Company Name: Citigroup Inc.
Public Availability Date: February 12, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 14, 2007
U.S. Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
100 F Street, N.E.
Washington, DC 20549
Re: Stockholder Proposal Submitted to Citigroup Inc. by William Steiner
Dear Sir or Madam:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), enclosed herewith for filing are six copies of a
stockholder proposal and supporting statement (the "Proposal") submitted by
William Steiner (the "Proponent"), for inclusion in the proxy materials to be
furnished to stockholders by Citigroup Inc. in connection with its annual
meeting of stockholders to be held on April 22, 2008 (the "Proxy Materials").
Also enclosed for filing are six copies of a statement outlining the reasons
Citigroup Inc. deems the omission of the attached Proposal from the Proxy
Materials to be proper pursuant to Rules 14a-8(b), 14a-8(f) and 14a-8(i)(10)
promulgated under the Exchange Act.
Rule 14a-8(f) provides that a proposal may be excluded if a proponent fails to
"follow one of the eligibility or procedural requirements explained in answers
to Questions 1 through 4 of" the Rule. Rule 14a-8(b)Question 2 of Rule
14a-8sets forth the requirement that a proponent demonstrate to the company to
which it is submitting a proposal that the proponent is eligible to submit that
proposal.
Rule 14a-8(i)(10) provides that a proposal may be omitted if "the company has
substantially implemented the proposal."
By copy of this letter and the enclosed material, Citigroup Inc. is notifying
the Proponent of Citigroup Inc.'s intention to omit the Proposal from the Proxy
Materials. Citigroup Inc. currently plans to file its definitive Proxy Materials
with the Securities and Exchange Commission on or about March 12, 2008.
Kindly acknowledge receipt of this letter and the enclosed material by stamping
the enclosed copy of this letter and returning it to me in the enclosed
self-addressed, stamped envelope. If you have any comments or questions
concerning this matter, please contact me at (212) 793-7396.
Very truly yours,
/s/
Shelley J. Dropkm
General Counsel, Corporate Governance
cc: William Steiner
John Chevedden
Encls.
[APPENDIX 1]
Exhibit A
William Steiner
112 Abbottsford Gate
Piermont, NY 10968
Mr. Charles O. Prince
Chairman
Citigroup Inc. (C)
399 Park Avenue
New York, NY 10043
PH: 212-559-1000
FX: 212-793-3946
Rule 14a-8 Proposal
Dear Mr. Prince,
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 the presentation of this proposal at the
annual meeting. This submitted format, with the shareholder-supplied emphasis,
is intended to be used for definitive proxy publication. This is the proxy for
John Chevedden and/or his designee to act on my behalf regarding this Rule 14a-8
proposal for the forthcoming shareholder meeting before, during and after the
forthcoming shareholder meeting. Please direct all future communication to John
Chevedder at:
olmsted7p (at) earthlink.net
(In the interest of company cost savings and efficiency please communicate via
email.)
PH: 310-371-7872
2215 Nelson Ave., No. 205
Redondo Beach, CA 90278
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 by email.
Sincerely,
/s/
William Steiner
10/2/07
Date:
cc: Michael S. Helfer
Corporate Secretary
PH: 212-559-9788
F: 212-793-7600
[APPENDIX 2]
[C: Rule 14a-8 Proposal, October 19, 2007]
3Special Shareholder Meetings
RESOLVED, Shareholders ask our board to amend our bylaws and any other
appropriate governing documents to give holders of 10% to 25% of our outstanding
common stock the power to call a special shareholder meeting, in compliance with
applicable law. This proposal favors 10% from the above range.
This proposal topic received our impressive 62%-vote at the 2007 Citigroup
annual meeting. "Boards should take actions recommended in shareowner proposals
that receive a majority of votes cast for and against," according to The Council
of Institutional Investors.
Special meetings allow investors to vote on important matters, such as a
takeover offer, that can arise between annual meetings. If shareholders cannot
call special meetings, management may become insulated and investor returns may
suffer.
Shareholders should have the ability to call a special meeting when they think a
matter is sufficiently important to merit expeditious consideration. Shareholder
control over timing is especially important in the context of a major
acquisition or restructuring, when events unfold quickly and issues may become
moot by the next annual meeting.
Fidelity and Vanguard are among the mutual funds supporting a shareholder right
to call a special meeting. The proxy voting guidelines of many public employee
pension funds, including the New York City Employees Retirement System, also
favor preserving this right. Governance ratings services, such as The Corporate
Library and Governance Metrics International, take special meeting rights into
account when assigning company ratings.
Additionally 18 proposals on this topic averaged 56%-support in 2007 - including
74%-support at Honeywell (HON).
I believe that another factor, not present at most other companies, would make
it more important for Citigroup to enable shareholders to call a special
meeting. Our board is composed of too many overextended directors. According to
The Corporate Library, http://www.thecorporatelibrary.com an independent
investment research firm, Board composition at Citigroup represents moderate
concern for shareholder interests due to the high concentration of active CEOs
on the board.
These individuals included Richard D. Parsons - Time Warner; Lead Director Alain
Belda - Donegal Group; George David - United Technologies Corporation; Anne
Mulcahy - Xerox; Andrew Liveris - Dow Chemical. These individuals are very busy
and the concern is that they may not have enough time to adequately contribute
to the supervision of the company's affairs.
Because boards should take actions recommended in shareowner proposals receiving
a majority of votes cast, please vote yes:
Notes:
William Steiner, 112 Abbottsford Gate, Piermont, NY 10968 sponsors this
proposal.
The above format is requested for publication without re-editing or
re-formatting.
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).
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.
Please advise if there is any typographical question.
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]
December 28, 2007
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 1 Citigroup Inc. (C)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
William Steiner
Ladies and Gentlemen:
Regarding the company December 14, 2007 no action request, attached is the
broker letter which was emailed to the company on November 9, 2007 with the
below message (and a typo of "(GE)" in the subject line):
------Forwarded Message
From: olmsted<olmsted7p@earthlink.net>
Date: Fri, 09 Nov 2007 12:50:48 -0800
To: Shelley Dropkin<dropkins@citigroup.com>
Subject: Rule 14a-8 proposal (GE) Broker Letter
Dear Ms. Dropkin, Please let me know on Monday whether there is any further
requirement at this point in the rule 14a-8 process in addition to the broker
letter attached.
Sincerely,
John Chevedden
------End of Forwarded Message
For this reason 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
proposal - since the company had the first opportunity.
Additional information will follow.
Sincerely,
John Chevedden
cc: William Steiner
Shelley Dropkin<dropkins@citigroup.com>
[INQUIRY LETTER]
January1, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 2 Citigroup Inc. (C)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
William Steiner
Ladies and Gentlemen:
Regarding the company December 14, 2007 no action request, the text of the Rule
14a-8 proposal states:
RESOLVED, Shareholders ask our board to amend our bylaws and any other
appropriate governing documents to give holders of 10% to 25% of our outstanding
common stock the power to call a special shareholder meeting, in compliance with
applicable law. This proposal favors 10% from the above range.
There is no call-out in the above text for the company to add a strict,
important and yet vaguely all-encompassing ("shall not") exclusion, and for
which the board would have great freedom to interpret the vague text to its own
personal advantage.
It is clear that this company exception is vague and all encompassing (bold
added):
A special meeting requested by stockholders shall not be held if either (i) the
Board has called or calls for an annual meeting of stockholders and the purpose
of such annual meeting includes (among any other matters properly brought before
the meeting) the purpose specified in the request, or (ii) an annual or special
meeting was held not more than 12 months before the request to call the special
meeting was received by the Company which included the purpose specified in the
request.
There is no methodology, criteria or formula given for the board to decide,
under this formal bylaw amendment, whether a previous shareholder meeting
included the purpose specified for a requested upcoming special shareholder
meeting.
Arguably there is no conceivable business that would fall outside this
exception. The company could make a practice to salt its annual meeting with a
brief discussion of the topics it would be most adverse to at a special
shareholder meeting. Thus there would effectively be no right to call a special
meeting according to this bylaw Amendment.
Thus the company "shall not be held" clause is merely the means to subtract
everything, or almost everything, that the remainder of bylaw amendment grants.
This "shall not be held" clause is the company's second bite at the apple method
to make sure that three are no special meetings held that are called by
shareholders.
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 this reason and the reasons in the December 28, 2008 shareholder letter 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 proposal - since the
company had the first opportunity.
Additional information will follow.
Sincerely,
John Chevedden
cc: William Steiner
Shelley Dropkin<dropkins@citigroup.com>
[STAFF REPLY LETTER]
February12, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Citigroup Inc. Incoming letter dated December 14, 2007
The proposal asks the board to amend the bylaws and any other appropriate
governing documents to give holders of 10% to 25% of Citi's outstanding common
stock the power to call a special shareholder meeting.
There appears to be some basis for your view that Citi may exclude the proposal
under rule 14a-8(i)(10). Accordingly, we will not recommend enforcement action
to the Commission if Citi omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(10). In reaching this position, we have not found it
necessary to address the alternative basis for omission upon which Citi relies.
Sincerely,
/s/
Heather L. Maples
Special Counsel
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