Company Name: Barr Pharmaceuticals, Inc.
Public Availability Date: September 25, 2006
Document Sections:
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
July 31, 2006
Direct Dial
(202) 955-8287
Client No.
C 11759-00003
Fax No.
(202) 530-9631
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Shareholder Proposal of Shayne Robinson Securities Exchange Act of 1934Rule
14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that Barr Pharmaceuticals, Inc. (the "Company")
intends to omit from its proxy statement and form of proxy for its 2006 Annual
Meeting of Shareholders (collectively, the "2006 Proxy Materials") a shareholder
proposal (the "Proposal") received from Shayne Robinson (the "Proponent").
Pursuant to Rule 14a-8(j), enclosed herewith are six (6) copies of this letter
and its attachments. Also, in accordance with Rule 14a-8(j), a copy of this
letter and its attachments is being mailed on this date to the Proponent's
representativeSusan L. Hall with People for the Ethical Treatment
Animalsinforming her of the Company's intention to omit the Proposal from the
2006 Proxy Materials. Due to a delay relating to the Company requiring
additional time to assess its response to the Proposal, the Company is
submitting this request 70 days in advance of the presently intended filing date
for its 2006 Proxy Materials. Nevertheless, we understand the view of the staff
of the Division of Corporation Finance (the "Staff") to be that a company should
notify the Staff whenever it determines that it may omit a shareholder proposal,
and we hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2006 Proxy Materials on the basis discussed
below. The Company agrees to promptly forward to the Proponent's representative
any response from the Staff to this no-action request that the Staff transmits
by facsimile to the Company only.
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2006 Proxy Materials pursuant to Rule
14a-8(i)(12)(i) because the Proposal deals with substantially the same subject
matter as a shareholder proposal submitted to a vote at the Company's 2005
Annual Meeting of Shareholders, and that proposal received less than three
percent of the total number of votes cast.
THE PROPOSAL
The Proposal asks that the Company adopt and publicize an Animal Welfare Policy
that addresses the Company's commitment to: "(a) reducing, refining and
replacing its use of animals in research and testing, and (b) implementing
acceptable standards of care for animals who continue to be used for these
purposes ... including provisions that address animals' psychological, social
and behavioral needs." A copy of the Proposal, as well as related correspondence
from the Proponent, is attached to this letter as Exhibit A.
ANALYSIS
The Proposal may be properly omitted under Rule 14a-8(i)(12)(i) because it deals
with substantially the same subject matter as a shareholder proposal that was
included in the Company's 2005 proxy materials, and that proposal did not
receive the support necessary for resubmission.
Rule 14a-8(i)(12)(i) permits the exclusion of a shareholder proposal dealing
with "substantially the same subject matter as another proposal or proposals
that previously has or have been included in the company's proxy materials
within the preceding 5 calendar years" and the proposal received "less than 3%
of the vote if proposed once within the preceding 5 calendar years...."
The Company included a shareholder proposal (the "Previous Proposal") in its
2005 proxy materials filed on September 27, 2005, which requested that the
Company:
1. commit specifically to using only non-animal methods for assessing skin
corrosion, irritation, absorption, phototoxicity and pyrogenicity;
2. confirm that it is in the Company's best interest to commit to replacing
animal-based tests with non-animal methods; and
3. petition the relevant regulatory agencies requiring safety testing for the
Company's products to accept as total replacements for animal-based methods,
those approved non-animal methods described above, along with any others
currently used and accepted by the Organization for Economic Cooperation and
Development (OECD) and other developed countries.
A copy of the Previous Proposal as it appeared in the Company's 2005 proxy
materials is attached hereto as Exhibit B.
The Proposal and the Previous Proposal are substantially similar for purposes of
Rule 14a-8(i)(12) since the substantive concern of both proposals is
animal-based testing and, more specifically, replacing animal testing with
non-animal testing. For example:
The Proposal requests that, among other things, the Company adopt and
publicize a policy on animal-based testing that addresses the Company's
commitment to "reducing, refining and replacing its use of animals in research
and testing" (emphasis added).
Similarly, the Previous Proposal focused on "using only non-animal [testing]
methods" and confirming that it is in the Company's "best interest" to "replac[e]
animal-based tests with non-animal methods" (emphasis added).
Moreover, both proposals (whether in their respective resolutions, recitals or
supporting statements) discuss the alleged pain and abuses suffered by animals
used in animal-based testing and argue that the Company should play a role in
stopping such alleged abuses. Despite the differences in some of the actions
requested by the proposals, the express language of both the Previous Proposal
and the Proposal deal with the same substantive concern and thus substantially
the same subject matter for purposes of Rule 14a-8(i)(12)reducing the use of
animal-based testing conducted by or on behalf of the Company.
The Staff recently concurred that a proposal similar to the Proposal submitted
to Abbott Laboratories in 2006 was excludable under Rule 14a-8(i)(12)(i) where
that company's shareholders had considered a shareholder proposal in 2005 that
is nearly identical to the Previous Proposal. See Abbott Laboratories (avail.
Feb. 28, 2006). If anything, the Proposal and Previous Proposal are more similar
than those considered in Abbott Laboratories. This is because Abbot
Laboratories' 2006 proposal did not contain the express language found in the
Proposal regarding "replacing" animal-based testing but instead focused on
amending Abbott Laboratories animal use policy to "ensure" superior standards of
care for animals used in testing and applying it to independent laboratories
contracted by Abbott Laboratories. Regardless, because Abbott Laboratories 2005
and 2006 proposals both concerned animal testing, the Staff concurred that the
2006 proposal was excludable under Rule 14a-8(i)(12)(i).
As recognized in Abbott Laboratories, Rule 14a-8(i)(12)'s reference to
"substantially the same subject matter" does not mean that the Previous Proposal
and the Proposal must be exactly the same. Although the predecessor to Rule
14a-8(i)(12) required a proposal to be "substantially the same proposal" as
prior proposals, the Securities and Exchange Commission (the "Commission")
amended this rule in 1983. The Commission explained the reason for and meaning
of the revision, stating:
The Commission believes that this change is necessary to signal a clean break
from the strict interpretive position applied to the existing provision. The
Commission is aware that the interpretation of the new provision will continue
to involve difficult subjective judgments, but anticipates that those judgments
will be based upon a consideration of the substantive concerns raised by a
proposal rather than the specific language or actions proposed to deal with
those concerns. SEC Release No. 34-20091 (August 16, 1983).
The Staff has confirmed in a number of recent precedents that Rule 14a-8(i)(12)
does not require that two proposals, or their subject matters, be identical in
order for a company to exclude the later-submitted proposal. When considering
whether a proposal deals with substantially the same subject matter, the Staff
has increasingly focused on the "substantive concerns" raised by the proposal as
the essential consideration, rather than the specific language or corporate
action proposed to be taken. The Staff has thus concurred with the exclusion of
proposals under Rule 14a-8(i)(12) when the proposal in question shares similar
underlying social or policy issues with a prior proposal, even if the proposals
recommended that the company take different actions.
For example, in both Medtronic Inc. (avail. June 2, 2005) and Bank of America
Corp. (avail. Feb. 25, 2005), the Staff permitted the omission of proposals
requesting that the companies list all of their political and charitable
contributions on their websites. In prior proposals, shareholders had requested
that the companies cease making charitable contributions. Despite the different
actions requested and the different subject matters of the prior proposals
(ceasing contributions) and the proposals at issue (disclosure of
contributions), the substantive concern of both proposals was corporate
contributions and, thus, the Staff concluded that the proposals at issue dealt
with substantially the same subject matter. See also Dow Jones & Co., Inc.
(avail. Dec. 17, 2004) (proposal requesting the company publish in its proxy
materials information relating to its process of donations to a particular
non-profit organization was excludable as it dealt with substantially the same
subject matter as a prior proposal requesting an explanation of the procedures
governing all charitable donations); Saks Inc. (avail. Mar. 1, 2004) (a proposal
requesting the board of directors to implement a code of conduct based on
International Labor Organization standards, establish an independent monitoring
process and annually report on adherence to such code was excludable as it dealt
with substantially the same subject matter as a prior proposal requesting a
report on the company's vendor labor standards and compliance mechanism);
Bristol-Myers Squibb Co. (avail. Feb. 11, 2004) (a proposal requesting that the
board review pricing and marketing policies and prepare a report on how the
company will respond to pressure to increase access to prescription drugs was
excludable because it dealt with substantially the same subject matter as prior
proposals requesting the creation and implementation of a policy of price
restraint on pharmaceutical products). But see Wm. Wrigley Jr. Company (avail.
Dec. 13, 2004) (addressing two proposals to add "against" to the proxy card; the
Staff's response in this instance may reflect the inclusion in the earlier but
not the later proposal of a request to also remove management's discretionary
voting authority where signed proxies did not specify a vote). This more recent
precedent thus appears to supersede earlier interpretations. See, e.g., Procter
& Gamble Co. (July 27, 1988).
This precedent confirms that, for purposes of Rule 14a-8(i)(12), the Previous
Proposal and the Proposal concern "substantially the same subject matter"
generally animal-based testing conducted by or on behalf of the Company and,
more specifically, "replacing" the use of animals in such testing. Moreover, as
evidenced in Exhibit C, the Previous Proposal received approximately 1.54% of
the vote at the Company's 2005 Annual Meeting of Shareholders.1 Thus, the
Previous Proposal failed to meet the required 3% threshold at the 2005 meeting.
For these reasons, we request that the Staff concur that the Proposal is
excludable pursuant to Rule 14a-8(i)(12)(i).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2006
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8287 or Ronald O. Mueller at (202) 955-8671.
Very truly yours,
/s/
Elizabeth Ising
Enclosures
cc: Sheldon Hirt, Associate Counsel, Barr Pharmaceuticals, Inc.
Susan L. Hall, People for the Ethical Treatment of Animals
-----FOOTNOTES-----
1 The Previous Proposal 71,709,367 received "against" votes and 1,123,688 "for"
votes. Pursuant to the Staff's position on counting votes for purposes of Rule
14a-8(i)(12), abstentions and broker non-votes were not included for purposes of
this calculation. See Staff Legal Bulletin No. 14, Question F.4 (July 13, 2001).
[APPENDIX]
SHAREHOLDER RESOLUTION
This Proposal is submitted by Shayne Robinson.
WHEREAS, the Company conducts tests on animals as part of its product research
and development; and
WHEREAS, the Company also retains independent laboratories to conduct tests on
animals as part of product research and development; and
WHEREAS, Covance Inc. is an independent laboratory testing facility that
conducts animal-based testing for many companies in the pharmaceutical industry;
and
WHEREAS, abuses of animals at Covance have been recently revealed and disclosed
by the media; and
WHEREAS, the Company has no published animal welfare or animal care policy
prominently posted on its website; NOW THEREFORE,
BE IT RESOLVED, that the shareholders request that the Board adopt and post an
Animal Welfare Policy online which addresses the Company's commitment to (a)
reducing, refining and replacing its use of animals in research and testing, and
(b) implementing acceptable standards of care for animals who continue to be
used for these purposes, both by the Company itself and by all independently
retained laboratories, including provisions that address animals' psychological,
social and behavioral needs. Further, the shareholders request that the Board
issue an annual report to shareholders on the extent to which in-house and
contract laboratories are adhering to this policy, including the implementation
of the psychological enrichment measures.
Supporting Statement:
The Boards of many companies have adopted and prominently published animal
welfare policies on their websites committing to the care, welfare, and
protection of animals used in product research and development. Our Company
should be an industry leader with respect to animal welfare issues, and yet it
has no publicly available animal welfare policy.
The recent disclosure of atrocities recorded at Covance, Inc. has made the need
for a formalized, publicly available animal welfare policy that extends to all
outside contractors all the more relevant, indeed urgent.1 Filmed footage showed
primates being subjected to such gross physical abuses and psychological
torments that Covance sued to enjoin PETA Europe from publicizing it. The
Honorable Judge Peter Langan in the United Kingdom who declined to enjoin PETA,
stated in his opinion that just two aspects of the video, namely the "rough
manner in which the animals are handled and the bleakness of the surroundings in
which they are kept ... even to a viewer with no particular interest in animal
welfare, at least cry out for explanation."
2
Shareholders cannot monitor what goes on behind the closed doors of the animal
testing laboratories, so the Company must. Accordingly, we urge the Board to
commit to ensuring that basic animal welfare measures are an integral part of
our Company's corporate stewardship.
We urge shareholders to support this Resolution.
-----FOOTNOTES-----
1 The proponent does not mean to imply that the Company retains Covance for
testing. Whether the Company does or does not retain Covance is unknown to the
proponent.
2 The case captioned Covance Laboratories Limited v. PETA Europe Limited was
filed in the High Court of Justice, Chancery Division, Leeds District Registry,
Claim No. 5C-00295. In addition to ruling in PETA's favor, the Court ordered
Covance to pay PETA [pound]50,000 in costs and fees.
[INQUIRY LETTER]
June 1, 2006
Frederick J. Killion
Corporate Secretary
Barr Laboratories, Inc.
400 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
Re: Shareholder Resolution for Inclusion in the 2006 Proxy Materials
Dear Mr. Killion:
Attached to this letter is a Shareholder Proposal submitted for inclusion in the
proxy materials for the 2006 annual meeting. Also enclosed is a letter from the
proponent of the resolution, Shayne Robinson, along with a letter from his
brokerage firm certifying to his ownership of stock. Mr. Robinson is a member of
PETA, and has appointed me as his designated representative.
If you need any further information, please do not hesitate to contact me. If
the Company will attempt to exclude any portion of the proposal under Rule
14a-8, please let me know within 14 days of your receipt of the resolution. I
can be reached at the following address: 8506 Harvest Oak Drive, Vienna, VA
22182, telephone (703) 478-5995, or by e-mail at SusanH@peta.org.
Very truly yours,
/s/
Susan L. Hall
Enclosures
SLH/pc
[INQUIRY LETTER]
May 26, 2006
Frederick J. Killion
Corporate Secretary
Barr Laboratories, Inc.
400 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
Re: Shareholder Resolution for Inclusion in the 2006 Proxy Materials
Dear Mr. Killion:
Attached to this letter is a Shareholder Proposal submitted for inclusion in the
proxy materials for the 2006 annual meeting. Also enclosed is a letter from my
brokerage firm certifying to my ownership of stock. I have held these shares
continuously for more than one year and intend to hold them through and
including the date of the 2006 annual meeting of shareholders.
Please communicate with my designated representative, Susan L. Hall, Esq. if you
need any further information. If the Company will attempt to exclude any portion
of my proposal under Rule 14a-8, please so advise my representative within 14
days of your receipt of this proposal. Ms. Hall may be reached at (703) 478-5995
or by e-mail at SusanH@peta.org.
Very truly yours,
/s/
Shayne Robinson
Enclosures
cc: Susan L. Hall
[INQUIRY LETTER]
May 26, 2006
Frederick J. Killion
Corporate Secretary
Barr Pharmaceuticals, Inc.
400 Chestnut Ridge Road
Woodcliff Lake, NJ 07677
Re: Shareholder Resolution for Inclusion in the 2006 Proxy Materials
Dear Mr. Killion:
This firm is the record holder of 62 shares of Barr Laboratories, Inc. common
stock held on behalf of our client, Shayne Robinson. Our client acquired these
shares on May 30, 2002 and has held them continuously for a period of one year
prior to the date on which the shareholder proposal is being submitted. Our
client intends to continue holding these shares through the date of the 2006
annual meeting.
If you have any further questions, please do not hesitate to contact me.
Thank you.
/s/
Timothy Smith
Senior Vice President
[INQUIRY LETTER]
May 26, 2006
To Whom It May Concern:
Boston Trust & Investment Management Company manages assets and acts as
custodian for Shayne Robinson through its Walden Asset Management division. We
are writing to verify that the Shayne Robinson currently owns 62 shares of Barr
Pharmaceuticals Inc. (Cusip # 068306109). We confirm that Shayne Robinson has
beneficial ownership of at least $2,000 in market value of the voting securities
of Barr Pharmaceuticals, Inc., and that such beneficial ownership has existed
for one or more years in accordance with rule 14a-8(a)(1) of the Securities
Exchange Act of 1934. Further, it is their intent to hold greater than $2,000 in
market value through the next annual meeting of Barr Pharmaceuticals.
Sincerely,
/s/
Timothy Smith
Senior Vice President
[INQUIRY LETTER]
August 11, 2006
BY REGULAR & ELECTRONIC MAIL: cfletters@sec.gov
Office of the Chief Counsel
Division of Corporation Finance
U.S. Securities and Exchange Commission
100 F. Street, N.W.
Washington, D.C. 20549
Re: Shareholder Proposal of Shayne Robinson for Inclusion in the 2006 Proxy
Statement of Barr Pharmaceuticals, Inc.
Ladies and Gentlemen:
This letter is filed in response to a letter dated July 31, 2006, submitted to
the SEC by Barr Pharmaceuticals, Inc. ("Barr" or "the Company"). The Company
seeks to exclude a shareholder proposal submitted by Shayne Robinson, a member
and supporter of the People for the Ethical Treatment of Animals ("PETA"). Mr.
Robinson has named the undersigned as his designated representative.
The Company argues that the proposal under review is substantially the same as
one filed in 2005, and should be omitted pursuant to Rule 14a-8(i)(12) since
last year's proposal did not garner enough votes. For the reasons which follow,
we request that the SEC recommend enforcement action if the proposal is omitted.
The resoiution under review is very straightforward:
[T]he shareholders request that the Board adopt and post an Animal Welfare
Policy online which addresses the Company's commitment to (a) reducing, refining
and replacing its use of animals in research and testing, and (b) implementing
acceptable standards of care for animals who continue to be used for these
purposes, both by the Company itself and by all independently retained
laboratories, including provisions that address animals' psychological, social
and behavioral needs. Further, the shareholders request that the Board issue an
annual report to shareholders on the extent to which in-house and contract
laboratories are adhering to this policy, including the implementation of the
psychological enrichment measures.
In short, Barr is being asked to do what many pharmaceutical companies have
already done, namely enact an animal welfare policy and publish it on its
corporate website.
I. THE 2006 ANIMAL WELFARE RESOLUTION AND THE 2005 "GTA5" PROPOSAL
This resolution has been informally referred to by PETA as the "Animal Welfare"
resolution. It was filed at 12 pharmaceutical companies and has received
considerable shareholder support, obtaining as much as 25.4% of the vote at one
pharmaceutical company.1
Last year's resolution requested that the Board commit to using
internationally-accepted non-animal (in vitro) tests for assessing five specific
endpoints, namely skin corrosion, skin irritation, skin absorption,
phototoxicity and pyrogenicity. That resolution was informally referred to as
the "Give the Animals Five" or the "GTA5" resolution, and is attached to Barr's
No Action Letter at Exhibit B. The GTA5 resolution was filed with 19 companies,
chemical and pharmaceutical, for inclusion in their respective 2005 proxy
materials.2
Barr argues that the Animal Welfare resolution is substantially similar to the
GTA5 resolution because the latter is focused on "using only non-animal
[testing] methods" and the former seeks "replacing ... use of animals." (No
Action Letter p. 3.) First, Barr has eclipsed the real meaning of the GTA5
resolution by making it appear to be broadly embracing "non-animal [testing]
methods," when in fact the words that are omitted from the complete sentence
make it apparent that the proposal related exclusively to five endpoints for
which in vitro methods are available (i.e. the uninterrupted, unedited sentence
reads as follows: "Commit specifically to using only non-animal methods for
assessing skin corrosion, irritation, absorption, phototoxicity and pyrogenicity."
Emphasis supplied.)
The language in the Animal Welfare resolution asks Barr to adopt and post an
animal care policy on line which among other things, "addresses the Company's
commitment to (a) reducing, refining and replacing its use of animal in research
and testing ..."
3 Barr places great emphasis on the concept of replacing animal
testing, as being the glue that makes these two resolutions similar. But that
can only stick if the entire context and thrust of each resolution is
disregarded.
The Animal Welfare proposal and the GTA5 resolution both relate to a diverse
class of beings collectively referred to as "animals." A vast universe of issues
and concerns arise within the context of the interactions that human beings have
with animals. The use of animals in product testing is one broad category of
animal-related issues with far-reaching economic, scientific and ethical
dimensions. While both proposals fall under the rubric "animal issues," they
address entirely different substantive concerns and seek very different forms of
implementation.
In SEC Release No. 34-20091 (August 16, 1983) the SEC explained its reason for
adopting the "substantially the same subject matter" standard, stating that
staff determinations should be "based upon a consideration of the substantive
concerns raised by a proposal rather than the specific language or actions
proposed to deal with those concerns." Thus, the substantially similar
determination hinges on the substantive concerns raised by the proposals at
issue.
The fact that two proposals relate to the same subject matter or class is not
dispositive under Rule 14a-8(i)(12)(i). The staff has consistently found that
where two proposals address different substantive concerns involving the same
broad issue, the second proposal will not be barred by the earlier proposal. For
example, in Cooper Industries, Inc. (January 14, 2002) the company was required
to include a shareholder proposal which requested a report detailing social and
environmental issues related to sustainability notwithstanding the company's
argument that a prior proposal that sought global corporate standards on human
rights, workplace safety, and the environment, was substantially similar. The
company argued that the proposals were substantially similar in that both
proposals focused primarily on living wages, social justice, and environmental
issues in the communities where the company operated. The Staff did not concur.
See also V.F. Corp. (Feb. 19, 1987) (the proponent's first proposal asked the
company to implement the MacBride labor principles. The second proposal asked
the board to establish a review committee to undertake an in-depth review of
Northern Ireland operations); General Electric Co. (Feb. 4, 1988) (the
proponent's first proposal asked the company to develop an action plan to
provide assistance to utilities to retire nuclear reactors and convert to coal
or gas power systems. In the second proposal, the proponent requested a report
detailing safety concerns related to boiling water reactors); Dresser Industries
(Jan. 25, 1984) (the first proposal asked the company to sign the Sullivan
Principles. The second proposal requested a report on the company's labor
policies and practices in South Africa).
The Commission's stated reason for focusing on substantive concerns was
expressed when the Rule was amended in 1983. "The Commission believes that by
focusing on substantive concerns addressed in a series of proposals, an
improperly broad interpretation of the new rule will be avoided." SEC Release
No. 34-20091 (August 16, 1983).
Specifically on point, the Staff has previously stated that two proposals
dealing with the use of animals in product testing do not necessarily implicate
substantially the same subject matter. In Bristol-Myers Squibb Company (March 7,
1991), the Staff stated that Bristol-Myers Squibb could not omit a shareholder
proposal dealing with animal testing under the "substantially similar" rule. The
proposal under review in Bristol-Myers Squibb requested that the company cease
all animal tests not required by law and stop selling certain products that
required animal testing. The Staff held that the proposal could not be excluded
where a prior proposal requested a report detailing the scope of the company's
use of animal tests in product testing. The Staff stated:
In arriving at this position the staff takes particular note of the fact that,
while the four proposals concern the same broad issue (i.e., use of live animals
in product development and testing), the present proposal recommends that the
Company take a very active and defined course of action as to the broad issue
(i.e., cease all animal tests not required by law and drop certain products).
The previous proposals asked only that the Company take a passive cause of
action (i.e., supply information). Accordingly, the staff does not believe the
Company may rely on Rule 14a-8(c)(12) as a basis for omitting the proposal from
its proxy materials. (Emphasis supplied.)
Like the respective proposals at issue in Bristol-Myers Squibb, the GTA5
proposal asked the Company to take a very definite course of action with respect
to the issue of animal testing. Conversely, the Animal Welfare proposal asks the
Company to look at the big picture and adopt an animal care policy which will
have broad application to all animals in laboratory settings, be they under
Barr's direct operation or by contract with independent laboratories.
II. PRIOR NON-CONCURRENCES ON ANIMAL RELATED ISSUES
During the last eighteen years, the Staff has ruled on a number of proposals
submitted by PETA that implicate the use of live animals in consumer product
testing. For example, in Procter & Gamble (July 27, 1988) the Staff denied the
company's no-action application ruling that a proposal which requested that the
company cease all animal tests not required by law and begin to phase out
product lines that could not be marketed without animal tests, was not
substantially similar to a prior proposal asking the company to report on the
cost of live-animal testing. In its denial, the Staff stated "The proposal
relates to the preparation of a report to shareholders regarding the scope and
cost of live-animal testing in Company research."
Just as Procter & Gamble argued that the "underlying subject of both proposals
is manifestly that of the Company's practice of conducting safety testing of
products on animals," Barr argues that the proposals are substantially similar
because "the substantive concern of both proposals is animal-based testing."
(No-Action Letter, p. 3.) The Procter & Gamble opinion reflects the Commission's
long-standing intent to focus on the substantive concerns raised by a proposal
in order to determine whether the proposal should be excluded for being
"substantially similar" pursuant to the policy objective embodied in Rule
14a-8(i)(12)(i).
As was the case in Procter & Gamble, the GTA5 resolution and the Animal Welfare
proposal were intended to address entirely distinct substantive concerns. To
that end, they request that the Company take vastly different courses of
actionthe former attempts to eliminate five specific animal tests; the latter
requests that a significant social and public policy concern, namely animal
welfare, be addressed at the policy-making level. Thus, both the conceptual and
substantive thrusts of the two proposals are manifestly distinct. Barr's attempt
to scramble the two simply because they implicate the same broad issue is
unpersuasive.
III. THE STAFF CONCURRENCE IN ABBOTT LABORATORIES IS NOT APPLICABLE BECAUSE THE
RESOLUTIONS ARE NOT THE SAME
The Company relies in part on the Staff's non-concurrence in Abbott Laboratories
(Feb. 28, 2006). However, the resolution under review in Abbott Laboratories was
decidedly different from the Animal Welfare resolution here. In Abbott the
company had an animal welfare policy and that policy was posted on its Web site.
Here, Barr has no animal care policy whatsoever, much less one that appears on
its Web site. Since the major thrust of the Barr resolution is to motivate the
Company to adopt and publish an animal welfare policy, the two resolutions are
markedly different, and the Staff's earlier position is not relevant to this
inquiry.
For the foregoing reasons, PETA respectfully urges the Staff not to concur that
Barr may exclude the shareholder proposal pursuant to Rule 14a-8(i)(12)(i).
Very truly yours,
/s/
Susan L. Hall
Legal Counsel
Research & Investigations
cc: Elizabeth Ising (via e-mail to eising@gibsondunn.com)
Shayne Robinson
-----FOOTNOTES-----
1 The Animal Welfare resolution was presented at Wyeth in April 2006 and
received 25.4% of the vote.
2 Approximately eight companies filed no action letters in an attempt to omit
the GTA5 resolution from their 2005 proxy materials. The Staff refused to concur
in any of the companies' positions. The various bases asserted in an attempt to
omit the GTA5 resolutions were ordinary business operations, false and
misleading, substantially implemented, vague, personal grievance, violation of
proxy rules, and violation of law and State law.
3
The Staff should note that the words "reducing, refining, and replacing" are
words of art, and are known as and referred to among scientists and those
associated with laboratory testing as "the 3Rs." The 3Rs form the basis for most
animal welfare policies adopted by American corporations. They were originally
put forth by two scientists in a study from the 1950s (See "The Principles of
Humane Experimental Techniques" at http://altweb.jhsph.edu/publications/humane_exp/het-toc.htm) and deal largely
with reducing pain associated with animal experiments rather than doing away
with animal experiments.
[INQUIRY LETTER]
August 29, 2006
Direct Dial
(202) 955-8287
Client No.
C 11759-00003
Fax No.
(202) 530-9631
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Response regarding Shareholder Proposal of Shayne Robinson Securities
Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter concerns the request by Barr Pharmaceuticals, Inc. (the "Company")
regarding a shareholder proposal (the "Proposal") received from Shayne Robinson
(the "Proponent"). In a letter dated July 31, 2006 (set forth hereto as Exhibit
A), the Company requested that the staff of the Securities and Exchange
Commission (the "Staff") concur that the Company may omit the Proposal from its
proxy statement and form of proxy for its 2006 Annual Meeting of Shareholders
pursuant to Rule 14a-8(i)(12) because the Proposal deals with substantially the
same subject matter as a shareholder proposal submitted to a vote at the
Company's 2005 Annual Meeting of Shareholders (the "Previous Proposal"), and
that proposal received less than three percent of the total number of votes cast
(the "No-Action Request"). The purpose of this letter is to respond to the
letter dated August 11, 2006 (set forth hereto as Exhibit B), from Susan L.
Hall, counsel for People for the Ethical Treatment of Animals ("PETA") and the
Proponent's representative for purposes of the Proposal, regarding the No-Action
Request (the "Proponent's Response").
The No-Action Request cited the Staff's response in Abbott Laboratories (avail.
Feb. 28, 2006) (reconsideration denied, Mar. 22, 2006) in support of our
conclusion that the Proposal is excludable under Rule 14a-8(i)(12). The
Proponent's Response asserts that Abbott Laboratories is not applicable to the
Proposal because Abbott Laboratories had an "animal welfare policy" whereas the
Company does not. We think that this is a distinction without a difference for
purposes of determining whether the Proposal concerns "substantially the same
subject matter" as the Previous Proposal and, thus, may be excluded under Rule
14a-8(i)(12). The Previous Proposal and the prior proposal in Abbott
Laboratories are essentially identical. Here, the Proposal asks the Company to
adopt an "animal welfare policy;" the Staff described the second proposal at
issue in Abbott Laboratories as relating to "amending the company's current
policies regarding animal welfare." For purposes of the standards under Rule
14a-8(i)(12), it does not matter whether the particular action called for under
the proposals relates to adopting a new policy or expanding an existing policy.
In both cases, the substantive concern of the Proposal and the Abbott
Laboratories' proposals relates to implementing new company policies regarding
animal testing and animal welfare, and the Proposal should therefore be excluded
just as in Abbott Laboratories.
We also disagree with the assertion in the Proponent's Response that the
Proposal and the Previous Proposal address "different substantive concerns." The
Previous Proposal and the Proposal do not simply relate to "animals" in general.
Instead, they both advocate implementation of Company policies relating to
animal testing and animal welfare. Moreover, we do not believe that the letters
cited in the Proponent's Response where the Staff concluded that two proposals
did not relate to "substantially the same subject matter" within the meaning of
Rule 14a-8(i)(12) or its predecessor are applicable in this regard. Those
precedent address situations in which one proposal requested a company to take a
particular action and the other proposal requested the company to issue a report
on certain of its activities. For example, the Staff quote in the Proponent's
Response from Bristol-Myers Squibb Co. (avail. Mar. 7, 1991), notes that two
proposals relating to animal testing did not relate to "substantially the same
subject matter" where one proposal "recommends that the Company take a very
active and defined course of action as to the broad issue (i.e., cease all
animal tests not required by law and drop certain products)" whereas the
previous proposals "asked only that the Company take a passive cause of action
(i.e., supply information)." In contrast to the proposals at issue in
Bristol-Myers Squibb, both the Proposal and the Previous Proposal ask the
Company to "take a very active and defined course of action" namely, implement
corporate policies relating to "animal welfare." For these reasons, the Proposal
is substantially similar to the Previous Proposal for purposes of Rule
14a-8(i)(12).
We also wish to note that many of the arguments set forth in the Proponent's
Response were previously made to the Staff when a different PETA representative
requested reconsideration of Abbott Laboratories. See Abbott Laboratories
(avail. Mar. 22, 2006) (reconsideration denied) (the "PETA Reconsideration
Request"). We believe that the Staff's refusal to reconsider its position in the
PETA Reconsideration Request despite these arguments further supports the Staff
concurring that the Company may omit the Proposal pursuant to Rule 14a-8(i)(12).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2006
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8287 or Ronald O. Mueller at (202) 955-8671.
Very truly yours,
/s/
Elizabeth Ising
Enclosures
cc: Sheldon Hirt, Associate Counsel, Barr Pharmaceuticals, Inc.
Susan L. Hall, People for the Ethical Treatment of Animals
[INQUIRY LETTER]
July 31, 2006
Direct Dial
(202) 955-8287
Client No.
C 11759-00003
Fax No.
(202) 530-9631
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Shareholder Proposal of Shayne Robinson Securities Exchange Act of 1934Rule
14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that Barr Pharmaceuticals, Inc. (the "Company")
intends to omit from its proxy statement and form of proxy for its 2006 Annual
Meeting of Shareholders (collectively, the "2006 Proxy Materials") a shareholder
proposal (the "Proposal") received from Shayne Robinson (the "Proponent").
Pursuant to Rule 14a-8(j), enclosed herewith are six (6) copies of this letter
and its attachments. Also, in accordance with Rule 14a-8(j), a copy of this
letter and its attachments is being mailed on this date to the Proponent's
representativeSusan L. Hall with People for the Ethical Treatment
Animalsinforming her of the Company's intention to omit the Proposal from the
2006 Proxy Materials. Due to a delay relating to the Company requiring
additional time to assess its response to the Proposal, the Company is
submitting this request 70 days in advance of the presently intended filing date
for its 2006 Proxy Materials. Nevertheless, we understand the view of the staff
of the Division of Corporation Finance (the "Staff") to be that a company should
notify the Staff whenever it determines that it may omit a shareholder proposal,
and we hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2006 Proxy Materials on the basis discussed
below. The Company agrees to promptly forward to the Proponent's representative
any response from the Staff to this no-action request that the Staff transmits
by facsimile to the Company only.
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2006 Proxy Materials pursuant to Rule
14a-8(i)(12)(i) because the Proposal deals with substantially the same subject
matter as a shareholder proposal submitted to a vote at the Company's 2005
Annual Meeting of Shareholders, and that proposal received less than three
percent of the total number of votes cast.
THE PROPOSAL
The Proposal asks that the Company adopt and publicize an Animal Welfare Policy
that addresses the Company's commitment to: "(a) reducing, refining and
replacing its use of animals in research and testing, and (b) implementing
acceptable standards of care for animals who continue to be used for these
purposes ... including provisions that address animals' psychological, social
and behavioral needs." A copy of the Proposal, as well as related correspondence
from the Proponent, is attached to this letter as Exhibit A.
ANALYSIS
The Proposal may be properly omitted under Rule 14a-8(i)(12)(i) because it deals
with substantially the same subject matter as a shareholder proposal that was
included in the Company's 2005 proxy materials, and that proposal did not
receive the support necessary for resubmission.
Rule 14a-8(i)(12)(i) permits the exclusion of a shareholder proposal dealing
with "substantially the same subject matter as another proposal or proposals
that previously has or have been included in the company's proxy materials
within the preceding 5 calendar years" and the proposal received "less than 3%
of the vote if proposed once within the preceding 5 calendar years...."
The Company included a shareholder proposal (the "Previous Proposal") in its
2005 proxy materials filed on September 27, 2005, which requested that the
Company:
1. commit specifically to using only non-animal methods for assessing skin
corrosion, irritation, absorption, phototoxicity and pyrogenicity;
2. confirm that it is in the Company's best interest to commit to replacing
animal-based tests with non-animal methods; and
3. petition the relevant regulatory agencies requiring safety testing for the
Company's products to accept as total replacements for animal-based methods,
those approved non-animal methods described above, along with any others
currently used and accepted by the Organization for Economic Cooperation and
Development (OECD) and other developed countries.
A copy of the Previous Proposal as it appeared in the Company's 2005 proxy
materials is attached hereto as Exhibit B.
The Proposal and the Previous Proposal are substantially similar for purposes of
Rule 14a-8(i)(12) since the substantive concern of both proposals is
animal-based testing and, more specifically, replacing animal testing with
non-animal testing. For example:
The Proposal requests that, among other things, the Company adopt and
publicize a policy on animal-based testing that addresses the Company's
commitment to "reducing, refining and replacing its use of animals in research
and testing" (emphasis added).
Similarly, the Previous Proposal focused on "using only non-animal [testing]
methods" and confirming that it is in the Company's "best interest" to
"replac[e] animal-based tests with non-animal methods" (emphasis added).
Moreover, both proposals (whether in their respective resolutions, recitals or
supporting statements) discuss the alleged pain and abuses suffered by animals
used in animal-based testing and argue that the Company should play a role in
stopping such alleged abuses. Despite the differences in some of the actions
requested by the proposals, the express language of both the Previous Proposal
and the Proposal deal with the same substantive concern and thus substantially
the same subject matter for purposes of Rule 14a-8(i)(12)reducing the use of
animal-based testing conducted by or on behalf of the Company.
The Staff recently concurred that a proposal similar to the Proposal submitted
to Abbott Laboratories in 2006 was excludable under Rule 14a-8(i)(12)(i) where
that company's shareholders had considered a shareholder proposal in 2005 that
is nearly identical to the Previous Proposal. See Abbott Laboratories (avail.
Feb. 28, 2006). If anything, the Proposal and Previous Proposal are more similar
than those considered in Abbott Laboratories. This is because Abbot
Laboratories' 2006 proposal did not contain the express language found in the
Proposal regarding "replacing" animal-based testing but instead focused on
amending Abbott Laboratories animal use policy to "ensure" superior standards of
care for animals used in testing and applying it to independent laboratories
contracted by Abbott Laboratories. Regardless, because Abbott Laboratories 2005
and 2006 proposals both concerned animal testing, the Staff concurred that the
2006 proposal was excludable under Rule 14a-8(i)(12)(i).
As recognized in Abbott Laboratories, Rule 14a-8(i)(12)'s reference to
"substantially the same subject matter" does not mean that the Previous Proposal
and the Proposal must be exactly the same. Although the predecessor to Rule
14a-8(i)(12) required a proposal to be "substantially the same proposal" as
prior proposals, the Securities and Exchange Commission (the "Commission")
amended this rule in 1983. The Commission explained the reason for and meaning
of the revision, stating:
The Commission believes that this change is necessary to signal a clean break
from the strict interpretive position applied to the existing provision. The
Commission is aware that the interpretation of the new provision will continue
to involve difficult subjective judgments, but anticipates that those judgments
will be based upon a consideration of the substantive concerns raised by a
proposal rather than the specific language or actions proposed to deal with
those concerns. SEC Release No. 34-20091 (August 16, 1983).
The Staff has confirmed in a number of recent precedents that Rule 14a-8(i)(12)
does not require that two proposals, or their subject matters, be identical in
order for a company to exclude the later-submitted proposal. When considering
whether a proposal deals with substantially the same subject matter, the Staff
has increasingly focused on the "substantive concerns" raised by the proposal as
the essential consideration, rather than the specific language or corporate
action proposed to be taken. The Staff has thus concurred with the exclusion of
proposals under Rule 14a-8(i)(12) when the proposal in question shares similar
underlying social or policy issues with a prior proposal, even if the proposals
recommended that the company take different actions.
For example, in both Medtronic Inc. (avail. June 2, 2005) and Bank of America
Corp. (avail. Feb. 25, 2005), the Staff permitted the omission of proposals
requesting that the companies list all of their political and charitable
contributions on their websites. In prior proposals, shareholders had requested
that the companies cease making charitable contributions. Despite the different
actions requested and the different subject matters of the prior proposals
(ceasing contributions) and the proposals at issue (disclosure of
contributions), the substantive concern of both proposals was corporate
contributions and, thus, the Staff concluded that the proposals at issue dealt
with substantially the same subject matter. See also Dow Jones & Co., Inc.
(avail. Dec. 17, 2004) (proposal requesting the company publish in its proxy
materials information relating to its process of donations to a particular
non-profit organization was excludable as it dealt with substantially the same
subject matter as a prior proposal requesting an explanation of the procedures
governing all charitable donations); Saks Inc. (avail. Mar. 1, 2004) (a proposal
requesting the board of directors to implement a code of conduct based on
International Labor Organization standards, establish an independent monitoring
process and annually report on adherence to such code was excludable as it dealt
with substantially the same subject matter as a prior proposal requesting a
report on the company's vendor labor standards and compliance mechanism);
Bristol-Myers Squibb Co. (avail. Feb. 11, 2004) (a proposal requesting that the
board review pricing and marketing policies and prepare a report on how the
company will respond to pressure to increase access to prescription drugs was
excludable because it dealt with substantially the same subject matter as prior
proposals requesting the creation and implementation of a policy of price
restraint on pharmaceutical products). But see Wm. Wrigley Jr. Company (avail.
Dec. 13, 2004) (addressing two proposals to add "against" to the proxy card; the
Staff's response in this instance may reflect the inclusion in the earlier but
not the later proposal of a request to also remove management's discretionary
voting authority where signed proxies did not specify a vote). This more recent
precedent thus appears to supersede earlier interpretations. See, e.g., Procter
& Gamble Co. (July 27, 1988).
This precedent confirms that, for purposes of Rule 14a-8(i)(12), the Previous
Proposal and the Proposal concern "substantially the same subject matter"
generally animal-based testing conducted by or on behalf of the Company and,
more specifically, "replacing" the use of animals in such testing. Moreover, as
evidenced in Exhibit C, the Previous Proposal received approximately 1.54% of
the vote at the Company's 2005 Annual Meeting of Shareholders.1 Thus, the
Previous Proposal failed to meet the required 3% threshold at the 2005 meeting.
For these reasons, we request that the Staff concur that the Proposal is
excludable pursuant to Rule 14a-8(i)(12)(i).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2006
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8287 or Ronald O. Mueller at (202) 955-8671.
Very truly yours,
/s/
Elizabeth Ising
Enclosures
cc: Sheldon Hirt, Associate Counsel, Barr Pharmaceuticals, Inc.
Susan L. Hall, People for the Ethical Treatment of Animals
-----FOOTNOTES-----
1 The Previous Proposal 71,709,367 received "against" votes and 1,123,688 "for"
votes. Pursuant to the Staff's position on counting votes for purposes of Rule
14a-8(i)(12), abstentions and broker non-votes were not included for purposes of
this calculation. See Staff Legal Bulletin No. 14, Question F.4 (July 13, 2001).
[STAFF REPLY LETTER]
September 25, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Barr Pharmaceuticals, Inc.
Incoming letter dated July 31, 2006
The proposal requests that the board adopt and post an animal welfare policy
addressing Barr Pharmaceuticals' commitment to (a) reducing, refining and
replacing its use of animals in research and testing, and (b) implementing
acceptable standards of care for animals used in research and testing by Barr
Pharmaceuticals and its independently retained laboratories.
There appears to be some basis for your view that Barr Pharmaceuticals may
exclude the proposal under rule 14a-8(i)(12)(i). Accordingly, we will not
recommend enforcement action to the Commission if Barr Pharmaceuticals omits the
proposal from its proxy materials in reliance on rule 14a-8(i)(12)(i).
Sincerely,
/s/
Mary Beth Breslin
Special Counsel
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