Company Name: Bank of America Corp.
Public Availability Date: June 18, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
May 11, 2007
BY OVERNIGHT DELIVERY
Securities and Exchange Commission
Office of Chief Counsel
Division of Corporation Finance
100 F. Street, N.E.
Washington, DC 20549
Re: Stockholder Proposal Submitted by John Jennings Crapo
Ladies and Gentlemen:
Bank of America Corporation (the "Corporation") has received a proposal and
supporting statement dated April 7, 2007 (the "Proposal") from John Jennings
Crapo (the "Proponent") for inclusion in the proxy materials for the
Corporation's 2008 Annual Meeting of Stockholders (the "2008 Annual Meeting").
The Proposal is attached hereto as Exhibit A. The Proposal is handwritten and,
in some instances, illegible. For your convenience, a good faith transcription
is attached as Exhibit B hereto. The Corporation hereby requests confirmation
that the staff of the Division of Corporation Finance (the "Division") will not
recommend enforcement action if the Corporation omits the Proposal from its
proxy materials for the 2008 Annual Meeting for the reasons set forth herein.
GENERAL
The 2008 Annual Meeting is scheduled to be held on or about April 24, 2008. The
Corporation intends to file its definitive proxy materials with the Securities
and Exchange Commission (the "Commission") on or about March 1, 2008 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 2008 Annual Meeting.
SUMMARY OF PROPOSAL
The Proposal requests that the Board of Directors provide a report "concerning
the thinking of the Directors concerning representative payees." The report
should include the "standards for selection of these important people."
REASONS FOR EXCLUSION OF PROPOSAL
The Corporation believes that the Proposal may be properly omitted from the
proxy materials for the 2008 Annual Meeting pursuant to Rule 14a-8(i)(3), Rule
14a-8(i)(4), Rule 14a-8(i)(5) and Rule 14a-8(i)(7). The Proposal may be excluded
pursuant to Rule 14a-8(i)(3) because it is in violation of the proxy rules. The
Proposal may be excluded pursuant to Rule 14a-8(i)(4) because it relates to a
personal interest of the Proponent that is not shared by other stockholders at
large. The Proposal may be excluded pursuant to Rule 14a-8(i)(5) because it is
not economically or otherwise significantly related to the business of the
Corporation. Finally, the Proposal may be excluded pursuant to Rule 14a-8(i)(7)
because (assuming it was applicable, as discussed further below) it deals with a
matter relating to the Corporation's ordinary business operations.
1. The Corporation may omit the Proposal pursuant to Rule 14a-8(i)(3) because it
is in violation of the proxy rules.
Rule 14a-8(i)(3) also permits the exclusion of a proposal if it or its
supporting statement is contrary to any of the Commission's proxy rules and
regulations, including Rule 14a-9, which prohibits the making of false or
misleading statements in proxy soliciting materials or the omission of any
material fact necessary to make statements contained therein not false or
misleading, and Rule 14a-5, which requires that information in a proxy statement
be "clearly presented." In addition, the Division has recognized that a proposal
and/or supporting statement may be excluded under Rule 14a-8(i)(3) if it is so
vague and indefinite that shareholders voting on the proposal would not be able
to determine with reasonable certainty exactly what action or measures would be
required in the event the proposal was adopted. See Bank of America (February
17, 1006) ("Bank of America I"); Sara Lee Corporation (March 31, 2004) ("Sara
Lee"); Bank of America (March 10, 2004); Philadelphia Electric Co. (July 30,
1992); IDACORP, Inc. (January 9, 2001); and Northeast Utility Service Company
(April 9, 2001).
The Proposal is false and misleading in violation of Rule 14a-9. Neither the
Corporation nor its board of directors is involved in the selection of
representative payees for its customers. The Proposal falsely assumes this to be
the case. The Proposal requests a report from the board of directors regarding
its representative payee selection process, criteria and retention policies. A
"representative payee" is an individual or organization that receives benefits
(such as Social Security and other benefit payments) for someone who cannot
manage or direct the management of his/her money.1 Representative payees are
expected to use the funds for the current and foreseeable needs of the
beneficiary and save any remaining funds for the beneficiary's future use.
Generally, minor children and legally incompetent adults have representative
payees appointed. Representative payees are typically relatives or friends, if
available, but may also be appointed by court order or by a federal or state
agency (such as the Social Security Administration or a parallel state agency
that provides health and human services). In addition, representative payees are
generally regulated by the federal and/or state agency from which they are
receiving benefits on behalf of a beneficiary. Whether or not a beneficiary (or
his/her representative payee) chooses to bank with the Corporation, neither the
Corporation nor its board of directors is involved in the selection, retention
or regulation of representative payees. Accordingly, the Proposal is false and
misleading because it is factually inaccurate and based on a false assumption.
In addition, the Proposal is vague and indefinite. The Proposal seeks a report
regarding the "thinking of Directors concerning representative payees." The
Proposal also request the criteria for the selection and retention of
representative payees. The Proposal does not provide any further clarification
of what is intended by the "thinking" of directors. As noted above, since
neither the Corporation nor its board of directors is responsible for the
selection or retention of representative payees, the Proposal is inapplicable to
the Corporation. As a result, neither the Corporation nor stockholders voting on
the Proposal would be able to determine with reasonable certainty exactly what
action or measures would be required in the event the Proposal was adopted. In
addition, the supporting statement is rambling and generally irrelevant to the
subject matter of the Proposal. The supporting statement discusses the housing
conditions of the Proponent and the staff that works at his resident home. Taken
as a whole, the Proposal and supporting statement are anything but "clearly
presented." The Proposal makes statements as if they were factually correctthat
the board of directors is responsible for the selection and retention of
representative payeesbut are in fact incorrect.
Based on the foregoing, the Corporation believes that the Proposal and
supporting statement are contrary to the proxy rules, including Rule 14a-9,
which prohibits materially false or misleading statements and may be omitted
under Rule 14a-8(i)(3), in violation of both Rule 14a-9 and Rule 14a-5.
2. The Corporation may omit the Proposal under Rule 14a-8(i)(4) because it
relates to a personal interest of the Proponent that is not shared by other
shareholders at large.
Rule 14a-8(i)(4) permits the exclusion of shareholder proposals that are: (i)
related to the redress of a personal claim or grievance against a company or any
other person, or (ii) designed to result in a benefit to a proponent or to
further a personal interest of a proponent, which other shareholders at large do
not share. See Sara Lee Corporation (August 10, 2001); KeyCorp (February 22,
2001); Chittenden Corporation (January 2, 2001) and The Dow Chemical Company
(March 5, 2003). The Proposal qualifies both as a personal grievance against the
Corporation and as an attempt by the Proponent to obtain a personal benefit that
will not be shared with other Stockholders of the Corporation. The Proponent is
upset with the Corporation because he believes that the Corporation is not
adequately selecting representative payees, including presumably, his own.
The Commission has stated that Rule 14a-8(i)(4) is designed to "insure that the
security holder proposal process [is] not abused by proponents attempting to
achieve personal ends that are not necessarily in the common interest of the
issuer's shareholders generally." Exchange Act Release 34-20091 (August 16,
1983). As explained below, the Proposal "is an abuse of the security holder
proposal process" designed to pursue the Proponent's personal grievances and
personal interests without producing any benefit for other shareholders at
large. The cost and time involved in dealing with the Proposal is therefore a
disservice to the interests of the issuer and its security holders at large."
Exchange Act Release 34-19135 (October 14, 1982).
The Proposal clearly relates to the Proponent's personal situation. The
supporting statement indicates that the Proponent lives at a "homeless men's
shelter at Boston, Massachusetts with a census of four hundred (400) men." Based
on the supporting statement, it appears that the Proponent has a representative
payee to assist him with his daily financial and other needs, possibly an
employee of his resident facility. The Proponent complains that he "knows
nothing as to qualifications of staff there who manage the place. Same goes for
the Directors of said [facility] who are the ones direct the place." The balance
of the supporting statement questions the ability and integrity of the persons
that are acting as representative payee. The Proposal is clearly unique to the
Proponent and is not relevant to shareholders at large.
The Proposal is (i) related to the redress of a personal claim or grievance and
(ii) designed to result further a personal interest of the Proponent, which
other Stockholders of the Corporation at large do not share. Accordingly, the
Proposal may be excluded under Rule 14a-8(i)(4).
3. The Corporation may omit the Proposal pursuant to Rule 14a-8(i)(5) because
The Proposal is not significantly related to the business of the Corporation
Rule 14a-8(i)(5) permits exclusion of a proposal which relates to operations
which (i) account for less than 5 percent of the company's total assets at the
end of its most recent fiscal year, (ii) account for less than 5 percent of its
net earnings for the most recent fiscal year, (iii) account for less than 5
percent of its gross sales for its most recent fiscal year and (iv) is not
otherwise significantly related to the company's business. See Merck & Co., Inc.
(January 4, 2006); The Proctor & Gamble Company (August 11, 2003); and
Hewlett-Packard Company (January 7, 2003) ("HPC").
As discussed above, neither the Corporation nor its board of directors is
involved in the selection, retention or regulation of representative payees. The
Corporation has no assets related to, and generates no earnings or revenues from
representative payee related matters. In addition, representative payee
appointments are not otherwise significantly related to the Corporation's
business and the Corporation has no control over and does not regulate the
appointment and retention of representative payees.
The Corporation clearly satisfies the economic tests of Rule 14a-8(i)(5) and the
policy issue raised by the Proposal, the selection and retention of
representative payees is not significant, and in fact is not in any way related,
to the Corporation's business. Rather, the Proposal only addresses the personal
concerns of the Proponent. For the reasons set forth above, the Corporation
believes the Proposal may be omitted from the proxy materials for the 2008
Annual Meeting pursuant to Rule 14a-8(i)(5).
4. The Corporation may omit the Proposal under Rule 14a-8(i)(7) because it deals
with a matter relating to the Corporation's ordinary business operations.
Rule 14a-8(i)(7) allows a company to omit a proposal that deals with a matter
relating to the conduct of the ordinary business operations of the company. As
discussed above, the Proposal is inapplicable to the Corporation. However, the
Proposal can generally be viewed as related to customer service. The Proposal
deals with the appointment of persons to assist individuals that need help
conducting their daily affairs. The Division has consistently found matters
related to customer service to be excludable under 14a-8(i)(7) because they
constitute the day-to-day ordinary business of the Corporation. See also
BellSouth Corporation (January 9, 2003); Verizon Communications Inc. (January 9,
2003); Wal-Mart Stores, Inc. (March 27, 2001); and Deere & Company (November 30,
2000).
The Proposal, if applicable, addresses the Corporation's customer relations and
raises no significant policy issues. The Corporation believes that it is clear
that the Proposal addresses ordinary business matters that are part of the
day-to day exercise of management responsibility. Accordingly, the Corporation
believes that the Proposal may be omitted from its proxy materials for its 2008
Annual Meeting based on Rule 14a-8(i)(7).
CONCLUSION
On the basis of the foregoing, the Corporation respectfully requests the
concurrence of the Division that the Proposal may be excluded from the
Corporation's proxy materials for the 2008 Annual Meeting.
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: John Jennings Crapo
-----FOOTNOTES-----
1 For general information regarding representative payees, see the Social
Security Administration website at http://www.ssa.gov/payee/faqrep.htm or the
North Carolina Department of Health and Human Services' website at http://info.dhhs.state.nc.us/olm/manuals/doa/gs/man/.
[INQUIRY LETTER]
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[APPENDIX]
Good Faith Translation of Crapo Proposal
IT IS REQUESTED that the Bank of American Corp. Board of Directors ("Directors")
provide us with a report in the proxy statement at the Stockholder Meeting which
shall take place next following this shareholder meeting concerning the thinking
of the Directors concerning representative payees. We wish the report be
complete. We want to know the standards for selection of these important people.
there their retention in these roles.
Supporting Statement
Shareholder proponent doesn't wish this to interfere in ordinary business of the
corporation but the proponent who was introduced presented and submitted
shareholder proposals to national corporations and diverse other companies and
has been sincere at these undertakings and done so at his own expense believes
there are compelling reasons that we understand further the thinking of our
directors and of them individually as directors. Directors set the policy.
Proponent himself is a terminated LCSW (Licensed Certified Social Worker) and
live at a homeless men's shelter at Boston, Massachusetts with a census of four
hundred (400) men. Where he has very little information as to how these
selections are made of representative payees. A population of substance abusers,
alcoholics, chronic smokers, [illegible], disabled, unemployed and other such
persons is the composition of the Pine INN STREET INN at 444 Harrison Avenue. He
knows nothing as to qualifications of staff there who manage the place. Same
goes for the Directors of said INN who are the ones direct the place.
There are those who are recipients of funds on behalf of people, and persons
funds are received by the payees. Doesn't know if how that is done is subject to
scrutiny and by whom and what causes there shall be for failure to do good and
honorable service to these people. And wonders what the reasons are for they
being in that situation. He wonders if a person had [sound housing] if they
would need a representative payee and could said payee do an effective job as
fiduciary if not having good housing and wonders what such good housing should
be then is it correct to nominate someone as trustee, conservator guardian or
other fiduciary simply for the reason of his having housing unfit for human
habitation or simply for minimum maintenance of life when that isn't written.
The province of recipient's beneficiary but rather the failure of the
care-takers.
[STAFF REPLY LETTER]
June 18, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bank of America Corporation
Incoming letter dated May 11, 2007
The proposal requests a report "concerning the thinking of the Directors
concerning representative payees."
There appears to be some basis for your view that Bank of America may exclude
the proposal under rule 14a-8(i)(3), as vague and indefinite. Accordingly, we
will not recommend enforcement action to the Commission if Bank of America omits
the submission from its proxy materials in reliance on rule 14a-8(i)(3). In
reaching this position, we have not found it necessary to address the
alternative bases for omission upon which Bank of America relies.
Sincerely,
/s/
Tamara M. Brightwell
Special Counsel
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