Company Name: JPMorgan Chase & Co.
Public Availability Date: March 5, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 11, 2008
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Shareholder Proposal of William Steiner Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that our client, JPMorgan Chase & Co. (the
"Company"), intends to omit from its proxy statement and form of proxy for its
2008 Annual Meeting of Shareholders (collectively, the "2008 Proxy Materials") a
shareholder proposal and statements in support thereof (the "Proposal") received
from William Steiner (the "Proponent"), who has appointed John Chevedden to act
on his behalf (the "Proponent's Representative").
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and its attachments;
filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before the Company intends
to file its definitive 2008 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponent.
Rule 14a-8(k) provides that shareholder proponents are required to send
companies a copy of any correspondence that the proponents elect to submit to
the Commission or the staff of the Division of Corporation Finance (the
"Staff"). Accordingly, we are taking this opportunity to inform the Proponent
that if the Proponent elects to submit additional correspondence to the
Commission or the Staff with respect to this Proposal, a copy of that
correspondence should concurrently be furnished to the undersigned on behalf of
the Company pursuant to Rule 14a-8(k).
THE PROPOSAL
The Proposal requests that the Company's Board of Directors (the "Board") adopt
a bylaw requiring that the Company "have an independent lead director whenever
possible with clearly delineated duties, elected by and from the independent
board members, to be expected to serve for more than one continuous year, unless
our [C]ompany at that time has an independent [B]oard chairman." A copy of the
Proposal, as well as related correspondence with the Proponent, is attached to
this letter as Exhibit A.
BASES FOR EXCLUSION
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2008 Proxy Materials pursuant to:
Rule 14a-8(b) and Rule 14a-8(f)(1) because the Proponent failed to
substantiate his eligibility to submit the Proposal; and
Rule 14a-8(i)(3) because the Proposal is impermissibly vague and indefinite so
as to be inherently misleading.
ANALYSIS
I. The Proposal May Be Excluded under Rule 14a-8(b) and Rule 14a-8(f)(1) Because
the Proponent Failed to Substantiate His Eligibility to Submit the Proposal.
The Proponent submitted the Proposal to the Company via facsimile on November
13, 2007, which the Company received on November 13, 2007. See Exhibit A. The
Proponent did not include with the Proposal evidence demonstrating satisfaction
of the ownership requirements of Rule 14a-8(b). Furthermore, the Company
confirmed that the Proponent does not appear on the records of the Company's
stock transfer agent as a shareholder of record. Accordingly, because the
Company was unable to verify the Proponent's eligibility to submit the Proposal
from its records, the Company sought verification from the Proponent of his
eligibility to submit the Proposal. Specifically, the Company sent via Federal
Express to the Proponent a letter on November 15, 2007, which was within 14
calendar days of the Company's receipt of the Proposal, notifying the Proponent
of the requirements of Rule 14a-8 and how the Proponent could cure the
procedural deficiency; specifically, that a shareholder must satisfy the
ownership requirements under Rule 14a-8(b) (the "Deficiency Notice"). A copy of
the Deficiency Notice is attached hereto as Exhibit B. The Company also sent via
email a copy of the Deficiency Notice to the Proponent's Representative on
November 15, 2007.
The Deficiency Notice requests that the Proponent provide proof of ownership
that satisfies the requirements of Rule 14a-8 and provides further guidance
regarding those requirements. The Deficiency Notice also explains that Rule
14a-8(f) requires that the deficiency be corrected within 14 calendar days from
the date the Proponent receives the Deficiency Notice. Further, the Deficiency
Notice explains that if the Proponent does not send a response that is
postmarked or transmitted electronically within those 14 days, the Company will
exclude the proposal from its 2008 Proxy Materials. Federal Express records
confirm delivery of the Deficiency Notice to the Proponent at 11:02 a.m. on
November 16, 2007. See Exhibit C. The Company never received a response to the
Deficiency Notice from the Proponent or the Proponent's Representative.
When a proponent fails to provide satisfactory evidence of eligibility under
Rule 14a-8(b) and Rule 14a-8(f)(1), the Staff has concurred that a company may
omit the proposal. See, e.g., General Motors Corp. (avail. Apr. 5, 2007)
(concurring with the exclusion of a shareholder proposal and noting that "the
proponent appears to have failed to supply documentary support sufficiently
evidencing that he satisfied the minimum ownership requirement for the one-year
period as of the date that he submitted the proposal as required by rule
14a-8(b)"). See also Yahoo! Inc. (avail. Mar. 29, 2007); CSK Auto Corp. (avail.
Jan. 29, 2007); Motorola, Inc. (avail. Jan. 10, 2005), Johnson & Johnson (avail.
Jan. 3, 2005); Agilent Technologies (avail. Nov. 19, 2004); Intel Corp. (avail.
Jan. 29, 2004); Seagate Technology (avail. Aug. 11, 2003); J.P. Morgan Chase &
Co. (avail. Mar. 13, 2002). Moreover, in Pfizer Inc. (avail. Jan. 16, 2004), the
Staff concluded that a shareholder proponent's failure to respond to Pfizer's
deficiency notice, which was substantially similar in content to the Deficiency
Notice, was a sufficient justification to concur with Pfizer's exclusion of the
proponent's proposal in reliance on Rule 14a-8(f)(1) and Rule 14a-8(b).
This Proponent in particular should be well aware of the need to demonstrate
compliance with the continuous ownership requirements of Rule 14a-8 as the
Staff, on multiple occasions, has determined that he failed to satisfy the
ownership requirements of Rule 14a-8(b) because of his failure to respond to
deficiency notices. See, e.g., Int'l Paper Co. (avail. Feb. 28, 2007)
(concurring with the exclusion of the Proponent's proposal because "the [P]roponent
appears not to have responded to International Paper's request for documentary
support indicating that the [P]roponent has satisfied the minimum ownership
requirement for the one-year period required by rule 14a-8(b)"); Anheuser-Busch
Cos., Inc. (avail. Jan. 24, 2006) (concurring with the exclusion of the
Proponent's proposal because he "failed to supply, within 14 days of the receipt
of [the company's] request, documentary support evidencing" that the Proponent
satisfied Rule 14a-8(b)'s minimum ownership requirements); Wal-Mart Stores, Inc.
(avail. Jan. 18, 2006) (same). In this instance, the Proponent has failed once
again to respond at all to the Deficiency Notice.
Accordingly, we believe that the Proposal is excludable under Rule 14a-8(b) and
Rule 14a-8(f)(1) due to the Proponent's failure to provide the Company with
satisfactory evidence of the Proponent's requisite continuous ownership of the
Company's stock as of the date the Proposal was submitted to the Company.
II. The Proposal May Be Excluded under Rule 14a-8(i)(3) Because It Is
Impermissibly Vague and Indefinite so as To Be Inherently Misleading.
Rule 14a-8(i)(3) permits the exclusion of a shareholder proposal if the proposal
or supporting statement is contrary to any of the Commission's proxy rules or
regulations, including Rule 14a-9, which prohibits materially false or
misleading statements in proxy soliciting materials. The Staff consistently has
taken the position that vague and indefinite shareholder proposals are
inherently misleading and therefore excludable under Rule 14a-8(i)(3) because
shareholders cannot make an informed decision on the merits of a proposal
without at least knowing what they are voting on. See Staff Legal Bulletin No.
14B (Sept. 15, 2004) ("SLB 14B") (noting that "neither the stockholders voting
on the proposal, nor the company in implementing the proposal (if adopted),
would be able to determine with any reasonable certainty exactly what actions or
measures the proposal requires"); see also Dyer v. SEC, 287 F.2d 773, 781 (8th
Cir. 1961) ("[I]t appears to us that the proposal, as drafted and submitted to
the company, is so vague and indefinite as to make it impossible for either the
board of directors or the stockholders at large to comprehend precisely what the
proposal would entail.").
Moreover, the Staff has, on numerous occasions, concurred that a shareholder
proposal was sufficiently misleading so as to justify its exclusion where a
company and its shareholders might interpret the proposal differently, such that
"any action ultimately taken by the [c]ompany upon implementation [of the
proposal] could be significantly different from the actions envisioned by
shareholders voting on the proposal." Fuqua Indus., Inc. (avail. Mar. 12, 1991).
See also Bank of America Corp. (avail. June 18, 2007) (concurring with the
exclusion of a shareholder proposal in reliance on Rule 14a-8(i)(3) calling for
the board of directors to compile a report "concerning the thinking of the
Directors concerning representative payees" as "vague and indefinite"); Puget
Energy, Inc. (avail. Mar. 7, 2002) (permitting exclusion of a proposal
requesting that the company's board of directors "take the necessary steps to
implement a policy of improved corporate governance"). Specifically, the Staff
has permitted the exclusion of proposals requesting that a company adopt a
particular definition or set of guidelines when the proposal or supporting
statement failed to include any reference to a description of the substantive
provisions of the definition or set of guidelines being recommended.
In the instant case, the Proposal provides that "the standard of independence
would be the standard set by the Council of Institutional Investors" but does
not specify what that standard is. In Boeing Co. (avail. Feb. 10, 2004), the
shareholder proposal requested a bylaw requiring the chairman of the company's
board of directors to be an independent director, "according to the 2003 Council
of Institutional Investors definition." The Staff concurred with the exclusion
of the proposal under Rule 14a-8(i)(3) as vague and indefinite because it "fails
to disclose to shareholders the definition of `independent director' that it
seeks to have included in the bylaws." See also Smithfield Foods, Inc. (avail.
July 18, 2003) (concurring in the exclusion under Rule 14a-8(i)(3) of a
shareholder proposal requesting a report based upon the "Global Reporting
Initiative"); Johnson & Johnson (avail. Feb. 7, 2003) (permitting the omission
of a shareholder proposal in reliance on Rule 14a-8(i)(3) requesting the
adoption of the "Glass Ceiling Commission's" business recommendations); Kohl's
Corp. (avail. Mar. 13, 2001) (concurring in the exclusion of a shareholder
proposal in reliance on Rule 14a-8(i)(3) requesting implementation of the
"SA8000 Social Accountability Standards").
The Proposal, which states, "The standard of independence would be the standard
set by the Council of Institutional Investors," is substantially similar to the
proposal in Boeing Corp. It includes no reference to, or description of, the
provisions of the particular standard the Proposal seeks to adopt. In fact, the
Proposal is even more vague and indefinite than the Boeing Corp. proposal.
Whereas the proposal in Boeing Corp. referred to the "2003 Council of
Institutional Investors definition," this Proposal is a moving target in that it
fails to specify the version of the standard of independence that is to be
adopted. As provided on the Council of Institutional Investors' website: "The
corporate governance policies of the Council of Institutional Investors are a
living document that is [sic] constantly reviewed and updated." Council of
Institutional Investors, Council Policies, available at http://www.cii.org/policies/index.html.
Thus, neither the Company nor its shareholders would be able to determine the
standard of independence to be applied under the Proposal. As the Staff has
found on numerous occasions, the Company's shareholders cannot be expected to
make an informed decision on the merits of the Proposal without at least knowing
what they are voting on. See SLB 14B (noting that "neither the stockholders
voting on the proposal, nor the company in implementing the proposal (if
adopted), would be able to determine with any reasonable certainty exactly what
actions or measures the proposal requires"); Philadelphia Electric Co. (avail.
Jul. 30, 1992) (same); Fuqua Indus., Inc. (avail. Mar. 12, 1991) (same).
The Proposal is distinguishable from other shareholder proposals that refer to
the independence of directors that the Staff did not concur were excludable as
vague and indefinite. First, the Staff has not granted no-action relief when the
proposal did not specify a standard for director independence. See First Mariner
Bancorp (avail. Jan. 10, 2005); Alaska Air Group Inc. (avail. Mar. 1, 2004).
Second, the Staff has not granted no-action relief when the proposal requested
the adoption of a specific standard for director independence and the
substantive provisions of the standard were identifiable to the company and
shareholders. See Clear Channel Communications Inc. (avail. Feb. 15, 2006); Ford
Motor Co. (avail. Mar. 9, 2005). Unlike in these situations, the Proposal
requests the adoption of a specific standard for director independence but does
not provide any reference to or description of the substantive provisions of the
standard. Accordingly, we believe that the Proposal is impermissibly misleading
as a result of its vague and indefinite nature and, thus, is excludable under
Rule 14a-8(i)(3).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2008
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
Moreover, the Company agrees to promptly forward to the Proponent any response
from the Staff to this no-action request that the Staff transmits by facsimile
to the Company only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8653 or Anthony J. Horan, the Company's Corporate
Secretary, at (212) 270-7122.
Sincerely,
/s/
Amy L. Goodman
ALG/pah/mbd
Enclosures
cc: Anthony J. Horan, JPMorgan Chase & Co.
William Steiner
John Chevedden
[APPENDIX 1]
Mr. James Dimon
Chairman
JPMorgan Chase & Co. (JPM)
Corporate Secretary
270 Park Ave
New York NY 10017
Rule 14a-8 Proposal
Dear Mr. Dimon,
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
Chevedden 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
10/12/07
Date
cc: Anthony J. Horan<ANTHONY.HORAN@chase.com>
Corporate Secretary
PH: 212-270-7122
FX: 212-270-4240
PH: 212 270-6000
FX: 212-270-1648
[APPENDIX 2]
[JPM: Rule 14a-8 Proposal, November 13, 2007]
3Independent Lead Director
Resolved, Shareholders request that our Board adopt a bylaw to require that our
company have an independent lead director whenever possible with clearly
delineated duties, elected by and from the independent board members, to be
expected to serve for more than one continuous year, unless our company at that
time has an independent board chairman. The standard of independence would be
the standard set by the Council of Institutional Investors.
The clearly delineated duties at a minimum would include:
Presiding at all meetings of the board at which the chairman is not present,
including executive sessions of the independent directors.
Serving as liaison between the chairman and the independent directors.
Approving information sent to the board.
Approving meeting agendas for the board.
Approving meeting schedules to assure that there is sufficient time for
discussion of all agenda items.
Having the authority to call meetings of the independent directors.
Being available for consultation and direct communication, if requested by
major shareholders.
A key purpose of the Independent Lead Director is to protect shareholders'
interests by providing independent oversight of management, including our CEO.
An Independent Lead Director with clearly delineated duties can promote greater
management accountability to shareholders and lead to a more objective
evaluation of our CEO.
An Independent Lead Director should be selected primarily based on his
qualifications as a Lead Director, and not simply default to the Director who
has another designation on our Board. Additionally an Independent Lead Director
should not be rotated out of this position each year just as he or she is
gaining valuable Lead Director experience.
We had neither an independent Chairman nor a Lead Director according to The
Corporate Library http://www.thecorporatelibrary.com. an independent investment
research firm.
Please encourage our board to respond positively to this proposal and establish
a Lead Director to protect shareholders' interests:
Notes:
William Steiner, 112 Abbottsford Gate, Piermont, NY 10968 sponsored this
proposal.
The above format is requested for publication without re-editing, re-formatting
or climination 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.
[INQUIRY LETTER]
January 14, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 1 JPMorgan Chase & Co. (JPM)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Independent Lead Director
William Steiner
Ladies and Gentlemen:
This responds to the company January 11, 2008 no action request - one of two
company no action requests dated January 11, 2008 regarding broker letters.
1) Regarding the broker letter argument
These is no record of receiving a request for a broker letter by the contact
person on this proposal. The cover letter for this proposal stated:
Please direct all future communication to John Chevedden at:
olmsted7p (at) earthlink.net
(In the interest of company cost savings and improving the efficiency of the
rule 14a-8 process please communicate via email.)
PH: 310-371-7872
2215 Nelson Ave., No. 205
Redondo Beach, CA 90278
However the contact person, John Chevedden, has a record of only receiving these
email messages since May 2007 from Mr. Anthony Horan - and two of these messages
concerned other 2008 proposals by Ray T. Chevedden and Kenneth Steiner:
------Forwarded Message
From:<ANTHONY.HORAN@chase.com>
Date: Mon, 26 Nov 2007 15:19:32 -0500
To:<olmsted7p@earthlink.net>
Cc:<caracciolo_irma@jpmorgan.com>,<ANTHONY.HORAN@chase.com>
Subject: JPMC - R. Chevedden Proposal
Mr. Chevedden:
Attached is our acknowledgment of the proposal submitted by Mr. Ray T. Chevedden
for our 2008 annual meeting.
Please be sure to include caracciolo_irma@jpmorgan.com on all correspondence to
insure receipt.
Tony Horan
------Forwarded Message
From:<ANTHONY.HORAN@chase.com>
Date: Thu, 15 Nov 2007 18:12:47 -0500
To:<olmsted7p@earthlink.net>
Cc:<caracciolo_irma@jpmorgan.com>,<ANTHONY. HORAN@chase.com>
Subject: JPMC - K. Steiner Proposal
Mr. Chevedden:
Attached is our acknowledgment of the proposal submitted by Mr. Kenneth Steiner
for our 2008 annual meeting.
Please be sure to include Irma (see address cc'd above) to ensure that we do not
inadvertently miss any future correspondence.
Tony Horan
------Forwarded Message
From:<ANTHONY.HORAN@chase.com>
Date: Thu, 17 May 2007 16:44:38 -0400
To: olmsted<olmsted7p@earthlink.net>
Cc:<caracciolo_irma@jpmorgan.com>
Subject: Re: Annual Meeting (JPM)
Mr. Chevedden - Mr. Steiner was welcome at the meeting.
We plan to file an 8-K with the full voting results tomorrow and my colleague
Irma Caracciolo will email a copy of it to you when we do.
Tony Horan
Additionally the contact person, John Chevedden, has no record since May 2007 of
receiving any additional email messages with "JPMC" in the subject line, other
than the two above for other proposals.
2) Regarding the vague argument
The text of the resolution states (bold added):
Resolved, Shareholders request that our Board adopt a bylaw to require that our
company have an independent lead director whenever possible with clearly
delineated duties, elected by and from the independent board members, to be
expected to serve for more than one continuous year, unless our company at that
time has an independent board chairman. The standard of independence would be
the standard set by the Council of Institutional Investors.
The company begins with a number of throwaway cases. For instance, claiming this
resolution is analogous to proposals with text:
"concerning the thinking of the Directors concerning representative payees"
"... to implement a policy of improved corporate governance"
"Global Reporting Initiative"
"Glass Ceiling Commission's" business recommendations
"SA8000 Social Accountability Standards"
Additionally this proposal seems consistent with a number of the company-cited
precedents (bold added):
Company NameFord Motor Co. (March 9, 2005):
[APPENDIX]
3- Form Independent Committee to Address Ford Family Conflicts with Shareholders
RESOLVED: Form Independent Committee to Address Ford Family Conflicts with
Shareholders. In other words form an Independent Board Committee to prevent
conflicts of interest between Ford Family shareholders and regular shareholders.
Ford shareholders request a policy to establish a committee of strictly
independent directors to evaluate (before the fact if possible) and make
recommendations regarding any question of conflict of interest between Ford
family shareholders and regular shareholders. The standard of independence is
that of the Council of Institutional Investors www.cii.org updated in 2004. And
formalize this as a corporate governance policy or bylaw consistent with the
governing documents of our company.
...
[STAFF REPLY LETTER]
March 9, 2005
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Ford Motor Company
Incoming letter dated January 12, 2005
The proposal relates to establishing a committee of independent directors to
evaluate and make recommendations regarding potential conflicts of interest.
We are unable to concur in your view that Ford may exclude the proposal under
rule 14a-8(i)(3). Accordingly, we do not believe that Ford may omit the proposal
from its proxy materials in reliance on rule 14a-8(i)(3).
We are unable to concur in your view that Ford may exclude the proposal under
rule 14a-8(i)(6). Accordingly, we do not believe that Ford may omit the proposal
from its proxy materials in reliance on rule 14a-8(i)(6).
We are unable to concur in your view that Ford may exclude the proposal under
rule 14a-8(i)(10). Accordingly, we do not believe that Ford may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(10).
Sincerely,
/s/
Daniel Greenspan
Attorney-Advisor
Company NameAlaska Air Group, Inc. (March 1, 2004):
[APPENDIX 2]
EXHIBIT B
NO. 2LEAD INDEPENDENT DIRECTOR: HIGHER STANDARDS NECESSARY AT OUR COMPANY
RESOLVED: Shareholders request the Board of Directors take all necessary steps
to amend our corporation's bylaws and adopt policy to ensure that the Lead
Independent Director is truly independent when the office of Chairman and CEO
are held by the same person. Furthermore, that the Lead Independent Director can
never have previously served as an executive of our company, or been retained on
the company's behalf as a consultant or attorney.
This proposal is submitted by Mr. Bill Davidge.
Currently, both the Securities and Exchange Commission and the New York Stock
Exchange recognize that directors will not be considered independent unless
certain relationships exist (or not) with the corporation within the prior five
years.
Shareholders propose that more stringent requirements be incorporated into our
company's Bylaws to ensure the highest standards for independency in corporate
governance, especially when the offices of Chairman and CEO are held by the same
person.
ENSURE LEADERSHIP OF BOARD INDEPENDENCYVOTE YES ON NO. 2
[STAFF REPLY LETTER]
March 1, 2004
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Alaska Air Group, Inc.
Incoming letter dated January 15, 2004
The proposal requests that the board take all necessary steps to amend the
bylaws and adopt a policy to ensure that the Lead Independent Director is truly
independent.
We are unable to concur in your view that Alaska Air may exclude the entire
proposal under rule 14a-8(i)(3). There appears to be some basis for your view,
however, that a portion of the supporting statement may be materially false or
misleading under rule 14a-9. In our view, the proponent must, in the sentence
that begins "Currently, both the Securities and Exchange Commission ..." and
ends "... within the prior five years," replace the work "five" with "three" and
provide a citation to a specific source. Accordingly, unless the proponent
provides Alaska Air with a proposal and supporting statement revised in this
manner, within seven calendar days after receiving this letter, we will not
recommend enforcement action to the Commission if Alaska Air omits only this
portion of the supporting statement from its proxy materials in reliance on rule
14a-8(i)(3).
Sincerely,
/s/
Lesli L. Sheppard-Warren
Attorney-Advisor
Company NameClear Channel Communications, Inc. (February 15, 2006):
[APPENDIX 2]
CREATION OF AN INDEPENDENT COMPENSATION COMMITTEE
Submitted by William C. Thompson, Comptroller, City of New York, on behalf of
the New York City Pension Funds
WHEREAS, we believe the primary role of the Compensation Committee (the
"Committee") is structuring executive pay and evaluating executive performance.
Critical to performing these functions is setting compensation policies and
evaluating them annually; setting justifiable performance criteria and
challenging performance benchmarks; retaining experts when needed to assist with
the process and substance of the Committee's work; and ensuring full and
accurate disclosure of the scope of compensation;
NOW THEREFORE, BE IT RESOLVED, the shareholders request the board to amend the
Committee charter to specify that the Committee be composed solely of
independent directors as defined below. The charter should also specify (a) how
to select a new independent Committee member if a current member ceases to be
independent during the time between annual meetings of shareholders; and (b)
that compliance with the policy is excused if no independent director is
available and willing to serve on the Committee.
BE IT FURTHER RESOLVED, for the purpose of this proposal an independent director
is someone whose only nontrivial professional, familial or financial connection
to the corporation, its chairman or its executive officers is his/her
directorship, and who also:
(1) is not or has not been, or whose relative is or in the past 5 years has not
been, employed by the corporation or employed by, or a director of, an
affiliate; and
(2) complies with Sections (b)..(h) of the Council of Institutional Investors
Definition of Director Independence as found on its website at:
http://www.cii.org/policies/ind dir defn.htm
[STAFF REPLY LETTER]
February 15, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Clear Channel Communications, Inc. Incoming letter dated December 23, 2005
The proposal requests the board to amend the compensation committee charter to
require that the compensation committee be composed solely of independent
directors, as defined in the proposal.
We are unable to concur with your view that Clear Channel may exclude the
proposal under rule 14a-8(i)(10). Accordingly, we do not believe Clear Channel
may exclude the proposal under rule 14a-8(i)(10).
We are unable to concur with your view that Clear Channel may exclude the
proposal under rule 14a-8(i)(3). Accordingly, we do not believe Clear Channel
may exclude the proposal under rule 14a-8(i)(3).
Sincerely,
/s/
Gregory Belliston
Attorney-Adviser
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.
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:
William Steiner
Anthony J. Horan<ANTHONY.HORAN@chase.com>
[INQUIRY LETTER]
January 18, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 2 JPMorgan Chase & Co. (JPM)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Independent Lead Director
William Steiner
Ladies and Gentlemen:
This responds to the company January 11, 2008 no action requestone of two
company no action requests dated January 11, 2008 regarding broker letters.
The company provided no evidence that it adequately informed the proponent of
the requirements for proof of ownership. The company exhibit of its one-page
letter regarding proof of ownership does not reference any attachment
whatsoever.
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 14, 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 proposal since the company had the
first opportunity
Sincerely,
John Chevedden
cc:
William Steiner
Anthony J. Horan<ANTHONY.HORAN@chase.com>
[INQUIRY LETTER]
January 31, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
# 3 JPMorgan Chase & Co. (JPM)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Independent Lead Director
William Steiner
Ladies and Gentlemen:
In further response to the company January 11, 2008 no action request the
company "vague" argument fails to note that just as the company encourages its
shareholders to access proxy materials via electronic delievery, that these same
shareholders can easily access the widely-known Council of Institutional
Shareholders core definition of independence via the Internet.
The following quote is from the 2007 company proxy (bold added after the
heading):
Electronic delivery of proxy materials and annual report
You may access this proxy statement and our annual report to shareholders on our
Web site at www.jpmorganchase.com, under the Investor Relations tab. From the
Investor Relations tab, you also may access our 2006 Annual Report on Form 10-K,
by selecting "Financial information" and then "SEC filings".
If you would like to reduce the Firm's costs of printing and mailing proxy
materials for next year's annual meeting of shareholders, you can opt to receive
all future proxy statements, proxy cards and annual reports electronically via
e-mail or the Internet rather than in printed form. To sign up for electronic
delivery, please visit https://icsdelivery.com/jpm/index.html and follow the
instructions to register. Or alternatively, if you vote your shares using the
Internet, when prompted, indicate that you agree to receive or access
shareholder communications electronically in future years. Prior to next year's
meeting, you will receive an e-mail notification that the proxy materials and
annual report are available on the Internet and instructions for voting by
Internet. Electronic delivery will continue in future years until you revoke
your election by sending a written request to the Secretary at the address
provided above under "Important notice regarding delivery of security holder
documents". If you are a beneficial, or "street name", shareholder who wishes to
register for electronic delivery, you should review the information provided in
the proxy materials mailed to you by your broker, bank, or other nominee.
The company fails to note that more than 65% of its shares are held by
institutional shareholders, who already know the core definition of independence
by the Council of Institutional Investors or who are most capable of locating it
within minutes.
The company does not provide any information on any purported history of change
of the core definition of independence by the Council of Institutional
Investors.
The company fails to take into consideration that the internet access of its
shareholder is probably at an all-time high. The company makes no comparison of
the internet usage of its shareholders currently, as measured by its own
internet voting, compared to its shareholders' internet usage on the dates of
the company's purported precedents.
Additionally the company has not provided any historical information that a term
that a few shareholders might not be familiar with will trigger a stampede of
yes-votes after the company advises a no-vote.
The company essentially argues that if a small minority of shareholders might
not fully understand a term in an otherwise clear proposal, then all
shareholders should be held back and excluded from voting on the topic.
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 14, 2008 and January 18, 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,
John Chevedden
cc:
William Steiner
Anthony J. Horan<ANTHONY.HORAN@chase.com>
[STAFF REPLY LETTER]
March 5, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: JPMorgan Chase & Co. Incoming letter dated January 11, 2008
The proposal requests that the board adopt a bylaw to provide for an independent
lead director, using the standard of independence set by the Council of
Institutional Investors.
There appears to be some basis for your view that JPMorgan Chase may exclude the
proposal under rule 14a-8(i)(3) as vague and indefinite. Accordingly, we will
not recommend enforcement action to the Commission if JPMorgan Chase omits the
proposal from its proxy materials in reliance on rule 14a-8(i)(3). In reaching
this position, we have not found it necessary to address the alternative basis
for omission upon which JPMorgan Chase relies.
Sincerely,
/s/
Greg Belliston
Special Counsel
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