Company Name: Abbott Laboratories
Public Availability Date: January 10, 2008
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 7, 2008
By Messenger
Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Abbott Laboratories - Shareholder Proposal Submitted by Sisters of Charity
of Saint Elizabeth, Basilian Fathers of Toronto, Benedictine Sisters Charitable
Trust (Texas), Benedictine Sisters of Virginia, Camilla Madden Charitable Trust,
Catholic Health Initiatives, Catholic Healthcare Partners, Catholic Healthcare
West, Benedictine Convent of Perpetual Adoration, Congregation of Divine
Providence, Inc., Mount St. Scholastica Benedictine Sisters, Providence Trust,
Sisters of Charity of the Incarnate Word, Houston, Texas, Sisters of the Holy
Names of Jesus and Mary U.S.-Ontario Province, Sisters of the Holy Spirit and
Mary Immaculate and Sisters of the Sorrowful Mother International Finance, Inc.
Ladies and Gentlemen:
On December 27, 2007, Abbott Laboratories submitted a request for a no-action
letter to the Division of Corporation Finance requesting that the Staff concur
with our view that, for the reasons stated in the request, the stockholder
proposal (the "Proposal") submitted by Sisters of Charity of Saint Elizabeth,
Basilian Fathers of Toronto, Benedictine Sisters Charitable Trust (Texas),
Benedictine Sisters of Virginia, Camilla Madden Charitable Trust, Catholic
Health Initiatives, Catholic Healthcare Partners, Catholic Healthcare West,
Benedictine Convent of Perpetual Adoration, Congregation of Divine Providence,
Inc., Mount St. Scholastica Benedictine Sisters, Providence Trust, Sisters of
Charity of the Incarnate Word, Houston, Texas, Sisters of the Holy Names of
Jesus and Mary U.S.-Ontario Province, Sisters of the Holy Spirit and Mary
Immaculate and Sisters of the Sorrowful Mother International Finance, Inc. (the
"Proponents") may properly be omitted from the proxy materials for Abbott's 2008
annual meeting of shareholders.
On January 3, 2008, Abbott received a letter from Sister Barbara Aires,
Coordinator of Corporate Responsibility of Sisters of Charity of Saint
Elizabeth. The letter informed Abbott that the Sisters of Charity of Saint
Elizabeth, as "Lead/primary filer" authorized to act on behalf of the
Proponents, were withdrawing the Proposal. (Each of the other Proponents, in
their original cover letters to us, copies of which were included with our
original request, either expressly designated Sister Barbara Aires as their
representative or the primary filer, or stated that they were co-filing or
filing in conjunction, coordination or collaboration with the Sisters of Charity
of Saint Elizabeth, and Sister Barbara Aires informed Abbott that she had
confirmed the withdrawal with each of the other Proponents.) A copy of the
withdrawal letter is enclosed as Exhibit A. We understand that Sister Barbara
Aires sent a letter directly to the Securities and Exchange Commission
confirming the withdrawal of the Proposal, a copy of which is attached to the
withdrawal letter.
Based on the withdrawal of the Proposal by the Proponents, Abbott is hereby
withdrawing the request for a no-action letter. A copy of this letter is being
provided to each Proponent.
If the Staff has any questions or comments with respect to the foregoing, please
contact me at 847.938.3591 or Deborah Koenen at 847.938.6166. We may also be
reached by facsimile at 847. 938.9492.
Thank you for your attention to this matter.
Very truly yours,
/s/
John A. Berry
Enclosures
cc: All representatives of the Proponents listed in Exhibit B.
[INQUIRY LETTER]
December 27, 2007
By Messenger
Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Abbott Laboratories - Shareholder Proposal Submitted by Sisters of Charity
of Saint Elizabeth, Basilian Fathers of Toronto, Benedictine Sisters Charitable
Trust (Texas), Benedictine Sisters of Virginia, Camilla Madden Charitable Trust,
Catholic Health Initiatives, Catholic Healthcare Partners, Catholic Healthcare
West, Benedictine Convent of Perpetual Adoration, Congregation of Divine
Providence, Inc., Mount St. Scholastica Benedictine Sisters, Providence Trust,
Sisters of Charity of the Incarnate Word, Houston, Texas, Sisters of the Holy
Names of Jesus and Mary U.S.-Ontario Province, Sisters of the Holy Spirit and
Mary Immaculate and Sisters of the Sorrowful Mother International Finance, Inc.
Ladies and Gentlemen:
On behalf of Abbott Laboratories and pursuant to Rule 14a-8(j) under the
Securities Exchange Act of 1934, I hereby request confirmation that the Staff of
the Securities and Exchange Commission will not recommend an enforcement action
if, in reliance on Rule 14a-8, we exclude a proposal submitted by Sisters of
Charity of Saint Elizabeth, as the primary sponsor of the proposal, and Basilian
Fathers of Toronto, Benedictine Sisters Charitable Trust (Texas), Benedictine
Sisters of Virginia, Camilla Madden Charitable Trust, Catholic Health
Initiatives, Catholic Healthcare Partners, Catholic Healthcare West, Benedictine
Convent of Perpetual Adoration, Congregation of Divine Providence, Inc., Mount
St. Scholastica Benedictine Sisters, Providence Trust, Sisters of Charity of the
Incarnate Word, Houston, Texas, Sisters of the Holy Names of Jesus and Mary
U.S.-Ontario Province, Sisters of the Holy Spirit and Mary Immaculate and
Sisters of the Sorrowful Mother International Finance, Inc., as co-sponsors of
the proposal, (the "Proponents") from the proxy materials for Abbott's 2008
annual shareholders' meeting, which we expect to file in definitive form with
the Commission on or about March 19, 2008.
We received a notice from the primary sponsor on behalf of the Proponents on
November 9, 2007, submitting the proposal for consideration at our 2008 annual
shareholders' meeting. The proposal, a copy of which, together with the preamble
and supporting statement, is attached as Exhibit A (the "Proposal"), reads as
follows:
RESOLVED, shareholders urge the Board of Directors to adopt principles for
comprehensive health care reform (such as those based upon principles reported
by the Institute of Medicine:
1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for
society.
5. Health insurance should enhance health and well being by promoting access to
high-quality care that is effective, efficient, safe, timely, patient-centered,
and equitable).
The preamble and supporting statement of the Proposal refer to current lobbying
efforts in the health sector and a desire of the Proponents to direct Abbott's
lobbying efforts. In addition, the supporting statement requests that the Board
"report annually about how it is implementing such principles." Copies of
correspondence between the Company and the Proponents relating to the Proposal
are attached as Exhibit B.
Pursuant to Rule 14a-8(j), I have enclosed six copies of the Proposal and this
letter, which sets forth the grounds upon which we deem omission of the Proposal
to be proper. Copies of this letter are being sent to notify each Proponent of
our intention to omit the Proposal from our 2008 proxy materials.
We believe that the Proposal may be properly omitted from Abbott's 2008 proxy
materials pursuant to Rule 14a-8 for the reasons set forth below.
I. The Proposal may be excluded under Rule 14a-8(i)(7) because it involves
ordinary business matters.
The Proposal in question seeks to compel Abbott to actively endorse universal,
affordable health care coverage. The preamble to the Proposal addresses the
current lobbying efforts of companies and the projected amounts spent on
lobbying in the health care industry and notes that the Proposal is needed
because "such lobbying by the health care industry, including that of our
company, actually may counter the underlying interests of its shareholders."
This demonstrates that the Proponents are primarily concerned with involving
Abbott in lobbying for and participating in public policy debates with respect
to legislative and regulatory initiatives, all of which are ordinary business
matters.
It is well established that shareholder proposals addressing issues involving
health care reform may be excluded from issuer proxy statements pursuant to Rule
14a-8(i)(7) when such proposals are directed at involving the company in the
political or legislative process on issues that relate to an aspect of a
company's operations or business. In International Business Machines Corp.
(January 21, 2002), a proposal required the company to "join with other
corporations to support the establishment of a national health insurance
system." The Staff permitted that exclusion because the proposal was "directed
at involving IBM in the political or legislative process relating to an aspect
of IBM's operations." In Chrysler Corp. (February 10, 1992) and Chrysler Corp.
(March 29, 1993), the Staff concurred in the exclusion of a proposal requesting
that the company actively support and lobby for universal health coverage and a
proposal requesting that the company support three universal health care program
concepts because the proposals were "directed at involving the Company in the
political or legislative process relating to an aspect of the Company's
operations."
The conclusion that involvement in the legislative and political process falls
within the ordinary course of business exclusion is not limited to health care
reform proposals. For example, in General Motors Corp. (April 7, 2006), the
Staff permitted exclusion of a proposal requesting that the company petition the
U.S. government for improved corporate average fuel economy standards and that
the company lead the effort to enroll the assistance of the Administration and
Congress and the automotive industry to develop a non-oil based transportation
system and spread this technology to other nations. The Staff found that the
proposal was directed at involving General Motors in the political or
legislative process relating to an aspect of General Motors' operations.
In Exchange Act Release No. 34-40018 (May 21, 1998), the Commission stated that
the term "ordinary business" refers to matters that are "rooted in the corporate
law concept [of] providing management with flexibility in directing certain core
matters involving the company's business and operations." Further, "[c]ertain
tasks are so fundamental to management's ability to run a company on a
day-to-day basis" that they should not be subject to shareholder vote. Id.
Exchange Act Release No. 34-40018 also states that another policy behind Rule
14a-8(i)(7) 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." An assessment of Abbott's approach to regulatory or legislative
reforms and public policies that affect Abbott's business is a customary and
important responsibility of management and is not a proper subject for
shareholder involvement. As part of its normal business operations, Abbott
participates in the legislative and regulatory process. This involves an
assessment of many complicated and interrelated factors, which include the
likelihood of success of the lobbying efforts, the effect of certain regulations
on Abbott, its financial position and shareholder value and the impact on
patient rights and access to medicine. Therefore, decisions as to how and
whether to lobby on behalf of particular initiatives are made by the Company
after taking into account a multitude of factors, many of which are not apparent
to shareholders. The Proposal seeks to address Abbott's activities that are more
appropriately addressed by management, and not by shareholders, and therefore
implicates Abbott's ordinary business operations.
In determining when the focus of a proposal involves the ordinary course of a
company's business operations, the Staff considers "both the proposal and the
supporting statement as a whole." Staff Legal Bulletin No. 14C, part D.2 (June
28, 2005). A supporting statement alone may cause the Staff to conclude that a
proposal relates to an ordinary business matter. In Pfizer Inc. (January 31,
2007) and General Electric Co. (January 30, 2007), the Staff permitted exclusion
of a proposal and supporting statement that requested that the company produce a
social responsibility report that included the company's plan to address
specific policy matters such as tax reform, litigation and tort law reform and
reform of the Sarbanes-Oxley Act of 2002. While the "resolved" clause simply
asked for a description of company activity and plans, the supporting statement
provided that "[s]hareholders expect management to take appropriate actions to
advance shareholder interests, including participating in public policy debates
and lobbying activities." As such, the Staff determined that the proposals
related to the ordinary business operations of the companies, as each required
an evaluation of the impact of government regulation on the company. See also
General Electric Co. (January 10, 2005) (exclusion permitted under the ordinary
business argument even though the resolution itself involved a policy typically
not excludable when the supporting statement requested a change relating to the
nature, presentation and content of the company's films by minimizing the
depiction of smoking).
The preamble to the Proposal discusses lobbying as the context for the Proposal,
noting that the health care industry pays lobbyists to "influence elected
leaders regarding the company's position." It further provides that the Proposal
is needed "[b]ecause such lobbying by the health care industry, including that
of our company, actually may counter the underlying interests of its
shareholders." The Proponents cannot circumvent the exclusion of an ordinary
course of business proposal by moving the language directly addressing lobbying
efforts to a preamble or supporting statement. As was the case in Pfizer Inc.
(January 31, 2007) and General Electric Co. (January 30, 2007), the "resolved"
clause in the Proposal does not specifically reference lobbying activities.
However, most of the Proposal's preamble describes the lobbying efforts of the
health sector. The focus of the Proposal primarily concerns the creation of an
Abbott lobbying program to induce the government to take action to establish
affordable, universal health care policies. Because these matters implicate
Abbott's ordinary business operations, the Proposal is excludable under Rule
14a-8(i)(7).
In the supporting statement, the Proponents urge the Board to report annually
about how it is implementing its health care reform principles. Although the
Proposal is phrased as a request to Abbott to report on how it is implementing
universal, affordable health care principles, the Staff "will consider whether
the subject matter of the special report involves a matter of ordinary
business." Exchange Act Release No. 34-20091 (August 16, 1983). The Staff has
frequently concurred in the exclusion of proposals that request a report
evaluating the impact of health care reform by a company's board of directors.
See Brunswick Corp. (February 10, 1992); Dole Food Co. (February 10, 1992); GTE
Corp. (February 10, 1992); Minnesota Mining and Manufacturing Co. (February 10,
1992); PepsiCo Inc. (March 7, 1991). In each of these letters, the Staff agreed
that the proposal was directed at involving the company in the political or
legislative process relating to an aspect of the company's operations. The Staff
has also excluded proposals requesting reports involving other topics relating
to legislative or regulatory proceedings as an ordinary business matter. See
Johnson & Johnson (January 24, 2006) (permitting exclusion of a proposal
relating to a report on the impact of a flat tax on the company); General Electric Co. (January 17, 2006) (same); Niagara Mohawk Holdings, Inc. (March 5,
2001) (permitting exclusion of a proposal relating to a report on
pension-related issues being considered in federal regulatory and legislative
proceedings); International Business Machines Corp. (March 2, 2000) (permitting
exclusion of a proposal relating to a report on federal regulatory issues and
legislative proposals regarding cash balance plan conversions). More recently,
the Staff determined that a proposal requesting that the company prepare a
report describing the company's plan to address specific issues under review by
federal regulators and legislative proposals is directed at involving the
company in the political or legislative process and is thus excludable. See
Pfizer Inc. (January 31, 2007); General Electric Co. (January 30, 2007). Like
Pfizer Inc. and General Electric Co., the Proponents are seeking to influence
Abbott's political and lobbying activities by requesting a report on legislative
reforms and political policies affecting Abbott's operations.
We recognize that not all proposals addressing reports on political activities
relate to ordinary business matters. For example, in Pfizer Inc. (February 9,
2006), the Staff did not permit exclusion of a proposal requesting a report on
the company's policies for political contributions. The critical difference
between the requested report in this Pfizer Inc. proposal and in the Proposal
received by Abbott is that a report establishing how funds are spent after the
fact does not infringe on management's ability to decide where to spend the
funds. The report requested in the Proposal, on the other hand, is designed to
influence Abbott's legislative and political policy in the area of health care
reform and, as such, is an attempt to move a management function to shareholders
and should thus be excluded as relating to ordinary business matters.
In Staff Legal Bulletin No. 14C, part D.2, the Staff explained that it does not
concur in excluding proposals on ordinary business grounds "to the extent that a
proposal and supporting statement focus on the company minimizing or eliminating
operations that may adversely affect the environment or the public's health."
While the Proponents argue that lobbying to affect public policy on the issue of
universal health care is not ordinary business, the Proposal does not identify
Abbott operations as a source of the problem inherent in health care coverage
and therefore is not requesting a minimization or elimination of Abbott
operations that may negatively affect public health. In this way the Proposal is
distinguishable from a proposal such as the one discussed in The Dow Chemical
Co. (February 23, 2005), where the Staff did not permit exclusion of a proposal
requesting a report on certain toxic chemicals in the company's products under
the argument that it relates to ordinary business operations.
The lobbying requested by the Proposal involves Abbott in the political or
legislative process relating to aspects of its operations. To the extent that
the Proposal is seeking lobbying to promote affordable, universal health care,
it affects Abbott's customer base, which, in turn, affects Abbott's sales and
marketing efforts. To the extent that lobbying is directed at employee health
care, it impacts Abbott's employee benefit plans. Both of these are aspects of
Abbott's ordinary business operations. Therefore, the requested political and
legislative process that the Proposal seeks clearly relates to an aspect of
Abbott's operations, making the Proposal excludable for involving ordinary
business operations under Rule 14a-8(i)(7).
II. The Proposal may be excluded under Rule 14a-8(i)(6) because Abbott lacks the
power to implement such principles.
To the extent the Proposal seeks to influence legislative and political policies
in the area of health care reform, Abbott lacks the power to implement such
policies. Rule 14a-8(i)(6) provides that a shareholder proposal may be excluded
"if the company would lack the power or authority to implement the proposal."
When examining whether it is beyond a company's power to implement a shareholder
proposal requesting that the company adopt a particular policy for purposes of
Rule 14a-8(i)(6), the Staff does not look at whether the company has the power
to adopt the proposed policy such as a health care policy, but instead looks at
the company's ability to implement the actions that are the subject of the
proposed policy (in this case, implementing health care reform initiatives).
See, for example, Catellus Development Corp. (March 3, 2005) (permitting
exclusion of a proposal that the company adopt a policy relating to a particular
piece of property because the company no longer owned the property that was the
subject of the proposed policy and could not control the property's transfer,
use or development); Ford Motor Co. (February 27, 2005) (permitting exclusion of
a proposal that the company adopt a policy that an independent director serve as
chairman of the board because the company could not ensure that the subject of
the proposed policy would be satisfied (i.e., that the chairman retain his or
her independence at all times) and no mechanism was provided to cure a failure);
General Electric Co. (January 14, 2005) (same).
The Proponents urge Abbott to adopt principles for comprehensive health care
reform, not principles limited to health coverage that Abbott offers to its
employees, and report on Abbott's implementation of these principles. Universal
health care coverage is not something within Abbott's power to implement.
Affordable, universal, continuous health care coverage requires extensive
governmental action. It may require additional tax revenue or reallocation of
governmental spending priorities. If private health care coverage is to be
offered, insurance companies must be involved in the process. Abbott does not
have power or authority to implement legislation, regulation or political
policies that will result in universal, affordable health care. Furthermore,
Abbott is not an insurance company; while Abbott provides health care coverage
for its employees, it does not sell health insurance to the public. Accordingly,
the Proposal should be excluded under Rule 14a-8(i)(6) because it is outside of
Abbott's power to implement.
III. The Proposal may be excluded under Rule 14a-8(i)(3) because it is vague,
indefinite and misleading.
Rule 14a-8(i)(3) allows the exclusion of a shareholder proposal if the proposal
or statement is contrary to any of the Commission's proxy rules or regulations.
Rule 14a-9 prohibits proposals that are false or materially misleading. The
Proponents argue that Abbott uses lobbyists to influence elected leaders in
"less-than-transparent ways" and will hide behind "any veil or secrecy."
Further, the comments of the Proponents in the preamble imply that there is no
existing law requiring companies to disclose the issues covered by lobbying
efforts. That is incorrect. Abbott submits reports to the United States Senate
and House of Representatives in accordance with all lobby laws. These reports
disclose the amount of money Abbott spends on lobbying, along with the issues
covered by that lobbying. Those reports have been generated by Abbott since 1995
as required by law and are publicly available on a federal government website.
Therefore, the language of the Proposal misleads shareholders into believing
that Abbott does not disclose its current lobbying efforts and should thus be
excluded.
A proposal is excludable as vague and indefinite under Rule 14a-8(i)(3) when
"neither the stockholders in voting on the proposal, nor the company in
implementing the proposal (if adopted) would be able to determine with any
reasonable certainty exactly what actions or measures the proposal requires."
Staff Legal Bulletin No. 14B (September 15, 2004).
For example, in Alcoa Inc. (December 24, 2002), the Staff permitted exclusion of
a proposal relating to the company committing itself to the "full implementation
of [International Labor Organization] human rights standards" and a program to
monitor compliance with "these standards" without identifying or fairly
summarizing those standards. Similarly, this Proposal focuses on Abbott adopting
principles to make health care universal, affordable and "sustainable for
society," while also making sure that the health insurance is "effective,
efficient, safe, timely, patient-centered, and equitable," without providing any
guidance on how a health care policy could accomplish all of these requirements
and without acknowledging that their goals are entirely beyond Abbott's reach to
accomplish. Therefore, a shareholder voting on the Proposal would have no idea
what was actually being approved. The Proposal misleads the shareholder into
believing that he or she is promoting high-quality, universal health care when
there is no insight as to how such a goal would be implemented from a practical
sense. Thus, the Proposal should be excluded as vague and misleading.
IV. The Proposal may be excluded under Rule 14a-8(i)(10) because it has been
substantially implemented.
To the extent the Proposal relates to promoting affordable, universal health
care through internal programs and initiatives, Abbott has substantially
implemented the Proposal. Rule 14a-8(i)(10) authorizes a company to exclude a
shareholder proposal if the company has "substantially implemented" the action
requested. According to the Commission, the exclusion provided in Rule
14a-8(i)(10) "is designed to avoid the possibility of shareholders having to
consider matters which have already been favorably acted upon by the
management." Exchange Act Release No. 34-12598 (July 7, 1976). Shareholder
proposals have been substantially implemented within the meaning of Rule
14a-8(i)(10) when the company already has policies, practices and procedures in
place relating to the subject matter of the proposal or has implemented the
essential objective of the proposal. See, for example, Telular Corp. (December
5, 2003); Cisco Systems, Inc. (August 11, 2003); The Talbots, Inc. (April 5,
2002).
Abbott has disclosed its position on health care. It believes that all people
should have access to quality health care and that solutions need to be found to
help the millions of Americans who do not have health insurance. See http://www.abbott.com/global/url/content/en_US/40.40:40 /general_content/General_Content_00274.htm.
The Company participates in numerous programs to assist the uninsured or
underinsured with their health care needs. These programs are explained in great
detail on the Company's website, www.abbott.com/citizenship. Among other
programs, Abbott's efforts include, among many other initiatives, the following
in 2006 and 2007:
In 2006, the Company and the Abbott Fund, a philanthropic foundation, invested
nearly $300 million in grants and products which assisted millions of
disadvantaged patients around the world.
In 2006, the Company donated free medicines, nutritional products and glucose
tests through its U.S. patient assistance programs valued at more than $172
million and which assisted 141,000 low-income Americans without medical
insurance.
Abbott helped create and participates in a partnership with pharmaceutical
companies, medical associations and patient advocacy organizations called
Partnership for Prescription Assistance, which has matched more than 3.2 million
Americans with patient assistance programs.
Abbott supported the enactment of the Medicare Modernization Act which
provided voluntary prescription drug coverage to Medicare health insurance for
senior citizens. Abbott mobilized employees to help educate eligible seniors
about the drug prescription plan and its options and to help them enroll.
The Abbott Fund sponsors the Global Health Council Policy Series which brings
together senior representatives of the U.S. Government, non-governmental
organizations, global health policy experts, United Nations agencies and
corporations to discuss and debate solutions to public health challenges.
The Company presented at a forum of Ministers of Health from Commonwealth
countries about the role of public/private partnerships to improve health
systems and increase access to health services for patients in these developing
countries.
Abbott supports the State Children's Health Insurance Program to preserve and
expand access to health care for thousands of children in the United States.
In short, the Company regularly participates in public policy forums, briefings
for policymakers and partnerships to advocate for expanded and affordable
healthcare for patients in the U.S. and around the world. All of these examples
establish that Abbott already has policies, practices and procedures in place
relating to making health care costs more affordable for the uninsured or
underinsured and have successfully implemented many programs having a positive
effect worldwide. Therefore, the Proposal should be excluded pursuant to Rule
14a-8(i)(10).
V. Conclusion
For the foregoing reasons, I request your confirmation that the Staff will not
recommend any enforcement action to the Commission if the Proposal is omitted
from Abbott's 2008 proxy materials. To the extent that the reasons set forth in
this letter are based on matters of law, pursuant to Rule 14a-8(j)(2)(iii), this
letter also constitutes an opinion of counsel of the undersigned as an attorney
licensed and admitted to practice in the State of Illinois.
If the Staff has any questions with respect to the foregoing, or if for any
reason the Staff does not agree that we may omit the Proposal from our 2008
proxy materials, please contact me at 847.938.3591 or Deborah Koenen at
847.938.6166. We may also be reached by facsimile at 847.938.9492 and would
appreciate it if you would send your response to us by facsimile to that number.
The primary sponsor of the Proposal may be reached by contacting Sister Barbara
Aires, SC by phone at 973.290.5402 and by facsimile at 973.290.5441. The
additional Proponents' representatives may be reached at the contact information
provided in Exhibit C.
Very truly yours,
/s/
John A. Berry
Divisional Vice President,
Securities and Benefits
Domestic Legal Operations
Enclosures
cc: All representatives of the Proponents listed in Exhibit C.
[INQUIRY LETTER]
November 5, 2007
Mr. Miles White, CEO
Abbott Laboratories
100 Abbott Park Road
Abbott Park, Illinois 60064-6400
Dear Mr. White,
The Sisters of Charity of Saint Elizabeth continue to be deeply committed to our
work to increase access to medicine particularly for the millions of un-insured
and underinsured and to protect shareholder value by encouraging meaningful
reform in the pharmaceutical industry. Therefore, the Sisters of Charity of
Saint Elizabeth request that the Board of Directors adopt principles for
comprehensive health care as in the attached proposal.
I have been authorized by the Sisters of Charity of Saint Elizabeth to notify
you of our intention to file this 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 Sisters of Charity of Saint Elizabeth are the beneficial owners of at least
500 shares of stock. Under separate cover you will receive proof of ownership.
We will retain shares through the annual meeting.
If you should, for any reason, desire to oppose the adoption of the proposal by
the stockholders, please include in the corporation's proxy material the
attached statement of the security holder, submitted in support of this
proposal, as required by the aforesaid rules and regulations.
We welcome dialogue on this important issue.
Sincerely,
/s/
Sister Barbara Aires, SC
Coordinator of Corporate Responsibility
[APPENDIX]
Health Care Principles for the Health Care Industry
The overriding domestic policy concern of U.S. citizens involves some form of
universal health care. Besides the Iraqi war, the greatest public policy issue
in the 2008 presidential campaign has been universal health care reform.
Most citizens want their government to "guarantee health insurance for all
Americans," particularly children. They say they'd pay higher taxes to make this
possible, although they disagree about how to achieve this.
Given such findings, health care reform has become an overriding public policy
issue for the health care industry, including our company. Its paid lobbyists
see to influence elected leaders regarding the company's position. Often this
occurs in less-than-transparent ways and, at times, against the interests of its
stakeholders.
In 2006, the health sector spent $351.1 million to lobby the federal government.
This represents 13.8% of all spending on lobbying. It nearly equals similar
spending by the financial sector. Within the health sector, manufacturers of
drugs, medical devices, and other health care products spent the most. Between
1998 and 2006, the AMA, the American Hospital Association, AARP, and PhRMA
spent, respectively, the second, fourth, sixth, and seventh most on lobbying.
Although contributions from the health sector to presidential and other federal
candidates may increase, they are projected to be dwarfed by the overall amount
the health industry spends to lobby. Most of this occurs without shareholder
consent and that of other stakeholders whose public policy interests may be
opposed to those of our company.
Currently, there is broad support across most sectors of the United States for
"fundamental changes in" or "completely rebuilding" the health care system. Our
company can no longer hide behind any veil or secrecy or argue that its lobbying
to affect public policy is "ordinary business," especially when polls show that
the goals of such lobbying may be diametrically opposed to the stated interests
of ordinary citizens such as its consumers.
Existing law demands companies reveal the amount they spend on lobbying but not
what they lobby for. Because such lobbying by the health care industry,
including that of our company, actually may counter the underlying interests of
its shareholders, therefore,
RESOLVED: shareholders urge the Board of Directors to adopt principles for
comprehensive health care reform (such as those based upon principles reported
by the Institute of Medicine:
1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for
society.
5. Health insurance should enhance health and well being by promoting access to
high-quality care that is effective, efficient, safe, timely, patient-centered,
and equitable).
Supporting Statement
As shareholders, we believe publicly-held companies should be accountable to the
public on their positions on critical public policy issues, such as universal
health care. This is especially urgent for those in the health care industry. We
urge the Board to report annually about how it is implementing such principles
and ask fellow shareholders to support this resolution.
[INQUIRY LETTER]
January 2, 2008
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Madam/Sir:
The Sisters of Charity of Saint Elizabeth hereby withdraw the shareholder
resolution entitled, "Healthcare Principles for the Health Care Industry," we
submitted as shareholders in Abbott Laboratories for inclusion in the 2008 Proxy
Statement.
Enclosed is a copy of my letter to Mr. Miles White, CEO of Abbott Laboratories
indicating the withdrawal of the resolution for consideration at the 2008 Annual
Meeting.
Sincerely,
/s/
Sister Barbara Aires, SC
Coordinator of Corporate Responsibility
Enc.
SBA/an
[STAFF REPLY LETTER]
January 10, 2008
John A. Berry
Divisional Vice President and Associate General Counsel
Abbott Laboratories
Securities and Benefits
Dept. 032L, Bldg. AP6A-2
100 Abbott Park Road
Abbott Park, IL 60064-6011
Re: Abbott Laboratories
Dear Mr. Berry:
This is in regard to your letter dated January 7, 2008 concerning the
shareholder proposal submitted by the Sisters of Charity of Saint Elizabeth; the
Basilian Fathers of Toronto; the Benedictine Sisters Charitable Trust; the
Benedictine Sisters of Virginia; the Camilla Madden Charitable Trust; Catholic
Health Initiatives; Catholic Healthcare Partners; Catholic Healthcare West; the
Benedictine Convent of Perpetual Adoration; the Congregation of Divine
Providence, Inc.; the Mount St. Scholastica; Providence Trust; the Congregation
of the Sisters of Charity of the Incarnate Word, Houston, Texas; the Sisters of
the Holy Names of Jesus and Mary U.S.-Ontario Province; the Sisters of the Holy
Spirit and Mary Immaculate; and the Sisters of the Sorrowful Mother for
inclusion in Abbott Laboratories' proxy materials for its upcoming annual
meeting of security holders. Your letter indicates that the proponents have
withdrawn the proposal, and that Abbott Laboratories therefore withdraws its
December 27, 2007 request for a no-action letter from the Division. Because the
matter is now moot, we will have no further comment.
Sincerely,
/s/
Heather L. Maples
Special Counsel
|
