Company Name: Great Plains Energy Inc.
Public Availability Date: February 27, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
December 28, 2006
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
100 F. Street NE
Washington, D.C. 20549-7010
Re: Bemis Company, Inc: 2007 Annual Meeting, Stockholder Proposal Submitted by
the Intemational Brotherhood of Dupont Workers
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I am
submitting this letter on behalf of Bemis Company, Inc., a Missouri corporation
("Bemis"), to respectfully request that the Staff of the Division of Corporate
Finance concur with Bemis' view that, for the reasons stated below, the
shareholder proposal and supporting statement (collectively, the "Proposal")
submitted by a stockholder, the International Brotherhood of Dupont Workers ("Dupont
Workers") may properly be omitted from Bemis' proxy statement and form of proxy
(together, the "proxy materials") for its 2007 Annual Meeting of Stockholders.
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 November 4, 2006 received by Bemis on November 20,
2006 from the Dupont Workers, which includes the Proposal;
this statement of Bemis, which sets forth Bemis' reasons why the Proposal may
be omitted from Bemis' proxy materials.
Bemis plans to file its definitive proxy materials with the SEC on or about
March 20, 2007.
I. The Proposal
The Dupont Workers set forth the Proposal as follows:
"Resolved: That the stockholders of Bemis, Inc, assembled in annual meeting in
person and by proxy, hereby request that the Board of Directors give
consideration to preparing a report, to be made available to shareholders four
months after the 2007 Annual meeting, that shall review the compensation
packages provided to senior executives of the Company and address the following.
1. Comparison of compensation packages for senior executives with that provided
to the lowest paid Company employees.
2. Whether there should be a ceiling on compensation provided to senior
executives so as to prevent the possibility of excessive compensation.
3. Whether compensation of senior executives should be adjusted in the event of
the layoff of a substantial number of employees."
II. Bemis' Bases for Exclusion of the Proposal Under Rule 14a-8(i)(7)
A. The Proposal Deals With Matters Relating to the Company's Ordinary Business
Operations and Is Therefore Properly Excludable under Rule 14a-8(i)(7)
Rule 14a-8(i)(7) permits an issuer to omit a stockholder proposal if the
proposal deals with matters relating to a company's ordinary business
operations. The Staff has stated that a proposal requesting a report, such as
the Dupont Workers proposal, may be excludable under Rule 14(a)-8(i)(7) if the
substance of the report is within the ordinary business of the issuer. See
Release No. 34-20091 (Aug. 16, 1983). The proposal, which requires that the
Board give consideration to preparing a report, will be excludable if the
subject matter sought in the proposal involves a matter of ordinary business
operations. See Johnson Controls, Inc. (October 26, 1999).
In applying Rule 14a-8(i)(7), the Staff has consistently taken the position that
stockholder proposals dealing with management of the workforce and general
compensation matters may be omitted as relating to ordinary business operations.
In a series of recent no-action letters, the Staff concurred in the exclusion of
proposals that sought to require companies to prepare reports on the effect of
job elimination and job relocation decisions on senior executive compensation.
See, e.g., Bank of America Corp. (February 4, 2005); The Black & Decker Corp.
(February 3, 2005); Citigroup Inc. (February 4, 2005); JP Morgan Chase & Co.
(February 4, 2005); and The Boeing Company (February 25, 2005).
B. Adjustment of Compensation in the Event of the Layoff of a Substantial Number
of Employees Deals with Ordinary Business Matters
The proposal from the Dupont Workers, which requests that a report address
whether compensation of senior executives should be adjusted in the event of the
layoff of a substantial number of employees, similarly would require Bemis to
report on an issue related to the management of its workforce. As stated by the
Staff in the no-action letters above, proposals such as this that deal with the
management of a company's workforce can be excluded under Rule 14a-8(i)(7).
By suggesting that compensation of senior executives should be adjusted in the
event of a layoff of a substantial number of employees, the Proposal seeks to
address Bemis' workforce policies, which is part of Bemis' ordinary business
operations. Management is in the best position to determine whether compensation
should be adjusted in the event of a layoff of employees, which can happen for a
variety of reasons.
C. Regardless of Whether the Proposal Touches upon Significant Policy Issues,
the Entire Proposal is Excludable Due to the Fact That It Addresses Ordinary
Business Matters.
While Bemis recognizes that the Staff has concluded that certain
employment-related proposals may sufficiently focus on significant policy issues
so as to preclude exclusion in certain circumstances, it believes that this
Proposal, which addresses both ordinary and non-ordinary business matters,
should be excluded in its entirety. The Staff has agreed that a proposal may be
excluded in its entirety when it addresses both ordinary and non-ordinary
business matters. In General Electric Co. (February 10, 2000), the Staff allowed
the company to exclude a proposal that mentioned executive compensation under
the premise that a portion of the proposal related to ordinary business matters.
Other no-action letters also support the premise that an entire proposal can be
omitted if a portion of the proposal is found to relate to ordinary business
matters. See also Medallion Financial Corp. (May 11, 2004), Wal-Mart Stores,
Inc. (March 15, 1999).
Although the proposal presented by the Dupont Workers refers to whether
executive compensation should be adjusted in the event of a layoff of employees,
this section of the Proposal clearly deals with workforce management and general
compensation matters. This aspect of the Proposal seeks to micro-manage Bemis,
not raise issues of significant policy, and the entire Proposal should be
excluded on these grounds.
III. Conclusion
In view of the foregoing, we believe that Bemis may rely on Rule 14a-8(i)(7) to
omit the Proposal from its proxy materials. On behalf of Bemis, we respectfully
request that the Staff confirm that it will not recommend enforcement action to
the SEC if Bemis omits the Dupont 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 Dupont Workers to notify them of Bemis' intention to omit the
Proposal from Bemis' 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
Enclosures
cc: Jim Flickinger, President of Dupont Works (certified mail)
James J. Seifert, General Counsel of Bemis
[INQUIRY LETTER]
January 11, 2007
SENT BY OVERNIGHT MAIL WITH ATTACHMENTS
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporate Finance
100 F Street, NE
Washington, DC 20549
Re: Bemis Company, Inc. 2007 Annual Stockholder Meeting Proposal Submitted by
International Brotherhood of Dupont Workers
Dear Sir or Madam:
I serve as counsel to The International Brotherhood of Dupont Workers ("IBDW")
and am writing to you in response to the request submitted by Bemis Company,
Inc., as attached, that the Securities and Exchange Commission ("Commission")
not recommend any enforcement action if the proposal submitted on behalf of the
IBDW is omitted from Bemis's proxy statement for the 2007 Annual Stockholders
Meeting.
The IBDW requested that the following proposal be submitted to shareholders:
"Resolved: That the stockholders of Bemis, Inc., assembled in annual meeting in
person and by proxy, hereby request that the Board of Directors give
consideration to preparing a report, to be made available to shareholders four
months after the 2007 Annual Meeting, that shall review the compensation
packages provided to senior executives of the Company and address the following:
1. Comparison of compensation packages for senior executives with that provided
to the lowest paid Company employees.
2. Whether there should be a ceiling on compensation provided to senior
executives so as to prevent the possibility of excessive compensation.
3. Whether compensation of senior executives should be adjusted in the event of
the layoff of a substantial number of employees."
Bemis erroneously contends that the instant proposal may be rejected consistent
with Rule 14a-8(i)(7). That Rule permits the exclusion of a proposal that "deals
with a matter relating to the conduct of the ordinary business operations of the
issuer." The SEC reasons that matters affecting the ordinary course of business
are "beyond the competence and directions of shareholders". Commission Release
No. 34-19135, n. 47 (October 14, 1982).
However, the Commission has long acknowledged that executive compensation is not
beyond the competence and directions of shareholders and, accordingly, has
required the inclusion of shareholder proposals concerning executive
compensation. In this regard, the Commission has acknowledged the right of
shareholders to have placed on the proxy proposals that recommend specific
merits of executive compensation systems, including those that address the
relationship between executive compensation and the wages and benefits paid to
that company's rank-and-file employees.
In Westinghouse Electric Corporation (January 27, 1995), a copy of which is
attached and marked as #1, the Commission required the inclusion of a proposal
to limit the bonuses paid to professional employees, to limit an executive's
total compensation to $1,500,000, and to link executive pay to stock dividends.
In USEC Inc. (January 12, 2004), a copy of which is attached and marked as #2,
the Commission rejected the corporation's efforts to exclude from its proxy a
shareholder proposal that recommended to the board of directors that the total
compensation package of top executives be limited to twenty times the average
pay of USEC non-exempted employees or ten times the average pay of USEC exempted
employees.
In Wal-Mart Stores, Inc. (March 1, 2006), a copy of which is attached and marked
as #3, the Commission rejected Wal-Mart's efforts to exclude from its proxy a
shareholder proposal requesting that the compensation committee of the board of
directors prepare a report comparing the total compensation of Wal-Mart's top
executives and Wal-Mart's lowest paid workers in the United States in July 1995
and July 2005.
The Commission must consider Bemis' objections within the context of the
shareholder's rights to set or recommend executive compensation.
Indeed, unlike the above proposals in Westinghouse Electric Corporation and USEC
Inc., which established actual compensation limits for senior executives, the
instant proposal would merely require the Directors to "give consideration to"
preparing and disseminating a study of the pay of senior executives, with
particular attention to three factors: their pay relative to the pay of the
lowest Company employees, their pay relative to the concept of "excessive
compensation", and their pay relative to the number of Company employees laid
off.
The Commission has, in fact, required the inclusion of proposals requiring such
studies.
In E.I. DuPont de Nemours and Co. (February 10, 2004), a copy of which is
attached and marked as #4, this same proponent, the IBDW, successfully sought a
shareholder vote directing the board of directors to prepare a report addressing
the following matters: linking compensation to the company's financial and
social performance; comparing the compensation of senior executives with that of
the lowest paid company employees; considering whether there should be a ceiling
on compensation to senior executives to prevent excessive compensation; and
considering whether compensation of senior executives should be adjusted in the
event of the layoff of a substantial number of its employees.
Precisely because they can pre-empt shareholder power by refusing to prohibit
excessive compensation, the Bemis Board of Directors is free to ignore the
disparity between the earnings of corporate executives and their rank-and-file
employees; this proposal merely requests a shareholder vote on whether such a
report should be prepared. Without a test of the degree of shareholder concern,
Directors are free to assume that there is no shareholder concern.
Finally, the cases relied upon by Bemis do not support the exclusion of the
instant proposal.
In Johnson Controls (October 26, 1999), a copy of which is attached and marked
as #5, the Commission permitted the exclusion of a proposal requesting changes
in the corporation's financial statements to reflect an accurate valuation of
"goodwill-net". The Commission explained that the preparation of financial
statements was part of the corporation's ordinary business and thus beyond
shareholder control. But the Commission as never ruled that executive
compensation is beyond shareholder control.
In Bank of America (February 4, 2005), a copy of which is attached and marked as
#6, the Commission allowed the exclusion of a proposal to require a study of job
losses but, unlike the instant proposal, that proposal was simply about job
losses; the instant proposal is about executive compensation.
In Wal-Mart Stores, Inc. (March 15, 1999), a copy of which is attached and
marked as #7, the Commission approved the exclusion of a proposal limiting the
corporation's choice of suppliers based on the supplier's labor relations
policies. Just as was the situation in the Bank of America case, this case as
well deals exclusively with ordinary business matters. The instant case deals
with executive compensation.
In General Electric Co. (February 10, 2000), a copy of which is attached and
marked as #8, the Commission allowed the exclusion of a proposal which sought to
control the source of funds for executive compensation (i.e., to prevent
withdrawing assets from a pension fund to pay executives). The instant proposal
in no way calls for any such restriction on funding for executive compensation.
In sum, the "ordinary business" exception in Rule 14a-8(i)(7) does not apply to
a request for a study of executive compensation even when the requested report
would consider such criteria as the pay and benefits provided to that company's
own employees as well as the size of that company's workforce.
For all of the above reasons, it is respectfully requested that Bemis be
required to include the proposal of the IBDW.
Please note that I have included six copies of this letter and the attachments.
Also, I have forwarded a copy of this letter and the attachments to counsel for
Bemis.
Also, I would appreciate it if you would stamp the enclosed extra copy of this
letter, acknowledging receipt, and return it in the enclosed postage prepaid,
self-addressed stamped envelope. This way I will know that this letter has been
received. Thanks in advance for doing that.
Very truly yours,
/s/
Kenneth Henley
General Counsel, IBDW
Cc: Amy Seidel, Esq. (Faegre & Benson, Counsel for Bemis)
Jim Flickinger, President, IBDW
[INQUIRY LETTER]
December 28, 2006
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
100 F. Street NE
Washington, D.C. 20549-7010
Re: Bemis Company, Inc: 2007 Annual Meeting, Stockholder Proposal Submitted by
the International Brotherhood of Dupont Workers
Ladies and Gentlemen:
Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, I am
submitting this letter on behalf of Bemis Company, Inc., a Missouri corporation
("Bemis"), to respectfully request that the Staff of the Division of Corporate
Finance concur with Bemis' view that, for the reasons stated below, the
shareholder proposal and supporting statement (collectively, the "Proposal")
submitted by a stockholder, the International Brotherhood of Dupont Workers
("Dupont Workers") may properly be omitted from Bemis' proxy statement and form
of proxy (together, the "proxy materials") for its 2007 Annual Meeting of
Stockholders.
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 November 4, 2006 received by Bemis on November 20,
2006 from the Dupont Workers, which includes the Proposal;
this statement of Bemis, which sets forth Bemis' reasons why the Proposal may
be omitted from Bemis' proxy materials.
Bemis plans to file its definitive proxy materials with the SEC on or about
March 20, 2007.
I. The Proposal
The Dupont Workers set forth the Proposal as follows:
"Resolved: That the stockholders of Bemis, Inc, assembled in annual meeting in
person and by proxy, hereby request that the Board of Directors give
consideration to preparing a report, to be made available to shareholders four
months after the 2007 Annual meeting, that shall review the compensation
packages provided to senior executives of the Company and address the following.
1. Comparison of compensation packages for senior executives with that provided
to the lowest paid Company employees.
2. Whether there should be a ceiling on compensation provided to senior
executives so as to prevent the possibility of excessive compensation.
3. Whether compensation of senior executives should be adjusted in the event of
the layoff of a substantial number of employees."
II. Bemis' Bases for Exclusion of the Proposal Under Rule 14a-8(i)(7)
A. The Proposal Deals With Matters Relating to the Company's Ordinary Business
Operations and Is Therefore Properly Excludable under Rule 14a-8(i)(7)
Rule 14a-8(i)(7) permits an issuer to omit a stockholder proposal if the
proposal deals with matters relating to a company's ordinary business
operations. The Staff has stated that a proposal requesting a report, such as
the Dupont Workers proposal, may be excludable under Rule 14(a)-8(i)(7) if the
substance of the report is within the ordinary business of the issuer. See
Release No. 34-20091 (Aug. 16, 1983). The proposal, which requires that the
Board give consideration to preparing a report, will be excludable if the
subject matter sought in the proposal involves a matter of ordinary business
operations. See Johnson Controls, Inc. (October 26, 1999).
In applying Rule 14a-8(i)(7), the Staff has consistently taken the position that
stockholder proposals dealing with management of the workforce and general
compensation matters may be omitted as relating to ordinary business operations.
In a series of recent no-action letters, the Staff concurred in the exclusion of
proposals that sought to require companies to prepare reports on the effect of
job elimination and job relocation decisions on senior executive compensation.
See, e.g., Bank of America Corp. (February 4, 2005); The Black & Decker Corp.
(February 3, 2005); Citigroup Inc. (February 4, 2005); JP Morgan Chase & Co.
(February 4, 2005); and The Boeing Company (February 25, 2005).
B. Adjustment of Compensation in the Event of the Layoff of a Substantial Number
of Employees Deals with Ordinary Business Matters
The proposal from the Dupont Workers, which requests that a report address
whether compensation of senior executives should be adjusted in the event of the
layoff of a substantial number of employees, similarly would require Bemis to
report on an issue related to the management of its workforce. As stated by the
Staff in the no-action letters above, proposals such as this that deal with the
management of a company's workforce can be excluded under Rule 14a-8(i)(7).
By suggesting that compensation of senior executives should be adjusted in the
event of a layoff of a substantial number of employees, the Proposal seeks to
address Bemis' workforce policies, which is part of Bemis' ordinary business
operations. Management is in the best position to determine whether compensation
should be adjusted in the event of a layoff of employees, which can happen for a
variety of reasons.
C. Regardless of Whether the Proposal Touches upon Significant Policy Issues,
the Entire Proposal is Excludable Due to the Fact That It Addresses Ordinary
Business Matters.
While Bemis recognizes that the Staff has concluded that certain
employment-related proposals may sufficiently focus on significant policy issues
so as to preclude exclusion in certain circumstances, it believes that this
Proposal, which addresses both ordinary and non-ordinary business matters,
should be excluded in its entirety. The Staff has agreed that a proposal may be
excluded in its entirety when it addresses both ordinary and non-ordinary
business matters. In General Electric Co. (February 10, 2000), the Staff allowed
the company to exclude a proposal that mentioned executive compensation under
the premise that a portion of the proposal related to ordinary business matters.
Other no-action letters also support the premise that an entire proposal can be
omitted if a portion of the proposal is found to relate to ordinary business
matters. See also Medallion Financial Corp. (May 11, 2004), Wal-Mart Stores,
Inc. (March 15, 1999).
Although the proposal presented by the Dupont Workers refers to whether
executive compensation should be adjusted in the event of a layoff of employees,
this section of the Proposal clearly deals with workforce management and general
compensation matters. This aspect of the Proposal seeks to micro-manage Bemis,
not raise issues of significant policy, and the entire Proposal should be
excluded on these grounds.
III. Conclusion
In view of the foregoing, we believe that Bemis may rely on Rule 14a-8(i)(7) to
omit the Proposal from its proxy materials. On behalf of Bemis, we respectfully
request that the Staff confirm that it will not recommend enforcement action to
the SEC if Bemis omits the Dupont 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 Dupont Workers to notify them of Bemis' intention to omit the
Proposal from Bemis' 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
Enclosures
cc: Jim Flickinger, President of Dupont Works (certified mail)
James J. Seifert, General Counsel of Bemis
[APPENDIX]
The International Brotherhood of Dupont Workors, P.O. Box 10, Waynesboro, VA
22980, and its member local, the Transpercut Film Workers, Inc., representing
the workers at the Clinton, Iowa Bemis factory, owner of 130 shares of Bemis
Common Stock, has given notice that it will introduce the following resolution
and statement in support thereof:
Resolved: That the stockholders of Bemis, Inc., assembled in annual meeting in
person and by proxy, hereby request that the Board of Directors give
consideration to preparting a report, to be made available to shareholders four
months after the 2007 Annual meeting, that shall review the compensation
packages provided to senior executives of the Company and address the following.
1. Comparison of compensation packages for senior executives with that provided
to the lowest paid Company employees.
2. Whether there should be a ceiling on compensation provided to senior
executives so as to prevent the possibility of excessive compensation.
3. Whether compensation of senior executives should be adjusted in the event of
the layoff of a substantial number of employees.
Stockholders' Statement
A review of Bemis' 2006 proxy statement reveals that CEO Curler received total
compensation in 2005, including wages and stock, of $7.43 million. This
represonted a 44% increase over his 2004 total compensation of $5.15 million. He
also has stock options, presently unexercised, worth over $7 million and an
estimated yearly pension of almost $600,000.
Contrast Mr. Curler's situation with that of the Bemis employees in the U.S. who
actually produce the products that have made this Company so snecessful. Their
yearly wage increase over the past two years has averaged about 3%. During this
same time period, these employees have seen their health care costs skyrocket,
eating up virtually all of their wage increase. The situation is even worse once
they retire; Bemis provides no help of any kind with retiree health care costs.
As for pensions, employees are no longer offered a pension - in place of a
pension, employees are only provided with a token amount in their 401K.
If it is appropriate to provide such generous compensation to Mr. Curler,
wouldn't it be appropriate to rethink the compensation provided to the employees
who work in the Company's very own factories.
It is time to reevaluate the criteria used for compensating those who work for
Bemis. This proposal will do just that, and would be applauded by the employees
of Bemis as well as the general public. This would serve Bemis well, given its
global stature and its increasing prominence in the market place.
If you AGREE, please mark your proxy FOR this resolution.
[STAFF REPLY LETTER]
February 26, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bemis Company, Inc. Incoming letter dated December 28, 2006
The proposal requests that the board give consideration to preparing a report
that shall review the compensation packages provided to senior executives,
including certain specified considerations enumerated in the proposal.
We are unable to concur in your view that Bemis may exclude the proposal under
rule 14a-8(i)(7). Accordingly, we do not believe that Bemis may omit the
proposal from its proxy materials in reliance on rule 14a-8(i)(7).
Sincerely,
/s/
Derek B. Swanson
Attorney-Adviser
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