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Item 4 on Proxy Card:
United Brotherhood of Carpenters Pension Fund, 101 Constitution
Avenue, N.W., Washington, DC 20001, owner of 45,100 shares
of the Companys common stock, proposes the following:
RESOLVED: That the shareholders of Verizon Communications
Inc. (Company) hereby request that the Board of
Directors initiate the appropriate process to amend the Companys
governance documents (certificate of incorporation or bylaws)
to provide that director nominees shall be elected by the
affirmative vote of the majority of votes cast at an annual
meeting of shareholders.
SUPPORTING STATEMENT: Our Company is incorporated
in Delaware. Delaware law provides that a companys certificate
of incorporation or bylaws may specify the number of votes
that shall be necessary for the transaction of any business,
including the election of directors. (DGCL, Title 8, Chapter
1, Subchapter VII, Section 216). The law provides that if
the level of voting support necessary for a specific action
is not specified in a corporations certificate or bylaws,
directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy at
the meeting and entitled to vote on the election of directors.
Our Company presently uses the plurality vote standard to
elect directors. This proposal requests that the Board initiate
a change in the Companys director election vote standard
to provide that nominees for the board of directors must receive
a majority of the vote cast in order to be elected or re-elected
to the Board.
We believe that a majority vote standard in director elections
would give shareholders a meaningful role in the director
election process. Under the Companys current standard,
a nominee in a director election can be elected with as little
as a single affirmative vote, even if a substantial majority
of the votes cast are "withheld" from that nominee.
The majority vote standard would require that a director receive
a majority of the vote cast in order to be elected to the
Board.
The majority vote proposal received high levels of support
last year, winning majority support at Advanced Micro Devices,
Freeport McMoRan, Marathon Oil, Marsh and McClennan, Office
Depot, Raytheon, and others. Leading proxy advisory firms
recommended voting in favor of the proposal.
Some companies have adopted board governance policies requiring
director nominees that fail to receive majority support from
shareholders to tender their resignations to the board. We
believe that these policies are inadequate for they are based
on continued use of the plurality standard and would allow
director nominees to be elected despite only minimal shareholder
support. We contend that changing the legal standard to a
majority vote is a superior solution that merits shareholder
support.
Our proposal is not intended to limit the judgment of the
Board in crafting the requested governance change. For instance,
the Board should address the status of incumbent director
nominees who fail to receive a majority vote under a majority
vote standard and whether a plurality vote standard may be
appropriate in director elections when the number of director
nominees exceeds the available board seats.
We urge your support of this important director election
reform.
BOARD OF DIRECTORS POSITION
The Corporate Governance Committee has ensured that the Company
has in place a robust process to identify, evaluate and select
potential nominees for directors of the Company. The Committee,
which is composed solely of independent directors, considers
all nominees who are proposed by shareholders, management
and other directors. In order to be selected, nominees must
meet the criteria specified in Verizons Corporate Governance
Guidelines. These criteria are more fully described in this
Proxy Statement beginning on page 5 and are designed to ensure
that the members of the Board of Directors are highly qualified,
meet the Companys independence standards, reflect a
diversity of experience and viewpoints and serve the best
interests of the Company and its shareholders.
The Board believes that the proponents characterization
of the plurality voting process in particular the suggestion
that a director may be elected by a single affirmative vote
is not supported by historic results. The Companys
shareholders have a history of electing strong and independent
Boards, not only by a plurality, but also in fact by a substantial
majority of the votes cast.
The value of requiring a majority vote to elect directors
is being actively discussed and evaluated by a number of independent
groups, companies and interested investors. The Company and
its Board members also track those developments. But there
are numerous issues that would have to be resolved in connection
with changing the required vote to elect directors, including
the extent to which it is necessary to revise certain state
laws. The dialogue is continuing on whether this change is
appropriate and there is not yet consensus on a comprehensive
approach that would address all of the issues related to implementing
a change in the standard for the election of directors. The
Board believes that requiring a majority vote standard could
have unintended consequences, including instability in the
Companys governance processes.
For these reasons, the Board believes that the proposal is
not in the best interests of the Company and its shareholders
as currently proposed.
The Board of Directors recommends a vote AGAINST this
proposal. |