Company Name: Bemis Co., Inc.
Public Availability Date: February 26, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 18, 2007
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
100 F. Street NE
Washington, D.C. 20549-7010
Re: Target Corporation: 2007 Annual Meeting Shareholder Proposal Submitted by
the Adrian Dominican Sisters and Certain Co-Sponsors
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I am
submitting this letter on behalf of Target Corporation, a Minnesota corporation
("Target"), regarding the shareholder proposal and supporting statement
(collectively, the "Proposal") submitted by a shareholder, the Adrian Dominican
Sisters ("Dominican Sisters"), and co-sponsored by Catholic Healthcare West,
Catholic Healthcare Partners, Boston Common Asset Management, Sisters of St.
Francis of Philadelphia, Trinity Health, Friends Fiduciary Corporation,
Congregation of the Passion, Missionary Oblates of Mary Immaculate, Benedictine
Sisters of Mount St. Scholastica, Bon Secours Health System and Sisters of St.
Joseph of La Grange (collectively, together with the Dominican Sisters, the
"Proponents").
I am submitting this letter to respectfully request that the Staff of the
Division of Corporate Finance concur with our view that, for the reasons stated
below, the Proposal may properly be excluded from Target's proxy statement and
form of proxy (together, the "proxy materials") for its 2007 Annual Meeting of
Shareholders.
In accordance with Rule 14a-8(j), enclosed are five additional copies of this
letter, which include the following:
a copy of the letter dated December 5, 2006 from the Dominican Sisters, which
includes the Proposal, and a copy of the letter from each of the other
Proponents; and
< this statement on behalf of Target, which sets forth our reasons why the
Proposal may be excluded from Target's proxy materials.
Target plans to file its definitive proxy materials with the SEC on or about
April 9, 2007. Target would appreciate the Staff's response to this request
prior to March 1, 2007, which is the date by which Target will need to finalize
its proxy materials in order to meet its current timetable.
I. THE PROPOSAL
The Proposal requests that Target "report (at reasonable cost and omitting
proprietary information) on the implications of rising health care expenses and
how it is positioning itself to address this public policy issue without
compromising the health and productivity of its workforce." The Proposal calls
for this report to be completed by June 30, 2007 and notes that Target "need not
address specific benefit offerings."
II. BASES FOR EXCLUSION OF THE PROPOSAL UNDER RULE 14A-8(I)(7)
The Proposal Deals with Matters Relating to Target's Ordinary Business
Operations
(a) Recent Precedent. Our analysis of the application of Rule 14a-8(i)(7) to the
Proposal is set forth below. However, as a preliminary matter, we note that the
Staff recently considered the same issue in Kohl's Corp. (January 8, 2007),
where Kohl's sought to exclude the exact same proposal as the present Proposal.
One of the proponents of the Proposal, Catholic Healthcare West, was also a
co-sponsor of the proposal in Kohl's Corp. In that matter, the Staff agreed that
the proposal related to Kohl's ordinary business operations. The result should
be no different here.
In the ordinary course of business, Target management monitors the costs of
benefits to employees in addition to the quality of the benefits provided and
the competitive landscape. Target management works to balance costs and benefits
of various alternative benefit programs when designing compensation packages to
attract and retain employees. Health care benefits are only one component of a
total compensation package, and any change in one benefit can have a ripple
effect and impact other benefits. Accordingly, Target management needs the
ability to conduct its own review of benefit programs and consider many factors,
including Target's hiring and retention objectives and alternatives available
from its health care provider networks, in order to make an informed decision
about health care benefits provided to its employees. Accordingly, the Proposal
to prepare a report on health care expenses and Target's plans to address the
issue relates to functions that are managerial in nature and fall within
Target's ordinary business operations.
(b) Analysis of Rule 14a-8(i)(7). Under Rule 14a-8(i)(7), a company may exclude
a shareholder proposal from its proxy materials "[i]f the proposal deals with a
matter relating to the company's ordinary business operations." The Proposal
deals with Target's ordinary business operationsemployee health and welfare
plansand it therefore may be omitted from Target's proxy materials.
Rule 14a-8(i)(7) has been interpreted to be "consistent with the policy of most
state corporate laws," which 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 shareholder's
meeting." Amendments to Rules on Shareholder Proposals, Release 34-40018 (May
21, 1998). In addition to that general principle, the Commission has found that
"[t]he policy underlying the ordinary business exclusion rests on two central
considerations." The first consideration is whether the proposal involves tasks
"so fundamental to management's ability to run a company on a day-to-day basis
that they could not, as a practical matter, be subject to shareholder
oversight." Id. "The second consideration is the degree to which the proposal
seeks to `micro-manage' the company by probing too deeply into matters of a
complex nature upon which shareholders, as a group, would not be in a position
to make an informed judgment." Id. This second consideration "may come into play
in a number of circumstances, such as where the proposal involves intricate
detail, or seeks to impose specific time-frames or methods for implementing
complex policies." Id. (emphasis added).
In Knight-Ridder, Inc. (January 23, 1991), a shareholder requested that the
company prepare a report involving the costs associated with providing health
care. Noting that the proposal involved a decision "relating to the selection
and evaluation of employee health and welfare plans[,]" and which therefore
involves "the Company's ordinary business operations[,]" the Staff concurred
with Knight-Ridder's position that the proposal was excludable because
"decisions relating to the selection and evaluation of employee health and
welfare plans are matters involving the Company's ordinary business operations."
Classification of matters involving health care as an "ordinary business matter"
has continued in recent years. In Sprint Corporation (January 28, 2004), the
Staff allowed Sprint to exclude a proposal to prepare a report on the potential
impact on the recruitment and retention of its employees due to changes in
retiree health care and life insurance coverage. The Staff agreed that this
matter of general employee benefits related to the company's ordinary business
operations. In International Business Machines (January 13, 2005) ("IBM 2005"),
the Staff allowed IBM to exclude a proposal that requested IBM to "prepare and
make available to shareholders, within six months, a report examining the
competitive impact of rising health insurance costs." Consistent with the
position that health care benefits, as part of a company's employee benefits,
constitute ordinary business matters, the SEC also allowed General Motors to
exclude a proposal to establish a directors' committee to develop specific
reforms for "the health care problem." General Motors Corporation (March 24,
2005). Furthermore, even in situations where only a portion of a proposal
relates to ordinary business operations, the Staff has concluded that the
proposal may be excluded in its entirety under Rule 14a-8(i)(7). See Sprint
Corporation.
The current Proposal not only involves tasks that are fundamentally managerial
in nature and are such that they could not practically be subject to shareholder
oversight, but the Proposal also seeks to "micro-manage" Target by imposing
onerous time constraints in executing this ordinary business task.
Since the 1990s, stockholders sought to have proposals promoting national health
insurance or similar insurance included in company proxy materials. "In all of
those earlier cases advocating or otherwise promoting national health care
coverage or similar insurance, the staff uniformly concurred with corporations
that proposals on this subject could be omitted from their proxy materials under
the ordinary business exclusion." IBM 2005 (citing Chrysler Corporation
(February 10, 1992) and Brunswick Corporation).
The similarity of the subject matter in the Knight-Ridder, IBM and, most
recently and most specifically, Kohl's Corp. proposals (employee benefits) to
the subject matter of the current Proposal (employee benefits), should lead the
Staff to treat the Proponents' Proposal no differently and allow Target to
exclude the Proposal from its proxy materials.
III. BASES FOR EXCLUSION OF THE PROPOSAL UNDER RULE 14A-8(I)(10)
Target Has Already Substantially Implemented the Proposal
Under Rule 14a-8(i)(10), a company may also exclude a shareholder proposal from
its proxy materials "[i]f the company has already substantially implemented the
proposal." While we believe that the subject matter of the Proposal is an
ordinary business matter, we also believe that Target has substantially
implemented the Proposal.
The Proposal asks that Target "address the implications of rising health care
expenses and how it is positioning itself to address this public policy issue
without compromising the health and productivity of its workforce." Target has
taken seriously the issue of rising health care costs and how this may affect
Target's ability to remain competitive without compromising the health or
productivity of its employees.
Included as a component of Target's Corporate Responsibility Report, the
relevant portion of which is attached as Appendix A to this letter, is a
discussion of the employee benefits offered to Target employees generally. This
discussion addresses Target's strategies to continue to provide a high-quality
standard benefits program for its team members, while also seeking to manage
rising health care costs. The Target Corporate Responsibility Report is publicly
available on Target's website at www.target.com by going to the "Investors"
section and selecting "Corporate Governance." We believe Target has
substantially implemented the thrust of the Proposal by having reviewed the
information that it deemed relevant to this issue, implementing a solution that
Target believes balances the concerns raised in the Proposal, and providing its
conclusions in a public manner through its Corporate Responsibility Report.
The standard under Rule 14a-8(i)(10) is "substantial implementation" and the
Staff has acknowledged that a company may meet the substantial implementation
standard even if the company did not follow precisely the specific request in
the shareholder proposal. In Borden, Inc. (February 23, 1994), the company
sought to exclude from its proxy materials, a shareholder request for the board
of directors to hire investment bankers, determine the value of a portion of the
company, and report the results to shareholders, where the company had already
"evaluated the full range of alternatives ..., including sale or merger" with
the help of investment bankers and made a determination of the course to take.
The Staff concluded that the company's action, although it was not precisely
what the resolution requested, constituted substantial implementation of the
proposal. The Staff permitted exclusion of the proposal on that basis.
In Louisiana-Pacific Corporation (March 18, 1994), the Staff concluded that the
company had substantially implemented a proposal requesting that non-employee
directors be empowered to conduct an internal investigation relative to certain
environmental matters and produce a written report, where the company had
created an environmental committee composed of non-employee directors with broad
investigative authority.
We believe that the actions taken by Target, as well as the implementation of a
solution believed by Target to reasonably address the issues raised by the
Proposal, substantially implement the actions requested by the Proposal.
IV. CONCLUSION
For the reasons and on the basis of the authorities cited above, we believe that
Target may rely on Rule 14a-8(i)(7) to exclude the Proposal from its proxy
materials. In addition, we believe that steps taken by Target to address the
issues raised by the Proposal also constitute substantial implementation of the
Proposal under Rule 14a-8(i)(10). On behalf of Target, we respectfully request
that the Staff confirm that it will not recommend enforcement action to the SEC
if Target excludes the Proponents' Proposal from its proxy materials.
As is required by Rule 14a-8(j)(1), a copy of this letter is simultaneously
being sent to the Dominican Sisters, and each of the Proponents that did not
direct correspondence to the representative for the Dominican Sisters, to notify
them of Target's intention to exclude the Proposal from its proxy materials.
Please stamp the enclosed extra copy of this letter, acknowledging receipt, and
return it in the enclosed postage prepaid, self-addressed envelope.
If you have any questions regarding the foregoing, please call the undersigned
at 612-766-7769.
Very truly yours,
/s/
Amy C. Seidel
fb.us.1761986.04
SEIDA:johjc
cc: Sister Judy Byron, OP, Northwest Coalition for Responsible Investment
Representative of the Dominican Sisters and certain of the other Proponents
Susan Vickers, Catholic Healthcare West
Michael D. Connelly, Catholic Healthcare Partners
Constance Brookes, Friends Fiduciary Corporation
John D. Gonzalez, Passionist Community
Seamus P. Finn, Missionary Oblates of Mary Immaculate
Everard O. Rutledge, PhD, Bon Secours Health System
Joellen Sbrissa, Sisters of St. Joseph of La Grange
Timothy R. Baer Senior Vice President and General Counsel, Target Corporation
[INQUIRY LETTER]
December 5, 2006
Mr. Robert J. Ulrich, CEO & Chair
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich,
The Adrian Dominicans are among the growing number of responsible investors who
recognize that medical benefits are a critical issue for U.S. Corporations.
Because this issue impacts the profitability of Target Corporation and the
health and productivity of its employees, we believe that our company should be
involved in the efforts designed to address this public policy issue.
Acting on behalf of the Adrian Dominican Sisters, I am authorized to present the
enclosed proposal, Universal Health Care Policy, for inclusion in the proxy
statement for consideration and action by the 2007 shareholder meeting in
accordance with Rule 14(a)(8) of the General Rules and Regulations of the
Securities and Exchange Act of 1934. We would appreciate indication in the proxy
statement that the Adrian Dominican Sisters are a sponsor of this resolution.
The Adrian Dominican Sisters are the beneficial owner of 1,600 shares of Target
Corporation common stock. A letter verifying our ownership is enclosed. We have
held the stock continuously for more than one year and we plan to continue our
holding through the 2007 shareholders meeting. A representative of the filers
will attend the annual meeting to move the resolution.
It is our hope that representatives of Target will be willing to dialogue with
us on how the company will address the national health care issue.
Sincerely,
/s/
Judy Byron, OP
Representative of the Adrian Dominican Sisters
Encl.: Verification of ownership
Resolution
For matters related to this resolution, please contact:
Sister Judy Byron, OP
Northwest Coalition for Responsible Investment
1216 NE 65th Street
Seattle, WA 98115
206.223.1138
jbyron@ipjc.org
[INQUIRY LETTER]
December 8, 2006
Robert J. Ulrich
CEO
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
Catholic Healthcare West, in collaboration with the Adrian Dominican Sisters,
hereby submits the enclosed proposal Universal Health Care Policy for inclusion
in the proxy statement for consideration and action by the 2007 shareholders
meeting in accordance with Rule 14(a)(8) of the General Rules and Regulations of
the Securities and Exchange Act of 1934. We would appreciate indication in the
proxy statement that Catholic Healthcare West is a sponsor of this resolution.
Other shareholders will be co-sponsoring this proposal.
Catholic Healthcare West has held over $2000.00 worth of Target Corporation
stock for more than one year. Proof of ownership is enclosed. A representative
of the filers will attend the stockholders meeting to move the resolution as
required by the rules of the Securities and Exchange Commission (SEC), and we
will continue to hold shares in the company through the stockholder meeting.
Sincerely yours,
/s/
Susan Vickers, RSM
Vice President Community Health
cc: Dan Rosan, Interfaith Center on Corporate Responsibility
Julie Wokaty, ICCR Director of Publications
Margaret Weber, Adrian Dominican Sisters
[INQUIRY LETTER]
VIA FEDERAL EXPRESS
December 8, 2006
Robert J. Ulrich CEO
Target Corp.
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ullrich:
Catholic Healthcare Partners, a Catholic healthcare ministry headquartered in
Cincinnati, Ohio has long been concerned not only with the financial returns of
its investments, but also (with many other churches and socially concerned
investors) with the social and ethical implications of its investments. As
background, Catholic Healthcare Partners is one of the largest not-for-profit
health systems in the United States and the largest in Ohio. Catholic Healthcare
Partners is currently the beneficial owner of 75,800 shares of Target Corp.
We believe that a commitment to employees, communities and the environment
fosters long-term business success. As healthcare providers, we are keenly aware
of the challenges in the current health system, including concerns relating to
both the cost and quality of care, and we are concerned as well that all persons
have access to needed services, irrespective of individual ability to pay.
Employer-provided health insurance coverage is a significant benefit to
employees to ensure necessary and affordable health services are available, and
also a significant benefit to employers by improving workforce productivity.
Catholic Healthcare Partners is therefore co-filing with the Adrian Dominican
Sisters the enclosed shareholder proposal for inclusion in the 2007 proxy
statement, in accordance with Rule 14a-8 of the General Rules and Regulations of
the Securities Exchange Act of 1934. Catholic Healthcare Partners has been a
shareholder for more than one year and will continue to invest in at least the
requisite number of shares for proxy resolutions through the stockholders'
meeting. We have enclosed a copy of the verification of our ownership position
with original sent under separate cover. A representative of the filers will
attend the stockholders' meeting to move the resolution as required by the SEC
rules.
Sincerely,
/s/
Michael D. Connelly
President & CEO
Catholic Healthcare Partners
Encl. Resolution Text [and Verification of Ownership]
cc: Judy Byron, OP
[INQUIRY LETTER]
December 8, 2006
Mr. Robert, J. Ulrich, CEO & Chair
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
Boston Common Asset Management serves investors concerned about the social
impacts and business practices, as well as the financial return, of their
investments. Our firm is among a growing number of responsible investors who
recognize that medical benefits are a critical issue for U.S. companies to
address. Because this issue directly impacts the profitability as well as the
health and productivity of its employees, we believe that Target should be
involved in efforts designed to address the issue of universal health care.
Please include the enclosed proposal in the Proxy Statement and Form of Proxy
relating to the 2007 Annual Meeting of the stockholders of Target Corporation.
Boston Common Asset Management is a co-filer of this resolution on behalf of its
clients. The primary filer is the Adrian Dominicans Sisters. As of December 8,
2006, Boston Common's clients hold a total of 24, 347 shares of Target
Corporation. Verification of ownership will be submitted upon request. We are
submitting the enclosed shareholder proposal for inclusion in the proxy
statement for the 2007 Annual Meeting of Shareholders, in accordance with Rule
14a-8 of the General Rules and Regulations of the Securities Exchange Act of
1934 (the "Act"). Boston Common is the beneficial owner, as defined in Rule
13d-3 of the Act, of the above-mentioned number of shares. Boston Common has
held at least $2,000 in market value of these securities for more than one year
at the time of the filing of this shareholder proposal and will continue to hold
at least the requisite number of shares for proxy resolutions through the
stockholders' meeting. A representative of the filers will attend the
stockholders' meeting to move the resolution as required.
It would be our sincere hope that Target would be willing to engage in a
dialogue on how they could address the national health care issue with the
shareholder representatives led by Sister Judy Byron, OP of the Adrian Dominican
Sisters. Please coordinate all correspondence and responses related to this
shareholder proposal through:
Sister Judy Byron, OP
Northwest Coalition for Responsible Investment
1216 NE 65th Street
Seattle, WA 98115
206.223-1138
jbyron@ipjc.org
Sincerely,
/s/
Lauren Compere
Director of Shareholder Advocacy
[INQUIRY LETTER]
December 8, 2006
Robert J. Ulrich, CEO
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
Peace and all good! The Sisters of St. Francis of Philadelphia have been
shareholders in Target for several years. The provision of health care coverage
is a vital component in attracting and retaining quality employees. We are
concerned that our company lacks a comprehensive, long-term plan to address
skyrocketing health care costs, and will be unable to compete in the global
economy. We strongly urge you to become more transparent as you make a public
report on the on the corporation's policies and practices.
As a faith-based investor, I am hereby authorized to notify you of our intention
to submit this shareholder proposal with the Adrian Dominican Sisters. I submit
it for inclusion in the proxy statement for consideration and action by the next
stockholders meeting in accordance with Rule 14a-8 of the General Rules and
Regulations of the Securities and Exchange Act of 1934. A representative of the
filers will attend the shareholder meeting to move the resolution. We hope that
the company will be willing to dialogue with the filers about this proposal.
Please note that the contact person for this resolution will be: Sr. Judy Byron,
OP. Her number is 206-223-1138, and her email address is: jbyron@ipje.org.
As verification that we are beneficial owners of common stock in Target, I
enclose a letter from Northern Trust Company, our portfolio custodian/record
holder, attesting to the fact. It is our intention to keep these shares in our
portfolio beyond the date of the 2007 meeting.
Respectfully yours,
/s/
Tom McCaney
Associate Director, Corporate Social Responsibility
Nora Nash, OSF
Director, Corporate
Social Responsibility
Enclosures
cc: Judy Byron, OP, Adrian Dominican Sisters
Daniel Rosan, ICCR
Julie Wokaty, ICCR
[INQUIRY LETTER]
December 7, 2006
Mr. Robert J. Ulrich
Chief Executive Officer
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403-2367
Dear Mr. Ulrich,
Trinity Health, with an investment position of over $2000 worth of shares of
common stock in Target Corporation, looks for social and environmental as well
as financial accountability in its investments.
Proof of ownership of common stock in Target Corporation is enclosed. Trinity
Health has held stock in Target continuously for over one year and intends to
retain the requisite number of shares through the date of the Annual Meeting.
As a socially responsible investor and as a health care institution, we have
enjoyed a fruitful discussion for nearly three years with Target on the issue of
violent video games. We, along with other members of the Interfaith Center for
Corporate Responsibility seek action on the part of Target on another issue of
great social concern: the crisis that America's health care system is suffering.
We support accessible, affordable and equitable health care for all, and
advocate for measures to reduce the number of uninsured individuals in our
nation. The U.S. Census Bureau report, "Income, Poverty, and Health Insurance
Coverage in the United States: 2005", found that the number of uninsured people
in the United States continues to escalate and the number of workers without
employer-sponsored insurance coverage has increased. The percentage of people
covered by employment-based health insurance has decreased to 59.5 percent.
We seek to understand the economic burden providing health benefits places on
American corporations. As a long-term shareholder, we believe it is in the
economic interest of our company to ensure that its workforce has access to
healthcare that is affordable and provided equitably.
We also believe that this is a moment for large employers such as Target to
exercise corporate social responsibility by taking a public stand on health care
reform and advocating for a system that provides universal, affordable,
accessible, comprehensive and quality health care.
Acting on behalf of Trinity Health, I am authorized to notify you of Trinity
Health's intention to present the enclosed proposal for consideration and action
by the stockholders at the next annual meeting, and I hereby submit it for
inclusion in the proxy statement in accordance with Rule 14-a-8 of the General
Rules and Regulations of the Securities Exchange Act of 1934.
The primary contact for this proposal is Judy Byron, OP, representing the Adrian
Dominican Sisters jbyron@ipjc.org (206-223-1138).
We look forward to discussing the issues addressed by this proposal at your
earliest convenience.
Sincerely,
/s/
Catherine Rowan, representing Trinity Health
Corporate Responsibility Consultant
enc.
[INQUIRY LETTER]
December 8, 2006
Mr. Robert J. Ulrich, CEO & Chair
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich,
Friends Fiduciary Corporation holds 12,750 shares of Target Corporation stock.
We believe that, medical benefits are a critical issue for U.S. Corporations and
that this issue impacts the profitability of Target Corporation and the health
and productivity of its employees. Therefore, we believe that our company should
be actively involved in the efforts to address this important public policy
issue.
Therefore, in conjunction with the The Adrian Dominican Sisters, Friends
Fiduciary Corporation is filing the enclosed shareholder proposal as a
"co-filer" for inclusion in the 2007 proxy statement, in accordance with Rule
14a-8 of the General Rules and Regulations of the Securities Exchange Act of
1934 (the "Act"). We are the beneficial owner, as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, of the above mentioned number of Target shares.
Friends Fiduciary Corporation has held at least $2,000 in market value of these
securities for more than one year as of the filing date and will continue to
hold at least the requisite number of shares for proxy resolutions through the
stockholders' meeting. Verification of ownership is enclosed. A representative
of the filers will attend the stockholders' meeting to move the resolution as
required.
Sincerely yours,
/s/
Constance Brookes
Executive Director
Friends Fiduciary Corporation
Encl. Resolution text and Verification of ownership
cc: Judy Byron, OP, Northwest Coalition for Responsible Investment
Julie Wokaty, ICCR Director of Publications
[INQUIRY LETTER]
December 8, 2006
Mr. Robert J. Ulrich, CEO & Chair
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
The Congregation of the Passion is concerned with the rising cost of health care
and the effect that is having on working Americans. We are aware of the growing
attention that this issue is generating and we are equally concerned for the
future implications that the negative publicity could have on this Company.
While we do believe that the issue of health care is a public policy issue we
also feel that companies, such as this one, share in promoting this social
responsibility. Furthermore we believe that this Company has an opportunity to
enhance its reputation and our investment by being on the forefront on the issue
of health care.
Therefore, in conjunction with the Adrian Dominican Sisters, the Congregation of
the Passion submit the enclosed shareholder resolution for inclusion in the 2007
proxy statement, in accordance with Rule 14a-8 of the General Rules and
Regulations of the Security and Exchange Act of 1934.
The Congregation of the Passion are the beneficial owners of 100 shares of the
Target Corporation. We have held at least $2,000 in market value of these
securities for more than one year as of the filing date and will continue to
hold at least the requisite number of shares for proxy resolutions through the
stockholders' meeting. Verification of ownership is enclosed. A representative
of the filers will attend the stockholders' meeting to move the resolution as
required.
Sincerely,
/s/
John D. Gonzalez, CPP
Program Director for JPIC and Lay Ministries
Congregation of the Passion
Encl. Resolution text and Verification of ownership
Cc: Sr. Judy Byron, OP
Dan Rosan, ICCR Program Director
Julie Wokaty, ICCR Director of Publications
[INQUIRY LETTER]
December 6, 2006
Mr. Robert J. Ulrich, CEO & Chair
Target Corporation
1000 Nicolet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
The Missionary Oblates of Mary Immaculate are a religious order in the Roman
Catholic tradition with over 4,000 members and missionaries in more than 70
countries throughout the world. We are members of the Interfaith Center on
Corporate Responsibility a coalition of 275 faith-based institutional investors
- denominations, orders, pension funds, healthcare corporations, foundations,
publishing companies and dioceses - whose combined assets exceed $110 billion.
We are the beneficial owners of 12,100 shares of Target Corporation.
Verification of our ownership of this stock is enclosed. We plan to hold these
shares at least until the annual meeting.
My Oblate brothers and I recognize that medical benefits are an important issue
for U.S. corporations. Because this issue impacts the profitability of Target
Corporation and the health and productivity of its workforce, we believe that
our company should be involved in efforts designed to address this public policy
issue.
It is with this in mind that I write to inform you of our intention to co-file
the enclosed stockholder resolution with the Adrian Dominican Sisters, for
consideration and action by the stockholders at the annual meeting. I hereby
submit it for inclusion in the proxy statement in accordance with Rule 14-a-8 of
the General Rules and Regulations of the Securities Exchange Act of 1934.
If you have any questions or concerns on this, please do not hesitate to contact
me.
Sincerely,
/s/
Seamus P. Finn. OMI
Director
Justice. Peace and Integrity of Creation Office
Missionary Oblates of Mary Immaculate
[INQUIRY LETTER]
December 7, 2006
TARGET CORP
ROBERT J. ULRICH - CEO
1000 NICOLLET MALL
MINNEAPOLIS, MN 55403
Dear Mr. Ulrich,
I have been authorized by the Benedictine Sisters of Mount St. Scholastica to
notify you of our intention to co-file with the Adrian Dominican Sisters a
resolution for consideration by the stockholders at the annual meeting and I
hereby submit it for inclusion in the proxy statement, in accordance with rule
14a-8 of the general rules and regulations of the Securities Act of 1934.
The Benedictine Sisters of Mount St. Scholastica are the beneficial owners of
350 shares of stock. Under separate cover you will receive proof of ownership.
We will retain shares through the annual meeting.
This resolution request that the company report (at reasonable cost and omitting
proprietary information) on the implications of rising health care expenses and
how it is positioning itself to address this public policy issue without
compromising the health and productivity of its workforce. The report should be
completed by June 30, 2007 and need not address specific benefit offerings.
Judy Byron is the primary contact regarding this resolution and she can be
reached at 206-223-1138.
Sincerely,
/s/
Rose Mane Stallbaumer, OSB
Treasurer
[INQUIRY LETTER]
VIA FEDERAL EXPRESS
December 7, 2006
Robert J. Ulrich
CEO & Chair
Target Corporation
1000 Nicollet Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
Bon Secours Health System is among the growing number of responsible investors
who recognize that medical benefits are a critical issue for U.S. Corporations.
Because this issue impacts the profitability of Target Corporation and the
health and productivity of its employees, we believe that our company should be
involved in the efforts designed to address this public policy issue. Bon
Secours, a Catholic health care ministry headquartered in Marriottsville,
Maryland, owns, manages, or joint ventures 20 acute-care hospitals, six
long-term care, six assisted living and independent and other facilities located
in 12 communities in nine states, primarily on the East Coast.
On behalf of Bon Secours, I am hereby authorized to ask you to include in your
proxy materials for the next annual meeting the enclosed shareholder resolution
Universal Health Care Policy in accordance with Rule 14(a)(8) of the General
Rules and Regulations of the Securities Exchange Act of 1934. We are co-filing
this resolution with the Adrian Dominican Sisters. A representative of the
filers will attend the 2007 stockholders meeting to move the resolution as
required by the SEC Rules.
Bon Secours Health System has owned a minimum of $2000 worth of common stock in
Target Corporation for over one year and will continue to hold shares through
the 2007 shareholder meeting. Verification of our beneficial ownership will be
sent under separate cover.
Sincerely.
/s/
Everard O. Rutledge, PhD
Vice President of Community Health
Enclosure - Resolution
cc: Judy Byron, OP, Adrian Dominican Sisters
[INQUIRY LETTER]
December 11, 2006
Robert J. Ulrich
Target Corporation
1000 Nicolette Mall
Minneapolis, MN 55403
Dear Mr. Ulrich:
We are concerned about the rising cost of employer-sponsored health plans. We
are also concerned on how our company is positioning itself to address this
public policy issue without compromising the heath and productivity of our
workforce.
The Sisters of St. Joseph of La Grange submit the enclosed proposal Universal
Health Care Policy for inclusion in the proxy statement for consideration and
action by the 2007 shareholders meeting in accordance with Rule 14(a)(8) of the
General Rules and Regulations of the Securities and Exchange Act of 1934. We are
filing this resolution along with other concerned investors. The primary contact
for you for the filers, Adrian Dominican Sisters, is Judy Byron, OP.
The Sisters of St. Joseph of La Grange are the beneficial owner of 5700 shares
Target Corporation common stock. Verification of ownership is enclosed. We have
held the stock for over one year and will continue to hold shares through the
2007 shareholders meeting.
Sincerely yours,
/s/
Joellen Sbrissa, CSJ
Coordinator
Social Responsible Investments Committee
Enclosure: text of resolution and proof of ownership
Cc: Dan Rosan, Interfaith Center on Corporate Responsibility
Judy Byron, OP, Adrian Dominican Sisters
Julie Wokaty, Interfaith Center on Corporate Responsibility
[APPENDIX]
Universal Health Care Policy 2007 - Target Corp.
The provision of health insurance is crucial to productivitythe HR Policy
Association estimates that the annual cost of reduced productivity stemming from
the lack of coverage is at least $87 billionand can be critical to attracting
and retaining talented workers. Employer-based coverage is an essential part of
America's health insurance system and will continue to be so for the near term.
However, the cost of employer-sponsored health plans has increased by nearly 75
percent since 2000, with premiums increasing more rapidly than either inflation
or wage growth. Health insurance costs are now among the fastest-growing
business expenses for American corporations. In fact, The McKinsey Quarterly
predicted that the average Fortune 500 company could see health benefit spending
equal profits as soon as 2008.
According to Business Week, "The biggest issue for Corporate America in 2005 and
beyond is getting out from under the crushing burden of costly medical-care
benefits." Soaring costs are putting upward pressure on cost structures and
cutting into profits. They also make it difficult for American companies to
compete in the global market place.
A study by the Manufacturers Alliance and the National Association of
Manufacturers found that structural costs, of which the largest component by far
is health care, add almost 23 percent to the price of doing business in the
United States. Wilbur Ross, the investor responsible for restructuring Bethlehem
Steel, estimated in a recent issue of The New Yorker that American companies are
confronted with a 15 percent cost disadvantage versus firms from countries with
universal health care.
Major American corporations are feeling the effects. General Motors' CEO
recently lamented that, "[GM's] health care expense represents a significant
disadvantage versus our foreign-based competitors. Left unaddressed, this will
make a big difference in our ability to compete in investment, technology and
other key contributors to our future success." GM's CEO is not alone. The
Economist recently speculated that many American executives harbor similar
sentiments and the U.S. Chamber of Commerce has identified the cost of health
care as an issue affecting the ability of U.S. corporations to compete in global
markets.
According to the Deloitte Center for Health Solutions, current attempts to hold
down the cost of coverage are not demonstrating appreciable results. And
eliminating benefits altogether is not a viable option either. According to
Ford's 2004/5 Sustainability Report, "Long-term, national solutions are needed."
In the meantime, state legislatures are beginning to address health coverage.
Four states have passed universal health care bills, at least eight more are
under consideration and an additional seven states are studying the possibility
of a universal system.
RESOLVED:. Shareholders request that the company report (at reasonable cost and
omitting proprietary information) on the implications of rising health care
expenses and how it is positioning itself to address this public policy issue
without compromising the health and productivity of its workforce. The report
should be completed by June 30, 2007 and need not address specific benefit
offerings.
[INQUIRY LETTER]
January 31, 2007
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-7010
Attention: Chief Counsel, Division of Corporation Finance
Re: Request by Target Corporation to omit shareholder proposal submitted by the
Adrian Dominican Sisters, Catholic Healthcare West, Catholic Healthcare
Partners, Boston Common Asset Management, Sisters of St. Francis of
Philadelphia, Trinity Health, Friends Fiduciary Corporation, Congregation of the
Passion, Missionary Oblates of Mary Immaculate, Benedictine Sisters of Mount St.
Scholastica, Bon Secours Health System, Sisters of St. Joseph of La Grange, and
National Ministries, American Baptist Churches USA
Dear Sir/Madam,
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, the Adrian
Dominican Sisters and twelve co-sponsors (the "Proponent") submitted a
shareholder proposal (the "Proposal") to Target Corporation. ("Target" or the
"Company"). The Proposal asks Target to report on the implications of rising
health care expenses and how the Company is positioning itself to address this
public policy issue without compromising the health and productivity of its
workforce.
By letter dated January 18. 2007, Target stated that it intends to omit the
Proposal from the proxy materials to be sent to shareholders in connection with
the 2007 annual meeting of shareholders and asked for assurance that the Staff
would not recommend enforcement action if it did so. Target claims that it is
entitled to exclude the Proposal in reliance on Rule 14a-8(i)(7), as relating to
Target ordinary business operations; and in reliance on Rule 14a-8(i)(10), as
regarding Target has already substantially implemented the proposal. As we
discuss more fully below, Target has not met its burden of proving it is
entitled to omit the Proposal; its request for relief should accordingly be
denied.
Rule 14a-8(i)(7) allows a company to exclude a proposal that "deals with a
matter related to the company's ordinary business operations." Target argues
that the Proposal is excludable on ordinary business grounds. The Company relies
on Exchange Act Release No. 40018 (May 21, 1998)(the "1998 Release"), which
states: "certain tasks are so fundamental to management's ability to run a
company on a day-to-day basis that they could not, as a practical matter, be
subject to direct shareholder oversight" and thus are excludable. Target also
claims that the Proposal seeks to micromanage the Company's provision of
employee benefits to its workforce.
Neither of these considerations militate in favor the Proposal's exclusion.
Contrary to Target's assertion, the Proposal does not seek to know "the
healthcare expenses and Target's plans to address the issue [which] relates to
functions that are managerial in nature and fall within Target's ordinary
business operations." Instead, the Proposal asks Target to assess the strategic
impact of spiraling health care costs on the Company and Target's responses to
this challenge. Such an evaluation would fall within the purview of the board
and Target's most senior management, not the lower-level personnel responsible
for plan design, vendor selection and benefits policy. Thus, the Proposal is not
concerned with day-to-day workforce management.
Similarly, the Proposal does not ask shareholders to make decisions regarding
Target's health care benefits, as the Company argues. Direct shareholder
oversight of health care benefits would be unwieldy and unworkable. The Proposal
does not try to impose such oversight. It operates at a much higher level of
generality and seeks only a report on Target's overall approach to the problem.
As a result, the concerns articulated by the Commission in the 1998 Release are
not present here.
Rule 14a-8(i)(10) allows a company to exclude a proposal if "the company has
already substantially implemented the proposal." Target argues that the company
"has substantially implemented the thrust of the Proposal by having reviewed the
information that it deemed relevant to this issue, implementing a solution that
Target believes balances the concerns raised in the Proposal, and providing its
conclusions in a public manner through its Corporate Responsibility Report." The
Proposal does not seek a "discussion of the employee benefits offered to
Target's employees" but requests that Target "address the implications of rising
health care expenses and how it is positioning itself to address this public
policy issue." For this reason the Company has not substantially implemented the
proposal.
Developments Since SEC Decision on KOHL's
Proponents believe that health care is a significant social policy issue that
transcends day-to-day business matters; that Target has not addressed this
public policy issue; and thus this Proposal is appropriate for a shareholder
vote. Evidence of this grows almost daily. As cited in the January 19, 2007 Wall
Street Journal, these significant developments occurred since the SEC's decision
on this proposal at KOHL's:
Tuesday January 16
Business Roundtable, Service Employees International Union, launched a group
called "Divided We Fail." www.dividedwefail.org
Wednesday January 17
A bipartisan group of Senators and members of the House unveiled the "Health
Partnership Act" which is aimed at providing grants to states that are crafting
their own health care reform plans.
Wednesday January 17
Pennsylvania Gov. Edward Rendell became the latest governor to propose a plan to
cover the state's uninsured residents. http://www.gohcr.state.pa.us/
Thursday January 18
Families USA, the US Chamber of Commerce and America's health insurance plans
announced a two-step approach to providing coverage to children and adults.
www.coalitionfortheuninsured.org
Thursday January 18
Sen. Ron Wyden (D-Oregon) introduced the Healthy Americans Act. The plan has
gained endorsements from Safeway CEO Steve Burd, as well as SEIU President Andy
Stern.
Additional Social Policy Indications
In the 2006 mid-term elections that changed control of both the U.S. House of
Representatives and U.S. Senate, voters sent a strong message that the rising
cost of health care is a key issue. Voters polled by Americans for Health Care
in November 2006 identified rising health care costs as their top economic
concern. (http://www.americansforhealthcare.com)
In December 2006, the Kaiser Family Foundation and Harvard School of Public
Health found health care tied for second place with economic concerns in a
survey of the public's policy priorities.
(http://www.kff.org/kaiserpolls/pomr120806nr.cfm) This same survey identified
health care as one of the three issues Americans are most interested in for the
2008 election.
A survey by the Employee Benefit Research Institute in May and June 2006 found
that 59% of respondents rated the nation's health care system as "poor" or
"fair." (Christopher Lee, "Shift in Congress Puts Health Care Back on the
Table," The Washington Post December 25, 2006)
There are a number of Congressional initiatives related to health care and
health insurance coverage. Two of the House Democrats' top "Six for '06"
priorities related to health care. (See Lee, supra.)
Three statesMaine, Massachusetts and Vermonthave enacted measures designed
to provide universal coverage to their residents. Governor Arnold Schwarzenegger
of California has developed a proposal that would require all state residents to
obtain health insurance and would share the cost among employers, individuals,
health care providers, health insurers and the government. (Tom Choreau,
"Sweeping State Health Plan," San Francisco Chronicle (January 9, 2007)
Agreement in the Business Community
The cost of health care and health insurance is not only of intense interest to
lawmakers and the general public; it is a particularly urgent social policy
issue for U.S. companies that provide health benefits to their employees.
General Motors CEO Rick Wagoner has quantified the burden: He estimates that
$1,500 of the cost of every car GM sells is attributable to health care, a
surcharge he says companies in other countries do not bear. (Ceci Connolly, "US
Firms Losing Health Care Battle, GM Chairman Says," The Washington Post Feb. 11,
2005) In an increasingly global economy, U.S. companies' rapidly growing health
care costs put them at a competitive disadvantage, given the larger role of
government in providing health coverage in other countries.
The 2006 Kaiser/Health Research and Educational Trust employer survey reported
that the cost of health insurance rose 7.7% in 2006, well over the 3.5%
inflation rate. According to the survey, the cost of health insurance has
increased by 87% since 2000, with cost increases outpacing inflation since 1999.
(http://www.kff.org/insurance/7527/index.cfm)
In the Business Roundtable's Fourth Quarter 2006 CEO Economic Outlook Survey,
over half of CEOs identified health care costs as the greatest cost pressure
facing their businesses, for the fourth year in a row.
(http://www.businessroundtable.org/newsroom/Document.aspx?qs=5916BF807822B0F1ADC478122FB51711FCF50C8)
"Our nation is facing a crisis that requires immediate attention. Working
together, business, labor, government, consumer groups and health care providers
can collectively solve this problem," said Safeway President and CEO Steve Burd.
Silicon Valley/San Jose Business Journal (December 13, 2006).
Larry Burton, the executive director of the Business Roundtable testified
before the Senate Health, Education, Labor and Pensions (HELP) Committee about
the need for comprehensive health care reform. "The issues of the uninsured must
be tackled, and health care costs must be reduced for all Americans, for our
economy and for our companies. For Business Roundtable CEOs, health care costs
are the number one cost pressure they face as employers. High health care costs
are affecting job creation. High health care costs are hurting our ability to
compete in global markets. And, high health care costs are straining the
household incomes of many Americans and forcing them to go without health care
coverage altogether."
(http://www.businessroundtable.org/newsroom/Document.aspx?qs=5926BF807822B0F1ADC448122FB51711FCF50C8)
In the current environment, it is difficult to imagine a more pressing social
policy issue facing U.S. companies, including Target, than the relentless growth
of health care costs and the state of health care in America.
In sum, the Proposal asks Target to report to shareholders on the implications
of rapidly rising health care costs and how Target is managing this challenge,
matters shareholders can comprehend without difficulty. The situation of health
care in the United States is a significant social concern, and media, business,
government, labor, other organizations and individual citizens are giving
greater attention to this issue. Accordingly, the Proposal does not involve
Target's ordinary business; Target has not substantially implemented the
Proposal; and Target's request for no-action relief should be denied.
If you have any questions or need anything further, please do not hesitate to
contact me:
Sister Judy Byron, OP
1216 NE 65th Street
Seattle, WA 98115
206.223.1138
jbyron@ipjc.org
Respectfully submitted,
/s/
Sister Judy Byron, OP
Representative of the Adrian Dominican Sisters
CC: Timothy R. Baer, Target Corporation
Amy C. Seidel, Faegre & Benson
Susan Vickers, RSM, Catholic Healthcare West
Michael D. Connelly, Catholic Healthcare Partners
Constance Brookes, Friends Fiduciary Corporation
John D. Gonzalez, Congregation of the Passion
Seamus P. Finn, Missionary Oblates of Mary Immaculate
Everard O. Rutledge, PhD, Bon Secours Health System
Joellen Sbrissa, Sisters of St. Joseph of La Grange
Lauren Compare, Boston Common Asset Management
Catherine Rowan, Trinity Health
Dr. Margaret Ann Cowden, National Ministries, American Baptist Churches USA
Rose Marie Stallbaumer, OSB, Benedictine Sisters of Mount St. Scholastica
Tom McCaney, Sisters of St. Francis of Philadelphia
STAFF REPLY LETTER]
February 27, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Target Corporation Incoming letter dated January 18, 2007
The proposal requests that the board prepare a report examining the implications
of rising health care expenses and how Target is addressing this issue without
compromising the health and productivity of its workforce.
There appears to be some basis for your view that Target may exclude the
proposal under rule 14a-8(i)(7), as relating to Target's ordinary business
operations (i.e., employee benefits). Accordingly, we will not recommend
enforcement action to the Commission if Target omits the proposal from its proxy
materials in reliance on rule 14a-8(i)(7). In reaching this position, we have
not found it necessary to address the alternative basis for omission upon which
Target relies.
Sincerely,
/s/
Tamara M. Brightwell
Special Counsel
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