Company Name: Bank of America Corp. (Inman)
Public Availability Date: February 14, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 19, 2005
BY OVERNIGHT DELIVERY
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, DC 20549
Re: Stockholder Proposal Submitted by Frank Coleman Inman
Ladies and Gentlemen:
Bank of America Corporation (the "Corporation") has received a proposal dated
October 14, 2005 (the "Proposal") from Frank Coleman Inman (the "Proponent"),
for inclusion in the proxy materials for the Corporation's 2006 Annual Meeting
of Stockholders (the "2006 Annual Meeting"). The Proposal is attached hereto as
Exhibit A. The Corporation hereby requests confirmation that the staff of the
Division of Corporate Finance (the "Division") will not recommend enforcement
action if the Corporation omits the Proposal from its proxy materials for the
2006 Annual Meeting for the reasons set forth herein.
GENERAL
The 2006 Annual Meeting is scheduled to be held on or about April 26, 2006. The
Corporation intends to file its definitive proxy materials with the Securities
and Exchange Commission (the "Commission") on or about March 20, 2006, and to
commence mailing to its stockholders on or about such date.
Pursuant to Rule 14a-8(j) promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") enclosed are:
1. Six copies of this letter, which includes an explanation of why the
Corporation believes that it may exclude the Proposal; and
2. Six copies of the Proposal.
A copy of this letter is also being sent to the Proponent as notice of the
Corporation's intent to omit the Proposal from the Corporation's proxy materials
for the 2006 Annual Meeting.
SUMMARY OF PROPOSAL
The Proposal requests that the Corporation's Board of Directors (the "Board")
nominate at least 50% more director nominees than there are open board seats.
Specifically, the Proposal states:
"Resolved: The shareholders recommend that our board of directors nominate at
least fifty percent more director nominees than there are open board seats.
Shareholders will be provided in the proxy materials with the director nominee
names, SEC-required declarations, biographical sketches, and photographs. Then
shareholders or legal agents of shareholders will be able to vote their shares
for no more than one nominee for each open seat.
From all shares voted, the director nominees with the most votes for the
available seats will comprise the new board until the next board election. The
board of directors has the discretion of fully endorsing all director nominees
or recommending, as they currently do to the shareholders, one director for each
open seat."
REASON FOR EXCLUSION OF PROPOSAL
The Corporation requests that the Division concur with its view that the
Proposal may properly be omitted from its 2006 proxy materials pursuant to the
provisions of Rule 14a-8(i)(12)(iii) because the Proposal is identical to or
deals with substantially the same subject matter as prior proposals that have
been included in the Corporation's proxy materials three times within the
preceding five calendar years and the Proposal received less than 10% of the
vote in its most recent submission to shareholders at the Corporation's 2005
annual meeting of shareholders (the "2005 Annual Meeting").
The Proposal May be Excluded Under Rule 14a-8(i)(12)(iii).
Pursuant to Rule 14a-8(i)(12)(iii), the Proposal may be excluded from the
Corporation's 2006 proxy materials. Rule 14a-8(i)(12)(iii) states:
"(12) Resubmissions: If the proposal deals with substantially the same subject
matter as another proposal or proposals that has or have been previously
included in the company's proxy material within the preceding 5 calendar years,
a company may exclude it from its proxy materials for any meeting held within 3
calendar years of the last time it was included if the proposal received:
...
(iii) Less than 10% of the vote on its last submission to shareholders if
proposed three times or more previously within the preceding 5 calendar years."
The Proposal is identical (with only minor changes to the supporting statement)
to shareholder proposals submitted and voted upon at the Corporation's annual
meetings held in 2005 and 2004. In fact, those two proposals were submitted by
the Proponent himself. The Proposal is also substantially the same as a proposal
submitted and voted upon at the Corporation's annual meeting held in 2002 (the
"2002 Proposal").
The 2002 Proposal urged the Board "to take the necessary steps to nominate at
least two candidates for each open board position, and that the names,
biographical sketches, SEC-required declarations and photographs of such
candidates shall appear in the company's proxy materials (or other required
disclosures) to the same extent that such information is required by law and is
our company's current practice with the single candidates it now proposes for
each position."
The 2002 Proposal is substantively the same as the Proposal (that is, more than
one candidate for each board seat), and varies from the Proposal almost solely
in that it contemplates the inclusion of a higher number of excess nominees.
Copies of the shareholder proposals referred to above which were voted upon at
the Corporation's 2005, 2004 and 2002 annual meetings of shareholders are
attached hereto as Exhibits B, C and D, respectively.
The Commission has stated that judgments under Rule 14a-8(i)(12) are to be
"based upon a consideration of the substantive concerns raised by a proposal
rather than the specific language or actions proposed to deal with those
concerns." Exchange Act Release No. 34-20091 (August 16, 1983). The substantive
concerns in the Proposal and the 2002 Proposal clearly are the same. The
supporting statements related to the proposals both highlight the intent of the
proponents to give shareholders a greater hand in director elections beyond the
withholding of votes. Whether 50% or 100% more nominees were proposed, the same
substantive concern is addressed in all four proposals.
The Division consistently has concluded that companies may properly exclude
resubmissions on the basis of similar substantive concerns, notwithstanding
differences in specific language or implementing activities. See Verizon
Communications, Inc. (January 21, 2005); AT&T Corporation (February 17, 1998);
Cooper Industries (January 14, 1997); Bristol-Myers Squibb Company (February 6,
1996; United Technologies Corporation (January 11, 1995); American Brands, Inc.
(February 10, 1994); The Gillette Company (February 25, 1993); and The
Interpublic Group of Companies (April 3, 1992).
If, as is the case here, a shareholder proposal has been submitted for a
shareholder vote three times within the preceding five calendar years, the
proposal may properly be omitted if it received less than 10% of the vote the
last time it was submitted.
The last time the proposal was submitted and voted upon, at the 2005 Annual
Meeting, there were 237,544,397 votes cast "for" the 2005 Proposal and
2,479,472,018 votes cast "against" the 2005 Proposal. As described in Section
F.4 of the Division of Corporation Finance: Staff Legal Bulletin No. 14 (July
13, 2001), only votes cast "for" and "against" a proposal are included in the
calculation of the shareholder vote on the proposal. Based on the formulation,
the number of shares voting "for" the 2005 Proposal at the 2005 Annual Meeting
constituted 8.74% of the total number of shares voting on the 2005 Proposal, as
shown in the following calculation: |[NCCDEF,20] |[UCA1] |[TDC3,MP2,QC,VM]
|[TCC4,M'::::',QC,VM] |[TCC4,MP1,QC,VM] |[TCC4,M'::::',QC,VM]
|[TCC4,M'0.00%',QC,VM] |[XT] |[ST]|[LC10]|[RS4]237,544,397 |[TA]
|[TA]237,544,397 |[TA] |[TA] |[ST]|[LC2]|[TU204] |[TN2]|MATH|4 |[TA]|[TU204]
|[TN4]|MATH|4 |[TA]8.74%
|[ST]|[LC3]|[WS]237,544,397|[WS]|MATH|0|[WS]2,479,472,018|[WS] |[TA]
|[TA]2,717,016,415 |[TA] |[TA] |[ET]
Accordingly, the percentage vote in favor of the 2005 Proposal submitted for a
shareholder vote at the 2005 Annual Meeting was less than 10%.
CONCLUSION
The Proposal is substantially similar to shareholder proposals voted upon three
times in the preceding five calendar years, and in the vote on its most recent
submission, the 2005 Proposal received less than 10% of the total votes cast.
Accordingly, the Corporation requests that the Division concur with the
Corporation's view that the Proposal may properly be omitted from the Proxy
Materials pursuant to Rule 14a-8(i)(12)(iii). Should the Division disagree with
the Corporation's position or require any additional information, we would
appreciate the opportunity to confer with the Division concerning these matters
prior to the issuance of its response.
If you have any questions or would like any additional information regarding the
foregoing, please do not hesitate to contact the undersigned at 704.386.5083.
Please acknowledge receipt of this letter by stamping and returning the enclosed
receipt copy of this letter. Thank you for your prompt attention to this matter.
Very truly yours,
/s/
William J. Mostyn III
Deputy General Counsel and Corporate Secretary
cc: Frank Coleman Inman
[INQUIRY LETTER]
October 14, 2005
Bank of America Corporation
Attention: Corporate Secretary
101 South Tryon Street
NC1-002-29-01
Charlotte, North Carolina 28255
Dear Corporate Secretary:
The following is my stockholder's proposal for consideration at the 2006 Annual
Meeting:
Stockholder Proposal Regarding Nomination of Directors
Resolved: The shareholders recommend that our board of directors nominate at
least fifty percent more director nominees than there are open board seats.
Shareholders will be provided in the proxy materials with the director nominee
names, SEC-required declarations, biographical sketches, and photographs. Then
shareholders or legal agents of shareholders will be able to vote their shares
for no more than one nominee for each open seat.
From all shares voted, the director nominees with the most votes for the
available seats will comprise the new board until the next board election. The
board of directors has the discretion of fully endorsing all director nominees
or recommending, as they currently do to the shareholders, one director for each
open seat.
Stockholder's Statement Supporting Item
In our typical board elections, stockholders have only one director nominee
option for each open board position. Any shareholder(s) can withhold votes for
any or all nominees, but lacking alternate director nominees, the election
results remain preordained. This lack of options for typical shareholders means
that all director nominees will be elected whether most stockholders believe
each nominee will represent most shareholders well or not, raising
accountability and control issues to many shareholders.
Director priorities other than representing most stockholders have often
contributed to corporate downfalls; examples may include Enron and Worldcom. Our
directors have approved large merger/acquisition deals overly generous to the
other firms' stockholders at the short term expense of Bank of America
stockholders; the FleetBoston and MBNA deal announcements were each quickly
followed by the loss of billions of dollars of BAC stock market capitalization.
While Bank of America directors have a good overall track record of helping grow
shareholder wealth, better director oversight via shareholder choice may
increase shareholders' control of investments.
Similar solutions for shareholder and/or member choice are often recommended by
corporate governance experts and are successfully implemented by many
organizations, including the publisher of Consumer Reports. Two years ago, when
this proposal was first put before BAC stockholders, over 94 million shares
(equal to over 188 million shares post August 2004 stock split) were voted in
favor, a strong start. Last year, this proposal grew more popular with BAC
stockholders, as over 237 million shares were voted in favor.
Providing positive, practical director choice for stockholders may increase our
Bank of America stock price, via more stockholder control of our BAC
investments. Corporate governance may improve most via better board elections,
and this practical solution makes sense for most Bank of America stockholders.
The above concludes my stockholder's proposal to be included in the proxy
statement for the 2006 Annual Meeting. As I am submitting this proposal prior to
the November 28, 2005 proxy statement deadline, the favor of a prompt reply is
requested.
Of course, I intend to continually hold at least $2,000 worth of Bank of America
common stock through the 2006 BAC stockholders' meeting, per SEC requirements
for a stockholder's proposal. In fact, I am not planning on selling any of my
29,600 shares.
Sincerely,
/s/
Frank Coleman Inman
[INQUIRY LETTER]
December 24, 2005
BY PRIORITY DELIVERY
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, DC 20549
Re: Stockholder Proposal Submitted by Frank Coleman Inman
Dear SEC Decision Makers:
Bank of America Corporation's Deputy General Counsel (William J. Mostyn, III)
wrote you a letter dated December 19, 2005 that BAC is seeking your inaction if
the bank "... omits the Proposal from its proxy materials for the 2006 Annual
Meeting ..." for modest stockholder choice in the election of corporate
directors.
I have several concerns relating to this matter. First, Bank of America claims
to have lost their first copy of my enclosed 2006 stockholder's proposal dated
October 14, 2005 with postal delivery confirmation. Only my follow up telephone
call to BAC resulted in discovery of this BAC mistake, and I resubmitted
promptly before any BAC deadline. Secondly, my overnight letter copy from BAC
pertaining to this SEC issue arrived on December 23, 2005. Did yours arrive
earlier?
My last concern is that there are two significant differences between Mr.
Bartlett Naylor's stockholder proposal of 2002 and mine, namely that his
proposed at least 100% more director nominees than open board positions whereas
mine proposes only 50% more. The second difference is that his proposal seems to
involve a challenging pairing of directors against each other for each board
position; mine does not.
My proposal for modest director choice has been growing more popular, earning
6.81% of shares voted in 2004 and 8.74% of shares voted in 2005. If the trend
continues, a 2006 vote (the third vote) will surpass 10%.
Bank of America is a great bank with fine directors overall. But there is much
room for improvement. Stockholders continue to have no say over the mid-week,
late morning annual stockholder meeting times not are inconvenient for many
working stockholders, despite my in person annual stockholder meeting requests
for meeting time choice. Our directors have approved (and not sought stockholder
approval for) an MBNA acquisition at a price with such a high premium to market
that the value of BAC stock capitalization fell by billions of dollars upon the
announcement of the acquisition. Some investors believe that BAC offered less
than competitive interest rates during part of 2005 to lose market share of
assets on deposit, to better ensure that the BAC/MBNA combination stays below
the required 10% of assets on deposit cap before the SEC gives final approval to
the combination.
In conclusion, I have been a BAC stockholder for about 15 years and have never
sold a share of BAC stock. Shouldn't the SEC give the benefit of any doubt to
the stockholders, the owners?
Enclosed are six paper clipped copy sets of each of the following: this letter,
my 2006 BAC stockholder's proposal, Bartlett Naylor's 2002 BAC stockholder's
proposal, and a corporate governance letter of mine that the Financial Times
published. Thank you.
Sincerely,
/s/
Frank Coleman Inman
Bank of America Stockholder
cc: William J. Mostyn III
[STAFF REPLY LETTER]
February 14, 2006
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bank of America Corporation Incoming letter dated December 19, 2005
The proposal recommends that the board of directors nominate at least fifty
percent more director nominees than there are open board seats.
There appears to be some basis for your view that Bank of America may exclude
the proposal under rule 14a-8(i)(12)(iii). Accordingly, we will not recommend
enforcement action to the Commission if Bank of America omits the proposal from
its proxy materials in reliance on rule 14a-8(i)(12)(iii).
Sincerely,
/s/
Mark F. Vilardo
Special Counsel
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