Company Name: Bristol-Myers Squibb Co.
Public Availability Date: January 30, 2008Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 28, 2007
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Stockholder Proposal of Nick Rossi Exchange Act of 1934-Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that our client, Bristol-Myers Squibb Company (the
"Company"), intends to omit from its proxy statement and form of proxy for its
2008 Annual Meeting of Stockholders (collectively, the "2008 Proxy Materials") a
stockholder proposal (the "Proposal") received from Nick Rossi, naming John
Chevedden as his designated representative (the "Proponent").
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and its attachments;
filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before the Company files
its definitive 2008 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponent.
Rule 14a-8(k) provides that stockholder proponents are required to send
companies a copy of any correspondence that the proponents elect to submit to
the Commission or the staff of the Division of Corporation Finance (the
"Staff"). Accordingly, we are taking this opportunity to inform the Proponent
that if the Proponent elects to submit additional correspondence to the
Commission or the Staff with respect to this Proposal, a copy of that
correspondence should concurrently be furnished to the undersigned on behalf of
the Company pursuant to Rule 14a-8(k).
THE PROPOSAL
The Proposal requests that the Board of Directors of the Company (the "Board")
amend the Company's "bylaws and any other appropriate governing documents in
order that there is no restriction on the shareholder right to call a special
meeting, compared to the standard allowed by applicable law on calling a special
meeting." The Proposal also includes statements in support thereof (the
"Supporting Statement") advocating the need for "[s]hareholder control over
timing" of special meetings and the need for special meetings to consider
"takeover offer[s]," "major acquisition[s]" and "restructuring[s]." A copy of
the Proposal, as well as related correspondence with the Proponent, is attached
to this letter as Exhibit A.
BASES FOR EXCLUSION
We believe that the Proposal may properly be excluded from the 2008 Proxy
Materials pursuant to:
Rule 14a-8(i)(2) because implementation of the Proposal would cause the
Company to violate state law; and
Rule 14a-8(i)(3) because the Proposal is impermissibly vague and indefinite so
as to be inherently misleading.
Alternatively, if the Staff declines to concur that the Proposal is excludable
in its entirety on the bases described above, we respectfully request that the
Staff concur in the exclusion under Rule 14a-8(i)(3) of a portion of the
Supporting Statement that is materially false and misleading in violation of
Rule 14a-9.
ANALYSIS
I. The Proposal May Be Excluded under Rule 14a-8(i)(2)
Because Implementation of the Proposal Would Cause the Company To Violate State
Law.
Rule 14a-8(i)(2) permits a company to exclude a stockholder proposal if
implementation of the proposal would cause it to violate any state, federal or
foreign law to which it is subject. The Company is incorporated under the laws
of the State of Delaware. For the reasons set forth below and in the legal
opinion regarding Delaware law from Morris, Nichols, Arsht & Tunnell LLP,
attached hereto as Exhibit B (the "Delaware Law Opinion"), the Company believes
that the Proposal is excludable under Rule 14a-8(i)(2) because, if implemented,
the Proposal would cause the Company to violate the Delaware General Corporation
Law (the "DGCL").
The Proposal requests that the Board amend the Company's "bylaws and any other
appropriate governing documents in order that there is no restriction on the
shareholder right to call a special meeting, compared to the standard allowed by
applicable law on calling a special meeting." Further, the Proposal cites the
importance of "[s]hareholder control over timing" of special meetings and the
need for special meetings to be held to consider "takeover offer[s]," "major
acquisition[s]" and "restructuring[s]." However, Delaware law provides
restrictions with respect to these same matters. Thus, as discussed below and as
supported by the Delaware Law Opinion, implementation of the Proposal would
cause the Company to violate state law since the Proposal requests "no
restriction" on the right of stockholders to call special meetings.
As discussed in the Delaware Law Opinion, the Board "cannot adopt a by-law that
grants stockholders the unrestricted right to call special meetings" because all
special meetings are subject to certain restrictions, imposed by the DGCL, that
"cannot be eliminated by a by-law or any other `governing document'...."
Specifically, Delaware law limits the subject matter to be considered at special
meetings of stockholders and the ability of stockholders to control the timing
of special meetings. For example, as stated in the Delaware Law Opinion,
"Section 222(b) of the DGCL specifies that a special meeting cannot be held on
less than ten days' notice to the stockholders." In contrast, the Supporting
Statement indicates that the Proposal is necessary because "[s]hareholder
control over timing" of special meetings is "especially" important in certain
situations.
The Proposal also calls for the amendment of the Company's By-laws or other
governing documents to enable a stockholder to call a meeting with "no
restriction" on what the stockholder specifies as the purpose of the meeting,
including even matters that are not a proper subject for stockholder action. The
Supporting Statement specifically discusses giving stockholders the ability to
unilaterally call a special meeting for the purpose of considering these
improper matters, including "takeover offer[s]," "major acquisition[s]" and "restructuring[s]."
As discussed in the Delaware Law Opinion, "under the DGCL, a stockholder cannot
call a special meeting to enable the stockholders to vote on merger agreements
or charter amendments because the DGCL does not permit stockholders to vote on
such items unless they have first been approved by the Board and then submitted
for stockholder approval." Thus, the Proposal seeks to create rights that are
inconsistent with the DGCL.
The Staff previously has concurred with the exclusion, under Rule 14a-8(i)(2) or
its predecessor, of stockholder proposals that requested the adoption of a
by-law or charter amendment that was invalid because it would violate state law.
See, e.g., PG&E Corp. (avail. Feb. 14, 2006) (requesting the amendment of the
company's governance documents to institute majority voting in director
elections where Section 708(c) of the California Corporation Code required that
plurality voting be used in the election of directors); Hewlett-Packard Co.
(avail. Jan. 6, 2005) (recommending that the company amend its by-laws so that
no officer may receive annual compensation in excess of certain limits without
approval by a vote of "the majority of the stockholders" in violation of the
"one share, one vote" standard set forth in DGCL Section 212(a)); GenCorp Inc.
(avail. Dec. 20, 2004) (concurring with the exclusion of a proposal requesting
an amendment to the company's governing instruments to provide that every
stockholder resolution approved by a majority of the votes cast be implemented
by the company since the proposal would conflict with Section 1701.59(A) of the
Ohio Revised Code regarding the fiduciary duties of directors). See also The
Boeing Co. (avail. Mar. 4, 1999) (concurring with the exclusion of a proposal
requesting that every corporate action requiring stockholder approval be
approved by a simple majority vote of shares since the proposal would conflict
with provisions of the DGCL that require a vote of at least a majority of the
outstanding shares on certain issues); Tribune Co. (avail. Feb. 22, 1991)
(concurring with the exclusion of a proposal requesting that the company's proxy
materials be mailed at least 50 business days prior to the annual meeting since
the proposal would conflict with Sections 213 and 222 of the DGCL, which set
forth certain requirements regarding the notice of, and the record date for,
stockholder meetings).
Moreover, complying with the Proponent's request to amend the Company's By-laws
to provide stockholders with an unrestricted right to call special meetings
would violate the DGCL, because, as noted in the Delaware Law Opinion, adopting
such a by-law would directly conflict with the Company's Amended and Restated
Certificate of Incorporation (the "Charter"). Section 109(b) of the DGCL
prohibits the adoption of a by-law that is inconsistent with a company's
charter. 8 Del. C. 109(b) ("The bylaws may contain any provision, not
inconsistent with law or with the certificate of incorporation, relating to the
business of the corporation, the conduct of its affairs, and its rights or
powers or the rights or powers of its stockholders, directors, officers or
employees."). Article Ninth of the Charter provides that special meetings may be
called only by the Chairman of the Board or by a majority of the entire Board.
Therefore, as noted in the Delaware Law Opinion, the Proposal could not be
adopted as a by-law without amending the Charter.
If, on the other hand, by requesting that the Company amend "and any other
appropriate governing documents," the Proponent is requesting that the Board
amend the Charter provision relating to the calling of special meetings, the
Proposal also would violate the DGCL. As more fully described in the Delaware
Law Opinion, "the Board lacks the power to unilaterally amend the Charter."
Section 242 of the DGCL requires that charter amendments be approved by the
board and a majority of the stock entitled to vote on such amendments. See 8
Del. C. 242(b)(1). The Staff repeatedly has concurred that a stockholder
proposal that is invalid under state law because it calls for unilateral board
action to amend a company's certificate of incorporation may be excluded
pursuant to Rule 14a-8(i)(2). See, e.g., Xerox Corp. (avail. Feb. 23, 2004)
(concurring that a New York corporation, subject to similar requirements with
respect to an amendment to a certificate of incorporation, could exclude a
stockholder proposal pursuant to Rule 14a-8(i)(2), requesting that "the board of
directors amend the certificate of incorporation to reinstate the rights of
shareholders to take action by written consent and to call special meetings");
Burlington Resources Inc. (avail. Feb. 7, 2003) (concurring that a Delaware
corporation could exclude a stockholder proposal under Rule 14a-8(i)(2)
requesting that "the board of directors amend the certificate of incorporation
to reinstate the rights of the shareholders to take action by written consent
and to call special meetings").1
The Proposal requests that the Company's Board amend the "bylaws and any other
appropriate governing document" so that there is "no restriction on the
shareholder right to call a special meeting, compared to the standard allowed by
applicable law on calling a special meeting." However, Delaware law imposes
certain restrictions on the procedures for calling and the substance of special
meetings, none of which can be altered by the Company, and the Charter imposes
restrictions that cannot be unilaterally amended by the Board. Therefore, the
Proposal is excludable pursuant to Rule 14a-8(i)(2) because, as supported by the
Delaware Law Opinion, implementation of the Proposal would cause the Company to
violate applicable state law.
II. The Proposal May Be Excluded under Rule
14a-8(i)(3) Because It Is Impermissibly Vague and Indefinite so as To Be
Inherently Misleading.
Rule 14a-8(i)(3) permits the exclusion of a stockholder proposal if the proposal
or supporting statement is contrary to any of the Commission's proxy rules or
regulations, including Rule 14a-9, which prohibits materially false or
misleading statements in proxy soliciting materials. For the reasons discussed
below, the Proposal is impermissibly misleading and vague and, therefore, is
excludable under Rule 14a-8(i)(3).
The Staff consistently has taken the position that vague and indefinite
stockholder proposals are inherently misleading and therefore excludable under
Rule 14a-8(i)(3) because "neither the stockholders 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 (Sept. 15, 2004) ("SLB 14B").
In this regard, the Staff has permitted the exclusion of a variety of
stockholder proposals, including proposals requesting amendments to a company's
charter or by-laws. For example, in Alaska Air Group Inc. (avail. Apr. 11,
2007), the Staff concurred with the exclusion of a stockholder proposal
requesting that the company's board amend the company's governing instruments to
"assert, affirm and define the right of the owners of the company to set
standards of corporate governance" as "vague and indefinite." See also Peoples
Energy Corp. (avail. Nov. 23, 2004) (concurring in the exclusion as vague of a
proposal requesting that the board amend the charter and by-laws "to provide
that officers and directors shall not be indemnified from personal liability for
acts or omissions involving gross negligence or reckless neglect").
Moreover, the Staff has on numerous occasions concurred that a proposal was
sufficiently misleading so as to justify exclusion where a company and its
stockholders might interpret the proposal differently, such that "any action
ultimately taken by the [c]ompany upon implementation [of the proposal] could be
significantly different from the actions envisioned by stockholders voting on
the proposal." Fuqua Industries, Inc. (avail. Mar. 12, 1991). See also Bank of
America Corp. (avail. June 18, 2007) (concurring with the exclusion of a
stockholder proposal calling for the board of directors to compile a report
"concerning the thinking of the Directors concerning representative payees" as
"vague and indefinite"); Puget Energy, Inc. (avail. Mar. 7, 2002) (permitting
exclusion of a proposal requesting that the company's board of directors "take
the necessary steps to implement a policy of improved corporate governance");
Dyer v. SEC, 287 F.2d 773, 781 (8th Cir. 1961) ("[I]t appears to us that the
proposal, as drafted and submitted to the company, is so vague and indefinite as
to make it impossible for either the board of directors or the stockholders at
large to comprehend precisely what the proposal would entail.").
While the Proposal is not a model of clarity, on its face it requests that the
Company's Board of Directors amend the By-laws and any other appropriate
governing documents to place "no restriction" on the right of stockholders to
call special meetings, without regard to the requirements set forth in Delaware
corporate law related to stockholders calling special meetings. This reading of
the Proposal is supported by the references in the Supporting Statement to the
need for stockholder control over the timing and subject matter of special
meetings. If the Proponent intends another meaning of the Proposal, a close
examination of the language of the Proposal and Supporting Statement does not
make that meaning evident and only serves to demonstrate the vagueness of, and
ambiguities in, the Proposal. For example, the Proposal references "no
restriction" on the "right" of stockholders to call special meetings "compared
to the standard allowed by applicable law on calling a special meeting." Under
Delaware law, stockholders do not possess a "right" to call special meetings;
only the board is specifically granted the power to call special meetings. See
DGCL, 211(d). Although the DGCL allows for the adoption of a wide variety of
by-law or charter provisions to enable certain persons other than the directors
to call meetings (e.g., permitting the holders of a threshold number of shares
to a call a special meeting), the DGCL does not establish a default standard for
when stockholders can call a special meeting. Thus, in the absence of default
standards in Delaware law for stockholder-called meetings, the request for a
"comparison" fails to clarify the Proposal and leaves it vague and misleading.
Similar to the Staff's findings on numerous occasions, the Company's
stockholders "cannot be expected to make an informed decision on the merits of
the Proposal without at least knowing what they are voting on." The Boeing Corp.
(avail. Feb. 10, 2004); see also Capital One Financial Corp. (avail. Feb. 7,
2003) (excluding a proposal under Rule 14a-8(i)(3) where the company's
stockholders "would not know with any certainty what they are voting either for
or against"). Moreover, neither the Company's stockholders nor the Board would
be able to determine with any certainty what actions the Company would be
required to take in order to comply with the Proposal. Accordingly, we believe
that as a result of the vague and indefinite nature of the Proposal, the
Proposal is impermissibly misleading and, thus, excludable in its entirety under
Rule 14a-8(i)(3).
III. The Proposal Requires Revision under Rule 14a-8(i)(3) Because a Portion of
the Supporting Statement Contains False and Misleading Statements in Violation
of Rule 14a-9.
Should the Staff not concur that the Proposal is excludable under Rule
14a-8(i)(2) or Rule 14a-8(i)(3) as set forth above, we respectfully request that
the Staff concur in the exclusion of a portion of the Supporting Statement in
accordance with Rule 14a-8(i)(3). Rule 14a-8(i)(3) permits the exclusion or
revision of a stockholder proposal or supporting statement if the proposal or
supporting statement is contrary to any of the Commission's proxy rules or
regulations (including Rule 14a-9, which prohibits materially false or
misleading statements).
In SLB 14B, the Staff clarified its views regarding when modification or
exclusion of a stockholder proposal or supporting statement is appropriate under
Rules 14a-8(i)(3) and 14a-9. Moreover, the Staff has indicated that modification
or exclusion is appropriate when "the company demonstrates objectively that a
factual statement is materially false or misleading." Specifically, the
Supporting Statement indicates, "Fidelity and Vanguard support a shareholder
right to call a special meeting," which we believe is materially false and
misleading. The Proponent makes this statement in an attempt to bolster support
for the Proposal, which would place "no restriction on the shareholder right to
call a special meeting." However, according to Vanguard's proxy voting
guidelines, Vanguard's "funds support shareholders' right to call special
meetings of the board (for good cause and with ample representation) and to act
by written consent. The funds will generally vote for proposals to grant these
rights to shareholders and against proposals to abridge them" (emphasis added).
Exhibit C. Similarly, Fidelity's proxy voting guidelines contain no reference to
an unqualified right of stockholders to call special meetings. See Exhibit C.
The Proposal's reference to Fidelity and Vanguard's "support [of] a shareholder
right to call a special meeting" suggests that these well-known, influential
institutional investors support the Proposal's broad request for such a right,
which is materially false and misleading.
In an analogous situation, the company in Bob Evans Farms, Inc. (avail. June 26,
2006) sought the exclusion of contact information for the five largest
stockholders of the company from a proposal where the inclusion of that
information suggested, without any actual support, that those stockholders
supported the proposal. The Staff permitted the exclusion of that portion of the
stockholder proposal as being "materially false or misleading." Moreover, the
Staff has on many occasions permitted companies to rely on Rule 14a-8(i)(3) to
exclude proposals or portions of proposals from proxy statements when those
portions made the proposal materially false or misleading. See e.g., Bank of
America Corp. (avail. Feb. 12, 2007) (permitting the exclusion of a portion of a
proposal as "materially false and misleading" where the company argued the
portion was unrelated and irrelevant to the actions requested by the proposal);
State Street Corp. (avail. Mar. 1, 2005) (permitting the exclusion of a
stockholder proposal that included false statements regarding the company's
legal authority to implement the proposal as "materially false and misleading");
Procter & Gamble Co. (avail. Jul. 15, 2004) (permitting the exclusion of
portions of a stockholder proposal as "materially false and misleading" where
the portions mischaracterized the company's animal research); Amerada Hess Corp.
(avail. Mar. 15, 2004); Kerr-McGee Corp. (avail. Mar. 15, 2004).
For the reasons stated above, we respectfully submit that the Proposal must be
amended to delete the sentence "Fidelity and Vanguard support a shareholder
right to call a special meeting" because it is materially false and misleading
under Rule 14a-8(i)(3).
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2008
Proxy Materials. Alternatively, should the Staff not concur that the Proposal is
excludable in its entirety, we respectfully request that the Staff concur in the
exclusion of a portion of the Supporting Statement in accordance with Rule
14a-8(i)(3). We would be happy to provide you with any additional information
and answer any questions that you may have regarding this subject. In addition,
the Company agrees to promptly forward to the Proponent any response from the
Staff to this no-action request that the Staff transmits by facsimile to the
Company only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8653 or Sandra Leung, the Company's Senior Vice President,
General Counsel and Secretary, at (212) 546-4260.
Sincerely,
/s/
Amy L. Goodman
cc: Sandra Leung, Bristol-Myers Squibb Company
John Chevedden
-----FOOTNOTES-----
1 The Company notes that prior to issuing its responses in Xerox and Burlington
Resources, the Staff had denied no-action relief to companies seeking to exclude
stockholder proposals in reliance on Rule 14a-8(i)(2) regarding the adoption of
an amendment to a certificate of incorporation that would violate Delaware law.
See Hartmarx Corp. (avail. Jan. 16, 2002); The Home Depot, Inc. (avail. Apr. 4,
2000). However, neither of these earlier no-action requests was supported by a
legal opinion from members of the Delaware bar. In contrast, the no-action
request in Burlington Resources was supported, as is the Company's no-action
request, by an opinion prepared by members of the Delaware bar who are licensed,
and actively practice, in Delaware. Similarly, the no-action request in Xerox
was supported by an opinion prepared by members of the New York bar.
[APPENDIX 1]
Mr. James D. Robinson
Chairman
Bristol-Myers Squibb Company (BMY)
345 Park Ave
New York NY 10154
Rule 14a-8 Proposal
Dear Mr. Robinson,
This Rule 14a-8 proposal is respectfully submitted in support of the long-term
performance of our company. This proposal is submitted for the next annual
shareholder meeting. Rule 14a-8 requirements are intended to be met including
the continuous ownership of the required stock value until after the date of the
respective shareholder meeting and the presentation of this proposal at the
annual meeting. This submitted format, with the shareholder-supplied emphasis,
is intended to be used for definitive proxy publication. This is the proxy for
John Chevedden and/or his designee to act on my behalf regarding this Rule 14a-8
proposal for the forthcoming shareholder meeting before, during and after the
forthcoming shareholder meeting. Please direct all future communication to John
Chevedden at:
olmsted7p (at) earthlink.net
(In the interest of company efficiency and cost savings please communicate via
email.)
PH: 310-371-7872
2215 Nelson Ave., No. 205
Redondo Beach, CA 90278
Your consideration and the consideration of the Board of Directors is
appreciated in support of the long-term performance of our company. Please
acknowledge receipt of this proposal by email.
Sincerely,
/s/
cc: Sandra Leung<sandra.leung@bms.com>
Corporate Secretary
Phone: 212 546-4000
PH: 212 546-4260
FX: 212 605-9622
Sonia Vora<Sonia.Vora@bms.com>
Assistant Corporate Secretary
PH: 609-897-3538
[APPENDIX 2]
[BMY: Rule 14a-8 Proposal, November 10, 2007]
3Special Shareholder Meetings
RESOLVED, Special Shareholder Meetings, Shareholders ask our board to amend our
bylaws and any other appropriate governing documents in order that there is no
restriction on the shareholder right to call a special meeting, compared to the
standard allowed by applicable law on calling a special meeting.
Special meetings allow investors to vote on important matters, such as a
takeover offer, that can arise between annual meetings. If shareholders cannot
call special meetings, management may become insulated and investor returns may
suffer.
Shareholders should have the ability to call a special meeting when they think a
matter is sufficiently important to merit expeditious consideration. Shareholder
control over timing is especially important regarding a major acquisition or
restructuring, when events unfold quickly and issues may become moot by the next
annual meeting.
Fidelity and Vanguard support a shareholder right to call a special meeting. The
proxy voting guidelines of many public employee pension funds, including the New
York City Employees Retirement System, also favor this right. Governance ratings
services, such as The Corporate Library and Governance Metries International,
take special meeting rights into account when assigning company ratings.
Please encourage our board to respond positively to this proposal:
Notes:
Nick Rossi, P.O. Box 249, Boonville, Calif. 95415 sponsored this proposal.
The above format is requested for publication without re-editing, re-formatting
or elimination of text, including beginning and concluding text, unless prior
agreement is reached. It is respectfully requested that this proposal be
proofread before it is published in the definitive proxy to ensure that the
integrity of the submitted format is replicated in the proxy materials. Please
advise if there is any typographical question.
Please note that the title of the proposal is part of the argument in favor of
the proposal. In the interest of clarity and to avoid confusion the title of
this and each other ballot item is requested to be consistent throughout all the
proxy materials.
The company is requested to assign a proposal number (represented by "3" above)
based on the chronological order in which proposals are submitted. The requested
designation of "3" or higher number allows for ratification of auditors to be
item 2.
This proposal is believed to conform with Staff Legal Bulletin No. 14B (CF),
September 15, 2004 including:
Accordingly, going forward, we believe that it would not be appropriate for
companies to exclude supporting statement language and/or an entire proposal in
reliance on rule 14a-8(i)(3) in the following circumstances:
the company objects to factual assertions because they are not supported;
the company objects to factual assertions that, while not materially false or
misleading, may be disputed or countered;
the company objects to factual assertions because those assertions may be
interpreted by shareholders in a manner that is unfavorable to the company, its
directors, or its officers; and/or
the company objects to statements because they represent the opinion of the
shareholder proponent or a referenced source, but the statements are not
identified specifically as such.
See also: Sun Microsystems, Inc. (July 21, 2005).
Stock will be held until after the annual meeting and the proposal will be
presented at the annual meeting.
Please acknowledge this proposal promptly by email and advise the most
convenient fax number and email address to forward a broker letter, if needed,
to the Corporate Secretary's office.
[INQUIRY LETTER]
January 1, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
#1 Bristol-Myers Squibb Company (BMY)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
Nick Rossi
Ladies and Gentlemen:
The company December 28, 2007 no action request misinterprets the text of the
proposal which states:
RESOLVED, Special Shareholder Meetings, Shareholders ask our board to amend our
bylaws and any other appropriate governing documents in order that there is no
restriction on the shareholder right to call a special meeting, compared to the
standard allowed by applicable law on calling a special meeting.
In other words the proposal asks that the board amend the bylaws and any other
appropriate governing documents in order that there is no limit on the
shareholder right to call a special meeting compared to, relative to or beyond
the limits allowed by the applicable Delaware law on calling a special meeting.
Since the proposal establishes as a floor the limits called for by Delaware law,
the rule 14a-8 proposal does not restrict the company in its adherence to
Delaware law.
Thus the text in the supporting statement about enabling shareholders to have
some control over the timing and subject matter of a special meeting is again
calling attention to this issue within the limits allowed by the applicable
Delaware law on calling a special meeting.
Although the company argument is not clear it seems to claim that there is no
explicit "default standard" or heading of "default standard" in Delaware law
regarding special meetings and thus there is no way to determine what is allowed
by Delaware law on special meetings. Apparently the company cannot accept the
concept of an implicit default standard based on analyzing the text of a
statute.
The company bolsters the text in the shareholder proposal regarding Fidelity and
Vanguard and then complains about its own bolstering. For instance the company
has essentially rewritten a proposal sentence to state that Fidelity and
Vanguard are among the mutual funds supporting "an unqualified right of
shareholders" to call a special meeting and then the company attacks its own
wording. There is no text in the proposal about "an unqualified right of
shareholders" in regard to special meetings and therefore the company argument
is misplaced.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons it is respectfully requested that concurrence not be granted
to the company. It is also respectfully requested that the shareholder have the
last opportunity to submit material in support of including this proposalsince
the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Nick Rossi
Sandra Leung<sandra.leung@bms.com>
[INQUIRY LETTER]
January 24, 2008
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
#2 Bristol-Myers Squibb Company (BMY)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
Nick Rossi
Ladies and Gentlemen:
In further response to the December 28, 2007, company no action request that
claims the company, a Delaware company, is unable to adopt this resolutionthis
is a timely example of a Delaware company adopting this exact same resolution
(bold added):
Form 8-K for BORDERS GROUP INC
18-Jan-2008
ITEM 5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGES IN FISCAL
YEAR
On and effective as of January 17, 2007, the Board of Directors adopted the
Fourth Amendment to the restated By-Laws of the Company. The purpose of the
Fourth Amendment was to provide that Special Meetings of Stockholders, for any
purpose or purposes, may be called by the Chief Executive Officer or by the
Board of Directors acting pursuant to a resolution adopted by a majority of the
entire Board of Directors, and shall be called by the Secretary upon the request
of the holders of at least twenty-five percent (25%) of the shares of the
Corporation outstanding and entitled to vote at the meeting. A copy of the
Fourth Amendment to the Restated By-Laws of the Company is attached hereto as
Exhibit 3.7 and is incorporated herein by reference.
This is evidence that this resolution is understood in practice and not just in
theory.
The December 28, 2007 company no action request appears to be an implicit
admission that the best way to attack this resolution is to redraft the original
resolution which states:
RESOLVED, Special Shareholder Meetings, Shareholders ask our board to amend our
bylaws and any other appropriate governing documents in order that there is no
restriction on the shareholder right to call a special meeting, compared to the
standard allowed by applicable law on calling a special meeting.
In other words the proposal asks that the board amend the bylaws and any other
appropriate governing documents in order that there is no limit on the
shareholder right to call a special meeting compared to, relative to or
consistent with the limits allowed by the applicable Delaware law on calling a
special meeting.
The company provides no definition of the "compared to" phrase used in the
resolution to support its conclusion of absolutely "no restriction."
Since the proposal establishes as a floor the limits called for by Delaware law,
the rule 14a-8 resolution does not restrict the company in its adherence to
Delaware law.
Thus the text in the supporting statement about enabling shareholders to have
some control over the timing and subject matter of a special meeting is again
calling attention to this issue within the limits allowed by the applicable
Delaware law on calling a special meeting.
Although the company argument is not clear it seems to claim that there is no
explicit "default standard" or heading of "default standard" in Delaware law
regarding special meetings and thus there is no way to determine what is allowed
by Delaware law on special meetings. Apparently the company cannot accept the
concept of an implicit default standard based on analyzing the text of a
statute.
The company should not be permitted to unilaterally redraft this resolution in
key places and then argue that the company redrafting of the resolution should
be excluded (implicit company-added words are in bold):
RESOLVED, Special Shareholder Meetings, Shareholders ask our board to amend our
bylaws and any other appropriate governing documents in order that there is
absolutely no restriction on the shareholder right to call a special meeting,
regardless of the standard allowed by applicable law on calling a special
meeting.
The company also redrafts the supporting text in the resolution regarding
Fidelity and Vanguard, consistent with its redrafting of the resolved statement,
and then complains about its own redrafting. For instance the company has
essentially redrafted a proposal sentence to read that Fidelity and Vanguard
support "an unqualified right of shareholders" to call a special meeting and
then the company attacks its redrafting. There is no text in the proposal about
"an unqualified right of shareholders" in regard to special meetings and
therefore the company argument is misleading.
A copy of this letter is forwarded to the company in a non-PDF email. In order
to expedite the rule 14a-8 process it is requested that the company forward any
addition rule 14a-8 response in the same type format to the undersigned.
For these reasons it is respectfully requested that concurrence not be granted
to the company. It is also respectfully requested that the shareholder have the
last opportunity to submit material in support of including this proposalsince
the company had the first opportunity.
Sincerely,
John Chevedden
cc:
Nick Rossi
Sandra Leung<sandra.leung@bms.com>
[STAFF REPLY LETTER]
January 30, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bristol-Myers Squibb Company Incoming letter dated December 28, 2007
The proposal asks the board to amend the "bylaws and any other appropriate
governing documents in order that there is no restriction on the shareholder
right to call a special meeting, compared to the standard allowed by applicable
law on calling a special meeting."
There appears to be some basis for your view that
Bristol-Myers may exclude the proposal under rule 14a-8(i)(3) as vague and
indefinite. Accordingly, we will not recommend enforcement action to the
Commission if Bristol-Myers omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(3). In reaching this position, we have not found it
necessary to address the alternative basis for omission upon which Bristol-Myers
relies.
Sincerely,
/s/
Heather L. Maples
Special Counsel
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