Company Name: Longs Drug Stores Corp.
Public Availability Date: January 23, 2008
Document Sections:
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
December 19, 2007
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Stockholder Submission of Patricia Thomassen Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that Longs Drug Stores Corporation (the "Company"
or "Longs") intends to omit from its proxy statement and form of proxy for
Longs' 2008 Annual Meeting of Stockholders (collectively, the "2008 Proxy
Materials") a purported stockholder proposal and statements in support thereof
(the "Submission") received from Patricia Thomassen (the "Proponent"), a Longs
store employee.
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and related attachments;
&bull filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before Longs definitive
2008 Proxy Materials are filed 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 to the staff of the Division of Corporation Finance (the
"Staff"). Accordingly, we take this opportunity to inform the Proponent that if
Proponent elects to submit additional correspondence to the Commission or to the
Staff with respect to this Submission, a copy of that correspondence should
concurrently be furnished to the attention of the undersigned on behalf of Longs
pursuant to Rule 14a-8(k).
BASES FOR EXCLUSION
Longs hereby respectfully requests that the Staff concur in our view that the
Submission may be excluded from the 2008 Proxy Materials because it is not a
proposal within the meaning of Rule 14a-8(a). Alternatively, if the Staff does
not concur that the Submission may be excluded on this basis, Longs requests the
Staff's concurrence that the Submission may be excluded pursuant to Rule
14a-8(i)(7), because the Submission relates to the Company's ordinary business
operations, Rule 14a-8(i)(4) because the Submission relates to redress of a
personal claim or grievance against the Company, and/or Rule 14a-8(i)(3) because
the Submission is impermissibly vague and indefinite so as to be inherently
misleading.
THE SUBMISSION
The Submission seeks to include in the 2008 Proxy Materials a motion to discuss
at Longs 2008 Annual Meeting of Stockholders issues raised by the Proponent. The
Submission states:
I hereby herewith intend to make the motion that this letter be entered into the
2008 Longs Drug Stores Corporation Letter to Stockholders/Notice of Annual
Meeting and Proxy Statement/2008 Annual Report on Form 10-K and discussed in the
meeting.
A copy of the Submission is attached to this letter as Exhibit A.
Longs hereby respectfully requests that the Staff concur in our view that the
Submission may be excluded from the 2008 Proxy Materials for the reasons
described below.
ANALYSIS
I. The Submission may be excluded under Rule 14a-8(a) because it is not a
proposal for purposes of Rule 14a-8.
The Submission is not a proposal for purposes of Rule 14a-8 because it does not
present a proposal for stockholder action but instead seeks to provide a
mechanism that would allow the Proponent to simply express her views on various
topics. Under the Commission's rules, Staff responses to no-action requests
under Rule 14a-8(a) and other Staff precedent, such a submission is not a proper
proposal under Rule 14a-8.
Rule 14a-8(a) defines a stockholder proposal as a stockholder's "recommendation
or requirement that the company and/or its board of directors take action." Rule
14a-8(a) further provides that a stockholder proposal "should state as clearly
as possible the course of action that [the proponent] believe[s] the company
should follow."
Rule 14a-8(a) was adopted as part of the 1998 amendments to the proxy rules. In
the Commission's 1996 release proposing these amendments, the Commission noted:
The answer to Question 1 of the revised rule 14a-8 would define a "proposal" as
a request that the company or its board of directors take an action. The
definition reflects our belief that a proposal that seeks no specific action,
but merely purports to express shareholders' views, is inconsistent with the
purposes of rule 14a-8 and may be excluded from companies' proxy materials. The
Division, for instance, declined to concur in the exclusion of a "proposal" that
shareholders express their dissatisfaction with the company's earlier
endorsement of a specific legislative initiative. Under the proposed rule, the
Division would reach the opposite result, because the proposal did not request
that the company take action.
Proposing Release, Amendments to Rules on Shareholder Proposals, Exchange Act
Release No. 39093 (September 18, 1997) (emphasis added)(citations omitted).
The Commission subsequently adopted this definition as proposed. Exchange Act
Release No. 34-40018 (May 21, 1998) (the "1998 Release"). ("We are adopting as
proposed the answer to Question 1 of the amended rule defining a proposal as a
request or requirement that the board of directors take an action.") Following
adoption of Rule 14a-8(a), the Staff has consistently confirmed that a
stockholder submission is excludable if it "merely purports to express
shareholders' views" on a subject matter. For example, in Sensar Corp. (avail.
Apr. 23, 2001), the Staff concurred that a submission seeking to allow a
stockholder vote to express stockholder displeasure over the terms of stock
options granted to management, the board of directors and certain consultants
could be omitted under Rule 14a-8(a) because it did not recommend or require any
action by the company or its board of directors. See also CSX Corp. (avail. Feb.
1, 1999) (concurring that a submission was excludable under Rule 14a-8(a) where
a stockholder submitted three poems for consideration but did not recommend or
require any action by the company or its board of directors.)
The Submission parallels the submission in Sensar in that it seeks to enable a
stockholder to merely express displeasure with respect to Longs' general
employment and compensation practices, including "hours, benefits, discounts,
and morale" instead of presenting "a request that the company or its board of
directors take an action." The Submission's supporting statement clearly
demonstrates that the Proponent has a similar objective, stating, for example,
"I ask that this letter from but one worker be put in the Long's [sic]
shareholder meeting notice because there is clearly a problem with upper
management at Longs of which most shareholders may be unaware...."
The Submission is of the type addressed by the Releases and Staff responses to
no-action requests cited above. Contrary to the requirements of Rule 14a-8(a),
the Submission neither recommends nor requires that the Company or its board of
directors take any specific action with respect to the matters discussed therein
but rather merely expresses the Proponent's views. Based on the foregoing, Longs
requests the Staff's concurrence that the Submission does not constitute a
proposal for purposes of Rule 14a-8(a) and accordingly may be excluded from its
2008 Proxy Materials.
II. The Submission may be excluded pursuant to Rule 14a-8(i)(7) because it deals
with matters related to Longs' ordinary business operations.
Under Rule 14a-8(i)(7), a proposal may be omitted from a registrant's proxy
statement if such proposal "deals with a matter relating to the company's
ordinary business operations." The general policy underlying the ordinary
business exclusion is "to confine the resolution of ordinary business problems
to management and the board of directors, since it is impracticable for
shareholders to decide how to solve such problems at an annual shareholders
meeting." 1998 Release. In the 1998 Release, the Staff noted that one of the
central considerations underlying this policy, which relates to the subject
matter of the Submission, is that "[c]ertain tasks are so fundamental to
management's ability to run a company on a day-to-day basis that they could not,
as a practical matter, be subject to direct shareholder oversight." 1998
Release. "The second consideration relates to 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." 1998 Release. Notably, the 1998 Release stated
that examples of this type of proposal include ones that address "the management
of the workforce, such as hiring, promotion and termination of employees." For
the reasons discussed below, the Company believes that it may exclude the
Submission because it relates to Longs' ordinary business operations.
A. Ordinary business relating to general employment compensation issues.
The Submission is not a model of clarity. At its heart, the Submission appears
to be a complaint about Longs' general employment and compensation practices and
a request to discuss these matters. Thus, to the extent that the Staff views the
Submission as a proposal under Rule 14a-8, the Submission implicates the two
policy considerations noted above for exclusion of the Submission as ordinary
business because it deals with Longs' day-to-day operations and seeks to
"micro-manage" Longs with respect to its relations with employees.
The ability to create and implement policies regarding employment and
compensation is fundamental to management's ability to control Longs' day-to-day
operations. The Commission has long recognized that stockholder proposals
concerning the structuring and analyses of general employee practices and
compensation and other issues relating thereto, as well as other decision-making
activities relating to the general employee population, all relate to ordinary
business operations of a corporation, and the Staff has consistently concurred
in the omission under Rule 14a-8(i)(7) of a variety of proposals regarding
employee compensation, benefits and other matters. For example, in Wal-Mart
Stores, Inc. (avail. Apr. 2, 2002), the Staff concurred that a proposal to
implement changes involving employee discounts, company contributions to
employee purchases of stock, hourly pay, the use of Wal-Mart gift cards, stock
option grants and employee control of displaying of merchandise in stores was
excludable under Rule 14a-8(i)(7) as relating to Wal-Mart's ordinary business
operations. See also General Motors Corp. (avail Mar. 24, 2005) (proposal to
establish a directors' committee to "develop specific reforms for the health
cost problem" was excludable); Exelon Corp. (avail. Mar. 10, 2005) (proposal to
forbid executive incentives tied to reduction of retiree benefits was
excludable); Aetna Inc. (avail. Feb. 14, 2005) (proposal to restore a subsidy
for dental benefits to retiree was excludable); International Business Machines
Corp. (avail. Jan. 13, 2005) (proposal requesting a reporting examining the
competitive impact of rising insurance costs was excludable); Wal-Mart Stores,
Inc. (avail. Mar. 17, 2003) (proposal to incorporate increases in the percentage
of employees covered by medical health insurance plan in determination of
executive compensation was excludable); International Business Machines Corp.
(avail. Jan. 15, 1999) (proposal to prohibit the extension of medical benefits
to friends of IBM employees and retirees was excludable).
While the Submission does not present a proposal for stockholder action, the
subject matter that the Proponent addresses clearly deals with the management of
Longs' workforce. The Submission expresses the Proponent's view that "hours,
benefits, discounts, and morale have been critically lowered." Also addressed in
the Submission are matters related to Proponent's hours, shift assignments and
related policies, and more generally, compensation levels, medical and dental
benefits, and store employee turnover.
In the ordinary course of its business, Longs actively monitors and assesses all
its expenses, including compensation and benefit costs. Like numerous other
business considerations, compensation and benefit policy decisions cannot be
made in a vacuum. Each of these decisions can have profound workforce
implications and must be made with a full knowledge and understanding of the
competitive landscape. These decisions involve detailed analytical assessments
of the risks and rewards of various employment practices, including benefit plan
design. Longs human resource executives and their advisors consider these
complex issues on an ongoing basis and regularly assess the balance between the
costs and benefits of offering varying levels of compensation and benefit
programs to attract and retain the highest quality employees.
Like the submissions addressed by the Staff's responses to the no-action
requests cited above, Proponent's Submission relates to ordinary business
matters (i.e., hourly pay and employee discounts as in Wal-Mart Stores, Inc.
(avail. Apr. 2, 2002) and employee benefits generally as in International
Business Machines Corp. (avail. Jan. 13, 2005). Due to the complexity of these
issues, Longs stockholders would not be in a position to make any informed
judgment from a discussion of the issues raised by the Proponent at Longs' 2008
Annual Meeting of Stockholders.
B. Ordinary business relating to implementation of a stock repurchase program.
A second matter raised in the Submission is the Company's repurchase of its
common stock. The objective of Longs board of directors in authorizing the stock
repurchase program is to maximize stockholder return and generally increase
stockholder value. The decision to repurchase stock is made in the context of
all the Company's capital raising, capital management and other financing
activities. Allowing stockholders to dictate such decisions would inevitably
result in second-guessing of the day-to-day business decisions of management of
the Company.
The Staff has consistently taken the position that the determination of a
company to repurchase its stock is a matter related to the conduct of its
ordinary business operations. See Pfizer Inc. (avail. Feb. 7, 2003) (proposal
requested that the board implement a policy to limit the repurchase of shares);
M&F Worldwide Corp. (avail. Mar. 29, 2000) (proposal requested the board to form
a special committee that would implement actions designed to enhance stockholder
value, including repurchase of shares, cash dividends, sale of assets and
curtailment of non-operating activities); Intel Corp. (avail. Jan. 15, 1992)
(proposal restricting the company from increasing the number of shares of common
stock that is issued from one fiscal year to the next, relating to stock
repurchases); Ford Motor Co. (avail. Mar. 26, 1999) (proposal to amend by-laws
to require that it not repurchase its common stock except under certain
circumstances). The Submission states, "For the whole store, I question the
constant buying back of stock, which has raised our stock's price with the same
general income or slightly higher, and then we have rewarded management when the
price of our remaining naturally goes up. It's as if shareholders, some of whom
are employees, are buying stock so upper management can have raises even though
they have not substantially financially improved the company." Thus, like the
precedent cited above, the Submission improperly concerns the implementation of
a stock repurchase program.
For the foregoing reasons, Longs believes that the Submission may be excluded
from Longs' 2008 Proxy Materials pursuant to Rule 14a-8(i)(7) and respectfully
requests that the Staff confirm that it will not recommend enforcement action if
the Submission is so omitted.
III. The Submission may be excluded pursuant to Rule 14a-8(i)(4) because it
concerns a personal grievance of the Proponent.
Rule 14a-8(i)(4) permits the exclusion of any proposal that "relates to the
redress of a personal claim or grievance against the company or any other
person, or if it is designed to result in a benefit to you [the proponent], or
to further a personal interest, which is not shared by the other shareholders at
large." The purpose of this subsection, according to the Commission, is to
"insure that the security holder proposal process would not be abused by
proponents attempting to achieve personal ends that are not necessarily in the
common interest of the issuer's shareholders generally." Exchange Act Release
No. 34-20091 (August 15, 1983). The Rule is designed to prevent stockholders
from unfairly and counter-productively taking over the stockholder proposal
process and using it as a forum for addressing their own personal concerns. The
Commission has noted that the costs and time associated with dealing with such
proposals do a disservice to the interests of stockholders as a whole. See
Exchange Act Release No. 34-10135 (October 14, 1982). A proposal may be
excluded, despite being drafted in such a way that it might relate to matters
which may be of interest to all security holders, if it is clear from the facts
that the proponent is using the proposal as a tactic to further a personal
interest. Id.
The Proponent is an employee of the Company, and while the Submission addresses
issues generally related to Longs' ordinary business operations, it reflects
personal grievances that the Proponent has in connection with her employment by
the Company. The Staff has long articulated the view that Rule 14a-8 may not be
misused by employees to redress their personal grievances or address their
personal interests. In the Staff's letter to International Business Machines
Corporation dated February 5, 1980, the Staff stated:
After consideration of the information contained in your letter and the exhibit
thereto, this Division believes that there may be some basis for your view that
the proposal may be omitted in reliance upon Rule 14a-8(c)(4) [the predecessor
to Rule 14a-8(i)(4)]. In the Division's view, despite the fact that the proposal
is drafted in such a way that it may relate to matters which may be of general
interest to all shareholders, it appears that the proponent is using the
proposal as one of many tactics designed to redress an existing personal
grievance against the Company.
See also General Electric Co. (avail. Feb. 2, 2005) (proposal requesting GE's
chief executive officer address certain matters excludable as a personal
grievance when submitted by an employee who brought and lost a discrimination
claim); Phillips Petroleum Corp. (avail. Mar. 12, 2001) (proposal requesting
that the company make certain disclosures to stockholders excludable as a
personal grievance when submitted by a discharged employee who was seeking "to
settle the accounts" with the company relating to the termination of his
employment); Johnson & Johnson (avail. Jan. 7, 2000) (exclusion of proposal that
company compensate inventors of products sold by company where proponent was
inventor); Northern States Power Co. (avail. Feb. 16, 1995) (exclusion of
proposal that company implement revised incentive compensation plan where
proponent would receive financial gain related to the proposal); and Caterpillar
Inc. (avail. Dec. 13, 1993) (exclusion of proposal to pay overtime to management
employees working extra shifts where proponent was management employee).
The Company believes that a similar conclusion is warranted in this case, as the
Company believes that the Proponent has submitted the Submission to address
personal grievances in connection with her employment as evidenced by the
following excerpts from her Submission:
Because of favoritism, I sometimes work more night, less day shifts.
Though competition for Pharmacy Tech is high due to a country-wide shortage, my
salary and that others has been frozen, as it allegedly would be higher than our
store manager's!
I was paid for back pay for lunches I had to work under local management, then
given a letter of warning not to do that by upper management!
I am told to take two short breaks a day, but mostly there is no one in my
classification to cover for me so I can take such breaks. I often can't and thus
mostly don't take breaks. Lip service is thus given to encourage taking breaks
when there is no proper way to take them ...
As we stay as loyal employees and get raises, our hours are cut to keep in line
with allotted store payroll.
I have been verbally reprimanded for briefly working overtime at the request of
a pharmacist when customers were lined deeply waiting for help. I was told there
would be one written reprimand and then I would be fired. So much for customer
service and the work ethic!
As the Staff has previously indicated, the purpose of the stockholder proposal
process is "to place stockholders in a position to bring before their fellow
stockholders matters of concern to them as stockholders in such corporation."
See Exchange Act Release No. 3638 (January 3, 1945). Rule 14a-8(i)(4) is
designed to allow registrants to exclude proposals that involve disputes that
are not of interest to stockholders in general, "because the Commission does not
believe than an issuer's proxy materials are a proper forum for airing person
claims or grievances." See Exchange Act Release No. 12999 (November 22, 1976).
The Staff has further stated that such "use of the security holder proposal
procedures is an abuse of the security holder proposal process, and the cost and
time involved in dealing with these situations do a disservice to the interests
of the issuer and its security holders at large." See Exchange Act Release No.
19135 (October 14, 1982).
Thus, to the extent that the Staff views the Submission as a proposal under Rule
14a-8, for the reasons set forth above, the Company believes that the Submission
is excludable from Longs' 2008 Proxy Materials because the Proponent is
attempting to use the stockholder proposal process to redress her personal
grievance with the Company and further her personal interest.
IV. The Submission may be excluded pursuant to Rule 14a-8(i)(3) because it is
inherently vague and indefinite.
Rule 14a-8(i)(3) allows 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 materials). Longs believes that the Submission is
so vague and indefinite that it violates the Rule 14a-9 prohibition on
materially false and misleading statements.* In addition, we believe that the
Submission is excludable under Rule 14a-8(i)(6) because Longs is unable to
determine what actions would be required by the Submission and, thus, lacks the
power to implement the Submission.
The Staff has consistently taken the position that vague and indefinite
stockholder proposals are excludable under Rule 14a-8(i)(3) because "neither the
shareholders voting on the proposal, nor the company in implementing the
proposal (if adopted), would be able to determine with any reasonable certainty
what actions or measures the proposal requires." Staff Legal Bulletin No. 14B
(Sept. 15, 2004). Moreover, a proposal is sufficiently vague and indefinite so
as to justify exclusion where a company and its shareholders 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 the shareholders voting on the proposal." Fuqua
Industries, Inc. (avail. Mar. 12, 1991).
In requesting that the Submission be included in Longs' 2008 Proxy Materials and
issues raised therein discussed at the annual meeting, the Submission is
inherently vague and indefinite as to what, if any, actions are proposed. The
Submission's supporting statement reads, in part, as follows:
"In short, the bottom-line mentality of current upper management has changed
Longs Drugs from a professional service store to a grocery store. In truth, lip
service is given to customer service.
For the whole store, I question the constant buying back of stock, which has
raised our stock's price with the same general income or slightly higher, and
then we have rewarded management when the price of our remaining naturally goes
up. It's as if shareholders, some of whom are employees, are buying stock so
upper management can have raises even though they have not substantially
financially improved the company.
In addition, employees on the front line have been consistently under attack by
upper management for several years, as hours, benefits, discounts, and morale
have been critically lowered ...
Yes, such miserliness seems to help the bottom line. But it destroys the quality
of the business. No robots nor Central Fill can replace the warmth of a helping
human being. We bring customers back. Too bad there are fewer of us in my store
to do that ...
As discussed above, the Submission is not actually a proposal for anything in
particular. It is simply a protest. Stockholders might support it or oppose it,
but in the language of Staff Legal Bulletin No. 14B, they would not know "with
any reasonable certainty what actions or measures the proposal requires." And,
if the Submission were adopted, the Company and its board of directors would be
altogether uncertain about what they were required to do. The lack of clarity on
its face makes the Submission properly excluded under Rule 14a-8(i)(3). Thus, to
the extent that the Staff views the Submission as a proposal under Rule 14a-8,
the Submission implicates the considerations noted above for exclusion of the
Submission as it is so inherently vague and indefinite as to what, if any,
actions are proposed that, if adopted neither Longs or Longs' board of directors
would be able to determine with any reasonable certainty what actions or
measures would be required.
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if Longs excludes the Submission from its 2008 Proxy
Materials. We would be pleased to provide any additional information and answer
any questions that you may have regarding this subject.
Please acknowledge receipt of this letter by date-stamping the accompanying
acknowledgment copy and returning it to the undersigned in the self-addressed,
postage pre-paid envelope provided. If we may be of any further assistance in
this matter, please do not hesitate to contact me at 925-210-6720, Devang Shah,
Senior Corporate Counsel, at 925-210-6525 or, Brian Lane at Gibson, Dunn &
Crutcher LLP at (202) 887-3646.
Sincerely,
/s/
William J. Rainey
Senior Vice President, General Counsel and Secretary
Enclosures
cc: Brian Lane, Esq.
Gibson, Dunn & Crutcher LLP
Patricia Thomassen
Devang Shah, Esq.
-----FOOTNOTES-----
* The Submission also contains a number of statements, suggestions and innuendos
that the Company believes are materially false and misleading.
[APPENDIX]
EXHIBIT A
LONGS DRUG STORES CORPORATION
141 North Civic Drive
Post Office Box 5222
Walnut Creek, California 94596-1222
Patricia Thomassen
263 Vega Avenue
Lompoc, California
Thursday, October 4, 2007
Motion for the Longs 2008 Meeting of Stockholders:
Discussion of Long's Upper Management Practices:
I am a shareholder of at least 200 Longs common shares in the 401(k) plan
component of the Longs Drug Stores Employee Savings and Profit Sharing Plan, and
Longs employee of over fifteen years, so, in the interest of all shareholders
and employees, I herewith intend to make the motion that this letter be entered
into the 2008 Longs Drug Stores Corporation Letter to Stockholders/Notice of
Annual Meeting and Proxy Statement/2008 Annual Report on Form 10-K and discussed
in the meeting.
I ask that this letter from but one worker be put in the Long's shareholder
meeting notice because there is clearly a problem with upper management at Longs
of which most shareholders may be unaware....
In short, the bottom-line mentality of current upper management has changed
Longs Drugs from a professional service store to a grocery store. In truth, lip
service is given to customer service.
For the whole store, I question the constant buying back of stock, which has
raised our stock's price with the same general company income or slightly
higher, and then we have rewarded management when the price of our remaining
stock naturally goes up. It's as if shareholders, some of whom are employees,
are buying stock so upper management can have raises even though they have not
substantially financially improved the company.
In addition, employees on the front line have been consistently under attack by
upper management for several years, as hours, benefits, discounts, and morale
have been critically lowered.
In my particular store, and for myself, for which I can most certainly speak,
there has been a general maltreatment of employees:
After California re-voted in the 8-hour minimum day for standard overtime, our
regular schedules in Pharmacy were shorted ten minutes from eight full hours,
and we were subsequently seriously warned if we went overtime, even if another
manager asked us to work to serve customers waiting. Employees at the front of
the store were made to go part-time.
Discounts lowered to employees, from cost plus 10% to cost plus 15%.
Because of allowed favoritism, I sometimes work more night, less day shifts.
Though competition for Pharmacy Tech is high due to a country-wide shortage, my
salary and that others has been frozen, as it allegedly would be higher than our
store manager's!
I was paid for back pay for lunches I had to work under local management, then
given a letter of warning not to do that by upper management!
I am told to take two short breaks a day, but mostly there is no one in my
classification to cover for me so I can take such breaks. I often can't and thus
mostly don't take breaks. Lip service is thus given to encourage taking breaks
when there is no proper way to take them.
Personnel have been cut back to a dangerous level in my store and others, asat
timesthere are but three people scheduled in a store-a clerk, a stocker, and a
manager, or even just a manager and a cashier. In one store at 7 a.m. there was
only one female manager ("key carrier") on the floor and a female worker in an
upstairs office counting money.
I know turnover in stores is enormous, as the front of the store employees are
part-timers. Time and monies are lost in constant training.
As we stay as loyal employees and get raises, our hours are cut to keep in line
with set allotted store payroll.
I have been verbally reprimanded for briefly working overtime at the request of
a pharmacist when customers were lined deeply waiting for help. I was told there
would be one written reprimand and then I would be fired. So much for customer
service and the work ethic!
For these reasons and others, morale in most stores is very low.
Benefits to employees have also been severely scrooged. In 2007, at one point,
it was not possible to enter sick time on one's pay card. When I took a needed
sick day, I was given the cold shoulder for several weeks by my manager.
I certainly also find it ironic a premier company store in the medical and
pharmaceutical field cannot come up with fully-paid medical and dental and
vision benefits for its employees.
Yes, such miserliness seems to help the bottom line. But it destroys the quality
of the business. No robots nor Central Fill can replace the warmth of a helping
human being. We bring customers back. Too bad there are fewer of us in my store
to do that.
In short, this time I again plan to vote against all management candidates and
most company proposals.
I hope you will support the motion to discuss this letter at the meeting.
Have a good vote!
Signed, Patricia Thomassen
/s/
cc: S.E.C.
San Francisco Regional Office
Helane L Morrison, Regional Director
44 Montgomery Street, Suite 2600
San Francisco, CA 94104
[STAFF REPLY LETTER]
January 23, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Longs Drug Stores Corporation Incoming letter dated December 19, 2007
The submission relates to placing a letter in the company's proxy materials.
There appears to be some basis for your view that Longs may exclude the
submission under rule 14a-8(a) because it does not recommend or require that
Longs or its board of directors take any action. Accordingly, we will not
recommend enforcement action to the Commission if Longs omits the submission
from its proxy materials in reliance on rule 14a-8(a). In reaching this
position, we have not found it necessary to address the alternative bases for
omission upon which Longs relies.
Sincerely,
/s/
Peggy Kim
Attorney-Adviser
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