Company Name: Verizon
Communications Inc.
Public Availability Date: January 7, 2008
Document Sections:
INQUIRY LETTER
APPENDIX
INQUIRY LETTER
STAFF REPLY LETTER
[INQUIRY LETTER]
December 17, 2007
Via: Express Mail
U. S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, DC 20549
Re: Verizon Communications Inc. 2008 Annual Meeting Shareholder Proposal of
Robert H. Calves
Ladies and Gentlemen:
This letter is in response to the attached letter to you from Verizon
Communications, Inc. I have enclosed six copies of this letter with its
attachment.
As per the copy of Verizon's letter attached Verizon attempts to exclude my
shareholder proposal for two reasons. I believe that the proposal has merit and
the legal basis for inclusion as stated herein:
First, Verizon believes that the proposal should be excluded under Rule
14a-8(i)(7) because they claim it deals with a matter relating to ordinary
business operations. I believe otherwise. The matter deals with corporate
policies concerning Verizon Communications, Inc. governance in dealing with the
general public and the communities wherein it operates. My proposal is no
different than other shareholders' proposals concerning corporate policies about
general community issues such as environmental, reporting charitable
contributions, etc. My proposal makes no mention of local laws or with
compliance of local laws.
Second, Verizon says that the proposal should be excluded under Rule 14a-8(i)(4)
because it relates to a special interest and not shared by shareholders at
large. This is not true. Verizon's public actions and the image created in the
communities it serves are important to all shareholders as these affect the
financial success of the company and the value of the investment made by the
shareholders.
Verizon says that:
"... the Proponent submitted the Proposal solely as a means of redressing a
complaint arising from a single incident in which a Verizon contractor
mistakenly placed cable on the Proponent's property in the course of installing
lines in a multi-unit dwelling. Although remedial action was taken promptly, the
Proponent apparently was not satisfied."
This statement by Verizon in the attached letter contains inaccuracies. First my
proposal is not motivated by just a single incident, but rather it is motivated
to improve Verizon's image in the public community at large and thus to improve
the financial return for stockholders at large. Next, there are no multi-unit
dwellings where I live; all homes are single family privately owned homes on
their own private lots. Prompt remedial action was never taken. This inaccurate
statement by Verizon is an indication of their bad community relations and my
proposal is presented as a means to improve Verizon's image in the community for
the good of all shareholders.
Towards the end of the attached letter Verizon says that it believes that the
proposal
"... provides no benefits that would `be shared by the other shareholders at
large' because, like many public companies, Verizon already has policies and
procedures in place designed to insure compliance with laws, rules and
regulations. The Proposal will not yield any benefit to the shareholders at
large because the proposed policies would simply be duplicative of those that
have already been established."
My proposed policies are not duplicative. My shareholder proposal has four
items: researching land records and notifying property owners, verifying service
orders and property easements, stopping work when mistakes are made, and
reporting to shareholders. Verizon currently does not have any effective polices
in place addressing these issues, and my proposals make no mention of compliance
with laws, rules and regulations.
My proposal will benefit the shareholders at large by improving community
relations and image to improve Verizon's business and the financial return to
shareholders at large.
I respectfully request the inclusion of my proposal in the Verizon 2008 Annual
Meeting.
Very truly yours,
/s/
[APPENDIX]
EXHIBIT "A"
Robert H. Calves
PO Box 967
Urbanna, VA 23175
November 13, 2007
Via: Certified Mail, Return Receipt
Assistant Corporate Secretary
Verizon Communications, Inc.
140 West Street, 29th Floor
New York, New York 10007
Subject: Annual Meeting Shareholder Proposal
Gentlemen:
I am the registered owner (and have owned for over one year) of 545 shares of
Verizon common stock and I intend to retain ownership of these shares beyond the
2008 Annual Meeting.
Attached is a Shareholder Proposal that I request to be included in the Proxy
Statement and on the Proxy Card for the up-coming 2008 Annual Meeting. I (or my
representative) expect to attend the meeting to present the proposal.
Sincerely,
/s/
Robert H. Calves
Robert H. Calves, PO Box 967, Urbanna, Virginia 23175, owner of 545 shares of
the Company's common stock proposes the following:
PRIVATE PROPERTY TRESPASS
Whereas: To operate its business it is necessary for Verizon and/or its
contractors to install communications lines over, on, or under private property,
and
Whereas: Mistakes are occasionally made wherein there is trespass on private
property when the property owner has not ordered any Verizon services and where
there are no easements permitting the installation of Verizon communications
lines, and
Whereas: Such illegal trespass actions can cause affected property owners to
spread ill will which besmirches and tarnishes Verizon's good name and image in
the community, and
Whereas: Such illegal trespass actions can cause property damage and lead to
legal actions against Verizon
Be It Resolved: That the Board of Directors adopts the following policies:
1. Verizon and/or its contractors will not access any private property without
first researching in the official local land records the ownership of the
property and contacting the owner at least forty-eight hours in advance.
2. Unless the property owner has ordered Verizon service and that fact has been
verified, Verizon and/or its contractors will not cross any private property
without having first established a legal easement and without using land
surveying to mark and establish the location of such easement. When doing
emergency repairs after storm damage access shall be only where communications
lines already exist.
3. When an illegal trespass is reported to any Verizon employee or contractor,
the work in progress shall be immediately stopped and the property owner shall
be contacted by a Verizon Corporate Officer within twenty-four hours to arrange
for immediate redress.
4. Once each year Verizon shall compile and send to all shareholders a report
describing the Company's policies for preventing and handling illegal trespass
incidents. The report shall also include in statistical/tabular form the types
of trespasses, remedial actions taken, and comparisons with the previous year's
number and type of trespasses.
[INQUIRY LETTER]
December 14, 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 H. Calves
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 H. Calves (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 15, 2007, Verizon received a letter from the Proponent containing
the following proposal:
Be It Resolved: That the Board of Directors adopts the following policies:
1. Verizon and/or its contractors will not access any private property without
first researching in the official local land records the ownership of the
property and contacting the owner at least forty-eight hours in advance.
2. Unless the property owner has ordered Verizon service and that fact has been
verified, Verizon and/or its contractors will not cross any private property
without having first established a legal easement and without using land
surveying to mark and establish the location of such easement. When doing
emergency repairs after storm damage access shall be only where communications
lines already exist.
3. When an illegal trespass is reported to any Verizon employee or contractor,
the work in progress shall be immediately stopped and the property owner shall
be contacted by a Verizon Corporate Officer within twenty-four hours to arrange
for immediate redress.
4. Once each year Verizon shall compile and send to all shareholders a report
describing the Company's policies for preventing and handling illegal trespass
incidents. The report shall also include in statistical/tabular form the types
of trespasses, remedial actions taken, and comparisons with the previous year's
number and type of trespasses.
Verizon believes that the Proposal may be properly omitted from its 2008 proxy
materials on the following grounds, each of which is discussed in detail below:
The Proposal may be excluded under Rule 14a-8(i)(7) because it deals with a
matter relating to Verizon's ordinary business operations; and
The Proposal may be excluded under Rule 14a-8(i)(4) because the Proposal
relates to a personal grievance against the Company and is designed to further a
personal interest, which is not shared by other shareholders at large.
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. Bases for Excluding the Proposal.
A. Verizon May Exclude the Proposal under Rule 14a-8(i)(7) Because It Deals with
a Matter Relating to Verizon's Ordinary Business Operations.
Rule 14a-8(i)(7) permits a company to omit a shareholder proposal from its proxy
materials if it deals with a matter relating to the company's ordinary business
operations. Exchange Act Release No. 34-12999 (November 22, 1976). The general
policy underlying the "ordinary business" exclusion is "to confine the
resolution of ordinary business problems to management and the board of
directors, since it is impracticable for shareholders to decide how to solve
such problems at an annual shareholders meeting." Exchange Act Release No.
34-40018 (May 21, 1998). This general policy reflects two central
considerations: (i) "[c]ertain tasks 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 (ii) the "degree to
which the proposal seeks to `micro-manage' the company by probing too deeply
into matters of a complex nature upon which shareholders, as a group, would not
be in a position to make an informed judgment." Exchange Act Release No.
34-40018 (May 21, 1998). Verizon believes that the Proposal may properly be
excluded under Rule 14a-8(i)(7) because the matter covered by the Proposal -
compliance with applicable laws in connection with installation and repair work
performed by the Company's employees and contractors - falls squarely within the
scope of Verizon's day-to-day business operations.
The Staff has long recognized that proposals which attempt to govern business
conduct involving internal operating policies, customer relations and legal
compliance programs may be excluded from proxy materials pursuant to Rule
14a-8(i)(7) because they infringe upon management's core function of overseeing
business practices. See, e.g., Ford Motor Company (March 19, 2007) (proposal
requiring appointment of independent legal advisory commission to investigate
alleged violations of law); The AES Corporation (January 9, 2007) (proposal to
create board committee to monitor compliance with applicable laws); H&R Block Inc. (August 1, 2006) (proposal sought implementation of legal compliance
program with respect to lending policies); ConocoPhillips (February 23, 2006)
(proposal requesting board report on all potential legal liabilities alleged by
proponent to have been omitted from a merger prospectus); Halliburton Company
(March 10, 2006) (proposal requesting board report on the policies and
procedures adopted to reduce or eliminate the recurrence of certain violations
and investigations); Monsanto Corp. (November 3, 2005) (proposal seeking board
oversight of compliance with code of ethics and applicable federal, state and
local rules and regulations); Associates First Capital Corporation (February 23,
1999) (proposal requested that Board monitor and report on legal compliance of
lending practices); Chrysler Corp. (February 18, 1998) (proposal requesting that
board of directors review and amend Chrysler's code of standards for its
international operations and present a report to shareholders); and Citicorp
(January 9, 1998) (proposal sought to initiate a program to monitor and report
on compliance with federal law in transactions with foreign entities).
The development and implementation of policies and procedures to ensure
compliance with applicable law when employees and contractors access customer
premises or cross private property is an integral part of Verizon's day-to-day
business operations. Verizon is one of the nation's largest telecommunications
carriers, delivering a wide variety of wireline and wireless communication
services to individual consumers, businesses, government and wholesale
customers. With operations in multiple states and jurisdictions, Verizon's
management is in the best position to determine what policies and procedures are
necessary to ensure compliance with applicable legal and regulatory
requirements. The Proposal impermissibly seeks to subject this complex aspect of
Verizon's business operations to shareholder oversight.
For the foregoing reasons, Verizon believes that the Proposal may be omitted
from its 2008 proxy materials because it deals with matters relating to
Verizon's ordinary business operations.
B. Verizon May Exclude the Proposal under Rule 14a-8(i)(4), Because It Relates
to a Personal Grievance or Special Interest, Which Is Not Shared by Shareholders
At Large
Under Rule 14a-8(i)(4), a company may omit a shareholder proposal from its proxy
materials if the proposal relates to the redress of a personal claim or
grievance, or if it is designed to further a personal interest not shared by the
other shareholders. Verizon believes that the Proponent submitted the Proposal
solely as a means of redressing a complaint arising from a single incident in
which a Verizon contractor mistakenly placed cable on the Proponent's property
in the course of installing lines in a multi-unit dwelling. Although remedial
action was taken promptly, the Proponent apparently was not satisfied.
The Staff has consistently permitted the exclusion of proposals which use broad
terms in order to appear to represent the general interests of shareholders
when, in fact, such proposals seek to redress a personal grievance or to advance
a special interest. See, e.g., The Dow Chemical Company (March 5, 2003)
(proposal that board investigate the alleged use of certain chemicals
manufactured by the company as grain fumigants used to seek redress for alleged
injury); Sara Lee Corp. (August 10, 2001) (proposal regarding approval of
payments used to address personal grievance regarding the cessation of a portion
of the company's business);); KeyCorp (February 22, 2001) (proposal regarding
disclosure of fund performance used to address litigation regarding the final
accounting of the company's funds); Burlington Northern Santa Fe Corp. (February
1, 2001) (proposals regarding executive compensation and employment issues used
to address employment dispute); Unocal Corp. (March 30, 2000) (proposals
regarding environmental issues used to address remediation cost dispute); and
Union Pacific Corp. (January 31, 2000) (proposal regarding pension plan used to
address dispute related to benefits payable to proponent); Station Casinos, Inc.
(October 15, 1997)(proposal to maintain liability insurance excludable as a
personal grievance when brought by attorney of a guest at the company's casino
who filed suit to recover damages from alleged theft that occurred at casino).
Verizon believes that the Proposal provides no benefits that would "be shared by
the other shareholders at large" because, like many public companies, Verizon
already has policies and procedures in place designed to ensure compliance with
laws, rules and regulations. The Proposal will not yield any benefit to the
shareholders at large because the proposed policies would simply be duplicative
of those that have already been established.
Rule 14a-8(i)(4) is designed to prevent shareholders from using the proposal
process to redress a personal grievance or to further a special interest rather
than an interest shared by other shareholders. (See Securities Exchange Act
Release No. 34-20091, August 16, 1983.) To prevent the Proponent from using his
Proposal as a means of addressing a grievance unrelated to those of other
shareholders, the Company believes that the Proposal should be omitted pursuant
to Rule 14a-8(i)(4).
III. Conclusion.
Verizon believes that the Proposal may be omitted from its 2008 proxy materials
(1) under Rule 14a-8(i)(7) because it deals with matters relating to Verizon's
ordinary business operations, and (2) under Rule 14a-8(i)(4) because the it
relates to a personal grievance or special interest. 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.
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: Mr. Robert H. Calves
P.O. Box 967
Urbanna, VA 23175
[STAFF REPLY LETTER]
January 7, 2008
Response of the Office of Chief Counsel Division of Corporation Finance
Re:
Incoming letter dated December 14, 2007
The proposal provides that the board should adopt policies to ensure that
Verizon and/or its contractors do not engage in illegal trespass actions,
including by researching official land records and establishing easements, and
prepare a report to shareholders describing Verizon's policies for preventing
and handling illegal trespassing incidents.
There appears to be some basis for your view that Verizon may exclude the
proposal under rule 14a-8(i)(7), as relating to Verizon's ordinary business
operations (i.e., general legal compliance program). Accordingly, we will not
recommend enforcement action to the Commission if Verizon omits the proposal
from its proxy materials in reliance on rule 14a-8(i)(7).
In reaching this position, we have not found it necessary to address the
alternative basis for omission upon which Verizon relies.
Sincerely,
/s/
Song Brandon
Attorney-Adviser
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