Securities Exchange Act of 1934 – Section 14(a) and Rule 14a-8 

College Retirement Equities fund – Fuller 

May 3, 2004 

Lisa Snow, Esq. 

Vice President and Chief Counsel 

College Retirement Equities Fund 

730 Third Avenue 

New York, NY 10017-3206 

 Re: College Retirement Equities Fund (“Fund”) 

Shareholder Proposal of Abigail A. Fuller 

 

Dear Ms. Snow: 

In a letter dated February 24, 2004, you notified the staff of the Securities and 

Exchange Commission (“Commission”) that the Fund intends to exclude from its proxy 

materials for its 2004 annual meeting a shareholder proposal submitted by letter dated 

February 11, 2004, from Abigail A. Fuller. The proposal provides: 

THEREFORE BE IT RESOLVED that the shareholder requests that TIAA-CREF 

divest all its shares of COSTCO and request that COSTCO repair damages to the 

society in Mexico and changes its corporate governance practices to include full ethical 

behavior. 

You request confirmation that we would not recommend enforcement action to the 

Commission if CREF excludes the Proposal in reliance on Rule 14a-8(i)(7) under the 

Securities Exchange Act of 1934, as amended. Rule 14a-8(i)(7) permits the exclusion of a 

shareholder proposal if “the proposal deals with a matter relating to the company's ordinary 

business operations.” 

There appears to be some basis for your opinion that the Proposal may be omitted from 

CREF's proxy materials pursuant to Rule 14a-8(i)(7). We note that the Proposal concerns a 

recommendation to sell CREF's position in one specific portfolio company. In this regard, the 

staff of the Commission has previously stated that it believes the ordinary business operations 

of an investment company include buying and selling portfolio securities.1

 In addition, 

although part of the proposal may address matters outside the scope of ordinary business, the 

staff of the Commission has previously stated that it is not its practice to permit revisions to 

 

1 See College Retirement Equities Fund (pub. avail. Sept. 7, 2000). 
Lisa Snow, Esq. 

May 3, 2004 

Page 2 

 

shareholder proposals otherwise excludible under the ordinary business exception.2

 

Accordingly, the Division will not recommend enforcement action to the Commission if 

CREF excludes the Proposal from its proxy materials in reliance on Rule 14a-8(i)(7). 

Because our position is based upon the facts recited in your letter, different facts or 

conditions or additional facts or conditions may require a different conclusion. Further, this 

response only expresses our position on enforcement action under Rule 14a-8 and does not 

express any legal conclusion on the issues presented. 

We note that the Fund did not file its reasons to exclude the proposal at least 80 

calendar days before the date on which it intends to file definitive proxy materials as required 

by Rule 14a-8(j)(1). Noting the circumstances of the delay, we grant the Fund’s request that 

the 80-day requirement be waived. 

For your reference, I have enclosed a brief description of the Division of Investment 

Management's informal procedures regarding shareholder proposals. If you have any 

questions or comments concerning this matter, please feel free to contact me at (202) 942-

0552. 

 Sincerely, 

 Harry Eisenstein 

 Senior Counsel 

 Office of Insurance Products 

2 See Z-Seven Fund, Inc. (pub. avail. November 3, 1999). 
DIVISION OF INVESTMENT MANAGEMENT 

INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS 

The Division of Investment Management believes that its responsibility with respect to 

matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy 

rules, is to aid those who must comply with the rule by offering informal advice and 

suggestions and to determine, initially, whether or not it may be appropriate in a particular 

matter to recommend enforcement action to the Commission. In connection with a 

shareholder proposal under Rule 14a-8, the Division's staff considers the information 

furnished to it by an investment company's proxy material, as well as any information 

furnished by the proponent or the proponent's representative. 

The staff will always consider information concerning alleged violations of the statutes 

administered by the Commission, including arguments as to whether or not proposed activities 

would be violative of the statute or rule involved. The receipt by the staff of such information, 

however, should not be construed as changing the staff's informal procedures and proxy 

review into a formal or adversary procedure. 

The determination reached by the staff in connection with a shareholder proposal 

submitted to the Division under Rule 14a-8 does not and cannot purport to "adjudicate" the 

merits of an investment company's position with respect to the proposal. Only a court, such as 

a U.S. District Court, can decide whether an investment company is obligated to include 

shareholder proposals in its proxy material. Accordingly, a discretionary determination not to 

recommend or take Commission enforcement action, does not preclude a proponent, or any 

shareholder of an investment company, from pursuing any rights he or she may have against 

the investment company in court, should the management omit the proposal from the 

investment company's proxy material. 
Lisa Snow, Esq. 

May 3, 2004 

Page 4 

INCOMING LETTERS – 1 

College Retirement

Equities Fund

730 Third Avenue 

New York, NY 10017-3206 

212 490-9000 

Lisa Snow 

Vice President and Chief Counsel 

(212) 916-5541 

(212) 916-5760 FAX 

lsnow@tiaa-cref.org

February 24, 2004 

William J. Kotapish, Esq. 

Assistant Director 

Division of Investment Management 

Securities and Exchange Commission 

450 5th Street, NW 

Washington, DC 20054 

Re: College Retirement Equities Fund’s Omission of Shareholder Proposal of 

Abigail A. Fuller

Dear Mr. Kotapish: 

The College Retirement Equities Fund (“CREF”) hereby gives notice to the staff of the 

Securities and Exchange Commission (the “Staff”) of CREF’s intention to omit from its proxy 

statement and form of proxy (“2004 Proxy Materials”) a shareholder proposal and supporting 

statement which was submitted to CREF by Abigail A. Fuller (the “Proponent” or “Fuller”) 

dated February 11, 2004 (the “Proposal”) for its 2004 annual meeting of shareholders.3

 Please 

be advised that pursuant to Rule 14a-8(j), CREF has simultaneously notified the Proponent of 

its intent to omit the Proposal from CREF’s proxy materials by a copy of this letter. 

The Proposal requests that CREF4

 divest its holdings of one specific stock, COSTCO 

Wholesale Corporation (“COSTCO”), and that CREF request COSTCO to repair damages to 

the society in Mexico and change its corporate governance policy. A copy of the proposal is 

attached hereto as Appendix A. 

 

3

 Unlike most other registered open-end investment companies, CREF voluntarily holds an annual meeting of its 

shareholders even though it is not required to do so under the Investment Company Act of 1940 or state law. 

This year, including the Proposal, CREF has received a total of 10 shareholder proposals for inclusion in its 

proxy materials. 

4

 For the purposes of this letter, it is assumed that the Proponent intended to submit her Proposal to CREF. 
Lisa Snow, Esq. 

May 3, 2004 

Page 5 

We request the Staff to confirm that it will not recommend that enforcement action be 

taken if CREF omits the Proposal from its proxy materials.5

 We believe that the Proposal may 

be omitted pursuant to paragraph (i)(3) and paragraph (i)(7) of Rule 14a-8 (the “Rule”) as 

discussed below.

CREF is a non-profit corporation established under the laws of New York State and 

registered with the Securities and Exchange Commission (“the “Commission”) as a diversified 

management company under the Investment Company Act of 1940 (“1940 Act”). Teachers 

Insurance and Annuity Association of America (“TIAA”), CREF’s companion organization, is 

a stock life insurance company. Together, through the issuance of variable and guaranteed 

annuity certificates, these companies comprise the principal retirement system for the nation’s 

education and research communities.

I. The Proposal may be excluded pursuant to Rule 14a-8(i)(7) 

A. The Proposal relates to CREF’s ordinary business operations.

Pursuant to paragraph (i)(7) of the Rule, CREF can omit a shareholder proposal if it 

“deals with a matter relating to the company’s ordinary business operations.” The Proposal, 

which principally requests CREF to divest it’s holding in the shares of one specific company, 

illustrates the type of interference with the conduct of ordinary business operations that 

paragraph (i)(7) is designed to prohibit. In essence, the Proposal would allow shareholders to 

dictate to CREF how the business and affairs of CREF should be managed, since the ordinary 

business of an investment company, like CREF, is selecting issuers in which to invest. 

The Proposal is substantially similar to a proposal CREF received on June 1, 2000 (the 

“Prior Proposal”) that was excluded pursuant to a no-action letter issued by the Staff (the 

“2000 Letter”).6

 There, the proposal requested CREF to divest its holdings of Freeport 

McMoRan Copper and Gold, Inc. from its Stock Account. The 2000 Letter permitted CREF 

to omit the Prior Proposal pursuant to Rule 14a-8(i)(7) because it related to the ordinary 

business operations of an investment company. In reaching its decision, the Staff noted that 

unlike proposals requesting the institution of a broad or fundamental corporate policy,7

 the 

Prior Proposal could 

 

5

 CREF respectfully requests that the Staff waive the requirement under Rule 14a-8(j) that the company file its 

reasons for excluding the Proposal no later than 80 calendar days before it files its definitive form of proxy with 

the Commission. The annual meeting of CREF has been historically held in November. The proxy statement for 

the 2003 annual meeting specifically noted that CREF was considering holding the 2004 annual meeting at an 

earlier date. CREF shareholders were subsequently notified that the annual meeting would be held in June 2004, 

and that the deadline for receiving shareholder proposals was February 12, 2004, allowing sufficient time for 

shareholder proposals to be submitted. CREF intends to file its definitive proxy statement on or about May 7, 

2004 in order to print and mail the over 2 million proxy materials required for this year's annual meeting. 

6 College Retirement Equities Fund (Sept. 7, 2000). 

7

 The Staff generally does not allow the exclusion of proposals relating to a broad or fundamental corporate 

policy. See e.g., College Retirement Equities Fund (Aug. 9, 1999) (the “1999 CREF Letter”) (proposal to 

establish a new socially conscious equity fund); Cargill Financial Markets PLC (Mar. 15, 1996) (proposal to 
Lisa Snow, Esq. 

May 3, 2004 

Page 6 

be excluded in reliance on Rule 14a-8(i)(7) since the ordinary business operations of an 

investment company include[s] buying and selling of portfolio securities.8

The policy and logic of the Staff’s position in this area is sound. If a registered 

investment company were vulnerable to being questioned by any or all of its shareholders with 

respect to every specific investment it makes, when those investments are consistent with law 

and the company’s stated policies, it could not operate. The cumulative effect of such requests 

would be to transfer the responsibility for decisions on whether to buy or sell securities from 

CREF’s investment adviser and management to its shareholders. 

B. The Proposal does not raise significant social policy issues.

The Staff has indicated that a shareholder proposal that would normally be excludable 

as dealing with a matter relating to a company's ordinary business operations may not be 

excludable if it raises significant social policy issues.9

 The Staff has determined that 

shareholder proposals involve significant social policies if they involve issues that engender 

widespread debate,10 media attention11 and legislative and regulatory initiatives.12 Here, the 

Proposal relates to the divestiture of a single portfolio investment. Therefore, although CREF 

appreciates the gravity of the allegations contained in the supporting statement, it believes that 

the Proposal itself is related to an ordinary business topic. 

C. The Proposal may be excluded in its entirety.

The Staff has previously noted in the context of operating companies that if any 

portion of a submission includes ordinary business matters, the entire submission may be 

excluded.13 The IBM and General Electric no-action letters were based upon long-standing 

Staff precedent that when any portion of a proposal implicates ordinary business matters, the 

entire proposal must be omitted under paragraph (i)(7) of the Rule. In the instant matter, the 

 convert the Fund to an open-end investment company); and The Charles Allmon Trust, Inc. (June 10, 1994) 

(proposal to change the advisory fee). 

8

 The Staff has stated a similar position in other no-action letters. See, 1999 CREF Letter (noting that the 

ordinary business of an investment company includes the “buying and selling of portfolio securities”) and Cargill 

Financial Markets PLC (Mar 15, 1996) (noting that the shareholder proposal in that no-action letter did not “deal 

with the ordinary operations of an investment company, such as the buying and selling of securities.”) 

9 See Rel. No. 34-40018 (1998). 

10 Staff Legal Bulletin No. 14A (July 12, 2002) (noting that the presence of widespread public debate regarding 

an issue is among the factors considered in determining whether the issue involves a significant social policy). 

See also, E.I. du Pont de Nemours and Company (Mar. 6, 2000). 

11 The Coca-Cola Company (Feb. 7, 2000). 

12 Synopsis, Inc. (July 12, 2002). 

13 See, e.g. International Business Machines Corporation (Jan. 9, 2001, reconsideration denied Feb. 14, 2001) and 

General Electric Company (Feb. 10, 2000). 
Lisa Snow, Esq. 

May 3, 2004 

Page 7 

Proponent’s request that CREF divest its holdings in a specific company, COSTCO, relates to 

ordinary business matters. Thus, the entire Proposal may be excluded. 

Based on the foregoing, the Proposal may properly be omitted from the 2004 Proxy 

Materials pursuant to Rule 14a-8(i)(7). 
Lisa Snow, Esq. 

May 3, 2004 

Page 8 

 

II. The Proposal may be excluded pursuant to Rule 14a-8(i)(3) 

Even if the Proposal is not excludable for the foregoing reasons, the Proposal and the 

supporting statement are contrary to the Commission’s proxy rules and can be omitted from 

the 2004 Proxy Materials under paragraph (i)(3) of the Rule. 

Under Rule 14a-8(i)(3), a company may exclude all or portions of a proposal if the 

proposal or supporting statement is contrary to any of the Commission's proxy rules. By 

extension, this includes proposals that are impermissibly vague and indefinite. In this regard, 

the Staff has consistently taken the position that shareholder proposals that are vague and 

indefinite are excludable under paragraph (i)(3) of the Rule as inherently misleading, because 

neither the voting shareholders nor CREF’s board would be able to determine with any 

reasonable amount of certainty what actions would be taken if the Proposal were adopted.14 

 In the instant matter, the Proponent requests that CREF “divest all of its shares of 

COSTCO and request that COSTCO repair damages to the society of Mexico and change[s] 

its corporate governance practices to include full ethical behavior.” The Proposal is vague 

because it is unclear what the Proponent means by “repair damages,” how such repair would 

be effected or calculated, and how CREF could request that COSTCO change its corporate 

governance practices. 

The Proposal is also internally inconsistent and would therefore only confuse 

shareholders and leave CREF's board without clear guidelines for implementation. Thus, it is 

unclear what actions or measures CREF could take to implement the Proposal and the manner 

in which the requested actions should be taken. For example, while the Proposal requests that 

CREF divest its holdings in one specific stock, it also requests that CREF request COSTCO to 

repair damages and change its corporate governance practices. If CREF divests of its holdings 

in COSTCO, then it would be further limiting its ability to ensure that COSTCO undertakes 

the requested actions. 

Based on the foregoing, the Proposal may properly be omitted from the 2004 Proxy 

Materials pursuant to Rule 14a-8(i)(3). 

14 See Smithfield Foods, Inc. (July 18, 2003) (allowing the company to exclude the proposal under Rule 14a8(i)(3) as vague and indefinite, based, in part, on the company's arguments that (i) the proposal did not inform 

shareholders of what the company would be required to do if the proposal were approved and (ii) if the 

shareholders were to approve the proposal, the company would not know what action to take to fulfill the 

request); PG&E Corp. (Mar. 1, 2002) (allowing the company to omit Proponent's proposal because the proposal 

was vague and indefinite, based on the company's argument that neither the shareholders nor the company's board 

of directors would be able to determine what actions the company would have to take to comply with the 

proposal); Philadelphia Electric Co. (July 30, 1992) (allowing the company to omit the proposal because it is "so 

inherently vague and indefinite that neither the shareholders 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"); and H.J. Heinz Company (May 25, 2001) (proposal requesting that 

the company implement a human rights standards program was excluded on the grounds that it was vague and 

indefinite). 
Lisa Snow, Esq. 

May 3, 2004 

Page 9 

 

III. The Proposal may be excluded pursuant to Rule 14a-8(c) 

CREF believes that the Proposal consists of three separate proposals in contravention 

of Rule 14a-8(c), which states that a shareholder may submit only one proposal to a company 

for a particular meeting. On February 19, 2004, CREF notified the Proponent that the 

Proposal was deficient because it contained three separate proposals. A copy of this 

notification is attached hereto as Appendix B. CREF’s notice was delivered to the Proponent 

on February 20, 2004. As of the date of this letter, the Proponent has not revised or rewritten 

the Proposal, nor has she eliminated two of the three proposals previously submitted.15 

Though the Staff may deem multiple proposals to be one proposal if such proposals relate to a 

single, specific concept, the Staff has also previously taken the position that substantially 

distinct multiple proposals will not be considered as a single proposal.16 

The first proposal requires CREF to divest its COSTCO shares. The second proposal 

requires CREF to request that COSTCO repair damages to Mexico. The third proposal 

requires CREF to request that COSTCO change its corporate governance practices. Each of 

these proposals requires distinct and separate action on the part of CREF; thus, they should be 

considered to be multiple proposals. Therefore, based on this defect, CREF may exclude the 

Proposal from its 2004 Proxy Materials. 

IV. Conclusion 

In view of the foregoing, CREF respectfully requests that the Staff not recommend any 

enforcement action if the Proposal is omitted from its proxy materials for its 2003 annual 

meeting. 

If you have any questions concerning our request or require any additional 

information, please contact the undersigned at (212) 916-5541.

Sincerely, 

Lisa Snow 

cc: Abigail A. Fuller 

15 Based upon the delivery of CREF’s notification on February 20, 2004, the Proponent has until March 5, 2004 

to revise the Proposal. Since this letter is submitted in advance of March 5, 2004, CREF undertakes to review, 

and if necessary, revise its no-action letter if the Proponent revises her proposals. 

16 See, Citigroup Inc. (Feb.26, 2002). 
Lisa Snow, Esq. 

May 3, 2004 

Page 10 

LETTER –2 

College Retirement Equities Fund 

730 Third Avenue 

New York, NY 10017-3206 

212 490-9000 800 842-2733

George Djurasovic 

Counsel 

(212) 916-6218 

(212) 916-5813

 February 19, 2004 

By Overnight Courier 

Abigail Fuller, Ph. D. 

807 East Street 

North Manchester, IN 46962 

Re: Submission of Shareholder Proposals

Dear Dr. Fuller: 

 This is to confirm that on February 12, 2004, we received your submission for 

inclusion in the CREF proxy statement. We believe that in order to comply with the proxy 

rules, you need to recast your proposal so that it puts forth a single recommendation for 

consideration by the shareholders, rather than the multiple recommendations contained in your 

submission. According to Rule 14a-8(c) (Question 3) of the proxy rules, a shareholder may 

not submit more than one proposal to a company for a particular meeting. 

Please revise your submission accordingly and send your corrected proposal to the 

attention of Laverne Jones within 14 days from receiving this letter. 

 If you have any questions, please call me at (212) 916-6218. 

 

 Very truly yours, 

 George Djurasovic 

cc: E. Laverne Jones 
Lisa Snow, Esq. 

May 3, 2004 

Page 11 

LETTER – 3 

Abigail A. Fuller, 807 East Street, "North Manchester, IN 46962, owning 140.303 

accumulation units in the CREF Social Choice Account, has given notice that she intends to 

present the following resolution at the annual meeting: 

WHEREAS TIAA-CREF professes to be a leader in corporate governance issues, and 

professes accountability and transparency as key pillars of effective governance; 

WHEREAS TIAA-CREF wishes to be considered a socially responsible investor concerned 

with environmental and social issues and believes itself to be active and involved in the 

solution of community problems; 

WHEREAS TIAA-CREF owns to the date of 30th of June, 2003, 3,372,396 shares of 

COSTCO corporation with an estimated value of $123,429,693, making it one of the largest 

investors of that company; 

WHEREAS COSTCO is a company that is responsible for the destruction of an ecologically 

important site in Cuernavaca, Mexico, destroying works of art and an archeological site,' 

WHEREAS the High Commission for Human Rights of the United Nations has made [a] 

declaration against the company for, with the support of local authorities, violating human

rights of first, second, and third generation[s]; . 

WHEREAS COSTCO has been insensitive to the community request that it not build 

warehouses at a historic and ecologically important site in Cuernavaca; 

WHEREAS COSTCO has not responded to nearly 150 organizations requesting that it not 

build warehouses at a historic and ecologically important site in Cuernavaca, Mexico;' . 

WHEREAS COSTCO chose to build a warehouse complex in an area in which it is prohibited 

by law from doing so and did not properly comply with the studies required to build them in a 

central part of the city of Cuernavaca; 

WHEREAS COSTCO is a company with an administration that asked stockholders to vote 

against extending its code of ethics to include land procurement practices; 

WHEREAS COSTCO is a company that has rejected a resolution proposal from Christian 

Brothers Investment, a socially responsible investment fund, to extend its code of ethics; : 

THEREFORE BE IT RESOLVED that the shareholder requests that TIAA-CREF divest all its 

shares of COSTCO and request that COSTCO repair damages to the society In Mexico and 

changes its corporate governance practices to include full ethical behavior. 

The present resolution makes references to several sources of information: the report of the 

High Commission for Human Rights of the United Nations for Mexico; the report presented 
Lisa Snow, Esq. 

May 3, 2004 

Page 12 

by OCED of the Earth council on the Casino de la Selva case; the report presented by

Amnesty International with respect to the situation of Human Rights in Mexico; [and] the 

resolutions taken by the board of directors of Costco Corporation, January 29th, 2004.