KFT » Topics » The Board recommends that you vote AGAINST this proposal.

This excerpt taken from the KFT DEF 14A filed Mar 31, 2009.

The Board recommends that you vote AGAINST this proposal.

Your Board is deeply committed to effective corporate governance. For example, you elect directors annually by majority vote. Your Board periodically reviews Kraft Foods’ corporate governance practices. Following one recent review, your Board amended Kraft Foods’ By-Laws to provide that shareholders representing at least 20% of Kraft Foods’ outstanding common shares may call a special meeting of shareholders. (See Exhibit C of this Proxy Statement.) To avoid unnecessary costs, we need not call a special meeting to address a matter that you are scheduled to address at an upcoming shareholder meeting or that you recently addressed at another shareholder meeting. Nor must we call a special meeting for an unlawful purpose or if the written request for a special meeting violated any applicable law or regulation.

The 10% threshold that Mr. Steiner advocates is inappropriately low. It allows a few shareholders to call special meetings for their own narrow purposes or on topics in which most of you have little interest. Kraft Foods’ current 20% threshold better protects you from such abuse and is generally consistent with practices at other major companies that provide for shareholders to call special meetings.

Mr. Steiner’s proposal also would require us to call for special meetings when the same matter has recently been rejected by you or is expected to be considered at another scheduled meeting. Any shareholder meeting is expensive for Kraft Foods and its shareholders. We must pay for the preparation and distribution of disclosure documents as well as pay the expenses of the meeting itself. Depending upon the circumstances, postage alone could exceed $450,000. Also, your Board and management must divert time from the business to prepare for and conduct the meeting.

Kraft Foods is incorporated in Virginia. Virginia legal counsel advised your Board that implementing Mr. Steiner’s proposal would violate the Virginia Stock Corporation Act (the “Act”). The Act grants unlimited power to Kraft Foods’ Board or Chairman to call a special meeting. Mr. Steiner’s proposal limits the shareholders’ ability to call special meetings to holders of 10% or more of Kraft Foods’ shares and also requires that condition be applied to “management and/or the board,” thereby limiting your Board’s power to call a special meeting. In addition, under Virginia law and the NYSE’s listing standards, you already have the right to vote on significant transactions, such as certain stock issuances, a merger or a sale of substantially all of Kraft Foods’ assets. If Mr. Steiner’s proposal is implemented, your Board may not be able to call a special meeting to obtain your approval of such a transaction.

Your Board believes that Kraft Foods’ current approach to special meetings affords you appropriate opportunities to call a special meeting while protecting you from abuses by a small minority of shareholders.

Lastly, Mr. Steiner criticizes Kraft Foods’ corporate governance practices. He cites outdated and misleading information from The Corporate Library, a corporate governance rating firm. For example, Mr. Steiner’s concern about director “over-extension” disregards your Board’s review of Mr. Pope’s attendance record (100% of Audit Committee meetings during 2008) and determination that his simultaneous service on more than three public company audit committees does not impair Mr. Pope’s leadership of Kraft Foods’ Audit Committee. Mr. Steiner’s representation that Myra Hart holds no Kraft Foods stock is outdated. She has owned stock since May 2008.

This excerpt taken from the KFT DEF 14A filed Mar 10, 2006.

The Board recommends a vote AGAINST this proposal.

The Company is committed to supporting the communities where we live and do business. Last year alone, the Company provided over $85 million in food and financial support to hundreds of non-profit organizations around the world.

The Company's charitable contributions program emphasizes three global focus areas relevant to its business: (a) promote better nutrition and more physical activity, (b) combat hunger and (c) promote agricultural sustainability. In addition, the Company supports local charities and civic events in its home communities, with an emphasis on organizations and events in Chicago, where our headquarters is located.

Diversity in all its forms is important to the Company. Based on a suggestion from one of our employee councils that help promote our awareness of and commitment to diversity, Kraft contributed $25,000 to the non-profit, tax-exempt entity that organizes the Gay Games VII. This will be an eight-day sports and cultural event that the City of Chicago is officially supporting. Other contributors to the event include CNA Insurance, Exelon, Harris Bank, and Walgreen's.

In short, while we understand the Proponent's position, the contribution was one of hundreds of donations that the Company made last year in the Chicago area and was well within the scope of our overall charitable giving program.

This excerpt taken from the KFT DEF 14A filed Mar 4, 2005.

The Board recommends a vote AGAINST this proposal.

In many countries around the world, farmers are cultivating food crops enhanced through biotechnology. Indeed, estimates show that during 2004 more than eight million farmers in seventeen countries used roughly 200 million acres to produce soy, corn, canola, cotton and other crops using biotechnology. Further, in the United States, biotechnology has contributed to many foods for nearly a decade.

Prestigious governmental and scientific organizations, including the World Health Organization, the Food and Agriculture Organization of the United Nations, the Organization for Economic Cooperation and Development, and the U.S. National Academy of Sciences, have concluded that biotechnology can be a safe and useful element of food production. For example, the U.S. Institute of Medicine, which is part of the National Academy of Sciences, stated in a 2004 report: "To date, no adverse health effects attributed to genetic engineering have been documented in the human population." It is therefore common in many countries to cultivate genetically engineered food crops for various reasons, including to reduce the need for pesticides and to increase crop yields.

The safety and quality of the Company's products and the trust of the Company's consumers are extremely important to the Board. The Company is aware that points of view can vary on the topic of food biotechnology. Therefore, beyond compliance with regulations, the Company stays abreast of scientific developments regarding the safety of food biotechnology, monitors consumer and public perceptions, and tracks regulatory trends to ensure responsible conduct in this regard.

In the United States, the Food and Drug Administration ("FDA") oversees new genetically modified plant varieties intended for use in human food and animal feed through its voluntary pre-market consultation process, while the Department of Agriculture and the Environmental Protection Agency assess potential agricultural and environmental impact. In 2003, the Commissioner of the FDA stated that the agency "is confident that the genetically engineered food products on the U.S. market today are as safe as their conventionally bred counterparts, and the agency is prepared to meet the safety and regulatory challenges presented by new products as they emerge from the laboratory...Genetically engineered foods must adhere to the same high standards of safety under the Federal Food, Drug, and Cosmetic Act that apply to more traditional food products." (FDA Consumer Magazine, Nov-Dec 2003)

The European Union has established a rigorous approval system to assess the safety and environmental impact of genetically modified foods, and a number of other countries have adopted regulatory requirements specifically governing such products. The Company supports science-based regulations that ensure the safety of the food supply and protect the environment yet recognize the usefulness of biotechnology.

The shareholder proposal asks that the Board review the Company's policies related to genetically engineered products and report on this topic to shareholders. In fact, the Board is keenly aware of this topic and has considered it in detail to assure itself that the Company's practices are responsible. Further, the Company has put extensive information on its policies related to biotechnology on its website (http://kraft.com/responsibility/quality_food_biotechnology.aspx). The site explains the factors that the Company considers in assessing the use of ingredients, including the requirement of a scientific consensus that the ingredient is safe, consumer acceptability, and legal compliance. The site also describes the Company's support for effective, science-based regulation of food biotechnology and gives links to authoritative scientific bodies and other organizations that represent a range of viewpoints on the subject of food biotechnology.

In short, the Company approaches biotechnology issues with due respect for scientific authorities, legal obligations, and the interests of its consumers, customers, and shareholders. The Board believes this resolution is unnecessary.

"The Board recommends that you vote AGAINST this proposal." elsewhere:

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