Company Name: Procter & Gamble Co.
Public Availability Date: July 26, 2006
Document Sections:
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
VIA FEDERAL EXPRESS
June 6, 2006
U.S. Securities and Exchange Commission
Division of Corporate Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
RE: The Procter & Gamble Company / Proposal Submitted by C. Lamar Owens
Ladies and Gentlemen:
This letter and the enclosed materials are submitted on behalf of The Procter &
Gamble Company (the "Company") in accordance with Rule 14a-8(j) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Company received a shareholder proposal from Mr. C. Lamar Owens
("Proponent") in a submission dated April 26, 2006 (the "Proposal"), received to
the Secretary's Office on May 3, 2006. Mr. Owens submitted the Proposal for
consideration and vote at the "next Annual Stockholders Meeting". The
Proponent's proposal failed to include: (i) proof of the Proponent's requisite
share ownership, (ii) a written statement verifying that Proponent has held any
such shares for more than a year prior to the record date, and (iii) a written
statement that Proponent plans to continue holding any such shares through the
date of the shareholder meeting, each as required by Rule 14a-8(b).
The Company intends to omit the Proposal under Rule 14a-8(b) and 14a-8(f)(1)
since the Proponent has not responded to its timely request for verification of
the above information. The Company respectfully requests the Staff's concurrence
that no enforcement action will be recommended if the Company omits the
Proposal.
Pursuant to Rule 14a-8(j) under the Exchange Act, please find enclosed six
copies of the Proposal by Mr. Owens, this letter, and our correspondence with
the Proponent concerning his proposal. The Company is simultaneously providing a
copy of this submission to Mr. Owens.
The Proposal fails to comply with Rule 14a-8(b)
Rule 14a-8(f) provides that a company may exclude a shareholder proposal if the
proponent fails to comply with the eligibility or procedural requirements,
provided that the company timely notifies the proponent of the deficiency and
the proponent fails to correct the deficiency within the required time. Rule
14a-8(b)(1) states:
1. In order to be eligible to submit a proposal, you must have continuously held
at least $2,000 in market value, or 1%, of the company's securities entitled to
be voted on the proposal at the meeting for at least one year by the date you
submit the proposal. You must continue to hold those securities through the date
of the meeting.
And Rule 14a-8(b)(2)(a) states:
2. If you are the registered holder of your securities, which means that your
name appears in the company's records as a shareholder, the company can verify
your eligibility on its own, although you will still have to provide the company
with a written statement that you intend to continue to hold the securities
through the date of the meeting of shareholders. However, if like many
shareholders you are not a registered holder, the company likely does not know
that you are a shareholder, or how many shares you own. In this case, at the
time you submit your proposal, you must prove your eligibility to the company in
one of two ways:
a. The first way is to submit to the company a written statement from the
"record" holder of your securities (usually a broker or bank) verifying that, at
the time you submitted your proposal, you continuously held the securities for
at least one year. You must also include your own written statement that you
intend to continue to hold the securities through the date of the meeting of
shareholders;
A. The Proposal does not contain evidence required by Rule 14a-8(b).
The Company received the Proposal on May 3, 2006 wherein the Proponent claimed
to be a "Stockholder and Pension Plan Trustee", but the Proposal did not contain
evidence demonstrating that the Proponent satisfied Rule 14a-8(b). Please see
Exhibit A. The Proposal failed to include (i) proof of the requisite share
ownership, (ii) a written statement verifying that Proponent has held any such
shares for more than a year prior to the record date, and (iii) a written
statement that Proponent plans to continue holding any such shares through the
date of the shareholder meeting.
B. The Company timely notified Mr. Owens of the Proposal's deficiencies and he
failed to respond.
The Company's records do not indicate that the Proponent is a shareholder of
record. Accordingly, within 14 days of receipt of the proposal, in a letter sent
to Proponent via overnight courier on May 9, 2006, the Company notified Mr.
Owens of these deficiencies. Please see Exhibit B. In its letter, the Company
informed the Proponent of the requirements of Rule 14a-8(b) and invited Mr.
Owens to submit a revised submission that complied with Rule 14a-8(b). The
Company's letter clearly explained:
the requirement of Rule 14a-8(b)
the requirement that a conforming response had to be postmarked or submitted
electronically within 14 days of receipt of the Company's notice.
The Company received confirmation from the overnight courier that the letter was
delivered to and signed for by the Proponent on May 10, 2006. A copy of this
confirmation is attached. Please see Exhibit C. To date, the Company has
received no response from Mr. Owens, and the allotted 14 days have long since
passed.
C. The Proposal does not comply with the eligibility requirements.
The Company believes it may exclude the proposal under Rule 14a-8(f)(1) because
the Proponent did not prove its eligibility to submit the proposal under Rule
14a-8(b). The Company satisfied its notification obligations under Rule 14a-8(f)
in its May 9 letter to the Proponent, and the Proponent failed to respond.
On numerous occasions, the Staff has concurred with a company's omission of a
shareowner proposal based on a proponent's failure to provide evidence of its
eligibility pursuant to Rules 14a-8(b) and 14a-8(f)(1). See e.g., H.J. Heinz
Company (May 23, 2006) (Staff concurred in the omission of the proposal because
the proponent appeared not to have responded to H.J. Heinz's request for
documentary support indicating that the proponent has satisfied the minimum
ownership requirement for the one-year period required by rule 14a-8(b)) See
also, General Motors Corporation (March 31, 2006) (concurring that there was a
basis for exclusion because of proponent's failure to supply, within 14 days of
GM's request, documentary support evidencing that he satisfied the minimum
ownership requirement for the one-year period as of the date that he submitted
the proposal as required by Rule 14a-8(b)); Nabors Industries Ltd. (March 8,
2005) (same as above); Fidelity Cash Reserves (May 8, 2006) (agreeing that there
is a basis for the view that the Fund may exclude the proposal because proponent
did not respond to the Fund's requests to provide a written statement that he
intends to continue holding his shares through the date of the shareholder
meeting as required by 14a-8(b)).
Despite notice and an opportunity to cure, the proposal does not comply with the
eligibility requirements in Rule 14a-8(b). Accordingly, since the Proponent
failed to provide evidence of ownership and modify his proposal and supporting
statement to include the necessary affirmations within 14 days as provided in
Rule 14a-8(f)(1), the Company respectfully requests that you concur in its view
that, in accordance with Rule 14a-8(j), it may properly exclude the Proposal
from its Proxy Materials for the 2006 Annual Meeting. Your confirmation that the
Staff will not recommend enforcement if the Proposal is omitted from the 2006
Proxy Statement is respectfully requested.
The Company also notes that there are substantive bases for objection to the
Proposal under 14a-8(i) of the Exchange Act. In light of the eligibility
deficiencies discussed in this letter, the Company refrains from raising
substantive objections at this time. We respectfully reserve our right to raise
such objections should the relief requested herein not be granted by the Staff.
Should you have any questions regarding this matter or require additional
information, please contact me at 513-983-7695. Please acknowledge receipt of
this letter by date-stamping the enclosed additional copy of this letter and
returning it to me in the enclosed envelope.
Very truly yours,
/s/
Susan S. Whaley
Senior Counsel
Enclosures
[APPENDIX]
Mr. Alan Lafley
Chairman & CEO
Procter & Gamble Co. br>
One Procter & Gamble Plaza
Cincinnati, OH 45202
Re: Stockholder Proposal
April 26, 2006
Good day:
The following proposal is submitted for consideration and vote at the next
Proctor & Gamble Company Annual Stockholders Meeting.
Proposal
The Stockholders propose that Proctor & Gamble Company (PG) Board of Directors
pass a resolution requiring management for each brand and operating entity to
hold an annual formal review and presentation of advertising agencies. Said
review shall include a minimum of two competitive advertising agencies and the
current agency for each PG entity. Management may decide to retain the existing
agency no more than three consecutive years. On the third year review the
current agency shall be deleted from the review process.
The above process is considered in the best competitive interest of PG entities,
since advertising agencies tend to become stale and jaded over a period of time
with any client. Fresh new ideas are garnered as a result of an annual review
process. Such a procedure has the additional benefit of keeping the selected
agency aggressive and more focus on improving the PG entity's market share and
public awareness.
As the previous President, CEO and Creative Director of a substantial agency I
can attest to the sharp edge of creativity and brand positioning becoming dull
over the years between client and advertising agency. I'm out of the advertising
business and have no vested interest in a review of PG entity ad agencies.
As a stockholder, both personally and as trustee of a pension plan, it is my
belief that the PG entities advertising agencies represent the best opportunity
for increasing public awareness and positive image as well as adding to market
share. Therefore, the recommended process should help add value to Proctor &
Gamble Company shareholder positions.
Respectfully submitted,
/s/
C. Lamar Owens
Stockholder & Pension Plan Trustee
[INQUIRY LETTER]
May 9, 2006
Via Federal Express Overnight Delivery w/Signature Proof of Delivery Requested
Mr. C. Lamar Owens
1933 E. Karen Drive
Phoenix, AZ 85022
Dear Mr. Owens:
We have received your letter submitting a shareholder proposal for the 2006
Proxy Statement of The Procter & Gamble Company (the "Company"). Your letter was
received by the Corporate Secretary's office on May 2, 2006.
Your proposal does not comply with the rules and regulations promulgated under
the Securities and Exchange Act of 1934. We have included Rule 14a-8 for your
reference. Your letter states that you are a stockholder and a trustee of a
pension plan, yet our records do not indicate that you are a shareholder of
record. Pursuant to Rule 14a-8(b), this requests that you provide substantiation
of your share ownership from the record holder in order that we may verify your
eligibility to submit a shareholder proposal. In addition, you failed to notify
us in your letter, as required by Rule 14a-8(b), that such shares have been held
continuously for more than a year prior to the date of your submission, and that
you plan to hold them through the date of the annual shareholder meeting.
This requests that you provide verification of your share ownership and that you
modify your proposal to comply with rule 14a-8 to correct the deficiencies cited
above. Any such verification and modification must be postmarked no later than
14 days after your receipt of this letter. If you wish to submit your response
electronically, you must submit it to the e-mail address or fax number above
within 14 days of your receipt of this letter.
The Company may exclude your proposal if you do not meet the requirements set
forth in the enclosed rules. However, if we receive a revised proposal on a
timely basis that complies with the applicable procedural rules, we are happy to
review it on its merits and take appropriate action. Thank you.
Sincerely,
/s/
Susan S. Whaley
Senior Counsel
Enclosure
[STAFF REPLY LETTER]
July 26, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: The Procter & Gamble Company
Incoming letter dated June 6, 2006
The proposal relates to annual review and presentation of advertising agencies.
There appears to be some basis for your view that Procter & Gamble may exclude
the proposal under rule 14a-8(f). We note that the proponent appears not to have
responded to Procter &Gamble's request for documentary support indicating that
the proponent has satisfied the minimum ownership requirement for the one-year
period required by rule 14a-8(b). Accordingly, we will not recommend enforcement
action to the Commission if Procter & Gamble omits the proposal from its proxy
materials in reliance on rules 14a-8(b) and 14a-8(f).
Sincerely,
/s/
Ted Yu
Special Counsel
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