Company Name: Mobil Corp.
Public Availability Date: 02-28-1991
[INQUIRY LETTER 1]
Mobil Corporation
3225 GALLOWS ROAD
FAIRFAX, VIRGINIA 22037-0001
TELEPHONE(703) 848-5362 December 14, 1990 1934 Act-Section 14(a)
Rule 14a-8 Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549 Attention: John C. Brousseau, Esq.
Special Counsel
Office of Chief Counsel
Division of Corporation Finance
Room 3033 Ladies and Gentlemen: This letter deals with a shareholder proposal which, in our view, offers a
unique opportunity for the Securities and Exchange Commission (the "Commission")
and its staff to provide useful guidance to issuers and prospective proponents.
And it suggests that the Commission endorse a new criterion of general
applicability that may substantially reduce future requests to the Commission
for no-action letters. I enclose six copies of a proposal and statement in support thereof submitted by
the Committee for Responsible Investment, Medical Mission Sisters, for inclusion
in the proxy materials of Mobil Corporation (the "Corporation" or "Mobile") for
its 1991 Annual Meeting of Stockholders. For the reasons detailed below, the
Corporation intends to omit the proposal from its proxy 14a-8 and requests that
the staff advise the Corporation that it will not recommend any action to the
Commission if the proposal is so omitted. A copy of this statement of the
reasons why the Corporation believes it is proper to omit the proposal and a
copy of a supporting opinion of counsel have been furnished to the proponent as
required by Rule 14a-8(d). A copy of such opinion is enclosed. The proposal calls for the Corporation's Board of Directors "to adopt a policy
leading to the gradual cessation of any involvement by our Company in the
production, packaging, and marketing of cigarettes by the year 2000". The
preamble to the proposal addresses the fact that Mobil manufactures transparent
plastic films, which are used by cigarette manufacturers to cover their
cigarette packages. The Films Division of Mobil Chemical Company, which Company
itself is a division of a wholly-owned subsidiary of the Corporation,
manufactures and sells a wide variety of plastic film packaging materials
utilized by many thousands of customers for a broad spectrum of uses, ranging
from cookie and candy wraps to heavy duty industrial applications. The proposal and supporting statement are attached hereto as Exhibit A. Mobil submits that the proposal may be omitted from the Corporation's proxy
material under Rule 14a-8(c)(7) by reason of the fact that the proposal deals
with a matter relating to the conduct of Mobil's ordinary business operations.
In so concluding, we are mindful of the views expressed by the Commission and
the staff earlier this year in connection with applications for no-action made
by Philip Morris Cos. Inc., American Brands, Inc. and Kimberly-Clark
Corporation, companies which manufacture cigarettes or produce or process
components of tobacco products. As indicated below, we believe there is a
meaningful distinction between those situations and the present proposal. A word about the development of Rule 14a-8(c)(7) may be useful as background.
The Commission noted in 1976, in its release on adoption of certain amendments
relating to proposals by security holders, that proposals having significant
policy, economic or other implications will be considered beyond the realm of
"ordinary business operations". The example then cited was a proposal that a
utility company not construct a nuclear power plant. Notwithstanding that such a
proposal had been deemed excludable under a prior formulation of Rule
14a-8(c)(7), the Commission concluded that the economic and safety
considerations attendant to nuclear power plants are of such magnitude that a
determination whether to construct one is not an "ordinary" business matter. See
41 Fed. Reg. 52,994, 52,998 (1976). Earlier this year, the Commission staff was unable to concur in the opinion of
Kimberly-Clark on exclusion of a proposal requesting that Kimberly-Clark's Board
of Directors amend the company's articles of incorporation to provide that after
December 31, 1999, the company not conduct any business in tobacco or tobacco
products and that the Board take the steps necessary to implement the proposed
change in business. Kimberly-Clark Corporation, February 22, 1990. Unlike Mobil in the present circumstance, Kimberly-Clark was actually engaged in
the manufacture of products constituting integral parts of cigarettes and other
tobacco products the use of which was of concern to the proponents of that
proposal. These were cigarette paper, porous plug wrap paper, conventional plug
wrap paper, tipping base paper, reconstituted cigarette tobacco and
reconstituted cigar wrappers and binders. The staff in Kimberly-Clark, reversing
its former rulings on such matters, held that the prior letters failed to
reflect adequately the growing significance of the social and public policy
issues attendant to operations involving the manufacture of tobacco related
products (emphasis added), and found that the proposal went beyond the realm of
Kimberly-Clark's ordinary business. Essentially the same line of argument was employed by the Commission in denying
no-action requests from Philip Morris and America Brands - both current
manufacturers of cigarettes. (Phillip Morris Cos. Inc., February 22, 1990;
American Brands, Inc., February 22, 1990.) Mobil need not, and does not, request that the staff (or the Commission) retreat
from the position expressed in Kimberly-Clark, Philip Morris and American
Brands. Rather, we invite the Commission to draw a "bright line" which will
afford shareholder access to issuers' proxy statements in appropriate cases, but
permit exclusion under Rule 14a-8(c)(7) in Mobil's and similar cases. In short,
we suggest the Commission adopt an approach of general applicability that
proposals to issuers who manufacture or provide integral components of the
manufacture of products of concern to shareholder proponents be include in such
issuers' proxy materials, but excluded from the proxy materials of issuers who
are not directly involved in such manufacturing and are only incidentally
involved in the broad range of activities from development to ultimate use of
such products. The proposal to Mobil provides a helpful example of the distinction we would
draw. The proposal requests cessation of "any involvement" by Mobil in the
production, packaging and marketing of cigarettes. Applied literally, this
proposal could be made to any issuer beginning with the owner of the land upon
which tobacco is to be grown through the retail seller or owner or manufacturer
of the vending machine patronized by the ultimate user. The farmer is involved.
The manufacturer of the farm equipment utilized is involved. So, too, is the
dealer who provides the fuel for the machines, and behind him those who explore
for, produce and refine the fuel he sells. So, too, are the truckers or
railroads who bring tobacco to the factory (and the builder or owner of the
factory) and those who supply equipment and fuel and other goods and services to
them. After manufacture follows distribution through another set of transporters
and their suppliers and a wholesale and retail distribution network embracing
every place where tobacco products are sold (probably including every
supermarket, drug store and miscellaneous retail outlet in the country) and all
their respective landlords and suppliers. We believe it is appropriate that
shareholder proposals should be addressed to those issuers whose activities
constitute, to some reasonable extent, the actual activity complained of. It must be recognized in candor that Rule 14-a(8), as administered by the
Commission, affords to interested shareholders a forum for the presentation of
views with which they are concerned, whether or not these views are of concern
to the other shareholders to whom they are presented or material to their
investment in financial terms. Access to issuers' proxy materials should,
however, be subject to reasonable limitation to avoid the patent absurdity of a
rule which would embrace every issuer "involved" in any way, however remote, in
the activity the proponent wishes to terminate. An appropriate limitation is suggested by the use of the word "manufacture" in
the 1990 staff response in Kimberly-Clark. Those issuers who are engaged in the
manufacture of cigarettes should, the staff and the Commission have decided,
provide a forum for ventilation of differing views on whether manufacture should
continue. But as to the myriad of others tangentially involved through provision
of goods or services not integral to the product, the decision should be
otherwise. The business involvement of the latter, who neither manufacture nor
provide materials incorporated in cigarettes, is truly "mundane" in nature and
does not raise any substantial policy consideration. See Release, 41 Fed. Reg.
52,944, 52,998 (1976); Grimes v. Centerior Energy Corporation, 909 F. 2d 529
(D.C. Cir., 1990). They are not, as the manufacturers are, the active promoters
of the business who provide the incentive to the farmer to sow his seed, and
each other participant in the long chain from the farmer to the consumer to play
his part. They are mere purveyors of neutral goods and services to a broad range
of customers some of whom may manufacture products objectionable to shareholder
proponents, but most of whom do not. They hold no brief for the continued
manufacture of any specific product to which their goods and services may be
incidental. It is inappropriate to require Mobil in the present case in effect
to defend or even to comment on the decisions of others that cigarettes should
be manufactured solely because Mobil manufactures plastic film wrap some of
which is purchased by cigarette manufacturers to wrap their products. It would
be equally inappropriate to require General Motors Corporation to do so because
it sells trucks which carry the product to market. We ask that the staff enunciate an appropriate, practical criterion for
determining the rights of interested shareholders to utilize an issuer's proxy
materials for a favored cause, recognizing such a right in the case of
manufacturers of a product deemed objectionable, but not in the case of those
indirectly involved in the extended spectrum from origin to final consumption of
the product. We consider Rule 14a-8(c)(7), and the gloss put upon it in the
Commission's 1976 Release and subsequent no-action letters and cases,
particularly appropriate for this purpose. We therefore ask that you concur in
Mobil's view that the proposal of the Medical Mission Sisters may be excluded on
that ground. By doing so, the staff will serve an important public purpose -
closing a circle which affords proxy statement access in appropriate cases while
denying it in inappropriate ones - and provide a clear rule for the guidance of
issuers and prospective proponents alike. Should you have any questions on the foregoing or wish to discuss any of the
arguments presented, please call me at (703) 846-5362 or my associate, Ralph N.
Johanson, Jr. at (703) 846-5064. Should you disagree with Mobil's position on
this proposal, we request the opportunity to present our views on the matter to
the Commission, recognizing as we do that we are requesting a ruling on a matter
of policy which may be thought to transcend the particular facts of this
situation. Very truly yours, Louis Hering LH:jkg cc: Hon. Richard C. Breeden, Chairman
Hon. Edward H. Fleischman
Hon. Mary Schapiro
Hon. Philip R. Lochner
Hon. Richard Roberts
[INQUIRY LETTER 2]
Mobil Corporation
3225 GALLOWS ROAD
FAIRFAX, VIRGINIA 22037-0001
TELEPHONE(703) 846-5362 Board of Directors
Mobil Corporation
3225 Gallows Road
Fairfax, Virginia 22037 Dear Mrs. Kaplan and Gentlemen: I refer to a proposal and statement in support thereof submitted by the
Committee for Responsible Investment Medical Mission Sisters, for inclusion in
the proxy materials of Mobil Corporation for its 1991 Annual Meeting of
Stockholders. I refer also to the letter of even date prepared and transmitted
by me on your behalf to the Securities and Exchange Commission analyzing the
proposal in light of the applicable provisions of Rule 14a-8 of the Commission.
For the reasons set forth in that letter, it is my opinion that the proposal may
be omitted from Mobil Corporation's proxy material under Rule 14a-8(c)(7) by
reason of the fact that the proposal deals with a matter relating to the conduct
of the Corporation's ordinary business operations. Very truly yours, L. Hering LH:jkg
[INQUIRY LETTER 3]
COMMITTEE FOR RESPONSIBLE INVESTMENT
338 WEST STREET
HYDE PARK, MA 02136 Mr. Allen R. Murray
Chairperson of the Board
Mobil Corporation
3225 Gallows Road
Fairfax, Virginia 22037-0001 Dear Mr. Murray: The Medical Mission Sisters have been providers of curative and preventative
health care for 65 years. We are also long-term shareholders in Mobil. As health care providers, we are very deeply concerned about the negative impact
that smoking has on health. Health statistics show that smoking contributes to
more than one in every six U.S. deaths. 390,00 people die in our country each
year from cigarette-caused diseases. This number does not include all those who
die from cigarette-caused diseases in both developed and developing countries. We were distressed that our company is involved with cigarettes by supplying the
transparent overwrap films, both acrylic coated and coextruded, for domestic and
international cigarette packaging. The Society of Catholic Medical Missionaries, also known as the Medical Mission
Sisters, is beneficial owners of 200 shares of Mobil common stock. Proof of
ownership from our broker, Hopper Soliday, is enclosed with this letter. I am hereby authorized to notify you of our intention to file the attached
proposal for consideration and action by the stockholders at the next 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 and Exchange Act of 1934. We will have a representative at the annual meeting to move the adoption of the
resolution. I realize that you share our concerns about health and the quality of life. In
last year's annual report there appears the statement: "Mobil's Product Safety
Information group ensures that our operations and customer use of our products
are safe". Mr. Tucker, in a speech given to a group of scientists and engineers
said: "We all want a safe and healthy environment for ourselves and for our
children. We all share in this responsibility; so we must all be
environmentalists...We must not compromise the common good". We believe you and
Mr. Tucker. We are willing to discuss our proposal if you should wish to do so. If you should, for any reason, desire to oppose the adoption of this proposal by
the stockholders, please include in the Corporation's proxy material the
stockholder's statement in support of the proposal as required by the aforesaid
Rules and Regulations. Sincerely, Sister Regina Rowan, S.C.M.M.
Chairperson,
Committee for Responsible Investment Enclosures: 2 Mailing Address: 20 Belgrade Avenue, Room 6
Roslindale, MA 02131 MOBILE RESOLUTION Becoming Smoke-Free by the Year 2000 WHEREAS In the U.S.A. cigarette smoking kills more people than heroin, cocaine,
alcohol, AIDS, fires, homicide, suicide, and automobile accidents combined; - Tobacco smoke is an air pollutant more cancer-causing than many widely-banned
toxic chemicals; - Children of smokers more readily suffer bronchitis, pneumonia, and other
respiratory problems than non-smokers' children; - In the U.S.A. alone, health care costs attributed to smoking-caused disease
has been estimated at $22 billion, with loss of work-years and productivity
estimated at $43 billion; - While the tobacco industry has proclaimed concern for the economic fate of
small tobacco farmers, their economic interests have been consistently subverted
when cheaper imported tobacco could be purchased; - An estimated 2,500,000 tobacco-caused deaths occur world-wide annually. The
suffering and death-toll rising from tobacco use is expected to reach 4,000,000
people by 2000. - Our Company is involved in the death chain connected to cigarettes insofar as
it supplies transparent overwrap films, both acrylic coated and coextruded, for
domestic and international cigarette packaging; - The Director General of WHO called for a 21st century "free of tobacco-related
diseases", while the U.S. Surgeon General proposed the U.S.A. become smoke-free
by 2000; THEREFORE BE IT RESOLVED that shareholders request the Board to adopt a policy
leading to the gradual cessation of any involvement by our Company in the
production, packaging, and marketing of cigarettes by the year 2000. Supporting Statement Consistent data that cigarette-smoking causes serious health hazards hasn't been
refuted by our Company and the tobacco industry despite their repeated efforts. There is nothing unprecedented about regulating production of hazards products.
Cigarettes, if used as intended, cause addiction, illness, misery and death.
Cigarettes unique because there is no way to prevent addiction and eliminate
smoking risks except to stop cigarette production. It would be criminal for
society to fail to protect non-smokers and prevent recruiting a new generation
of smokers (American Cancer Society). If you agree and want to make our world healthier for the next generation,
please vote in favor of this resolution and make Mobil smoke-free by 2000 by
ending our tobacco connection.
[INQUIRY LETTER 4]
PAUL M. NEUHAUSER
914 HIGHWOOD STREET
IOWA CITY, IOWA 52240
TELEPHONE(319) 335-9076 February 01, 1991 Securities & Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 Att: John C. Brousseau, Esq.
Office of the Chief Counsel
Division of Corporation Finance Re: Shareholder Proposal Submitted to Mobil Corporation Dear Sir/Madam: I have been asked by the Society of Catholic Medical Missionaries (the Medical
Mission Sisters) (which Roman Catholic religious institution is hereinafter
referred to as the "Sisters"), which is the beneficial owner of 200 shares of
common stock of Mobil Corporation (hereinafter referred as "Mobil" or the
"Company"), and which has submitted a shareholder proposal to Mobil, to respond
to the letter dated December 14, 1990, sent to the Securities & Exchange
Commission by the Company, in which Mobil contends that the Sisters' shareholder
proposal may be excluded from the Company's 1991 proxy statement by virtue of
Rule 14a-8(c)(7). Unfortunately, a copy of the December 14 letter was not sent
by Mobil to the Sisters until January 7, 1991, nearly three and one-half weeks
after the time that Rule 14a-8(d) required Mobil to send it to the Sisters. This
delay has prejudiced the Sisters by preventing the undersigned from responding
as fully as would have been possible had Mobil complied with the Rule. I have reviewed the Sisters' shareholder proposal, as well as the aforesaid
letter sent by the Company, and based upon the foregoing, as well as upon a
review of Rule 14a-8, it is my opinion that the Sisters' shareholder proposal
must be included in Mobil's 1991 proxy statement and that it is not excludable
by virtue of Rule 14a-8(c)(7). There is much that is helpful, even satisfying in Mobil's thoughtful and well
considered letter. Its recitation of the history of the Rule and the general
principles which should govern its application is an wholly accurate reading of
that history and those principles. Its expressed desire for the establishing of
a bright line to be applied under Rule 14a-8(c)(7) is also understandable, and
such a line may even be desirable. Nevertheless, we are constrained to disagree
that the particular bright line which Mobil suggests is the appropriate one or,
even if it is the appropriate line, that its application would result in the
exclusion of the Sisters' shareholder proposal by Rule 14a-8(c)(7). First, the question of whether the bright line suggested by Mobil is an
appropriate one to be used under 14a-8(c)(7). As we read Mobil's letter, that
line would be drawn so as to require the inclusion of a shareholder proposal in
an issuer's proxy statement only if the issuer either directly manufactures or
provides "integral components of toward? the manufacture" of the product at
issue. Thus, if the issuer was neither a manufacturer of the product at issue
nor of a component used in that product, a shareholder proposal concerning that
product would be excludable by Rule 14a-8(c)(7) as one dealing with an ordinary
business matter. The drawing of a bright line in such a manner would produce undesirable results.
For example, at one time it was common for banks and others in the United States
to offer for sale the South African Krugerrand, a gold coin manufactured in
South Africa for the South African government and exported by that government as
an explicit part of its balance of payment policy. Importation of the Krugerrand
was banned by an Executive Order issued by President Reagan on October 1, 1985
(Ex. O. No. 12535). Subsequently, in 1986, Congress also banned the importation
of Krugerrands (See 22 USCA 5051) and provided penalties for any violation of
that ban (See 22 USCA 5113). However, prior to the taking of action by either
the President or the Congress, the SEC Staff had held that a shareholder
proposal addressed to a retail seller of Krugerrands requesting that seller to
cease selling the coins was not subject to exclusion by Rule 14a-8(c)(7). First
Union Bancorporation (February 7, 1980). The bright line suggested by Mobil
would have precluded that president Staff decision, since the issuer had not
manufactured the product, but was a mere vendee of it. (Cf. also The Southern
Company (March 14, 1977), involving the importation of South African coal.) It
is thus apparent that the sale of a given product, as well as its manufacture,
can raise those public policy issues which preclude the application of Rule
14a-8(c)(7) to tobacco or South African shareholder proposals. A further example
of why the public policy exception of (c)(7) should not be restricted solely to
manufacturers can be seen by examining some issues which have arisen in
connection with sales of Mobil's principal product, petroleum. Unlike
cigarettes, there is, of course, nothing inherently evil in the production of
gasoline. Nevertheless, despite Mobil's suggestion that merely supplying
gasoline will be too remote an activity, the supply of petroleum products, to
certain types of purchasers has, indeed, withstood a (c)(7) attack. In Mobil
Corporation (February 11, 1978) a shareholder proposal that Mobil reduce its
sales to the nation of South Africa by one third was held by the Staff not to be
excludable under Rule 14a-8(c)(7). (Note that the shareholder proposal was
addressed to the importation of petroleum products, and it was irrelevant
whether Mobil imported crude or refined product that it had itself produced or
whether it purchased product on the open market for shipment to South Africa.)
Subsequently, when shareholder proposals requesting that Mobil make no sales of
petroleum products to the South Africa military or police, Mobil's then
corporate securities counsel, Kathleen Warwick, a well-reputed expert on Rule
14a-8, did not even make a (c)(7) argument in opposing the shareholder proposal.
Mobil Corporation (February 26, 1981 (American Lutheran Church). Cf Mobil
Corporation (March 6, 1980) (no such argument made in Mobil's submission to the
SEC). Also, see Texaco. Inc (February 7, 1983) (no (c)(7) argument made by
Texaco on a similar shareholder proposal). More generally, shareholder proposals
which would restrict the sale of goods to nations with repressive regimes have
consistently survived 14a-8(c)(7) attack. In these instances, whether the issuer
has itself manufactured the goods is irrelevant, because it is the nature of the
purchaser itself which is at issue. Consequently, it is apparent that in
applying Rule 14a-8(c)(7) the total context of the sale is the key determinant
in deciding whether important public policy issues have been raised by the
shareholder proposal, and that any artificial restriction to the manufacturer of
the product itself will undermine the basic philosophy of that Rule, which is to
permit shareholder proposals which raise important public policy issues.
Therefore, the bright line proposed by Mobil will not successfully winnow the
wheat from the chaff. On the contrary, it will be necessary, on a case by case
basis, to examine the means between (i) the specific activity of the issuer at
which the shareholder proposal is aimed and (ii) the underlying public policy
issue. There are numerous other examples of shareholder proposals which have
successfully withstood attack under Rule 14a-8(c)(7) despite the fact that the
issuer, which was not the manufacturer of the product, had only an indirect
relationship to the underlying social injustice. For example, shareholder
proposals concerning the transportation of nuclear weapons have survived attack
under Rule 14a-8(c)(7) by issuers which had no participation in the manufacture
of the nuclear weapon, but were merely transporting them. Burlington Northern
Inc. (February 19, 1985). It is thus apparent that the bright line suggested by
Mobil will not serve to distinguish between those shareholder proposals which
are excludable by virtue of Rule 14a-8(c)(7) and those which are not. In addition, the supplying of standard commercial products which are innocent in
and of themselves, has been held by the Staff not to cause a shareholder
proposal concerning weapons sales to be excludable under Rule 14a-8(c)(7).
Eastman Kodak Company (February 22, 1984). The corporate community itself apparent believes that (c)(7) is inapplicable to
another type of shareholder proposal despite the fact that the issuer clearly
has only an indirect relationship to the underlying social injustice. These are
proposals which have called on owners of minority interests in a third company
to try to persuade that third company to take a given action with respect to
South Africa. (See American Telephone and Telegraph Company (January 20, 1987),
with respect to AT&T's investment in Olivetti, where experienced counsel did not
even argue (c)(7), although (c)(5) and other subparagraphs were argued). Note
also that NCNB, which is usually litigious on shareholder proposals, has not
contested a shareholder proposal which will appear in 1991 for the third year
requesting NCNB to use its portfolio ownership of stock in Royal Dutch Shell to
join other shareholders in calling for a special shareholder meeting of that
Dutch company to consider terminating its South Africa ties. Finally, it should be noted that many issuers which are not directly involved in
the actual manufacture of tobacco products have nevertheless taken steps to
disassociate themselves from secondary connection with a product that kills
400,000 Americans per year. For example the undersigned is informed that in
response to a shareholder proposal submitted (and subsequently withdrawn) by the
Sisters, Minnesota Mining and Manufacturing Company has agreed to phase out all
tobacco advertising on the numerous billboards owned by a subsidiary. Similarly,
Travelers Corporation, in response to a subsequently withdrawn shareholder
proposal has revealed a previously existing policy of sharply curtailing
investments in tobacco producers. It is therefore apparent that the corporate
community itself recognized that tobacco raises significant policy issues not
only for the direct producers of tobacco products, but also for the penumbra of
companies which surround that direct producer. In summary, the only conclusion that one can draw from the foregoing Staff
opinions and actual company practices is that, as already noted, the bright line
proposed by Mobil will not successfully winnow the wheat from the chaff. On the
contrary, it will be necessary, on a case by case basis, to examine the nexus
between (i) the specific activity of the issuer at which the shareholder
proposal is aimed and (ii) the underlying public policy issue. II When one makes such an examination in the instant situation, it becomes apparent
that the Sisters' shareholder proposal is not excludable by Rule 14a-8(c)(7).
Mobil is not in the position of some remote vendor which sells gasoline to a
truck which transports some seed to a tobacco farmer. Mobil is within the
penumbra. It is intimately involved with the manufacture and sale of tobacco
products by supplying the container (or one layer of the container) in which
product which painfully kills hundreds of thousands of persons per year is both
transported and sold. The packaging of the product is as essential as the
product itself. Not only is it intended to attract customers, but without proper
packaging sales by the tobacco industry would undoubtedly collapse because the
tobacco in the cigarette would dry up and become state long before the consumer
had the opportunity to purchase the product. Thus, without Mobil's contribution,
tobacco sales would decline sharply, or perhaps disappear entirely.
Consequently, the nexus between Mobil's activity and the underlying societal
concern about tobacco is an intimate one. III For similar reasons, even if the Staff were to accept Mobil's bright line
suggestion, Mobil's activities would fall on the wrong side of that line. by
supplying an ingredient essential to the successful manufacture and sale of
tobacco products, is in a situation identical to that of Kimberly-Clark. (See
Kimberly-Clark Corporation February 22, 1990.) In summary, the bright line suggested by Mobil is not the line which will
successfully separate the "mundane" from significant policy matters. But whether
or not Mobil's suggested test is adopted under Rule 14a-8(c)(7), the Sisters'
shareholder proposal is not subject to exclusion by that subparagraph of Rule
14a-8. In conclusion, we request the Staff to inform the Company that the SEC proxy
rules require denial of the Company's no-action request. We would appreciate
your telephoning the undersigned at 319-335-9076 with respect to any question in
connection with this matter or if staff wishes any further information. Very truly yours, Paul M. Neuhauser
Attorney at Law cc: Louis Hering, Esq.
Sr. Regina Rowan
Fr. Michael Crosby
Tim Smith
[STAFF REPLY LETTER]
February 28, 1991 REVISION OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE Re: Mobil Corporation (the "Company")
Incoming letter dated December 14, 1990 The proposal requests that the Company's board of directors adopt a policy
leading to the gradual cessation of any involvement by the Company in the
production, packaging and marketing of cigarettes by the year 2000. There appears to be some basis for your view that the proposal may be omitted
from the Company's proxy material. In arriving at this position the staff
particularly notes that the Company is not directly involved in the manufacture
of tobacco activities from development to ultimate use of such products. In this
regard, we note your oral representation that the Company's earnings
attributable to sales of transparent plastic films to cigarette manufacturers in
its most recent fiscal year accounted for less than 1% of the Company's total
earnings for the period. Under the circumstances, the Division will not
recommend enforcement action to the Commission if the proposal is excluded from
the Company's proxy materials. Sincerely, William H. Carter
Special Counsel
|
