Company Name: Loews Corp. (Recon.)
Public Availability Date: March 22, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
[INQUIRY LETTER]
March 15, 2006
VIA OVERNIGHT MAIL AND FACSIMILE
Office of the Chief Counsel
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
Fax: 202-772-9201
Attn: Eric Finseth, Esq. Mark F. Vilardo, Esq.
Re: Loews Corporation Omission of Shareholder Proposal of the Congregation of
the Sisters of St. Agnes and Trinity Health
Ladies and Gentlemen:
On December 16, 2005 Loews Corporation, a Delaware corporation (the "Company")
filed a letter with the Securities and Exchange Commission (the "Commission")
pursuant to Rule 14a-8(j) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") in connection with a shareholder proposal (the
"Proposal") from the Congregation of the Sisters of St. Agnes and Trinity Health
(together, the "Proponent"), which the Proponent seeks to have included in the
Company's proxy statement relating to its 2006 annual meeting of shareholders
(the "Proxy Materials"). A copy of this letter, together with the Commission's
response, is attached hereto for your convenience.
In this letter the Company asserted, among other things, that the Proposal was
excludable from the Proxy Materials pursuant to Rule 14a-8(i)(7) under the
Exchange Act because it deals with matters related to the Company's ordinary
business operations, including a matter that is the subject of litigation. The
Company noted that its subsidiary, Lorillard Tobacco Company ("Lorillard") "is
currently involved in many cases relating to the health hazards of cigarettes,
including cases involving African American smokers and menthol cigarettes. Many
of these cases also involve the content of information Lorillard disseminates
publicly about the health hazards of cigarettes. Finally, several of these cases
relate to Lorillard's use in some of its products of descriptors such as
'light', including a purported national class action (Schwab v. Philip Morris
USA, Inc., et al. (U.S. District Court, Eastern District, New York)). The health
hazards of cigarettes, including whether cigarettes pose unique hazards to
certain individuals or demographic groups, is at issue in all these cases."
On February 9, 2006 the staff of the Commission issued a letter stating that it
was unable to concur with the Company's view that it may omit the Proposal from
its Proxy Materials for the reasons stated above.
We recently became aware that on December 28, 2005, Reynolds American Inc.
("Reynolds") filed a letter with the Commission requesting that the staff of the
Commission concur with its opinion that a proposal identical to the Proposal
received by the Company may be omitted from Reynolds's proxy statement for its
2006 meeting of the shareholders. A copy of this letter, together with the
Commission's response, is also attached hereto for your convenience.
In its letter, Reynolds asserted, among other things, that the Proposal "would
adversely affect the litigation strategy of ... [its] operating subsidiary, R.J.
Reynolds Tobacco Company ('Reynolds Tobacco'), in multiple lawsuits in which it
and certain of its indemnities are involved. Reynolds Tobacco is currently
litigating (i) a health care cost recovery case in which one of the plaintiffs'
principal allegations relates to the defendants' marketing of menthol cigarettes
to the African American community and the claim that the use of menthol
cigarettes by the African American community poses unique health hazards, and
(ii) multiple cases relating to allegations by plaintiffs claiming the use of
the terms 'light' and 'ultralight' in product descriptions is deceptive."
On February 10, 2006 the staff of the Commission issued a letter stating that
there appeared to be a basis for Reynolds's view that it may omit the Proposal
from its proxy materials for the reasons stated above.
In support of its assertions, Reynolds appended a detailed description of the
litigation referred to in its letter. The single health care recovery case
referenced was City of St Louis, et al. v. American Tobacco Company, Inc., et
al, No. CV 982-09652, Circuit Court of the City of St. Louis, State of Missouri.
Lorillard is a defendant in this case, together with Reynolds. Among the
allegations in plaintiffs' second amended complaint are those directed to the
purported practice of the defendants, including Lorillard, of targeting minority
smokers generally and African American smokers specifically. Plaintiffs contend,
among other things, that the defendants "predominantly market mentholated
cigarettes to African Americans," and that African American smokers have higher
risks of disease and addiction from their smoking. As Reynolds has noted, the
defendants deny these allegations and will present expert testimony countering
these claims. Consequently, the Proposal would require Lorillard to take a
public position in direct contradiction to the position it will take in defense
of this litigation.
Reynolds also cites a number of other cases, including Schwab v. Philip Morris
USA, Inc., et al., which was cited by the Company in its original letter. The
plaintiffs in this case are a purported nationwide class composed of individuals
who purchased cigarettes labeled as "lights" or "mild," or that deliver lower
levels of tar or nicotine as compared to other cigarettes. Plaintiffs contend
that smokers of "lights" cigarettes were misled by defendants' advertising and
marketing of these cigarettes. While Lorillard is not named as a defendant in
the other cases specifically cited by Reynolds, Lorillard, like Reynolds, is a
defendant in a number of other individual actions in which the plaintiffs make
allegations implicating the issues raised in the Proposal. For example,
Lorillard is a defendant in the case of Evans v. Lorillard Tobacco Company, et
al., Case No.04-2840-A, pending in the Suffolk Superior Court of the
Commonwealth of Massachusetts. In this case, plaintiff contends that his
mother's lung cancer and subsequent death was caused by smoking a particular
menthol brand of cigarettes manufactured by Lorillard, and Lorillard's practices
in marketing this brand were directed towards African American smokers, such as
the decedent. Lorillard has denied the allegations plaintiffs have asserted in
these matters regarding its menthol cigarettes, its "lights" or "low tar"
cigarettes, and its purported practices in marketing cigarettes to certain
segments of the market, such as to African Americans. As a result, all of these
issues are being actively litigated.
As discussed above, if adopted, the Proposal would adversely affect Lorillard's
litigation strategy to the same extent that it would adversely affect Reynolds'
litigation strategy. As a consequence, the Company continues to believe that,
just as in Reynolds American Inc. (February 10, 2006), the Proposal is
excludable from the Proxy Materials pursuant to Rule 14a-8(i)(7) under the
Exchange Act because it deals with matters related to the Company's ordinary
business operations, and the Exchange Act rules should be applied in a
consistent manner to similar fact patterns.
In light of Reynolds American Inc. (February 10, 2006), and in consideration of
the foregoing, we respectfully request that the staff of the Commission
reconsider its position as set forth in Loews Corporation (February 9, 2006).
We would also greatly appreciate the staff's prompt response to this request, in
light of imminent printing and mailing deadlines applicable to the Company's
Proxy Materials. Should you require additional information, please do not
hesitate to contact the undersigned at (212) 521-2936.
Very truly yours,
/s/
Glenn P. Zarin
Att.
cc: The Congregation of the Sisters of St. Agnes 320 County Road K Fond du Lac,
WI 54935 Phone: 920-907-2315 Fax: 920-921-8177 Attn: S. Kathleen Nelessen, CSA
Trinity Health 766 Brady Avenue, Apt. 635 Bronx, New York 10462 Phone:
718-822-0820 Fax: 718-504-4787 Attn: Catherine Rowan
Paul M. Neuhauser 1253 North Basin Lane Siesta Key Sarasota, Florida 34242
Phone/Fax: 941-349-6164
[INQUIRY LETTER]
November 16, 2005
Mr. James Tisch, CEO
Loews Corporation
667 Madison Avenue
New York, N. Y. 10021-8087
Dear Mr. Tisch,
I write to you on behalf of the Congregation of Sisters of St. Agnes (CSA) and
other shareholders in requesting our Company to voluntarily undertake a campaign
aimed at African Americans apprising them of the unique health hazards to them
associated with smoking menthol cigarettes, including data showing the industry
descriptors such as "light" and "ultralight" do not mean that those who smoke
such brands will be any less likely to incur diseases than those who smoke
regular brands.
The members of our Congregation established hospitals over a century ago and
continue to minister in the promotion of wellness and preventive health care.
Members minister with the African American people of Louisiana, Alabama,
Mississippi, North Carolina, Illinois and Wisconsin.
We submit the resolution for the inclusion in the proxy statement under Rule
14a-8 of the general rules and regulations of the Security Exchange Act of 1934.
We would appreciate indication in the proxy statement that Congregation of
Sisters of St. Agnes is a co-sponsor of this resolution. Primary contact should
be made with Sr. Lillian Anne Healy, CCVI, Congregation of the Sisters of
Charity of the Incarnate Word and we would like to receive all correspondence
sent to her.
The Congregation of Sisters of Saint Agnes is the beneficial owner of Loews
Corporation stocks which have been owned for more than one year and there is no
intent to sell it. A letter verifying ownership is enclosed. We urge you to
implement the action requested so further resolutions will not be necessary.
Sincerely,
/s/
S. Kathleen Nelessen, CSA
Member - Justice, Peace, Ecology Committee
CC: Sr. Lillian Anne Healy, CCVI Rev. Michael Crosby, OFM Cap.
[APPENDIX]
ADDRESS HEALTH HAZARDS FOR AFRICAN AMERICANS ASSOCIATED WITH SMOKING MENTHOL
CIGARETTES
Loews (Newport)
WHEREAS, most African Americans who smoke have become addicted to menthol
cigarettes. Approximately three of every four who smoke prefer menthols; among
Black youth who smoke, as many as nine of every ten prefer menthol brands.
Noting findings in Nicotine and Tobacco Research (07.01.05) on "the influence of
gender, race, and menthol content on tobacco exposure measures," BusinessWeek
reported (09.05.05): "Menthol evokes smooth refreshment, but for African
American smokers, it may be lethal. Researchers have long puzzled over why black
male smokers are 30% more likely to develop lung cancer and die from it than are
white men, even though they smoke fewer cigarettes. New Harvard research points
the finger at menthol cigarettes, which are favored by more than 70% of black
smokers. Scientists at the Harvard School of Public Health analyzed the menthol
in several brands and found much more had been added to those cigarettes labeled
as light or ultralight. Because menthol is a numbing agent, they said, the high
levels may lead to deeper inhalation."
The BusinessWeek article commented: "That helps explain earlier studies showing
smoking-cessation programs are least successful for black menthol smokers; They
may draw in more addictive substances along with menthol." One of the authors of
the study noted that while 'smokers may believe the term 'light' implies a
reduction in disease risk, this is not true, and menthol may be playing an
important role in this misperception.'"
An abstract of the original study noted that "more than 25% of cigarettes sold
in the United States are branded as mentholated, and these cigarettes are smoked
disproportionately among populations with disparate tobacco-related health
outcomes.... Results [of the study] showed menthol per cigarette and menthol per
tobacco to be significantly greater in cigarettes labeled with industry
descriptors of ultralight or light, belying the common consumer perception that
'light' means less. Menthol per cigarette and tobacco per cigarette were
significantly greater in 100-mm compared with 85-mm cigarettes. The study
results are consistent with prior research that suggests menthol may be used to
offset reductions in smoke delivery or impact and to facilitate compensatory
smoke inhalation behaviors in smokers of cigarettes with reduced
machine-measured smoke delivery."
The Harvard study recommends that "tobacco manufacturers should be required by
federal or other regulatory agencies to report the amount of menthol added to
cigarettes."
RESOLVED, within six months of this annual meeting, this Company shall
voluntarily undertake a campaign aimed at African Americans apprising them of
the unique health hazards to them associated with smoking menthol cigarettes,
including data showing the industry descriptors such as "light" and "ultralight"
do not mean those who smoke such brands will be any less likely to incur
diseases than those who smoke regular brands.
[INQUIRY LETTER]
December 16, 2005
VIA OVERNIGHT COURIER
Office of the Chief Counsel
Division of Corporate Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549
Re: Loews Corporation Omission of Shareholder Proposal of the Congregation of
the Sisters of St. Agnes and Trinity Health
Ladies and Gentlemen:
Loews Corporation, a Delaware corporation (the "Company") is filing this letter
with the Securities and Exchange Commission (the "Commission") pursuant to Rule
14a-8(j) promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The Company has received a shareholder proposal (the "Proposal") from the
Congregation of the Sisters of St. Agnes and Trinity Health (together, the
"Proponent"), which the Proponent seeks to have included in the Company's proxy
statement relating to the Company's 2006 Annual Meeting of Shareholders (the
"Proxy Materials"). A copy of the Proposal is attached hereto as Exhibit A.
The Proposal requires that the Company "undertake a campaign aimed at African
Americans apprising them of the unique health hazards to them associated with
smoking menthol cigarettes, including data showing the industry descriptors such
as 'light' and 'ultralight' do not mean those who smoke such brands will be any
less likely to incur diseases than those who smoke regular brands." This
Proposal apparently relates to the Company's subsidiary, Lorillard Tobacco
Company ("Lorillard"), which is engaged in the tobacco business. The Company
believes that it may omit the Proposal from the Proxy Materials for each of the
following, separately sufficient, reasons:
(i) pursuant to Rule 14a-8(i)(7) because it pertains to matters of ordinary
business operations, including litigation strategy and the implementation of a
"campaign" imparting information relating to a product of one of the Company's
subsidiaries;
(ii) pursuant to Rule 14a-8(i)(3) and Rule 14a-8(i)(6) because it is vague and
indefinite in that the means, method and scope of the requested "campaign" are
unspecified; and
(iii) pursuant to Rule 14a-8(i)(1) because it is not a proper subject for action
by shareholders under Delaware Law in that it fails to contain precatory
language thereby usurping the authority of the Company's board of directors.
The Company therefore respectfully requests confirmation that the staff of the
Commission (the "Staff") will not recommend any enforcement action against the
Company if the Company omits the Proposal from the Proxy Materials. Pursuant to
Rule 14a-8(j), the Company is submitting six (6) copies of this letter, and the
Proponent's letter, including the Proposal. A copy of this submission is being
furnished simultaneously to the Proponent.
A. The Proposal.
The Proposal requires that the Company "undertake a campaign aimed at African
Americans apprising them of the unique health hazards to them associated with
smoking menthol cigarettes, including data showing the industry descriptors such
as 'light' and 'ultralight' do not mean those who smoke such brands will be any
less likely to incur diseases than those who smoke regular brands." See Exhibit
A.
B. The Proposal May Be Excluded Under Rule 14a-8(i)(7) Because It Deals With
Matters Related To The Company's Ordinary Business Operations.
The Company believes the Proposal may be excluded from the Proxy Materials
pursuant to Rule 14a-8(i)(7) because it relates directly to matters within the
ordinary business operations of Lorillard, in two respects.
First, the Proposal deals with a matter that is the subject of litigation.
Lorillard is currently involved in many cases relating to the health hazards of
cigarettes, including cases involving African American smokers and menthol
cigarettes. Many of these cases also involve the content of information
Lorillard disseminates publicly about the health hazards of cigarettes. Finally,
several of these cases relate to Lorillard's use in some of its products of
descriptors such as "light", including a purported national class action (Schwab
v. Philip Morris USA, Inc., et al. (U.S. District Court, Eastern District, New
York)). The health hazards of cigarettes, including whether cigarettes pose
unique hazards to certain individuals or demographic groups, is at issue in all
these cases.
In addition the Proposal requires the Company to undertake a campaign apprising
African Americans of the "unique health hazards" to them associated with smoking
menthol cigarettes, including "data showing the industry descriptors such as
'light' and 'ultralight' do not mean those who smoke such brands will be any
less likely to incur diseases." The Proposal assumes that (1) smoking menthol
cigarettes does pose unique health hazards to African Americans, (2) the actual
health risks of a specific type of cigarette to a specific category of smoker
are known, and (3) cigarettes described as "light" and "ultralight" are not
safer than others. These assumptions may be the opinions of the Proponent, but
they are presented as facts. These conclusions are important issues in several
cases in which Lorillard is a defendant.
Attached as Exhibit B is the opinion of Ronald Milstein, Esq., the General
Counsel of Lorillard, stating that implementation of the Proposal could be
expected to have an adverse impact on the ability of Lorillard to defend these
cases.
The Staff has previously acknowledged that a shareholder proposal is properly
excludable under the "ordinary course of business" exception contained in Rule
14a-8(i)(7) when the subject matter of the proposal is the same or similar to
that which is central or material to litigation in which a registrant is then
involved. The Proposal falls squarely within a series of no-action letters in
which the Staff has acknowledged as properly excludable under the "ordinary
course" exception proposals involving the use of "light" and "ultralight"
descriptors for tobacco products. See R.J. Reynolds Tobacco Holdings, Inc.
(February 21, 2003) (proposal requesting the board find appropriate ways of
informing customers of the risks of smoking "light" and "ultralight" brands
excludable under the "ordinary course" exception because it interfered with
litigation strategy); RJR Nabisco Holdings Corp. (February 22, 1999) (proposal
requiring the company to stop using the terms "light" and "ultralight" until
shareholders can be assured through independent research that such brands reduce
the risk of smoking-related diseases excludable under the "ordinary course"
exception because it interfered with litigation strategy); Philip Morris
Companies Inc. (February 22, 1999) (proposal requiring the company to stop using
the terms "light" and "ultralight" until shareholders can be assured through
independent research that such brands reduce the risk of smoking-related
diseases excludable under the "ordinary course" exception because it interfered
with litigation strategy). See, also, the letters listed on Exhibit C attached
hereto.
Secondly, the effect of the Proposal is to interfere with the day-to-day conduct
of the marketing of Lorillard's products by mandating a campaign to a targeted
demographic population relating specifically to Lorillard's menthol cigarette
products and the information about the health hazards of cigarettes that
Lorillard is to disseminate to its customers or to the public generally.
These are the kind of circumstances contemplated by the Commission in the
release adopting the current version of Rule 14a-8, "The general underlying
policy of [the ordinary business] exclusion is ... to confine the resolution of
ordinary business problems to management and the board of directors, since it is
impracticable for shareholders to decide how to solve such problems at an annual
shareholders meeting." (Release 34-40018 (May 21, 1998, at p. 20)). Lorillard's
management, supervised by its board of directors, is responsible for making
informed and reasoned decisions about the marketing of its products and the
information to be communicated publicly regarding the health aspects of its
products. The manner in which it markets its products is precisely the type of
decision that Lorillard makes in the ordinary course of business and that its
board of directors, rather than its shareholders, or the shareholders of its
parent company, are charged by law with directing. Lorillard's decisions
relating to its communications with its customers result from a complex process
that considers business objectives, target audiences, competitors' products and
marketing efforts, governmental regulations, contractual obligations and
creative matters. These matters properly fall within the purview of management
and the board of directors of Lorillard, which have the capacity, knowledge and
training necessary to evaluate them and make appropriate decisions. Moreover,
this type of information generally is not available to shareholders.
Accordingly, these decisions cannot, "as a practical matter, be subject to
direct shareholder oversight." (Id.)
As a result, the Staff has taken the position in numerous no-action letters
issued as recently as January 2005 that advertising or marketing matters are
excludable under clause (i)(7) (and its predecessor, clause (c)(7)). See, for
examples, the letters listed on Exhibit D attached hereto. In each of the cases
listed on Exhibit D, the proponent sought to cause the corporation to conform
its marketing, programming or other media content to the proponent's own
opinions of how the company should conduct these activities, especially in light
of a social issue about which the proponent had a particular viewpoint. Each
proposal was nonetheless excludable because it involved the ordinary business
operations of the company. In the present case, the Proposal would require
Lorillard to create and implement an entirely new and unspecified "campaign"
targeted at a specific demographic population and relating to a single category
of its products, a massive interference with its ordinary business operations.
In a number of letters issued in 1999, the Staff, without comment, declined to
apply this precedent to tobacco companies attempting to exclude proposals
seeking to implement a policy of submitting advertising campaigns to independent
testing to ensure that they are not more appealing to children than to adults.
The Proposal is distinguishable from those proposals in that it would require
the creation and implementation of a new campaign targeted at a specific
demographic population and relating to a specific class of Lorillard's products,
rather than providing for the independent vetting of campaigns Lorillard's
management had already developed and determined to implement. In addition, as
noted, the Proposal relates to litigation strategy, which was not an issue in
the consideration of the foregoing proposals.
C. The Proposal May Be Excluded Under Rule 14a-8(i)(3) And Rule 14a-8(i)(6)
Because It Is Vague And Indefinite.
Rule 14a-8(i)(3) allows the exclusion of a shareholder proposal if the proposal
or supporting statement is contrary to any of the Commission's proxy rules or
regulations (including Rule 14a-9). We believe that the Proposal is so vague and
indefinite that it violates the Rule 14a-9 prohibition on materially false and
misleading statements. In addition, we believe that the Proposal is excludable
under Rule 14a-8(i)(6) because the Company is unable to determine what actions
would be required by the Proposal and, thus, lacks the power to implement the
Proposal.
The Staff has consistently taken the position that vague and indefinite
shareholder proposals are excludable under Rule 14a-8(i)(3) because "neither the
stockholders voting on the proposal, nor the company in implementing the
proposal (if adopted), would be able to determine with any reasonably certainty
exactly what actions or measures the proposal requires." Staff Legal Bulletin
No. 14B (Sept. 15, 2004). Moreover, a proposal is sufficiently vague and
indefinite so as to justify exclusion where a company and its shareholders might
interpret the proposal differently, such that "any action ultimately taken by
the company upon implementation of the proposal could be significantly different
from the actions envisioned by the shareholders voting on the proposal." Fuqua
Industries, Inc. (Mar. 12, 1991).
The Proposal is inherently vague and misleading. It seeks to require the Company
to "undertake a campaign," without providing a basis on which the Company can
determine exactly what the proponent expects it to do. The Proposal does not
provide a definition of "campaign" and gives no indication of the scope or means
of execution intended by the Proponent, and fails to recognize or account for
the legal and contractual restrictions to which Lorillard is subject.
Accordingly, if adopted, there would be no way for the Company to determine
whether or not it could, in fact, comply with the Proposal.
The supporting statements in the Proposal fail to clarify these material
ambiguities. Accordingly, the Proposal is excludable under Rule 14a-8(i)(3) as
misleading "because any action(s) ultimately taken by [the company] upon
implementation of the proposal could be significantly different from the
action(s) envisioned by shareholders voting on the proposal." Occidental
Petroleum Corp. (Feb. 11, 1991). See also Dyer v. SEC, 287 F.2d 773, 781 (8th
Cir. 1961) ("it appears to us that the proposal as drafted and submitted to the
company, is so vague and indefinite as to make it impossible for either the
Board of Directors or the shareholders at large to comprehend precisely what the
proposal would entail."). As a result of these vague and indefinite provisions
in the Proposal, the Proposal is excludable under Rule 14a-8(i)(3).
The Proposal also may be properly excluded pursuant to Rule 14a-8(i)(6) since it
is vague and ambiguous, with the result that a company "would lack the power to
implement" the Proposal. A company "lacks[s] the power or authority to
implement" a proposal when the proposal "is so vague and indefinite that [the
company] would be unable to determine what action should be taken." Int'l
Business Machines Corp. (Jan. 14, 1992). Because it would be impossible for the
Company to determine what action should be taken under the Proposal, the
Proposal also may be excluded from the Proxy Materials under Rule 14a-8(i)(6).
D. The Proposal May Be Excluded Under Rule 14a-8(i)(1) Because It Is Not A
Proper Subject For Action By Shareholders Under The Laws Of The State Of
Delaware.
The Proposal may be excluded under Rule 14a-8(i)(1), because it is not a proper
subject for action by shareholders under Delaware Law.
The Company is a Delaware corporation subject to the Delaware General
Corporation Law. Under Delaware law, the board of directors is responsible for
overseeing the Company's management. Section 141(a) of the Delaware General
Corporation Law provides that the business and affairs of a Delaware corporation
are to be managed by or under the direction of the board of directors unless the
corporation's certificate of incorporation provides otherwise. The Company's
certificate of incorporation does not contain any provision that would allow
shareholders to require the board to adopt or implement policies regarding the
public dissemination of product information.
The Proposal purports to require that the Company adopt a policy concerning the
marketing of a product by a subsidiary. This does not constitute a request, a
recommendation or a suggestion for the board to consider adopting or
implementing a new policy in this regard. There is no precatory language in the
Proposal. Instead, it is a flat requirement for the Company to implement the
policy in the Proposal. Under any logical interpretation, the Proposal would
require the board both to adopt a policy and then to implement it. Because the
Proposal would require board action, it constitutes a shareholder effort to
regulate directly and in a mandatory manner the conduct of business that
Delaware law entrusts to directors. As a mandate for director action, the
Proposal is not within the power of shareholders and may be excluded.
The Note to paragraph (i)(1) of Rule 14a-8 states in relevant part, "Depending
on the subject matter, some proposals are not considered proper under state law
if they would be binding on the company if approved by shareholders."
The Division of Corporation Finance Staff Legal Bulletin No. 14, dated July 13,
2001, states in relevant part, under the heading "Substantive Issues," "When
drafting a proposal, shareholders should consider whether the proposal, if
approved by shareholders, would be binding on the company. In our experience, we
have found that proposals that are binding on the company face a much greater
likelihood of being improper under state law and, therefore, excludable under
Rule 14a-8(i)(1)."
The Proposal purports to bind the Company's board, without any precatory
language, with respect to a matter that is within board control. Therefore, the
Company has concluded that it may exclude the Proposal from its Proxy Materials
on these grounds.
E. Conclusion.
For the reasons set forth above, the Company respectfully requests that the
Staff concur in its view that it may exclude the Proposal from the Company's
Proxy Materials under Rules 14a-8(i)(7), 14a-8(i)(3), 14a-8(i)(6) and
14a-8(i)(1). In order to meet the Company's timetable for preparing its Proxy
Materials and distributing responses to shareholder proposals in a timely manner
pursuant to the rules of the Commission, the Company would appreciate your
response to this request by February 1, 2006. Should you require additional
information, please do not hesitate to contact the undersigned at (212)
521-2936. Please acknowledge receipt of this filing by date-stamping the
enclosed additional copy of this letter and returning it in the enclosed
preaddressed, stamped envelope.
Very truly yours,
/s/
Glenn P. Zarin
Enc.
cc: The Congregation of the Sisters of St. Agnes 320 County Road K Fond du Lac,
WI 54935 920-907-2315 Attn: S. Kathleen Nelessen, CSA
Trinity Health 766 Brady Avenue, Apt. 635 Bronx, New York 10462 718-822-0820
Attn: Catherine Rowan
[INQUIRY LETTER]
March 22, 2006
Glenn P. Zarin
Counsel
Loews Corporation
667 Madison Avenue
New York, NY 10021-8087
Re: Loews Corporation Incoming letter dated March 15, 2006
Dear Mr. Zarin:
This is in response to your letter dated March 15, 2006 concerning the
shareholder proposal submitted to Loews by the Congregation of the Sisters of
St. Agnes and Trinity Health. On February 9, 2006, we issued our response
expressing our informal view that Loews could not exclude the proposal from its
proxy materials for its upcoming annual meeting because we were unable to
conclude that Loews had met its burden of establishing that Loews could exclude
the proposal under rule 14a-8(i)(7) You have asked us to reconsider our
position.
The Division grants the reconsideration request, as there now appears to be some
basis for your view that Loews may exclude the proposal under rule 14a-8(i)(7),
as relating to Loews' ordinary business operations (i.e., litigation strategy).
Accordingly, we will not recommend enforcement action to the Commission if Loews
omits the proposal from its proxy materials in reliance on rule 14a-8(i)(7).
Sincerely,
/s/
Martin P. Dunn
Deputy Director
cc: Paul M. Neuhauser 1253 North Basin Lane Siesta Key Sarasota, FL 34242
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