Company Name: Exxon Mobil Corp.
Public Availability Date: January 29, 2008
Document Sections:
INQUIRY LETTER
APPENDIX 1
APPENDIX 2
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
January 22, 2008
VIA HAND DELIVERY
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, DC 20549
Re: Securities Exchange Act of 1934Section 14(a); Rule 14a-8 Omission of
Shareholder Proposal Regarding Shareholder Return Policy
Gentlemen and Ladies:
This letter is to inform you that Exxon Mobil Corporation (the "Company")
intends to omit from its proxy statement and form of proxy for its 2008 Annual
Meeting of Shareholders (collectively, the "2008 Proxy Materials") a shareholder
proposal and statements in support thereof (the "Proposal") received from Thomas
A. Bonnie (the "Proponent").
Pursuant to Rule 14a-8(j), we have:
enclosed herewith six (6) copies of this letter and its attachments;
filed this letter with the Securities and Exchange Commission (the
"Commission") no later than eighty (80) calendar days before the Company intends
to file its definitive 2008 Proxy Materials with the Commission; and
concurrently sent copies of this correspondence to the Proponent.
Rule 14a-8(k) provides that shareholder proponents are required to send
companies a copy of any correspondence that the proponents elect to submit to
the Commission or the staff of the Division of Corporation Finance (the
"Staff"). Accordingly, we are taking this opportunity to inform the Proponent
that if the Proponent elects to submit additional correspondence to the
Commission or the Staff with respect to the Proposal, a copy of that
correspondence should concurrently be furnished to the undersigned on behalf of
the Company pursuant to Rule 14a-8(k).
BASIS FOR EXCLUSION
We hereby respectfully request that the Staff concur in our view that the
Proposal may be excluded from the 2008 Proxy Materials pursuant to Rule 14a-8(b)
and Rule 14a-8(i)(f)(1) because the Proponent has not provided the requisite
proof of continuous share ownership in response to the Company's proper request
for that information. A copy of the Proposal, which requests that the Company's
Board of Directors consider whether to arrange for "a rigorous analysis of the [C]ompany's
total shareholder return policy, its purpose and effects on shareholders,
including an [sic] meaningful analysis of the balance between the dividend rate
and share appreciation through buy-backs," is attached hereto as Exhibit A.
ANALYSIS
The Proposal May Be Excluded under Rule 14a-8(b) and Rule 14a-8(f)(1) Because
the Proponent Failed to Establish the Requisite Eligibility to Submit the
Proposal.
A. Background.
The Proponent submitted his Proposal on December 10, 2007, to the Company via
facsimile, which the Company received on December 10, 2007. See Exhibit A. The
Proponent did not include with the Proposal evidence demonstrating satisfaction
of the ownership requirements of Rule 14a-8(b), nor did he include a statement
that he intended to hold Company shares through the date of the 2008 Annual
Meeting of Shareholders. Furthermore, the Company confirmed that the Proponent
does not appear on the records of the Company's stock transfer agent as a
shareholder of record.
Accordingly, the Company sought verification from the Proponent of his
eligibility to submit the Proposal. Specifically, the Company sent via overnight
mail to the Proponent a letter on December 12, 2007, which was within 14
calendar days of the Company's receipt of the Proposal, notifying the Proponent
of the requirements of Rule 14a-8(b) and how the Proponent could cure the
procedural deficiency (the "Deficiency Notice"). A copy of the Deficiency Notice
is attached hereto as Exhibit B. The Deficiency Notice stated that "proof of
share ownership was not included with [the Proponent's] submission," and
explained that the "proof of ownership (1) must be provided by the holder of
record; (2) must indicate that [the Proponent] owned the required amount of
securities as of December 10, 2007, the date of submission of the [P]roposal;
(3) must state that [the Proponent has] continuously owned the securities for at
least 12 months prior to December 10, 2007; and (4) must be dated on or after
the date of submission." The Deficiency Notice also included a copy of Rule
14a-8.
According to United Parcel Service tracking records, the Proponent received the
Deficiency Notice on December 13, 2007. See Exhibit C. On December 13, 2007, the
Company received a facsimile from the Proponent acknowledging receipt of the
Deficiency Notice and attaching "a sheet from Fidelity Investments" purporting
to substantiate his eligibility to submit the Proposal (the "Proponent's
Response"). See Exhibit D. The Proponent's Response also stated that, "this is
my written statement that I `intend to continue ownership of the shares through
the date of the annual meeting.'" The attached sheet from Fidelity Investments
does not contain a name or an account number, but rather states only "Trust:
Under Agreement" dated "as of 12/13/2007."
B. Exclusion of the Proposal under Rule 14a-8(b) and Rule 14a-8(f)(1).
The Company may exclude the Proposal under Rule 14a-8(f)(1) because the
Proponent did not substantiate his eligibility to submit the Proposal under Rule
14a-8(b). Rule 14a-8(b)(1) provides, in part, that "[i]n order to be eligible to
submit a proposal, [a shareholder] must have continuously held at least $2,000
in market value, or 1%, of the company's securities entitled to be voted on the
proposal at the meeting for at least one year by the date [the shareholder]
submit[s] the proposal." Staff Legal Bulletin No. 14 specifies that when the
shareholder is not the registered holder, the shareholder "is responsible for
proving his or her eligibility to submit a proposal to the company," which the
shareholder may do by one of the two ways provided in Rule 14a-8(b)(2). See
Section C.1.c, Staff Legal Bulletin No. 14 (July 13, 2001) ("SLB 14").
As described above, the Company received the Proposal on December 10, 2007. On
December 12, 2007, which was within 14 days of receiving the Proposal, the
Deficiency Notice was sent to the Proponent. The Proponent's Response fails, in
several respects, to meet the requirements set out in Rule 14a-8(b).
Specifically, the Proponent's Response includes a printout from the Fidelity
Investments website, which does not demonstrate the Proponent's continuous
ownership of the Company's securities. See Section C.1.c.(2), SLB 14 (noting
that a shareholder's "monthly, quarterly or other periodic investment statements
[does not] demonstrate sufficiently continuous ownership of the securities").
Moreover, the Proponent's Response does not establish his ownership as of the
date the Proposal was submitted to the Company (December 10, 2007) but instead
appears to describe ownership "as of 12/13/2007." Further, the Proponent's
Response does not include a statement from the record holder that he
continuously held at least $2,000 in market value, or 1%, of the Company's
securities entitled to be voted on the Proposal for at least one year as of the
date the Proposal was submitted to the Company (December 10, 2007). Moreover,
the Fidelity Investment printout, which does not include a name or account
number, seems to relate to shares owned by a "Trust: Under Agreement" although
the Proponent submitted the Proposal in his individual capacity. Thus, the
Proponent has failed to supply sufficient proof of his ownership under Rule
14a-8(b) and has failed to provide a written statement from the record holder of
his securities that he continuously has held the requisite number of Company
shares for at least one year as of December 10, 2007, the date the Proposal was
submitted to the Company.
Rule 14a-8(f) provides that a company may exclude a shareholder proposal if the
proponent fails to provide evidence of eligibility under Rule 14a-8, including
the continuous ownership requirements of Rule 14a-8(b), provided that the
company timely notifies the proponent of the problem and the proponent fails to
correct the deficiency within the required time. The Company satisfied its
obligation under Rule 14a-8 by transmitting to the Proponent in a timely manner
the Deficiency Notice, which stated:
the ownership requirements of Rule 14a-8(b), including that the Proponent
provide evidence of his continuous ownership of the requisite amount of Company
stock for at least one year;
the type of documentation necessary to demonstrate the Proponent's continuous
ownership under Rule 14a-8(b);
that the Proponent had to reply to the Deficiency Notice no later than 14
calendar days from the date the Proponent received the Deficiency Notice; and
that a copy of the shareholder proposal rules set forth in Rule 14a-8 was
enclosed.
On numerous occasions the Staff has taken a no-action position concerning a
company's omission of shareholder proposals based on a proponent's failure to
provide satisfactory evidence of eligibility under Rule 14a-8(b) and Rule
14a-8(f)(1). See, e.g., General Motors Corp. (avail. Apr. 5, 2007) (concurring
with the exclusion of a shareholder proposal and noting that "the proponent
appear[ed] to have failed to supply documentary support sufficiently evidencing
that he satisfied the minimum ownership requirement for the one-year period as
of the date that he submitted the proposal as required by rule 14a-8(b)");
Yahoo! Inc. (avail. Mar. 29, 2007); CSK Auto Corp. (avail. Jan. 29, 2007);
Motorola, Inc. (avail. Jan. 10, 2005), Johnson & Johnson (avail. Jan. 3, 2005);
Agilent Technologies, Inc. (avail. Nov. 19, 2004); Intel Corp. (avail. Jan. 29,
2004); Seagate Technology (avail. Aug. 11, 2003); J.P. Morgan Chase & Co.
(avail. Mar. 13, 2002). Similarly, the Proponent has not satisfied his burden of
proving his eligibility to submit the Proposal based on his continuous ownership
for at least one year of the requisite amount of Company shares as required by
Rule 14a-8(b).
Moreover, even if the Proponent's Response included documentation that
specifically identified him as the holder of a sufficient quantity or value of
the Company's shares, the Proponent's Response would be insufficient because the
Fidelity Investment printout does not correspond to the date that the Proposal
was submitted to the Company on December 10, 2007, but rather the printout is
dated "as of 12/13/2007." Further, the Proponent's Response fails to state that
Company shares were continuously held for at least one year preceding the
Proponent's submission of the Proposal to the Company. The Staff previously has
concurred with the exclusion of shareholder proposals because of a record
holder's failure to make this claim. See, e.g., General Motors Corp. (avail.
Apr. 3, 2001) (noting that "while it appears that the proponent did provide some
indication that he owned shares, it appears that he has not provided a statement
from the record holder evidencing documentary support of continuous beneficial
ownership of $2,000 or 1% in market value of voting securities, for at least one
year prior to the submission of the proposal") (emphasis added). In addition,
the Staff has taken a no-action position based on the insufficiency of
fixed-dated account records in proving that a proponent has met the minimum
ownership requirements of Rule 14a-8(b). See Duke Realty Corp. (avail. Feb. 7.
2002) (noting that despite the proponent's submission of a monthly account
statement in response to a deficiency notice, "the proponent ha[d] not provided
a statement from the record holder evidencing documentary support of continuous
beneficial ownership of $2,000 or 1% in market value of voting securities for at
least one year prior to submission of the proposal"). Similarly, the Proponent's
Response is insufficient as evidence that the Proponent meets the minimum
ownership requirements of Rule 14a-8(b) because it fails to demonstrate his
continuous ownership of the Company's securities.
CONCLUSION
Based upon the foregoing analysis, we respectfully request that the Staff concur
that it will take no action if the Company excludes the Proposal from its 2008
Proxy Materials. We would be happy to provide you with any additional
information and answer any questions that you may have regarding this subject.
Moreover, the Company agrees to promptly forward to the Proponent any response
from the Staff to this no-action request that the Staff transmits by facsimile
to the Company only.
If we can be of any further assistance in this matter, please do not hesitate to
call me at (972) 444-1478.
Sincerely,
/s/
James E. Parsons
Enclosures
cc: Thomas A. Bonnie
[APPENDIX 1]
December 10, 2007
Mr. Henry Hubble
Vice President, Shareholder Relations
ExxonMobil Corp
5959 Las Colinas Blvd
Irving Texas, 75039-2298
Dear Mr. Hubble:
I own 600 shares of Exxon Mobil Corp. Attached is a shareholder resolution for
consideration by the shareholder of ExxonMobil at the 2008 Annual Meeting.
Please let me know if any additional information is needed.
Thank you,
Sincerely,
/s/
Thomas A. Bonnie
[APPENDIX 2]
Shareholder Resolution
2008 study and report on ExxonMobil shareholder return policy
It has been ExxonMobil's announced position in recent years to balance share
buybacks with its dividend rate in a way that ExxonMobil has stated is in the
best interest of total shareholder return. This balance has been the subject of
frequent debate by shareholders.
Though ExxonMobil's policy has been publicly stated in summary terms, the
economic and policy bases on which the Board bases this policy have not been
explained sufficiently for the needed understanding of the policy and its
effects.
It is hereby respectfully proposed that the Board of Directors of Exxon Mobil
consider whether it would be in the best interests of its shareholders
to arrange for an credible independent party to undertake or update, as
appropriate, a rigorous analysis of the company's total shareholder return
policy, its purpose and effects on shareholders, including an meaningful
analysis of the balance between the dividend rate and share appreciation through
buy-backs;
that this study reference credible and diverse academic and financial
community research and opinion on theses issues, as considered necessary to give
objectivity to the report;
that the report include a comparison of the ExxonMobil dividend rate versus
that of its peers and industry competitors inside and outside the USA and any
known reasons for these differences;
that the report analyze the effect of its current dividend rate on segments of
the company's shareholder base, for example, its individual shareholders,
long-term and short term, and institutional investors;
that the report include projections regarding the likely effect of the
company's shareholder return policy on the make-up of the ExxonMobil shareholder
base over the next decade;
that the report include such other material as necessary to make it meaningful
and useful to ExxonMobil shareholders, given their diverse individual
circumstances, and the larger market;
that the report be published on the ExxonMobil website during 2008 for the
education and understanding of the company's stakeholders, now and future.
[INQUIRY LETTER]
January 25, 2008
United States Securities and Exchange Commission
Division of Corporate Finance
Office of Chief Council
100 F Street, NW
Washington, DC 20549
James Earl Parsons
Counsel
Exxon Mobil Corporation
5959 Las Colinas Boulevard
Irving, TX 75039-2298
RE: Securities and Exchange Act of 1934Section 14(a); Rule 14a-8 Commission of
Shareholder Proposal Regarding Shareholder Return Policy
Exxon Mobil response to my proposal
This letter is in response to a January 22, 2008 letter filed with the SEC by
Exxon Mobil Corporation (the Exxon SEC Letter) stating that Exxon intends to
exclude my shareholder proposal from its 2008 Proxy Statement.
I am writing to correct the factual errors in the Exxon SEC Letter. I am now and
have been in full compliance with the SEC requirements regarding eligibility to
submit a shareholder proposal. There is no basis whatsoever for its exclusion.
Rule 14(a)8 requires I provide respond to a deficiency notice within 14 days of
receiving it. I complied with this rule.
I received a notice of deficiency from Exxon on December 13, 2008.
I replied within 1 day.
On December 14, 2008, at 6:47 A.M. I faxed to Exxon a letter and account
position statement provided by the record holder of the shares, Fidelity
Investments (the Fidelity Report). I then mailed the original of the Fidelity
Report to Exxon, attention of Mr. Henry Hubble, Vice President, Shareholder
Relations. Please see Attachment 1. Exxon does not contest that I did this.
Rule 14(a)8 requires proof of ownership from the holder of record. I complied
with this rule.
In fact, I did provide proof of ownership from the record holder of my shares.
Fidelity Investments is the record holder and/or owner of the nominee in which
my shares are held. My shares are held in my personal trust, titled T.A. Bonnie
Revocable Trust U/A 1/15/92 T.A. Bonnie Trustee, account number X43052299.
Therefore I contacted Fidelity Investments and asked for a statement showing
my ownership and the period of my ownership. I was advised that the only way to
obtain this was to use the Fidelity Investments website and print out the "View
Lots" screen. I did this. This was the above-referenced Fidelity Report.
The Fidelity website in question is a secured site, requiring a password and
proper authentication to me. Only I have access to it. Thus the information
extracted is mine only and the shares reported there are mine. This is further
evidence of ownership.
In order further to verify as factual the Fidelity Report I extracted I
directed a Fidelity Investments representative to stamp and sign both the cover
letter and the Fidelity Report. I sent Exxon the Fidelity Report as certified by
the authorized Fidelity Investments representative.1
As a final corroboration I now am sending the Premium Services Investment
Report (Attachment 2). The Fidelity Report and the Fidelity Investments Premium
Service Investment Report reference the same account number, X43052299 and show
the trust titled "T.A. Bonnie Revocable Trust U/A 1/15/92 T.A. Bonnie Trustee."
There is therefore no question that the Fidelity Report does evidence my
ownership and was timely submitted December 14, 2008.
Rule 14(a)8 requires proof of continuous ownership for the period of at least
one year prior to submission of the shareholder proposal. I complied with this
rule.
I timely proved that I owned the required shares for the required period and
many years longer.
Reading the Fidelity Report section "Position History," submitted December 14,
2008, clearly shows that as of the date of the Fidelity Report (12/13/08) I
owned 2 lots of Exxon shares, both purchased much more than 1 year before.
Lot 1: 556 shares acquired in 1992.
Lot 2: 44 shares, acquired in 2001.
The Fidelity Report therefore shows that I owned these shares on December 10
and every day before that date, going all the way back to the dates of
acquisition in 1992 and 2001, respectively.
Rule 14(a)8 requires proof of ownership as of the date on which the proposal is
filed. I complied with this rule.
I provided proof of ownership as of December 10, 2008.
As per the facts set forth above, the Fidelity Report clearly demonstrated
ownership of Exxon shares as of December 10, the date of submission of the
shareholder proposal. It shows that I owned these shares on December 10, since
it shows I owned them on December 13 and every day before that date, going all
the way back to the dates of acquisition in 1992 and 2001, respectively.
In conclusion Exxon has misstated the facts of my good faith submission. I do
not appreciate the additional time, effort, and counsel fees required for me to
re-establish those facts in response to Exxon's inappropriate and wasteful
effort to exclude my lawful shareholder proposal. The facts are that I did all
that is required under the SEC rules and all that has been requested by Exxon,
including accepting Exxon's request that I engage with them in a wasteful
telephone conference call in January, in which Exxon gave me no answers or
information at all.
I am sincerely interested in the total shareholder return issue set out in my
shareholder proposal. This is each shareholder's proper role: to ask questions
and get answers about his investment. I am doing what is appropriate for myself,
as I have a very significant $50,000+investment in Exxon, and doing what is
appropriate for the entire Exxon shareholder population.
Thank you,
Sincerely,
/s/
Thomas A. Bonnie
Attachment 1: Fidelity Report
Attachment 2: Fidelity Investments Investment Report
-----FOOTNOTES-----
1 The Fidelity verification stamp was in green ink, a color completely
transparent to facsimile transmission and to xerographic reproduction. Thus the
Fidelity Report and the accompanying letter show the signature of Rachel Auxier,
the authorized Fidelity representative, and the date of 12/13/07, but
unfortunately do not show the outline of the stamp.
[STAFF REPLY LETTER]
January 29, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Exxon Mobil Corporation Incoming letter dated January 22, 2008
The proposal relates to ExxonMobil's shareholder return policy.
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, within 14 days of receipt of
ExxonMobil's request, 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/
William A. Hines
Special Counsel
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