Company Name: Exxon Corp.
Public Availability Date: 02-02-1987INQUIRY LETTER
EXXON CORPORATION
1251 AVENUE OF THE AMERICAS
NEW YORK, N.Y. 10020-1198
TELEPHONE(212) 333-6398 November 26, 1987 Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549 Attention: Ms. Cecilia D. Blye Dear Ms. Blye: Re: Shareholder proposal Exxon Corporation has received from Dorothy Braude Edinburg a proposal to
increase dividends and statement in support thereof for inclusion in the proxy
material for its 1987 annual meeting of shareholders. As Exxon intends to omit
the proposal and statement from such proxy material, this letter and its
enclosures are being sent to the Commission for filing, pursuant to paragraph
(d) of Rule 14a-8. 1. The Proposal Enclosure 1 hereto is a copy of the shareholder proposal to which this letter is
addressed. 2. Proponent's Statement in Support of Proposal Enclosure 1 hereto is also a copy of the statement in support of the proposal,
as received from the proponent. 3. Statement of Reasons for Omission Exxon believes that it is entitled to omit the proponent's proposal and
statement, pursuant to paragraphs (c)(1), (c)(2), (c)(3) and (c)(13) of 14a-8,
for the reasons set forth below: Paragraph (c)(1) Exxon is incorporated under the laws of the state of New Jersey. Those laws
clearly establish that the declaration of dividends lies solely within the
competence of a corporation's board of directors. N.J. Stat. Ann. §14A:7-14 (1),
7-15 (1) (West 1969). Thus Exxon, pursuant to paragraph (c)(1) of the rule, is
entitled to omit the proponent's proposal and statement as the proposed dividend
action is not a proper subject for action by security holders. Paragraph (c)(2) The proponent's proposal, if implemented, would require an increase in the
dividend payout ratio without regard to another provision of the laws of the
state of New Jersey. Those laws specifically provide that cash dividends may
only be paid out of surplus, or, if dividends should exceed surplus, to the
extent that the cost of wasting or specific assets has been recovered by
depletion reserves, amortization or sale. N.J. Stat. Ann. $14A:7-14 (2) (West
1969). Implementation of the proposal could require violation of that provision
and thus, in Exxon's view, the proposal and statement may omitted pursuant to
paragraph (c)(2) of the Rule. Paragraph (c)(3) The proponent's proposal explicitly asserts that the proposed dividend action
would enhance share value. Exxon submits that proposition is speculative and
therefore misleading, in violation of Rule 14a-9. Thus Exxon is entitled to omit
the proposal, pursuant to paragraph (c)(3). Paragraph (c)(13) The proponent's proposal and statement refer to an increase in the dividend
"payout ratio" from the previous year, "increasing the rate of return in the
form of dividends" and, finally, to "increasing the dividends yearly by a rate
of at least 10%." Such a formula would establish a specific amount of cash
dividends, and omission of the proposal and statement is appropriate pursuant to
paragraph (c)(13). Exxon's position regarding a dividend formula is supported by
no-action letters form the Commission's staff. The Rhymer Co. (January 3, 1986);
Thetford Corp. (October 24, 1985). Pursuant to paragraph (d) of Rule 14a-8, enclosed are five additional copies of
this letter and six copies of each of the above-mentioned enclosures, and a copy
of this letter is being sent to the proponent. If you desire any further
information with respect to this matter, please telephone me at 212-333-6398. Very truly yours, DEC:ep
Enclosure, as stated
cc: Dorothy Braude Edinburg Exxon Corp: Shareholder Records
1251 Avenue of the Americas
New York, New York 10020 Dear Sir: I would like this shareholder proposal on your Proxy Statement for the first
Annual Shareholders Meeting that the timing of the proposal would permit. Please call me if there are any questions. Very sincerely yours Dorothy Braude Edinburg
192 Fairway Road
Chestnut Hill, Massachusetts 02167 617-738-8135 or 731-1643 RESOLVED that the Directors vote to increase the dividend payout ratio from the
previous year for the upcoming year so as to enhance to shareholder stock value
and retain shareholder long term loyalty by increasing the rate of return in the
form of dividends. Reasons: Under the Tax Reform Act long term capital gains are now taxed at the
same rate as ordinary income, making risk free income more attractive. Many
stock market analysts have opined that stocks will once again be purchased on
the basis of rate of return in the form of dividends because of the Tax Reform
Act and the lowering of income tax rates. The company in order to increase
shareholder value and longterm loyalty and thusly to prevent disruptive and
hostile takeovers and the disaffection of loyalty should increase shareholder
value by increasing the dividend payout as well as increasing the dividends
yearly by a rate of at least 10%.
[STAFF REPLY LETTER]
RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Exxon Corporation (the "Company")
Incoming letter dated November 26, 1986 The proposal and supporting statement relate to increasing the dividend payout
ratio from the previous year and increasing dividends yearly by at least 10%. There appears to be some basis for your view that the proposal may be omitted
from the Company's proxy material under Rule 14a-8(c)(13), which provides that a
proposal may be omitted if it "relates to a specific amount of cash or stock
dividends." Since the subject proposal and supporting statement purport to
establish a formula for dividend payments, it is our view that the proposal
relates to a specific amount of dividends and is, therefore, excludable under
paragraph (c)(13) of Rule 14a-8. Under the circumstances, this Division will not
recommend any enforcement action to the Commission if the Company omits the
subject proposal from its proxy material. In considering our enforcement
alternatives, we have not found it necessary to reach the other bases for
omission upon which you rely. Sincerely, Cecilia D. Blye
Special Counsel
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