Company Name: Wal-Mart Stores, Inc. (Recon.)
Public Availability Date: April 13, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
April 5, 2006
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal Submitted to Wal-MartRequest for Reconsideration On
Behalf of Green Century Capital Management
Dear Sir/Madam:
I am writing on behalf of Green Century Capital Management to request
reconsideration of the staff no action letter of March 24 relating to the
resolution on toxic chemical policies at Wal-Mart. We are requesting
reconsideration because the staff decision appears to us to be inconsistent with
a long line of precedents related to toxic chemicals policy.
The decision related to a resolution asking for Wal-Mart's Board to, at
reasonable cost and omitting proprietary information:
publish a report evaluating Company policies and procedures for systematically
minimizing customers' exposure to toxic substances in products, including, at a
minimum, hormone disrupting chemicals, persistent bioaccumulative toxicants,
carcinogens, mutagens, and reproductive toxicants. The report should summarize
the criteria used to evaluate such chemicals, and include options for
systematically identifying toxic chemicals in stocked products, encouraging
suppliers to reduce or eliminate such chemicals and develop safer alternatives,
and routinely reporting on progress.
In our view the resolution should withstand challenge and not be deemed ordinary
business because it does not dictate what products should be sold, or how those
products will be chosen. Instead, it merely asks for a report on policy,
including policies and procedures such as "options for systematically
identifying toxic chemicals in stocked products, encouraging suppliers to reduce
or eliminate such chemicals and develop safer alternatives, and routinely
reporting on progress." Because it is not directive of company policies or
practices and does not attempt to dictate which products will or will not be
sold at Wal-Mart, it should not be seen as intervening in ordinary business.
There have been numerous decisions in which the staff has supported and has not
treated as ordinary business resolutions seeking chemical phase-outs or
screening policies by producers, retailers and others.
Most recently the staff concluded (March 3, 2006) that it was not excludable as
"ordinary business" to ask the CVS Board in a resolution to publish:
a report evaluating the feasibility of a) CVS reformulating all its private
label cosmetics products to be free of chemicals linked to cancer, mutation or
birth defects, thereby globally meeting the standards set by the EU Cosmetics
Directive 2003/15/EC which amended EU Directive 76/768/EEC b) complying with the
additional actions sought by the Campaign for Safe Cosmetics as described
above," and c) encouraging or requiring manufacturers or distributors of other
cosmetics products sold in CVS to ensure that their products comply with the
same reformulation and other actions that the company is taking.
This follows numerous other similar resolutions addressing toxics in products.
Take for example Avon Products, Inc. (avail. Mar. 3, 2003) in which the proposal
requested a report on "the feasibility of removing or substituting with safer
alternatives all parabens used in the company's products."
Similarly, consider Dow Chemical Co. (available March 7,2003) in which the
proponents requested a report summarizing the company's plans to phase out
products and processes leading to emissions of persistent organic pollutants and
dioxins.
The above referenced resolutions asked for reports on policy, but even if a
resolution directly seeks to eliminate the sale or use of products the
Commission has allowed them and not treated them as ordinary business. Even
resolutions which have attempted to directly dictate policy related to the use
of certain products have been permissible. Consider the HCA/Columbia and
Universal Health Services decisions (both available March 30, 1999), in which
health care providers were asked to phase out the use of polyvinyl chloride in
medical devices. Also, a similar resolution that was also found not to intrude
on ordinary business, focused on medical device manufacturer Baxter
International (available March 1, 1999) in calling for the company's phase-out
of PVC in medical devices. In Loews (available Feb. 22, 1990) a shareholder
proposal for eventual cessation of manufacture of tobacco products, the company
unsuccessfully argued that directing it to phase out its focus on particular
products involves "ordinary business operations".
The Proposal is also consistent with a previously allowed Dow Chemical
resolution (available February 11, 1980) which requested the company to:
"establish a review committee to examine and evaluate the existing and potential
health consequences of 2.4,5-T, Silvex and their derivatives, and to make
recommendations to the Board relating to the economic justification of continued
production of these herbicides. The committee shall have the following structure
and duties;
1) The committee shall be no less then seven persons and shall include outside
directors and representatives of management, employees and non-company persons
expert in environmental science, medicine and public health;
2) Release its report-on the public health consequences of these herbicides to
the board and shareholders within 6 months of the 1980 annual meeting;
3) Funds to be expended by the committee shall be limited to reasonable amounts
as determined by the board.
Be it further resolved that the shareholders request that Dow Chemical place a
moratorium on all production destined for export of these herbicides until
publication of the review committee report."
In that matter, Staff responded that the resolution was not directed to Dow's
ordinary business operations despite its consideration of the consequences and
economic justification of individual products. The staff concluded that this was
not directed to the ordinary business operations of the Company.
CONCLUSION
In conclusion, we request the Staff to reconsider its decision and inform the
Company that the SEC proxy rules require denial of the Company's no-action
request. Please call Sanford Lewis at (413) 549-7333 with respect to any
questions in connection with this matter, or if the Staff wishes any further
information.
Sincerely,
/s/
Sanford Lewis
Attorney at Law
cc:
Samuel A. Guess
Andrew Shalit, Green Century Capital Management
John C. Harrington, Harrington Investments
[INQUIRY LETTER]
April 10, 2006
VIA ELECTRONIC MAIL AND OVERNIGHT DELIVERY
Ted Yu, Special Counsel
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Wal-Mart Stores, Inc.Request for Reconsideration of Response Relating to
Shareholder Proposal of Green Century Capital Management (the "Proponent")
Dear Mr. Yu:
Wal-Mart Stores, Inc., a Delaware corporation (the "Company"), received a copy
of the Proponent's letter to the Securities and Exchange Commission, Division of
Corporation Finance, Office of Chief Counsel, dated April 5, 2006, a copy of
which is attached ("Proponent's Letter"). The Proponent requests that you
reconsider your response to our letter, dated January 23, 2006 (the "No-Action
Request"). The No-Action Request addressed the Company's intent to omit from the
proxy statement relating to our 2006 Annual Shareholders' Meeting (the "Proxy
Statement") a shareholder proposal submitted by the Proponent concerning
establishing a safer products policy (the "Proposal"). In your letter to us
dated March 24, 2006 (the "No-Action Response"), you stated that the Office of
the Chief Counsel would not recommend any action be taken by the Securities and
Exchange Commission if we omit the Proposal from our Proxy Statement.
The Company believes reconsideration of the No-Action Response is inappropriate
for two primary reasons:
1. The Proponent does not provide a valid basis for reconsideration. As the
basis for its request, the Proponent cites eight "no-action" letters (the "Cited
Letters"), all of which relate to shareholder proposals with a much narrower
scope than the Proposal. As the Proponent's Letter indicates, the focus of the
Cited Letters was: CVS (available March 3, 2006)a report solely on matters
regarding cosmetic products; Avon Products (available March 3, 2003)a report
solely about removal of parabens from Avon's products; Dow Chemical Co.
(available March 7, 2003)a report solely on products and processes of Dow
Chemical; HCA Columbia (available March 30, 1999), Universal Health Services
(available March 30, 1999), and Baxter International (available March 1, 1999)a
report solely on phase-out of polyvinyl chloride in medical devices; Loews
(available February 22, 1990)solely related to the cessation of manufacture of
tobacco products; and Dow Chemical (available February 11, 1980)solely related
to matters regarding the use of 2.4, 5-T, Silvex and their derivatives.
In stark contrast to the proposals considered in the Cited Letters, the Proposal
would have the Company prepare a report that would necessarily be highly
scientific and detailed and relate to the evaluation of and options regarding
the many thousands of products the Company acquires from over 61,000 suppliers
in the United States as well as more than 70 countries around the world.
Preparation of such a report differs greatly from the preparation of the reports
requested in the Cited Letters. Moreover, the fact remains that the Proposal
relates to the selection of the products that the Company will sell as well as
the products used in constructing and maintaining our stores and clubs. We
believe that those complex decisions fundamentally are matters of our ordinary
business operations and for management's oversight in its day-to-day conduct of
our business. They are not decisions well suited to, and are not an appropriate
subject of, shareholder oversight.
2. Any reconsideration of the No-Action Response at this time would place an
unreasonable burden on the Company and others. Consistent with our statement on
the first page of our No-Action Request, we plan to commence the printing of our
Proxy Statement in the next two days and to commence the mailing of the Proxy
Statement and related proxy cards to shareholders on April 14, 2006.
Reconsideration of the No-Action Response could delay the printing of
approximately 2.7 million copies of Proxy Statement, the printing and
preparation of the related proxy cards, and the mailing of those proxy
materials. Inclusion of the Proposal and the Company's related Statement in
Opposition in the Proxy Statement and of the Proposal in the proxy card would
result in even further delay. Any delay would result in significant difficulties
and additional costs for the Company, as well as for the vendors who will print
the Proxy Statement, prepare the proxy cards, and mail our proxy materials. Any
delay would also likely cause scheduling difficulties for other companies served
by our vendors. Moreover, any delay would necessarily reduce the time prior to
our 2006 Annual Shareholders' Meeting that our shareholders would have to review
the Proxy Statement and to return their proxies.
For the foregoing reasons, we respectfully urge you not to reconsider your
No-Action Response. In view of the schedule for the commencement of printing and
mailing of our proxy materials, please notify the undersigned at ((479)277-3302)
as to whether you propose to reconsider the No-Action Response as soon as
possible.
Respectfully Submitted,
/s/
Samuel A. Guess
Enclosures
cc: Green Century Capital Management, Inc.
29 Temple Place, Suite 200
Boston, MA 02111
Attention: Amy Perry, President
Harrington Investments, Inc.
1001 2nd Street, Suite 325
Napa, CA 94559
Attention: John C. Harrington
Sanford J. Lewis, Attorney
PO Box 231
Amherst, MA 01004-0231
[INQUIRY LETTER]
April 5, 2006
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Shareholder Proposal Submitted to Wal-Mart-Request for Reconsideration On
Behalf of Green Century Capital Management
Dear Sir/Madam:
I am writing on behalf of Green Century Capital Management to request
reconsideration of the staff no action letter of March 24 relating to the
resolution on toxic chemical policies at Wal-Mart. We are requesting
reconsideration because the staff decision appears to us to be inconsistent with
a long line of precedents related to toxic chemicals policy.
The decision related to a resolution asking for Wal-Mart's Board to, at
reasonable cost and omitting proprietary information:
publish a report evaluating Company policies and procedures for systematically
minimizing customers' exposure to toxic substances in products, including, at a
minimum, hormone disrupting chemicals, persistent bioaccumulative toxicants,
carcinogens, mutagens, and reproductive toxicants. The report should summarize
the criteria used to evaluate such chemicals, and include options for
systematically identifying toxic chemicals in stocked products, encouraging
suppliers to reduce or eliminate such chemicals and develop safer alternatives,
and routinely reporting on progress.
In our view the resolution should withstand challenge and not be deemed ordinary
business because it does not dictate what products should be sold, or how those
products will be chosen. Instead, it merely asks for a report on policy,
including policies and procedures such as "options for systematically
identifying toxic chemicals in stocked products, encouraging suppliers to reduce
or eliminate such chemicals and develop safer alternatives, and routinely
reporting on progress." Because it is not directive of company policies or
practices and does not attempt to dictate which products will or will not be
sold at Wal-Mart, it should not be seen as intervening in ordinary business.
There have been numerous decisions in which the staff has supported and has not
treated as ordinary business resolutions seeking chemical phase-outs or
screening policies by producers, retailers and others.
Most recently the staff concluded (March 3, 2006) that it was not excludable as
"ordinary business" to ask the CVS Board in a resolution to publish:
a report evaluating the feasibility of a) CVS reformulating all its private
label cosmetics products to be free of chemicals linked to cancer, mutation or
birth defects, thereby globally meeting the standards set by the EU Cosmetics
Directive 2003/15/EC which amended EU Directive 76/768/EEC b) complying with the
additional actions sought by the Campaign for Safe Cosmetics as described
above," and c) encouraging or requiring manufacturers or distributors of other
cosmetics products sold in CVS to ensure that their products comply with the
same reformulation and other actions that the company is taking.
This follows numerous other similar resolutions addressing toxics in products.
Take for example Avon Products, Inc. (avail. Mar. 3, 2003) in which the proposal
requested a report on "the feasibility of removing or substituting with safer
alternatives all parabens used in the company's products."
Similarly, consider Dow Chemical Co. (available March 7, 2003) in which the
proponents requested a report summarizing the company's plans to phase out
products and processes leading to emissions of persistent organic pollutants and
dioxins.
The above referenced resolutions asked for reports on policy, but even if a
resolution directly seeks to eliminate the sale or use of products the
Commission has allowed them and not treated them as ordinary business. Even
resolutions which have attempted to directly dictate policy related to the use
of certain products have been permissible. Consider the HCA/Columbia and
Universal Health Services decisions (both available March 30, 1999), in which
health care providers were asked to phase out the use of polyvinyl chloride in
medical devices. Also, a similar resolution that was also found not to intrude
on ordinary business, focused on medical device manufacturer Baxter
International (available March 1, 1999) in calling for the company's phase-out
of PVC in medical devices. In Loews (available Feb. 22, 1990) a shareholder
proposal for eventual cessation of manufacture of tobacco products, the company
unsuccessfully argued that directing it to phase out its focus on particular
products involves "ordinary business operations".
The Proposal is also consistent with a previously allowed Dow Chemical
resolution (available February 11, 1980) which requested the company to:
"establish a review committee to examine and evaluate the existing and potential
health consequences of 2.4,5-I, Silvex and their derivatives, and to make
recommendations to the Board relating to the economic justification of continued
production of these herbicides. The committee shall have the following structure
and duties;
1) The committee shall be no less then seven persons and shall include outside
directors and representatives of management, employees and non-company persons
expert in environmental science, medicine and public health;
2) Release its report-on the public health consequences of these herbicides to
the board and shareholders within 6 months of the 1980 annual meeting;
3) Funds to be expended by the committee shall be limited to reasonable amounts
as determined by the board.
Be it further resolved that the shareholders request that Dow Chemical place a
moratorium on all production destined for export of these herbicides until
publication of the review committee report."
In that matter, Staff responded that the resolution was not directed to Dow's
ordinary business operations despite its consideration of the consequences and
economic justification of individual products. The staff concluded that this was
not directed to the ordinary business operations of the Company.
CONCLUSION
In conclusion, we request the Staff to reconsider its decision and inform the
Company that the SEC proxy rules require denial of the Company's no-action
request. Please call Sanford Lewis at (413) 549-7333 with respect to any
questions in connection with this matter, or if the Staff wishes any further
information.
Sincerely,
/s/
Sanford Lewis
Attorney at Law
cc:
Samuel A. Guess
Andrew Shalit, Green Century Capital Management
John C. Harrington, Harrington Investments
[STAFF REPLY LETTER]
April 13, 2006
Sanford J. Lewis
PO Box 231
Amherst, MA 01004-0231
Re: Wal-Mart Stores, Inc. Incoming letter dated April 5, 2006
Dear Mr. Lewis:
This is in response to your letter dated April 5, 2006 concerning the
shareholder proposal submitted to Wal-Mart by Green Century Capital Management,
Inc. and Harrington Investments, Inc. We also have received a letter from
Wal-Mart dated April 10, 2006. On March 24, 2006, we issued our response
expressing our informal view that Wal-Mart could exclude the proposal for its
upcoming annual meeting. You have asked us to reconsider our position.
After reviewing the information contained in your letter, we find no basis to
reconsider our position.
Sincerely,
/s/
Martin P. Dunn
Deputy Director
cc: Samuel A. Guess
Associate General Counsel
Wal-Mart Stores, Inc.
702 S.W. 8th Street
Bentonville, Arkansas 72716-0215
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