Company Name: McDonald's Corp.
Public Availability Date: January 31, 2008Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 18, 2008
VIA FEDEX AND ELECTRONIC MAIL
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: McDonald's Corporation - Intention to Omit Shareholder Proposal of Professor
Lucian Bebchuk
Ladies and Gentlemen:
This letter is to inform you that McDonald's Corporation (the "Company") intends
to exclude from its proxy statement and form of proxy for the Company's 2008
Annual Shareholders' Meeting (collectively, the "2008 Proxy Materials") a
shareholder proposal and statement in support thereof (the "Proposal") received
from Lucian Bebchuk (the "Proponent"). The Proposal recommends that the
Company's Board of Directors (the "Board") adopt a by-law mandating inclusion in
the Company's proxy materials of any "qualified proposal" for an amendment of
the Company's by-laws that is submitted by a shareholder even where such
proposal could otherwise be properly excluded under Exchange Act Rule 14a-8. The
Proponent's letter setting forth the Proposal is attached hereto as Exhibit A.
We hereby respectfully request that the Staff of the Division of Corporation
Finance (the "Staff") concur in our opinion that the Proposal may be properly
excluded from the 2008 Proxy Materials pursuant to Rules 14a-8(i)(1), (2) and
(3) for the reasons set forth below. In support of our position that the
Proposal may be excluded pursuant to Rules 14a-8(i)(1) and (2), an opinion on
Delaware law from the law firm of Morris, Nichols, Arsht & Tunnell LLP (the
"Opinion") is attached hereto as Exhibit B.
By copy of this letter, we also are notifying the Proponent of the Company's
intention to omit the Proposal from the 2008 Proxy Materials. Pursuant to
guidance set forth on the Commission's web site at www.sec.gov/contact/mailboxes.htm,
we are submitting this letter via e-mail to cfletters@sec.gov with six (6)
confirmatory hard copies to be filed concurrently with the Staff via mail. The
Company intends to file its definitive 2008 Proxy Materials with the Commission
no earlier than April 7, 2008; accordingly, pursuant to Rule 14a-8(j), we submit
this letter not less than 80 days before the Company intends to file its 2008
Proxy Materials. We also attach hereto as Exhibit C the Company's additional
correspondence with the Proponent.
I. The Proposal
The Proposal requests the Board to adopt a by-law that would require the Company
to include in its proxy materials any shareholder proposal for an amendment of
the Company's by-laws that complies with most, but not all, of the eligibility
and procedural requirements that the Commission imposes on shareholder proposals
through Rule 14a-8, but eliminates all of the substantive bases for excluding
proposals under Rule 14a-8(i) other than the legal validity of the proposed
by-law amendment. The Proponent believes that because the Commission's rules
allow, but do not require, companies to exclude proposals pursuant to Rule
14a-8(i), shareholders may submit a shareholder proposal pursuant to Rule 14a-8
that seeks to replace the Commission's Rule 14a-8 regulatory framework with a
shareholder's less restrictive criteria for regulating future shareholder
proposals.
II. The Proposal is Contrary to the Commission's Proxy Rules and Therefore May
be Excluded Pursuant to Rule 14a-8(i)(3)
The Company may properly exclude the Proposal pursuant to Rule 14a-8(i)(3). Rule
14a-8(i)(3) permits exclusion of any shareholder proposal that is contrary to
the proxy rules. The Proposal may be excluded on this basis because, contrary to
the proxy rules, it seeks to remove the Company from the Commission's framework
for regulating the contents of the Company's proxy materials. The irony of a
shareholder proposal made pursuant to Rule 14a-8 that seeks the evisceration of
the very rule under which it purports to be made exposes its flaws. The
Commission did not draft Rule 14a-8 to include the seeds of its own destruction.
A. The Staff Has Already Considered and Permitted Exclusion of a Similar
Proposal Pursuant to Rule 14a-8(i)(3)
Presented 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) as contrary to the proxy rules. State Street
Corporation (Feb. 3, 2004). Like the Proposal submitted to the Company, the
proposal in State Street would have required State Street to include on its
proxy every proposed by-law amendment that met certain criteria drawn from, but
less restrictive than, those specified by Rule 14a-8. In State Street, the
proposal would have required inclusion of all proposals that were timely
submitted. State Street argued it could exclude the proposal on multiple
grounds, including pursuant to Rule 14a-8(i)(3): "[t]he [proposal's] attempt to
clothe stockholders with rights of access to [State Street's] proxy statement
and form of proxy absent compliance with Rule 14a-8 is flatly inconsistent with
the scheme for access to the corporate machinery that the Commission has
carefully crafted, including under Rule 14a-8." (emphasis in original). State
Street concluded that exclusion pursuant to Rule 14a-8(i)(3) was warranted
because the proposal "would both (1) eliminate the requirement of compliance
with Rule 14a-8 for access to the proxy material, and (2) impose new obligations
on State Street's proxy statement and form of proxy that Regulation 14A does not
recuire...." The Staff concurred with the exclusion on the grounds that the
proposal was contrary to the proxy rules pursuant to Rule 14a-8(i)(3).
While the Proposal submitted to the Company garnishes its definition of
"qualified proposal" with a handful of additional procedural and eligibility
requirements drawn from Rule 14a-8, it remains, for the same reasons adopted by
the Staff in State Street, properly excludable pursuant to Rule 14a-8(i)(3).
Rule 14a-8 is not a menu from which shareholders can pick and choose selective
requirements to create a new regulation - a "Rule 14a-8 Lite" - that must be
applied by companies to future shareholder proposals made under the federal
proxy rules. The Proponent has added a few more ingredients from Rule 14a-8 than
were included in the State Street proposal, but his proposal still shares the
same fundamental flaw contained in the State Street proposal of undermining the
Commission's carefully crafted regulatory framework.
B. The Commission Has Already Considered and Rejected the Logic Underlying the
Proponent's Proposal
The Commission has also already considered and rejected the logic underlying the
Proposal. The Proposal is premised on the notion that shareholders should have
the ability to formulate their own rules with regard to the inclusion of
shareholder proposals in a company proxy. The Commission has, however, already
considered and rejected this notion on two occasions as not in the best
interests of shareholders.
During a comprehensive review of the shareholder proposal process in 1982, the
Commission considered alternative frameworks that would have dramatically
changed the regulation of shareholder access to the proxy statement. See
Securities Exchange Act Release No. 34-19135 (Oct. 14, 1982). One approach would
have required the inclusion of any proposal proper under state law, aside from
those concerning the election of directors. Another approach would have
supplemented the Rule 14a-8 framework by allowing shareholders and companies to
develop their own rules and procedures governing inclusion of shareholder
proposals, the very end the Proponent seeks to achieve through his Proposal. A
recent Commission release which again confirmed the Commission's longstanding
policies explained the approach of the 1982 proposal that was rejected:
The proposed approach [of the 1982 proposal] would have allowed a company's
board of directors and shareholders, rather than the Commission or its staff, to
make judgments as to what proposals should be included in the company's proxy
materials at the company's expense. The plan could have been proposed by either
the company's board of directors or shareholders, and subject to certain minimum
requirements, the provisions of the plan could have been as liberal or
restrictive as shareholders were willing to approve.
Securities Exchange Act Release No. 34-56160 (July 27, 2007) at 51, note 71.
After several months of public comment and debate, the Commission decided in
1983 against adopting either of these proposals on the determination that "the
basic framework of [the then] current Rule 14a-8 provides a fair and efficient
mechanism for the [shareholder] proposal process, and that with [certain
modifications to the rule and interpretations thereunder adopted thereto], [the
current Rule 14a-8 framework] should serve the interests of shareholders and
issuers well." Securities Exchange Act Release No. 34-20091 (Aug. 16, 1983).
The Commission more recently revisited the idea of allowing shareholders and
companies to develop their own rules and procedures governing shareholder
proposals in its proposing release on shareholder access. See Securities
Exchange Act Release No. 34-56160 (July 27, 2007). In this proposing release,
the Commission specifically requested public comment on whether a board of
directors should "be able to adopt a bylaw setting up a separate procedure for
non-binding shareholder proposals and be able, under [the Commission's] proxy
rules to follow that procedure in lieu of Rule 14a-8." Id. However, the
Commission, in its ultimate adopting release, once again decided to retain the
existing Rule 14a-8 framework and determined not to alter its position that the
current framework governing shareholder proposals best serves the interests of
shareholders. See Securities Exchange Act Release No. 34-56914 (Dec. 7, 2007).
Thus, after years of public debate and comment, the Commission has, on two
distinct occasions, carefully considered and decided against changing the proxy
rules to allow shareholders and companies to set their own rules, distinct from,
or more or less restrictive than, Rule 14a-8. Since the Commission has taken the
position that the proxy rules should not be altered to allow shareholder or
company driven governance of shareholder proposals in lieu of Rule 14a-8, it
follows that the proxy rules currently do not permit shareholders or companies
to develop their own procedures for inclusion of shareholder proposals.
Shareholder proposals that seek to achieve this same end are therefore
excludable pursuant to Rule 14a-8(i)(3) as contrary to the proxy rules.
C. The Proposal's Attempt to Eliminate the Company's Discretion in Excluding
Shareholder Proposals is Contrary to the Proxy Rules
Congress has, through the Exchange Act, vested the Commission with the authority
to promulgate rules relating to the solicitation of proxies. Pursuant to this
authority, the Commission has developed a framework for governing shareholder
proposals that is evidenced in Rule 14a-8. Through conscious policy decisions
formed and refined after decades of public debate and comment, the Commission
has decided to govern shareholder proposals under a framework in which a company
may, in its discretion, exclude a proposal that is brought under Rule 14a-8 if
it falls within the various 14a-8(i) categories. Allowing discretion rather than
making exclusion mandatory was clearly not an oversight: the Commission has over
the decades been well within its authority to adopt such a standard. But it has
not. Instead, the Commission has consciously opted for a case-by-case approach
that provides companies with the flexibility with which to govern the contents
of their proxy statements based on the specific circumstances they face.
Discretion is clearly an integral part of the Commission's well-established
framework for regulating shareholder proposals.
Contrary to the proxy rules, the Proposal seeks to deprive a company of the
discretion that the Commission has deliberately provided it through its
regulatory framework governing shareholder proposals. The Proposal thus attempts
to alter the Commission's framework for regulating shareholder proposals and
thus may be excluded as contrary to the proxy rules pursuant to Rule
14a-8(i)(3).
D. The Proposal Would Require Inclusion in the Company Proxy Materials of
Proposals Inconsistent with the Commission's Policy Determinations
The Commission has carefully crafted the elements of Rule 14a-8 to reflect its
conscious policy decisions regarding the form and content of, and procedure for
submitting, shareholder proposals. The Proponent's proposed regime of selective
and incomplete compliance with Rule 14a-8 compromises the Commission's
regulatory authority and its ability to protect the interests of shareholders.
The Proposal seeks to require the Company to include in its proxy materials
proposed by-law amendments without regard to whether the substance of such
amendments would be inconsistent with the Commission's articulated policy
determinations. Rule 14a-8(i) permits exclusion of shareholder proposals from a
company's proxy statement that relate to, inter alia, personal grievances or
special interests not shared by other shareholders at large, proposals that
relate to an immaterial part of its business, proposals that directly conflict
with one of the company's own proposals to be submitted at the meeting, and
proposals that deal with matters relating to the company's ordinary business
operations. Through its rule-making, the Commission has decided that requiring
companies to include in their proxy materials the types of shareholder proposals
mentioned above - whether or not they would be valid by-laws if adopted by the
board or initiated by shareholders in an independent proxy solicitation- does
not serve shareholder interests and does not promote effective corporate
governance.
Take, for instance, the Commission's policy statements regarding shareholder
proposals seeking redress of a personal grievance, which are excludable under
Rule 14a-8(i)(4): the Commission has indicated that the purpose of the Rule was
"to insure that the security holder proposal process would not be abused by
proponents attempting to achieve personal ends that are not necessarily in the
common interest of the issuers shareholders generally," Securities Exchange Act
Release No. 34-20091 (August 16, 1983) and that the cost and time involved in
dealing with such abuse "do a disservice to the issuer and its security holders
at large." Securities Exchange Act Release No. 34-19135 (October 14, 1982). The
Staff has consistently permitted exclusion of such proposals pursuant to Rule
14a-8(i)(4), see General Electric Company (January 9, 2006); Morgan Stanley
(January 14, 2004); The Southern Company (January 21, 2003). Yet, if
implemented, the Proposal could lead to the cluttering of the proxy materials
with a potentially limitless number of proposals seeking by-law amendments that
attempt to redress personal grievances such as proposals to require the annual
meeting to be held in the shareholder's hometown, to establish director
qualification requirements that directors be union members, or to form
shareholder committees financed with company funds to investigate personal
grievances.
The Proposal, if implemented, would additionally require inclusion in the proxy
materials of other types of distracting, immaterial and disruptive proposals
that the Staff traditionally allows companies to exclude - including, inter
alia: (i) proposals relating to a company's ordinary business operations under
Rule 14a-8(i)(7), see, e.g., Citigroup (December 31, 2007) and (ii) proposals
immaterial to the company's business under Rule 14a-8(i)(5), see, e.g., Merck &
Co., Inc (January 4, 2004) - provided the proponent could draft them in the form
of by-law amendments. This outcome would amount to an end-run around the
Commission's carefully crafted policy determinations with regard to the contents
of shareholder proposals relating to the Company's ordinary business operations
or immaterial to the Company's business by permitting any shareholder proposals
that could be drafted in the form of a by-law amendment to be exempt from the
substantive limitations set forth in Rule 14a-8(i). Moreover, due to the
possibility of information overload, the Proponent's by-law could reduce the
time that shareholders devote to considering proposals and consequently reduce
the quality of shareholder engagement.
Finally, the Proponent's proposed piecemeal revision of Rule 14a-8 is not
limited to the Rule's substantive requirements: while the Proposal incorporates
most of the Rule 14a-8 procedural requirements, it truncates the eligibility
requirements set forth in Rule 14a-8(b)(1), which requires, inter alia, that
shareholders "must continue to hold [their shares] through the date of the
meeting." In adopting an amendment to a predecessor of this eligibility rule,
the Commission explained that "[t]he purpose of [a prior version of this rule]
is to assure that the proponent will maintain an investment interest in the
issuer through the meeting date." Securities Exchange Act Release No. 34-12999
(Nov. 22, 1976) at 2. The Proposal, if implemented, would however force the
Company to completely disregard the Commission's policy concerns by requiring
the Board to include in the proxy materials and consider at annual meetings
shareholder proposals submitted by proponents who, at the time of the annual
meeting, no longer own shares of, and hence no longer maintain any investment
interest in, the Company. The idea that the Board would be required to include
in the Company's proxy materials a proposal submitted by a proponent who no
longer held shares at the time of the Company meeting is moreover plainly
inconsistent with the well-established paradigm that the proxy should closely
approximate the shareholder meeting: "[o]ur regulations have been designed to
facilitate the corporate proxy process so that it functions, as nearly as
possible, as a replacement for an actual, in-person gathering of security
holders `to control the corporation as effectively as they might have by
attending a shareholder meeting.'" Securities Exchange Act Release No. 34-56160
(July 27, 2007) at 10-11. Nothing could be more clearly antithetical to this
principle than requiring shareholders to vote on a proposal offered by a
proponent who is not even a shareholder at the time of the shareholder meeting.
E. The Proposal Would Undermine the Commission's Recent Position on Shareholder
Access
The most immediate and predictable effect of the implementation of the Proposal
would be to undermine completely the Commission's recently reaffirmed stance on
shareholder access to company proxy statements for director nominations.
Following months of public comment to the Commission's proposed rules and years
of discussion, in December 2007, the Commission adopted an amendment to Rule
14a-8(i)(8) reaffirming its position that shareholder proposals relating to the
process of director elections, including those seeking shareholder access to the
company's proxy, could be categorically excluded pursuant to the Rule. See
Securities Exchange Act Release No. 34-56914 (Dec. 7, 2007). In its adopting
release, the Commission explains that the use of shareholder proposals as a
means for nominating directors would compromise the integrity of director
elections, as nominations via shareholder proposals would circumvent several of
the proxy rules intended to promote investor protection through full and
accurate disclosure including Rules 14a-3 and 14a-12 and Items 4(b) and 5(b) of
Schedule 14A. See id..
The Proposal would provide a means for circumventing the Commission's recent
policy decision. In essence, the Proposal seeks to accomplish in two steps what
the Commission foreclosed in one: if the Proposal were supported by shareholders
and implemented by the Company, the Company would be required to include in its
proxy materials any future "qualified proposal" that sought a shareholder access
by-law. This blatant attempt to perform an end-run around the proxy rules would,
for the reasons articulated by the Commission in its recent release, compromise
the integrity of director elections and more broadly reduce the Commission's
oversight and ability to protect investors.
It should be noted that the Commission has already provided shareholders with
two distinct avenues for submitting proposals for a vote at a company's annual
meeting: in addition to submitting a proposal for inclusion on the company's
proxy statement pursuant to Rule 14a-8, a shareholder may also independently
solicit his or her own proxies. The Proponent attempts to impose a third regime
a "Rule 14a-8 Lite" not by means of the proper, public process for proposing
rule changes, but instead through the guise of a company-specific shareholder
proposal proffered under Rule 14a-8.
III. The Proposal is Not a Proper Subject for Action by Shareholders Under
Delaware Law and Would, if Implemented, Require the Board to Violate Delaware
Law, and Therefore May be Excluded Under Rules 14a-8(i)(1) and 14a-8(i)(2)
The Company may also properly exclude the Proposal pursuant to Rule 14a-8(i)(1),
which permits exclusion of any shareholder proposal that is not a proper subject
for action by shareholders under the jurisdiction of the company's organization,
and Rule 14a-8(i)(2), which permits exclusion of any shareholder proposal that,
if implemented, would cause the Company to violate state law. For the reasons
set forth in greater detail in the Opinion, we believe that the Proposal, if
implemented, would violate the Delaware General Corporation Law ("DGCL") and is
thus not a proper subject for action by shareholders under Delaware law.
If implemented, the resulting by-law would cause the Company to contravene
Sections 141(a) and 146 of the DGCL and an analogous provision in the Company's
certificate of incorporation (the "Certificate") by preventing the Board from
fulfilling its fiduciary duty to manage the business and affairs of the Company.
The Proposal seeks to deprive the Board of its ability to determine the matters
to be included in the Company's proxy statement for action by shareholders
including whether "qualified proposals" may be excluded from the proxy
materials.
Section 141(a) of the DGCL articulates the fundamental Delaware law principle
(which is also set forth in the Certificate) that the business and affairs of a
corporation shall be managed by or under the direction of its board of
directors. As explained in the Opinion, Section 146 of the DGCL further
contemplates that a Board must approve a matter before agreeing to submit it to
shareholders as part of the Company's proxy statement, other than as required by
federal law through Rule 14a-8. Moreover, under Delaware law, "directors cannot
lawfully agree to surrender to others the duties of corporate management which
the statutes impose upon them," Rosenblatt v. Getty Oil Co., No 5278, 1983 WL
8936, at *18 (Del Ch. Sept. 19, 1983), aff'd,
493 A.2d 929 (Del. 1985), and the
fact that shareholders approve a corporate action does not exonerate directors
who do not exercise proper business judgment consistent with their fiduciary
duties. Smith v. Van Gorkom, 488 A. 2d 858, 873 (Del. 1985). However, it is
precisely such an abdication of the Board's Section 141(a) duties that the
Proposal seeks to implement.
Because directors are charged with fiduciary responsibility for the management
of the corporation's business, they are also responsible for decisions about the
use of corporate property. A fundamental element of the Board's Section 141(a)
obligation is its authorship and dissemination to shareholders of the corporate
proxy materials. However, the Proposal, if implemented, would mandate that the
Board abandon its critical fiduciary responsibility by requiring the inclusion
of shareholder proposals irrespective of the Board's good faith determination;
indeed, going forward, that responsibility would permanently (unless and until
the by-law is amended or repealed) be vested in the Proponent (who drafted it)
and the one-off majority of shareholders (who approved it).
The Proposal would require inclusion of any number, perhaps dozens, of
shareholder proposals for amendments to the Company by-laws that, for instance,
are immaterial to the Company's business or relate to personal grievances or
ordinary business functions. The costs of reviewing and responding to each
proposal and engaging legal counsel to determine which proposals are "qualified
proposals" could be substantial, as would the distraction to management and
shareholders. Notwithstanding the express language of Delaware law and the
Certificate to the contrary, the Proposal would take away the Board's ability to
determine in its informed business judgment that the publication and mailing of
a lengthy proxy statement filled with such superfluous proposals is not in the
best interests of the Company and its shareholders and not a prudent use of
corporate funds. The dereliction of the directors' fundamental fiduciary
obligations mandated by the proposed by-law is thus clearly inconsistent with
the role of the Board contemplated by Sections 141(a) and 146 of the DGCL, and
the Proposal is therefore not a proper subject for action by shareholders under
Delaware law.
We also note that, although the Proposal "recommends" that the Company adopt the
proposed by-law amendment, even a precatory proposal is excludable if the action
called for by the proposal would violate state, federal or foreign law. See,
e.g., MeadWestvaco Corporation (Feb. 27, 2005) (concurring that a proposal
recommending amendment of the company's by-laws to require majority stockholder
approval to authorize certain levels of executive compensation is excludable
under Rule 14a-8(i)(2)).
For the foregoing reasons and in the legal opinion of the Company's Delaware
counsel, Morris, Nichols, Arsht & Tunnell LLP, attached hereto as Exhibit B, the
Proposal may be properly excluded from the 2008 Proxy Materials under Rules
14a-8(i)(1) and (2).
IV. Conclusion
Based on the foregoing, we respectfully request that the Staff concur in our
opinion that the Proposal may be properly excluded from the 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. Should you
disagree with the conclusions set forth herein, we respectfully request the
opportunity to confer with you prior to the determination of the Staff's final
position. Please feel free to call the undersigned or Eric S. Robinson or Igor
Kirman at 212-403-1000 with any questions or comments regarding the foregoing.
Very truly yours,
/s/
Andrew R. Brownstein
Attachment
cc: Professor Lucian Bebchuk (w/attachments)
[APPENDIX 1]
December 10, 2007
VIA TELECOPY AND VIA OVERNIGHT MAIL
Corporate Secretary
McDonald's Corporation
McDonald's Plaza
Oak Brooke, IL 60523
Re: Sharcholder Proposal of Lucian Bcbchuk
To: Corporate Secrctary
I am the owner of 75 shares of common stock of McDonald's Corporation (the
"Company"). which I have continuously held for more than I year as of today's
date. I intend to continue to hold these securities through the date 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]
RESOLVED that stockholders of McDonald's Corporation recommend that the Board of
Directors adopt a By-Law provision under which the Corporation, to the extent
permitted under federal law and state law, 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. A qualified proposal refers
in this resolution to a proposal that satisfies the following requirements:
(a) The proposed amendment of the By-Laws 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
(1) 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.
SUPPORTING STATEMENT:
Statement of Professor Lucian Bebchuk: In my view. the ability to place
proposals for By-Law amendments on the corporale 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 proposal 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
companiesbut do not currently require themto 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 a qualified proposal. 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.
[INQUIRY LETTER]
January 31, 2008
VIA FEDEX AND ELECTRONIC MAIL
Office of the Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: McDonald's CorporationIntention to Omit Shareholder Proposal of Professor
Lucian Bebchuk
Ladies and Gentlemen:
McDonald's Corporation (the "Company") hereby withdraws its request dated
January 18, 2008 for a no-action letter regarding its intention to exclude from
its proxy statement and form of proxy for its 2008 Annual Shareholders' Meeting
a share-holder proposal and statement in support thereof (the "Proposal")
received from Lucian Bebchuk (the "Proponent"). The Proponent has withdrawn the
Proposal in a letter to the Company dated January 30, 2008, which is attached
hereto as Attachment A.
Please call the undersigned at 212-403-1000 if we may be of any further
assistance in this matter.
Very truly yours,
/s/
Andrew R. Brownstein
cc: Professor Lucian Bebchuk (w/attachments)
[INQUIRY LETTER]
January 30, 2008
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 McDonald's
Corporation'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 McDonald's Corporation ("McDonald's" or the
"Company") on December 10, 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 McDonald's is attached
as Exhibit B.
Sincerely,
/s/
Michael J. Barry
cc: Andrew R. Brownstein, Esquire
[STAFF REPLY LETTER]
January 31, 2008
Andrew R. Brownstein
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019-6150
Re: McDonald's Corporation
Dear Mr. Brownstein:
This is in regard to your letter dated January 31,
2008 concerning the shareholder proposal submitted by Lucian Bebchuk for
inclusion in McDonald's proxy materials for its upcoming annual meeting of
security holders. Your letter indicates that the proponent has withdrawn the
proposal, and that McDonald's therefore withdraws its January 18, 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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