Company Name: Marion Merrrel Dow Inc.
Public Availability Date: 03-26-1993
[INQUIRY LETTER 1]
SHOOK, HARDY & BACON P.C.
ONE KANSAS CITY PLACE, 1200 MAIN STREET
KANSAS CITY, MISSOURI 64105-2118
TELEPHONE(816) 474-6550 January 06, 1993 Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549 Re: Marion Merrell Dow Inc.
Omission of Stockholder Proposal by Mr. Earl F. Glynn under Rule 14a-8(d) Ladies and Gentlemen: On behalf of Marion Merrell Dow Inc. (the "Company"), the undersigned hereby
encloses for filing with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 14a-8(d) under the Securities Exchange Act of
1934, as amended, six copies of the following: 1. A proposal (the "Proposal") and statement in support of the Proposal,
attached as Exhibit A hereto, which was submitted by Mr. Earl F. Glynn (the
"Proponent"), a stockholder and former employee of the Company, for inclusion in
the Company's Proxy Statement (the "Proxy Statement") for its 1993 Annual
Meeting of Stockholders; and 2. This letter, which contains both the Company's statement of reasons why
omission of the Proposal from the Proxy Statement is appropriate and the legal
opinion of this firm with respect to omission of the Proposal under Rule
14a-8(c)(1). The Company tentatively expects to file a definitive Proxy Statement for its
1993 Annual Meeting of Stockholders on or about March 30, 1993. For the reasons discussed below, the Company respectfully requests that the
Commission Staff not recommend any enforcement action to the Commission against
the Company if the Company omits the Proposal from the Proxy Statement for the
Company's 1993 Annual Meeting of Stockholders. By copy of this letter, the
Company is notifying the Proponent of its intention to omit the Proposal from
the Proxy Statement and its reasons for doing so. I. THE PROPOSAL MAY BE OMITTED FROM THE PROXY STATEMENT UNDER RULE 14a-8(c)(1)
BECAUSE IT IS NOT A PROPER SUBJECT FOR ACTION BY SECURITY HOLDERS UNDER SECTION
141(a) OF THE DELAWARE GENERAL CORPORATION LAW. Rule 14a-8(c)(1) allows omission of a stockholder proposal from a company's
proxy materials if the proposal is not a proper subject for action by security
holders under the laws of the company's domicile. The Note to Rule 14a-8(c)(1)
states in relevant part that "a proposal that mandates certain action by the
registrant's board of directors may not be a proper subject matter for
shareholder action" under state law. The Company is a Delaware corporation, incorporated under the Delaware General
Corporation Law (the "DGCL"). Section 141(a) of the DGCL provides in relevant
part that "the business and affairs of every corporation organized under the
DGCL shall be managed by or under the direction of a board of directors, except
as may be otherwise provided in the DGCL or in its certificate of
incorporation." Neither the DGCL nor the Company's Restated Certificate of
Incorporation, as amended (the "Certificate of Incorporation") contains any
provision that limits the authority of the Company's Board of Directors to
manage and direct the business and affairs of the Company with respect to the
areas addressed by the Proposal--labor-management relations, employee
supervision and discipline, personnel administration and employee benefits and
compensation. On the contrary, Article Ninth of the Company's Certificate of
Incorporation specifically provides that "all powers of management, direction
and control of the corporation shall be vested in the Board of Directors." The Proposal mandates certain Company employment practices and policies. Under
Section 141(a) of the DGCL and Article Ninth of the Company's Certificate of
Incorporation, the direction and control of such matters is reserved to the
Company's Board of Directors. Therefore, the Proposal may be omitted from the
Proxy Statement because it is not a proper subject for action by stockholders
under the laws of the Company's domicile. Based upon the foregoing, it is the opinion of this firm that the Proposal may
properly be omitted from the Proxy Statement under Rule 14a-8(c)(1). II. THE PROPOSAL MAY BE OMITTED FROM THE PROXY STATEMENT UNDER RULE 14a-8(c)(7)
BECAUSE IT DEALS WITH MATTERS RELATING TO THE CONDUCT OF THE ORDINARY BUSINESS
OPERATIONS OF THE COMPANY. Rule 14a-8(c)(7) allows omission of a stockholder proposal if the proposal deals
with matters "relating to the conduct of the ordinary business operations of the
registrant." In Phillips Petroleum Company, publicly available February 13,
1992, a stockholder submitted a proposal to modify the company's retirement
income plan to allow employees to retire if their age plus the number of years
of their service totaled eighty-five. The Staff took a no-action position with
respect to omission of the proposal under Rule 14a-8(c)(7) because it dealt with
general compensation issues, which are related to ordinary business operations.
In TRW Incorporated, publicly available January 11, 1988, a stockholder
submitted a proposal requiring the company to "adopt special provisions to
insure that future pension benefits to divested salaried employees will be based
upon years of service and salary regardless of age at the date of divestiture."
The Staff took a no-action position with respect to omission of the proposal
from the proxy materials under Rule 14a-8(c)(7), noting that pension benefits
were a matter related to the conduct of the company's ordinary business
operations. In Rockwell International Corporation, publicly available December
1, 1986, a stockholder submitted a proposal to grant certain employees "break in
service" provisions under its retirement plan. The Staff took a no-action
position with respect to omission of the proposal because it dealt with a matter
related to the ordinary business operations of Rockwell and could be excluded
under Rule 14a-8(c)(7). The Staff has reached the same conclusion regarding stockholder proposals
dealing with retirement and compensation related issues on numerous occasions.
See, e.g., E.I. du Pont de Nemours and Company, publicly available February 13,
1992 (modify Employee Awards Program to provide greater compensation to certain
employees); NYNEX Corporation, publicly available February 13, 1992
(standardization of medical, dental and visual benefits for management and
non-management employees); CSX Transportation, publicly available February 13,
1992 (establishment of Employee Stock Ownership Plan or Employee Savings Plan);
Merck and Company Incorporated, publicly available February 13, 1992 (adoption
of profit sharing plan for all employees not covered by a collective bargaining
agreement); General Motors Corporation, publicly available March 15, 1991 (free
health care coverage for new spouses of retirees); American Telephone and
Telegraph Company, publicly available January 5, 1990 (longevity bonus for
employees). The Proposal attempts to direct, through the implementation of accelerated
retirement plan vesting provisions, the duties and responsibilities assigned to
individual employees of the Company. Such personnel matters are intimately
interwoven with the day-to-day conduct of the Company's business operations. In
Motorola, Incorporated, publicly available February 6, 1991, the Staff stated
that "decisions by management on matters such as employee relations, supervision
and administration involve the conduct of the Company's day-to-day operations."
Therefore, stockholder proposals encompassing such matters may be properly
excluded under Rule 14a-8(c)(7). Similarly, in response to the proposed omission
of a stockholder proposal requiring certification of employees before they can
be promoted to management positions, the Staff stated in The Southern Company,
publicly available March 13, 1992, that training and qualifications of employees
for management positions are matters within the conduct of ordinary business
operations and may be excluded under Rule 14a-8(c)(7). See also Eastman Kodak
Company, publicly available January 30, 1991 (proposal to "provide new ways and
means for employees to bring inconsistencies of company procedures" to the
attention of company managers dealt with "labor-management relations, employee
supervision and discipline and personnel administration" which are matters
relating to the conduct of ordinary business operations). As set forth in the Proposal, the Proponent seeks to impose upon the Company a
requirement that employees who are not fully vested in retirement plans "shall
have the right to at least 50% of the assignments and responsibilities discussed
in pre-employment interviews" and "current position description." The Proposal
clearly deals with matters that the Commission has consistently found to be
within the realm of ordinary business operations--retirement benefits,
employment practices and policies and labor-management relations. The terms and
conditions of employment, including assignment of duties and responsibilities as
well as compensation related issues such as retirement benefits, are an integral
part of the conduct of a company's day-to-day business operations. As such, they
are not the types of issue that stockholders, who are not in a position to
micromanage the day-to-day personnel affairs of a company, should become
involved with. Because the Proposal seeks to implement specific employment practices and
policies, matters that are clearly within the domain of management in the
day-to-day operation of the Company, the Proposal may properly be omitted from
the Proxy Statement under Rule 14a-8(c)(7). III. THE PROPOSAL MAY BE OMITTED FROM THE PROXY STATEMENT UNDER RULE 14a-8(c)(4)
BECAUSE IT RELATES TO THE REDRESS OF A PERSONAL GRIEVANCE AGAINST THE COMPANY,
AND THE PROPOSAL WILL NOT BENEFIT THE COMPANY'S STOCKHOLDERS AT LARGE. Rule 14a-8(c)(4) allows omission of a stockholder proposal if it "relates to the
redress of a personal claim or grievance" or "if it is designed to result in a
benefit to the proponent or to further a personal interest, which benefit or
interest is not shared with the other security holders at large." In Florida
Progress Corporation, publicly available December 31, 1991, a stockholder
submitted a proposal to require automatic review of the termination of fully
vested, non-union employees not accused of misconduct. The proponent of the
proposal stated in correspondence to the Commission that he was terminated due
to a "personal vendetta" against him by a supervisor whom he had criticized. In
taking a no-action position with respect to the omission of the proposal under
Rule 14a-8(c)(4), the Staff noted that "the proposal concerns the Company's
employee termination policies and that the proposal apparently was submitted as
a result of the Proponent's employment termination." As set forth in the correspondence from the Proponent attached to this letter as
Exhibit B, the Proponent is a former employee of the Company who, in his own
words is "furious," about his "treatment" while employed by the Company.
According to the attached correspondence, the Proponent was apparently unhappy
enough about his job duties to quit his job, but he was deterred from doing so
because he did not want to lose deferred compensation benefits in which he was
not fully vested. The Proponent states that he "still loses sleep" over his
personal experience as a Company employee, two years after leaving the Company.
While the Proposal purports to have been "drafted to address broader
considerations" it was apparently submitted in response to the Proponent's
frustration over being unable to quit his job at the Company without losing his
deferred compensation benefits. See Eastman Kodak Company, publicly available
February 28, 1992; Florida Progress Corporation, publicly available December 31,
1991. Moreover, it is clearly meant to benefit employees and would not result in
a direct benefit to the stockholders of the Company at large. See Thomas
Industries Incorporated, publicly available January 13, 1992 (company policies
and practices relating to employment discrimination); Rockwell International
Corporation, publicly available November 21, 1991 (incentive and compensation
policies for employees). Because the Proposal seeks to redress a personal grievance by the Proponent and
would not directly benefit the stockholders of the Company at large, it may be
properly omitted from the Proxy Statement under Rule 14a-8(c)(4). IV. THE PROPOSAL MAY BE OMITTED FROM THE PROXY STATEMENT UNDER RULE 14a-8(c)(3)
BECAUSE IT IS SO VAGUE AS TO BE MISLEADING UNDER RULE 14a-9. Rule 14a-8(c)(3) allows the omission of a stockholder proposal "if the proposal
or the supporting statement is contrary to any of the Commission's proxy rules
and regulations, including Rule 14a-9 which prohibits false or misleading
statements in proxy soliciting materials." A proposal that is inherently vague
or indefinite may be misleading under Rule 14a-9 and should be excluded from
proxy materials under Rule 14a-8(c)(3). See Dyer v. SEC, 287 F.2d 773, 781 (8th
Cir. 1961); Philadelphia Electric Company, publicly available July 30, 1992;
Occidental Petroleum Corporation, publicly available April 14, 1990;
International Paper Company, publicly available February 13, 1985. The Proposal, which would give Company employees "the right to at least 50% of
the assignments and responsibilities discussed during pre-employment interviews"
and "the right to at least 50% of the assignments and responsibilities detailed
in one's current position description" while not fully vested in retirement
plans, is inherently vague and misleading, making it difficult for stockholders
to understand and impossible for the Company to implement. The 50% criteria is
inherently misleading because it does not distinguish between actual amount of
time spent on job responsibilities and the actual number of job responsibilities
delineated in a position description or discussed in an interview. For example,
a position description may detail ten responsibilities, three of which would
normally constitute over 50% of the employee's time. The Proposal is unclear
whether it would be violated if the employee was regularly assigned to those
three duties. In addition, the Proposal states that the assignments and
responsibilities "will be measurable by either the Company or the Associate."
However, the Proposal does not set forth any guidance as to the criteria that
would be used to measure the assignments and responsibilities nor does it state
what the result would be in case of a conflict in measurement by the Company and
the employee. Because the Proposal is so inherently vague and indefinite that it would be
misleading to stockholders voting upon the Proposal and would be impossible for
the Company to implement, it should be omitted from the Proxy Statement under
Rule 14a-8(c)(3). V. CONCLUSION AND REQUESTED ADVICE. The Proposal may be omitted from the Proxy Statement for the reasons discussed
above. Based on the foregoing, the Company requests that the Commission Staff
not recommend any enforcement action to the Commission against the Company if
the Company omits the Proposal from its Proxy Statement for its 1993 Annual
Meeting of Stockholders. If the Staff does not concur with the conclusions set
forth in this letter, the Company respectfully requests a conference with the
Staff before the issuance of any adverse written response to this letter. Please
contact the undersigned, or in his absence, Merry Evans of this Firm, at (816)
474-6550 with any questions or comments with respect to the contents of this
letter. Sincerely, Randall B. Sunberg, Esq. RBS:arh Enclosure 10663064
[INQUIRY LETTER 2]
Earl F. Glynn
10808 West 105th Street
Overland Park, KS 66214-3057 Exhibit A Mr. William K. Hoskins
Corporate Secretary
Marion Merrell Dow Inc.
P.O. Box 8480
9300 Ward Parkway
Kansas City, MO 6411 Subject: Proposal for 1993 Annual Meeting of Stockholders --
Fair Treatment of Associates Who are Not Fully Vested in
Deferred Compensation (Retirement) Plans Dear Corporate Secretary: Proposal: The following proposal deals with MMD Associates who are not fully vested in
deferred compensation (retirement) plans: All MMD Associates shall have the right to at least 50% of the assignments and
responsibilities discussed during pre-employment interviews while not fully
vested in retirement plans. These assignments and responsibilities will be
included in the formal justification for hiring and will be measurable by either
the Company or the Associate. All MMD Associates shall have the right to at least 50% of the assignments and
responsibilities detailed in one's current position description while not fully
vested in retirement plans. The assignments and responsibilities described in
the position description will be measurable by either the Company or the
Associate. Management has the right at any time to reassign an individual and change
position responsibilities. However, if management's decisions deprive an
individual of more than 50% of the assignments and responsibilities promised in
pre-employment interviews, and/or in the current position description, while the
Associate is not fully vested in retirement plans, the Associate is entitled to
leave the Company's employment with full vesting. The Associate's professional
career, and retirement benefits, must not be penalized by Management changes. Discussion: While this proposal is for all current and future MMD associates, its Original
Text Illegible is to address only one major problem caused by the 1987 expansion
of Marion R&D and subsequent Marion/Merrell Dow merger. However, this proposal
is not intended to apply to past MMD Associates, including those involved in the
Marion R&D expansion who have separated from the Company. The Company must realize that it has more responsibilities to its Associates
than just issuing paychecks. The Company must be serious about it foundations
and principles. Breaking promises to new employees, or misleading current
employees, results in considerable losses of productivity to the Company and
professional and personal harm to Associates. The Company must address these
issues instead of ignoring them and hoping they go away. The low-level Associates must not be the victims of the jockeying of middle
mangers during a merger or continuing reorganizations. Management must learn to respect highly-specialized scientific and technical
talent, and especially those with advanced degrees. Scientists and technicians
should not be treated as second-class corporate citizens. I am greatly saddened to hear from MMD R&D Associates that Associate morale
continues to drop and is still at an all time low. MMD Shareholders' interests
are not served when morale adversely affects productivity, especially over a
period of a number of years. I purchased 100 shares of MMD stock on September 5, 1991 and plan to keep the
stock indefinitely -- at least through the 1993 Annual Meeting. The enclosure
documents my ownership of MMD stock. Sincerely, Earl F. Glynn Enclosure
[INQUIRY LETTER 3]
Earl F. Glynn
10808 West 105th Street
Overland Park, KS 66214-3057 January 18, 1993 Securities and Exchange Commission
450 Fifth Street, NW
Judiciary Plaza
Washington, DC 20549 Subject: Marion Merrell Dow Inc.
Omission of Stockholder Proposal by Earl F. Glynn under Rule 14a-8(d) To Whom It May Concern: On behalf of Marion Merrell Dow Inc. (MMD--the "Company"), Mr. Randall B.
Sunberg, in a letter to you dated January 6, 1993, outlined several reasons why
my proposal could be omitted from the MMD Proxy Statement. Because I feel Mr.
Sunberg's letter contained several inaccurate statements, I am sending you this
letter to clarify certain matters regarding my proposal. ". . . the proposal may be omitted from the proxy statement. . . because it is
not a proper subject. . ." The primary purpose of my proposal is to rectify resource utilization problems
caused by actions taken by MMD as part of planned expansion (Marion R&D
expansion in 1987 and 1988) and subsequent merger (Marion with Merrell Dow in
1990). Both the expansion and merger were proper subjects for action by security
holders. The security holders have the right to know that MMD management wasted human
resources as part of the expansion and merger activities mentioned above. This
waste of human resources was at considerable cost to the corporation and its
shareholders, and could occur again without acceptance of my proposal. A significant number of the nearly 100 Marion R&D employees hired during the
Marion R&D expansion found conditions at Marion/MMD to be inconsistent with
those described during pre-employment interviews -- a "bait and switch" tactic
from the employee's perspective. Many of these employees have subsequently left
employment. The cost to the corporation for the waste of human resources in the
Marion R&D expansion, and in the later merger, was considerable (relocation
costs, salaries, training, office space, and special equipment). This waste of
human resources may also affect the future viability of the corporation because
of its effect on the R&D pipeline and the lack of new products. This should be
of concern to all MMD shareholders. ". . . the proposal may be omitted from the proxy statement. . . because it
deals with matters relating to the conduct of ordinary business. . ." MMD is again planning possible future expansion, which has been the subject of
several public hearings and news stories in the Kansas City area in recent
months. These plans include possible further R&D expansion, which is similar to
the proposed Marion R&D expansion of just a few years ago. Without ratification of my proposal, MMD as a corporation could start a new
round of under-utilization of R&D employees, who have highly-specialized
scientific and technical talent. Since existing management has shown no signs of
learning from the mistakes of the R&D expansion and subsequent merger, MMD
shareholders must have the right to hold the Company accountable for wasting
human resources. (And as citizens of the world, everyone should have the right
to hold a corporation accountable for wasting human resources, which is an
opportunity cost for everyone else.) My proposal only attempts to force MMD to be accountable for their words and
actions, not to tell them how to conduct their business. When the Company
follows through on its own proposed actions, especially changes in its strategic
direction, my proposal does NOT affect the Company in any way. The proposal absolutely does NOT suggest the implementation of an accelerated
retirement vesting provision. An employee CANNOT plan to have one's skills and
talents wasted by an employer. But an employee can plan to work a specified
number of years to fulfill vesting requirements. The proposal's statement "the
Associate is entitled to leave the Company's employment with full vesting"
refers to compensation for breach of implied contract by the Company, which is
numerically equivalent to the unvested amount. The proposal acknowledges management's rights and does not attempt to abridge
these rights in any way: "Management has the right at any time to reassign an
individual and change position responsibilities." There is absolutely no attempt
in this proposal to allow stockholders "to micromanage the day-to-day personnel
affairs. . ." of the Company. The proposal only seeks to make management
accountable for their actions -- or inactions. ". . . the proposal may be omitted from the proxy statement. . . because it
relates to the redress of a personal grievance against the Company, and the
proposal will not benefit the Company's stockholders at large." Mr. Sunberg selectively quotes from my letter to Dow CEO and principal MMD
shareholder, Mr. Frank Popoff, to make me appear as a "furious," if not
irrational, ex-employee of the Company. In the very next line, which he does not
quote, I state that I am only trying "to find meaning out of my 2 1/2 year
ordeal." The purpose of my letters to legislators -- mentioned in the next line of my
letter to Mr. Popoff -- is for the future good of society as a whole not just my
personal well being. I am trying for some good to come out of a very bad
experience. I see no such effort on the part of the Company, which gives me even
more reason to speak up and press for adoption of my proposal. In my discussion of the proposal, I state "this proposal is for all current and
future MMD associates" and that the "proposal is not intended to apply to past
MMD Associates." This explicitly excluded me and others affected by the Marion
R&D expansion, who have left employment. As stated earlier, adoption of my proposal will not cost the Company anything if
the Company follows through on promises to stockholders and to new employees.
Adoption of my proposal will help guarantee that stockholders see a return on
their investment in future R&D expansions. Adoption of my proposal will prevent
needless expenditures for relocation of new employees, for their training and
for offices and special equipment needed to perform their duties. For example,
in 1988 as part of the R&D expansion, MMD hired a Molecular Chemist, relocated
him from Maryland to the KC area, purchased a $250,000+ specialized,
minisupercomputer for his molecular modelling work, and then frustrated the
individual into leaving by mid-1990. My proposal will stop this waste of
stockholders' resources in further expansions. Also, my proposal would help improve the morale and productivity of all
employees, who have suffered since the merger. Such improvements would translate
directly into higher returns for investors. My proposal also helps ensure that
the Company's R&D reputation improves, so the Company can attract talented
scientific and technical personnel when they are required in the future. ". . . the proposal may be omitted from the proxy statement. . . because it is
so vague as to be misleading. . . Mr. Sunberg claims my proposal ". . . is inherently vague and misleading, making
it difficult for stockholders to understand and impossible for the Company to
implement." Because proposals are limited to only 500 words (per November 17, 1992
correspondence from William Hoskins, MMD VP, General Counsel and Corporate
Secretary), and because a proposal should be a general policy statement without
implementation details (or it may be construed as micromanagement), I should not
have, and did not include such details as part of the formal proposal. Stockholders should have no trouble in understanding what "at least 50% of the
assignments and responsibilities" means. The 50% criteria simply means the
Company followed through with more than half of what the Company said it would
do. The 50% figure was chosen since a level above 50% could be easily
interpreted by stockholders as "yes, the Company followed through," and a level
less than 50% could be easily interpreted as "no, the Company did not follow
through" on promises and actions. This binary, "yes" or "no" interpretation of
the 50% level assists stockholders in keeping the Company accountable for its
words and actions. Implementing the 50% criteria is at least as easy as any normal employee
evaluation. But instead of measuring an employee's work performance, the Company
would be required to measure its own performance on following through on its own
words and proposed actions. At present the Company can easily omit such resource
utilization information from Stockholders -- which is also misleading. The
Company already did not give stockholders details about significant additional
expenditures (such as in 1989), or significant reductions in expenditures (such
as in 1990-1991) as a way of adjusting the view of the Company's performance to
outside investors. Mr. Sunberg's difficulty with a 50% criteria could be easily resolved by a
simple statement identifying how individual responsibilities should be time
weighted in determining an overall utilization value. A weighted average is not
an advanced mathematical concept, which would not be difficult to implement, and
does not require an MBA skilled in quantitative analysis. The implementation detail of how to resolve a conflict in measurement by the
Company and an employee could easily be addressed through the Company's existing
Problem Solving Process, or through an outside, independent mediator. Conclusion I request the Commission Staff consider the above information while reviewing
the letter from Mr. Randall B. Sunberg, on behalf of Marion Merrell Dow Inc. Please contact me at 913/492-2970 if you have any questions or comments about
this letter. Sincerely, Earl F. Glynn cc: Owen K. Ball, MMD Corporate Counsel
[INQUIRY LETTER 4]
SHOOK, HARDY & BACON P.C.
ONE KANSAS CITY PLACE, 1200 MAIN STREET
KANSAS CITY, MISSOURI 64105-2118
TELEPHONE(816) 474-6550 January 26, 1993 Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549 Attention: Office of Chief Counsel
Division of Corporation Finance Re: Marion Merrell Dow Inc.
Omission of Stockholder Proposal by
Mr. Earl F. Glynn under Rule 14a-8(d) Ladies and Gentlemen: Reference is made to our letter to the Securities and Exchange Commission (the
"Commission") on behalf of Marion Merrell Dow Inc., a Delaware corporation (the
"Company"), dated January 6, 1993, with respect to the Company's intention to
omit from the Company's Proxy Statement (the "Proxy Statement") for its 1993
Annual Meeting of Stockholders a proposal (the "Proposal") and statement in
support thereof submitted by Mr. Earl F. Glynn (the "Proponent"). The Proposal
is attached as Exhibit A to our letter of January 6, 1993, a copy of which is
attached hereto for your convenience. The Company has received from the Proponent a copy of his letter dated January
18, 1993 to the Commission. After a review of the Proponent's letter, the Company continues to believe that
the Proposal is excludable from the Proxy Statement on each of the grounds set
forth in our letter of January 6, 1993. In addition, the Proponent's letter, while purporting to demonstrate the
non-excludability of the Proposal, actually does just the opposite. The
Proponent's letter, like the Proposal, clearly addresses only certain alleged
employment practices of the Company, which the Proponent alleges adversely
affected him. However, the issue presented here is not the merits of such
practices but, rather, the ordinariness of the subject matter of the Proposal.
As discussed in considerable detail in our letter of January 6, 1993, the issue
presented includes whether the Proposal relates to the ordinary business
activities of the Company. Further to the matters discussed in our letter of
January 6, 1993, the Staff has concluded that stockholder proposals concerning a
company's employment practices for the general workforce are within the realm of
ordinary business operations of the registrant and may be excluded from the
company's proxy materials under Rule 14a-8(c)(7), even where such proposal is
tied to a social issue. See Cracker Barrel Old Country Store, Inc., October 13,
1992. Although the Proponent has not espoused a social issue in connection with
the Proposal, we cite this recent no-action position taken by the Staff as
further precedent for the omission of the Proposal from the Proxy Statement as a
matter clearly within the domain of management in the day-to-day operation of
the Company. In addition, we respectfully reassert the other reasons and bases
set forth in our letter of January 6, 1993 for omission of the Proposal from the
Proxy Statement. The Company respectfully requests your advice that the Division will not
recommend enforcement action to the Commission if the Proposal is omitted from
the Proxy Statement. If the Staff does not concur with the conclusions set forth
in this letter and our letter of January 6, 1993, the Company respectfully
requests a conference with the Staff prior to the issuance of any adverse
written response to this letter. If you have any questions regarding this
request, please contact the undersigned, or Merry Evans of this Firm, at (816)
474-6550. Pursuant to Rule 14a-8(d) we are filing with the Commission five copies of this
letter and one copy of this letter is being forwarded to the Proponent. Very truly yours, Randall B. Sunberg RBS:nes
Enc. 10678385
[STAFF REPLY LETTER]
March 26, 1993 RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE RE: Marion Merrell Dow, Inc. (the "Company")
Incoming Letters Dated January 6, and January 26, 1993 The proposal, which only applies to "associates" in the Company who are not yet
fully vested in its deferred compensation plans, would give all such associates
the right to at least 50 percent of the assignments and responsibilities: (1)
discussed during pre-employment interviews; and (2) detailed in the employee's
current position description. Failure by the Company to meet those standards
shall give the associate the right to leave the Company with full vesting in the
deferred compensation plans. There appears to be some basis for your view that the proposal may be excluded
from the Company's proxy materials pursuant to Rule 14a-8(c)(7) as dealing with
a matter relating to the conduct of the ordinary business operations of the
registrant (i.e., employee relations and general compensation). Under the
circumstances, the Division will not recommend enforcement action to the
Commission if the Company omits the proposal from its proxy materials. In
reaching a position, the staff has not found it necessary to address the
alternative bases for omission upon which the Company relies. Sincerely, William H. Carter
Special Counsel
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