SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT.
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 'SS' 240.14a-11(c) or 'SS' 240.14a-12
EXXON CORPORATION
......................................................................
(Name of Registrant as Specified In Its Charter)
.......................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
.......................................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................................
(5) Total fee paid:
.......................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................................
(3) Filing Party:
.......................................................................
(4) Date Filed:
.......................................................................
EXXON CORPORATION
Notice of
Annual Meeting
April 30, 1997
and
Proxy Statement
[TIGER]
[Logo] CORPORATION
5959 Las Colinas Boulevard
Irving, TX 75039-2298
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders to
be held in Dallas, Texas, on Wednesday, April 30, 1997.
By attending the meeting, you will have an opportunity to hear a report on
the operations of your Corporation and to meet your directors and executives.
This booklet includes the notice of the meeting and the proxy statement
which contains information about the functions of your Board of Directors and
its committees and personal information about each of the nominees for the
Board. It also includes three Board of Directors proposals and two shareholder
proposals, with the Board's position on each.
It is important that your shares be represented at the meeting regardless
of the size of your holdings. I urge you to complete, sign, date, and return
your proxy card promptly.
If you plan to attend the meeting, please mark your proxy card in the space
provided for that purpose. An admission ticket is included with the proxy card
for each shareholder of record and each participant in Exxon's Shareholder
Investment Program (including IRA accounts) and the Exxon Thrift Plan. If you
did not receive an admission ticket, please advise the shareholder of record
(your bank, broker, etc.) that you wish to attend. That firm must provide you
with evidence of your ownership which will enable you to gain admittance to the
meeting.
The Board of Directors has approved a two-for-one stock split effective
March 14, 1997. We anticipate the new share certificates will be distributed to
shareholders around April 11, 1997.
A report on the annual meeting will be included in the June issue of Exxon
Perspectives, the Corporation's periodic report to shareholders.
Sincerely yours,
/s/ Lee R. RAYMOND
L. R. RAYMOND
Chairman of the Board
March 19, 1997
------------------------------------------------
YOUR VOTE IS IMPORTANT
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN
YOUR PROXY CARD IN THE ENCLOSED ENVELOPE
------------------------------------------------
Notice of
Annual Meeting
of
Shareholders
The annual meeting of shareholders of the Corporation will be held at the
Morton H. Meyerson Symphony Center, 2301 Flora Street, Dallas, Texas, on
Wednesday, April 30, 1997, beginning at 10:00 a.m., Central Daylight Time, for
the following purposes:
to elect directors;
to consider and act upon:
a proposal concerning amendment of the 1993 Incentive Program, which is
RECOMMENDED by the Board of Directors;
a proposal concerning performance-based incentive awards, which is
RECOMMENDED by the Board of Directors;
a proposal concerning ratification of the appointment of independent
public accountants, which is RECOMMENDED by the Board of Directors;
the shareholder proposals set forth on pages 20 through 22, which are
OPPOSED by the Board of Directors; and
to transact any other business which properly may be brought before the
meeting.
Shareholders of record at the close of business on March 3, 1997 will be
entitled to vote at the meeting.
By order of the Board of Directors,
/s/ T. P. TOWNSEND
T. P. TOWNSEND
Secretary
Exxon Corporation
5959 Las Colinas Boulevard
Irving, TX 75039-2298
March 19, 1997
Proxy Statement
TABLE OF CONTENTS
page
General Information............................................... 1
Board of Directors................................................ 2
Election of Directors............................................. 4
Executive Compensation............................................ 9
Board of Directors Proposals
Amendment of 1993 Incentive Program............................. 17
Performance-based incentive awards.............................. 19
Ratification of the appointment of independent public
accountants.................................................. 20
Shareholder Proposals
Additional reporting of political contributions................. 21
Additional executive compensation reporting..................... 21
Additional Information............................................ 23
GENERAL INFORMATION
Attendance at the annual meeting of shareholders is limited to shareholders
of record or their proxies, beneficial owners of Exxon stock having evidence of
ownership, and guests of the Corporation.
Any shareholder or shareholder's representative who, because of a
disability, may need special assistance to allow him or her to participate at
the annual meeting of shareholders may request reasonable assistance from the
Corporation by contacting Exxon Corporation, Investor Relations, P.O. Box
140369, Irving, TX 75014-0369, (972) 444-1157. To provide the Corporation
sufficient time to arrange for reasonable assistance, please submit all requests
by April 18, 1997.
Consideration of certain matters, such as the election of directors, is
required at the annual meeting. In addition, by submitting a proposal to the
Corporation on a timely basis, a shareholder may present any proposal which is a
proper subject for inclusion in the proxy statement and for consideration at the
annual meeting.
Stock Split
On February 26, 1997, the Board of Directors approved a two-for-one stock
split to shareholders of record on March 14, 1997. Each shareholder as of March
14, 1997 will receive one additional share for each share owned. The new share
certificates will be distributed to shareholders around April 11, 1997.
ALL INFORMATION IN THIS PROXY STATEMENT, INCLUDING SHARE NUMBERS, IS ON A
PRE-SPLIT BASIS.
Shareholder Proposals for 1998 Annual Meeting
Under the current rules of the Securities and Exchange Commission, in order
to be included in proxy material for the 1998 annual meeting, a proposal must be
received by the Corporation by the close of business on November 19, 1997. It is
suggested that a proponent submit any proposal by Certified Mail -- Return
Receipt Requested to the Secretary of the Corporation, 5959 Las Colinas
Boulevard, Irving, TX 75039-2298. Detailed information for submitting a proposal
will be provided upon written request to the Secretary of the Corporation.
Voting
It is the policy of the Corporation that all proxy (voting instruction)
cards and ballots, which identify shareholders, be kept secret. Proxy cards are
returned in envelopes addressed to the independent tabulator who receives,
inspects, and tabulates the proxies. Individual-voted proxies and ballots are
not seen by, nor reported to, the Corporation, except in cases where
shareholders write comments on their proxy cards or in limited circumstances,
such as a proxy solicitation in opposition to the Board of Directors.
The accompanying proxy card is designed to permit each shareholder of
record at the close of business on March 3, 1997 to vote in the election of
directors and on the proposals described in this proxy statement. If a
shareholder is a participant in Exxon's Shareholder Investment Program, the
proxy card will be used for voting instructions for the number of full shares in
the Shareholder Investment Program account as well as shares registered in the
participant's name. Shares in the Exxon Thrift Fund are registered in the name
of the Trustee-Thrift Fund. A separate proxy must be used for voting
instructions for those shares held in a participant's Thrift Fund Account.
The number of shares that are eligible to vote are those outstanding on the
March 3, 1997 record date for the annual meeting. Accordingly, the shares to be
received in the stock split are not entitled to vote at the annual meeting.
There will be no change in a shareholder's proportional voting interest as the
result of the two-for-one stock split.
The proxy card provides space for a shareholder to withhold voting for any
or all nominees for the Board of Directors or to abstain from voting for any
proposal if the shareholder chooses to do so. The election of directors requires
a plurality of the votes cast at the meeting. Each other matter to be submitted
to the shareholders requires the affirmative vote of a majority of the votes
cast at the meeting. For purposes of determining the number of votes cast with
respect to any voting matter, only those cast 'for' or 'against' are included.
Abstentions and broker non-votes are counted only for purposes of determining
whether a quorum is present at the meeting.
When a signed proxy card is returned with choices specified with respect to
voting matters, the shares represented are voted by the Proxy Committee in
accordance with the shareholder's instructions to the tabulator. That Committee
consists of five directors whose names are listed on the proxy card. A
shareholder wishing to name as his or her proxy someone other than those
designated on the proxy card may do so by crossing out the names of the five
designated proxies and inserting the name of another person to act as his or her
proxy. In that case, it will be necessary for the shareholder to sign the proxy
card and deliver it to the person named and for the person so named to be
present and vote at the meeting. Proxy cards so marked should not be mailed
directly to the independent tabulator or the Corporation.
If a signed proxy card is returned and the shareholder has made no
specifications with respect to voting matters, the shares will be voted for the
nominees for director identified on pages 4 through 8, for the Board of
Directors proposals described on pages 17 through 20, and against the
shareholder proposals described on pages 20 through 22. A shareholder who has
returned a
1
proxy card may revoke it at any time before it is voted at the meeting by
executing a later-dated proxy, by voting by ballot at the meeting, or by filing
with the Inspectors of Election an instrument of revocation.
Annual Report
Securities and Exchange Commission rules require that an annual report
precede or accompany proxy material. More than one annual report need not be
sent to the same address if the recipient agrees. If more than one annual report
is being sent to your address, at your request, mailing of the duplicate copy to
the account you select will be discontinued. You may so indicate in the space
provided on the proxy card.
BOARD OF DIRECTORS
The Board met nine times in 1996. It meets regularly to review significant
developments affecting Exxon and to act on matters requiring Board approval. The
average attendance of the directors during 1996 at the aggregate of the total
number of meetings of the Board and committees of the Board was 98%. The Board
reserves certain powers and functions to itself. In addition, it has requested
that the Chief Executive Officer refer certain matters to it. The Board normally
considers dividend action in January, April, July, and October. At its February
meeting, it reviews and approves the annual report to shareholders for the prior
year, the annual report on Form 10-K to be filed with the Securities and
Exchange Commission, and the proxy material for the forthcoming annual meeting
of shareholders. In November, it normally reviews Exxon's capital investment
plans for the coming years.
The directors are elected annually by the shareholders of the Corporation.
Ten are to be elected for the coming year. All nominees are presently serving as
directors. All current nominees were elected at the last annual meeting of
shareholders.
Seven of the nominees are not Exxon employees. They include business
executives and an economist and educator. The other three nominees are Exxon
executive officers with broad service and experience in a variety of the
Corporation's worldwide activities. Personal information for each nominee is
given in the 'Election of Directors' section of this proxy statement.
Nonemployee directors cannot stand for reelection after they have reached
age 70. Thus, John H. Steele and Joseph D. Williams, who were elected last year,
are not standing for reelection at the forthcoming annual meeting of
shareholders. Employee directors normally resign from the Board no later than
the date on which they cease to be employees of Exxon.
Employee directors are not compensated for services as a director.
Nonemployee directors receive annual compensation at the rate of $40,000 and a
fee of $1,500 for each Board of Directors and Board committee meeting attended.
Exclusive of service on the Executive Committee, they also receive annual
compensation at the rate of $3,000 for each Board committee membership and an
additional $5,000 for serving as chairman of a Board committee. Nonemployee
directors are given the opportunity to elect to defer all or part of their
compensation and fees.
Effective January 1997, the Board adopted the 1997 Nonemployee Director
Restricted Stock Plan ('Plan') to replace a similar prior plan. Under the new
Plan, each new nonemployee director is granted an award of 2,000 shares
(increased from 1,500 shares under the prior plan) of restricted Common Stock.
Each nonemployee director also is granted an award of 300 restricted shares
(increased from 200 shares) at the beginning of each year. Each incumbent
nonemployee director on the effective date of the plan was also granted a
one-time award of 500 restricted shares.
During the restricted period, restricted shares are nontransferable, but
the nonemployee director receives cash dividends and has voting rights. The
restricted period normally expires at the earlier to occur of the nonemployee
director's normal termination of service on the Board (1) after reaching the age
(currently 70) at which the nonemployee director may no longer stand for
reelection, (2) by reason of disability or death, and (3) may expire earlier in
exceptional cases as specified in the Plan.
Upon expiration of the restricted period, the nonemployee director receives
the shares free of restrictions. If a nonemployee director ceases to be a member
of the Board during the restricted period, all of his or her restricted shares
are forfeited.
Committees of the Board
The Board has established a number of standing committees to assist it in
the discharge of its responsibilities. The principal responsibilities of each
committee are described in the succeeding paragraphs. Actions taken by any
committee of the Board are reported to the Board of Directors, usually at its
next meeting or by written report. Respective memberships on the various
standing committees are identified in the annual report. They are also
identified in the personal information on each director in this proxy statement,
except for John H. Steele and Joseph D. Williams. Dr. Steele is a member of the
Board Affairs Committee and the Public Issues Committee. Mr. Williams is
chairman of the Board Affairs Committee and a member of the Audit Committee and
the Executive Committee.
2
The Audit Committee, consisting of six directors who are not employees of
Exxon or its affiliates, met three times in 1996. Each year it recommends the
appointment of a firm of independent public accountants to examine the financial
statements of the Corporation and its subsidiaries. In making this
recommendation, it reviews the nature of audit services rendered, or to be
rendered, to Exxon and its subsidiaries by the independent public accountants
and also reviews the nature of nonaudit-related services rendered to the
Corporation and its subsidiaries. It reviews with representatives of the
independent public accountants the auditing arrangements and scope of the
independent public accountants' examination of the financial statements, results
of those audits, their fees, and any problems identified by the independent
public accountants regarding internal accounting controls, together with their
recommendations. It also meets with Exxon's Controller and the General Auditor
to review reports on the functioning of Exxon's programs for compliance with its
policies and procedures regarding ethics and those regarding financial controls
and internal auditing. This includes an assessment of internal controls within
the Corporation and its subsidiaries based upon the activities of Exxon's
internal auditing staffs as well as an evaluation of the performance of those
staffs. The Committee is also prepared to meet at any time upon request of the
independent public accountants, the Controller, or the General Auditor to review
any special situation arising in relation to any of the foregoing subjects.
The Board Advisory Committee on Contributions consists of five directors.
It met three times in 1996 to review, among other matters, the general levels
and areas of Exxon's financial support for public service programs, including
the Corporation's contributions to the Exxon Education Foundation, which
supports programs to improve the quality of education.
The Board Affairs Committee (formerly the Nominating Committee), which met
twice in 1996, consists of four directors who are not employees of Exxon or its
affiliates. It recommends to the Board the director nominees proposed in the
proxy statement for election by the shareholders. It reviews the qualifications
of, and recommends to the Board, candidates to fill Board vacancies as they may
occur during the year. The Committee considers suggestions from shareholders and
other sources regarding possible candidates for director. Such suggestions,
together with appropriate biographical information, should be submitted to the
Secretary of the Corporation. Board-approved guidelines and criteria regarding
the qualifications of candidates for director, insofar as they apply to
nonemployees, give considerable weight to a candidate's experience as a manager
of a relatively large, complex business, educational, or other organization
which equips the individual to deal with complex problems. The Committee also
reviews proposed changes in the compensation and benefits of nonemployee
directors. The Committee also reviews Board practices. The Committee makes such
recommendations to the Board of Directors as it deems advisable.
The Board Compensation Committee, consisting of four directors who are not
employees of Exxon or its affiliates, met five times in 1996. The Chief
Executive Officer does not attend Board Compensation Committee meetings, except
upon invitation by the chairman of the Committee. This Committee makes
recommendations to the Board of Directors as to the salary of the Chief
Executive Officer, sets the salaries of the other elected officers, and reviews
salaries of certain other senior executives. It grants incentive compensation to
elected officers and other senior executives and reviews guidelines for the
administration of Exxon's incentive programs. It also reviews and approves or
makes recommendations to the Board of Directors on any proposed plan or program
which would benefit primarily the senior executive group. Each year the
Committee reviews an independent analysis, prepared by a leading public
accounting firm, of the competitiveness of Exxon's top management compensation
and reviews summary results of various salary surveys, as well as competitive
data developed by Exxon's executive compensation staff.
The Finance Committee, consisting of four directors, is responsible for
reviewing the Corporation's financial policies, strategies, and capital
structure. The Committee held one meeting and acted by written consent in lieu
of meeting four times in 1996. As required, the Board delegates specific
authority to the Committee to act on behalf of the Board in authorizing the
issuance or guarantee of corporate debt and other financial matters.
The Public Issues Committee, consisting of six directors, has as its
principal responsibility the review of the Corporation's policies, programs, and
practices on public issues of significance, including their effects on the
environment, safety, and health. The Committee met three times in 1996 and
considered varying subjects, including reports of reviews undertaken by
operating units with respect to environmental and safety activities. The
Committee periodically tours operating sites to observe and to comment on
current practices, including spill and hazard prevention.
The Executive Committee consists of five directors. Although the Committee
has very broad powers, in practice, it meets only infrequently to take formal
action on a specific matter when it would be impractical to call a meeting of
the Board. The Committee did not meet in 1996. Directors who are not regular
members of the Committee are alternate members and, if necessary to establish a
quorum for a meeting, one or more of them is called to attend the meeting in
accordance with a rotational schedule adopted by the Board.
3
ELECTION OF DIRECTORS (ITEM 1 ON PROXY CARD)
Directors are elected to serve until the next annual meeting of
shareholders. Although the Board of Directors does not contemplate that any of
the nominees named will be unavailable for election, in the event a vacancy in
the slate of nominees is occasioned by death or other unexpected occurrence, the
proxy will be voted for the election of a replacement nominee, if one is
designated by the Board.
-----------------------
Nominees for director
-----------------------
MICHAEL J. BOSKIN
T. M. Friedman Professor of Economics, and
Senior Fellow, Hoover Institution, Stanford
University
Member -- Audit Committee, Finance
Committee, and Public Issues Committee
Director since 1996 Age 51
Exxon shares owned* 2,300
[Photo] Received bachelor of arts, masters, and Ph.D. degrees in
economics from the University of California at Berkeley.
Joined Stanford University in 1970, professor since 1978.
Currently the T. M. Friedman Professor of Economics, and
senior fellow of the Hoover Institution. On leave of
absence to chair the President's Council of Economic
Advisors, 1989-93. Adjunct scholar, American Enterprise
Institute; research associate, National Bureau of Economic Research. Director,
AirTouch Communications, Inc.; Oracle Corporation; HealthCare COMPARE
Corporation. Chairman, Congressional Advisory Commission on the Consumer Price
Index. Member, Advisory Committee of the Joint Committee on Taxation of the U.S.
Congress; Panel of Advisors to the Congressional Budget Office; Economic
Advisory Council to the Governor of California; Los Angeles Times Board of
Advisors. Awards include Stanford's Distinguished Teaching Award; National
Association of Business Economists' Abramson Award for outstanding research and
their Distinguished Fellow Award; Medal of the President of the Italian Republic
for contributions to global economic understanding.
- - --------------------------------------------------------------------------------
D. WAYNE CALLOWAY
Retired Chairman of the Board and Chief
Executive Officer, PepsiCo, Inc.
Chairman -- Audit Committee
Member -- Board Compensation
Committee and Finance Committee
Director since 1988 Age 61
Exxon shares owned* 4,700
[Photo] Received bachelor of business administration degree from
Wake Forest University. Joined PepsiCo, Inc. (beverages,
snack foods, and restaurants) in 1967. Elected president
and chief operating officer of Frito-Lay, Inc. in 1976 and
chairman of the board and chief executive officer in 1978.
Elected executive vice president, chief financial officer,
and director of PepsiCo, Inc. in 1983, president and chief
operating officer in 1985, and chairman and chief executive officer in 1986.
Retired as chief executive officer April 1996 and as chairman of the board
November 1996. Director, Citicorp; General Electric Company; PepsiCo, Inc.
Member, The Business Council. Chairman, board of trustees, Wake Forest
University.
- - --------------------------------------------------------------------------------
JESS HAY
Chairman, Texas Foundation
for Higher Education
Chairman, HCB Enterprises Inc.
Chairman -- Board Advisory Committee
on Contributions
Member -- Board Compensation
Committee and Executive Committee
Director since 1981 Age 66
Exxon shares owned* 10,200
[Photo] Received bachelor of business administration degree in
1953 and law degree in 1955 from Southern Methodist
University. Chairman, Texas Foundation for Higher
Education; HCB Enterprises Inc. (private investment firm).
Prior to his retirement in December 1994, served for 29
years as chief executive officer of The Lomas Financial
Group, a diversified financial services group of companies
engaged principally in mortgage banking and real estate lending. Practiced law
in Dallas, Texas prior to joining Lomas in 1965. Director, The Viad Corporation;
SBC Communications Inc.; Trinity Industries, Inc. Member of the board, Greater
Dallas Planning Council; Southwestern Medical Foundation; Texas Research League;
Zale-Lipshy Hospital of Dallas; World War II Memorial Advisory Board; State Fair
of Texas. Member, American, Dallas, and Texas Bar Associations.
- - --------------------------------------------------------------------------------
*See Notes on page 8.
4
JAMES R. HOUGHTON
Retired Chairman of the Board and
Chief Executive Officer,
Corning Incorporated
Member -- Audit Committee, Finance
Committee, and Public Issues Committee
Director since 1994 Age 61
Exxon shares owned* 3,800
[Photo] Received bachelor of arts degree in 1958 and master of
business administration degree in 1962 from Harvard
University. Joined Corning Incorporated (specialty glass
and ceramic materials, communications, laboratory
services, and consumer products) in 1962. Elected vice
president and European area manager, Corning Glass
International, S.A. in 1965. Appointed general manager of
the Consumer Products Division and elected vice president of Corning
Incorporated in 1968, director in 1969, vice chairman responsible for
international operations in 1971, and chairman of the board in 1983. Retired
April 1996. Director, Corning Incorporated; J. P. Morgan & Co. Incorporated;
Metropolitan Life Insurance Company. Trustee, The Corning Museum of Glass;
Corning Incorporated Foundation; The Metropolitan Museum of Art; The Pierpont
Morgan Library. Member, The Business Council; Council on Foreign Relations;
Harvard Corporation.
- - --------------------------------------------------------------------------------
WILLIAM R. HOWELL
Chairman Emeritus,
J. C. Penney Company, Inc.
Chairman -- Board Compensation
Committee
Member -- Audit Committee,
Board Affairs Committee, and
Executive Committee
Director since 1982 Age 61
Exxon shares owned* 3,900
[Photo] Received bachelor of business administration degree from
the University of Oklahoma. Joined J. C. Penney Company,
Inc. (department stores and catalog chain) in 1958.
Elected executive vice president and director in 1981,
vice chairman in 1982, and chairman and chief executive
officer in 1983. Relinquished chief executive officer
position January 1995 and retired as chairman of the board
in January 1997. Director, Bankers Trust New York Corporation and Bankers Trust
Company; Halliburton Co.; Warner-Lambert Company; The Williams Companies; Dallas
Citizens Council; National Organization on Disability; National Retail
Federation. Chairman, board of trustees, Southern Methodist University.
- - --------------------------------------------------------------------------------
PHILIP E. LIPPINCOTT
Retired Chairman and
Chief Executive Officer,
Scott Paper Company
Chairman -- Public Issues Committee
Vice Chairman -- Board Compensation
Committee
Member -- Board Advisory Committee
on Contributions and Executive Committee
Director since 1986 Age 61
Exxon shares owned* 4,700
[Photo] Received bachelor of arts degree from Dartmouth College
and master of business administration degree in food
distribution from Michigan State University. Joined Scott
Paper Company (sanitary paper, printing and publishing
papers, and forestry operations) in 1959. Elected vice
president -- marketing in 1972, director in 1978,
president and chief operating officer in 1980, chief
executive officer in 1982, and chairman in 1983. Retired April 1994. Director,
Campbell Soup Company. Chairman of the board and director, Fox Chase Cancer
Center. Trustee, The Penn Mutual Life Insurance Company. Board of overseers, The
Huntsman Center for Competition and Innovation, The Wharton School, University
of Pennsylvania. Member, The Business Council.
- - --------------------------------------------------------------------------------
*See Notes on page 8.
5
HARRY J. LONGWELL
Senior Vice President
Member -- Board Advisory Committee
on Contributions and Public Issues
Committee
Director since 1995 Age 55
Exxon shares owned* 66,962
[Photo] Principal responsibilities include the Corporation's oil,
gas, coal and minerals exploration and production
activities; venture operations in the Commonwealth of
Independent States and China; Exxon Coal and Minerals
Company; Exxon Exploration Company; Exxon Production
Research Company; human resources. Received bachelor's
degree in petroleum engineering from Louisiana State
University in 1963. Joined the Exxon organization in 1963 and held various
managerial positions in domestic and foreign operations. Became vice
president -- production, Exxon Company, U.S.A. in 1983; vice president, Esso
Europe Inc. in 1986; vice president -- exploration and production, senior vice
president -- exploration, production, and gas, and executive vice president,
Exxon Company, International in 1987, 1988, and 1990, respectively; president,
Exxon Company, U.S.A. in 1992. Elected senior vice president of the Corporation
in January 1995 and director in October 1995. Director, U.S.-China Business
Council; Louisiana State University Foundation; United Way of Dallas. Board of
visitors, University of Texas M. D. Anderson Cancer Center. Member, American
Petroleum Institute; Society of Petroleum Engineers.
- - --------------------------------------------------------------------------------
MARILYN CARLSON NELSON
Director and Vice Chairman,
Carlson Holdings, Inc.
Member -- Audit Committee, Board
Advisory Committee on Contributions,
and Board Affairs Committee
Director since 1991 Age 57
Exxon shares owned* 7,800
[Photo] Received bachelor's degree in international economics from
Smith College. Joined Carlson Holdings, Inc. (travel,
hotels, restaurants, and marketing services) in 1989 as a
director and senior vice president and became vice
chairman in 1991. Co-chairman, Carlson Wagonlit Global
Travel Company, 1994. Director, Carlson Companies, Inc.;
U.S. West, Inc.; Fund for Democracy and Development; Hubert H. Humphrey
Institute of Public Affairs; United States National Tourism Organization; World
Travel and Tourism Council; United Way of America, 1984-90. Trustee, Macalester
College, 1974-80; Smith College, 1980-85. Chairman, Minnesota Super Bowl 1992
Task Force. Member, Bretton Woods Committee; Center for International
Leadership; Committee for Economic Development (CED); Committee of 200. Awards,
Career Achievement, Sales and Marketing Executives of Minneapolis; Directors'
Choice Award, National Women's Economic Alliance Foundation; Extraordinary
Leadership, Greater Minneapolis Chamber of Commerce; 1995 Woman of the Year,
Roundtable for Women in Foodservice; 'Others' Award, Salvation Army. Holds
honorary degrees of Doctor of Humane Letters from The College of St. Catherine
and Gustavus Adolphus College.
- - --------------------------------------------------------------------------------
*See Notes on page 8.
6
LEE R. RAYMOND
Chairman of the Board and
Chief Executive Officer
Chairman -- Executive Committee and
Finance Committee
Director since 1984 Age 58
Exxon shares owned* 116,903
[Photo] Received bachelor's degree in chemical engineering from
the University of Wisconsin in 1960 and Ph.D. in the same
discipline from the University of Minnesota in 1963.
Joined the Exxon organization in 1963 as a production
research engineer in Tulsa, Oklahoma. Held various
positions with Exxon Company, U.S.A.; Creole Petroleum
Corporation; Exxon International Company; Exxon
Enterprises. Became president of Esso Inter-America Inc. in 1983. Elected senior
vice president and director of the Corporation in 1984, president in 1987,
became chairman and chief executive officer in 1993, and added title of
president in 1996. Director, J. P. Morgan & Co. Incorporated; Morgan Guaranty
Trust Company of New York; United Negro College Fund. Director and chairman,
American Petroleum Institute. Trustee, Southern Methodist University; Wisconsin
Alumni Research Foundation. Member, The Business Council; The Business
Roundtable; Council on Foreign Relations; Emergency Committee for American
Trade; National Petroleum Council; Singapore-U.S. Business Council; Trilateral
Commission; University of Wisconsin Foundation.
- - --------------------------------------------------------------------------------
ROBERT E. WILHELM
Senior Vice President
Member -- Board Advisory Committee
on Contributions and Public Issues
Committee
Director since 1992 Age 56
Exxon shares owned* 73,910
[Photo] Principal responsibilities include the Corporation's
worldwide refining, marketing, and transportation
activities; Exxon Company, U.S.A.; Exxon Research and
Engineering Company; accounting and financial control;
corporate planning. Received bachelor's degree from
Massachusetts Institute of Technology and master of
business administration degree from Harvard University.
Joined the Exxon organization in 1963 and held various managerial positions in
domestic and foreign operations. Became vice president -- petroleum products of
Esso Europe Inc. in 1981; president of Esso Inter-America Inc. in 1984;
executive vice president of Exxon Company, International in 1986. Elected senior
vice president of the Corporation in 1990 and director in 1992. Vice chairman,
Council of the Americas. Board of governors, Foreign Policy Association;
Massachusetts Institute of Technology Political Science Visiting Committee.
Member, Coal Industry Advisory Board of the International Energy Agency; Council
on Foreign Relations. Vice president, Circle 10 Council of Boy Scouts of
America. Trustee, Greenhill School, Dallas, Texas.
- - --------------------------------------------------------------------------------
*See Notes on page 8.
7
NOTES
* As of January 31, 1997, all directors and nominees beneficially owned (as
this term is interpreted by the Securities and Exchange Commission
('SEC')) an aggregate of 317,931 shares of Exxon Corporation Common Stock,
representing in the case of each director or nominee less than 0.1 percent
of the outstanding shares. The foregoing includes 6,200 shares held in a
defined benefit plan for Mr. Hay; 600 shares held by Mr. Houghton's
spouse; 1,350 restricted shares for which Mr. Howell is constructive
trustee on behalf of his former spouse; 23 shares held by Mr. Longwell's
spouse; 4,500 shares held in a trust for the benefit of Mrs. Nelson; 600
shares held by Mr. Raymond's mother over which he has power of attorney;
1,431 shares held jointly by Dr. Steele and his spouse; 1,535 shares held
jointly by Mr. Wilhelm and his spouse; and 3,227 shares held in trust for
the benefit of Mr. Wilhelm's children. As of the same date, each of the
other executive officers named in the Summary Compensation Table shown on
page 9 beneficially owned (as so interpreted) less than 0.1 percent of the
outstanding shares of Exxon Corporation Common Stock as follows: Mr.
Dahan, 27,361 shares, including 13,596 shares held jointly with his
spouse; and Mr. Nesbitt, 57,962 shares. As of the same date, all directors
and executive officers as a group beneficially owned (as so interpreted)
740,447 shares of Exxon Corporation Common Stock, representing in the
aggregate less than 0.1 percent of the outstanding shares. Beneficial
ownership of certain of these shares has been, or is being, specifically
disclaimed by certain nominees and officers in ownership reports filed
with the SEC.
The trustee of the Corporation's Thrift Plan holds all the outstanding
shares of Exxon Corporation Class A Preferred Stock described on page 23
and has the right to vote such shares. The trustee is comprised of four
Exxon Corporation officers and an officer of a division, none of whom is a
director or nominee.
These amounts do not include shares of Exxon Corporation Common Stock
covered by exercisable options as of January 31, 1997 as follows: Mr.
Raymond, 1,244,441; Mr. Longwell, 377,325; Mr. Wilhelm, 524,000; Mr.
Dahan, 265,104; Mr. Nesbitt, 223,000; and all directors and executive
officers as a group, 4,157,455. When shares so covered are added to shares
beneficially owned by any director, nominee, or named executive officer,
the percentage for such person, as of January 31, 1997, does not exceed
0.11 percent of the outstanding shares, and the aggregate for all
directors and executive officers as a group, as of the same date, is less
than 0.5 percent.
Transactions with Management
The Corporation and its affiliates have transactions in the ordinary course
of business with unaffiliated corporations of which certain of the nonemployee
directors are executive officers. The Corporation does not consider the amounts
involved in such transactions material by any reasonable standard.
8
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table shows certain compensation information for
the Chief Executive Officer and the four other most highly compensated executive
officers based on 1996 salaries and bonuses. This information includes the
dollar value of base salaries, bonus awards and long term incentive plan
payouts, the number of stock options and stock appreciation rights ('SARs')
granted, restricted stock awards, and certain other compensation, if any,
whether paid or deferred during the fiscal years ended December 31, 1996, 1995,
and 1994.
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
-------------------------------------- -------------------------- -------
Other Annual Restricted Options/ LTIP
Name and Principal Salary Bonus Compensation Stock SARs Payouts
Position Year ($) ($) ($) Award(s)($)(a) (#) ($)(b)
- - -------------------------------------------------------------------------------------------------------------------------
L. R. Raymond 1996 1,550,000 1,250,000 19,977 943,125 225,000 525,000
Chairman and CEO 1995 1,400,000 1,000,000 93,486 775,000 225,000 798,000
1994 1,300,000 550,000 16,262 593,750 200,000 348,000
H. J. Longwell 1996 685,000 385,000 6,129 330,094 110,000 150,000
Senior Vice President 1995 610,000 300,000 49,316 271,250 90,000 225,000
and Director 1994 535,833 160,000 4,822 178,125 75,000 99,000
R. E. Wilhelm 1996 745,000 415,000 6,461 330,094 110,000 210,000
Senior Vice President 1995 705,000 350,000 6,811 271,250 110,000 357,000
and Director 1994 675,000 225,000 6,081 207,813 100,000 153,000
R. Dahan 1996 685,000 385,000 3,590 330,094 110,000 150,000
Senior Vice President; 1995 570,000 300,000 7,620 271,250 90,000 219,000
President, Exxon 1994 516,666 150,000 5,337 178,125 70,000 93,000
Company, International
R. B. Nesbitt 1996 595,000 265,000 10,170 235,781 70,000 132,000
Vice President; President, 1995 560,000 220,000 8,208 193,750 60,000 219,000
Exxon Chemical 1994 535,000 133,000 7,733 118,750 50,000 102,000
Company
- - -------------------------------------------------------------------------------------------------------------------------
All Other
Name and Principal Compensation
Position ($)(c)
- - ----------------------------------------------------------
L. R. Raymond 93,000
Chairman and CEO 102,816
94,224
H. J. Longwell 53,019
Senior Vice President 44,746
and Director 38,527
R. E. Wilhelm 57,497
Senior Vice President 52,116
and Director 49,569
R. Dahan 53,019
Senior Vice President; 41,906
President, Exxon 37,217
Company, International
R. B. Nesbitt 51,366
Vice President; President, 46,276
Exxon Chemical 44,250
Company
- - -----------------------------------------------------------------------
(a) The values set forth in the column above for restricted stock awards are
as of 12/1/96 for 1996, as of 12/1/95 for 1995, and as of 12/1/94 for
1994, the dates of grants of Career Shares. The total number of restricted
shares held by the named executive officers and their values on 12/31/96
were as follows: Mr. Raymond, 40,000 shares valued at $3,920,000; Mr.
Longwell, 13,000 shares valued at $1,274,000; Mr. Wilhelm, 14,000 shares
valued at $1,372,000; Mr. Dahan, 13,000 shares valued at $1,274,000; and
Mr. Nesbitt, 9,000 shares valued at $882,000. The 12/31/96 values are
based on a 12/31/96 closing market stock price of $98.00 and do not take
into account any diminution of value attributable to the career duration
restrictions on such shares. Normal common dividends are paid on these
shares. Career Shares are described on page 14.
(b) Represents settlements of Earnings Bonus Units ('EBUs'), which the SEC
rules categorize as long term incentive plan ('LTIP') payouts since EBUs
serve as incentive for performance to occur over a period longer than one
fiscal year. The Corporation, however, considers EBUs to be short term
awards, as described on page 13. Payouts shown for 1994 were for EBUs
awarded in 1991; payouts for 1995 were for EBUs awarded in 1992 and 1993;
and payouts shown for 1996 were for EBUs awarded in 1994.
(c) All Other Compensation for 1996 includes matching credits by the
Corporation under the Corporation's Thrift Plan and the related
supplemental thrift plans ($93,000 for Mr. Raymond; $42,662 for Mr.
Longwell; $46,233 for Mr. Wilhelm; $42,662 for Mr. Dahan; and $37,229 for
Mr. Nesbitt) and the Corporation's cost allocation of supplemental life
insurance ($10,357 for Mr. Longwell; $11,264 for Mr. Wilhelm; $10,357 for
Mr. Dahan; and $14,137 for Mr. Nesbitt).
9
Option Grants in Last Fiscal Year
The following table shows information regarding grants of stock options
made to the named executive officers under Exxon's 1993 Incentive Program during
the fiscal year ended December 31, 1996. The amounts shown for each of the named
executive officers as potential realizable values are based on arbitrarily
assumed annualized rates of stock price appreciation of five percent and ten
percent over the full ten-year term of the options, which would result in stock
prices of approximately $153.32 and $244.14, respectively. The amounts shown as
potential realizable values for all shareholders represent the corresponding
increases in the market value of 1,242,262,504 outstanding shares of Exxon
Corporation Common Stock held by all shareholders (other than the Corporation)
as of January 31, 1997, which would total approximately $73.5 billion and $186.3
billion, respectively. No gain to the optionees is possible without an increase
in stock price which will benefit all shareholders proportionately. The
potential realizable values are based solely on arbitrarily assumed rates of
appreciation required by applicable SEC regulations. Actual gains, if any, on
option exercises and common stockholdings are dependent on the future
performance of Exxon Corporation Common Stock. There can be no assurance that
the potential realizable values shown in this table will be achieved.
OPTION GRANTS IN LAST FISCAL YEAR
Potential
Realizable Value
at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants (a) for Option Term
-------------------------------------------------------------- --------------------------------
% of
Total
Number of Options
Securities Granted If Stock At If Stock At
Underlying to Exercise $153.32 $244.14
Options Employees or Base
Granted in Fiscal Price Expiration 5% 10%
Name (#) Year (b) ($/Sh) Date ($) ($)
- - -----------------------------------------------------------------------------------------------------------------------------------
All Shareholders' N/A N/A N/A N/A 73.5 billion 186.3 billion
Stock Appreciation
L. R. Raymond 225,000 3.8% 94.13 11/27/06 13,318,809 33,752,477
H. J. Longwell 110,000 1.8% 94.13 11/27/06 6,511,418 16,501,211
R. E. Wilhelm 110,000 1.8% 94.13 11/27/06 6,511,418 16,501,211
R. Dahan 110,000 1.8% 94.13 11/27/06 6,511,418 16,501,211
R. B. Nesbitt 70,000 1.2% 94.13 11/27/06 4,143,629 10,500,771
- - -----------------------------------------------------------------------------------------------------------------------------------
(a) Stock options are awarded to senior executives at the fair market value of
shares of Exxon Corporation Common Stock on the date of award and become
exercisable one year from such date if the optionee has not terminated, or
upon death if earlier. Such options lapse at the earliest of ten years
after award, five years after the optionee's normal termination of
employment, three years after the optionee's death, or at the time of the
optionee's termination of employment otherwise than normally. No SARs were
awarded in 1996.
(b) Total options granted = 5,983,945
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
The following table summarizes for each of the named executive officers the
number of stock options and SARs, if any, exercised during the fiscal year ended
December 31, 1996, the aggregate dollar value realized upon exercise, the total
number of unexercised options and SARs, if any, held at December 31, 1996, and
the aggregate dollar value of the in-the-money, unexercised options and SARs, if
any, held at December 31, 1996. Value realized upon exercise is the difference
between the fair market value of the underlying stock on the exercise date and
the exercise or base price of the option or SAR. Value of unexercised, in-the-
money options or SARs at fiscal year-end is the difference between their
exercise or base price and the fair market value of the underlying stock on
December 31, 1996, which was $98.00 per share. These values, unlike the amounts
set forth in the column headed 'Value Realized,' have not been, and may never
be, realized. The underlying options or SARs have not been, and may never be,
exercised; and the actual gains, if any, on exercise will depend on the value of
Exxon Corporation Common Stock on the date of exercise. There can be no
assurance that these values will be realized. Unexercisable options are those
which have been held for less than one year.
10
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
Value of
Number of Unexercised,
Shares Number of Securities In-the-Money
Underlying Underlying Unexercised Options/SARs at
Options/SARs Value Options/SARs at FY-End (#) FY-End ($)*
Exercised Realized ------------------------------- --------------------------------
Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable
- - -----------------------------------------------------------------------------------------------------------------------------------
L. R. Raymond 125,559 5,853,286 1,269,441 225,000 46,599,325 871,875
H. J. Longwell 21,175 901,447 377,325 110,000 13,111,313 426,250
R. E. Wilhelm 24,000 864,000 548,000 110,000 18,973,250 426,250
R. Dahan -0- -0- 265,104 110,000 8,136,319 426,250
R. B. Nesbitt 37,884 1,462,724 243,000 70,000 8,188,437 271,250
- - -----------------------------------------------------------------------------------------------------------------------------------
* In-the-Money Options/SARs are those where the fair market value of the
underlying securities exceeds the exercise or base price of the option or
SAR. The named executive officers hold no other options or SARs.
Long Term Incentive Plans -- Awards in Last Fiscal Year
The following table shows information regarding Earnings Bonus Units
('EBUs') awarded to the named executive officers under Exxon's Short Term
Incentive Program or 1993 Incentive Program during the fiscal year ended
December 31, 1996. Each EBU entitles the holder to an amount in cash equal to
the cumulative net income per share of Exxon Corporation Common Stock, as
announced quarterly commencing with the first full quarter following the date of
award, payable on the fifth anniversary of the unit's date of grant, or earlier
upon achieving the maximum settlement value of $8.50 per unit. Although the
Corporation considers EBUs to be short term awards as described on page 13, the
SEC rules categorize EBUs as long term incentive awards since EBUs serve as
incentive for performance to occur over a period longer than one fiscal year. No
amounts are shown in the table as 'target' or 'threshold' future payouts because
no such payout levels are set or contemplated under the Corporation's Incentive
Programs.
LONG TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
Performance or
Other Period Estimated Future Payouts Under
Number of Until Non-Stock Price-Based Plans
Shares, Units or Maturation or ------------------------------
Name Other Rights (#) Payout Maximum ($)
- - -----------------------------------------------------------------------------------------
L. R. Raymond 150,000 5 years maximum 1,275,000
H. J. Longwell 45,000 5 years maximum 382,500
R. E. Wilhelm 48,000 5 years maximum 408,000
R. Dahan 45,000 5 years maximum 382,500
R. B. Nesbitt 31,000 5 years maximum 263,500
- - -----------------------------------------------------------------------------------------
Employee Annuities
Under Exxon's current Annuity Plan, subject to age and service
requirements, an employee acquires a right to a yearly annuity upon retirement.
The yearly annuity is equal to 1.6 percent of the average annual 36-month pay
times years of accredited service, less up to half of estimated Old Age Social
Security benefit payable. The following table illustrates the approximate yearly
undiscounted annuity which may become payable under the Annuity Plan and the
related supplemental annuity plans to an employee in the higher salary
classifications, including those named in the Summary Compensation Table shown
on page 9. Whether these amounts actually become payable in whole or in part
depends on the contingencies and conditions governing the Annuity Plan.
11
ESTIMATED UNDISCOUNTED ANNUITY
Average Years of Accredited Service
Annual -------------------------------------------------------
36-Month Pay* 30 35 40 45
- - --------------------------------------------------------------------------
$ 500,000 $ 240,000 $ 280,000 $ 320,000 $ 360,000
1,000,000 480,000 560,000 640,000 720,000
1,500,000 720,000 840,000 960,000 1,080,000
2,000,000 960,000 1,120,000 1,280,000 1,440,000
2,500,000 1,200,000 1,400,000 1,600,000 1,800,000
3,000,000 1,440,000 1,680,000 1,920,000 2,160,000
3,500,000 1,680,000 1,960,000 2,240,000 2,520,000
4,000,000 1,920,000 2,240,000 2,560,000 2,880,000
- - --------------------------------------------------------------------------
* Average annual 36-month pay includes salary for the 36 consecutive months of
highest earnings during the last ten years of employment and short term bonus
awards, including Earnings Bonus Units ('EBUs'). The bonus awards included in
the computation are the highest three awards granted during the final five
years of employment. For purposes of this computation, EBUs are valued at
their maximum settlement value. See the Long Term Incentive Plans table on
page 11 for data on 1996 awards of EBUs to the named executive officers. For
the executive officers named in the Summary Compensation Table on page 9,
average annual 36-month pay includes amounts shown in the 'Salary' and
'Bonus' columns of that table, as well as EBU awards shown in the Long Term
Incentive Plans table.
As of January 31, 1997, average annual 36-month pay and years of accredited
service for the executive officers named in the Summary Compensation Table
are as follows: Mr. Raymond, $3,244,444, 34 years; Mr. Longwell, $1,176,111,
34 years; Mr. Wilhelm, $1,363,556, 36 years; Mr. Dahan, $1,152,778, 35 years;
and Mr. Nesbitt, $976,339, 43 years.
The amounts shown above are based on the normal form of annuity under the
Annuity Plan with 60 monthly payments guaranteed and are before deduction for
the estimated Old Age Social Security benefit referred to on page 11.
Board Compensation Committee Report on Executive Compensation
Overview
The Board Compensation Committee ('BCC') consists entirely of nonemployee
directors who are not eligible to participate in any of the compensation plans
or programs it administers. The BCC approves or endorses for approval by the
full Board or shareholders all of the programs under which compensation is paid
or awarded to the Corporation's senior executives.
Exxon's executive compensation program is designed to motivate, reward, and
retain the management talent needed to achieve its business objectives and
maintain its position of leadership in the petroleum industry. The program is
also designed to make a substantial component of senior executives' potential
compensation dependent upon increased shareholder return.
It does this by providing incentives to achieve short-term and long-term
objectives, by rewarding exceptional performance and accomplishments that
contribute to the business, and by utilizing competitive base salaries that
recognize a philosophy of career continuity.
Exxon's financial success is highly dependent upon its long-term capital
investment strategy and decisions that focus on the Corporation's future
results. The nature of the petroleum business requires long-term and capital-
intensive investments, which often take years to generate returns to
shareholders. Therefore, incentive awards are granted with an orientation
towards long-term corporate performance and may not fluctuate as greatly as
year-to-year corporate financial results.
In keeping with this long-term view and the highly technical and
capital-intensive nature of the petroleum business, retention of executives who
have developed the skills and expertise required to lead a global organization
is vital to Exxon's competitive strength. Retention and motivation of these
individuals are, and will continue to be, key to the Corporation's success.
The philosophical basis of the compensation program is to pay for
performance and the level of responsibility of an individual's position.
Assessments of both individual and corporate performance influence executives'
compensation levels. It is important to encourage a performance-based
environment that motivates individual performance by recognizing the past year's
results and by providing incentives for further improvement in the future. This
includes the ability to implement the Corporation's business plans as well as to
react to unanticipated external factors that can have a significant impact on
corporate performance. Compensation decisions for all executives, including the
12
Chief Executive Officer ('CEO') and the other named executive officers, are
based on the same criteria.
There are three major components of Exxon's compensation program: Base
Salary, Short Term Awards, and Long Term Incentive Awards.
Base Salary
A competitive base salary is vital to support the philosophy of management
development and career orientation of executives and is consistent with the
long-term nature of Exxon's business.
Salary budget expenditures and adjustments to the salary program structure
are a result of annual reviews of competitive positioning (how Exxon's salary
structure for comparable positions compares with that of other companies),
business performance, and general economic factors. While there is no specific
weighting of these factors, competitive positioning is the primary consideration
in setting the salary budget expenditures. Business and other economic factors,
such as net income and estimates of inflation, are secondary considerations. In
determining competitive position, a number of surveys are utilized. Primary
consideration is given to the U.S.-based oil companies included in the industry
group used for comparing share investment performance on page 16. Foreign-based
oil companies used in the industry group are excluded since their compensation
structures for executive officers are not considered comparable. Additional
consideration is given to other major U.S.-based corporations because the scope
of Exxon's business extends beyond the oil industry, as does competition for
executives. Consequently, major U.S.-based corporations in the same or similar
lines of business as Exxon, as well as a number of those in other lines of
business but with which Exxon competes for executives, are included. Competitive
orientation of salary ranges is targeted between the median and high end of
survey data given Exxon's size and complexity relative to the surveyed
companies. Within this framework, executive salaries are determined based on
individual performance, level of responsibility, and experience.
The BCC makes recommendations to the Board of Directors as to the salary of
the CEO, sets the salaries of the other elected officers, and reviews salaries
of certain other senior executives. The BCC met in November 1995 to recommend
the 1996 salaries for the CEO, to set the 1996 salaries for the other elected
officers, and to review the 1996 salaries for certain other senior executives.
Any changes to these approved salaries must be reviewed with the BCC before
implementation.
The CEO's salary is determined based on the competitive salary framework
described above, recognizing the Corporation's size and complexity. Within this
framework, the CEO's salary is determined based on the BCC's judgment concerning
the CEO's individual contributions to the business, level of responsibility, and
career experience. Although none of these factors has a specific weight, primary
consideration is given to the CEO's individual contributions to the business. No
particular formulas or measures are used. L. R. Raymond's salary reflects his
strong leadership and significant individual contributions to Exxon's business.
Short Term Awards
Short term awards to executives are granted in cash and Earnings Bonus
Units ('EBUs') to recognize contributions to the business during the past year.
EBUs are also granted to focus on a strong midterm corporate performance and to
stress that decisions and contributions in any one year impact future years. In
1996, approximately one half of executive bonuses were in the form of EBUs. Each
such EBU entitles the holder to an amount equal to the cumulative net income per
share, as announced quarterly, commencing with the first full quarter following
the date of award, payable on the fifth anniversary of the unit's date of grant
or earlier upon achieving the maximum settlement value of $8.50 per unit. The
EBU maximum settlement value was raised in 1995 from $7.50 to $8.50 per unit
which increased the earnings performance target to a higher level. In 1996, the
maximum settlement value was achieved for the EBUs granted in 1994. This
resulted in a payment to grantees of $7.50 per unit.
The BCC annually establishes a ceiling in relation to business results for
awards of cash and EBUs. The BCC established a $61 million ceiling for 1996
awards of cash and EBUs, substantially all of which were granted in awards to
over 1,000 employees. The ceiling is determined by Exxon's competitive position,
assessment of progress in attainment of long-term goals, and business
performance considerations. These include measurements such as net income,
earnings per share, return on capital employed, return on equity, and dividends
both in absolute terms and relative to the industry. None of these measurements
has a specific weight. The 1996 ceiling was increased from the 1995 ceiling. No
formula was used in determining the ceiling amount. Rather, the BCC considered
several factors, including Exxon's second consecutive year of record earnings
and business performance, continued strengthening of the Corporation's worldwide
competitive position, and its achievement towards attainment of long-range
strategic goals.
The specific bonus opportunity an executive receives is dependent on
individual performance and level of responsibility. Assessment of an
individual's relative performance is made annually based on a number of factors
which include initiative, business judgment, technical expertise, and management
skills.
L. R. Raymond's 1996 award reflects his level of responsibility within the
organization and his leadership which significantly contributed to achievement
of the second consecutive year of record corporate earnings
13
and continued strengthening of the Corporation's worldwide competitive position.
This determination was based on the judgment of the BCC regarding his overall
contribution as CEO utilizing negative discretion as described below under '1993
U.S. Income Tax Legislation.' Narrow quantitative measures or formulas are not
viewed as sufficiently comprehensive for this purpose. The combination of Mr.
Raymond's base salary and short term awards was appropriately positioned
compared to CEOs of competitors, as well as the size and business results of
these companies relative to Exxon.
Long Term Incentive Awards
Long term incentive awards provided by the shareholder-approved 1993
Incentive Program are designed to develop and retain strong management through
share ownership and incentive awards.
Stock options were the primary long term incentive granted to executive
officers and over 2,200 other key employees in 1996. The BCC believes that a
significant portion of senior executives' compensation should be dependent on
value created for the shareholders. Options are an excellent vehicle to
accomplish this by tying the executives' interests directly to the shareholders'
interests. Options are granted to executives at the fair market value of Exxon
Common Stock on the date of grant and become exercisable one year from such date
if the optionee is still employed.
The number of options that the BCC grants to executive officers is based on
individual performance (determined as described under 'Short Term Awards') and
level of responsibility. The award level must be sufficient in size to provide a
strong incentive for executives to work for long-term business interests and
become significant owners of the business. The number of options currently held
by an executive was not a factor in determining individual grants since such a
factor would create an incentive to exercise options and sell the shares.
A limited number of senior executives received grants of Career Shares in
1996. Career Shares are shares of Exxon Common Stock granted with a restriction
designed to promote long-term retention, as well as superior long-term
performance of key strategic and operating management. These restrictions
generally expire after the executive reaches normal retirement age. The number
of Career Shares granted to senior executives also recognizes the increased
responsibility and complexity of senior positions. Individual grants are based
on personal contribution and level of responsibility within the organization.
The number of shares currently held by an executive was not a factor in
determining individual grants since Career Shares are primarily designed to
promote long-term retention.
L. R. Raymond's long term incentive awards reflect his level of
responsibility within the organization and his leadership which significantly
contributed to Exxon's corporate performance. Mr. Raymond's long term incentive
awards reflect the BCC's judgment of his overall contribution as CEO. In making
this determination, the BCC considered the complex, highly technical, and long-
term nature of the business. Narrow quantitative measures or formulas are not
viewed as sufficiently comprehensive for this purpose.
1993 U.S. Income Tax Legislation
The U.S. income tax law limits the deductibility of certain compensation
paid to the CEO and the four other most highly compensated executives in excess
of the statutory maximum.
The value of all stock options granted in 1996, any value received from
stock options granted in prior years and exercised in 1996, and EBUs that were
granted in 1994 and paid out in 1996 are exempt from this limit.
In order to entitle the Corporation to continue to deduct, for U.S. income
tax purposes, the compensation expense resulting from option or SAR exercises by
covered executives, the Board of Directors, on the recommendation of the BCC,
has proposed an amendment to the 1993 Incentive Program (see page 17). If
approved by shareholders, the amendment will set a limit to the number of shares
that may be granted to any one grantee in any one calendar year, thereby
allowing such awards to continue to be deducted for U.S. income tax purposes.
Short term awards (consisting of cash bonuses and EBUs) granted in 1996 to
the CEO and a limited number of senior executives, are also exempt from the
limit on deductibility. For 1996, the BCC established an upper limit on certain
awards dependent on attainment of a broad performance measure based on earnings
per share. From this limit, it was intended that the BCC would exercise
discretion to reduce or eliminate the amount of the actual award to any
individual such that actual awards would be equal to the amounts determined to
be appropriate in accordance with the qualitative criteria and other factors
discussed above under 'Short Term Awards.' Upon achievement of the measure, the
BCC exercised such discretion with respect to the cash bonuses and EBUs granted
to the CEO and such senior executives. This approach gave the BCC the broad
flexibility it previously had to determine short term incentive compensation
while allowing this compensation to be deductible for U.S. income tax purposes.
In order to entitle the Corporation to continue to deduct, for U.S. income
tax purposes, the compensation expense resulting from these and other types of
awards to certain executives, the Board of Directors has proposed material terms
under which such awards may be granted in the future (see page 19). If approved
by
14
shareholders, these material terms will define the class of employees eligible
for such awards, allow the BCC to set broad performance measures to be met in
order for awards to be granted, and set a maximum award which can be granted to
any one recipient for any one year, thereby allowing such awards to be deducted
for U.S. income tax purposes.
Summary
The BCC has the responsibility for ensuring that Exxon's compensation
program continues to be in the best interest of its shareholders. The BCC is
guided by an independent analysis, prepared by a leading public accounting firm,
of the competitiveness of Exxon's executive compensation. The results of various
salary surveys are also reviewed. Finally, compensation programs providing
stock-based compensation to executives, such as the 1993 Incentive Program and
the amendment thereto proposed on page 17 of this proxy statement, are
periodically submitted to shareholders for review and approval.
Exxon has had, and continues to have, an appropriate and competitive
compensation program. The balance of a sound base salary position, competitive
short term bonus orientation, and emphasis on long term incentives is the
foundation which builds stability and supports Exxon's business.
William R. Howell, Chairman D. Wayne Calloway
Philip E. Lippincott, Vice Chairman Jess Hay
15
Share Investment Performance
The following graphs show changes over the past five- and ten-year periods
in the value of $100 invested in: (1) Exxon Corporation Common Stock; (2) the
Standard & Poor's 500 Index; and (3) an industry group of seven other
international, integrated major oil companies: Amoco Corporation, The British
Petroleum Company p.l.c., Chevron Corporation, Mobil Corporation, Royal Dutch
Petroleum Company, The 'Shell' Transport and Trading Company, p.l.c., and Texaco
Inc. Investments in the industry group of other international, major oil
companies have been prorated based on the companies' relative market
capitalizations at the beginning of each year.
The values of each investment are based on share price appreciation plus
dividends, with reinvestment of dividends. The calculations exclude trading
commissions and taxes. For The British Petroleum Company p.l.c., Royal Dutch
Petroleum Company, and The 'Shell' Transport and Trading Company, p.l.c., the
calculations are based on investments in American depository receipts; dividends
are before any withholding taxes, but include any applicable U.K. advance
corporation tax credits.
FIVE-YEAR CUMULATIVE TOTAL RETURNS
Value of $100 Invested at Year-End 1991
[PERFORMANCE GRAPH]
Fiscal Years Ended December 31
--------------------------------------------------------
1991 1992 1993 1994 1995 1996
--------------------------------------------------------
EXXON CORPORATION 100 105 114 115 158 200
S&P 500 100 108 118 120 165 203
INDUSTRY GROUP 100 97 125 139 183 233
TEN-YEAR CUMULATIVE TOTAL RETURNS
Value of $100 Invested at Year-End 1986
[PERFORMANCE GRAPH]
Fiscal Years Ended December 31
-------------------------------------------------------------------------------------
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
-------------------------------------------------------------------------------------
EXXON CORPORATION 100 114 138 165 179 221 232 251 253 349 441
S&P 500 100 105 123 162 157 204 220 242 245 337 415
INDUSTRY GROUP 100 117 131 188 205 219 211 274 303 401 509
16
BOARD OF DIRECTORS PROPOSALS
Amendment of 1993 Incentive Program
(Item 2 on proxy card)
The following proposal will be offered by the Board of Directors:
Resolved, That the shareholders of the Corporation hereby approve an
amendment to the 1993 Incentive Program to add the following new Section VII(5):
'Notwithstanding the foregoing provisions of this Section VII, the total number
of shares that may be effectively granted under stock options or stock
appreciation rights to any one grantee in any one calendar year may not exceed
two tenths of one percent (0.2%) of the total number of shares of Common Stock
of the Corporation outstanding (excluding shares held by the Corporation) on
December 31, 1996.'
The foregoing amendment shall become effective on the date shareholder
approval is obtained.
BOARD OF DIRECTORS RECOMMENDATION --
The Board recommends a vote FOR this proposal.
The sole purpose of the proposed amendment to the 1993 Incentive Program
(1993 Program) is to entitle the Corporation to continue to deduct the
compensation expense resulting from option or SAR exercises by certain
executives for U.S. income tax purposes. In order for the Corporation to
continue to receive this tax deduction, Internal Revenue Code Section 162(m)
currently requires that the 1993 Program contain a limit on the number of shares
that may be granted to any employee during a specified period. The 1993 Program
provides for the grant of stock options and other stock-related awards as more
fully described below under 'Summary of 1993 Program.' The Board Compensation
Committee (BCC) has historically granted individual awards that have been
significantly less than the maximum number of shares which may be awarded under
the proposed amendment to the 1993 Program. This amendment is not intended to
result in compensation above the level that would otherwise be provided. If the
proposed amendment is approved by shareholders, it is expected that the BCC will
continue to use its discretion to make future awards that are less than the
proposed maximum.
Copies of the 1993 Program as currently in effect will be provided to
shareholders without charge upon telephone request to (972) 444-1832 or upon
written request to the Secretary of the Corporation, 5959 Las Colinas Boulevard,
Irving, TX 75039-2298. If the proposed amendment is not approved, the 1993
Program will continue in effect in its present form. In that case, the Board has
made no determination as to what action, if any, will be taken with respect to
this matter.
Summary of 1993 Program
The 1993 Program permits the grant of any or all of the following types of
awards: (1) stock options, including incentive stock options (ISOs); (2) stock
appreciation rights (SARs), in tandem with stock options or freestanding; (3)
restricted stock; (4) performance awards; (5) incentive shares; (6) dividend
equivalent rights (DERs), in tandem with other awards or freestanding; and (7)
other awards based on, payable in, or related to Common Stock of the
Corporation. The 1993 Program was originally approved by shareholders on April
28, 1993 and expires on April 28, 2003 after which time no further awards may be
made thereunder.
All key employees of the Corporation (including employee directors and
officers) or of any affiliate of the Corporation at least 50 percent owned are
eligible for selection to receive awards under the 1993 Program. While the
concept of a 'key employee' eligible to participate in the 1993 Program is
necessarily flexible, approximately 2,500 employees (including a total of 14
current executive officers) are considered to fall within this category.
The 1993 Program is administered by the Board of Directors of the
Corporation. With respect to executive officers subject to the insider reporting
requirements of Section 16 of the Securities Exchange Act of 1934 (herein
referred to as 'reporting persons'), the authority to make awards and to
interpret and apply the 1993 Program is conferred on the BCC. With respect to
other eligible employees, the Board has delegated the authority to make awards
and to interpret and apply the 1993 Program to a committee consisting of
executive officers of the Corporation. In the case of non-reporting persons,
determinations and interpretations in individual cases (but not the grant of
awards) may also be made by or at the direction of the Chairman of the Board.
The Board is authorized to amend or terminate the 1993 Program, except that
shareholder approval is required for amendments that would decrease the minimum
exercise price of an option or SAR, increase the number of shares that may be
granted, or as otherwise deemed necessary under applicable securities, tax, or
other laws.
Subject to adjustment as described below, the number of shares of Common
Stock, no par value, that may be awarded during each year of the 1993 Program
may not exceed seven tenths of one percent (0.7%) of the total number of shares
of Common Stock of the Corporation outstanding (excluding shares held by the
Corporation) on December 31 of the preceding year. If the total number of shares
awarded in any year is less than the maximum number of shares allowable, the
balance may be carried over to future years. In addition, for each year in which
the 1993 Program is in effect, the
17
number of shares awarded as ISOs may not exceed seven tenths of one percent
(0.7%) of the total number of shares of Common Stock outstanding (excluding
shares held by the Corporation) on December 31, 1992. If the number of shares
granted as ISOs in any year is less than the maximum number allowable, the
balance may be carried over to future years.
Stock options granted under the 1993 Program are subject to the terms and
conditions determined by the granting authority, except that (i) the option
price cannot be less than 100 percent of the fair market value of Common Stock
at the time the option is granted; (ii) no option may be exercised more than ten
years after it is granted; and (iii) no option may be exercised more than five
years after the grantee's termination. Unless otherwise provided in the award,
an option becomes immediately exercisable in full upon the death of the grantee.
Options may be exercised for up to three years after the grantee's death.
Payment of the exercise price of a stock option can be made in cash, shares, or
other consideration in accordance with the terms of the 1993 Program and any
applicable rules of the granting authority and valued at fair market value on
the date of exercise. Options are subject to forfeiture if the grantee
terminates employment prior to normal retirement time (subject to exceptions for
termination due to incapacity or for certain approved terminations) or is
determined to have engaged in activity detrimental to the interests of the
Corporation or its affiliates.
ISOs may be granted provided they meet the requirements of the Internal
Revenue Code. To the extent that the fair market value of shares with respect to
which ISOs are exercisable for the first time in any one year as to any
participant exceeds $100,000, such options shall not be treated as ISOs. An
option for additional shares, if any, which the granting authority may grant to
an employee who in the same year has been granted the maximum permissible ISOs
would be in the form of a nonqualified stock option not intended to qualify as
an ISO.
The Corporation is of the opinion that an employee receiving a stock option
does not realize any compensation income under the Internal Revenue Code upon
the grant of the option. However, an employee does realize compensation income
at the time of exercise (except options which are ISOs) in the amount of the
excess of the fair market value on the date of exercise over the option price.
The Corporation is also of the opinion that it is entitled to a deduction under
the Internal Revenue Code at the same time and equal to the amount of
compensation income that is realized by the employee. Although no compensation
income is realized upon exercise in the case of ISOs, the excess of the fair
market value on the date of exercise over the option price is included in
alternative minimum taxable income for alternative minimum tax purposes.
An SAR may be granted in tandem with a stock option or as a freestanding
award. An SAR permits the holder to receive a number of shares having an
aggregate value equal to any excess of the fair market value of the
Corporation's shares subject to the SAR over the grant price of the SAR (which
may not be less than 100 percent of fair market value of such shares at the time
of grant). If the SAR is granted in tandem with a stock option, exercise of the
SAR cancels the related option to the extent of such exercise. SARs may
authorize the optionee to elect to settle the SAR in cash. The provisions of
SARs with respect to exercisability upon termination or death of the grantee, as
well as forfeiture, are substantially the same as for stock options.
Restricted stock may be awarded under the 1993 Program either at no cost to
the recipient or for such cost as may be required by law or otherwise determined
by the granting authority. Restricted stock may not be disposed of by the
recipient until the restrictions specified in the award expire. These
restrictions can be based solely on a specified period of continuous employment
or could also be contingent on attaining specific business objectives or other
quantitative or qualitative criteria. Except as otherwise specified in the
award, (i) the holder of record of restricted stock has all of the rights of a
shareholder of the Corporation, including the right to vote the shares and the
right to receive any cash dividends; (ii) if the holder terminates employment
prior to normal retirement time (subject to exceptions for termination due to
incapacity or for certain approved terminations) or is determined to have
engaged in activity detrimental to the interests of the Corporation or its
affiliates, all shares still subject to restriction are forfeited by such holder
and reacquired by the Corporation; and (iii) if employment of the holder
terminates normally, or if the holder dies, any and all remaining restrictions
with respect to such restricted stock expire.
A performance award may be granted under the 1993 Program either at no cost
to the recipient or for such cost as may be required by law or otherwise
determined by the granting authority. Performance awards may take the form of
performance shares, or of performance units or rights valued by reference to the
value of Common Stock of the Corporation or by reference to some other formula
or method. A performance award may require attainment of performance criteria
within a specified period in order for the award to be earned. Performance
awards, when and if payable, may be paid in cash, stock, other consideration, or
a combination thereof.
Incentive shares may be granted as a form of bonus under the 1993 Program
either at no cost to the recipient or for such cost as may be required by law or
otherwise determined by the granting authority. The time and method of payment
are as specified by the grant, provided that the delivery of any incentive
shares must
18
be completed no later than the tenth anniversary of the grantee's date of
termination.
DERs which may be awarded under the 1993 Program give the recipient the
right to receive credits for dividends that would be paid if the grantee held a
specified number of shares of Common Stock, either as a component of another
award or as a freestanding award. Dividend equivalents credited to the holder of
a DER may be paid currently or be deemed to be reinvested in additional shares
(which may thereafter accrue additional dividend equivalents) at fair market
value at the time of deemed reinvestment. DERs may be settled in cash, shares,
or a combination thereof, in a single installment or installments, as specified
in the award. In addition, awards payable in cash on a deferred basis may
provide for crediting and payment of interest equivalents.
Other forms of award based on, payable in, or otherwise related in whole or
in part to Common Stock of the Corporation may be granted under the 1993 Program
if the granting authority determines that such awards are consistent with the
purposes and restrictions of the 1993 Program. The terms and conditions of such
awards shall be specified by the grant. Such awards may be granted for no cash
consideration, for such minimum consideration as may be required by applicable
law, or for such other consideration as may be specified by the granting
authority.
In the event of any stock split, stock dividend, or other relevant change
in capitalization that is determined to be dilutive to outstanding awards, the
1993 Program provides that appropriate adjustment will be made in the number of
shares and the purchase price per share, if any, under such awards and in
determining the number of shares available for future awards. Accordingly, as a
result of the two-for-one stock split described on page 1 of this proxy
statement, the number of shares available for future grants under the 1993
Program on the effective date of the stock split, as well as the limit on
individual option and SAR grants contained in the proposed amendment, if
approved, will be doubled and appropriate adjustments will be made to
outstanding awards.
The 1993 Program provides that awards are not transferable except by will
or the laws of descent and distribution. An award may permit the recipient to
pay applicable withholding taxes by surrendering previously owned shares or
authorizing the Corporation to withhold shares otherwise deliverable under the
award.
The number of stock options or other forms of award that will be granted
hereafter under the 1993 Program is not currently determinable. Information
regarding stock options and restricted stock awarded to the named executive
officers in 1996 is provided on page 9 of this proxy statement. In addition, in
1996, (i) options for 909,000 shares and 33,000 shares of restricted stock were
granted to all current executive officers as a group; and (ii) options for
5,074,945 shares and 25,000 shares of restricted stock were granted to all other
eligible employees, including current officers who are not executive officers.
Directors who are not executive officers of the Corporation are not eligible for
awards under the 1993 Program.
At December 31, 1996, 1,242,078,503 shares of Common Stock of the
Corporation were outstanding (excluding shares held by the Corporation). The
last closing price of a share of Common Stock on the New York Stock Exchange
consolidated tape on January 31, 1997 was $103 5/8.
Performance-based incentive awards
(Item 3 on proxy card)
The following proposal will be offered by the Board of Directors:
Resolved, That in order to entitle the Corporation to continue to deduct,
for U.S. income tax purposes, the compensation expense resulting from certain
performance awards (exclusive of stock options and SARs) to certain executives,
the shareholders of the Corporation hereby approve the following material terms
under which such awards may be granted hereafter to such executives as provided
in Internal Revenue Code Section 162(m) and the regulations thereunder, as the
same may be amended from time to time ('Section 162(m)'):
-- The class of employees eligible for awards under these terms consists
of the chief executive officer, the other four most highly compensated
officers, and other key employees designated by the Board Compensation
Committee ('BCC') as of the end of each taxable year of the
Corporation.
-- Performance-based awards under these terms shall require attainment of
objective, pre-established goals based on one or more of the following
criteria: earnings per share, net income, cash flow, operating income,
return on capital employed, and total shareholder return. Such goals
shall be established by the BCC, which shall be comprised of 'outside
directors' as that term is defined in Section 162(m).
-- The maximum amount of performance-based awards granted to any
recipient under these terms for any one year shall not exceed two
tenths of one percent (0.2%) of the Corporation's net income from
operations. The BCC may grant a recipient less, but not more, than the
maximum award.
The foregoing material terms of performance-based incentive awards shall
become effective on the date shareholder approval is obtained.
19
BOARD OF DIRECTORS RECOMMENDATION --
The Board recommends a vote FOR this proposal.
The intent of this proposal is (1) to satisfy applicable provisions of the
Internal Revenue Code, as interpreted by the Internal Revenue Service, in order
for the Corporation to continue to be entitled to U.S. income tax deductions for
compensation paid or accrued under certain performance awards to certain key
employees and (2) to continue to provide the BCC the discretion and flexibility
required by the complex, highly technical, and long-term nature of the
Corporation's business. These terms do not amend the 1993 Program. Awards in
accordance with these terms may be granted under the 1993 Program or under
another applicable plan or arrangement of the Corporation.
The Internal Revenue Code was amended in 1993 to add Section 162(m), which
limits tax deductions previously allowed for certain compensation to the chief
executive officer and the other four most highly compensated officers unless
such compensation meets certain requirements. Under these requirements, such
compensation must be 'performance-based' and the material terms of such
compensation must be approved by shareholders. For the past three years under
Section 162(m) transition rules, the BCC has established upper limits on certain
performance awards in the form of short-term awards (consisting of cash bonuses
and EBUs) to certain key employees dependent on attainment of a broad
performance measure based on earnings per share. The BCC has exercised its
discretion in each of the past three years to reduce awards from this limit to
the amount determined to be appropriate. If the proposed material terms are
approved by shareholders, it is expected that the BCC will continue to use its
discretion to make future awards that are lower than the proposed maximums. A
fuller discussion of the BCC's approach to short-term and other awards is
contained on pages 12 through 15 of this proxy statement.
It is expected that only executive officers named in the Summary
Compensation Table will be granted awards under these terms. The amount of such
awards that will hereafter be awarded is not currently determinable. Information
regarding awards of this type in the form of cash bonuses and EBUs made to the
named executive officers in 1996 is provided on pages 9 and 11, respectively, of
this proxy statement.
The Board of Directors believes that approval of these terms is in the best
interests of the Corporation and its shareholders because such approval will
entitle the Corporation to continue to deduct for U.S. income tax purposes
amounts paid or accrued for certain performance awards to certain executives. If
this resolution is not approved by shareholders, the Board has made no
determination as to what action, if any, will be taken with respect to this
matter.
Ratification of the appointment of independent public accountants
(Item 4 on proxy card)
The following proposal will be offered by the Board of Directors:
Resolved, That the appointment, by the Board of Directors of the
Corporation, of Price Waterhouse LLP as independent public accountants to make
an examination of the accounts of the Corporation and its subsidiary companies
for the year ending December 31, 1997, effective upon ratification by the
shareholders, be, and it hereby is, ratified; and that a representative of Price
Waterhouse LLP be requested to attend the annual meeting of shareholders to be
held in 1998.
BOARD OF DIRECTORS RECOMMENDATION --
The Board recommends a vote FOR this proposal.
Price Waterhouse LLP has offices in most countries where affiliates of the
Corporation operate, which is an essential requirement. The Board believes that
Price Waterhouse LLP has demonstrated that it is well qualified to make an
independent examination of the accounts of the Corporation. Representatives of
Price Waterhouse LLP will be present at the 1997 annual meeting of shareholders
and will have the opportunity to make such statements as they may desire. Those
representatives will also be available to respond to appropriate questions from
the shareholders present.
The services provided by Price Waterhouse LLP include examinations of the
Corporation's annual consolidated financial statements, statutory examinations
of affiliated companies' financial statements, examination of financial
statements of employee benefit plans, certification of various special-purpose
financial reports and reports to comply with regulations of the Securities and
Exchange Commission and other governmental agencies, the preparation of tax
returns for employees on foreign assignments insofar as such tax returns pertain
to their assignments outside their home countries, and assistance and advice to
various affiliates with respect to certain tax and systems matters.
SHAREHOLDER PROPOSALS
Shareholder proponents have stated their intention to present the following
proposals at the 1997 annual meeting. In accordance with applicable proxy
regulations of the SEC, the shareholdings of the proponents will be furnished by
the Corporation to any person, orally or in writing as requested, promptly upon
the receipt of any oral or written request therefor addressed to the Secretary
of the Corporation. The proposals and supporting statements, for which the Board
of Directors and the Corporation accept no responsibility, are set forth
20
on the following pages. The Board opposes these proposals for the reasons stated
after each proposal.
Additional reporting of political contributions
(Item 5 on proxy card)
This proposal was submitted by Mrs. Evelyn Y. Davis, Watergate Office
Building, 2600 Virginia Avenue, N.W., Suite 215, Washington, DC 20037.
'Resolved, That the shareholders recommend that the Board direct management
that within five days after approval by the shareholders of this proposal, the
management shall publish in newspapers of general circulation in the cities of
New York, Washington, D.C., Detroit, Chicago, San Francisco, Los Angeles,
Dallas, Houston and Miami, and in the Wall Street Journal and U.S.A. Today, a
detailed statement of each contribution made by the Company, either directly or
indirectly, within the immediately preceding fiscal year, in respect of a
political campaign, political party, referendum or citizens' initiative, or
attempts to influence legislation, specifying the date and amount of each such
contribution, and the person or organization to whom the contribution was made.
Subsequent to this initial disclosure, the management shall cause like data to
be included in each succeeding report to shareholders. And if no such
disbursements were made, to have that fact publicized in the same manner.'
Reasons: 'This proposal, if adopted, would require the management to advise
the shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to promote
with those funds. It is therefore no more than a requirement that the
shareholders be given a more detailed accounting of these special purpose
expenditures that they now receive. These political contributions are made with
dollars that belong to the shareholders as a group and they are entitled to know
how they are being spent.
Last year the owners of 46,363,214 shares, representing approximately 5.2%
of shares voting, voted FOR this proposal.
If you AGREE, please mark your proxy FOR this proposal.'
BOARD OF DIRECTORS RECOMMENDATION --
The Board recommends a vote AGAINST this proposal.
A similar proposal was presented by this same proponent at Exxon's 1975,
1976, 1984, and 1996 annual meetings, and each time it was rejected by
shareholders owning more than 94 percent of the shares voted.
Exxon Corporation makes limited contributions to political candidates or
political parties, which are fully in keeping with applicable laws. Eligible
management and administrative employees and selected retirees who wish to
participate in the political process are given the opportunity to do so by
contributing to candidates through the Exxon Corporation Political Action
Committee and the Exxon Corporation Political Action Committee of Texas (the
'Exxon PACs'). As required by applicable federal and state election laws,
information about political contributions made by the Corporation and the Exxon
PACs is publicly available.
The Corporation legally may, and as a matter of policy does, take positions
with respect to proposed legislation and ballot propositions or referenda which
could affect the business activities of the Corporation and the shareholders'
investment in it. It communicates such positions in a variety of ways, including
testimony before congressional and other legislative committees, articles in
company publications which shareholders receive, and occasionally, special
letters to shareholders. From time to time, subject to strict management review,
the Corporation provides financial support to citizens' groups which are taking
positions for or against ballot propositions or referenda having an important
impact on the Corporation. The Corporation also belongs to various trade and
other associations which take public positions on such matters.
In view of the Corporation's policies and practices in this area, the Board
of Directors believes that this proposal would result in publishing information
that is already publicly available and create an unnecessary expense.
Accordingly, as it did in the past when similar proposals were under
consideration, the Board of Directors recommends a vote AGAINST this proposal.
Additional executive compensation reporting
(Item 6 on proxy card)
This proposal was submitted by The Sinsinawa Dominicans, 2128 So. Central
Park Avenue, Chicago, IL 60623 and six co-proponents.
'Whereas, We believe that financial, social and environmental criteria
should all be taken into account in fixing compensation packages for corporate
officers. Public scrutiny on compensation is reaching a new intensity, not just
for the Chief Executive Officer, but for all executives. Concerns include the
following:
. . . Total annual compensation for our Company's top five executives in 1995
was nearly $6 million, not including other long term compensation and tax
deductions worth millions of dollars.
. . . Too often top executives receive considerable increases in compensation
packages even when share investment performance is below that of the industry
group as well as the S&P 500.
. . . Our Company continues to be involved in costly appeals related to $5
billion in punitive damages connected with the Exxon Valdez grounding, as well
as other significant litigation and liability issues that
21
jeopardize our Company's financial condition. Should the pay of executives be
'as usual' when 'in their watch' our Company experiences costly fines and
expensive, protracted litigation?
. . . The relationship between compensation and the social and environmental
impact of company decision-makers is an important question. For instance, should
top officers' pay be reduced when Native American and other local communities
stand in public opposition to resource development projects of our Company?
Should CEO compensation be affected when local resistance occasions long-term
publicity detrimental to the best interests of our Company?
We believe that these considerations deserve the careful scrutiny of our
Board and committees dealing with compensation. Other companies, including
Procter & Gamble, Bristol-Myers Squibb and Westinghouse, have reported to
shareholders on how they integrate similar factors into compensation packages.
Resolved: Shareholders request that a committee of outside directors of the
Board institute an Executive Compensation Review and prepare a report available
to shareholders by the October following this year's annual meeting with the
results of the Review and any recommended changes in practices. The report shall
cover pay, benefits, perks, stock options, tax advantages and any special
arrangements in the compensation packages for all our Company's top officers.'
BOARD OF DIRECTORS RECOMMENDATION --
The Board recommends a vote AGAINST this proposal.
Exxon believes that it has substantially implemented this proposal. The
Board Compensation Committee ('BCC'), which is composed entirely of outside
directors, annually conducts a comprehensive review of executive compensation in
order to carry out its important oversight role in this area. In conducting this
review, in setting or recommending specific compensation levels, and in
designing plans and granting incentive awards, the BCC takes into consideration
numerous factors. These factors are detailed in the report on executive
compensation by the BCC, which is published each year in Exxon's proxy
statement. This year's report is set forth on pages 12 through 15 of this proxy
statement.
As required by applicable Securities and Exchange Commission rules, the
annual BCC report on executive compensation already describes every measure of
the Corporation's performance, whether qualitative or quantitative, on which the
Chief Executive Officer's compensation was based. As stated in this year's BCC
report, compensation decisions for all executives, including the CEO and the
other named executive officers, are based on the same criteria. The Corporation
also provides extensive disclosure in the Executive Compensation Section of its
proxy statement for the CEO and the other named executive officers, including a
three year history. Given this extensive dissemination of information, the Board
does not believe that the preparation, printing, and distribution of an
additional special report on executive compensation and the expense involved
would benefit the Corporation or its shareholders.
Accordingly, the Board of Directors recommends a vote AGAINST this
proposal.
22
ADDITIONAL INFORMATION
Other Business
It is not anticipated that there will be presented to the meeting any
business other than the election of directors and the proposals described
herein, and the Board of Directors was not aware, a reasonable time before this
solicitation of proxies, of any other matters which might properly be presented
for action at the meeting. If any other business should come before the meeting,
the persons named on the enclosed proxy card will have discretionary authority
to vote all proxies in accordance with their best judgment.
Outstanding Voting Stock
Shareholders of record at the close of business on March 3, 1997 are
entitled to notice of the meeting and to vote the shares held on that date. At
the close of business on January 31, 1997, excluding the shares owned by the
Corporation which are not voted, 1,242,262,504 shares of the Common Stock of the
Corporation were outstanding. As of the same date, 4,848,096 shares of the
Corporation's Class A Preferred Stock were outstanding. Holders of shares of
Common Stock and holders of Class A Preferred Stock vote together as one class.
Each share of Common Stock and of Class A Preferred Stock entitles the
registered holder thereof to one vote.
Solicitation of Proxies.
This proxy is solicited by the Board of Directors of the Corporation. The
cost of soliciting proxies in the accompanying form has been, or will be, borne
by the Corporation. In addition to solicitation by mail, banks, brokers and
other custodians, nominees, and fiduciaries will be requested to send proxy
material to the beneficial owners and to secure their voting instructions, if
necessary. The Corporation will reimburse them for their expenses in so doing.
Officers and other employees of the Corporation may solicit proxies
personally, by telephone, or other telecommunications from some shareholders if
proxies are not received promptly. In addition, the firm of D.F. King & Co.,
Inc., New York, NY has been retained to assist in the solicitation of proxies at
a fee of $25,000, plus expenses.
By order of the Board of Directors,
/s/ T. P. Townsend
T. P. TOWNSEND
Secretary
March 19, 1997
23
STATEMENT OF DIFFERENCES
The section symbol shall be expressed as.......'SS'
[TIGER]
['RECYCLED' LOGO]
Printed on recycled paper
APPENDIX 1
PROXY CARD
[DALLAS AREA MAP] [STREET MAP]
From I-45/Hwy 75--Take I-35 exit (Woodall Rodgers Frwy) to Pearl St.
exit or St. Paul exit (follow frontage road east to Pearl St.), turn south
and continue to Ross Ave., turn left to Arts District Garage.
From I-35E--Take I-45/Hwy 75 exit (Woodall Rodgers Frwy) to Pearl St.
exit, continue to Ross Ave., turn left to Arts District Garage.
From DFW Airport--Take South Exit to Hwy 183 east
(merges with I-35E), follow directions from I-35E (above).
From Love Field--Exit airport on Mockingbird Ln. west to I-35E south,
follow directions from I-35E (above).
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
PROXY
[LOGO] SOLICITED BY BOARD OF DIRECTORS
EXXON CORPORATION ANNUAL MEETING, APRIL 30,1997
5959 Las Colinas Boulevard DALLAS, TEXAS
Irving, TX 75039-2298
The undersigned hereby appoints D.W. Calloway, J. Hay, W.R. Howell, P.E.
Lippincott, and L.R. Raymond, or each or any of them, with power of
substitution, proxies for the undersigned to act and vote at the 1997 annual
meeting of shareholders of Exxon Corporation and at any adjournments thereof, as
indicated, upon all matters referred to on the reverse side and described in the
proxy statement for the meeting and, at their discretion, upon any other matters
that may properly come before the meeting.
1. Election of Directors
NOMINEES: M.J. Boskin, D.W. Calloway,
J. Hay, J.R. Houghton, W.R. Howell,
P.E. Lippincott, H.J. Longwell, M.C. Nelson,
L.R. Raymond, R.E. Wilhelm.
IF NO OTHER INDICATION IS MADE, THE
PROXIES SHALL VOTE (A) FOR THE ELECTION
OF THE DIRECTOR NOMINEES AND (B) in
ACCORDANCE WITH THE RECOMMENDATIONS OF
THE BOARD OF DIRECTORS ON THE OTHER
MATTERS REFERRED TO ON THE REVERSE SIDE.
P.O. Box 9157
Boston, MA 02205-9157
PLEASE COMPLETE, SIGN, DATE, AND PROMPTLY RETURN IN ENCLOSED ENVELOPE. (OVER)
[LOGO]
EXXON CORPORATION 1997 ANNUAL MEETING
ADMISSION TICKET
TO AVOID DELAY AT THE ENTRANCE
TO THE MEETING, PLEASE PRESENT
THIS TICKET.
You are cordially invited to attend the annual meeting of shareholders of Exxon
Corporation on Wednesday, April 30 at the Morton H. Meyerson Symphony Center,
2301 Flora Street, Dallas, Texas. The meeting will begin at 10:00 a.m., Central
Daylight Time. Admission is limited to shareholders, their proxies, and guests
of the Corporation. This ticket will admit you and a guest. Free parking is
available in the Arts District Garage. Have your parking ticket validated at the
annual meeting. Please allow extra time for parking.
DETACH TICKET
- - --------------------------------------------------------------------------------
[LOGO]
EXXON CORPORATION
Attached below is a proxy card for the 1997 annual meeting of shareholders
of Exxon Corporation.
Please mark the boxes on the proxy card to indicate how your shares should be
voted. Complete, sign, date, and promptly return your proxy card in the
enclosed postpaid envelope.
Votes are tallied by Bank of Boston, Exxon Corporation's transfer agent. Any
comments noted on the proxy card or an attachment will be forwarded by Bank of
Boston to Exxon Corporation.
Advance indications of attendance are helpful to us in making arrangements for
the meeting. If you plan to attend, mark the box provided on the proxy
card. The attached admission ticket should be presented at the meeting to
expedite registration.
DETACH CARD BEFORE MAILING
- - --------------------------------------------------------------------------------
[X] Please mark
votes as in
this example.
The Board of Directors recommends a vote FOR items 1, 2, 3, and 4.
WITHHELD
FOR ALL FROM ALL FOR AGAINST ABSTAIN
1. Election of [ ] [ ] 2. Amendment of [ ] [ ] [ ]
Directors 1993 Incentive
(page 4). Program (page 17)
3. Performance- [ ] [ ] [ ]
based incentive
- - --------------------------------- awards (page 19).
For all nominees except as noted
4. Appointment of [ ] [ ] [ ]
independent
public accountants
(page 20)
The Board of Directors recommends a vote
AGAINST items 5 and 6.
FOR AGAINST ABSTAIN
5. Additional reporting [ ] [ ] [ ]
of political
contributions (page 21).
6. Additional executive [ ] [ ] [ ]
compensation
reporting (page 21).
Discontinue duplicate annual report [ ]
I plan to attend the annual meeting. [ ]
I have made comments on this card or
an attachment. [ ]
Signature:_____________ Date _____1997 Signature: ____________ Date______1997
NOTE: Please sign exactly as name appears hereon. When signing as attorney,
executor, administrator, trustee, or guardian, please give full name as such.
