Company Name: Pfizer Inc.
Public Availability Date: January 29, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 2
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 21, 2007
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Re: Shareholder Proposal of William Steiner Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that Pfizer Inc. ("Pfizer") intends to omit from
its proxy statement and form of proxy for its 2008 Annual Meeting of
Shareholders (collectively, the "2008 Proxy Materials") a shareholder proposal
(the "Proposal") received from William Steiner, 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 Pfizer 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 shareholder 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
Pfizer pursuant to Rule 14a-8(k).
THE PROPOSAL
The Proposal requests that the Board of Directors of Pfizer amend Pfizer'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]." 1 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 Pfizer 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 Pfizer To Violate State Law.
Rule 14a-8(i)(2) permits a company to exclude a shareholder proposal if
implementation of the proposal would cause it to violate any state, federal or
foreign law to which it is subject. Pfizer 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"), Pfizer believes that the
Proposal is excludable under Rule 14a-8(i)(2) because, if implemented, the
Proposal would cause Pfizer to violate the Delaware General Corporation Law (the
"DGCL").
The Proposal requests that the Board of Directors of Pfizer amend Pfizer'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 acquisitions[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 Pfizer to violate state law since the Proposal requests "no
restriction" on the right of shareholders to call special meetings.
As discussed in the Delaware Law Opinion, Pfizer's Board of Directors "cannot
adopt a by-law that guarantees each ... stockholder the unrestricted right to
call a special meeting" 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 shareholders and the ability of
shareholders 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 Pfizer's By-laws or other governing
documents to enable a shareholder to call a meeting with "no restriction" on
what the shareholder specifies as the purpose of the meeting, which would
include even matters that are not a proper subject for shareholder action. The
Supporting Statement specifically discusses giving shareholders 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 shareholder 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
shareholder 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 shareholder 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,
shareholder meetings).
The Proposal requests that Pfizer's Board act 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 Pfizer. 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 Pfizer 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 shareholder 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
shareholder 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
shareholder 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 shareholder 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
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 shareholders 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
shareholder 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
Pfizer's Board of Directors amend the By-laws and any other appropriate
governing documents to place "no restriction" on the right of shareholders to
call special meetings, without regard to the requirements set forth in Delaware
corporate law related to shareholders calling special meetings. This reading of
the Proposal is supported by the references in the Supporting Statement to the
need for shareholder 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 do not make
that meaning evident and only serve to demonstrate the vagueness of, and
ambiguities in, the Proposal. For example, the Proposal references "no
restriction" on the "right" of shareholders to call special meetings "compared
to the standard allowed by applicable law on calling a special meeting." Under
Delaware law, shareholders 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 shareholders can call a special meeting. Thus, in the absence of default
standards in Delaware law for shareholder-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, Pfizer's shareholders
"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 shareholders "would not
know with any certainty what they are voting either for or against"). Moreover,
neither Pfizer's shareholders nor the Board would be able to determine with any
certainty what actions Pfizer 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 Because the Proposal 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 shareholder 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 Staff Legal Bulletin No. 14B (Sept. 15, 2004) ("SLB 14B"), the Staff
clarified its views regarding when modification or exclusion of a shareholder
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 are among the mutual funds supporting 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 shareholders to call special meetings. See
Exhibit C. The Proposal's reference to Fidelity and Vanguard "supporting 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
shareholders of the company from a proposal where the inclusion of that
information suggested, without any actual support, that those shareholders
supported the proposal. The Staff permitted the exclusion of that portion of the
shareholder 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
shareholder 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 shareholder 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 are among the mutual funds
supporting 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 Pfizer 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,
Pfizer agrees to promptly forward to the Proponent any response from the Staff
to this no-action request that the Staff transmits by facsimile to Pfizer only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (212) 733-4802.
Sincerely,
/s/
Margaret M. Foran
Enclosures
cc: John Chevedden
[APPENDIX 1]
Mr. Jeffrey B, Kindler
Chairman
Pfizer Inc. (PFE)
235 E 42nd St
New York NY 10017
Rule 14a-8 Proposal
Dear Mr. Kindler,
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 cost savings and efficiency 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/
William Stiner
/s/
Date
10/12/07
cc: Margaret M. Foran
Corporate Secretary
Phone: 212 573-2323
PH: 212.733,5356
FX: 212.573.1853
-----FOOTNOTES-----
1 The Proponent initially submitted a shareholder proposal regarding special
meetings to Pfizer on October 16, 2007. The Proponent subsequently replaced that
proposal with the Proposal, which Pfizer agreed to accept. See Exhibit A.
[APPENDIX 2]
[PFE: Rule 14a-8 Proposal, October 18, 2007, Revised November 16, 2007] 3 -
Special 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 expeditions consideration. Shareholder
control over timing is especially important in the context of a major
acquisition or restructuring, when events unfold quickly and issues may become
moot by the next annual meeting.
Fidelity and Vanguard are among the mutual funds supporting 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 Metrics International, take special meeting rights into account when
assigning company ratings.
Eighteen (18) proposals on this topic averaged 56%-support in 2007 - including
74%-support at Honeywell (HON).
The advantage of adopting this proposal should also be considered in the context
of our company's board composition and the weak link between CEO compensation
and shareholder return. For instance in 2007 The Corporate Library had the
following concerns:
The composition of the board and the weak link between CEO compensation and
shareholder return suggests that the board is not being as effective as it could
be in providing the checks and balances necessary to protect shareholder
interests. Pfizer's share price underperformed the S&P 500 by 10% during a
12-month period in 2007 and its corporate governance risk profile remains high.
Board membership represents a moderate concern for shareholder interests: there
are two directors who have been on the board for more than 15 years; there are
two directors over 70-years of age; there are two directors who serve on more
than four other boards; and, there is one director who is a former company
executive.
Former CEO Hank McKinnell's retirement with $213 million does little or nothing
to enhance the reputation of Pfizer's board. And the compensation committee is
composed entirely of the same members over the past several years.
The compensation committee policies appear not to have changed since Mr.
McKinnell's departure. Further, the compensation committee awarded 30-times the
number of options to performance shares to Mr. Kindler, our current Chairman,
de-emphasizing the pay for performance standard. Also, they continue to
reimburse executives for taxes on perks. In light of these findings, The
Corporate Library reaffirmed its high concern with the company's compensation
practices.
[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 Pfizer Inc. (PFE)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
William Steiner
Ladies and Gentlemen:
The company December 21, 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 proposal -
since the company had the first opportunity.
Sincerely,
John Chevedden
cc:
William Steiner
Margaret M. Foran<Margaret.Foran@pfizer.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 Pfizer Inc. (PFE)
Shareholder Position on Company No-Action Request
Rule 14a-8 Proposal: Special Shareholder Meetings
William Steiner
Ladies and Gentlemen:
In further response to the December 21, 2007 company no action request that
claims the company, a Delaware company, is unable to adopt this resolution -
this 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 21, 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 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 proposal -
since the company had the first opportunity.
Sincerely,
John Chevedden
cc:
William Steiner
Margaret M. Foran<Margaret.Foran@pfizer.com>
[STAFF REPLY LETTER]
January 29, 2008
Response of the Office of Chief Counsel
Division of Corporation Finance
Re: Pfizer Inc. Incoming letter dated December 21, 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
Pfizer 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
Pfizer 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 Pfizer relies.
Sincerely,
/s/
Heather L. Maples
Special Counsel
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