the board of directors shall be minorities, as that
term is used in the proposal.
We are unable to concur in your view that Safeway may exclude the proposals
under rules 14a-8(c) and 14a-8(f). Accordingly, we do not believe that Safeway
may omit the proposals from its proxy materials in reliance on rules 14a-8(c)
and 14a-8(f).
We are unable to concur in your view that Safeway may exclude the second
proposal under rule 14a-8(i)(2). Accordingly, we do not believe that Safeway may
omit the second proposal from its proxy materials in reliance on rule
14a-8(i)(2).
We are unable to concur in your view that Safeway may exclude the second
proposal or portions of the supporting statement under rule 14a-8(i)(3).
Accordingly, we do not believe that Safeway may omit the second 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 Safeway may exclude the second
proposal under rule 14a-8(i)(6). Accordingly, we do not believe that Safeway may
omit the second proposal from its proxy materials in reliance on rule
14a-8(i)(6).
Sincerely,
/s/
Sara D. Kalin
Attorney-Advisor
I believe that the above case is all the more persuasive since Mr. Rossi did not
submit any rebuttal whatsoever to the staff.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons and the previous reasons it is respectfully requested that
concurrence not be granted to the company on any basis. It is also respectfully
requested that the shareholder have the last opportunity to submit material in
support of including this proposalsince the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[INQUIRY LETTER]
January 3, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 1=CUV The Boeing Company (BA)
Shareholder Position on Specific Rule 14a-8 Proposal from the Bundled Company
No-Action Request
Rule 14a-8 Proposal: Cumulative Voting
John Chevedden
Ladies and Gentlemen:
Regarding the company bundled December 21, 2007 no action request, the same or
similar "Shareholders recommend that our Board adopt cumulative voting" text
that was used in this proposal was also submitted to 9 large-cap companies for
2007. The result was that none of these 9 companies contested the same text as
used in this proposal. These 9 companies had a market capitalization of $1.3
trillion. And these 9 companies are no strangers to filing no action requests.
This same text then received a total of more than 6 billion yes-votes, which
represented an average supporting vote of 35%.
The above could lead to the conclusion that the text "Shareholders recommend
that our Board adopt cumulative voting" is implicit in stating that the board is
requested to "take all the steps in their power" to adopt cumulative voting. And
that the 9 companies that published the rule 14a-8 proposals and the
shareholders who cast the 6 billion yes-votes understood this to be implicit.
The proposal text is addressed to the board, which clearly must act first to
adopt the proposal.
The non-excluded Wal-Mart Stores Inc. (March 20, 2007) precedent has the text
"that the board `take all the steps in their power' to adopt cumulative voting."
However, in this instance Wal-Mart gave its proponent the opportunity to add the
text "take all the steps in their power." On the other hand Boeing did not give
its proponent the opportunity to add similar text and instead filed a bundled
16-page no action request letter which included this proposal.
The non-excluded Alaska Air Group, Inc. (March 1, 2004) precedent used the same
"Board adopt cumulative voting" text of this proposal to Boeing. The proponent
response to the Alaska Air no action request made these two points:
1) "Shareholder participation in corporate governance via writing and submitting
proposals is defined in simple English in the Question-and-Answer portion of
Commission's instructions. We believe that the most reasonable understanding of
this format is that it expects corporations to communicate with shareholder
proponents to resolve structural and procedural details before appealing for
guidance on disputed points to the Commission. The company declined to take this
approach."
2) "Please be advised that Mr. Flinn [the proponent] is ready, willing and able
to recast and revise his proposal based upon the guidance of the Staff."
The shareholder party here is wiling to revise the text similar to the 2007
Wal-Mart precedent.
The flowing is the definition of Cumulative Voting from the Council of
Institutional Investors. This definition seems to favor Cumulative Voting from a
shareholder perspective and this proposal is directed to shareholders (Bold
added):
Cumulative voting:
If cumulative voting is allowed at a company, shareholders can allocate the
total number of votes they are entitled to cast in the election of directors in
any fashion they wish-all for one candidate, split among two or three, or
divided evenly among all director nominees. (The total number is equal to the
number of directors to be elected at the meeting multiplied by the number of
shares eligible to be voted.) This may enable holders of a minority stake to
elect one or more directors if they vote all their shares for a single nominee
or small, select number of nominees. It has been touted as a way for
institutional investors to improve corporate governance by electing qualified,
independent, accountable directors to boards, although companies say it could
lead to a "constituency" representation and a divided board. While nearly half
the states once mandated cumulative voting in corporate elections, most now
leave it up to companies, and most companies have eliminated it.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons it is requested that the staff find that this resolution
cannot be omitted from the company proxy. It is also respectfully requested that
the shareholder have the last opportunity to submit material in support of
including this proposalsince the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[INQUIRY LETTER]
January 16, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 2=CUV The Boeing Company (BA)
Shareholder Position on Specific Rule 14a-8 Proposal from the Bundled Company
No-Action Request
Rule 14a-8 Proposal: Cumulative Voting
John Chevedden
Ladies and Gentlemen:
Regarding the company bundled December 21, 2007 no action request, the same or
similar "Shareholders recommend that our Board adopt cumulative voting" text
that was used in this proposal was also submitted to 9 large-cap companies for
2007. The result was that none of these 9 companies contested the same text as
used in this proposal. These 9 companies had a market capitalization of $1.3
trillion. And these 9 companies are no strangers to filing no action requests.
This same text then received a total of more than 6 billion yes-votes, which
represented an average supporting vote of 35%.
The above could lead to the conclusion that the text "Shareholders recommend
that our Board adopt cumulative voting" is implicit in stating that the board is
requested to "take all the steps in their power" to adopt cumulative voting. And
that the 9 companies that published the rule 14a-8 proposals and the
shareholders who cast the 6 billion yes-votes understood this to be implicit.
The proposal text is addressed to the board, which clearly must act first to
adopt the proposal.
The non-excluded Wal-Mart Stores Inc. (March 20, 2007) precedent has the text
"that the board `take all the steps in their power' to adopt cumulative voting."
However, in this instance Wal-Mart gave its proponent the opportunity to add the
text "take all the steps in their power." On the other hand Boeing did not give
its proponent the opportunity to add similar text and instead filed a bundled
16-page no action request letter which included this proposal.
The non-excluded Alaska Air Group, Inc. (March 1, 2004) precedent used the same
"Board adopt cumulative voting" text of this proposal to Boeing. The proponent
response to the Alaska Air no action request made these two points:
1) "Shareholder participation in corporate governance via writing and submitting
proposals is defined in simple English in the Question-and-Answer portion of
Commission's instructions. We believe that the most reasonable understanding of
this format is that it expects corporations to communicate with shareholder
proponents to resolve structural and procedural details before appealing for
guidance on disputed points to the Commission. The company declined to take this
approach."
2) "Please be advised that Mr. Flinn [the proponent] is ready, willing and able
to recast and revise his proposal based upon the guidance of the Staff."
The shareholder party here is wiling to revise the text similar to the 2007
Wal-Mart precedent.
Additionally, Staff Legal Bulletin No. 14 refers to the long-standing staff
practice of issuing no-action responses that permit shareholders to make
revisions that are minor in nature (bold added):
1. Why do our no-action responses sometimes permit shareholders to make
revisions to their proposals and supporting statements?
There is no provision in rule 14a-8 that allows a shareholder to revise his or
her proposal and supporting statement. However, we have 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. We adopted
this practice to deal with proposals that generally comply with the substantive
requirements of the rule, but contain some relatively minor defects that are
easily corrected. In these circumstances, we believe that the concepts
underlying Exchange Act section 14(a) are best served by affording an
opportunity to correct these kinds of defects.
For this resolution the minor revision would be to insert take all the steps in
their power into "Shareholders recommend that our Board take all the steps in
their power to adopt cumulative voting ..." or "Shareholders recommend that our
Board take the steps necessary to adopt cumulative voting ..." similar to this
August 2007 Staff Reply Letter (bold and italics added):
[STAFF REPLY LETTER]
August 29, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Torotel, Inc. Incoming letter dated June 5, 2007
The proposal calls for the articles of incorporation to be amended to revoke a
provision of the by-laws to remove advance notice requirements for shareholders
to bring business before a shareholder meeting.
We are unable to concur in your view that Torotel may exclude the proposal under
rules 14a-8(b) and 14a-8(f). Accordingly, we do not believe that Torotel may
omit the proposal from its proxy materials in reliance on rules 14a-8(b) and
14a-8(f).
We are unable to concur in your view that Torotel may exclude the proposal under
rule 14a-8(c). Accordingly, we do not believe that Torotel may omit the proposal
from its proxy materials in reliance on rule 14a-8(c).
There appears to be some basis for your view that Torotel may exclude the
proposal under rule 14a-8(i)(1) as an improper subject for sharcholder action
under applicable state law or rule 14a-8(i)(2) because it would, if implemented,
cause Torotel to violate state law. It appears that this defect could be cured,
however, if the proposal were recast as a recommendation or request that the
board of directors take the steps necessary to implement the proposal.
Accordingly, unless the proponent provides Torotel with a proposal revised in
this manner, within seven calendar days after receiving this letter, we will not
recommend any enforcement action to the Commission if Torotel omits the proposal
from its proxy materials in reliance on rules 14a-8(i)(1) or 14a-8(i)(2).
Sincerely,
/s/
Ted Yu
Special Counsel
In the El Paso Corp. (February 10, 2006) precedent the text of the shareholder
proposal stated:
RESOLVED: Cumulative Voting Shareholders recommend that our Board adopt
cumulative voting as a bylaw or long-term policy.
And the staff required no change to this text (bold added):
[STAFF REPLY LETTER]
February 10, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: El Paso Corporation Incoming letter dated December 19, 2005
The proposal recommends that the board adopt cumulative voting for the election
of directors as a bylaw or long-term policy.
We are unable to concur in your view that El Paso may exclude the proposal under
rule 14a-8(i)(1). Accordingly, we do not believe that El Paso may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(1).
We are unable to conclude that El Paso has met its burden of establishing that
the proposal would violate applicable state law. Accordingly, we do not believe
that El Paso may omit the proposal from its proxy materials in reliance on rule
14a-8(i)(2).
We are unable to concur in your view that El Paso may exclude the proposal under
rule 14a-8(i)(3). Accordingly, we do not believe that El Paso may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(3).
Sincerely,
/s/
Geoffrey M. Ossias
The flowing is the definition of Cumulative Voting from the Council of
Institutional Investors. This definition seems to favor Cumulative Voting from a
shareholder perspective and this proposal is directed to shareholders (Bold
added):
Cumulative voting:
If cumulative voting is allowed at a company, shareholders can allocate the
total number of votes they are entitled to cast in the election of directors in
any fashion they wish-all for one candidate, split among two or three, or
divided evenly among all director nominees. (The total number is equal to the
number of directors to be elected at the meeting multiplied by the number of
shares eligible to be voted.) This may enable holders of a minority stake to
elect one or more directors if they vote all their shares for a single nominee
or small, select number of nominees. It has been touted as a way for
institutional investors to improve corporate governance by electing qualified,
independent, accountable directors to boards, although companies say it could
lead to a "constituency" representation and a divided board. While nearly half
the states once mandated cumulative voting in corporate elections, most now
leave it up to companies, and most companies have eliminated it.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons it is requested that the staff find that this resolution
cannot be omitted from the company proxy. It is also respectfully requested that
the shareholder have the last opportunity to submit material in support of
including this proposalsince the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[INQUIRY LETTER]
January 23, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
#3=CUV The Boeing Company (BA)
Shareholder Position on Specific Rule 14a-8 Proposal from the Bundled Company
No-Action Request
Rule 14a-8 Proposal: Cumulative Voting
John Chevedden
Ladies and Gentlemen:
Regarding the company bundled December 21, 2007 no action request, there is no
text in the cumulative voting resolution asking the board to act "unilaterally"
to adopt cumulative voting. The company should not be permitted to revise this
resolution and then argue that its revised version should be excluded.
Consistent with the text of the proposal the board can adopt cumulative voting
by setting in motion the required steps for adoption and monitoring those steps.
If the board made up its mind to adopt cumulative voting, the company does not
describe how the board could likely fail to adopt cumulative voting. Plus the
company submitted evidence that the board could routinely access Delaware
counsel to advise the board on the ordinary business details of adopting
cumulative voting.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons, and the January 3, 2008 and January 16, 2008 reasons, it is
requested that the staff find that this resolution cannot be omitted from the
company proxy. It is also respectfully requested that the shareholder have the
last opportunity to submit material in support of including this proposalsince
the company had the first opportunity.
Sincerely,
/s/
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[INQUIRY LETTER]
February 12, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
#3 The Boeing Company (BA)
Shareholder Position on One No-Action Request regarding 4 Rule 14a-8 proposals
by 4 proponents
1) Cumulative Voting John Chevedden
2) Independent Lead Director Thomas Finnegan
3) Shareholder Say on Executive Pay Ray T. Chevedden
4) Performance Based Stock Options David Watt
Ladies and Gentlemen:
The company no action request did not acknowledge that the above proponent, Mr.
David Watt traveled 2000 miles to attend the Boeing 2006 and 2007 annual
meetings and formally presented his proposals at both meetings.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons and January 1, 2008 and January 2, 2008 reasons, it is
requested that the staff find that this resolution cannot be omitted from the
company proxy. It is also respectfully requested that the shareholder have the
last opportunity to submit material in support of including this proposalsince
the company had the first opportunity.
Sincerely,
/s/
John Chevedden
cc:
Mark Pacioni<Mark.R.Pacioni@boeing.com>
[STAFF REPLY LETTER]
February 20, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: The Boeing Company Incoming letter dated December 21, 2007
The first proposal recommends that the board adopt cumulative voting. The second
proposal relates to director independence. The third proposal relates to an
advisory resolution on compensation. The fourth proposal relates to equity
compensation.
There appears to be some basis for your view that Boeing may exclude the first
proposal under rules 14a-8(i)(2) and 14a-8(i)(6). We note that in the opinion of
your counsel, implementation of the proposal would cause Boeing to violate state
law. Accordingly, we will not recommend enforcement action to the Commission if
Boeing omits the first proposal from its proxy materials in reliance upon rules
14a-8(i)(2) and 14a-8(i)(6). In reaching this position, we have not found it
necessary to address the alternative bases for omission of the first proposal
upon which Boeing relies.
We are unable to concur in your view that Boeing may the second proposal under
rule 14a-8(c). Accordingly, we do not believe Boeing may omit the second
proposal from its proxy materials in reliance upon rule 14a-8(c).
We are unable to concur in your view that Boeing may the third proposal under
rule 14a-8(c). Accordingly, we do not believe Boeing may omit the third proposal
from its proxy materials in reliance upon rule 14a-8(c).
We are unable to concur in your view that Boeing may the fourth proposal under
rule 14a-8(c). Accordingly, we do not believe Boeing may omit the fourth
proposal from its proxy materials in reliance upon rule 14a-8(c).
Sincerely,
/s/
Craig Slivka
Attorney-Adviser
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