December 16, 1997
     
     
     
Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
     
Re:                           Amendments to Rules 
on Shareholder Proposals
File No. S7-25-97
     
Ladies and Gentlemen:
     
Exxon Corporation offers the following comments on Release
No. 34-39093, dated September 18, 1997 (the "Release") which proposed amendments
to Rule 14a-8 (the "Rule") and other rules related to shareholder proposals to 
be included in proxy statements.  We believe we bring substantial experience to 
the discussion.  As a public company with a large number of shareholders, we 
have received shareholder proposals almost every year since the Rule was first 
adopted in 1942 and every year in the past 30 years.
     
We appreciate the SEC's decision to propose amendments of
the Rule.  We know that public companies, proponents and the SEC have been 
unhappy with the proposal process for at least two decades without being able to
find an easier path.  We recognize that the current proposals have been strongly
criticized by many groups, but we hope that comments from us and others will 
lead to improved procedures.
     
We understand the pressures that lead to the decision to
reverse the position in your letter to Cracker Barrel.  However, we believe it 
is an unfortunate choice.  We have no doubt that a large portion of activist 
shareholders have the best of intentions and many of their proposals reflect 
important societal issues.  However, we question whether the corporate proxy 
statement and annual meeting are the right forum to debate these issues.  The 
percentage of shares voted in favor of such proposals is almost always small.  
Even if the proposal receives enough votes for resubmission, it still receives a
percentage that would be considered a resounding defeat in any other form of 
election.  Thus the vast majority of shareholders who voted against the proposal
can only wonder why the proposal keeps reappearing year after year.  We are 
concerned that the reversal of Cracker Barrel will bring more such proposals to 
a vote.   We think that the proposed override will further contribute to the 
problem.  We also are concerned that the proposed amendments of Rule 14a-4 will 
further increase the number of issues burdening the proxy statement.  One 
consequence of an increasing proliferation of proxy proposals is that 
shareholders will become increasingly "put off" by the proxy/annual meeting 
process and decide to opt out of the process.  It is important that we not take 
steps which permit the annual meeting to become the forum to debate societal 
issues which are not directly relevant to the company.
     
Relevance.  The amendments in the Release would allow the
exclusion of proposals that related to purchases or sales of goods or services 
below a threshold of the lesser of $10 million or 3% of revenues or assets.  We 
are very concerned that the proposed exclusion will be practically useless for 
the vast majority of companies that annually receive shareholder proposals.  The
Release describes the amendments in terms of "balance".  In particular, it 
states that the inflexibility of this clause is mitigated by the override 
provision as part of the balance of the participants' concerns.  We believe that
balance is missing since clause (i)(5) will exclude little.
     
First, there is the matter of using a $10 million dollar
threshold for relevance.  That is simply too low to be a reasonable threshold of
relevance to most companies involved. The Small Business Regulatory portion of 
the Release makes it clear that very few small companies receive these 
proposals.  If
anything, the threshold should be geared to the size of the large company 
recipients.  But better still is not to use a dollar amount at all.  As for many
SEC rules, a percentage test would be the fairest test for relevance to all 
companies. The 3% test proposed for small companies in the Release should be 
used for all companies.  We note that in response to the SEC's questionnaire 
earlier this year, a substantial portion of shareholder proponents would favor a
5% of assets, sales or earnings threshold for all proposals except those on 
corporate governance.  Therefore the more straight forward exclusion set forth 
in the questionnaire should be acceptable to the interested parties, 
particularly when combined with the override procedure that was not included in 
the questionnaire.
     
One reason we favor the percentage and formulation set
forth in the questionnaire is to avoid the other major defect of the relevance 
proposal.  That is the intent to tie it to "purchases" or "sales" of "goods" and
"services".  We believe that far too many proposals will not relate to those 
terms or will be drafted specifically to not be measurable by them.  We know 
that some proponents claim the opposite.  It would be better by far to simply 
avoid any tie to "purchase", "sale", "goods" or "services".  Instead use the 
formulation in your questionnaire that excludes proposals representing less than
5% of assets, earnings and sales, unless the proposal relates to corporate 
governance.
     
Resubmission.  For the reasons stated earlier, we recommend
the adoption of the increased resubmission thresholds of 6%, 15% and 30%. 
     
We wish to note a proposal we once received that indicates
the level of irrelevant "noise" in the proxy voting system.  In 1982 Exxon 
received a proposal to change the record date to the day before the meeting, the
proponent feeling that holders who may have sold their shares in the 60 days 
between the record date and the meeting should not vote.  Despite the fact that 
the proposal would have made it impossible for anyone to vote by proxy at the 
meeting, the proposal received 1.5% of the votes cast.  This took place before 
today's level of activism and on an issue of no social importance.  If it 
received 1.5% of the votes then, 3% is clearly too low a level to require 
resubmission today.
     
We agree that the Rule is intended to provide shareholder
democracy, but we believe that the current percentages are far too low to be 
democratic in reality.  While proponents may firmly believe in the value of 
their proposals, it simply is not fair to the overwhelming majority of remaining
shareholders to let a small minority use the majority's time and money after the
minority view has been heard and recently voted down by a percentage that far 
exceeds the percentages seen in most governmental elections.
     
However, what we most desire to comment about on this
subject are two questions in the Release.  Those are whether the percentage for 
resubmission should be lower for larger companies and whether the threshold 
should be based instead on a number of shareholders.  We say no to both 
suggestions.
     
The same percentage of shares voted should be used for all
size issuers.  It is the only fair thing to do.  The interests of the proponents
must be balanced with those of all other shareholders.  The fact that a 
proponent chooses to direct a proposal to a company with a great many 
shareholders cannot be a basis for concluding that an ever larger majority of 
the ownership should be obliged to underwrite the interests of an ever small 
minority.  If the SEC is to choose an arbitrary small percentage for 
resubmission, it should be the same percentage for every company subject to the 
Rule.
     
Similarly, a flat number of shareholders is unfair.  For
the reasons noted before, a flat number is always going to be a less equitable 
standard than a percentage when applied to a wide range in size of public 
companies.  Moreover, a resubmission threshold should not be based on 
shareholders rather than shares. Shareholders are foremost economic investors, 
and as such are normally treated in proportion to the number of shares they have
invested in.  Usually their voting rights on shareholder proposals are in 
similar proportion.  That treatment is generally recognized by corporate law and
should be recognized by the SEC.
     
Personal grievance.  Under the current Rule, the SEC
determines whether or not a proposal is excludable as a personal grievance when 
that argument is raised.  We do not favor the SEC's proposal to take a "no view"
position on a proposal asserted to be a personal grievance unless that can be 
determined on the face of the proposal.  We recognize that if a proponent has a 
personal grievance motivation, it can be hidden and denied. However, we believe 
both proponents and companies will be better off if the SEC serves as an 
arbitrator on this topic.  Both groups will continue to frequently feel the SEC 
made the wrong decision, but both groups as a whole should prefer the relative 
certainty of an SEC decision.  Arrangements for annual meetings are complex and 
time sensitive.  Most companies are not well served by entering into a court 
battle over the issue.  At the same time, we realize that some proponents fear 
exclusion unless they undertake court expense and would similarly prefer that 
the SEC continue to make determinations in this area.
     
Rule 14a-4.  Under Rule 14a-4, for a company to have
discretion on votingthe proxy card, the company must disclose certain matters in the
proxy statement if the company has sufficient notice that such matters will be 
brought to a vote at the meeting.  We have significant concerns with the 
proposed changes to Rule 14a-4 on discretionary voting.  First and foremost, we 
think it is a bad idea to increase the importance of Rule 14a-4 at a time that 
Rule 14a-8 is being revised and could include all forms of proxy material on 
shareholder proposals.  It does not make sense to create a parallel disclosure 
process and it is unnecessary.  If a proponent desires to avoid Rule 14a-8, he 
or she is free to do so and may solicit proxies or contact shareholders outside 
of the proxy process.  If not, there should be one rule under which there is an 
available means to have a proponent's views included in the proxy statement.  
Not all matters brought to the company's notice must be disclosed to grant 
discretion on voting.  Matters brought up too late are not.  Matters excluded 
under Rule 14a-8 are not.  The SEC can and should set in its own rules a 
standard that those seeking disclosure in the company's proxy statement follow 
Rule 14a-8.
     
If the proposed format of Rule 14a-4 were adopted despite
these serious concerns, we believe it requires substantial change.  The proposal
would require a "discussion" of the "nature" of the proposal in the proxy 
statement (with the Release reminding readers to give enough information for an 
informed voting decision).   In effect the full position of the proponent will 
be in the company's proxy statement without any of the limitations of Rule 
14a-8.  This is bad policy, undermining the use of Rule 14a-8.  At most, amended
Rule 14a-4 should allow a proponent the opportunity to have a brief description 
of his or her proposal included in the proxy statement.
     
We are also concerned that any added prominence for Rule
14a-4 proposals will increase the gray area as to whether the company has been 
notified about a proposal.  Shareholders do not simply provide companies with 
proposals setting forth in their letters all of the requirements of Rule 14a-8. 
We receive letters saying the writer is "thinking" of submitting a proposal on a
specific topic and even letters enclosing a resolution that the writers say is 
the resolution they might submit.  This is much more complex under Rule 14a-4.  
If the company concludes it has not formally been notified in sufficient time, 
it may thereafter find it is obligated to make a second mailing to shareholders.
 Even worse, it might conclude the second mailing was not required and later 
face an argument that all other shareholders voting by proxy had not granted 
discretion and lost the right to vote on the issue. 
     
Rule 14a-5.  In line with our concerns about Rule 14a-4
above, we are concerned by the change to Rule 14a-5 to require in the proxy 
statement notice of the deadline for inclusion under Rule 14a-4 in the following
years.  This is a totally unnecessary further elevation of Rule 14a-4 as a 
parallel process to the Rule 14a-8.  It never has been and it would be bad 
policy to do so in the future.
     
Intention to Omit.  Proposed clause (l)(2) would advance
the time by which a company must advise the SEC of the company's intent to omit 
a proposal to 40 days after receipt from the proponent.  We understand the 
intent to start the process earlier to accommodate the override procedure.  
However, we request that the amendment as adopted provide that a proponent may 
not submit a second proposal if the first is excluded pursuant to the new 
procedures.  The new deadline should not become a basis for making the proxy 
season twice as onerous.
     
Proponent's statement.  Proposed clause (m) states that the
proponent may submit a response to the company's filing.  In an attempt to use 
plain English, the proponent is told to "try" to submit it to the SEC, with a 
copy to the company, as soon as possible.  We are concerned that a proponent 
will not try hard enough to send a copy to the company since this has happened 
to us in the past under the word "should" in current Rule 14a-8. Perhaps the 
reference to the copy could be moved to a new sentence stating "you must send 
the company a copy of each submission sent to us at the same time and in the 
same manner you sent it to us."
     
We would be happy to discuss any of these matters with you further.
     
Very truly yours,
     
     
     
     
T. Peter Townsend