Company Name: Exxon Mobil Corp.
Public Availability Date: December 13, 2007
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
November 27, 2007
VIA Network Courier
U. S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, D.C. 20549
RE: Securities Exchange Act of 1934Section 14(a); Rule 14a-8 Omission of
Shareholder Proposal Regarding Dividends
Gentlemen and Ladies:
Enclosed as Exhibit 1 are copies of correspondence between Jonathan C. Dill and
Exxon Mobil Corporation regarding a shareholder proposal for ExxonMobil's
upcoming annual meeting. We intend to omit the proposal from our proxy material
for the meeting for the reasons explained below. To the extent this letter
raises legal issues, it is my opinion as counsel for ExxonMobil.
Proponent failed to establish eligibility.
The proposal was dated October 22, 2007, and was received in our office on
October 25, 2007. By letter dated October 29, 2007 (included in Exhibit 1), we
notified the proponent as required by Rule 14a-8(f) that the proponent must
demonstrate eligibility under Rule 14a-8(b)(2).
Our letter of October 29, 2007, specifically advised the proponent that, in
order to be eligible to submit a proposal, the proponent must have continuously
held at least $2,000 in market value of the company's securities entitled to
vote at the meeting for at least one year as of October 22, 2007, the date of
the proposal. We highlighted the fact that, since the proponent does not appear
on our records as a registered shareholder, the proponent needed to provide
proof of ownership from the record holder (such as a bank or broker) through
whom the proponent may own shares beneficially. As required by Rule 14a-8(f), we
also advised the proponent that proof of ownership must be postmarked or
transmitted electronically to us no later than 14 days from the date the
proponent received our notification. As a courtesy, we also enclosed a copy of
Rule 14a-8 for the proponent's reference.
Our tracking information (included in Exhibit 1) indicates that our letter
requesting the proponent to provide proof of ownership was delivered to the
proponent's address on October 30, 2007. The 14th day after that date was
November 13, 2007.
On November 16, 2007, we received a response from the proponent dated November
14, 2007. This response was insufficient in two respects:
1. The proponent's response was received three days after the 14-day deadline.
In his letter, the proponent argues that the deadline should be extended because
the proponent was traveling. However, the 14-day period provided under Rule
14a-8(f) is strictly enforced. It is the proponent's responsibility to ensure
that proof of ownership is received by the company within the required period.
See Exxon Mobil Corporation (available February 28, 2007) (proposal excluded
because proponent failed to supply sufficient proof of ownership with 14 days;
proponent had asserted that the late response was caused by delays in receiving
information from the proponent's broker).
2. The proof of ownership submitted with the proponent's responseconsisting of
an account statement for the month of October 2007does not establish that the
proponent has continuously held a qualifying amount of securities for one year
as of the date of the proposal, as required by Rule 14a-8(b)(2) and as
specifically requested in the company's letter of October 29. See Staff Legal
Bulletin No. 14 at Question C.1.c.(2) (monthly statement does not sufficiently
demonstrate continuous ownership).
Since the proponent failed to provide adequate proof of ownership within the
meaning of Rule 14a-8(b), within the time period required by Rule 14a-8(f), the
proposal may be omitted from our proxy material in reliance on Rule 14a-8(f).
If you have any questions or require additional information, please contact me
directly at 972-444-1478. In my absence, please contact Lisa K. Bork at
972-444-1473.
Please file-stamp the enclosed copy of this letter and return it to me in the
enclosed self-addressed postage-paid envelope. In accordance with SEC rules, I
also enclose five additional copies of this letter and the enclosures. A copy of
this letter and the enclosures is being sent to Mr. Dill.
Sincerely,
/s/
James Earl Parsons
JEP/jep
Enclosures
cc - w/enc:
Jonathan C. Dill
9936 N. Lamplighter Lane
Mequon, WI 53092
[INQUIRY LETTER]
History: This message has been forwarded.
Dear Mr. Henry,
I trust that you are well and that you had a good vacation during the summer
months.
In the past, Exxon has sent out to shareholders copies of a formal business
photograph of John D. Does the company still do that? If so, would you please be
so kind as to send me a copy of the photo? I would greatly appreciate it. My
address (although you probably have it) is:
9936 N. Lamplighter Lane
Mequon, WI 53092
Also, just a little warning that I plan to offer my "dividend strategy"
resolution to the shareholders at the next annual meeting, so we will probably
need to talk in the next few months. Except perhaps for some minor change or
deletion, the resolution will be the same as last year, although I will change
the wording of the support statement. Presumably, this will save everyone the
hassle of appealing to the SEC since they have already opined on the matter.
Thanks for your assistance.
Jon Dill
[INQUIRY LETTER]
9936 N. Lamplighter Lane
Mequon, WI 53092
October 22, 2007
Mr. David G. Henry
Section Head
Investor Relations Department
ExxonMobil Corporation
5959 Las Colinas Boulevard
Irving, TX 75039
Dear Mr. Henry,
Thank you very much for the copies of the John D. Rockefeller photographs that
you sent to me earlier. I appreciate your kind consideration.
I also understand your request to have me not resubmit my shareholder proposal
this year, but I am far too passionate about both my company and its dividend
and share repurchase policies as they affect shareholders who do not wish to
sell any of their shares for me to remain silent. I am sorry to disappoint your
bosses in this regard, but I still find the refusal of senior management to
consider even a five or ten cent special dividend, while spending over $5.00 per
share in repurchases, to be academically narrow, somewhat contrived, and grossly
inconsiderate of smaller direct equity investors who do not own price-sensitive
stock options or awards.
Consequently, I enclose a proposed shareholder resolution and supporting
statement for inclusion in the proxy statement for the 2007 annual shareholder
meeting. The resolution is exactly the same as last year with the exception of
the deletion of last year's first paragraph. If you have any questions or wish
any additional information, please feel free to contact me either at the address
above or via email at: joncdill@gmail.com.
I know that I am probably annoying you somewhat in this matter so I am
especially grateful and appreciative of your assistance.
Sincerely,
/s/
Jonathan C. Dill
[APPENDIX]
Proposed Shareholder Resolution for 2008 Annual Meeting of Shareholders
WHEREAS, the Board of Directors has a recent history of spending significantly
larger amounts of cash to repurchase stock than the payment of dividends during
periods of above average cash flow;
AND WHEREAS, many shareholders maintain their investment in the corporation for
the purpose of securing a good income in the form of dividends and have no
interest in selling their stock,
NOW BE IT RESOLVED by the shareholders assembled that the shareholders do not
approve of a policy to use free cash flow to repurchase stock in amounts that
are seriously disproportionate to much smaller amounts of cash returned to the
shareholders in the form of dividends, and;
BE IT FURTHER RESOLVED that the shareholders request the Board of Directors to
consider, in times of above average free cash flow, providing a more equal ratio
of the dollars paid to repurchase stock relative to the dollars paid in
dividends by utilizing such devices as special or extra dividends, and;
BE IT FURTHER RESOLVED that this policy will not affect the corporation's
repurchase of stock in order to avoid having the number of shares outstanding
increase due to normal business activities involving the issuance of stock.
Statement of Support For Resolution Concerning Dividend Strategy
In January 2007, the management of ExxonMobil submitted a letter to the U.S.
Securities and Exchange Commission as part of a larger legal pleading. That
letter contained the following statement of corporate policy:
"It has been the company's objective to effectively balance business investment,
dividends, and share repurchases..."
Note the company's public statement that its objective has been to "balance"
dividends and share repurchases.
Unfortunately, and quite to the contrary of this stated policy, our Board has
not tried to balance the amount of free cash flow used to pay dividends and the
amount used to repurchase shares. In the past several years, the Board has used
extraordinary amounts of company money to repurchase shares rather than
returning some of this cash to shareholders in the form of special dividends.
For example, in 2006, the Board spent $29.6 billion repurchasing shares and paid
only $7.6 billion as cash dividends, or only about 25% as much as was spent to
repurchase shares. During the years 2002 to 2006, the amount of cash spent to
repurchase shares increased from $4.8 billion to $29.6 billion, or a 517%
increase, while cash dividends increased from $6.2 billion to $7.6 billion, an
increase of only 23%.
This policy of imbalance in the use of company cash is detrimental to
shareholders who wish to continue owning their shares and receiving a greater
dividend return more reasonably related to their company's free cash flow. A
policy of paying modest special cash dividends when free cash flow warrants
would greatly benefit continuing shareholders while continuing to allow
management to repurchase huge volumes of shares. A balanced policy including
special dividends would also support a higher share price as effectively as
repurchasing shares does.
Last year, over 250,000,000 shares were voted for this resolution by
shareholders who want a change in dividend policy.
[INQUIRY LETTER]
9936 N. Lamplighter Lane
Mequon, WI 53092
7 December, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, DC 20549
RE: ExxonMobil Correspondence dated November 27, 2007, concerning Request to
Omit Shareholder Resolution Submitted by Jonathan C. Dill
Gentlemen and Ladies:
You have received correspondence from ExxonMobil Corporation requesting
permission to exclude my shareholder resolution from the company's proxy based
on two reasons. These reasons are bogus and without merit and ExxonMobil's
request should be rejected for the reasons described below.
1. Failure to respond in a timely manner:
ExxonMobil states that I did not respond within 14 days of receiving its letter.
This is false. The letter was "delivered" to my address on October 30, but I was
out of state traveling. This can be verified by numerous credit card charges for
the purchase of ExxonMobil gasoline and hotel invoices during the following 14
day period. UPS simply dropped the letter outside the door of my home and did
not receive a delivery signature. I actually receivedand the operative word in
the regulations is "received" not "delivered" the letter upon my arrival at my
home, the address to which it had been sent, on November 11. I responded within
14 days of receiving the letter.
The absurdity of the corporation's assertion that I must respond within 14 days
of whenever the corporation chose to deliver a letter rather than when I receive
the letter is blatant and manifest. Would I be able to obtain summary judgment
against the Chairman of ExxonMobil simply because I deliver a legal letter to
his office at the start of one of his extended overseas business trips? Of
course not! He would have 14 days to respond from the time he actually received
the letter to respond.
I complied fully with and met the standards set by the requirements of the
applicable regulation.
2. Failure to prove continuous ownership of equity in ExxonMobil Corporation:
The statement I submitted did show ownership of 67,321 shares of ExxonMobil
Corporation stock during the entire month of October 2007, or, in the words of
ExxonMobil's letter, "as of October 22, 2007". These are exactly the same 67,361
shares that I owned during the month of September 2006, documentation for which
is already in the files of ExxonMobil as justification for my shareholder
resolution at last year's annual meeting. Only someone wishing to misuse the law
against someone else and against common sense and equity (no pun intended) would
assert or even assume that I had sold 67,321 shares, incurred a capital gains
tax liability, and then repurchased exactly the same number of shares at a later
date.
Furthermore, ExxonMobil clearly states in its letter to me dated October 29,
2007 that I must show ownership of my shares "as of October 22, 2007" and, as a
separate requirement, a statement that I have continuously owned the securities
for at least 12 months prior to October 22, 2007. Please note the requirement is
to "state," not to "prove," concerning the continuous ownership requirement. A
satisfactory statement regarding the fact of my continuous ownership of the
stock that is fully in accordance with the stipulation for a "statement" as set
forth in ExxonMobil's letter was included with the proof in my responding
letter. Additionally, a very similar signed statement in a letter from me was
accepted last year by ExxonMobil as fully meeting this requirement of the
applicable regulations. This year, ExxonMobil is trying to create a higher
standard than was acceptable to them last year simply to try to fabricate an
unacceptable reason to not address a legitimate shareholder concern. Finally,
since I transferred custodynot ownershipof my shares from one trust company to
another during the past twelve months, the current trustee would be unable to
supply such a statement of continuous ownership. In this situation, it is
inconceivable that ExxonMobil management would wish to deny or abridge my rights
as a shareholder simply due to such an inconsequential change in the repository
of my shares by asserting claims that it never asserted or sought in the past,
especially when, as stated above, they already have in their files ample
evidence of such continuing ownership.
For the above reasons, I ask you to reject ExxonMobil's request and require them
to include my resolution in the annual proxy statement to the shareholders.
I enclose five copies of this letter for your use and ask that you time stamp
and return the sixth copy to me in the enclosed self-addressed envelope. If you
have any questions or require additional information, please feel free to
contact me at 414-801-5666. A copy of this letter is being sent to ExxonMobil
Corporation.
I thank you for your time and consideration,
Respectfully,
/s/
Jonathan C. Dill
[INQUIRY LETTER]
December 12, 2007
VIA UPS NEXT DAY AIR
U. S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, D.C. 20549
RE: Securities Exchange Act of 1934Section 14(a); Rule 14a-8 Omission of
Shareholder Proposal Regarding Dividends
Gentlemen and Ladies:
We are writing to respond briefly to the letter from Jonathan C. Dill to the
staff dated December 7, 2007 (enclosed as Exhibit 1), responding to ExxonMobil's
no-action letter request dated November 27, 2007.
ExxonMobil receives a large number of shareholder proposals each year and we
believe it is in the best interest of the corporation and all of our
shareholders to insist on strict adherence to the eligibility standards of Rule
14a-8. Mr. Dill's letter of December 7 does not refute either of the key
eligibility defects highlighted in our no-action request.
First, Mr. Dill argues that the 14 day deadline for our receipt of his proof of
ownership for purposes of Rules 14a-8(b)(2) and (f) should run, not from the
date the company's notice of defects was actually delivered to his home (at the
address provided in his original submission), but from a later date on which Mr.
Dill claims to have returned from travel. Mr. Dill's suggested approach is not
in accord with the well established standards of the proxy rules. See Exxon
Mobil Corporation (available March 1, 2007) (notice of deficiency delivered to
proponent's front door). See also Exxon Mobil Corporation (available February
28, 2007) (cited in our original no-action request) (shareholder absent from
notice address).
The annual meeting process in general, and the proxy proposal process in
particular, depends on a tight series of deadlines. In order to maintain the
scheduling certainty on which the process depends, it must be sufficient both
for proponents submitting proposals and for companies sending deficiency notices
and other communications to be able to rely on the date material is delivered to
the notice address (or transmitted successfully to the fax number) provided by
the other party. To introduce a standard of notice above and beyond proof of
delivery to a party's notice address would leave both companies and proponents
exposed for an indefinite period of time to unverifiable claims by the other
that mail was not opened or read until a later date. If a party sponsoring a
shareholder proposal expects to be traveling during the relevant time periods,
it is that party's responsibility either to provide the company with an
alternative address, or to make arrangements for matters to be appropriately
handled during the proponent's absence.
Second, Mr. Dill's letter of December 7 confirms that he has not provided a
statement of continuous ownership from the record holder as requested, and that,
based on the "snapshot" evidence of ownership he has provided, it would be
possible for shares to have been bought and sold in the interim periods such
that his ownership was not continuous for the past year. Staff Legal Bulletin
No. 14 contemplates exclusion of a proposal under Rules 14a-8(b)(2) and (f)
under precisely such circumstances. We note that, contrary to the proponent's
assertion, the company's notice of deficiency specifically and clearly informed
the proponent that his proof of eligibility must take the form of a statement
from the record holder (for example, a bank or broker). We further clearly and
specifically informed the proponent that the proof of ownership "(1) must be
provided by the holder of record; (2) must indicate that you owned the required
amount of securities as of October 22, 2007, the date of submission of the
proposal; [and] (3) must state that you have continuously owned the securities
for at least 12 months prior to October 22, 2007." It could not be more clear
that the required statement of continuous ownership must be provided by the
record holder. We also note that the evidence of ownership provided by the
proponent only appears to speak to the dates October 1 and October 31 (the first
and last days of the monthly period), not October 22 as requested.
If you have any questions or require additional information, please contact me
directly at 972-444-1478. In my absence, please contact Lisa K. Bork at
972-444-1473.
Please file-stamp the enclosed copy of this letter and return it to me in the
enclosed self-addressed postage-paid envelope. In accordance with SEC rules, I
also enclose five additional copies of this letter and the enclosures. A copy of
this letter and the enclosures is being sent to Mr. Dill.
Sincerely,
/s/
James Earl Parsons
JEP/jep
Enclosures
cc - w/enc:
Mr. Jonathan Dill
9936 North Lamplighter Lane
Mequon, WI 53092
[STAFF REPLY LETTER]
December 13, 2007
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Exxon Mobil Corporation Incoming letter dated November 27, 2007
The proposal relates to repurchases of stock and dividends.
There appears to be some basis for your view that ExxonMobil may exclude the
proposal under rule 14a-8(f). We note that the proponent appears to have failed
to supply documentary support sufficiently evidencing that he satisfied the
minimum ownership requirement for the one-year period required by rule 14a-8(b).
Accordingly, we will not recommend enforcement action to the Commission if
ExxonMobil omits the proposal from its proxy materials in reliance on rules
14a-8(b) and 14a-8(f).
Sincerely,
/s/
Eduardo Aleman
Attorney-Adviser
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