Company Name: Home Depot, Inc.
Public Availability Date: February 1, 2008Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
APPENDIX 3
STAFF REPLY LETTER
[INQUIRY LETTER]
January 31, 2008
Office of Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal of Lucian Bebchuk
Ladies and Gentlemen:
On January 7, 2008, The Home Depot, Inc. (the "Company") submitted a letter to
the staff of the Division of Corporation Finance requesting that the Staff
confirm that no enforcement action will be recommended if the Company excludes a
shareholder proposal from the Company's proxy materials for its 2008 Annual
Meeting of Shareholders (the "No-Action Request"). Professor Lucian Bebchuk (the
"Proponent") submitted the proposal.
Enclosed (as Exhibit A) is a letter from the Proponent dated January 30, 2008.
The Proponent states that he has withdrawn the proposal. In reliance on this
letter, the Company hereby withdraws the No-Action Request.
Kindly acknowledge receipt of this letter by stamping and returning the enclosed
copy in the enclosed envelope. If you have any questions with respect to this
matter, please telephone me at (770) 384-2858. I may also be reached by fax at
(770) 384-5842.
Very truly yours,
/s/
Jonathan M. Gottsegen, Director
Corporate and Securities Practice Group
cc: Professor Lucian Bebehuk
[INQUIRY LETTER]
January 7, 2008
Office of Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal of Lucian Bebchuk
Ladies and Gentlemen:
On behalf of The Home Depot, Inc. (the "Company"), the purpose of this letter is
to notify the staff of the Division of Corporation Finance (the "Staff") of the
Company's intention to exclude a shareholder proposal from the Company's proxy
materials for its 2008 Annual Meeting of Shareholders (the "2008 Proxy
Materials"). Professor Lucian Bebchuk (the "Proponent") submitted the proposal
(the "Proposal"), which is attached as Exhibit A.
In accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), we hereby respectfully request that the Staff
confirm that no enforcement action will be recommended against the Company if
the Proposal is omitted from the 2008 Proxy Materials. Pursuant to Rule
14a-8(j), enclosed are six copies of this letter and Exhibits A to F. A copy of
this letter, including Exhibits A to F, is being mailed on this date to the
Proponent in accordance with Rule 14a-8(j), informing him of the Company's
intention to omit the Proposal from the 2008 Proxy Materials. The Company
intends to commence distribution of its definitive 2008 Proxy Materials on or
around April 11, 2008. Pursuant to Rule 14a-8(j), this letter is being submitted
not less than 80 days before the Company files its definitive 2008 Proxy
Materials with the Securities and Exchange Commission (the "Commission").
The Proposal sets forth the following resolution:
"RESOLVED that Article I of the Corporation's By-Laws is hereby amended by
adding the following new Section 10:
To the extent permitted under federal law and state law, the Corporation shall
include in its proxy materials for an annual meeting of stockholders any
qualified proposal for an amendment of the By-Laws submitted by a proponent, as
well as the proponent's supporting statement if any, and shall allow
stockholders to vote with respect to such a qualified proposal on the
Corporation's proxy card. For a proposal to be qualified, the following
requirements must be satisfied:
(a) The proposed By-Law amendment would be legally valid if adopted;
(b) The proponent submitted the proposal and supporting statement to the
Corporation's Secretary by the deadline specified by the Corporation for
stockholder proposals for inclusion in the proxy materials for the annual
meeting;
(c) The proponent beneficially owned at the time of the submission at least
$2,000 of the Corporation's outstanding common stock for at least one year, and
did not submit other stockholder proposals for the annual meeting;
(d) The proposal and its supporting statement do not exceed 500 words;
(e) The proposal does not substantially duplicate another proposal previously
submitted to the Corporation by another proponent that will be included in the
Corporation's proxy materials for the same meeting; and
(f) The proposal is not substantially similar to any other proposal that was
voted upon by the stockholders at any time during the preceding three calendar
years and failed to receive at least 3% of the votes cast when so considered."
The Proposal requests that the Company amend its By-Laws to allow any
shareholder to include in the Company's annual proxy statement a "qualified
proposal", as such term is defined in the Proposal and as set forth above, to
amend the Company's By-Laws and to allow shareholders to vote on such
"qualified" proposal. The Company intends to omit the Proposal on the following
grounds:
A. Rules 14a-8(b) and 14a-8(f) - Failure to Prove
Eligibility
Rule 14a-8(b) provides that, to be eligible to submit a proposal, a proponent
must have continuously held at least $2,000 in market value (or 1% of the
company's securities) for at least one year by the date the proponent submitted
the proposal and must continue to hold those securities through the date of the
meeting. Rule 14a-8(f) states that, if the proponent fails to provide the
necessary evidence of ownership in accordance with Rule 14a-8(b), the company
may exclude the proposal if, within 14 calendar days of receiving the proposal,
the company notifies the proponent of such defect and the time frame for
responding to remedy the defect (14 calendar days from receipt of such
notification) and the proponent fails to correct the defect within the 14 day
period.
The Company received the Proposal on December 13, 2007. The Proponent stated
that he was the owner of 90 shares of the Company's common stock which he has
continuously held for more than one year as of December 13 and intends to
continue to hold those securities through the date of the Company's 2008 Annual
Meeting of Shareholders. However, the Proponent did not enclose proof of such
ownership in his letter. According to the Company's records, the Proponent is
not a record owner of the Company's common stock. Therefore, in accordance with
Rule 14a-8(f), on December 14, 2007, the Company sent, by overnight mail, a
letter requesting that the Proponent provide proof of satisfaction of the
eligibility requirements of Rule 14a-8 (the "Notification Letter"), which is
attached as Exhibit B. A copy of Rule 14a-8 was provided to the Proponent with
the Notification Letter. In particular, the Notification Letter stated that the
Proponent is required to submit "a written statement from the "record" holder of
the securities (usually a broker or bank) verifying that, at the time [the
Proponent] submitted the [P]roposal, [the Proponent] continuously held the
securities for at least one year" and that such proof of ownership is required
within 14 calendar days of receiving the Notification Letter. On December 21,
2007, the Company received a facsimile copy of a letter from Charles Schwab
stating that, at December 20, 2007, the Proponent's Charles Schwab account held
90 shares of the Company's common stock and that such shares have been
continuously held in such account for more than 15 months prior to December 20,
2007 (the "Verification Letter", which is attached as Exhibit C).
The Staff has made it clear that a written statement from an investment advisor
verifying that a proponent held securities continuously for at least one year
(prior to the date of submission) is insufficient evidence of ownership, unless
the investment advisor is also the record holder. See Staff Legal Bulletin No.
14 (July 13, 2001). According to Computershare, the Company's registrar and
transfer agent, as of December 13, 2007, Charles Schwab was not a record owner
of the Company's common stock other than as custodian for specified persons who
do not include the Proponent. Moreover, the Verification Letter does not purport
to be from a record holder, a broker, bank or other intermediary through which
the Proponent owns the shares in question. Charles Schwab purports only to be
the holder of an account held in the Proponent's name. Therefore, Charles Schwab
could not verify ownership under Rule 14a-8 and the Verification Letter does not
provide sufficient evidence of the Proponent's beneficial ownership. A letter
from Computershare confirming that Charles Schwab is not a record holder of the
Company's common stock (other than as custodian for specified persons who do not
include the Proponent) is attached as Exhibit D.
The Staff has consistently concurred that a proposal may be excluded pursuant to
Rule 14a-8(f) due to a proponent's failure to provide an affirmative written
statement from the record holder of his or her securities that specifically
verifies that the proponent owned the securities continuously for a period of
one year as of the time of submitting the proposal. See The McGraw Hill
Companies, Inc. (Mar. 12, 2007); CIGNA Corporation (Feb. 21, 2006); Clear
Channel Communications, Inc. (Feb. 9, 2006); Anheuser-Bush Companies, Inc. (Jan.
24, 2006); Yahoo! Inc. (Feb. 1, 2005); AMR Corporation (Mar. 15, 2004); Bank of
America Corporation (Feb. 28, 2003); General Motors Corporation (Apr. 3, 2002);
Allegheny Energy, Inc. (Mar. 26, 2002); and Cabot Corporation (Dec. 9, 1999).
For the foregoing reasons, the Proponent has not provided, within the time
period set forth in Rule 14a-8(f), adequate verification that the Proponent
satisfies the eligibility requirements under Rule 14a-8(b). Therefore, the
Proposal may be properly excluded pursuant to Rule 14a-8(f).
B. Rule 14a-8(i)(1) - Improper Subject for Shareholder
Action
Rule 14a-8(i)(1) states that a shareholder proposal may be omitted from a proxy
statement if "the proposal is not a proper subject for action by shareholders
under the laws of the jurisdiction of the company's organization." The Company
believes that the Proposal may be excluded under this rule for two reasons: (i)
it mandates action and usurps the authority of the Board of Directors under
Delaware law and (ii) it would result in an impermissible delegation of Board
authority.
It is important to note that the Proposal is mandatory rather than advisory. The
Staff has agreed that shareholder mandates that intrude on the authority of the
board of directors are properly excludable under Rule 14a-8(i)(1). See Community
Bancshares, Inc. (Mar. 15, 1999); RJR Nabisco Holding Corp. (Feb. 23, 1998);
Eastman Kodak Co. (Feb. 20, 1985); and Tele-Communication, Inc. (Mar. 9, 1995).
The Company is incorporated under the laws of the State of Delaware. Section
141(a) of the Delaware General Corporation Law ("DGCL") provides that "the
business and affairs of every corporation organized under this chapter shall be
managed by or under the direction of a board of directors, except as may be
otherwise provided in this chapter or in its certificate of incorporation." The
Delaware Supreme Court has also stated that "[a] cardinal precept of the [DGCL]
is that directors, rather than shareholders, manage the business and affairs of
the corporation." Aronson v Lewis,
473 A.2d 805, 811 (Del. 1984). Based upon
this principle, the court has stated that arrangements which "have the effect of
removing from directors in a very substantial way their duty to use their own
best judgment on management matters" violate Delaware law. Chapin v. Benwood
Foundation, Inc.,
402 A.2d 1205, 1211 (Del. Ch. 1979) (quoting Abercrombie v.
Davies,
123 A.2d 893, 899 (Del. Ch. 1956), rev'd on other grounds, 130 A.2d 338
(Del. 1957), aff'd sub. nom.,
415 A.2d 1068).
The Staff has noted that a board of directors may be considered to have
exclusive authority in corporate matters, absent a specific provision to the
contrary in the corporation code of the state in which it is incorporated, the
issuer's charter or its bylaws. See Securities Exchange Act Release No. 34-12999
(Nov. 22, 1976). Nothing in other sections of the DGCL, the Company's
Certificate of Incorporation or By-Laws restricts the Board's authority in
corporate matters, including the Board's discretion to determine those matters
to be set forth in the Company's proxy statement and submitted to shareholders
for consideration.
The Proposal would also result in an unauthorized delegation of power to
shareholders. The board of directors of a Delaware corporation may not delegate
their decision making authority on matters that they are required to exercise
their business judgment. Such business judgment would necessarily include the
use of the company proxy statement. Rosenblatt v. Getty Oil Co., C.A. No. 5278,
slip op. at 41 (Del. Ch. Sept. 19, 1983); Paramount Communications, Inc. v.
Time, Inc.,
571 A.2d 1140, 1154 (Del. 1989); Smith v. Van Gorkom,
488 A.2d 858, 873 (Del. 1985).
Adoption of the Proposal would deprive the Board of the power and discretion to
determine whether inclusion of a particular shareholder proposal to amend the
Company's By-Laws would be in the best interests of the Company and its
shareholders. Subject to the rules of the Commission, the use of a company's
proxy statement is a matter squarely within the power of the board of directors.
The Proposal, if adopted, would force the Company to include in its proxy
statement any "qualified proposal" to amend the Company's By-Laws, even in
circumstances where the Board believes that such inclusion is not in the best
interests of the Company and its shareholders. This will divest the Board of any
right to exercise its judgment with respect to the inclusion or exclusion of
proposals for by-law amendments and vest such power with shareholders. This
directly contravenes the power and authority vested in the Board under Section
141(a) of the DGCL and is particularly material in light of the fact that the
communication at issue (i.e., the annual meeting notice, proxy statement and
proxy card) is the only annual communication to shareholders mandated by
Delaware law. See 8 Del. C. 211(c).
In addition, implementation of the Proposal would require the advice and
oversight of counsel to ensure that the Company includes in its proxy statement
every "qualified proposal" to amend the By-Laws. This requires the Company to
expend additional resources. However, only the board of directors (or persons
duly authorized to act on its behalf) has the power to direct the expenditure of
corporate funds. See 8 Del. C. 122(5); Wilderman v. Wilderman,
315 A.2d 610
(Del. Ch. 1974); Brehm v. Eisner,
746 A.2d 244, 263 (Del. 2000); and Alessi v.
Beracha, 849 A.2d 939, 943 (Del. Ch. 2004). It is inappropriate for shareholders
to restrict board discretion regarding the expenditure of funds. By mandating
that corporate funds be spent to include every "qualified proposal" in the
Company's proxy statement, the Proposal would thereby abrogate the duty of the
Board of Directors to exercise its informed business judgment concerning
expenditures by the Company.
For the foregoing reasons and in the legal opinion of the Company's Delaware
counsel, Richards, Layton & Finger, P.A., attached hereto as Exhibit E, the
Proposal may be properly excluded from the 2008 Proxy Materials under Rule
14a-8(i)(1).
C. Rule 14a-8(i)(2) - Violation of State Law
Rule 14a-8(i)(2) provides that a registrant may omit a proposal and any
supporting statement from its proxy materials if implementation of the proposal
would require the company to violate any state or federal law. The Company
believes that it may exclude the Proposal as implementation would violate
Delaware law in two ways: (i) conflict with the provisions of the Company's
Certificate of Incorporation and (ii) be inconsistent with the Company's By-Laws
(attached as Exhibit F).
First, Section 109 of the DGCL requires that by-law provisions not be
inconsistent with the law or the company's certificate of incorporation. See 8
Del. C. 109(b). Delaware courts have repeatedly held that a by-law provision
that is inconsistent with a corporation's charter violates Delaware law. Centaur
Partners, IV v. National Intergroup, Inc.,
582 A.2d 923, 929 (Del. 1990); and
Oberly v. Kirby,
592 A.2d 445, 459 (Del. 1991).
The Proposal, if implemented, provides for the amendment of the Company's
By-Laws to require that any "qualified proposal" be included in the Company's
proxy statement regardless of the Board's power and discretion to determine
whether the inclusion of such a proposal is, or is not, in the best interest of
the Company and its shareholders. This would directly conflict with the Board's
power under Article Sixth, Section 4 of the Company's Certificate of
Incorporation, which provides that the Board has "the right (which to the extent
exercised, shall be exclusive) to establish the rights, powers, duties, rules
and procedures that from time to time shall govern the Board of Directors and
each of its members ... and that from time to time shall affect the directors'
power otherwise to manage the business and affairs of the Corporation." This
provision further provides that "no by-law shall be adopted by stockholders
which shall interpret or qualify, or impair or impede the implementation of, the
foregoing." As the proposed by-law undermines the Board's power under Article
Sixth, Section 4 and conflicts with the Company's Certificate of Incorporation,
the implementation of the Proposal would cause the Company to violate Delaware
law.
Second, the proposed by-law amendment in the Proposal is inconsistent with the
Company's By-Laws. The By-Laws allow shareholders to bring matters before annual
shareholder meetings and to solicit votes in favor of their proposals through
their own proxy materials. The By-Laws further specify that, in order for a
shareholder to properly present such matters before an annual meeting, the
shareholder must have given written notice of his or her intention to do so not
less than 120 days before the date of the Company's proxy statement released to
shareholders in connection with the previous year's annual meeting of
shareholders. The proposed by-law, however, would require advance notice only
"by the deadline specified by the Corporation for stockholder proposals for
inclusion in the proxy materials for the annual meeting." The proposed by-law is
further inconsistent with the Company's By-Laws in that it fails to require the
same extent of information in the notice required by the By-Laws. Because the
proposed by-law conflicts with the Company's By-Laws, implementation of the
Proposal would be contrary to Delaware law. See 1 Rodman Ward, Jr., et al., Folk
on the Delaware General Corporation Law 109.8 at GCL-I-93 (2007-1 Supp.)
(citing H.F. Ahmanson & Co. v. Great W. Fin. Corp., C.A. No. 15650, slip op. at
8 (Del. Ch. Apr. 25, 1997)) ("A corporation's violation of one of its by-laws is
sufficient to support a claim for coercive relief that would enforce the command
of that by-law because to hold otherwise `would violate basic concepts of
corporate governance.'").
For the reasons set forth above and in the opinion of the Company's Delaware
counsel, Richards, Layton & Finger, P.A., attached hereto as Exhibit E, the
implementation of the Proposal would conflict with the Company's Certificate of
Incorporation and be inconsistent with the Company's By-Laws. As such, the
Proposal may be excluded from the Company's 2008 Proxy Materials pursuant to
Rule 14a-8(i)(2).
D. Rule 14a-8(i)(3) - Contrary to the Proxy Rules
Rule 14a-8(i)(3) provides that a proposal or supporting statement may be omitted
from a company's proxy statement if "the proposal or supporting statement is
contrary to any of the Commission's proxy rules." The Company believes that the
Proposal is contrary to the Commission's proxy rules on three grounds: (i)
inconsistency with the recently amended Rule 14a-8(i)(8); (ii) elimination of
the Company's discretion in excluding shareholder proposals, such discretion
being an integral part of the Commission's framework for regulating shareholder
proposals; and (iii) inconsistency with the regulatory framework for proxy
statements.
First, the Commission recently approved an amendment to Rule 14a-8(i)(8) to
provide that companies may exclude a shareholder proposal on the ground that it
"relates to an election for membership on the company's board of directors or
analogous governing body or a procedure for such nomination or election." See
Shareholder Proposals Relating to the Election of Directors, Securities and
Exchange Act of 1934 Release No. 34-56914 (Dec. 6, 2007). In effect, the amended
rule denies shareholders direct access to a company's proxy materials to
nominate director candidates or to present proposals that would relate to the
procedures by which directors are elected. The Proposal does not exclude
proposed By-Law amendments that are excludable under the revised Rule
14a-8(i)(8). The practical effect of the Proposal would be to require the
Company to include in its proxy statements future proposals to amend the By-Laws
that would otherwise be excluded under Rule 14a-8(i)(8). The Proposal attempts
to circumvent the Commission's recent amendment to Rule 14a-8(i)(8), as well as
the Commission's explicit decision to defer more far-reaching amendments to Rule
14a-8, and pre-empt the Commission's efforts to maintain the integrity of
director elections within the construct of the Commission's revised Rule
14a-8(i)(8).
Second, the Proposal deprives the Company of its discretion under Rule 14a-8 to
seek exclusion of a shareholder proposal. Under Rule 14a-8, a company may, in
its discretion, seek exclusion of a shareholder proposal brought under Rule
14a-8 if it falls within one of the categories for exclusion. This allows a
company the flexibility to determine the content of its proxy statement and such
discretion is an essential part of the Commission's regulatory framework for
proxy statements. The Proposal, if adopted, would deprive the Company of its
discretion under Rule 14a-8 as it would require the Company to include any
"qualified proposal" to amend the Company's By-Laws in the Company's proxy
materials. As such, the Proposal is contrary to the Commission's proxy rules.
Third, the Proposal is inconsistent with the regulatory scheme for the
regulation of proxy statements. Shareholders have two alternate ways to put
matters forward for shareholder vote. One is the "traditional" proxy contest in
which each side is responsible for its own proxy materials. Under Delaware law,
shareholders have the right, subject to compliance with reasonable limitations
prescribed by advance notice and director qualification by-laws, to bring
business before any annual meeting of shareholders and to solicit votes in favor
of their proposals through their own proxy materials. The alternate route
available to shareholders is the Commission's relatively narrow and carefully
crafted framework under Rule 14a-8. The Commission and the Staff have, in the
formulation of the Commission's proxy rules, carefully balanced the advantages
and disadvantages to registrants and shareholders of these two paths. While the
exact contours of the balancing drawn by the Commission cannot neatly be
summarized, the well-established salient principle is easily stated: if a
shareholder proposal is within Rule 14a-8, the shareholder is spared
substantially all the burdens of Regulation 14A; if not, the shareholder must
comply with the same rules as the registrant and prepare and distribute proxy
materials. The Proposal, if adopted, would create a third, broadly unregulated
proxy solicitation regime. Therefore, the Proposal is inconsistent with and
undermines the integrity of the regulatory scheme for proxy statements.
Also, the Proposal is inconsistent with the Commission's previous determinations
regarding the ability of shareholders and companies to formulate their own rules
with regard to the inclusion of shareholder proposals on the company's proxy
materials. In 1982 and most recently in 2007, the Commission considered and
rejected proposed changes to the proxy rules to allow shareholders and companies
to formulate their own rules regarding the inclusion of shareholder proposals on
a company's proxy materials. See Securities Exchange Act Release No. 34-19135
(Oct. 14, 1982); Securities Exchange Act Release No. 34-20091 (Aug. 16, 1983);
Securities Exchange Act Release No. 34-56160 (July 27, 2007); and Securities
Exchange Act Release No. 34-56914 (Dec. 7, 2007). On both occasions, the
Commission determined that Rule 14a-8 provides a fair and efficient mechanism
for the shareholder proposal process which best serves the interests of
shareholders. However, if the Proposal were adopted, the Proponent would achieve
precisely what the Commission decided against: the implementation of a
shareholder's own rules regarding the inclusion of shareholder proposals to
amend the By-Laws of the Company. Therefore, the Proposal is contrary to the
Commission's proxy rules.
Moreover, the authority to regulate what is required or permitted in a proxy
statement is vested exclusively with the Commission under Section 14 of the
Exchange Act and is expressed in related rules and in Regulation 14A. The
Commission and the Staff have repeatedly commented on the Commission's role as
gatekeeper to the proxy statement through the process that Rule 14a-8
contemplates. The Commission has made clear that proposals that would curtail or
reduce its role are improper. See Securities Exchange Act Release No. 34-40018
(May 21, 1998); and Securities Exchange Act Release No. 34-20091 (Aug. 16,
1983). When considering proposals that sought to reduce the Commission's
involvement in the review of shareholder proposals, the Commission noted that
"some of the proposals we are not adopting share a common theme: to reduce the
Commission's and its staff's role in the process and to provide shareholders and
companies with a greater opportunity to decide for themselves which proposals
are sufficiently important and relevant to the company's business to justify
inclusion in its proxy materials." See Securities Exchange Act Release No.
34-40018 (May 21, 1998).
The Proponent's attempt to eliminate the Commission's oversight role through a
shareholder proposal directly conflicts with the Commissions express recognition
of the importance of its oversight and its repeated refusal to adopt rules that
reduce its role. In addition to being contrary to the express position of the
Commission, the Proposal, in seeking to supplant the legal exceptions currently
embedded in Rule 14a-8, is clearly contrary to existing proxy rules and can be
properly excluded. Indeed, faced with a shareholder proposal substantially
similar to that advanced by the Proponent, the Staff concurred that such
proposal could be properly excluded pursuant to Rule 14a-8(i)(3). See State
Street Corporation (Feb. 3, 2004).
For the reasons discussed above, as the Proposal is contrary to the Commission's
proxy rules, the Company may omit the Proposal from its 2008 Proxy Materials in
accordance with Rule 14a-8(i)(3).
Accordingly, the Company respectfully requests that the Staff not recommend
enforcement action if the Company omits the Proposal from its 2008 Proxy
Materials. If the Staff does not concur with the Company's position, we would
appreciate an opportunity to confer with the Staff concerning this matter prior
to the issuance of a response. The Proponent is requested to copy the
undersigned on any response it may choose to make to the Staff.
Kindly acknowledge receipt of this letter by stamping and returning the enclosed
copy of the first page and returning it in the enclosed envelope. If you have
any questions with respect to this matter, please telephone me at (770)
384-2858. I may also be reached by fax at (770) 384-5842.
Very truly yours,
/s/
Jonathan M. Gottsegen, Director
Corporate and Securities Practice Group
[APPENDIX 1]
December 13, 2007
VIA FACSIMILE AND OVERNIGHT MAIL
James C. Snyder, Jr.
Corporate Secretary
The Home Depot, Inc.
2455 Paces Ferry Road
Atlanta, Georgia 30339
Re: Shareholder Proposal of Lucian Bebchuk
To James C. Snyder, Jr.:
I am the owner of 90 shares of common stock of The Home Depot Inc. (the
"Company"), which I have continuously held for more than 1 year as of today's
date. I intend to continue to hold these securities through the data of the
Company's 2008 annual meeting of shareholders.
Pursuant to Rule 14a-8, I enclose herewith a shareholder proposal and supporting
statement (the "Proposal") for inclusion in the Company's proxy materials and
for presentation to a vote of shareholders at the Company's 2008 annual meeting
of shareholders.
Please let me know if you would like to discuss the Proposal or if you have any
questions.
Sincerely,
/s/
Lucian Bebchuk
[APPENDIX 2]
It is hereby RESOLVED that Article I of the Corporation's By-Laws is hereby
amended by adding the following new Section 10:
Section 10. Stockholder Proposals for a By-Law Amendment
To the extent permitted under federal law and state law. the Corporation shall
include in its proxy materials for an annual meeting of stockholders any
qualified proposal for an amendment of the By-Laws submitted by a proponent, as
well as the proponent's supporting statement if any, and shall allow
stockholders to vote with respect to such a qualified proposal on the
Corporation's proxy card. For a proposal to be qualified, the following
requirements must be satisfied:
(a) The proposed By-Law amendment would be legally valid if adopted;
(b) The proponent submitted the proposal and supporting statement to the
Corporation's Secretary by the deadline specified by the Corporation for
stockholder proposals for inclusion in the proxy materials for the annual
meeting;
(c) The proponent beneficially owned at the time of the submission at least
$2,000 of the Corporation's outstanding common stock for at least one year, and
did not submit other stockholder proposals for the annual meeting;
(d) The proposal and its supporting statement do not exceed 500 words;
(e) The proposal does not substantially duplicate another proposal previously
submitted to the Corporation by another proponent that will be included in the
Corporation's proxy materials for the same meeting; and
(f) The proposal is not substantially similar to any other proposal that was
voted upon by the stockholders at any time during the preceding three calendar
years and failed to receive at least 3% of the votes cast when so considered.
This By-Law shall be effective immediately and automatically as of the date it
is approved by the vote of stockholders in accordance with Article XII of the
Corporation's By-Laws.
SUPPORTING STATEMENT:
Statement of Professor Lucian Bebehuk: In my view, the ability to place
proposals for By-Law amendments on the corporate ballot could in some
circumstances be essential for stockholders' ability to use their power under
state law to initiate By-Law amendments. In the absence of ability to place such
a proposa on the corporate ballot, the costs involved in obtaining proxies from
other stockholders could deter a stockholder from initiating a proposal even if
the proposal is one that would obtain stockholder approval were it to be placed
on the corporate ballot. Current and future SEC rules may in some cases allow
companies - but do not currently require them - to exclude proposals from the
corporate ballot. In my view, even when SEC rules may allow exclusion, it would
be desirable for the Corporation to place on the corporate ballot proposals that
satisfy the requirements of the proposed By-Law. I urge even stockholders who
believe that no changes in the Corporation's By-Laws are currently desirable to
vote for my proposal to facilitate stockholders' ability to initiate proposals
for By-Law amendments to be voted on by their fellow stockholders.
I urge you to vote for this proposal.
[APPENDIX 3]
VIA FACSIMILE AND OVERNIGHT MAIL
Office of Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal Submitted by Lucian Bebchuk for Inclusion in The Home
Depot Inc.'s 2008 Proxy Statement
Ladies and Gentlemen:
This letter is to inform you that our client Lucian Bebchuk has determined to
withdraw his proposal submitted to The Home Depot Inc. ("Home Depot" or the
"Company") on December 13, 2007, for inclusion in the Company's proxy materials
for its 2008 annual meeting of shareholders (the "Annual Meeting"), and attached
as Exhibit A. A copy of Lucian Bebchuk's letter informing Home Depot is attached
as Exhibit B.
Sincerely,
/s/
Michael J. Barry
cc: Jonathan M. Gottsegen, Esquire (via fax)
[STAFF REPLY LETTER]
February 1, 2008
Jonathan M. Gottsegen
Director
Corporate and Securities Practice Group
The Home Depot, Inc.
2455 Paces Ferry Rd.
Atlanta, GA 30339
Re: The Home Depot, Inc.
Dear Mr. Gottsegen:
This is in regard to your letter dated January 31,
2008 concerning the shareholder proposal submitted by Lucian Bebchuk for
inclusion in Home Depot's proxy materials for its upcoming annual meeting of
security holders. Your letter indicates that the proponent has withdrawn the
proposal, and that Home Depot therefore withdraws its January 7, 2008 request
for a no-action letter from the Division. Because the matter is now moot, we
will have no further comment.
Sincerely,
/s/
William A. Hines
Special Counsel
cc: Michael J. Barry
Grant & Eisenhofer P.A.
Chase Manhattan Centre
1201 North Market Street
Wilmington, DE 19801
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