Company Name: Verizon Communications Inc.
Public Availability Date: January 22, 2008Document Sections:INQUIRY LETTER
APPENDIX 1
APPENDIX 2
STAFF REPLY LETTER
[INQUIRY LETTER]
December 21, 2007
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, N.E.
Washington, D.C. 20549
Re: Verizon Communications Inc. 2008 Annual Meeting Shareholder Proposal of
Robert A. Rehm
Ladies and Gentlemen:
This letter is submitted on behalf of Verizon Communications Inc., a Delaware
corporation ("Verizon"), pursuant to Rule 14a-8(j) under the Securities Exchange
Act of 1934, as amended. Verizon has received a shareholder proposal and
supporting statement (the "Proposal") from Robert A. Rehm (the "Proponent"), for
inclusion in the proxy materials to be distributed by Verizon in connection with
its 2008 annual meeting of shareholders (the "2008 proxy materials"). A copy of
the Proposal is attached as Exhibit A. For the reasons stated below, Verizon
intends to omit the Proposal from its 2008 proxy materials.
Pursuant to Rule 14a-8(j)(2), enclosed are six copies of this letter and the
accompanying attachments. A copy of this letter is also being sent to the
Proponent as notice of Verizon's intent to omit the Proposal from Verizon's 2008
proxy materials.
I. Introduction
On November 19, 2007, Verizon received a letter from the Proponent containing
the following proposal:
RESOLVED, pursuant to Section 7.06 of the Bylaws of Verizon Communications Inc.,
the stockholders hereby amend the Bylaws to add the following to Section 4.12(c)
of Article IV, permitting shareholders to nominate candidates for election to
the Board under limited circumstances:
"Notwithstanding the above, the corporation shall include in its proxy materials
for a meeting of shareholders at which directors are to be elected the name,
together with the Disclosure and Statement (as defined in this section), of any
person nominated for election to the Board of Directors by a shareholder or
group thereof that satisfies the requirements of this section 4.12(c) (the
"Nominator"), and allow shareholders to vote with respect to such nominee on the
corporation's proxy card. Each Nominator may nominate up to two candidates for
election at a meeting.
A Nominator must:
(a) have beneficially owned 3% or more of the corporation's outstanding common
stock ("Required Shares") continuously for at least two years;
(b) provide written notice received by the secretary of the corporation within
the time period specified in this section 4.12(c) containing (i) with respect to
the nominee, (A) the information required by such section and (B) such nominee's
consent to being named in the proxy statement and to serving as a director if
elected; and (ii) with respect to the Nominator, proof of ownership of the
Required Shares; and
(c) execute an undertaking that it agrees to (i) assume all liability stemming
from any legal or regulatory violation arising out of the Nominator's
communications with the corporation's shareholders, including, without
limitation, the Disclosure and Statement; (ii) to the extent it uses soliciting
material other than the corporation's proxy materials, comply with all
applicable laws and regulations, including, without limitation, the SEC's Rule
14a-12.
The Nominator may furnish a statement, not to exceed 500 words, in support of
the nominee's candidacy (the "Statement") at the time the Disclosure is
submitted. The Board of Directors shall adopt a procedure for timely resolving
disputes over whether notice of a nomination was timely given and whether the
Disclosure and Statement comply with this section 4.12 and any applicable SEC
rules.
Verizon believes that the Proposal may be properly omitted from its 2008 proxy
materials under Rule 14a-8(i)(8) because the Proposal relates to a procedure for
nomination or election for membership on the company's board of directors.
Verizon respectfully requests the concurrence of the Staff of the Division of
Corporation Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission") that it will not recommend enforcement action against Verizon if
Verizon omits the Proposal in its entirety from its 2008 proxy materials.
II. The Proposal May be Excluded from the 2008 Proxy Materials Pursuant to Rule
14a-8(i)(8) Because the Proposal Relates to a Procedure for Nomination or
Election for Membership on the Company's Board of Directors.
Rule 14a-8(i)(8) currently provides that a company may omit a shareholder
proposal from its proxy materials "if the proposal relates to an election for
membership on the company's board of directors." The Commission has stated that
the "principal purpose of [subparagraph (i)(8)] is to make clear, with respect
to corporate elections, that Rule 14a-8 is not the proper means for conducting
campaigns or effecting reforms in elections of that nature, since other proxy
rules, including 14a-11 [subsequently recast as rule 14a-12(c)] are applicable
thereto." Exchange Act Release No. 34-12598 (July 7, 1976). In accordance with
the Commission's clear position, the Staff historically has found that
shareholder proposals establishing a procedure that may result in contested
elections to the board of directors of a company may properly be omitted
pursuant to Rule 14a-8(i)(8). In Oxford Health Plans. Inc., (February 23, 2000),
the Staff stated that a precatory proposal which urged "Oxford to take all
necessary steps to ensure that, if holders of at least three percent of Oxford's
common stock nominate candidates for the board of directors, Oxford will include
the names, biographical sketches and photographs of these nominees in its proxy
materials, print the names of these nominees on its proxy card, and afford
shareholders the same opportunity to vote for these nominees as is provided for
Oxford's nominees" may be omitted from the company's proxy materials under Rule
14a-8(i)(8). In reaching its conclusion, the Staff stated that the proposal,
"rather than establishing procedures for nomination or qualification generally,
would establish a procedure that may result in contested elections of directors,
which is more appropriately addressed under rule 14a-12." See also, AOL Time Warner Inc. (February 28, 2003); The Bank of New York Inc. (February 28, 2003);
Eastman Kodak Company (February 28, 2003); ExxonMobil Corp. (February 28, 2003);
Sears, Robuck & Co. (February 28, 2003); Citigroup, Inc. (January 31, 2003); and
HealthSouth Corp. (January 21, 2003). In each of these precedents, the Staff
concurred with the companies' position that shareholder proposals, which are
substantively similar to the one at issue here, were excludable under Rule
14a-8(i)(8) because "it appears that the proposal, rather than establishing
procedures for nomination or qualification generally, would establish a
procedure that may result in contested elections of directors."
In response to the uncertainty resulting from a recent decision of the U.S.
Court of Appeals for the Second Circuit that did not defer to the Commission's
longstanding interpretation of Rule 14a-8(l)(8) described in the previous
paragraph, on December 6, 2007, Commission issued Release No. 34-56914 (the
"Adopting Release"), adopting an amendment to Rule 14a-8(i)(8). The amended
rule, which will become effective on January 10, 2008 (prior to the time Verizon
mails its 2008 proxy materials), clarifies the uncertainty surrounding the
excludability of "equal access" proposals such as the Proposal. The amended rule
provides that a proposal may be excluded "[i]f the proposal relates to a
nomination or an election for membership on the company's board of directors or
analogous governing body or a procedure for such nomination or election." The
amendment "is intended to clarify the meaning of Rule 14a-8(i)(8) by codifying
the agency's longstanding interpretation of the Rule" (Adopting Release at p.
16, emphasis added). Under this interpretation, "Rule 14a-8(i)(8) permits
exclusion of a proposal that would result in an immediate election contest
(e.g., by making or opposing a director nomination for a particular meeting) or
would set up a process for shareholders to conduct an election contest in the
future by requiring the company to include the shareholders' director nominees
in the company's proxy materials for subsequent meetings." (Adopting Release at
p.13).
The Proposalwhich would amend Verizon's Bylaws to establish a process for
shareholders to conduct an election contest by requiring Verizon to include the
shareholders' nominee in its proxy materialsfalls squarely within the intended
scope of the exclusion.
III. Conclusion.
Verizon believes that the Proposal may be omitted from its 2008 proxy materials
under Rule 14a-8(i)(8) because the Proposal relates to a procedure for
nomination or election for membership on the company's board of directors.
Accordingly, Verizon respectfully requests the concurrence of the Staff that it
will not recommend enforcement action against Verizon if Verizon omits the
Proposal in its entirety from Verizon's 2008 proxy materials.
Verizon requests that the Staff fax a copy of its determination of this matter
to the undersigned at (908) 696-2068 and to the Proponent at (631) 367-1190.
Kindly acknowledge receipt of this letter by stamping and returning the extra
enclosed copy of this letter in the enclosed self-addressed, stamped envelope.
If you have any questions with respect to this matter, please telephone me at
(908) 559-5636.
Very truly yours,
/s/
Mary Louise Weber
Assistant General Counsel
Enclosures
cc: Robert A. Rehm
5 Erie Court
Jericho, NY 11753
[APPENDIX 1]
EXHIBIT "A"
November 16, 2005
Marianne Drost, Esq.
Deputy General Counsel and Corporate Secretary
Verizon Communications Inc.
140 West Street, 29th floor
New York, NY 10007
Dear Ms. Drost:
I hereby submit the attached stockholder proposal for inclusion in the Company's
2008 proxy statement as allowed under Securities and Exchange Commission Rule
14a-8.
The resolution requests the Company's Board of Directors to amend Verizon's
Bylaws to permit shareholders to nominate candidates for election to the Board
under limited circumstances.
As shown on the attachment, I have continuously held the requisite number of
shares of Verizon common stock for more than one year. I intend to maintain my
ownership position through the date of the 2008 Annual Meeting. I will attend to
introduce my resolution at the Company's 2008 Annual Meeting.
Thank you for including my proposal in the Company's Proxy Statement. If you
need any additional information about the proposal, please initially contact
Bill Jones, President and Executive Director of the Association of BellTel
Retirees.
Sincerely yours,
/s/
Robert A. Rehm
ATTACHMENT
[APPENDIX 2]
STOCKHOLDER NOMINEES FOR ELECTION TO THE BOARD
Robert A. Rehm, 5 Erie Court, Jericho, NY 11753, who owns 5,134 shares of the
Company's common stock, hereby notifies the Company that he intends to introduce
the following resolution at the 2008 Annual Meeting for action by the
stockholders:
PROPOSAL
RESOLVED, pursuant to Section 7.06 of the Bylaws of Verizon Communications Inc.,
the stockholders hereby amend the Bylaws to add the following to Section 4.12(c)
of Article IV, permitting shareholders to nominate candidates for election to
the Board under limited circumstances:
"Notwithstanding the above, the corporation shall include in its proxy materials
for a meeting of shareholders at which directors are to be elected the name,
together with the Disclosure and Statement (as defined in this section), of any
person nominated for election to the Board of Directors by a shareholder or
group thereof that satisfies the requirements of this section 4.12(c) (the
"Nominator"), and allow shareholders to vote with respect to such nominee on the
corporation's proxy card. Each Nominator may nominate up to two candidates for
election at a meeting.
A Nominator must:
(a) have beneficially owned 3% or more of the corporation's outstanding common
stock ("Required Shares") continuously for at least two years;
(b) provide written notice received by the secretary of the corporation within
the time period specified in this section 4.12(c) containing (i) with respect to
the nominee, (A) the information required by such section and (B) such nominee's
consent to being named in the proxy statement and to serving as a director if
elected; and (ii) with respect to the Nominator, proof of ownership of the
Required Shares; and
(c) execute an undertaking that it agrees to (i) assume all liability stemming
from any legal or regulatory violation arising out of the Nominator's
communications with the corporation's shareholders, including, without
limitation, the Disclosure and Statement; (ii) to the extent it uses soliciting
material other than the corporation's proxy materials, comply with all
applicable laws and regulations, including, without limitation, the SEC's Rule
14a-12.
The Nominator may furnish a statement, not to exceed 500 words, in support of
the nominee's candidacy (the "Statement") at the time the Disclosure is
submitted. The Board of Directors shall adopt a procedure for timely resolving
disputes over whether notice of a nomination was timely given and whether the
Disclosure and Statement comply with this section 4.12 and any applicable SEC
rules."
Supporting Statement
Shareowners believe their ability to nominate candidates for the Board is
central to ensuring accountability to owner's interests. Verizon, like most
companies, does not give shareholders a choice among competing candidates in
director elections.
In 2003 the SEC proposed a process similar to the one proposed here. The SEC
explained that shareholders "dissatisfied with the leadership of a company
generally must undertake a proxy contest, along with its related expenses, to
put nominees before security holders for a vote," The Board's nominees, in
contrast, are presented in the proxy statement at Company expense.
I believe competition in director elections would particularly benefit Verizon.
The Corporate Library (TCL) rated Verizon's Board as one of the "ten worst"
(among America's 1,700 largest companies) in its 2003 Board Effectiveness
Ratings, and named Verizon one of 12 "Pay for Failure" companies the past two
years.
Please vote FOR this proposal.
[STAFF REPLY LETTER]
January 22, 2008
Mary Louise Weber
Assistant General Counsel
Verizon Communications Inc.
One Verizon Way, Rm VC54S440
Basking Ridge, NJ 07920
Re: Verizon Communications Inc.
Dear Ms. Weber:
This is in regard to your letter dated January 21, 2008 concerning the
shareholder proposal submitted by Robert A. Rehm for inclusion in Verizon's
proxy materials for its upcoming annual meeting of security holders. Your letter
indicates that the proponent has withdrawn the proposal, and that Verizon
therefore withdraws its December 21, 2007 request for a no-action letter from
the Division. Because the matter is now moot, we will have no further comment.
Sincerely,
/s/
Heather L. Maples
Special Counsel
cc: Robert A. Rehm
5 Erie Court
Jericho, NY 11753-1507 |
