Proctor & Gamble Co.

Aug. 01, 1983

INQUIRY LETTER

KAYE, SCHOLER, FIERMAN, HAYS & HANDLER

425 PARK AVENUE

NEW YORK, N.Y. 10022

(212) 407-8000

June 27, 1983

BY HAND

Securities and Exchange Commission

Division of Corporation Finance

450 Fifth Street, N.W.

Judiciary Plaza

Washington, D.C. 20549

Attention: William E. Morley, Esq.

Deputy Chief Counsel

Re: Shareholder Proposals -- Eugene L. Gaupp

Dear Sirs:

We represent Mr. Eugene L. Gaupp, a Proctor & Gamble Company ("P&G") shareholder who submitted two proposals to P&G for consideration at P&Gs forthcoming annual meeting (scheduled for October 11, 1983) and for inclusion in P&Gs proxy statement. This is in response to P&Gs position, set forth in a June 10, 1983 letter to the Commission from Mr. Ashley L. Ford, that P&G will omit from its 1983 proxy materials the two proposals submitted by Mr. Gaupp. Although we understand that you (by letter dated June 15, 1983) have preliminarily agreed with P&Gs position, we submit that such a finding would be contrary to the letter and spirit of Rule 14a-8(a)(3), and to fundamental principles of shareholder participation in corporate decision making.

P&Gs primary argument for excluding Mr. Gaupps proposals is that they are untimely because they were submitted on Monday, June 6, 1983, one day after the deadline specified by P&G in its previous proxy materials. The June 5, 1983 "deadline" imposed by P&G, however, fell on a Sunday. The Commission has never held, and P&G has cited no authority to support the proposition, that shareholder proposals required to be delivered on a Sunday are not timely served if delivered by Monday, the next business day. It was Mr. Gaupps understanding, as a shareholder interested in expressing concern on two important issues, and seeking the views of other shareholders on those two issues, that his efforts would not be frustrated because he did not visit the P&G offices on Sunday to deliver the proposals. Indeed, his understanding in that regard is consistent with the very rules applicable to papers filed before the Commission itself, which provide that papers due to be filed on a Sunday are timely if filed by Monday, the first business day following. SEC General Rule 0-3(a), 17 CFR §240.0-3(a). It would stand SEC General Rule 0-3(a) on its head to apply it to papers filed with the Commission but not to papers required by the Commission to be served on others. There is no legitimate reason to deny Mr. Gaupp his opportunity to communicate with shareholders regarding these two proposals merely because he abided by SEC General Rule 0-3(a).

Moreover, not only were Mr. Gaupps proposals timely served within the letter of Rule 14a-8(a)(3)(i) by service on Monday, June 6, 1983, but the Commission should also consider such service as timely in this case because it complies with the spirit of Rule 14a-8(a)(3)(i) and causes no injury or delay to P&G. Rule 14a-8(a)(3)(i) is intended to insure that a corporation receive shareholder proposals ninety days before the corporations proxy materials are distributed. By its terms, however, the rule requires shareholder proposals to be submitted ninety days prior to the date of the previous years proxy statement, which merely results in delivery of proposals approximately ninety days in advance of distribution of this years proxy materials. Although June 5, 1983 -- the deadline specified by P&G -- is ninety days prior to September 3, 1983, the anniversary date of last years proxy statement, there is no question that P&Gs proxy materials this year will be distributed on September 6, 1983. That is because P&G has regularly distributed its proxy statement on the Tuesday after Labor Day, which this year is September 6, 1983. Ninety days prior to September 6, 1983 was June 8, 1983, two days after Mr. Gaupps proposals were submitted.

Mr. Gaupps proposals, therefore, should not be barred on timeliness grounds. Rather, they should be regarded as timely filed, complying with both the letter and spirit of Rule 14a-8(a)(3)(i).

P&G, in its June 10, 1983 letter, makes passing but unsupported reference to Rules 14a-8(c)(1), (3), (4) and (7) as bases for excluding Mr. Gaupps proposals. P&G makes little of that argument and we shall not dignify it with a lengthy response. In an effort to ameliorate P&Gs concerns, however, we are submitting herewith a revised form of Mr. Gaupps proposals.

In sum, we believe there is no basis for P&G to exclude Mr. Gaupps proposals (in their original form or as modified) from consideration by shareholders or from its proxy statement. On the contrary, to allow P&G to do so would frustrate the very efforts at shareholder democracy which the Commission is mandated to protect. Such exclusion would allow management to arbitrarily withhold from shareholder consideration on the slightest pretext, two proposals with which it apparently disagrees, without any showing of injury to P&G or to the regulatory scheme which the Commission is empowered to enforce.

Sincerely,

Ira S. Sacks

ISS:lb

cc: Proctor & Gamble Co.

Mr. John L. Murphy - Branch Chief

REVISED SHAREHOLDER PROPOSAL

WHEREAS:

The United Steelworkers of America and Proctor & Gambles Kansas City employees have been unable to reach a first labor agreement with Proctor & Gamble after 75 bargaining sessions, although the United Steelworkers of America has been certified by the National Labor Relations Board since November 6, 1980 as the bargaining representative of Proctor & Gambles Kansas City employees, and

WHEREAS:

Since 1980, employees at Proctor & Gambles Kansas City plant have not had similar wage and benefit improvements compared to workers at other Proctor & Gamble plants.

RESOLVED, that the Board of Directors establish a subcommittee of the Board consisting entirely of outside directors to investigate the foregoing situation and to make recommendations to the full Board concerning the ongoing labor dispute with the United Steelworkers of America at the Kansas City plant.

REVISED SHAREHOLDER PROPOSAL

RESOLVED:

That the Company discontinue the use of NTA (nitrilotriacetate compound) in all consumer products.

RESOLVED FURTHER:

That the Company discontinue the use in consumer products of all substances known to cause cancer in humans or experimental animals.

RESOLVED FURTHER:

That the Board of Directors establish a subcommittee of the Board consisting entirely of outside directors to oversee the implementation of this policy. This panel should have access to all information in the Companys possession necessary to perform its function, be empowered to investigate complaints, and issue an annual report to the Stockholders and the public.

The proponent has submitted the following statement in support of this resolution:

NTA is used as a detergent builder in certain areas where phosphate use is restricted. Studies by the U.S. National Cancer Institute have shown NTA to cause cancer in laboratory animals. For this reason, New York State has announced its intention to ban NTA, and the Company has voluntarily withdrawn NTA from the New York market pending the outcome of the case. While the Company maintains that NTA is safe, many reputable scientists believe that NTA presents a threat to public health. In addition, this issue could effect consumer confidence in all Proctor & Gamble products. Consumers must be assured that the Companys products contain no suspected carcinogens. This can be accomplished by the voluntary withdrawal of NTA, a stated corporate policy against the use of suspected carcinogens in consumer products, and the establishment of a subcommittee of the Board consisting entirely of outside directors to monitor the policys implementation.

STAFF REPLY LETTER

July 1, 1983

Ira S. Sacks

Kaye, Scholer, Fierman, Hays & Handler

425 Park Avenue

New York, New York 10022

Re: The Proctor & Gamble Company (the "Company")

(Recon)

Dear Mr. Sacks:

This is in response to your letter dated June 27, 1983, which was received in my office on June 28, 1983, concerning two shareholder proposals submitted by Eugene L. Gaupp ("Proponent") to the Company for inclusion in its proxy material for the 1983 annual meeting.

By letter dated June 15, 1983, the Division concurred in the Companys conclusion that the proposals could be properly omitted from the Companys proxy material under Rule 14a-8(a)(3). Your letter was not received by the Commission until after I had responded to the Companys letter concerning this matter. In your June 27 letter you take issue with the interpretation of Rule 14a-8(a)(3) that is expressed in our June 15 letter and in the Companys letter to the staff pursuant to Rule 14a-8(d).

Rule 14a-8(a)(3) requires that a shareholder proposal be "received at the issuers principal executive offices not less than 90 days in advance of the date of the issuers proxy statement released to security holders in connection with the previous years annual meeting of security holders..." The Company indicated that the date printed on its proxy material for the 1982 annual meeting was September 3. Therefore, pursuant to Rule 14a-8(a)(3), the proposals should have been received by the management on or before June 5, 1983 in order to have been timely filed. In your opinion, because June 5 fell on a Sunday, the Proponent should have been allowed to submit his proposals in a timely manner on the following business day, Monday, June 6, when in fact they were delivered to and received by the Company. The staff, however, has consistently taken the position that in those instances where the final date for submission of a shareholder proposal under Rule 14a-8 is on a weekend, the proposal must in fact be received by the prior Friday in order to be timely filed, (see, e.g., Amax (February 18, 1977) and Southern California Edison (January 8, 1980)) Since we do not believe it necessary to alter this interpretive position, we are unable to conclude that the position expressed in our June 15 letter should be changed.

Sincerely,

John J. Gorman

Attorney Adviser

cc: Ashley L. Ford, Secretary

The Proctor & Gamble Company

P.O. Box 599

Cincinnati, Ohio 45201