Company Name: Wyeth
Public Availability Date: February 25, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 21, 2007
Direct Dial (202) 955-8653
Fax No. (202) 530-9677
Client No. C 98425-00002
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 the Sisters of Charity of St. Elizabeth, Catholic
Healthcare Partners, Trinity Health and Catholic Health Initiatives Exchange Act
of 1934Rule 14a-8
Dear Ladies and Gentlemen:
This letter is to inform you that our client, Wyeth, 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 and statements
in support thereof (the "Proposal") received from The Sisters of Charity of St.
Elizabeth, Catholic Healthcare Partners, Trinity Health and Catholic Health
Initiatives (the "Proponents").
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 Wyeth intends to
file its definitive 2008 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponents.
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 Proponents
that if the Proponents elect 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
Wyeth pursuant to Rule 14a-8(k).
THE PROPOSAL
The Proposal requests that Wyeth's Board of Directors (the "Board") adopt
principles for comprehensive health care reform. Specifically, the Proposal
states:
RESOLVED: shareholders urge the Board of Directors to adopt principles for
comprehensive health care reform (such as those based upon principles reported
by the Institute of Medicine:
1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for
society.
5. Health insurance should enhance health and well being by promoting access to
high-quality care that is effective, efficient, safe, timely, patient-centered,
and equitable).
The Proposal's supporting statement describes the importance of companies'
positions on "critical public policy issues, such as universal health care." A
copy of the Proposal, as well as related correspondence with the Proponents, is
attached to this letter as Exhibit A.
BASES FOR EXCLUSION
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2008 Proxy Materials pursuant to:
Rule 14a-8(i)(7) because the Proposal pertains to Wyeth's ordinary business
operations; and
Rule 14a-8(i)(3) because the Proposal is impermissibly vague and indefinite so
as to be inherently misleading.
ANALYSIS
I. The Proposal May Be Excluded under Rule 14a-8(i)(7) Because It Deals with
Matters Related to Wyeth's Ordinary Business Operations.
Rule 14a-8(i)(7) permits the omission of a stockholder proposal dealing with
matters relating to a company's "ordinary business" operations. According to the
Commission's release accompanying the 1998 amendments to Rule 14a-8, the
underlying policy of 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." Exchange Act Release No. 40018
(May 21, 1998) (the "1998 Release").
In the 1998 Release, the Commission described the two "central considerations"
for the ordinary business exclusion. The first is that certain tasks are "so
fundamental to management's ability to run a company on a day to day basis" that
they can not be subject to direct stockholder oversight. Examples of such tasks
cited by the Commission are "management of the workforce, such as the hiring,
promotion, and termination of employees, decisions on production quality and
quantity, and the retention of suppliers." 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."
For the reasons addressed below, the Proposal relates to Wyeth's ordinary
business operations because: (A) the Proposal seeks to involve Wyeth in the
political or legislative process with respect to an aspect of Wyeth's business;
and (B) the Proposal relates to employee benefits. In well-established
precedent, the Staff consistently has concurred that stockholder proposals
relating to each of the foregoing implicate ordinary business matters, and as
such, the Staff has concurred with the excludability of these proposals under
Rule 14a-8(i)(7).
A. The Proposal and Supporting Statement Involve Ordinary Business Matters by
Attempting to Involve Wyeth in the Legislative and Political Process Regarding
Health Care Reform.
The Proposal asks that the Board adopt "principles for comprehensive health care
reform" and suggests that such action is necessary because of rising costs.
Thus, as discussed in more detail below, the essential objective of the Proposal
is to involve Wyeth in the political and legislative process with respect to
health care reform.
The Staff consistently has granted no-action relief to companies where, as here,
a stockholder proposal seeks to involve the company in the political or
legislative process. For example, in Chrysler Corp. (avail. Feb. 10, 1992), the
Staff concurred, in reliance on the predecessor to Rule 14a-8(i)(7), in the
omission of a proposal requesting that the company support and lobby for
universal health coverage because it was "directed at involving the [c]ompany in
the political or legislative process relating to an aspect of the [c]ompany's
operations." In Brunswick Corp. (avail. Feb. 10, 1992), the Staff concurred that
a similar stockholder proposal calling for a report (i) comparing health care
standards, methods of administration, costs and financing of health care plans
in all countries where the company does business, and (ii) describing aspects of
governmental policy affecting those plans that should be included in the United
States' development of a national health insurance plan, could be excluded from
the company's proxy materials in reliance on the predecessor to Rule 14a-8(i)(7)
because it was directed at involving the company in the political or legislative
process relating to an aspect of the company's operations. It is noteworthy that
the Staff's determination regarding this stockholder proposal was challenged by
its proponent, the New York City Employees' Retirement System ("NYCERS"), and
the Staff's determination that the proposal could be excluded as ordinary
business was upheld. See New York City Employees' Retirement System v. Brunswick
Corp., 789 F. Supp. 144 (S.D.N.Y. 1992). Judge Patterson, who heard the
challenge, noted that "[NYCERS's] [p]roposal as adopted is not limited to
corporate policy but seeks to cause the corporation to form national policy,"
and that "as admirable as [NYCERS's] objectives may be, there is no precedent to
support such a proposal...." Id. at 147.
Likewise, on numerous occasions the Staff has concurred that stockholder
proposals calling for an evaluation of the impact on the company of various
health care reform proposals being considered by policymakers could be excluded
from the companies' proxy materials in reliance on Rule 14a-8(i)(7) or its
predecessor. See Brown Group Inc. (avail. Mar. 29, 1993, exclusion affirmed May
6, 1993); Dole Food Co. (avail. Feb. 10, 1992); GTE Corp. (avail. Feb. 10,
1992); Tribune Co. (avail. Mar. 6, 1991); Minnesota Mining and Manufacturing Co.
(avail. Feb. 6, 1991); Knight-Ridder (avail. Jan. 23, 1991); Albertsons (avail.
Jan. 22, 1991). Similarly, in International Business Machines Corp. (avail. Jan.
21, 2002), the Staff concurred that a stockholder proposal requiring the company
to "[j]oin with other corporations in support of the establishment of a properly
financed national health insurance system" was excludable because it "appears
directed at involving IBM in the political or legislative process relating to an
aspect of IBM's operations."
As was the case with each of the no-action requests discussed above, by
requesting the implementation of principles relating to health care reform, the
Proposal seeks to have Wyeth engage in political and lobbying activities with
respect to public policies affecting Wyeth's operations, namely health care
reform. In this regard and as discussed in detail below, the Proposal's
supporting statement discusses specific political issues surrounding health care
reform.
The supporting statement's repeated references to the political efforts with
respect to health care reform confirm that the Proposal's goal is to involve
Wyeth in such efforts. For example, the supporting statement points to efforts
made by "national organizations" regarding lobbying in the area of health care
reform. All of the organizations that are mentionedthe American Medical
Association, the American Hospital Association, AARP and the Pharmaceutical
Research and Manufacturers of Americaare groups specifically involved in
political and legislative lobbying and advocacy. Similarly, the health care
reform principles that the Proponents list as a model were drafted by the
Institute of Medicine, an organization formed within the National Academy of
Science to examine policy matters pertaining to the health of the public and to
act as an advisor to the federal government.
Moreover, the supporting statement refers to the political debate regarding
comprehensive health care reform as part of the 2008 presidential campaign. The
Proponents clearly intend to compel Wyeth to get involved in this debate, not to
mention similar and related debates that may occur in the U.S. Congress. As in
the past, when the stockholder proposals cited above have been considered by the
Staff, health care reform is on the legislative calendar. Numerous bills
relating to health care coverage have been introduced in the U.S. Congress
during 2007, and numerous others seek to expand health care coverage. See, e.g.,
United States National Health Insurance Act, H.R. 676, 110th Cong. (2007)
(introduced Jan. 24, 2007) ("A bill to provide for comprehensive health
insurance coverage for all United States residents, and for other purposes.");
American Health Security Act of 2007, H.R. 1200, 110th Cong. (2007) (introduced
Feb. 27, 2007) ("A bill to provide for health care for every American and to
control the cost and enhance the quality of the health care system."); Healthy
Americans Act, S. 334, 110th Cong. (2007) (introduced Jan. 18, 2007) ("A bill to
provide affordable, guaranteed private health coverage that will make Americans
healthier and can never be taken away."); Universal Health Care Choice and
Access Act, S. 1019, 110th Cong. (2007) (introduced Mar. 28, 2007) ("A bill to
provide comprehensive reform of the health care system of the United States, and
for other purposes."); Kids Come First Act of 2007, S. 95, 110th Cong. (2007)
(introduced Jan. 4, 2007) ("A bill to amend titles XIX and XXI of the Social
Security Act to ensure that every uninsured child in America has health
insurance coverage, and for other purposes."); Access to Affordable Health Care
Act, S. 158, 110th Cong. (2007) (introduced Jan. 4, 2007) ("A bill to expand
access to affordable health care and to strengthen the health care safety net
and make health care services more available in rural and underserved areas.").
It is these debates that the lobbying organizations mentioned in the supporting
statement seek to influence, and it appears that the ultimate goal of the
Proponents in submitting the Proposal is to see that Wyeth engages in these
debates, as well.
In addition, there are significant health care aspects of Wyeth's business
operations. As of December 31, 2006, Wyeth had more than 50,000 employees
throughout the world and more than 26,000 employees in the United States,
including Puerto Rico. As an employer offering both employee and retiree health
benefits, Wyeth is a significant health care consumer. Wyeth also has made
substantial investments in its own health care operations and currently
develops, manufactures, distributes, and sells pharmaceuticals, biotechnology
products, vaccines and nutrition products, as well as over-the-counter health
care products. Wyeth is involved in research and development activities focused
on discovering, developing and bringing to market new products to treat and/or
prevent serious health care problems. All of these business operations would be
affected by any principles for "comprehensive health care reform" that Wyeth
might be required to address under the Proposal.
Determining whether to take a position on potential reform of public policies
and the terms and scope of any such position thus impacts many aspects of
Wyeth's business. These determinations are "fundamental to management's ability
to run a company on a day to day basis." Wyeth devotes significant time and
resources to monitoring its compliance with existing laws and participating in
the legislative and regulatory process, including whether and how to take a
position on legislative policies that are in line with the best interests of
Wyeth and its stockholders. This process involves the study of a number of
factors, including the likelihood that lobbying efforts will be successful and
the anticipated effect of specific regulations on Wyeth's financial position and
stockholder value. Likewise, decisions as to how and whether to lobby on behalf
of certain issues of public policy, or whether to otherwise participate in the
political process, involve complex considerations. These include the impact of
proposed legislation on Wyeth's business, the use of corporate resources and the
interaction of such efforts with other lobbying and public policy communications
by Wyeth.
For these reasons and consistent with the precedent discussed above, the
Proposal is directed at involving Wyeth in a political and legislative process
related to an aspect of its operations and, thus, is excludable pursuant to Rule
14a-8(i)(7).
B. The Proposal Involves Ordinary Business Matters Because It Relates to
Employee Benefits.
The Proposal deals with matters relating to Wyeth's ordinary business
operationsemployee benefitswhich the Staff routinely has concluded are
properly excludable in reliance on Rule 14a-8(i)(7). The design, maintenance,
and administration of health care coverage are part of a company's ordinary
business operations. In its day-to-day employee benefits administration, Wyeth
determines the coverage and applicable eligibility requirements for employees,
retirees and others. Decisions that could impact changes in health care
coverage, including "principles for comprehensive health care reform" that would
undeniably impact the nature of health care coverage provided to Wyeth's
employees, are best left to those who handle such decisions on a daily basis.
The Staff has recognized that stockholder proposals similar to the Proposal
involve ordinary business matters. For example, in General Motors Corp. (avail.
Mar. 24, 2005), the Staff concurred that the company could exclude under Rule
14a-8(i)(7) a stockholder proposal requesting the formation of a "directors
committee to develop specific reforms for the health cost problem" because it
related to "employee benefits." Here, the Proposal requests that the Board
develop "principles for comprehensive health care reform," which is very similar
to the request in the proposal in General Motors for the "directors committee to
develop specific reforms." Thus, we believe that the Proposal, as with the
proposal in General Motors, is excludable as relating to ordinary business
matters, specifically employee benefits.
The Staff also has determined consistently that stockholder proposals concerning
health care benefits and health insurance costs are excludable as relating to
ordinary business operations, specifically employee benefits. For example, in
Target Corp. (avail. Feb. 27, 2007), the proposal requested a report on "the
implications of rising health care expenses and how [the company] is positioning
itself to address this issue without compromising the health and productivity of
its workforce." The proposal, which the Staff concurred could be excluded under
Rule 14a-8(i)(7) as relating to employee benefits, discussed extensively the
rising cost of health care and its effect on the company's actions with respect
to employee benefits. Similarly, the Proposal emphasizes the need for
"'fundamental changes in' or `completely rebuilding' the health care system."
See also General Motors Corp. (avail. Apr. 11, 2007) (permitting the exclusion
of a similar proposal under Rule 14a-8(i)(7)); Int'l Business Machines Corp.
(avail. Jan. 13, 2005) (concurring in the exclusion under Rule 14a-8(i)(7) of a
proposal requesting a board report on the competitive impact of rising health
insurance costs, including information regarding policies that the board has
adopted, or is considering, to reduce such costs); PepsiCo, Inc. (avail. Mar. 7,
1991) (permitting the exclusion of a stockholder proposal, noting that
"decisions relating to the evaluation of employee health and welfare plans are
matters involving the [c]ompany's ordinary business operations").
For these reasons, the Proposal is excludable under Rule 14a-8(i)(7) as
implicating Wyeth's ordinary business operations because it relates to employee
benefits.
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.
We believe that the broad and undefined scope of the Proposal's subject matter
renders the Proposal so vague and indefinite that it may properly be excluded
under Rule 14a-8(i)(3) as being in violation of Rule 14a-9. 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. The
Staff consistently has taken the position that vague and indefinite stockholder
proposals are 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." See Staff Legal
Bulletin No. 14B (Sept. 15, 2004); Philadelphia Electric Co. (avail. July 30,
1992). Moreover, a proposal is sufficiently vague and indefinite 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 the shareholders voting on the proposal." Fuqua
Industries, Inc. (avail. Mar. 12, 1991).
On a number of occasions, the Staff has concurred with the exclusion of
stockholder proposals that relate to a general set of standards, principles or
criteria that lack a precise definition or ascertainable scope. In Alaska Air
Group, Inc. (avail. Apr. 11, 2007), the Staff agreed that a proposal requesting
the board of directors to amend the governing documents of the company to
"assert, affirm and define the right of the owners of the company to set
standards of corporate governance" could be excluded as vague and indefinite. In
its letter to the Staff, the company argued that "standards of corporate
governance" is a concept that is "sweeping in its scope," thus making it
impossible for the company, its board of directors or the stockholders to
determine with any certainty what must be addressed in order to comply with the
proposal. In Johnson & Johnson (avail. Feb. 7, 2003), the Staff concurred that
the company could exclude as vague and indefinite a proposal requesting a report
on the company's progress concerning "the Glass Ceiling Commission's business
recommendations." In its letter to the Staff, the company noted that the
proposal and supporting statement did not provide sufficient context and
background information to allow stockholders and the company to understand the
scope of the requested report. Further, in Alcoa, Inc. (avail. Dec. 24, 2002),
the Staff concurred that the company could exclude as vague and indefinite a
proposal calling for the full implementation of "human rights standards." In its
letter to the Staff, the company pointed out that, although the supporting
statement referenced a variety of International Labor Organization human rights
goals, the reference to "standards" did not clarify for either stockholders or
the company what standards were being referenced or precisely what actions were
contemplated under the proposal.
The Proposal is similarly vague and indefinite as to the actions or measures it
requests in at least two respects: (1) it fails to define sufficiently the
subject matter of the Proposal; and (2) it fails to specify the Proposal's
scope. The Proposal requests the Board to adopt "principles for comprehensive
health care reform." Similar to the principles addressed in the proposals in
Alaska Air Group, Johnson & Johnson and Alcoa, "comprehensive health care
reform" is a concept that lacks a precise definition that might enable the Board
and the stockholders to ascertain what principles might sufficiently implement
the Proposal. Additionally, the Proposal refers to the principles of the
Institute of Medicine as examples of the types of principles that it asks the
Board to adopt. The Institute of Medicine principles do little to clarify the
Proposal and introduce further unclear concepts, such as "universal,"
"continuous," "affordable" and "sustainable" health care coverage. See Institute
of Medicine's Committee on the Consequences of Uninsurance, Insuring America's
Health: Principles and Recommendations, (National Academies Press: 2004),
abstract available at http://www.iom.edu/?id=17848.
The lack of an agreed-upon definition and scope of "principles for comprehensive
health care reform" makes it impossible for the Board and stockholders to
ascertain whether any principles subsequently adopted are in compliance with the
Proposal, and therefore render the Proposal vague and indefinite. The ability to
ensure compliance is further frustrated by the Proposal's recitation of the
Institute of Medicine principles, which introduce such sweeping concepts as
"universal," "continuous," "affordable" and "sustainable" health care coverage.
The Proposal also is vague and indefinite because the unbounded scope of the
subject matter and inherent diversity of views regarding what constitutes
compliance with the Proposal make it inevitable that the stockholders would not
know what they were voting upon. See New York City Employees' Retirement System
v. Brunswick Corp., 789 F. Supp. 144, 146 (S.D.N.Y. 1992) ("Shareholders are
entitled to know precisely the breadth of the proposal on which they are asked
to vote."); see also 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 the board of directors or the
stockholders at large to comprehend precisely what the proposal would entail.").
Such stockholder disagreement would further complicate the task of the Board in
crafting principles to implement the Proposal. 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"); Occidental Petroleum Corp. (avail. Feb 11, 1991)
("The staff, therefore, believes that the proposal may be misleading because any
action(s) ultimately taken by the [c]ompany upon implementation of this proposal
could be significantly different from the action(s) envisioned by shareholders
voting on the proposal.").
As with the stockholder proposals in Alaska Air Group, Johnson & Johnson and
Alcoa, the Proposal is vague and indefinite. Thus, we believe that that the
Proposal is in violation of Rule 14a-9, warranting exclusion on the basis of
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 Wyeth excludes the Proposal from its 2008 Proxy
Materials. We would be happy to provide you with any additional information and
answer any questions that you may have regarding this subject. Moreover, Wyeth
agrees to promptly forward to the Proponents' representatives any response from
the Staff to this no-action request that the Staff transmits by facsimile to
Wyeth only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8653, my colleague Elizabeth A. Ising at (202) 955-8287 or
Eileen M. Lach, Wyeth's Vice President, Corporate Secretary and Associate
General Counsel, at (973) 660-6112.
Sincerely,
/s/
Amy L. Goodman
ALG/eai
Enclosures
cc: Eileen M. Lach, Wyeth
Sister Barbara Aires, SC, The Sisters of Charity of St. Elizabeth
Michael D. Connelly, Catholic Healthcare Partners
Catherine Rowan, Trinity Health
Colleen Scanlon, Catholic Health Initiatives
[APPENDIX 1]
November 5, 2007
Mr. Robert Essner, CEO
Wyeth, Inc.
Five Giralda Farms
Madison, New Jersey 07940
Dear Mr. Essner,
The Sisters of Charity of Saint Elizabeth continue to be deeply committed to our
work to increase access to medicine particularly for the millions of un-insured
and underinsured and to protect shareholder value by encouraging meaningful
reform in the pharmaceutical industry. Therefore, the Sisters of Charity of
Saint Elizabeth request that the Board of Directors adopt principles for
comprehensive health care as in the attached proposal.
I have been authorized by the Sisters of Charity of Saint Elizabeth to notify
you of our intention to file this resolution for consideration by the
stockholders at the annual meeting and I hereby submit it for inclusion in the
proxy statement, in accordance with rule 14a-8 of the general rules and
regulations of the Securities Act of 1934.
The Sisters of Charity of Saint Elizabeth are the beneficial owners of at least
500 shares of stock. Under separate cover you will receive proof of ownership.
We will retain shares through the annual meeting.
If you should, for any reason, desire to oppose the adoption of the proposal by
the stockholders, please include in the corporation's proxy material the
attached statement of the security holder, submitted in support of this
proposal, as required by the aforesaid rules and regulations.
We welcome dialogue on this important issue.
Sincerely,
/s/
Sister Barbara Aires, SC
Coordinator of Corporate Responsibility
[APPENDIX 2]
Health Care Principles for the Health Care Industry
The overriding domestic policy concern of U.S. citizens involves some form of
universal health care. Besides the Iraqi war, the greatest public policy issue
in the 2008 presidential campaign has been universal health care reform.
Most citizens want their government to "guarantee health insurance for all
Americans," particularly children. They say they'd pay higher taxes to make this
possible, although they disagree about how to achieve this.
Given such findings, health care reform has become an overriding public policy
issue for the health care industry, including our company. Its paid lobbyists
seek to influence elected leaders regarding the company's position. Often this
occurs in less-than-transparent ways and, at times, against the interests of its
stakeholders.
In 2006, the health sector spent $351.1 million to lobby the federal government.
This represents 13.8% of all spending on lobbying. It nearly equals similar
spending by the financial sector. Within the health sector, manufacturers of
drugs, medical devices, and other health care products spent the most. Between
1998 and 2006, the AMA, the American Hospital Association, AARP, and PhRMA
spent, respectively, the second, fourth, sixth, and seventh most on lobbying.
Although contributions from the health sector to presidential and other federal
candidates may increase, they are projected to be dwarfed by the overall amount
the health industry spends to lobby. Most of this occurs without shareholder
consent and that of other stakeholders whose public policy interests may be
opposed to those of our company.
Currently, there is broad support across most sectors of the United States for
"fundamental changes in" or "completely rebuilding" the health care system. Our
company can no longer hide behind any veil or secrecy or argue that its lobbying
to affect public policy is "ordinary business," especially when polls show that
the goals of such lobbying may be diametrically opposed to the stated interests
of ordinary citizens such as its consumers.
Existing law demands companies reveal the amount they spend on lobbying but not
what they lobby for. Because such lobbying by the health care industry,
including that of our company, actually may counter the underlying interests of
its shareholders, therefore,
RESOLVED: shareholders urge the Board of Directors to adopt principles for
comprehensive health care reform (such as those based upon principles reported
by the Institute of Medicine:
1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for
society.
5. Health insurance should enhance health and well being by promoting access to
high-quality care that is effective, efficient, safe, timely, patient-centered,
and equitable).
Supporting Statement
As shareholders, we believe publicly-held companies should be accountable to the
public on their positions on critical public policy issues, such as universal
health care. This is especially urgent for those in the health care industry. We
urge the Board to report annually about how it is implementing such principles
and ask fellow shareholders to support this resolution.
[INQUIRY LETTER]
February 22, 2008
Direct Dial (202) 955-8653
Fax No. (202) 530-9677
Client No. C 98425-00002
VIA HAND DELIVERY
Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Supplemental Letter Regarding Stockholder Proposal of The Sisters of Charity
of St. Elizabeth, Catholic Healthcare Partners, Trinity Health and Catholic
Health Initiatives Exchange Act of 1934Rule 14a-8
Dear Ladies and Gentlemen:
On December 21, 2007, we submitted a letter (the "No-Action Request") on behalf
of our client, Wyeth, notifying the staff of the Division of Corporation Finance
(the "Staff") of the Securities and Exchange Commission that Wyeth 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
and statements in support thereof (the "Proposal") received from The Sisters of
Charity of St. Elizabeth, Catholic Healthcare Partners, Trinity Health and
Catholic Health Initiatives (collectively, the "Proponents"). A copy of the
No-Action Request, including the Proposal text, is attached hereto as Exhibit A.
The Proposal requests that Wyeth's Board of Directors adopt principles for
comprehensive health care reform and "report annually about how it is
implementing such principles." The No-Action Request indicated our belief that
the Proposal may be excluded from the 2008 Proxy Materials because, among other
reasons, the Proposal deals with matters related to Wyeth's ordinary business
operationsspecifically, employee benefitsand therefore is excludable pursuant
to Rule 14a-8(i)(7).
We now write supplementally to reiterate our position in light of the Staff's
recent no-action position in CVS Caremark Corp. (avail. Jan. 31, 2008), which
involved a stockholder proposal that is identical to the Proposal. The Staff
concurred that the proposal in CVS Caremark could be omitted on ordinary
business grounds because the proposal relates to employee benefits. See CVS
Caremark Corp. (avail. Jan. 31, 2008). Both the Proposal and the proposal in CVS
Caremark ask the companies' boards of directors to adopt principles for
comprehensive health care reform and to report annually on the implementation of
those principles at the companies. Thus, the Proposal (as with the proposal in
CVS Caremark) is directed at the nature and scope of Wyeth's employee benefits.
Specifically, by seeking annual reports on the implementation of health care
principles, the Proposal would involve stockholders in the design, maintenance,
and administration of Wyeth's health care coverage in a manner that directly
implicates Wyeth's ordinary business operations. Accordingly, the Proposal may
be excluded under Rule 14a-8(i)(7).
We would be happy to provide you with any additional information and answer any
questions that you may have regarding this subject. Moreover, Wyeth agrees to
promptly forward to the Proponents' representatives any response from the Staff
to this no-action request that the Staff transmits by facsimile to Wyeth only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (202) 955-8653, my colleague Elizabeth A. Ising at (202) 955-8287 or
Eileen M. Lach, Wyeth's Vice President, Corporate Secretary and Associate
General Counsel, at (973) 660-6112.
Sincerely,
/s/
Amy L. Goodman
Enclosures
cc: Eileen M. Lach, Wyeth
Sister Barbara Aires, SC, The Sisters of Charity of St. Elizabeth
Michael D. Connelly, Catholic Healthcare Partners
Catherine Rowan, Trinity Health
Colleen Scanlon, Catholic Health Initiatives
[STAFF REPLY LETTER]
February 25, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Wyeth Incoming letter dated December 21, 2007
The proposal urges the board of directors to adopt principles for health care
reform, such as those based upon principles specified in the proposal, and to
report annually on how it is implementing such principles.
There appears to be some basis for your view that Wyeth may exclude the proposal
under rule 14a-8(i)(7), as relating to Wyeth's ordinary business operations
(i.e., employee benefits). Accordingly, we will not recommend enforcement action
to the Commission if Wyeth omits the proposal from its proxy materials in
reliance on rule 14a-8(i)(7). In reaching this position, we have not found it
necessary to address the alternative basis for omission upon which Wyeth relies.
Sincerely,
/s/
Eduardo Aleman
Attorney-Adviser
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