Company Name: Merck & Co., Inc.
Public Availability Date: December 21, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
VIA OVERNIGHT DELIVERY
December 12, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of the Chief Counsel
100 F Street, N.E.
Washington. DC 20549
Re: Merck & Co., Inc. Shareholder Proposal from Howard Bicker, Executive
Director, Minnesota State Board of Investment (the "Proponent")
Dear Ladies and Gentlemen:
Merck & Co., Inc. (the "Company") has received a shareholder's proposal (the
"2008 Proposal") from the Proponent for inclusion in the Company's proxy
materials for the 2008 Annual Meeting of Stockholders (the "Proxy Materials").
As fully explained below, I believe that the proposal is excludible from the
Proxy Materials under rule 14a-8(i)(7) as relating to an evaluation of risk.
Therefore, I respectfully request that the Division of Corporation Finance (the
"Staff") indicate that it will not recommend enforcement action to the
Securities and Exchange Commission ("SEC") if the Company omits the Proposal.
The Proposal is virtually identical to proposals received by the Company from
the Proponent for the 2006 proxy materials (the "2006 Proposal") and the 2007
proxy materials (the "2007 Proposal"). The Staff agreed that there was a basis
to exclude the 2006 Proposal and the 2007 Proposal under Rule 14a-8(i)(7). See
Merck & Co., Inc. (avail. January 11, 2006), Merck & Co., Inc. (avail. December
11, 2006). Virtually identical proposals from the Proponent to other registrants
were also excludible under rule 14a-8(i)(7) in Pfizer, Inc. (avail. January 29,
2007), Pfizer Inc. (avail. January 13, 2006), and Eli Lilly and Company (avail.
January 11, 2006).
The 2008 Proposal requests that the Proxy Materials include the following
proposed resolution:
Resolved:
Shareholders request the Board of Directors to prepare a report on the effects
on the long-term economic stability of the company and on the risks of liability
to legal claims that arise from the company's policy of limiting the
availability of the company's products to Canadian wholesalers or pharmacies
that allow purchase of its products by U.S. residents. The report should be
prepared at reasonable cost and omitting proprietary information, by September
30, 2008.
The Proponent's supporting statement for the 2008 Proposal is attached as
Appendix A.
Staff Legal Bulletin 14C (CF), dated June 28, 2005, provides clarification of
the Staff's view of which proposals may be excluded under rule 14a-8(i)(7) as
relating to an evaluation of risk.
To the extent that a proposal and supporting statement focus on the company
engaging in an internal assessment of the risks or liabilities that the company
faces as a result of its operations that may adversely affect the environment or
the public's health, we concur with the company's view that there is a basis for
it to exclude the proposal under rule 14a-8(i)(7) as relating to an evaluation
of risk.
The 2008 Proposal explicitly relates to evaluation of risk and focuses solely on
an internal assessment of risk facing the Company as a result of its operations.
Consistent with Staff Legal Bulletin 14C (CF) and prior Staff opinions, the 2008
Proposal is excludible under rule 14a-8(i)(7).
Therefore, I respectfully request that the Staff not recommend any enforcement
action if the Company omits the Proposal from its Proxy Materials. If the Staff
believes that it will not be able to concur in our view that the Proposal may be
omitted, we would very much appreciate the opportunity to discuss this issue in
more detail with the appropriate persons before issuance of a formal response.
In accordance with Rule 14a-8(j)(2), we have enclosed six copies of this letter
and six copies of the Proposal, including the statement in support thereof. An
additional copy is included, which we ask that you use to acknowledge receipt of
this submission by date stamping and returning to me in the enclosed
self-addressed envelope.
By copy of this letter to him, the Company is notifying the Proponent of its
intention to omit the Proposal from the Proxy Materials.
For the Staff's information, the Company anticipates beginning to print its
proxy card on or about February 29, 2008.
If you have any questions regarding this matter or require further information,
please contact me at (908) 423-4883.
Thank you for your time and consideration.
Very truly yours,
MERCK & CO., INC.
/s/
IIilary M. Wandall Attorney Corporate Legal
Enc.
cc: Howard Bicker Executive Director, Minnesota State Board of Investment
[INQUIRY LETTER]
October 19, 2007
Ms. Celia A. Colbert Vice President, Secretary and Assistant General Counsel
WS3A-65 Merck & Co., Inc. One Merck Drive Whitehouse Station, NJ 08889-0100
Dear Ms. Colbert:
The Minnesota State Board of Investment (MSBI) has asked me to notify you of our
intention to sponsor the enclosed proposal for consideration and approval of
stockholders at the next annual meeting, I submit it to you in accordance with
the general rules and regulations under Rule 14a-8 of the Securities Exchange
Act of 1934 and ask that our name be included in your proxy statements.
The enclosed letter from State Street Bank and Trust Company of Boston asserts
the Board's ownership, for more than a year, of your outstanding shares.
Under current policies affecting MSBI portfolio, the MSBI will continue to hold
shares in your company through the date of the 2008 Annual Meeting.
Sincerely,
/s/
Howard J. Bicker Executive Director
HJB:dfg
WHEREAS, current business practices of the company have resulted in a pricing
structure that charges United States customers significantly higher prices for
the same prescription medicines made available at significantly lower prices in
Canada, other developed countries and world markets; and
WHEREAS, governmental agencies and individuals in the United States are
demanding affordable drug prices and are taking actions to access lower priced
products from Canada and other world markets; and
WHEREAS, according to published reports, the company has cut supplies of its
medicines to Canadian wholesalers and companies that it claims allowed its
product to be sold to Americans seeking lower prices available in the Canadian
market; and
WHEREAS, according to published reports, the company's actions have resulted in
lawsuits and threatened lawsuits; and
WHEREAS, the company's actions to limit supply of medicines in Canada may
violate local, national and international laws and could result in large
settlements, large awards of damages and potential punitive damages which would
negatively impact the economic stability of the company and the value of its
shares.
Resolved:
Shareholders request the Board of Directors to prepare a report on the effects
on the long-term economic stability of the company and on the risks of liability
to legal claims that arise from the company's policy of limiting the
availability of the company's products to Canadian wholesalers or pharmacies
that allow purchase of its products by U.S. residents. The report should be
prepared at reasonable cost and omitting proprietary information, by September
30, 2008.
SUPPORTING STATEMENT
We urge shareholders to vote FOR this proposal,
258 words
[STAFF REPLY LETTER]
December 21, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Merck & Co., Inc. Incoming letter dated December 12, 2007
The proposal requests the board to prepare a report on "the effects on the
long-term economic stability of the company and on the risks of liability to
legal claims" resulting from the company's policy of limiting the availability
of the company's products to Canadian wholesalers or pharmacies that allow
purchase of its products by U.S. residents.
There appears to be some basis for your view that Merck may exclude the proposal
under rule 14a-8(i)(7), as relating to Merck's ordinary business operations
(i.e., evaluation of risk). Accordingly, we will not recommend enforcement
action to the Commission if Merck omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(7).
Sincerely,
/s/
William A. Hines
Special counsel
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