The Kraft Heinz Company Stockholder Proposal of Wallace Global Fund Securities Exchange Act of 1934 – Rule 14A-8
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GIBSON DUNN Gibson, Dunn & Crutcher LLP 200 Park Avenue New York, NY 10166-0193 Tel 212.351.4000 www.gibsondunn.com Lori Zyskowski Direct: +1 212.351.2309 Fax: +1 212.351.6309 [email protected] January 7, 2021 VIA E-MAIL Office of Chief Counsel Division of Corporation Finance Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Re: The Kraft Heinz Company Stockholder Proposal of Wallace Global Fund Securities Exchange Act of 1934 – Rule 14a-8 Ladies and Gentlemen: This letter is to inform you that our client, The Kraft Heinz Company (the “Company”), intends to omit from its proxy statement and form of proxy for its 2021 Annual Meeting of Stockholders (collectively, the “2021 Proxy Materials”) a stockholder proposal relating to a report on plastic packaging (the “Proposal”) and statements in support thereof received from As You Sow (the “Representative”) purportedly on behalf of Wallace Global Fund (the “Proponent”). Pursuant to Rule 14a-8(j), we have concurrently sent copies of this correspondence to the Proponent. Rule 14a-8(k) and Staff Legal Bulletin No. 14D (Nov. 7, 2008) (“SLB 14D”) provide that stockholder 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 the Proposal, a copy of that correspondence should be furnished concurrently to the undersigned on behalf of the Company pursuant to Rule 14a-8(k) and SLB 14D. BASIS FOR EXCLUSION We hereby respectfully request that the Staff concur in our view that the Proposal may properly be excluded from the 2021 Proxy Materials pursuant to Rule 14a-8(b) and Rule 14a- 8(f)(1) because the Proponent (i) failed to provide the requisite proof of continuous stock ownership in response to the Company’s proper request for that information and (ii) the BeiJing • Brussels• Century City• Dallas • Denver • Duba i • Frankfurt• Hong Kong • London• Los Angeles • Munich New York • Orange County • Palo Alto • Paris • San Francisco • Sao Pau lo • Singapore • Washington, D.C. GIBSON DUNN Office of Chief Counsel Division of Corporation Finance January 7, 2021 Page 2 Representative failed to demonstrate authority to submit the Proposal on the Proponent’s behalf. BACKGROUND The Proposal was submitted to the Company by the Representative via email and received by the Company on November 27, 2020. See Exhibit A. The Proponent did not include with such letter any documentary evidence of ownership of Company shares. In addition, the Company reviewed its stock records, which did not indicate that the Proponent was a record owner of Company shares. Further, the submission did not include any evidence of the Proponent’s delegation of authority to the Representative. Accordingly, the Company properly sought verification of stock ownership and other documentary support from the Proponent. Specifically, the Company sent the Representative a letter dated December 4, 2020, identifying the deficiencies, notifying the Proponent of the requirements of Rule 14a-8 and explaining how the Proponent could cure the procedural deficiencies (the “Deficiency Notice”). The Deficiency Notice, attached hereto as Exhibit B, provided detailed information regarding the “record” holder requirements, as clarified by Staff Legal Bulletin No. 14F (Oct. 18, 2011) (“SLB 14F”), and attached a copy of Rule 14a-8 and SLB 14F. Specifically, the Deficiency Notice stated: • the ownership requirements of Rule 14a-8(b); • that, according to the Company’s stock records, the Proponent was not a record owner of sufficient Company shares; • the type of statement or documentation necessary to demonstrate beneficial ownership under Rule 14a-8(b), including “a written statement from the ‘record’ holder of [the Proponent’s] shares (usually a broker or a bank) verifying that [the Proponent] continuously held the required number or amount of Company shares for the one-year period preceding and including November 27, 2020”, the date the Proposal was submitted to the Company; • that evidence of the Proponent authorizing the Representative to act on its behalf as of the date the Proposal was submitted was required per the guidance of Staff Legal Bulletin No. 14I (Nov. 1, 2017) (“SLB 14I”); and • that any response had to be postmarked or transmitted electronically no later than 14 calendar days from the date the Representative received the Deficiency Notice. GIBSON DUNN Office of Chief Counsel Division of Corporation Finance January 7, 2021 Page 3 The Company sent the Deficiency Notice to the Representative via email and overnight delivery on December 4, 2020, which was within 14 calendar days of the Company’s receipt of the Proposal. Overnight delivery service records confirm delivery of a physical copy of the Deficiency Notice to the Representative at 9:59 a.m. on December 7, 2020. See Exhibit C. The Company received a response to the Deficiency Notice from the Representative via email on December 7, 2020, in which the Representative confirmed receipt of the Deficiency Notice and informed the Company that it intended to respond to the Deficiency Notice within 14 days of receipt, by December 18, 2020. See Exhibit D. However, no response to the Deficiency Notice was received. To date, more than thirty days from the date the Representative received the Deficiency Notice, the Company still has not received any documentary support from the Proponent regarding its eligibility to submit the Proposal. Subsequently, on December 22, 2020, after the 14-day deadline to cure deficiencies passed, the Company sent a courtesy email to the Representative to inquire about the status of a response to the Deficiency Notice and whether such response had been sent via mail to the Company. See Exhibit E. In addition, the Company sent a second courtesy email to the Representative on January 4, 2021 informing the Representative that the Company had not yet received a response to the Deficiency Notice. See Exhibit F. As of the date of this letter, the Company has not received any further correspondence from the Representative or Proponent relating to the Proposal. ANALYSIS I. The Proposal May Be Excluded Under Rule 14a-8(b) And Rule 14a-8(f)(1) Because The Proponent Failed To Timely Establish Eligibility To Submit The Proposal Despite Proper Notice. The Company may exclude the Proposal under Rule 14a-8(f)(1) because the Proponent failed to substantiate its eligibility to submit the Proposal under Rule 14a-8(b). Rule 14a-8(b)(1) provides, in part, that “[i]n order to be eligible to submit a proposal, [a stockholder] must have continuously held at least $2,000 in market value, or 1%, of the company’s securities entitled to be voted on the proposal at the meeting for at least one year by the date [the stockholder] submit[s] the proposal.” Staff Legal Bulletin No. 14 specifies that when the stockholder is not the registered holder, the stockholder “is responsible for proving his or her eligibility to submit a proposal to the company,” which the stockholder may do by one of the two ways provided in Rule 14a-8(b)(2). See Section C.1.c, Staff Legal Bulletin No. 14 (Jul. 13, 2001). Further, the Staff has clarified that these proof of ownership letters must come from the “record” holder of the Proponent’s stock, and that only Depository Trust GIBSON DUNN Office of Chief Counsel Division of Corporation Finance January 7, 2021 Page 4 Company (“DTC”) participants are viewed as record holders of securities that are deposited at DTC. See SLB 14F. Rule 14a-8(f) provides that a company may exclude a stockholder proposal if the proponent fails to provide evidence of eligibility under Rule 14a-8, including the beneficial ownership requirements of Rule 14a-8(b), provided that the company timely notifies the proponent of the problem and the proponent fails to correct the deficiency within the required time. Here, as established above, the Company satisfied its obligation under Rule 14a-8 by transmitting to the Representative in a timely manner the Deficiency Notice, which specifically set forth the information and instructions listed above and attached a copy of both Rule 14a-8 and SLB 14F. See Exhibit B. However, despite the clear explanation in the Deficiency Notice to provide the requisite documentary support, the Proponent failed to do so. As such, the Proposal may be excluded. The Staff has consistently concurred with the exclusion of stockholder proposals based on a proponent’s failure to provide satisfactory evidence of eligibility under Rule 14a-8(b) and Rule 14a-8(f)(1). See Exxon Mobil Corp. (avail. Feb. 13, 2017) (concurring with the exclusion of a stockholder proposal under Rule 14a-8(b) and Rule 14a-8(f) and noting that “the proponent appears to have failed to supply, within 14 days of receipt of ExxonMobil’s request, documentary support sufficiently evidencing that she satisfied the minimum ownership requirement for the one-year period required by rule 14a-8(b)”); Cisco Systems, Inc. (avail. Jul. 11, 2011); I.D. Systems, Inc. (avail. Mar. 30, 2011); Amazon.com, Inc. (avail. Mar. 29, 2011); Yahoo! Inc. (avail. Mar. 24, 2011); Alcoa Inc. (avail. Feb. 18, 2009); Qwest Communications International, Inc. (avail. Feb. 28, 2008); Occidental Petroleum Corp. (avail. Nov. 21, 2007); General Motors Corp. (avail. Apr. 5, 2007); 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.