Company Name: Bank of America Corp.
Public Availability Date: January 11, 2008
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
December 17, 2007
Rule 14a-8
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 Rhoda L. Fry
Ladies and Gentlemen:
By letter dated December 11, 2007 (the "Request Letter"),
as counsel to Bank of America Corporation, a Delaware corporation (the
"Corporation"), we requested confirmation that the staff of the Division of
Corporation Finance (the "Division") would not recommend enforcement action if
the Corporation omitted from its proxy materials for the Corporation's 2008
Annual Meeting of Stockholders (the "2008 Annual Meeting") for the reasons set
forth therein, a proposal submitted by Rhoda L. Fry (the "Proponent"). For your
convenience, a copy the Request Letter is attached hereto as Exhibit A. A copy
of the Request Letter was also sent to the Proponent. On December 13, 2007, the
Proponent sent a message to the undersigned via electronic mail (the "Email")
stating that she had received the Request Letter and that the matter was a moot
point as she was no longer a stockholder. However, the Proponent did not
expressly withdraw the Proposal. A copy of the Email is attached hereto as
Exhibit B. In addition to the reasons set forth in the Request Letter, the
Proposal may also be excluded from the Corporation's proxy materials for the
2008 Annual Meeting pursuant to Rule 14a-8(b) because the Proponent no longer
holds securities in the Corporation.
Based on the Email and the Request Letter, and on behalf of the Corporation, we
respectfully request the concurrence of the Division that the Proposal may be
excluded from the Corporation's proxy materials for the 2008 Annual Meeting.
Based on the Corporation's timetable for the 2008 Annual Meeting, a response
from the Division by February 3, 2008 would be of great assistance.
If you have any questions or would like any additional information regarding the
foregoing, please do not hesitate to me at 704-378-4718 or, in my absence,
Teresa M. Brenner, Associate General Counsel of the Corporation at 704-386-4238.
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/
Andrew A. Gerber
cc: Teresa M. Brenner
Rhoda L. Fry
[INQUIRY LETTER]
December 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 Rhoda L. Fry
Ladies and Gentlemen:
Pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and as counsel to Bank of America Corporation, a
Delaware corporation (the "Corporation"), we request confirmation that the staff
of the Division of Corporation Finance (the "Division") will not recommend
enforcement action if the Corporation omits from its proxy materials for the
Corporation's 2008 Annual Meeting of Stockholders (the "2008 Annual Meeting")
for the reasons set forth herein, the proposal described below. The statements
of fact included herein represent our understanding of such facts.
GENERAL
The Corporation received a proposal and supporting statement dated April 16,
2007 (the "Proposal") from Rhoda L. Fry (the "Proponent") for inclusion in the
proxy materials for the 2008 Annual Meeting. The Proposal is attached hereto as
Exhibit A. The 2008 Annual Meeting is scheduled to be held on or about April 23,
2008. The Corporation intends to file its definitive proxy materials with the
Securities and Exchange Commission (the "Commission") on or about March 13,
2008.
Pursuant to Rule 14a-8(j) promulgated under 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.
To the extent required by Rule 14a-8(j)(2)(iii), this letter shall also be
deemed to be my opinion of counsel. I am licensed to practice law in the States
of Maryland and North Carolina.
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 mandates
that the "descriptions of nominees for the Board of
Directors included in the annual proxy statement shall include all current
business activities of the nominees, both paid and volunteer." (emphasis added)
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)(1), Rule
14a-8(i)(3), Rule 14a-8(i)(7) and Rule 14a-8(i)(10). The Proposal may be
excluded pursuant to Rule 14a-8(i)(1) because it deals with a matter that is not
a proper subject for action by stockholders under Delaware law. 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)(7) because it
deals with a matter relating to the Corporation's ordinary business operations.
Finally, the Proposal may be excluded pursuant to Rule 14a-8(i)(10) because it
has been substantially implemented.
1. The Corporation may omit the Proposal pursuant to
Rule 14a-8(i)(1) because it deals with a matter that is not a proper subject for
action by stockholders under Delaware law.
Rule 14a-8(i)(1) provides that shareholder proposals that are "not a proper
subject for action by shareholders under the laws of the jurisdiction of the
company's organization" are excludable from the company's proxy materials. The
Proposal would require action that, under state law, falls within the scope of
the powers of the Corporation's Board of Directors. As stated above, the
Corporation is a Delaware corporation. Section 141(a) of the Delaware General
Corporation Law states that the "business and affairs of every corporation
organized under this chapter shall be managed by or under the direction of a
board of directors, except as may be otherwise provided in this chapter or in
its certificate of incorporation." Authority to dictate the appropriate level of
disclosure in the Corporation's proxy statement has not been provided to
stockholders under Delaware law or the Corporation's certificate of
incorporation or by-laws.
The Division has consistently permitted the exclusion of shareholder proposals
mandating or directing a company's board of directors to take certain action
inconsistent with the discretionary authority provided to it under state law.
See Constellation Energy Group, Inc. (March 2, 2004); Phillips Petroleum Company
(March 13, 2002); Ford Motor Co. (March 19, 2001); American National Bankshares,
Inc. (February 26, 2001); and AMERCO (July 21, 2000). Additionally, the note to
Rule 14a-8(i)(1) provides that "[d]epending on the subject matter, some
proposals are not considered proper under state law if they would be binding on
the company if approved by shareholders...."
The Proposal was not drafted as a request of or as a recommendation to the
Corporation's Board of Directors, but rather mandates board action. Thus, the
Proposal relates to matters for which only the Board of Directors has the power
to review, evaluate and make proper determinations. Accordingly, in my opinion
as counsel to the Corporation, the Proposal is not proper for stockholder action
under Delaware law and is excludable under Rule 14a-8(i)(1).
2. 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) 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, 2006); Sara Lee Corporation (March 31, 2004); 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 because it is
vague and indefinite. As discussed further below in part 3, the scope of the
Proposal is overly broad. The Proposal requires disclosure of "all business
activities" of nominees, "both paid and voluntary," without regard to
materiality or relevance. (emphasis added) The scope of disclosure required by
the Proposal is unlimited. The Corporation is concerned that shareholders would
not clearly understand the level of disclosure required by the Proposal. By way
of example (and not necessarily applicable to any of the Corporation's
directors), the Proposal would require disclosure of all of the following
business activities, none of which are likely to be important to investors: (a)
serving as treasurer for a neighborhood home owners' association or swim club;
(b) serving as a board member or advisor for a religious organization or for a
private school; (c) any personal investments or being a member of an investment
club with personal friends; (d) participating in a business or investment
venture with a spouse or other family member; (e) participating or organizing
fundraising activities for a child's school, medical research organizations,
such as the American Heart Association, or for any charitable organization; (f)
selling one or more personal items on an internet auction website; (g) renting a
timeshare property through a rental pool or any other rental activities; (h)
serving as an executor of a family estate; and (i) any other undertaking that
could be characterized as a business activity. Since the scope of the Proposal
is unlimited and could require the irrelevant disclosures noted above, the
Proposal is not "clearly presented."
Based on the foregoing, the Proposal is 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.
3. 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 its ordinary business operations. The Commission has
determined that proposals dealing with matters of ordinary business are
generally excludable because (a) certain activities are "so fundamental to
management's ability to run a company on a day-to-day basis that they could not,
as a practical matter, be subject to direct shareholder oversight" and (b) such
proposals seek to "micromanage the company." See Exchange Act Release No. 34-40018 (May 21, 1998). The Corporation believes that the Proposal may properly
be excluded under Rule 14a-8(i)(7) because the Proposal seeks to "micro-manage"
(a) the activities of the Corporation's Board of Directors and (b) the
Corporation's compliance with the Exchange Act disclosure requirements and the
corporate governance listing standards of the New York Stock Exchange (the
"NYSE"), the exchange on which the Corporation's common stock is listed. Both
Commission and NYSE rules are designed to provide investors with necessary
material information regarding director nominees to ensure that informed voting
decisions can be made. In addition, the anti-fraud provisions of the Exchange
Act and related Commission rules prohibit the omission of material information
not otherwise specifically required by the Commission's rules and regulations.
Proposals that relate to the activities of a board of directors or related
disclosure, beyond what is required to satisfy the detailed requirements of the
Exchange Act, the Commission and the NYSE, relate to ordinary business and are
excludable.
The Proposal relates to the activities of directors and is overly broad because
it mandates the disclosure of detailed information that is not otherwise
required by the Exchange Act, the Commission or the NYSE or material to making
an informed voting decision concerning director nominees. The disclosure
mandated by the Proposal would be incremental to the material information that
is already required to be disclosed under the federal securities laws and the
listing requirements of the NYSE. The Proposal requires disclosure of "all
business activities" of nominees, "both paid and voluntary" without regard to
materiality or relevance. (emphasis added) Compliance with the specific and
general materiality disclosure requirements, as well as determinations regarding
the appropriate level of voluntary disclosures, are well within the
Corporation's day-to-day operations. The Corporation is best situated to
determine what limitations should be imposed on director nominees and what level
of disclosure is appropriate. The Proposal micro-manages these areas by
mandating disclosure of immaterial and irrelevant details of a director
nominee's activities. As noted above, and by way of example (and not necessarily
applicable to any of the Corporation's directors), the Proposal would require
disclosure of all of the following activities, none of which are material or
relevant to a voting decision: (a) serving as treasurer for a neighborhood home
owners' association or swim club; (b) serving as a board member or advisor for a
religious organization or for a private school; (c) any personal investments or
being a member of an investment club with personal friends; (d) participating in
a business or investment venture with a spouse or other family member; (e)
participating or organizing fundraising activities for a child's school, medical
research organizations, such as the American Heart Association, or for any
charitable organization; (f) selling one or more personal items on an internet
auction website; (g) renting a timeshare property through a rental pool or any
other rental activities; (h) serving as an executor of a family estate; and (i)
any other undertaking that could be characterized as a business activity.
The Division has consistently found proposals regarding director or nominee
activities and time commitments to be excludable under 14a-8(i)(7) (and its
predecessor, Rule 14a-8(c)(7)) because they constitute the day-to-day ordinary
business of the Corporation. In American Electric Power Company (January 27,
2003), a proposal required that each director expend a minimum of twenty hours
each month to attend and prepare for formal monthly board meetings. The Division
found the proposal excludable under Rule 14a-8(i)(7) because it established a
"restriction on activities of directors," a matter of ordinary business. Much
like the instant proposal, in
NSTAR
(January 4, 2005), a proposal requested that the company publish in its proxy
statement "information concerning the personal investments of each trustee." The
proponent in NSTAR argued that this information was relevant to a voting
decision and should consequently be disclosed. The Division did not agree and
found that the proposal in NSTAR could be excluded under 14a-8(i)(7) since it
related to ordinary business matters (i.e., certain investment information of
trustees). In
McKesson Corporation
(April 1, 2004), a proposal requested detailed information about the board of
directors including, the actions taken by the board and all committees thereof
in the prior year, the agenda items on which the board and each committee voted
and the existence of any non-unanimous board or committee vote, identifying the
director or directors whose votes were not in accord with the majority. The
Division concurred with the company in McKesson Corporation that the proposal
could be excluded under Rule 14a-8(i)(7) because it related to matters of
ordinary businessi.e., "reporting on board actions." See also, Chittenden Corporation (March 10, 1987) (omitting a proposal seeking disclosure of
biographical information not required by law including, the director's stock
ownership, partnerships interests and solely-owned business investments). The
Corporation believes that the responsibility for determining the appropriate
level of disclosure and compliance with applicable disclosure requirements is a
complex task with respect to which shareholders are not in a position to make an
informed judgment.
In addition, the Division has consistently found proposals requesting additional
disclosure or the presentation of information in filings with the Commission to
be excludable under 14a-8(i)(7) (and its predecessor, Rule 14a-8(c)(7)) because
they constitute the day-to-day ordinary business of the Corporation. This has
been the case even where the disclosure sought relates to directors or trustees,
areas of accounting and financial performance. See AmerInst Insurance Group, Ltd. (April 14, 2005) ("AmerInst"). In AmerInst, a proposal requested that the
board provide "a full, complete and adequate disclosure of the accounting, each
calendar quarter, of the line items and amounts of Operating and Management
expenses of the Company." In AmerInst, the proponent's supporting statement
argued that while the company "may be in compliance with the minimum disclosure
requirements required for SEC purposes, we AmerInst shareholders are interested
in, and entitled to, significant detail by which to gauge their management of
our investment." The Division did not agree and found that the proposal in
AmerInst could be excluded under 14a-8(i)(7) since it related to ordinary
business matters (i.e., the disclosure of certain financial information). See
also,
NiSource, Inc. (March 10, 2003) (omitting a proposal seeking disclosure of
certain financial information of the Company's subsidiaries in its annual
report); and General Electric Company
(January 21, 2003) (omitting a proposal
seeking disclosure in annual report of (a) a directory listing of all of the
company's businesses; (b) the gross earnings, profits and losses, assets and
liabilities of these businesses; and (c) the major investments, activities and
risks of these businesses).
The Proposal raises no significant policy issues. To the contrary, the Proposal
relates to the day to day business activities of director nominees, which are
matters of ordinary business. In addition, matters relating to detailed
disclosure and compliance with the securities laws are matters of ordinary
business. The Proposal seeks to micro-manage the disclosure process and calls
for information that may be immaterial and irrelevant. 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).
4. The Corporation may omit the Proposal pursuant to
Rule 14a-8(i)(10) because it has been substantially implemented.
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)(10), which
permits the omission of a shareholder proposal if "the company has already
substantially implemented the proposal." The "substantially implemented"
standard replaced the predecessor rule, which allowed the omission of a proposal
that was "moot." The current rule also clarifies the Commission's interpretation
of the predecessor rule that the proposal need not be "fully effected" by the
company to meet the mootness test, so long as it was substantially implemented.
The Proposal seeks additional disclosure that the Proponent believes would be
helpful to determine if a director nominee's outside business activities impact
his or her commitments to the Corporation. The Corporation believes that through
compliance with the disclosure rules adopted by the Commission and the NYSE (the
exchange on which the Corporation's stock is listed), the Corporation has
substantially implemented the Proposal. The current disclosure requirements
include disclosure regarding business experience, board attendance, service on
other boards of directors, related person transactions, director independence
and other related corporate governance matters. The Corporation believes that
the cumulative result of these disclosure requirements provides all material
information regarding the activities of its director nominees. Certain of these
required disclosures are set forth below. In addition, if a director nominee
engages in any business or other activity that materially limits his or her
ability to serve as a director, the anti-fraud provisions of the federal
securities laws would require such matters to be disclosed. The only part of the
Proposal that has not been implemented relates solely to immaterial or
irrelevant information regarding the director nominees. The Corporation does not
believe that the Division or the Commission would intend for the disclosure of
immaterial or irrelevant information to satisfy the substantially implemented
standard set forth under Rule 14a-8(i)(10).
Under Item 401 of Regulation S-K, the Corporation must provide, among other
things, (a) the business experience for each director nominee for the past five
years, including their principal occupation and employment, and the name and
principal business of the entity in which they are employed and (b) any other
directorships they hold in any other public company. Under Item 403 of
Regulation S-K, the Corporation must provide the stock ownership of the director
nominees. Under Item 407 of Regulation S-K, the Corporation must (a) identify in
its proxy statement each nominee for director that is independent under the
independence standards of the NYSE and (b) for each director nominee that is
identified as independent, describe, by specific category or type, any
transactions, relationships or arrangements not disclosed pursuant to Item
404(a) that were considered by the board of directors under the applicable
independence definitions in determining that the director is independent. The
instructions to paragraph (a) of Item 407 further provide that the description
of the specific categories or types of transactions, relationships or
arrangements must be provided in such detail as is necessary to fully describe
the nature of the transactions, relationships or arrangements. In addition, Item
407(b) of Regulation S-K requires detailed information regarding a director
nominee's attendance at board, board committee and annual meetings. In addition,
the NYSE rule 303A.07(a) requires "each prospective audit committee member
should evaluate carefully the existing demands on his or her time before
accepting this important assignment." Rule 303A.07(a) also requires disclosure
if an audit committee member serves on more than three audit committees. As seen
by the foregoing, the current disclosure requirements provide a significant
amount of disclosure regarding director nominees. Through compliance with these
disclosure requirements, and general anti-fraud disclosure requirements, the
Corporation has substantially implemented the Proposal. See
Wal-Mart Stores, Inc.
(March 28, 2007) (permitting exclusion of a proposal seeking disclosure of the
company's relationships with its executive compensation consultants or firms,
including the matters specified in the proposal because it was already
substantially required under Regulation S-K); and Verizon Communications Inc.
(February 21, 2007) (permitting the exclusion of a proposal seeking disclosure
of the material terms of all relationships between each director nominee deemed
to be independent and the company, or any of its executive officers, that were
considered by the board in determining whether such nominee was independent
because it was already substantially required under Regulation S-K).
As was the case in Wal-Mart Stores and Verizon Communications, through
compliance with the substantial disclosure requirements of the Exchange Act, the
Commission and the NYSE, the Corporation already provides all material
information regarding the activities of its director nominees. For this reason,
the Proposal has been substantially implemented and may be omitted from the
Corporation's proxy materials for the 2008 Annual Meeting pursuant to Rule
14a-8(i)(10).
CONCLUSION
On the basis of the foregoing and on behalf of the Corporation, we respectfully
request the concurrence of the Division that the Proposal may be excluded from
the Corporation's proxy materials for the 2008 Annual Meeting. Based on the
Corporation's timetable for the 2008 Annual Meeting, a response from the
Division by February 3, 2008 would be of great assistance.
If you have any questions or would like any additional information regarding the
foregoing, please do not hesitate to contact the undersigned at 704-378-4718 or,
in his absence, William J. Mostyn III, Deputy General Counsel and Corporate
Secretary of the Corporation 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/
Andrew A. Gerber
cc: Rhoda L. Fry
[APPENDIX]
EXHIBIT A
7341 E. Solcito Ln.
Scottsdale, AZ 85250
April 16, 2007
Corporate Secretary
Bank of America Corporation.
101 S. Tryon St.
NCI-002-29-01
Charlotte, NC 28255
Stockholder Proposal Regarding Nominee Information
RESOLVED: That the descriptions of nominees for the Board of Directors included
in the annual proxy shall include all current business activities of the
nominees, both paid and volunteer.
REASONS: A considerable amount of time must be spent as a director of a
corporation and most directors are involved in many other activities which often
includes positions on other corporation boards. It is imperative to know of
these other activities to determine if the nominees have the time to devote to
the proper execution of their duties.
The vast majority of public corporations include this information in their
proxies in order to provide full disclosure to the voting shareholders.
Submitted by,
/s/
Rhoda L. Fry
Owner of 400 shares
[STAFF REPLY LETTER]
January 11, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Bank of America Corporation Incoming letter dated December 11, 2007
The proposal relates to nominee information.
Rule 14a-8(b) requires that a proponent hold a
specified amount of company securities through the date of the meeting of
shareholders. We note that the proponent has stated that she no longer holds
Bank of America securities. 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(b). 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/
Eduardo Aleman
Attorney-Adviser
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