DEF 14A 1 ddef14a.htm DEFINITIVE PROXY STATEMENT Definitive Proxy Statement
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

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 §240.14a-12    

 

EXXON MOBIL 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)(4) 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.

 

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NOTICE OF 2010  
ANNUAL MEETING  
AND PROXY STATEMENT   LOGO
    April 13, 2010

Dear Shareholder:

We invite you to attend the annual meeting of shareholders on Wednesday, May 26, 2010, at the Morton H. Meyerson Symphony Center, 2301 Flora Street, Dallas, Texas 75201. The meeting will begin promptly at 9:00 a.m., Central Time. At the meeting, you will hear a report on our business and vote on the following items:

 

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Election of directors;

 

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Ratification of PricewaterhouseCoopers LLP as independent auditors;

 

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Eleven shareholder proposals contained in this proxy statement; and,

 

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Other matters if properly raised.

Only shareholders of record on April 6, 2010, or their proxy holders may vote at the meeting. Attendance at the meeting is limited to shareholders or their proxy holders and ExxonMobil guests. Only shareholders or their valid proxy holders may address the meeting.

This booklet includes the formal notice of the meeting, proxy statement, and financial statements. The proxy statement tells you about the agenda, procedures, and rules of conduct for the meeting. It also describes how the Board operates, gives information about our director candidates, and provides information about the other items of business to be conducted at the meeting.

Even if you own only a few shares, we want your shares to be represented at the meeting. You can vote your shares by Internet, toll-free telephone call, or proxy card.

To attend the meeting in person, please follow the instructions on page 3. A live audiocast of the meeting and a report on the meeting will be available on our Web site at exxonmobil.com.

Sincerely,

 

LOGO

 

     LOGO
David S. Rosenthal      Rex W. Tillerson
Secretary      Chairman of the Board


Table of Contents

Table of Contents

 

     Page

General Information

   1

Board of Directors

   4

Corporate Governance

   4

Item 1 – Election of Directors

   17

Director Compensation

   20

Certain Beneficial Owners

   22

Director and Executive Officer Stock Ownership

   22

Compensation Committee Report

   23

Compensation Discussion and Analysis

   24

Executive Compensation Tables

   40

Audit Committee Report

   51

Item 2 – Ratification of Independent Auditors

   52

Shareholder Proposals

   53

Item 3 – Special Shareholder Meetings

   54

Item 4 – Incorporate in North Dakota

   55

Item 5 – Shareholder Advisory Vote on Executive Compensation

   56

Item 6 – Amendment of EEO Policy

   57

Item 7 – Policy on Water

   59

Item 8 – Wetlands Restoration Policy

   60

Item 9 – Report on Canadian Oil Sands

   62

Item 10 – Report on Natural Gas Production

   64

Item 11 – Report on Energy Technology

   65

Item 12 – Greenhouse Gas Emissions Goals

   67

Item 13 – Planning Assumptions

   69

Additional Information

   70

Appendix A – Financial Section

   A-1

Stock Performance Graphs

   A-69

Directions to 2010 Annual Meeting

  


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GENERAL INFORMATION

Who May Vote

Shareholders of ExxonMobil, as recorded in our stock register on April 6, 2010, may vote at the meeting.

How to Vote

You may vote in person at the meeting or by proxy. We recommend you vote by proxy even if you plan to attend the meeting. You can always change your vote at the meeting.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 26, 2010.

 

Ÿ  

The 2010 Proxy Statement and 2009 Summary Annual Report are available at www.edocumentview.com/xom

Electronic Delivery of Proxy Statement and Annual Report

Instead of receiving future copies of these documents by mail, shareholders can elect to receive an e-mail that will provide electronic links to the proxy materials. Opting to receive your proxy materials online will save the Company the cost of producing and mailing documents to your home or business, and will also give you an electronic link to the proxy voting site.

 

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Shareholders of Record: If you vote on the Internet at www.investorvote.com/exxonmobil, simply follow the prompts for enrolling in the electronic proxy delivery service. You may enroll in the electronic proxy delivery service at any time in the future by going directly to www.computershare.com/exxonmobil. You may also revoke an electronic delivery election at this site at any time.

 

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Beneficial Shareholders: If you hold your shares in a brokerage account, you may also have the opportunity to receive copies of the proxy materials electronically. Please check the information provided in the proxy materials mailed to you by your bank or broker regarding the availability of this service.

How Proxies Work

ExxonMobil’s Board of Directors is asking for your proxy. Giving us your proxy means you authorize us to vote your shares at the meeting in the manner you direct. You may vote for all, some, or none of our director candidates. You may also vote for or against the other proposals, or abstain from voting.

If your shares are held in your name, you can vote by proxy in one of three convenient ways:

 

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Via Internet: Go to www.investorvote.com/exxonmobil and follow the instructions. You will need to have your proxy card or electronic notice in hand. At this Web site, you can elect to access future proxy statements and annual reports via the Internet.

 

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By Telephone: Call toll-free 1-800-652-8683 or 1-781-575-2300 (outside the United States, Canada, and Puerto Rico), and follow the instructions. You will need to have your proxy card in hand.

 

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In Writing: Complete, sign, date, and return your proxy card in the enclosed envelope.

Your proxy card covers all shares registered in your name and shares held in your Computershare Investment Plan account. If you own shares in the ExxonMobil Savings Plan for employees and retirees, your proxy card also covers those shares.

 

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If you give us your signed proxy but do not specify how to vote, we will vote your shares in favor of our director candidates; in favor of the ratification of the appointment of independent auditors; and against the shareholder proposals.

If you hold shares through someone else, such as a stockbroker, you will receive material from that firm asking how you want to vote. Check the voting form used by that firm to see if it offers Internet or telephone voting.

Voting Shares in the ExxonMobil Savings Plan

The trustee of the ExxonMobil Savings Plan will vote Plan shares as participants direct. To the extent participants do not give instructions, the trustee will vote shares as it thinks best. The proxy card serves to give voting instructions to the trustee.

Revoking a Proxy

You may revoke your proxy before it is voted at the meeting by:

 

Ÿ  

Submitting a new proxy with a later date via a proxy card, the Internet, or by telephone;

 

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Notifying ExxonMobil’s Secretary in writing before the meeting; or,

 

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Voting in person at the meeting.

Confidential Voting

Independent inspectors count the votes. Your individual vote is kept confidential from us unless special circumstances exist. For example, a copy of your proxy card will be sent to us if you write comments on the card.

Quorum

In order to carry on the business of the meeting, we must have a quorum. This means at least a majority of the outstanding shares eligible to vote must be represented at the meeting, either by proxy or in person. Treasury shares, which are shares owned by ExxonMobil itself, are not voted and do not count for this purpose.

Votes Required

 

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Election of Directors Proposal: A plurality of the votes cast is required for the election of directors. This means that the director nominee with the most votes for a particular seat is elected for that seat. Only votes FOR or WITHHELD count. Abstentions and broker non-votes are not counted for purposes of the election of directors. A “broker non-vote” occurs when a bank, broker, or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because the record holder does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. If you own shares through a broker, you must give the broker instructions to vote your shares in the election of directors. Otherwise, your shares will not be voted.

Our Corporate Governance Guidelines, which can be found in the Corporate Governance section of our Web site at exxonmobil.com/governance, state that all directors will stand for election at the annual meeting of shareholders. In any non-contested election of directors, any director nominee who receives a greater number of votes WITHHELD from his or her election than votes FOR such election shall tender his or her resignation. Within 90 days after certification of the election results, the Board of Directors will decide, through a process managed by the Board Affairs Committee and excluding the nominee in question, whether to accept the resignation. Absent a compelling reason for the director to remain on the Board, the Board shall accept the resignation. The Board will promptly disclose its decision and, if applicable, the reasons for rejecting the tendered resignation on Form 8-K filed with the Securities and Exchange Commission (SEC).

 

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Ÿ  

Other Proposals: Approval of the Ratification of Independent Auditors proposal and the shareholder proposals requires the favorable vote of a majority of the votes cast. Only votes FOR or AGAINST these proposals count. Abstentions count for quorum purposes, but not for the voting of these proposals. Broker non-votes count as votes “FOR” the proposal for Ratification of Independent Auditors but do not count for purposes of voting on shareholder proposals.

Annual Meeting Admission

Only shareholders or their proxy holders and ExxonMobil guests may attend the meeting. For safety and security reasons, cameras, camera phones, recording equipment, electronic devices, computers, large bags, briefcases, or packages will not be permitted in the meeting. In addition each shareholder and ExxonMobil guest will be asked to present a valid government-issued picture identification, such as a driver’s license, before being admitted to the meeting.

For registered shareholders, an admission ticket is attached to your proxy card. Please detach and bring the admission ticket with you to the meeting.

If your shares are held in the name of your broker, bank, or other nominee, you must bring to the meeting an account statement or letter from the nominee indicating that you beneficially owned the shares on April 6, 2010, the record date for voting. You may receive an admission ticket in advance by sending a written request with proof of ownership to the address listed under “Contact Information” below.

Shareholders who do not present admission tickets at the meeting will be admitted only upon verification of ownership at the admission counter.

Audiocast of the Annual Meeting

You are invited to visit our Web site at exxonmobil.com to hear the live audiocast of the meeting at 9:00 a.m., Central Time, on Wednesday, May 26, 2010. An archived copy of this audiocast will be available on our Web site for one year.

Conduct of the Meeting

The Chairman has broad responsibility and legal authority to conduct the annual meeting in an orderly and timely manner. This authority includes establishing rules for shareholders who wish to address the meeting. Only shareholders or their valid proxy holders may address the meeting. Copies of these rules will be available at the meeting. The Chairman may also exercise broad discretion in recognizing shareholders who wish to speak and in determining the extent of discussion on each item of business. In light of the number of business items on this year’s agenda and the need to conclude the meeting within a reasonable period of time, we cannot ensure that every shareholder who wishes to speak on an item of business will be able to do so.

Dialogue can be better accomplished with interested parties outside the meeting and, for this purpose, we have provided a method for raising issues and contacting the non-employee directors either in writing or electronically on our Web site at exxonmobil.com/directors. The Chairman may also rely on applicable law regarding disruptions or disorderly conduct to ensure that the meeting is conducted in a manner that is fair to all shareholders. Shareholders making comments during the meeting must do so in English so that the majority of shareholders present can understand what is being said.

Contact Information

If you have questions or need more information about the annual meeting, write to:

Mr. David S. Rosenthal

Secretary

Exxon Mobil Corporation

5959 Las Colinas Boulevard

Irving, TX 75039-2298

call us at 1-972-444-1157, or send a fax to 1-972-444-1505.

 

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For information about shares registered in your name or your Computershare Investment Plan account, call ExxonMobil Shareholder Services at 1-800-252-1800 or 1-781-575-2058 (outside the United States, Canada, and Puerto Rico), or access your account via the Web site at www.computershare.com/exxonmobil. We also invite you to visit ExxonMobil’s Web site at exxonmobil.com. Investor information can be found at exxonmobil.com/investor. Web site materials are not part of this proxy solicitation.

BOARD OF DIRECTORS

CORPORATE GOVERNANCE

Overview

The Board of Directors and its committees perform a number of functions for ExxonMobil and its shareholders, including:

 

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Overseeing the management of the Company on your behalf, including oversight of risk management;

 

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Reviewing ExxonMobil’s long-term strategic plans;

 

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Exercising direct decision-making authority in key areas, such as declaring dividends;

 

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Selecting the CEO and evaluating the CEO’s performance; and,

 

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Reviewing development and succession plans for ExxonMobil’s top executives.

The Board has adopted Corporate Governance Guidelines that govern the structure and functioning of the Board and set out the Board’s position on a number of governance issues. A copy of our current Corporate Governance Guidelines is posted on our Web site at exxonmobil.com/governance.

All ExxonMobil directors stand for election at the annual meeting. Non-employee directors cannot stand for election after they have reached age 72, unless the Board makes an exception on a case-by-case basis. Employee directors resign from the Board when they are no longer employed by ExxonMobil.

Risk Oversight

Responsibility for risk oversight rests with the full Board of Directors. Committees help the Board carry out this responsibility by focusing on specific key areas of risk inherent in our business.

 

Ÿ  

The Audit Committee oversees risks associated with financial and accounting matters, including compliance with legal and regulatory requirements, and the Company’s financial reporting and internal control systems.

 

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The Board Affairs Committee oversees risks associated with corporate governance, including Board structure and director succession planning.

 

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The Compensation Committee helps ensure that the Corporation’s compensation policies and practices support the retention and development of executive talent with the experience required to manage risks inherent to the business and do not encourage or reward excessive risk-taking by our executives.

 

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The Finance Committee oversees risks associated with financial instruments, financial policies and strategies, and capital structure.

 

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The Public Issues and Contributions Committee oversees operational risks such as those relating to employee and community safety, health, environmental and security matters.

 

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The Board receives regular updates from the committees about their activities in this regard and at least annually participates in reviews with management addressing the progress of significant projects and operational activities. Updates are measured against benchmark expectations, all of which reflect identified risk factors and the impact of those identified risks on expected outcomes and results.

Board Leadership Structure

The Company’s By-Laws currently provide that, subject to the authority of the Board of Directors, the Chairman of the Board “shall have general care and supervision of the business and affairs of the corporation,” and in the absence of a President, shall also “direct the current administration of the business and affairs of the corporation.”

The Board believes the interests of all shareholders are best served at the present time through a leadership model with a combined Chairman/CEO position and an independent Presiding Director. However, the Board retains authority to amend the By-Laws to separate the positions of Chairman and CEO at any time.

The current CEO possesses an in-depth knowledge of the Company, its integrated, multinational operations, the evolving energy industry supply and demand, and the array of challenges to be faced, gained through over 34 years of successful experience in progressively more senior positions, including domestic and international responsibilities.

The Board believes that these experiences and other insights put the CEO in the best position to provide broad leadership for the Board as it considers strategy and as it exercises its fiduciary responsibilities to its shareholders.

Further, the Board has demonstrated its commitment and ability to provide independent oversight of management.

The Board is comprised entirely of independent directors except the CEO, and 100 percent of the Audit, Compensation, Board Affairs, and Public Issues and Contributions Committee members are independent. Each independent director has access to the CEO and other Company executives on request; may call meetings of the independent directors; and may request agenda topics to be added or dealt with in more detail at meetings of the full Board or an appropriate Board committee.

In addition, after considering evolving governance practices and shareholder input regarding Board independence, the Board established the role of Presiding Director. The Board believes the Presiding Director can provide effective, independent Board leadership. S.J. Palmisano has served as Presiding Director for the past year and is expected to remain in the position at least through the annual meeting of shareholders. In accordance with the specific duties prescribed in the Corporate Governance Guidelines, the Presiding Director chairs executive sessions of the independent directors, which are held several times per year, normally coincident with meetings of the Board and without management present; chairs meetings of the Board in the absence of the Chairman; and, works closely with the Chairman in developing Board agendas, topics, schedules, and in reviewing materials provided to the directors.

Director Qualifications

The Board has adopted guidelines outlining the qualifications sought when considering non-employee director candidates and they are published on our Web site at exxonmobil.com/governance.

In part, the guidelines describe the necessary experiences and skills expected of director candidates as follows:

“Candidates for non-employee director of Exxon Mobil Corporation should be individuals who have achieved prominence in their fields, with experience and demonstrated expertise in managing large, relatively complex organizations, and/or, in a professional or scientific capacity, be accustomed to dealing with complex situations preferably those with worldwide scope.”

The key criteria the Board seeks across its membership to achieve a balance of experiences important to the Corporation include: financial expertise; experience as the CEO of a significant company or

 

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organization or as a next-level executive with responsibilities for global operations; experience managing large, complex organizations; experience on one or more boards of significant public or non-profit organizations; and, expertise resulting from significant academic, scientific or research activities.

The table below describes the particular experience, qualifications, attributes, and skills of each director nominee that led the Board to conclude that such person should serve as a director of the Company.

 

M.J. Boskin

   Ÿ    Public finance, tax, budget and macroeconomic policy experience as senior fellow at the Hoover Institution and the T.M. Friedman Professor of Economics at Stanford University
     Ÿ    Financial expertise
     Ÿ    Government/research experience as chairman of the President’s Council of Economic Advisors and an associate at the National Bureau of Economic Research
     Ÿ    Experience advising the federal government, heads of state, finance ministries, and central banks around the world
     Ÿ    Outside board experience as a director of Oracle, Shinsei Bank, and the Vodaphone Group

P. Brabeck-Letmathe

   Ÿ    Global leadership position as chairman of Nestlé
     Ÿ    Outside board experience at Nestlé, and as a director of L’Oréal, Credit Suisse Group, Roche Holding, and Alcon
     Ÿ    Experience with worldwide leadership of strategic business groups
     Ÿ    Affiliation with leading business associations (European Round Table of Industrialists and Foundation Board of the World Economic Forum)
     Ÿ    Recipient of awards, including “La Orden Mexicana del Aguila Azteca,” the Schumpeter Prize for outstanding contribution in Economics, and the Austrian Cross of Honour for service to the Republic of Austria

L.R. Faulkner

   Ÿ    Leadership position as president of the Houston Endowment
     Ÿ    Leadership experience as president of the University of Texas at Austin
     Ÿ    Financial expertise
     Ÿ    Academic/administration experience at major universities such as the University of Illinois and Harvard University
     Ÿ    Expertise in chemistry, electrochemistry, and materials
     Ÿ    Outside board experience as a director of Temple-Inland and Guaranty Financial Group
     Ÿ    Recognition by the American Academy of Arts and Sciences and leadership of the National Mathematics Advisory Panel

J.S. Fishman

   Ÿ    Global leadership position as chairman and chief executive officer of The Travelers Companies
     Ÿ    Outside board experience at The Travelers Companies, and as a director of Platinum Underwriters Holdings Ltd. and Nuveen Investments
     Ÿ    Affiliation with a leading academic institution as a member of the Board of Trustees, the Board of Overseers of the Graduate School of Education, and the Industry Advisory Board of the Financial Institutions Center for The Wharton School
     Ÿ    Affiliation with leading business associations (the Business Council, the Kennedy Center Corporate Fund Board in Washington D.C., The National Academy Foundation, and the American Insurance Association)

K.C. Frazier

   Ÿ    Global leadership position as executive vice president and president of Global Human Health at Merck & Co.
     Ÿ    Affiliation with leading legal, business and public policy associations (the Council on Foreign Relations, the American Law Institute, and the European Federation of Pharmaceutical Industries and Associations)
     Ÿ    Outside board experience at non-profit organizations
     Ÿ    Recipient of award for extraordinary achievement in pro bono and public service

 

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W.W. George

   Ÿ    Global business experience as former chairman, president, and chief executive officer at Medtronic
     Ÿ    Leadership position as professor of management practice at Harvard University
     Ÿ    Academic experience at Harvard Business School and Yale School of Management
     Ÿ    Outside board experience as a director of Goldman Sachs, Novartis, and Target
     Ÿ    Authorship of books and articles on leadership and corporate governance

M.C. Nelson

   Ÿ    Global business experience as chairman and chief executive officer at Carlson
     Ÿ    Recipient of leadership awards from Forbes magazine and U.S. News and World Report
     Ÿ    Outside board experience at Carlson and as a director of Rezidor Hotel Group
     Ÿ    Affiliation with leading business associations (the World Economic Forum’s International Business Council, the National Women’s Business Council, the World Travel and Tourism Council, the Foreign Policy Association, and the Business Roundtable)

S.J. Palmisano

   Ÿ    Global business experience as chairman, president, and chief executive officer of IBM
     Ÿ    Outside board experience at IBM
     Ÿ    Affiliation with leading business and public policy associations (the Business Roundtable and the Executive Committee of the Council on Competitiveness)
     Ÿ    Awarded honorary fellowship from the London Business School

S.S Reinemund

   Ÿ    Global business experience as former chairman, president, and chief executive officer of PepsiCo
     Ÿ    Leadership position as dean of business at Wake Forest University
     Ÿ    Academic experience as professor of leadership and strategy at Wake Forest University
     Ÿ    Financial expertise
     Ÿ    Outside board experience as a director of American Express, Marriott, and Johnson & Johnson
     Ÿ    Affiliation with leading charitable and business associations (United States Naval Academy Foundation, National Minority Supplier Development Council, and National Advisory Board of the Salvation Army)

R.W. Tillerson

   Ÿ    Global business experience as chairman and chief executive officer of ExxonMobil since January 2006 with demonstrated leadership skills resulting from a more-than-34-year career involving positions of increasing responsibility with the Company’s domestic and international business operations
     Ÿ    Affiliation with leading business and public policy associations (the Executive Committee and the Policy Committee of the American Petroleum Institute, the Center for Strategic and International Studies, the National Petroleum Council, the Business Council, the Business Roundtable and its Energy Task Force, the Business Council for International Understanding, and the Emergency Committee for American Trade)
     Ÿ    Leadership as a member of the Executive Board of the Boy Scouts of America, a director of the United Negro College Fund, and vice-chairman of the Ford’s Theatre Society

E.E. Whitacre, Jr.

   Ÿ    Global business experience as chairman and chief executive officer of General Motors Company
     Ÿ    Global business experience as former chairman and chief executive officer of AT&T and SBC Communications
     Ÿ    Outside board experience at General Motors and as a director of Burlington Northern Santa Fe and Anheuser Busch
     Ÿ    Affiliation with leading business and community organizations (Institute for International Economics, the Business Council, Boy Scouts of America, Board of Regents of Texas Tech University, and the United Way)

 

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Director Independence

Our Corporate Governance Guidelines require that a substantial majority of the Board consist of independent directors. In general the Guidelines require that an independent director must have no material relationship with ExxonMobil, directly or indirectly, except as a director. The Board determines independence on the basis of the standards specified by the New York Stock Exchange (NYSE), the additional standards referenced in our Corporate Governance Guidelines, and other facts and circumstances the Board considers relevant.

Under ExxonMobil’s Corporate Governance Guidelines, a director will not be independent if a reportable “related person transaction” exists with respect to that director or a member of the director’s family for the current or most recently completed fiscal year. See the Guidelines for Review of Related Person Transactions posted on the Corporate Governance section of our Web site and described in more detail under “Related Person Transactions and Procedures” on pages 14-16.

The Board has reviewed relevant relationships between ExxonMobil and each non-employee director and director nominee to determine compliance with the NYSE standards and ExxonMobil’s additional standards. The Board has also evaluated whether there are any other facts or circumstances that might impair a director’s independence. Based on that review, the Board has determined that all ExxonMobil non-employee directors and director nominees are independent. The Board has also determined that each member of the Audit, Board Affairs, Compensation, and Public Issues and Contributions Committees (see membership table on page 9) is independent.

In recommending that each director and nominee be found independent, the Board Affairs Committee reviewed the following transactions, relationships, or arrangements. All matters described below fall within the NYSE and ExxonMobil independence standards.

 

Name    Matters Considered

P. Brabeck-Letmathe

   Ordinary course business with Nestlé (purchases of food and nutrition products; sales of fuels and plastic film)

K.C. Frazier

   Ordinary course business with Merck (purchases of pharmaceuticals; sales of chemicals and oils)

M.C. Nelson

   Ordinary course business with Carlson (purchases of travel, hotel, and event services; sales of lubricants)

S.J. Palmisano

   Ordinary course business with IBM (purchases of consulting and IT maintenance services)

E.E. Whitacre, Jr.

   Ordinary course business with General Motors (purchases of fleet vehicles; sales of lubricants, plastics, and specialty chemicals)

Board Meetings and Committees; Annual Meeting Attendance

The Board met 11 times in 2009. ExxonMobil’s incumbent directors, on average, attended approximately 94 percent of Board and committee meetings during 2009; and no director attended less than 75 percent of such meetings. ExxonMobil’s non-employee directors held three executive sessions in 2009.

As specified in our Corporate Governance Guidelines, it is ExxonMobil’s policy that directors should make every effort to attend the annual meeting of shareholders. All incumbent directors attended last year’s meeting except Mr. Frazier, who was first elected to the Board in May 2009.

The Board appoints committees to help carry out its duties. Board committees work on key issues in greater detail than would be possible at full Board meetings. Only non-employee directors may serve on the Audit, Compensation, Board Affairs, and Public Issues and Contributions Committees. Each committee has a written charter. The charters are posted on the Corporate Governance section of our Web site at exxonmobil.com/governance.

 

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The table below shows the current membership of each Board committee and the number of meetings each committee held in 2009. Committee membership reflecting the addition of two new director nominees once elected by shareholders and the retirement of Dr. King, will be published on our Web site soon after the annual meeting.

 

Director   Audit   Compensation  

Board

Affairs

  Finance  

Public

Issues and
Contributions

  Executive (1)

M.J. Boskin

  C       Ÿ     Ÿ

L.R. Faulkner

  Ÿ           Ÿ        

K.C. Frazier

          Ÿ       Ÿ    

W.W. George

      C   Ÿ            

R.C. King

      Ÿ           C   Ÿ

M.C. Nelson

          C       Ÿ   Ÿ

S.J. Palmisano

      Ÿ   Ÿ           Ÿ

S.S Reinemund

  Ÿ           Ÿ        

R.W. Tillerson

              C       C

E.E. Whitacre, Jr.

      Ÿ           Ÿ    

2009 Meetings

  11   9   7   2   5   0

C = Chair

Ÿ = Member

(1) Other directors serve as alternate members on a rotational basis.

Below is additional information about each Board committee.

Board Affairs Committee

The Board Affairs Committee serves as ExxonMobil’s nominating and corporate governance committee. The Committee recommends director candidates, reviews non-employee director compensation, and reviews other corporate governance practices, including the Corporate Governance Guidelines. The Committee also reviews any issue involving an executive officer or director under ExxonMobil’s Code of Ethics and Business Conduct and administers ExxonMobil’s Related Person Transaction Guidelines.

The Committee has adopted Guidelines for the Selection of Non-Employee Directors that describe the qualifications the Committee looks for in director candidates. These Selection Guidelines, as well as the Committee’s charter, are posted on the Corporate Governance section of our Web site, and are described in more detail in the section titled Director Qualifications, pages 5-7.

A substantial majority of the Board must meet the independence standards described in the Corporation’s Corporate Governance Guidelines, and all candidates must be free from any relationship with management or the Corporation that would interfere with the exercise of independent judgment. Candidates should be committed to representing the interests of all shareholders and not any particular constituency. The Board must include members with the particular experience required for service on key Board committees, as described in the Committee charters.

The Guidelines for the Selection of Non-Employee Directors state:

“ExxonMobil recognizes the strength and effectiveness of the Board reflects the balance, experience, and diversity of the individual directors; their commitment; and importantly, the ability of directors to work effectively as a group in carrying out their responsibilities. ExxonMobil seeks candidates with diverse backgrounds who possess knowledge and skills in areas of importance to the Corporation.”

 

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In addition to seeking a diverse set of business or academic experiences, the Committee seeks a mix of nominees whose perspectives reflect diverse life experiences and backgrounds, as well as gender and ethnic diversity. The Committee does not use quotas but considers diversity along with the other requirements of the Selection Guidelines when evaluating potential new directors. The Committee has also instructed its executive search firm to include diversity as part of the candidate search criteria.

The Committee identifies director candidates primarily through recommendations made by the non-employee directors. These recommendations are developed based on the directors’ own knowledge and experience in a variety of fields, and research conducted by ExxonMobil staff at the Committee’s direction. The Committee has also engaged an executive search firm to help the Committee identify new director candidates. The firm identifies potential director candidates for the Committee to consider and helps research candidates identified by the Committee. Additionally the Committee considers recommendations made by the employee directors, shareholders, and others. All recommendations, regardless of the source, are evaluated on the same basis against the criteria contained in the Selection Guidelines.

The recommendations of Messrs. Brabeck-Letmathe and Fishman were made by an incumbent non-employee director of the Board Affairs Committee.

Shareholders may send recommendations for director candidates to the Secretary at the address given under “Contact Information” on page 3. A submission recommending a candidate should include:

 

Ÿ  

Sufficient biographical information to allow the Committee to evaluate the candidate in light of the Selection Guidelines;

 

Ÿ  

Information concerning any relationship between the candidate and the shareholder recommending the candidate; and,

 

Ÿ  

Material indicating the willingness of the candidate to serve if nominated and elected.

The procedures by which shareholders may recommend nominees have not changed materially since last year’s proxy statement.

The Committee also administers provisions of the Corporate Governance Guidelines that require a director to tender a resignation when there is a substantial change in the director’s circumstances. The Committee reviews the relevant facts to determine whether the director’s continued service would be appropriate and makes a recommendation to the Board. During 2009, the Committee considered Mr. Whitacre’s new role as Chairman of General Motors. The Committee believed that Mr. Whitacre would continue to be a valuable and effective member of the ExxonMobil Board and, on the Committee’s recommendation, the Board declined Mr. Whitacre’s offer to resign.

Another responsibility of the Committee is to review and make recommendations to the Board regarding the compensation of the non-employee directors. The Committee uses an independent consultant, Pearl Meyer & Partners, to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.

Audit Committee

The Audit Committee oversees accounting and internal control matters. Its responsibilities include oversight of:

 

Ÿ  

Management’s conduct of the Corporation’s financial reporting process;

 

Ÿ  

The integrity of the financial statements and other financial information provided by the Corporation to the SEC and the public;

 

Ÿ  

The Corporation’s system of internal accounting and financial controls;

 

Ÿ  

The Corporation’s compliance with legal and regulatory requirements;

 

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Ÿ  

The performance of the Corporation’s internal audit function;

 

Ÿ  

The independent auditors’ qualifications, performance, and independence; and,

 

Ÿ  

The annual independent audit of the Corporation’s financial statements.

The Committee has direct authority and responsibility to appoint (subject to shareholder ratification), compensate, retain, and oversee the independent auditors.

The Committee also prepares the report that SEC rules require be included in the Corporation’s annual proxy statement. This report is on pages 51-52.

The Audit Committee has adopted specific policies and procedures for pre-approving fees paid to the independent auditors. Under the Audit Committee’s approach, an annual program of work is approved each October for the following categories of services: Audit, Audit-Related, and Tax. Additional engagements may be brought forward from time to time for pre-approval by the Audit Committee. Pre-approvals apply to engagements within a category of service, and cannot be transferred between categories. If fees might otherwise exceed pre-approved amounts for any category of permissible services, the incremental amounts must be reviewed and pre-approved prior to commitment. The complete text of the Audit Committee’s pre-approval policies and procedures is posted on the Corporate Governance section of ExxonMobil’s Web site.

The Board has determined that all members of the Committee are financially literate within the meaning of the NYSE standards, and that all are “audit committee financial experts” as defined in the SEC rules.

Compensation Committee

The Compensation Committee oversees compensation for ExxonMobil’s senior executives, including their salary, bonus, incentive awards, and succession plans for key executive positions. The Committee’s charter is available on the Corporate Governance section of our Web site.

During 2009 the Committee established the ceiling for the 2009 short term and long term incentive award programs, endorsed the salary program for 2010, reviewed the individual performance and contributions of each senior executive, granted individual incentive awards and set salaries for the senior executives, and reviewed progress on executive development and succession planning for senior positions.

The Compensation Committee’s report is on page 23.

The Committee does not delegate its responsibilities with respect to ExxonMobil’s executive officers and other senior executives (approximately 25 positions). For other employees, the Committee delegates authority to determine individual salaries and incentive awards to a committee consisting of the Chairman and the Senior Vice Presidents of the Corporation. That committee’s actions are subject to a salary budget and aggregate annual ceilings on cash and equity incentive awards established by the Compensation Committee.

The Committee utilizes the expertise of an external independent consultant, Pearl Meyer & Partners, whom the Committee retains and works with during the year. At the direction of the Chair of the Compensation Committee, the consultant provides the following services:

 

Ÿ  

Attends meetings of the Compensation Committee.

 

Ÿ  

Makes an annual presentation to the Compensation Committee regarding:

 

   

General trends in executive compensation across industries, particularly trends that reflect a change in compensation practices. The consultant advises the Committee on whether changes in compensation practices are relevant to ExxonMobil’s compensation programs.

 

   

A perspective on the structure and competitive standing of ExxonMobil’s compensation program for senior executives.

 

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Ÿ  

Participates in the Committee’s deliberations regarding compensation for Named Executive Officers that include items such as:

 

   

How to interpret the level of compensation of each Named Executive Officer compared to similar positions across industries.

 

   

The appropriate level of each element of compensation for individual Named Executive Officers considering their career experience and tenure in their positions, as well as general performance of the Company within the industry.

 

   

The pace at which compensation levels should be adjusted over future years.

 

   

How to weigh or consider the impact of a compensation change today on future retirement income.

 

   

The interpretation of issues involving executive compensation raised by shareholders and the appropriate responses from management.

 

   

The relationship between compensation and executive succession planning.

 

   

How the Committee should emphasize or weigh one element of compensation versus another to address the long-term nature of the business and long planning lead times.

 

Ÿ  

Prepares the analysis of comparator company compensation used by the Compensation Committee.

The input of the independent consultant is given serious consideration as part of the Committee’s decision-making process but is not assigned a weight versus the other matters considered by the Committee as described in the “Compensation Discussion and Analysis” beginning on page 24.

In addition at the direction of the Chair of the Board Affairs Committee, Pearl Meyer & Partners provides an annual survey of non-employee director compensation for use by that Committee.

ExxonMobil management does not use Pearl Meyer & Partners to advise on ExxonMobil’s general employee compensation and benefit programs. The Compensation Committee retains sole discretion to hire and fire the independent consultant and to negotiate the terms of the consultant’s engagement.

The Committee meets with ExxonMobil’s CEO and other senior executives during the year to review the Corporation’s business results and progress against strategic plans. The Committee uses this input to help determine the aggregate annual ceilings to be set for the Corporation’s cash and equity incentive award programs. The CEO also provides input to the Committee regarding performance assessments for ExxonMobil’s other senior executives and makes recommendations to the Committee with respect to salary and incentive awards for these executives and succession planning for senior positions.

The Committee uses tally sheets to assess total compensation for the Corporation’s senior executives. The tally sheets value all elements of cash compensation; incentive awards, including restricted stock grants; the annual change in pension value; and other benefits and perquisites. The tally sheets also display the value of outstanding awards and lump sum pension estimates.

See pages 33-34 for additional information on tally sheets and other analytical tools used by the Committee to facilitate compensation decisions.

The Compensation Committee determines whether ExxonMobil’s compensation policies and practices could result in inappropriate risk-taking. Based on its assessment, the Committee does not believe that ExxonMobil’s compensation policies and practices create any material adverse risks for the Company for the following reasons:

 

Ÿ  

Inappropriate risk-taking is discouraged by requiring senior executives to hold a substantial portion of their equity incentive award for their entire career and beyond retirement. These lengthy holding periods are tailored to our business model. The Compensation Committee requires that these equity grants with long holding periods comprise 50 to 70 percent of total compensation for Named Executive Officers as depicted on page 37 of the “Compensation Discussion and Analysis,” whereas the annual bonus award was only about 10 percent of total annual compensation in 2009.

 

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Ÿ  

Payout of 50 percent of the annual bonus is delayed and subject to risk of forfeiture, which is a unique feature of the annual bonus program relative to many comparator companies and further discourages inappropriate risk-taking; the timing of the delayed payout is determined by earnings performance.

 

Ÿ  

Executives below the Named Executive Officers participate in the same plans which are also reviewed by the Compensation Committee; therefore, inappropriate risk-taking is discouraged at all levels of the Company through similar compensation design features and allocation of awards.

 

Ÿ  

Finally, it should also be noted that a large percentage of career compensation for all executives and employees is in the form of a defined benefit pension which requires many years of dedicated service to the Company to have material value and is based on a standard retirement age of 65, with early retirement eligibility at age 55 with a minimum of 15 years of service. This is another dimension of total compensation that discourages inappropriate risk-taking; instead, it encourages executives to take a long-term view when making business decisions and to focus on achieving sustainable growth for shareholders.

For more information on the Committee’s approach to executive compensation and the decisions made by the Committee for 2009, refer to the “Compensation Discussion and Analysis” beginning on page 24.

Finance Committee

The Finance Committee reviews ExxonMobil’s financial policies and strategies, including our capital structure, dividends, and share purchase program. The Committee authorizes the issuance of corporate debt subject to limits set by the Board. The Committee’s charter is available on the Corporate Governance section of our Web site.

Public Issues and Contributions Committee

The Public Issues and Contributions Committee reviews the effectiveness of the Corporation’s policies, programs, and practices with respect to safety, security, health, the environment, and social issues. The Committee hears reports from operating units on safety and environmental activities, and also visits operating sites to observe and comment on current operating practices. In addition the Committee reviews the level of ExxonMobil’s support for education and other public service programs, including the Company’s contributions to the ExxonMobil Foundation. The Foundation works to improve the quality of education in the United States at all levels, with special emphasis on math and science. The Foundation also supports the Company’s other cultural and public service giving. The Committee’s charter is available on the Corporate Governance section of our Web site.

Executive Committee

The Executive Committee has broad power to act on behalf of the Board. In practice the Committee meets only when it is impractical to call a meeting of the full Board.

Shareholder Communications

The Board Affairs Committee has approved and implemented procedures for shareholders and other interested persons to send written or electronic communications to individual directors, including the Presiding Director, Board Committees, or the non-employee directors as a group.

 

Ÿ  

Written Communications: Written correspondence should be addressed to the director or directors in care of the Secretary at the address given under “Contact Information” on page 3.

 

Ÿ  

Electronic Communications: You may send e-mail to individual non-employee directors, Board Committees, or the non-employee directors as a group by using the form provided for that purpose on our Web site at exxonmobil.com/directors.

Additional instructions and procedures for communicating with the directors are posted on the Corporate Governance section of our Web site at exxonmobil.com/proceduresdircom.

 

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Code of Ethics and Business Conduct

The Board maintains policies and procedures (which we refer to in this proxy statement as the “Code”) that represent both the code of ethics for the principal executive officer, principal financial officer, and principal accounting officer under SEC rules, and the code of business conduct and ethics for directors, officers, and employees under NYSE listing standards. The Code applies to all directors, officers, and employees. The Code includes a Conflicts of Interest Policy under which directors, officers, and employees are expected to avoid any actual or apparent conflict between their own personal interests and the interests of the Corporation.

The Code is posted on the ExxonMobil Web site at exxonmobil.com/governance. The Code is also included as an exhibit to our Annual Report on Form 10-K. Any amendment of the Code will be posted promptly on our Web site.

The Corporation maintains procedures for administering and reviewing potential issues under the Code, including procedures that allow employees to make complaints without identifying themselves. The Corporation also conducts periodic mandatory business practice training sessions, and requires each regular employee and non-employee director to make an annual compliance certification.

The Board Affairs Committee will initially review any suspected violation of the Code involving an executive officer or director and will report its findings to the Board. The Board does not envision that any waiver of the Code will be granted. Should such a waiver occur, it will be promptly disclosed on our Web site.

Related Person Transactions and Procedures

In accordance with SEC rules, ExxonMobil maintains Guidelines for Review of Related Person Transactions. These Guidelines are available on the Corporate Governance section of our Web site.

In accordance with the Related Person Transaction Guidelines, all executive officers, directors, and director nominees are required to identify, to the best of their knowledge after reasonable inquiry, business and financial affiliations involving themselves or their immediate family members that could reasonably be expected to give rise to a reportable related person transaction. Covered persons must also advise the Secretary of the Corporation promptly of any change in the information provided, and will be asked periodically to review and re-affirm their information.

For the above purposes, “immediate family member” includes a person’s spouse, parents, siblings, children, in-laws, and step-relatives.

Based on this information, we review the Company’s own records and make follow-up inquiries as may be necessary to identify potentially reportable transactions. A report summarizing such transactions and including a reasonable level of detail is then provided to the Board Affairs Committee. The Committee oversees the Related Person Transaction Guidelines generally and reviews specific items to assess materiality.

In assessing materiality for this purpose, information will be considered material if, in light of all the circumstances, there is a substantial likelihood a reasonable investor would consider the information important in deciding whether to buy or sell ExxonMobil stock or in deciding how to vote shares of ExxonMobil stock. A director will abstain from the decision on any transactions involving that director or his or her immediate family members.

Under SEC rules, certain transactions are deemed not to involve a material interest (including transactions in which the amount involved in any 12-month period is less than $120,000 and transactions with entities where a related person’s interest is limited to service as a non-employee director). In addition based on a consideration of ExxonMobil’s facts and circumstances, the Committee will presume that the following transactions do not involve a material interest for purposes of reporting under SEC rules:

 

Ÿ  

Transactions in the ordinary course of business with an entity for which a related person serves as an executive officer, provided (1) the affected director or executive officer did not participate in the

 

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decision on the part of ExxonMobil to enter into such transactions; and, (2) the amount involved in any related category of transactions in a 12-month period is less than 1 percent of the entity’s gross revenues.

 

Ÿ  

Grants or membership payments in the ordinary course of business to nonprofit organizations, provided (1) the affected director or executive officer did not participate in the decision on the part of ExxonMobil to make such payments; and, (2) the amount of general-purpose grants in a 12-month period is less than 1 percent of the recipient’s gross revenues.

 

Ÿ  

Payments under ExxonMobil plans and arrangements that are available generally to U.S. salaried employees (including contributions under the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs and payments to providers under ExxonMobil health care plans).

 

Ÿ  

Employment by ExxonMobil of a family member of an executive officer, provided the executive officer does not participate in decisions regarding the hiring, performance evaluation, or compensation of the family member.

Transactions or relationships not covered by the above standards will be assessed by the Committee on the basis of the specific facts and circumstances.

The following disclosures are made as of February 24, 2010, the date of the most recent Board Affairs Committee review of potential related person transactions.

ExxonMobil and its affiliates have about 81,000 employees around the world and employees related by birth or marriage may be found at all levels of the organization. The spouse of T.R. Walters, a Vice President of the Corporation, retired from ExxonMobil in 2009. Excluding pension and other retirement-related distributions, her partial-year compensation was less than $120,000.

ExxonMobil employees do not receive preferential treatment by reason of being related to an executive officer, and executive officers do not participate in hiring, performance evaluation, or compensation decisions for family members. ExxonMobil’s employment guidelines state: “Relatives of Company employees may be employed on a non-preferential basis. However an employee should not be employed by or assigned to work under the direct supervision of a relative, or to report to a supervisor who in turn reports to a relative of the employee.” Accordingly, consistent with ExxonMobil’s Related Person Transaction Guidelines, we do not consider the relationship noted above to be material within the meaning of the related person transaction disclosure rules.

P.T. Mulva (Vice President and Controller) has a brother currently serving as Chairman and CEO of ConocoPhillips. As is the case with most other major companies in the oil and gas industry, ExxonMobil has a variety of business transactions with ConocoPhillips. These transactions include routine purchases and sales of crude oil, petroleum products, and pipeline transportation capacity. Affiliates of ExxonMobil and ConocoPhillips have joint ownership of a refinery in Germany and a number of pipelines, terminals, emergency response companies, and service companies, and also have undivided interests in a variety of exploration, development, and production projects. All of these transactions are entered into in the ordinary course of business without influence from P.T. Mulva. Neither P.T. Mulva nor, to our knowledge after reasonable inquiry, his brother, has any interest in these transactions different from the general interest of other employees and shareholders. Accordingly, consistent with ExxonMobil’s Related Person Transaction Guidelines, we do not consider these transactions to be material within the meaning of the related person transaction disclosure rules.

S.R. LaSala (retired Vice President and General Tax Counsel) has a son who is a partner of a law firm that performs work for ExxonMobil. Mr. LaSala was not involved in decisions to retain the firm, and, therefore, we do not consider the relationship to be material within the meaning of the related person transaction disclosure rules.

S.J. Glass, Jr. (Vice President) has a brother who is a partner of a law firm that performs work for ExxonMobil. Mr. Glass is not involved in decisions to retain the firm, and, therefore, we do not consider the relationship to be material within the meaning of the related person transaction disclosure rules.

 

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The Board Affairs Committee also reviewed ExxonMobil’s ordinary course business with companies for which non-employee directors serve as executive officers and determined that, in accordance with the categorical standards described above, none of those matters represent reportable related person transactions. See “Director Independence” on page 8.

We are not aware of any related person transaction required to be reported under applicable SEC rules since the beginning of the last fiscal year where our policies and procedures did not require review, or where such policies and procedures were not followed.

The Corporation’s Related Person Transaction Guidelines are intended to assist the Corporation in complying with its disclosure obligations under SEC rules. These procedures are in addition to, not in lieu of, the Corporation’s Code of Ethics and Business Conduct.

Litigation

Two shareholder derivative petitions filed in September 2009 have been consolidated and captioned In re Exxon Mobil Corp. Derivative Litigation, in the District Court of Dallas County, Texas, naming certain current and former directors (including Messrs. Boskin, George, Palmisano, Reinemund, and Tillerson and Ms. Nelson) as defendants and ExxonMobil as a nominal defendant. The petitions claim that the individual defendants breached their fiduciary duties by, among other things, allegedly failing to properly supervise the management of land leases overlaying hydrocarbon resources in the Point Thomson Unit on the Northern Slope of Alaska. The petitions also allege that the individual defendants caused the Company to make materially false and misleading statements concerning the leases and caused the waste of corporate assets. The petitions seek damages from the individual defendants in favor of ExxonMobil, equitable relief to remedy their alleged breaches, and costs and expenses of the action. The defendants have filed pleadings with the court seeking dismissal of both cases for failure to make a demand on the Corporation and failure to plead particularized facts to excuse a demand. The Corporation is defending the case on behalf of all defendants.

In October 2009, a purported shareholder complaint captioned Resnik v. Boskin et al., alleging direct and derivative claims, was filed in the United States District Court for the District of New Jersey, naming the present directors (including each of the incumbent nominees), the “named executive officers” (as defined in SEC regulations) listed in the Corporation’s 2009 proxy statement, and ExxonMobil as defendants. The complaint was amended in December 2009, alleging that the defendants made materially false or misleading proxy solicitations in connection with the 2008 and 2009 shareholder votes regarding the election of directors, and failed to seek stockholder reapproval of the Exxon Mobil Corporation 2003 Incentive Program to qualify certain incentive compensation paid to the named executive officers as properly deductible expenditures. The amended complaint also alleges, on behalf of the Corporation, that these acts injured the Corporation, breached fiduciary duties, and constituted waste. The amended complaint seeks various injunctive remedies, including corrective disclosure, new election of directors after corrective disclosure, enjoining candidates from serving on the Board until a new election occurs, stockholder reapproval of the program, enjoining payments under the program and short term incentive program to the named executive officers, damages from the individual defendants in favor of ExxonMobil, and costs and expenses of the action. The defendants have filed a motion seeking dismissal of the lawsuit on several grounds, including, that the plaintiff’s allegations concerning the Corporation’s proxy solicitations do not state claims under the federal securities laws and that the plaintiff’s derivative claims cannot stand since the plaintiff failed to make a demand on the Corporation or allege facts that would excuse such a demand. The Corporation is defending the case on behalf of all defendants.

 

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ITEM 1 – ELECTION OF DIRECTORS

The Board of Directors has nominated the director candidates named on the following pages. Personal information on each of our nominees, including public company directorships during the past five years, is provided. All of our nominees currently serve as ExxonMobil directors except Messrs. Brabeck-Letmathe and Fishman, who have been nominated by the Board for first election as a director at the annual meeting. Dr. King has reached the usual retirement age and is not standing for re-election this year.

If a director nominee becomes unavailable before the election, your proxy authorizes the people named as proxies to vote for a replacement nominee if the Board names one.

The Board recommends you vote FOR each of the following candidates:

 

 

Michael J. Boskin

LOGO

Age 64

Director since 1996

 

Principal Occupation: T.M. Friedman Professor of Economics and Senior Fellow, Hoover Institution, Stanford University

 

Business Experience: Dr. Boskin is also a Research Associate, National Bureau of Economic Research. He is Chief Executive Officer and President of Boskin & Co., an economic consulting company.

 

Current Public Company Directorships: Oracle

Past Public Company Directorships: Shinsei Bank; Vodafone

 

Peter Brabeck-Letmathe

LOGO

Age 65

Director nominee

 

Principal Occupation: Chairman of the Board, Nestlé

 

Business Experience: Mr. Brabeck-Letmathe was elected Chairman of Nestlé in 2005, and Chief Executive Officer in 1997, relinquishing the role of CEO in 2008. He also served as Vice Chairman, Executive Vice President, and Senior Vice President of Nestlé.

 

Current Public Company Directorships: Nestlé; Credit Suisse Group; L’Oréal

Past Public Company Directorships: Alcon; Roche Holding

 

Larry R. Faulkner

LOGO

Age 65

Director since 2008

 

Principal Occupation: President, Houston Endowment; President Emeritus, the University of Texas at Austin

 

Business Experience: Dr. Faulkner served as President of the University of Texas at Austin from 1998 to 2006. He also served on the chemistry faculties of the University of Texas, the University of Illinois, and Harvard University. At the University of Illinois, he also held a number of positions in academic administration including Provost and Vice Chancellor for Academic Affairs.

 

Current Public Company Directorships: Temple-Inland

Past Public Company Directorships: Guaranty Financial Group

 

 

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Jay S. Fishman

LOGO

Age 57

Director nominee

 

Principal Occupation: Chairman of the Board and Chief Executive Officer, The Travelers Companies

 

Business Experience: Mr. Fishman was elected Chairman of The Travelers Companies in 2005, and Chief Executive Officer in 2004 upon the merger of The St. Paul Companies and Travelers Property Casualty Corporation. From 2001 to 2004 he was Chairman, Chief Executive Officer, and President of The St. Paul Companies.

 

Current Public Company Directorships: Travelers

Past Public Company Directorships: Platinum Underwriters Holdings Ltd.; Nuveen Investments

 

Kenneth C. Frazier

LOGO

Age 55

Director since 2009

 

Principal Occupation: Executive Vice President and President, Global Human Health, Merck & Co.

 

Business Experience: Mr. Frazier was elected Executive Vice President and President, Global Human Health, at Merck in 2007, and Executive Vice President and General Counsel in 2006. He served as Senior Vice President and General Counsel at Merck from 1999 to 2006.

 

Current Public Company Directorships: None

Past Public Company Directorships: None

 

William W. George

LOGO

Age 67

Director since 2005

 

Principal Occupation: Professor of Management Practice, Harvard University

 

Business Experience: Mr. George was elected Chairman of Medtronic in 1996, and retired in 2002; Chief Executive Officer in 1991; and President and Chief Operating Officer in 1989.

 

Current Public Company Directorships: Goldman Sachs

Past Public Company Directorships: Novartis; Target

 

Marilyn Carlson Nelson

LOGO

Age 70

Director since 1991

 

Principal Occupation: Chairman of the Board, Carlson

 

Business Experience: Mrs. Nelson was elected Chairman and Chief Executive Officer of Carlson in 1998, and relinquished the role of CEO in 2008. She has held a number of other management positions at Carlson including President, Chief Operating Officer, Vice Chair, and Senior Vice President.

 

Current Company Directorships: Carlson

Past Public Company Directorships: Rezidor Hotel Group

 

 

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Samuel J. Palmisano

LOGO

Age 58

Director since 2006

Presiding Director since 2008

 

Principal Occupation: Chairman of the Board, President, and Chief Executive Officer, IBM

 

Business Experience: Mr. Palmisano was elected Chairman, President, and Chief Executive Officer of IBM in 2003. Mr. Palmisano also served as President, Senior Vice President, and Group Executive for IBM’s Enterprise Systems Group, IBM Global Services, and IBM’s Personal Systems Group.

 

Current Public Company Directorships: IBM

Past Public Company Directorships: None

 

Steven S Reinemund

LOGO

Age 62

Director since 2007

 

Principal Occupation: Dean of Business, Wake Forest University

 

Business Experience: Mr. Reinemund served as Executive Chairman of the Board of PepsiCo from 2006 to 2007, and retired in 2007; was elected Chief Executive Officer and Chairman of the Board in 2001; President and Chief Operating Officer in 1999; and Director in 1996. He was also elected President and CEO of Frito-Lay in 1992 and Pizza Hut in 1986.

 

Current Public Company Directorships: American Express; Marriott

Past Public Company Directorships: Johnson & Johnson; PepsiCo

 

Rex W. Tillerson

LOGO

Age 58

Director since 2004

 

Principal Occupation: Chairman of the Board and Chief Executive Officer, Exxon Mobil Corporation

 

Business Experience: Mr. Tillerson was elected Chairman and Chief Executive Officer of ExxonMobil in 2006; President and Director in 2004; and Senior Vice President in 2001. Mr. Tillerson has held a variety of management positions in domestic and foreign operations since joining the Exxon organization in 1975, including President, Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc.; Vice President, Exxon Ventures (CIS) Inc.; President, Exxon Neftegas Limited; and Executive Vice President, ExxonMobil Development Company.

 

Current Public Company Directorships: None

Past Public Company Directorships: None

 

 

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Edward E. Whitacre, Jr.

LOGO

Age 68

Director since 2008

 

Principal Occupation: Chairman of the Board and Chief Executive Officer, General Motors; Chairman Emeritus, AT&T

 

Business Experience: Mr. Whitacre joined General Motors in July 2009 as Chairman and became CEO in December 2009. At AT&T, Mr. Whitacre was elected Chairman and Chief Executive Officer upon its merger with SBC Communications in 2005, and retired in 2007. He was elected Chairman and Chief Executive Officer of SBC in 1990; and President and Chief Operating Officer in 1988.

 

Current Public Company Directorships: General Motors

Past Public Company Directorships: Anheuser Busch; AT&T; Burlington Northern Santa Fe

 

DIRECTOR COMPENSATION

Director compensation elements are designed to:

 

Ÿ  

Ensure alignment with long-term shareholder interests;

 

Ÿ  

Ensure the Company can attract and retain outstanding director candidates who meet the selection criteria outlined in the Guidelines for Selection of Non-Employee Directors, which can be found on the Corporate Governance section of our Web site;

 

Ÿ  

Recognize the substantial time commitments necessary to oversee the affairs of the Corporation; and,

 

Ÿ  

Support the independence of thought and action expected of directors.

Non-employee director compensation levels are reviewed by the Board Affairs Committee each year, and resulting recommendations are presented to the full Board for approval. The Committee uses an independent consultant, Pearl Meyer & Partners, to provide information on current developments and practices in director compensation. Pearl Meyer & Partners is the same consultant retained by the Compensation Committee to advise on executive compensation, but performs no other work for ExxonMobil.

ExxonMobil employees receive no additional pay for serving as directors.

Non-employee directors receive compensation consisting of cash and equity in the form of restricted stock. Non-employee directors are also reimbursed for reasonable expenses incurred to attend board meetings or other functions relating to their responsibilities as a director of Exxon Mobil Corporation.

The annual cash retainer for non-employee directors is $100,000 per year. Chairs of the Audit and Compensation Committees and the Presiding Director (effective January 2010) receive an additional $10,000 per year.

A significant portion of director compensation is paid in restricted stock to align director compensation with the long-term interests of shareholders. The annual restricted stock award grant for incumbent non-employee directors is 2,500 shares. A new non-employee director receives a one-time grant of 8,000 shares of restricted stock upon first being elected to the Board.

While on the Board, the non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the non-employee director is not allowed to sell the shares. The restricted shares may be forfeited if the non-employee director leaves the Board early, i.e., before the retirement age of 72, as specified for non-employee directors.

Current and former non-employee directors of Exxon Mobil Corporation are eligible to participate in the ExxonMobil Foundation’s Educational and Cultural Matching Gift Programs under the same terms as the Corporation’s U.S. employees.

 

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Director Compensation for 2009

 

Name  

Fees

Earned

or Paid

in Cash

($)

 

Stock

Awards

($)(a)

 

Option

Awards

($)

 

Non-Equity

Incentive Plan

Compensation

($)

 

Change in
Pension Value
and
Nonqualified
Deferred
Compensation

Earnings

($)

 

Other

Compensation

($)(b)

 

Total

($)

M.J. Boskin

  105,962   201,263   0   0   0   388   307,613

L.R. Faulkner

  100,000   201,263   0   0   0   388   301,651

K.C. Frazier

  59,615   554,280   0   0   0   388   614,283

W.W. George

  110,000   201,263   0   0   0   388   311,651

J.R. Houghton

  44,423   201,263   0   0   0   388   246,074

R.C. King

  100,000   201,263   0   0   0   388   301,651

M.C. Nelson

  100,000   201,263   0   0   0   388   301,651

S.J. Palmisano

  100,000   201,263   0   0   0   388   301,651

S.S Reinemund

  100,000   201,263   0   0   0   388   301,651

W.V. Shipley

  40,385   201,263   0   0   0   388   242,036

E.E. Whitacre, Jr.

  100,000   201,263   0   0   0   388   301,651

 

(a) In accordance with SEC rules, the valuation of stock awards in this table represents fair value on the date of grant. Dividends on stock awards are not shown in the table because those amounts are factored into the grant date fair value.

 

   Each director (other than Mr. Frazier, who joined the Board in May 2009) received an annual grant of 2,500 restricted shares in January 2009. The valuation of these awards is based on a market price of $80.51 on the date of grant.

 

   Mr. Frazier received a one-time grant of 8,000 restricted shares upon being first elected to the Board in May 2009. The valuation of this award is based on a market price of $69.29 on the date of grant.

 

   At year-end 2009, the aggregate number of restricted shares held by each director was as follows:

 

Name    Restricted Shares  (#)

M.J. Boskin

   49,300

L.R. Faulkner

   10,500

K.C. Frazier

   8,000

W.W. George

   21,000

R.C. King

   48,100

M.C. Nelson

   53,300

S.J. Palmisano

   17,000

S.S Reinemund

   13,000

E.E. Whitacre, Jr.

   10,500

 

(b) The amount shown for each director is the prorated cost of travel accident insurance covering death, dismemberment, or loss of sight, speech, or hearing under a policy purchased by the Corporation with a maximum benefit of $500,000 per individual.

The non-employee directors are not entitled to any additional payments or benefits as a result of leaving the Board or death except as described above. The non-employee directors are not entitled to any payments or benefits resulting from a change in control of the Corporation.

 

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CERTAIN BENEFICIAL OWNERS

Based on our review of ownership reports filed with the SEC, the firm listed below is the only beneficial owner of more than 5 percent of ExxonMobil’s outstanding common stock as of December 31, 2009.

 

Name and Address

of Beneficial Owner

  

Shares

Owned

  

Percent of

Class

BlackRock Inc.

40 East 52nd Street

New York, NY 10022

   273,289,117    5.76

DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP

These tables show the number of ExxonMobil common stock shares each executive named in the “Summary Compensation Table” on page 40 and each non-employee director or director nominee owned on February 28, 2010. In these tables, ownership means the right to direct the voting or the sale of shares, even if those rights are shared with someone else. None of these individuals owns more than 0.04 percent of the outstanding shares.

 

Named Executive Officer    Shares Owned     Shares Covered by
Exercisable  Options

R.W. Tillerson

   1,325,613 (1)    327,307

D.D. Humphreys

   615,458 (2)     175,097

M.J. Dolan

   388,794 (3)     59,998

H.R. Cramer

   858,558      210,000

S.D. Pryor

   839,501 (4)     350,000

 

(1) Includes 1,525 shares owned by dependent child.
(2) Includes 69,179 shares jointly owned with spouse.
(3) Includes 37,599 shares jointly owned with spouse.
(4) Includes 23,022 shares owned by spouse.

 

Non-Employee Director/Nominee   Shares Owned  

M.J. Boskin

  51,800   

P. Brabeck-Letmathe

  0   

L.R. Faulkner

  13,000   

J.S. Fishman

  0   

K.C. Frazier

  10,500   

W.W. George

  33,500 (1)  

R.C. King

  53,404 (2)  

M.C. Nelson

  73,800 (3)  

S.J. Palmisano

  19,500   

S.S Reinemund

  17,775 (4)  

E.E. Whitacre, Jr.

  13,000   

 

(1) Includes 10,000 shares held as co-trustee of family foundation.
(2) Includes 1,000 shares owned by spouse.
(3) Includes 18,000 shares held as co-trustee of family trusts.
(4) Includes 1,100 shares held in family trust of which spouse is a trustee, and 1,175 shares held by family foundation of which Mr. Reinemund is a director.

 

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On February 28, 2010, ExxonMobil’s incumbent directors and executive officers (28 people) together owned 7,766,475 shares of ExxonMobil stock and 1,655,013 shares covered by exercisable options, representing about 0.2 percent of the outstanding shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934 requires that our executive officers and directors file reports of their ownership and changes in ownership of ExxonMobil stock on Forms 3, 4, and 5 with the SEC and NYSE. We are not aware of any unfiled reports and are not aware of any late reports for 2009.

COMPENSATION COMMITTEE REPORT

The Compensation Committee of the Board of Directors has reviewed and discussed the “Compensation Discussion and Analysis” for 2009 with management of the Corporation. Based on that review and discussion, we recommended to the Board that the “Compensation Discussion and Analysis” be included in the Corporation’s proxy statement for the 2010 annual meeting of shareholders, and also in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009.

 

William W. George, Chair    Samuel J. Palmisano
Reatha Clark King    Edward E. Whitacre, Jr.

 

23


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Discussion and Analysis and Executive Compensation Tables are organized as follows:

 

         Topics    Page
Overview         Ÿ         Business Environment    25
        Ÿ    Key Business Strategies    25
        Ÿ    Key Elements of the Compensation Program    25
        Ÿ    Other Supporting Compensation and Staffing Practices    25
        Ÿ    Business Performance and Basis for Compensation Decisions    26
        Ÿ    Key Changes for Named Executive Officers in 2009    26
        Ÿ    People and Business Strategies Model    27
Key Elements of the Compensation Program         Ÿ    Career Orientation    28
        Ÿ    Salary    28
        Ÿ    Bonus    28
        Ÿ    Equity    29
        Ÿ    Retirement    31
Compensation Committee Decisions         Ÿ    Analytical Tools    33
      –    Tally Sheets    33
      –    Pension Modeling    33
      –    Benchmarking    33
        Ÿ    Performance Measurements    34
      –    Business Results Considered    34
      –    Performance Assessment Process    35
      –    Individual Experience and Responsibility    35
        Ÿ    Pay Awarded to Named Executive Officers    36
        Ÿ    Award Timing    38
        Ÿ    Tax Matters    38
Executive Compensation Tables and Narratives         Ÿ    Summary Compensation Table    40
        Ÿ    Grants of Plan-Based Awards    44
        Ÿ    Outstanding Equity Awards    45
        Ÿ    Option Exercises and Stock Vested    46
        Ÿ    Pension Benefits    47
        Ÿ    Nonqualified Deferred Compensation    49
        Ÿ    Administrative Services for Retired Employee Directors    50
        Ÿ    Health Care Benefits    50
        Ÿ    Unused Vacation    50
  

     Ÿ

 

   Termination and Change in Control    50
  

     Ÿ

 

   Payments in the Event of Death    51

 

24


Table of Contents

Overview

Providing energy to meet the world’s demands is a complex business. We meet this challenge by taking a long-term view rather than reacting to short-term business cycles. The compensation program of ExxonMobil aligns with and supports the long-term business fundamentals and core business strategies outlined below and illustrated in the model on page 27.

Business Environment

 

Ÿ  

Long investment horizons;

 

Ÿ  

Large capital investments;

 

Ÿ  

Worldwide diverse resources and markets; and,

 

Ÿ  

Commodity-based, cyclical product prices.

Key Business Strategies

 

Ÿ  

Long-term growth in shareholder value;

 

Ÿ  

Disciplined, selective, and long-term focus in making investments;

 

Ÿ  

Operational excellence; and,

 

Ÿ  

Industry-leading returns on capital and superior cash flow.

Key Elements of the Compensation Program

The key elements of our compensation program and staffing objectives that support the business fundamentals and strategies are:

 

Ÿ  

Long-term career orientation with high individual performance standards (see page 28);

 

Ÿ  

Base salary that rewards individual experience and performance (see page 28);

 

Ÿ  

Annual bonus grants based on business performance, as well as individual experience and performance (see pages 28-29);

 

Ÿ  

Payment of a large portion of executive compensation in the form of equity with long mandatory holding periods that extend beyond retirement (see pages 29-31); and,

 

Ÿ  

Retirement benefits (pension and savings plans) that provide for financial security after employment (see pages 31-32).

Other Supporting Compensation and Staffing Practices

 

Ÿ  

Executives are “at-will” employees of the Company. They do not have employment contracts, a severance program, or any benefits triggered by a change in control.

 

Ÿ  

A strong program of management development and succession planning is in place to reinforce a career orientation and provide continuity of leadership.

 

Ÿ  

We do not believe that our compensation policies and practices create any material adverse risks for the Company. Inappropriate risk-taking is discouraged by requiring senior executives to hold a substantial portion of their equity incentive award for their entire career and beyond retirement. These lengthy holding periods are tailored to our business model. Furthermore, payout of 50 percent of the annual bonus is delayed and subject to risk of forfeiture. The timing of the payout is determined by earnings performance.

 

Ÿ  

All U.S. executives, including the CEO, the other Named Executive Officers, and about 1,200 other U.S. executives, participate in common programs (the same salary, incentive, and retirement

 

25


Table of Contents
 

programs). Within these programs, the compensation of executives is differentiated based on individual experience, level of responsibility, and performance assessment.

 

Ÿ  

No tax assistance is provided by the Company on any elements of executive officer compensation or perquisites other than relocation. The relocation policy is a broad-based program that applies to all transferred U.S. professional and executive employees.

 

Ÿ  

Substantial amounts of executive compensation are at risk of forfeiture in case of detrimental activity, unapproved early termination, or material negative restatement of financial or operating results.

 

Ÿ  

The Company does not reprice equity incentive awards. The utilization of restricted stock instead of stock options and the determination of annual grants on a share-denominated versus price basis help reinforce this practice.

 

Ÿ  

Equity compensation is not included in pension calculations.

Business Performance and Basis for Compensation Decisions

 

Ÿ  

Compensation decisions are based on the results achieved in the following areas over multiple year periods:

 

   

Total shareholder return;

 

   

Earnings;

 

   

Return on capital employed;

 

   

Cash returned to shareholders;

 

   

Safety, health, and environmental performance;

 

   

Operating performance of the Upstream, Downstream, and Chemical segments;

 

   

Business controls; and,

 

   

Effectiveness of actions that support the long-term, strategic direction of the Company.

 

Ÿ  

The decision-making process with respect to compensation requires judgment, taking into account business and individual performance and responsibility. Quantitative targets or formulas are not used to assess individual performance or determine the amount of compensation. The Compensation Committee assesses the results described above against a broad range of goals and objectives and takes into consideration multiple external factors that influence these results.

Key Changes for Named Executive Officers in 2009

 

Ÿ  

Bonus awards to the Named Executive Officers in 2009 were reduced by amounts ranging from 32 to 40 percent versus 2008.

 

Ÿ  

Equity awards were granted in the form of restricted stock in 2009. The Named Executive Officers were granted the same number of shares as in 2008, except for Mr. Dolan, whose grant was increased. The grant date fair value of each restricted share for the 2009 grant was 4 percent lower versus 2008.

 

26


Table of Contents

People and Business Strategies Model

The following summary illustrates how the compensation and executive development strategies support and integrate with ExxonMobil’s business model. This integrated approach supports long-term growth in shareholder value.

LOGO

 

27


Table of Contents

Key Elements of the Compensation Program

Career Orientation

 

Ÿ  

It is our objective to attract and retain for a career the best talent available.

 

Ÿ  

It takes a long period of time and a significant investment to develop the experienced executive talent necessary to succeed in the oil and gas business; senior executives must have experience with all phases of the business cycle to be effective leaders.

 

Ÿ  

Career orientation among a dedicated and highly skilled workforce, combined with the highest performance standards, contributes to the Company’s leadership in the industry and serves the interests of shareholders in the long term.

 

Ÿ  

The long Company service of executive officers reflects this strategy at all levels of the organization.

 

   

The Named Executive Officers have career service ranging from 29 to over 38 years.

 

   

The other executive officers of the Corporation have on average over 28 years of career service.

 

Ÿ  

Consistent with our long-term career orientation, high-performing executives typically earn substantially higher levels of compensation in the final years of their careers than in the earlier years.

 

   

This pay practice reinforces the importance of a long-term focus in making decisions that are key to business success.

 

   

Because the compensation program emphasizes individual experience and long-term performance, executives holding similar positions may receive substantially different levels of compensation.

Salary

 

Ÿ  

Salaries provide executives with a base level of income.

 

Ÿ  

The level of annual salary is based on the executive’s responsibility, performance assessment, and career experience.

 

Ÿ  

Salary decisions directly affect the level of retirement benefits since salary is included in retirement-benefit formulas. The level of retirement benefits is, therefore, performance-based like other elements of compensation.

Bonus

 

Ÿ  

The 2009 annual bonus pool was $139 million versus $232 million in 2008, a decrease of 40 percent. This reflects the combined value at grant of cash and Earnings Bonus Units.

 

Ÿ  

The annual bonus program is highly variable depending on annual financial and operating results.

 

Ÿ  

The size of the annual bonus pool is based on the annual earnings of the Company and other business performance factors as described under “Business Results Considered” on page 34.

 

Ÿ  

In setting the size of the annual bonus pool and individual executive awards, the Compensation Committee:

 

   

Secures input from the Chairman on the performance of the Company and from the Compensation Committee’s external consultant regarding compensation trends across industries.

 

   

Uses judgment to determine the overall size of the annual bonus pool, taking into consideration the cyclical nature and long-term orientation of the business.

 

Ÿ  

To recognize the cyclical nature of the commodities business in which we operate and the long-term orientation of our business model, the annual bonus pool and individual grants are managed to recognize only a portion of the change in annual earnings performance both on the upside and

 

28


Table of Contents
 

downside. For example, when earnings increase, the full percentage change in earnings is not reflected in the bonus pool. The size of the individual awards within the bonus pool is differentiated among participants based on individual performance assessments, experience, and level of responsibility.

 

Ÿ  

The annual bonus program incorporates unique elements to further reinforce retention and recognize performance. Awards under this program are generally delivered as:

LOGO

 

Ÿ  

Earnings Bonus Units are cash awards that are tied to future cumulative earnings per share. Earnings Bonus Units pay out when a specified level of cumulative earnings per share is achieved or within three years at a reduced level.

 

   

For bonus awards granted in 2009, the trigger or cumulative earnings per share required for payout of the delayed portion is $5.75 per unit, which is the same as 2008.

 

   

If cumulative earnings per share do not reach $5.75 within three years, the delayed portion of the bonus would be reduced to an amount equal to the number of units times the actual cumulative earnings per share over the period.

 

   

The intent of the earnings per share trigger is to tie the timing of the bonus payment to the rate of the Corporation’s future earnings and not to decrease the amount of the payment, although it is at risk of forfeiture as described below. Thus the trigger of $5.75 is intentionally set at a level that is expected to be achieved within the three-year period.

 

   

Prior to payment, the delayed portion of a bonus may be forfeited if the executive leaves the Company before the standard retirement age, or engages in activity that is detrimental to the Company.

 

   

Cash and Earnings Bonus Unit payments are subject to recoupment in the event of material negative restatement of the Corporation’s reported financial or operating results. Even though a restatement is unlikely given ExxonMobil’s high ethical standards and strict compliance with accounting and other regulations applicable to public companies, a recoupment policy was approved by the Board of Directors to reinforce the well-understood philosophy that incentive awards are at risk of forfeiture and that how we achieve results is as important as the actual results.

Equity

 

Ÿ  

Equity compensation accounts for a substantial portion of total compensation to align the personal financial interests of executives with the long-term interests of shareholders.

 

Ÿ  

It is the objective to grant 50 to 70 percent of a senior executive’s total compensation in the form of restricted stock as measured by grant date fair market value, as described beginning on page 36.

 

Ÿ  

The Compensation Committee makes grant decisions on a share-denominated basis rather than a price basis. The Committee does not support a practice of offsetting the loss or gain of prior restricted stock grants by the value of current year grants. This practice would minimize the risk/reward profile of equity-based awards and undermine the long-term view that executives are expected to adopt.

 

Ÿ  

The Corporation also compares the total value of restricted stock grants against the combined value of all forms of long term awards by comparator companies through an annual benchmarking process, and makes adjustments as necessary (see page 33).

 

29


Table of Contents

Rationale

 

Ÿ  

Given the long-term orientation of our business, granting equity in the form of restricted stock with long vesting provisions keeps executives focused on the fundamental premise that decisions made currently affect the performance of the Corporation and Company stock many years into the future.

 

Ÿ  

Long restricted stock vesting periods that extend beyond retirement support a long-term risk/reward profile that aligns with underlying business fundamentals and discourages inappropriate risk taking.

 

Ÿ  

The long restriction periods reinforce the Company’s focus on growing shareholder value over the long term by subjecting a large percentage of executive compensation and personal net worth to the long-term return on ExxonMobil stock realized by shareholders.

 

Ÿ  

Restricted stock removes employee discretion on the sale of Company-granted stock holdings and reinforces the retention objectives of the compensation program.

Restriction Periods

 

Ÿ  

The restriction periods for ExxonMobil’s stock grants to the most senior executives are among the longest of public companies.

 

   

50 percent of each grant is restricted for five years; and,

 

   

The balance is restricted for 10 years or until retirement, whichever is later.

 

Ÿ  

For the most senior executives, more than half of the total amount of restricted stock may not be sold or transferred until after the executive retires.

 

Ÿ  

The restricted period for stock awards is not subject to acceleration, except in the case of death.

Forfeiture Risk and Hedging Policy

 

Ÿ  

Restricted stock is subject to forfeiture if an executive:

 

   

Leaves the Company before standard retirement time (defined as age 65 for U.S. employees). In the event of early retirement prior to the age of 65 (i.e., age 55 to 64), the Compensation Committee must approve the retention of awards by an executive officer.

 

   

Engages in activity that is detrimental to the Company, even if such activity occurs or is discovered after retirement.

 

Ÿ  

Company policy prohibits all employees, including executives, from entering into put or call options on ExxonMobil common stock or futures contracts on oil or gas.

Share Utilization

 

Ÿ  

The Compensation Committee establishes a ceiling each year for annual stock awards. The overall number of shares granted in the restricted stock program in 2009 represents dilution of 0.2 percent, which is well below the average of the other large U.S.-based companies benchmarked for compensation and incentive program purposes based on historical grant patterns.

 

Ÿ  

The Company has a long-established practice of purchasing shares in the marketplace to eliminate the dilutive effect of stock-based incentive awards.

Prior Stock Programs

 

Ÿ  

All equity awards granted since 2003 are granted under the Corporation’s 2003 Incentive Program. All equity-based awards (including stock options and restricted stock) granted prior to 2003 that remain outstanding were granted under the Corporation’s 1993 Incentive Program (other than awards granted by Mobil Corporation prior to the merger). No further grants can be made under the 1993 Incentive Program.

 

30


Table of Contents
Ÿ  

Prior to 2002, ExxonMobil granted Career Shares to the Company’s most senior executives.

 

   

Career Shares vest the year following an executive’s retirement and are subject to forfeiture on substantially the same terms as current grants of restricted stock. The long vesting period further aligns the personal financial interests of executives with the long-term interests of shareholders, and helps ExxonMobil retain senior executives for the duration of their careers.

 

   

The Corporation ceased granting Career Shares in 2002 when the Corporation began granting restricted stock to the broader executive population in lieu of stock options.

 

   

Restricted stock and long mandatory holding periods achieve the same objectives as Career Shares, and, therefore, it is unnecessary to grant both Career Shares and the current form of restricted stock.

 

   

Career Shares could be granted again in the future under the Corporation’s 2003 Incentive Program, but there are no current plans to make such grants.

 

Ÿ  

Before the merger, Mobil Corporation granted retention awards under the former Mobil Corporation Management Retention Plan. Retention awards are stock units that settle in cash in a single lump sum payment as soon as practicable after retirement (taking into account the required six-month delay in payment required under the American Jobs Creation Act of 2004). Messrs. Cramer and Pryor have outstanding retention awards.

Stock Ownership

 

Ÿ  

The table below shows stock ownership as a multiple of salary and the percentage of shares that are still subject to restrictions for the Named Executive Officers and the average for all other current executive officers as of year-end 2009. Valuation for this purpose is based on the year-end stock price. These levels of ownership ensure executive officers have a significant stake in the sustainable long-term success of the Corporation.

 

Name  

Dollar Value of

Stock Ownership

as a Multiple of Salary

   Percent of
Shares  Restricted

R.W. Tillerson

  44    88%

D.D. Humphreys

  42    84%

M.J. Dolan

  31    88%

H.R. Cramer

  63    62%

S.D. Pryor

  61    61%

All Other U.S. Dollar-Paid Executive Officers (average)

  27    75%

Retirement

Common Programs

 

Ÿ  

Senior executives participate in the same tax-qualified pension and savings plans as most other U.S. employees. Senior executives also participate in the same nonqualified defined benefit and defined contribution plans as other U.S. executives.

 

Ÿ  

A key principle on which the pension and savings programs are based is commonality of design for all employees, except where the American Jobs Creation Act of 2004 requires delayed timing of nonqualified plan distributions for higher-level executives. The same principle of commonality applies to the Company health care benefits (see page 50).

 

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Table of Contents

Pension Plans

 

Ÿ  

The tax-qualified and nonqualified pension plans, described in more detail beginning on page 47, provide an annual benefit of 1.6 percent of final average pay per year of service, with an offset for Social Security benefits.

 

Ÿ  

Pay for the purpose of pension calculations includes base salary and bonus but does not include equity compensation.

 

Ÿ  

Bonus includes the amounts that are paid at grant and the amounts delayed by the Company, as described beginning on page 28.

 

Ÿ  

The portion of annual bonus subject to delayed payment is expected to pay out subject to forfeiture provisions and therefore is included for pension purposes in the year of grant rather than the year of payment, as described on page 48.

 

Ÿ  

Pension benefits are paid upon retirement as follows:

 

   

Qualified pension plan benefits are payable, at the election of the employee, in a lump sum or in one of various forms of annuity payments.

 

   

Nonqualified pension plan benefits are paid in the form of an equivalent lump sum six months after retirement.

Qualified Savings Plan

 

Ÿ  

The qualified savings plan described on page 43 permits employees to make pre- or post-tax contributions and receive a Company-matching contribution of 7 percent of eligible salary, subject to Internal Revenue Code (“Code”) limits on the amount of pay taken into account and the total amount of contributions.

 

Ÿ  

To receive the Company-matching contribution, employees must contribute a minimum of 6 percent of salary.

 

Ÿ  

Qualified benefits are payable in a single lump sum or in partial withdrawals at any time after retirement.

 

Ÿ  

The Code generally requires distributions to commence after the employee has attained age 70-1/2.

Nonqualified Savings Plan

 

Ÿ  

The nonqualified savings plan described on pages 43 and 49 does not permit employee contributions, but provides 7 percent of eligible pay to restore matching contributions that could not be made to the qualified plan due to Code limits.

 

Ÿ  

The nonqualified savings plan balance is paid in a single lump sum six months after retirement.

Compensation Committee Decisions

The Committee sets the compensation for the Named Executive Officers and certain other senior executives. The following describes the basis on which the Committee made decisions in 2009.

LOGO

 

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Analytical Tools

Tally Sheets

 

Ÿ  

A tally sheet is a matrix used by the Compensation Committee that shows the individual elements of compensation and benefits for each Named Executive Officer. The total of all compensation and benefit plan elements is included to reflect the full employment costs for each Named Executive Officer.

 

Ÿ  

Tally sheets were used for the following principal purposes:

 

   

To understand how decisions on each individual element of compensation affect total compensation for each senior executive;

 

   

To gauge total compensation for each senior executive against publicly available data for similar positions at comparator companies; and,

 

   

To confirm that equity compensation represents a substantial portion of each senior executive’s total compensation.

Pension Modeling

 

Ÿ  

A pension modeling tool was used to determine how current compensation decisions would affect pension values upon retirement.

Benchmarking

 

Ÿ  

Compensation is benchmarked annually. The primary benchmark for the Named Executive Officers is a select group of large companies across industries.

 

Ÿ  

Comparator Companies

 

   

The following criteria are used to select comparator companies:

 

  Ÿ  

U.S. companies;

 

  Ÿ  

International operations;

 

  Ÿ  

Large scope and complexity;

 

  Ÿ  

Capital intensive; and,

 

  Ÿ  

Proven sustainability/permanence.

 

   

The 12 companies benchmarked are listed below. The comparator group included the same companies as noted in the 2009 Proxy Statement, except that Altria and Citigroup were removed from the overall analysis. Altria was removed due to the reduction in the scope of its operations when the U.S. and international businesses were separated through the formation of Philip Morris International. Citigroup was removed due to the uncertain future regarding the stability of its business model. The changes aligned the comparator group more closely with ExxonMobil’s current business circumstances and the above selection criteria.

 

AT&T

Boeing

Chevron

 

ConocoPhillips

General Electric

Hewlett-Packard

 

IBM

Johnson & Johnson

Pfizer

 

Procter & Gamble

United Technologies

Verizon

 

   

In the United States, only Chevron and ConocoPhillips have the size, complexity, and geographic scope in the oil and gas business to provide reasonable comparisons. Other smaller oil companies in the United States do not have the international scale or functional integration to make comparisons meaningful for our senior executives.

 

33


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Ÿ  

Principles

 

   

Consistent with the Compensation Committee’s practice of using well-informed judgment rather than formulas to determine executive compensation, the Committee does not target any particular percentile among comparator companies at which to align compensation.

 

   

When the Committee cross-checks compensation levels against comparator companies, the focus is on a broader and more flexible orientation, generally a range around the median of comparator company compensation, which provides the ability to:

 

  Ÿ  

Better respond to changing business conditions;

 

  Ÿ  

Manage salaries based on a career orientation;

 

  Ÿ  

Minimize the potential for automatic ratcheting-up of compensation that could occur with an inflexible and narrow target among benchmarked companies; and,

 

  Ÿ  

Differentiate compensation based on experience and performance levels among executives.

 

   

These benchmarking principles apply to salaries and the annual incentive program that includes bonus awards and stock grants.

 

   

For the purpose of its analysis, the Compensation Committee does not adjust for differences in the types or nature of businesses. Consideration is given, however, to the differences in size, scope, and complexity among ExxonMobil and the comparator companies. This is one of several judgmental factors the Committee considers and is not based on a formula.

 

   

The Compensation Committee uses an independent consultant to assist in this analysis as discussed in the Corporate Governance section on page 11.

Performance Measurements

Decisions made by the Compensation Committee in 2009 were based on the Company’s operating and financial performance, as well as individual performance, experience and level of responsibility as described below.

Business Results Considered

The operating and financial performance measurements listed below and the Company’s continued maintenance of sound business controls and a strong corporate governance environment formed the basis for the salary and incentive award decisions made by the Committee in 2009. The Committee considered the results in the aggregate and over multiple years, in recognition of the long-term nature of our business.

 

Ÿ  

Earnings of $19.3 billion in 2009, down by 57 percent versus 2008. Five-year annual average of $36.1 billion.

 

Ÿ  

Total shareholder return was a negative 12.6 percent in 2009 versus the S&P 500 of 26.5 percent. Ten-year annual average of 7.7 percent, versus the S&P 500 of negative 1.0 percent.

 

Ÿ  

$26 billion distributed to shareholders as dividends and share purchases in 2009. $213 billion in dividends plus share purchases since the beginning of 2000. Dividend payments per share increased for the 27th consecutive year.

 

Ÿ  

Strong results in the areas of safety, health, and environment. Best-ever lost-time incident rate for combined employee and contractor workforce and leading the industry.

 

Ÿ  

Industry-leading return on average capital employed of 16.3 percent, with a five-year average of 29.2 percent.

 

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Performance Assessment Process

 

Ÿ  

The above business results form the context in which the Committee assesses the individual performance of each senior executive, taking into account experience and level of responsibility.

 

Ÿ  

During the annual executive development review with the Board of Directors in October of each year, the CEO reviews the performance of the Management Committee and all officers in achieving results in line with the long-term business strategies (see page 25).

 

Ÿ  

The same long-term business strategies and results are key elements in the assessment of the CEO’s performance by the Compensation Committee.

 

Ÿ  

The performance of all officers is also assessed by the Board of Directors throughout the year during specific business reviews and Board committee meetings that provide reports on strategy development; operating and financial results; safety, health, and environmental results; business controls; and, other areas pertinent to the general performance of the Company.

 

Ÿ  

The Committee does not use quantitative targets or formulas to assess executive performance or determine compensation. The Compensation Committee does not assign weights to the factors considered. Formula-based performance assessments and compensation typically require emphasis on two or three business metrics. For the Company to be an industry leader and effectively manage the technical complexity and global scope of ExxonMobil, the most senior executives must advance multiple strategies and objectives in parallel, versus emphasizing one or two at the expense of others that require equal attention.

 

Ÿ  

An executive’s performance must be high in all key performance areas for the executive to receive an overall superior evaluation. Outstanding performance in one area will not cancel out poor performance in another. For example:

 

   

A problem in safety, health, or environmental performance in a business unit for which the executive is responsible could result in an executive’s incentive award being reduced even though the executive’s performance against financial and other criteria was superior.

 

   

A violation of the Company’s code of business conduct could result in elimination of an executive’s incentive award for the year, as well as termination of employment and/or cancelation of all previously granted awards that have not yet vested or been paid.

 

Ÿ  

The Management Committee and all other executive officers are expected to perform at the highest level or they are replaced. If it is determined that another executive is ready and would make a stronger contribution than one of the current executive officers, a succession plan is implemented.

 

Ÿ  

The fact that executives do not have employment contracts, severance agreements, or change-in-control arrangements eliminates any real or perceived “safety net” with respect to job security. This increases the risk and consequences to the individual of performance that does not meet the highest standards.

Individual Experience and Responsibility

Experience and assigned responsibilities are factors in assessing the contribution of individual executives. The current responsibilities, tenure in the current job, and recent past experience of each Named Executive Officer are described below. Refer to page 40 for information on the leadership structure of the Company.

 

Ÿ  

Management Committee

 

   

Mr. Tillerson was a Senior Vice President before becoming President and a member of the Board in 2004, and Chairman of the Board and CEO in 2006.

 

   

Mr. Humphreys was Vice President and Controller, and then Vice President and Treasurer before becoming Senior Vice President and Treasurer in 2006.

 

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Mr. Dolan was President of ExxonMobil Chemical Company before becoming Senior Vice President in 2008.

 

Ÿ  

Other Named Executive Officers

 

   

Mr. Cramer has been President of ExxonMobil Fuels Marketing Company since 1999.

 

   

Mr. Pryor was President of ExxonMobil Refining & Supply Company since 2004 before becoming President of ExxonMobil Chemical Company in 2008.

As discussed on page 28, the career service for Named Executive Officers ranges from 29 to over 38 years.

Pay Awarded to Named Executive Officers

 

Ÿ  

Within the context of the compensation program structure and performance assessment processes described above, the Compensation Committee aligned the value of 2009 incentive awards and 2010 salary adjustments with the:

 

   

Performance of the Company;

 

   

Individual performance;

 

   

Long-term strategic plan of the business; and,

 

   

Annual compensation of comparator companies.

 

Ÿ  

The Committee’s decisions reflect judgment taking all factors into consideration, rather than application of formulas or targets. The Committee approved the individual elements of compensation and the total compensation as shown in the tables beginning on page 40.

CEO

 

Ÿ  

The higher level of compensation for Mr. Tillerson, CEO, versus the other Named Executive Officers reflects his greater level of responsibility, including the ultimate responsibility for the performance of the Corporation and oversight of the other senior executives.

Other Named Executive Officers

 

Ÿ  

The higher level of compensation for Mr. Humphreys, versus the other Named Executive Officers, reflects his level of responsibility as Senior Vice President and Treasurer and tenure as a member of the Management Committee. Mr. Humphreys reports to the CEO.

 

Ÿ  

The compensation for the other Named Executive Officers is lower than that of the CEO and Mr. Humphreys based on combined salary, bonus, and the annual stock grant (calculated using the fair market value on date of grant). This occurs because Mr. Dolan has short tenure as Senior Vice President and Messrs. Cramer and Pryor report to designated members of the Management Committee (CEO and Senior Vice Presidents).

Compensation Allocation

 

Ÿ  

To achieve alignment with the interests of shareholders, it is the objective that 50 to 70 percent of annual total remuneration be in the form of stock with long holding periods as described on page 29.

 

Ÿ  

To further tie compensation to the performance of the business, the objective is to have 10 to 20 percent of annual total remuneration in the form of variable annual bonus awards, which are described beginning on page 28.

 

Ÿ  

Salary represents less than 10 percent of annual total remuneration, with pension accruals and other forms of compensation comprising the remainder.

 

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Ÿ  

Whether an executive’s total compensation is near, substantially below, or substantially above the comparator group median is a qualitative factor the Compensation Committee considers along with experience, level of responsibility, and performance (see page 34).

 

Ÿ  

The allocation of compensation in 2009 for the CEO and the average for the other Named Executive Officers is illustrated in the chart below.

LOGO

Salary

 

Ÿ  

The changes in salary for the Named Executive Officers from the prior year, as shown in the “Summary Compensation Table” primarily reflect adjustment to the competitive position of the base salary program for all U.S. executives, taking into account increased individual experience and level of responsibility.

Bonus

 

Ÿ  

Annual bonuses (consisting of cash plus the full value of Earnings Bonus Units awards) for the Named Executive Officers other than Mr. Dolan were reduced 40 percent compared to 2008. Mr. Dolan’s bonus was reduced 32 percent.

 

Ÿ  

The changes primarily reflect a lower level of Company earnings in 2009.

 

Ÿ  

The relative difference in Mr. Dolan’s bonus compared to the other Named Executive Officers reflects his transition to a higher-level position. Mr. Dolan first joined the Company’s Management Committee in 2008.

Restricted Stock

 

Ÿ  

The number of shares granted as restricted stock in 2009 to each Named Executive Officer was the same as their 2008 grant except for Mr. Dolan, whose grant level was increased.

 

Ÿ  

The grant date fair value of each restricted share was 4 percent lower in 2009, in line with the lower stock price on the 2009 grant date compared to 2008.

 

Ÿ  

The increase in the number of shares granted to Mr. Dolan from 2008 reflects his transition to a higher-level position as previously noted.

Other Compensation

 

Ÿ  

This category comprises the change in pension value and all other compensation as shown in the “Summary Compensation Table.”

 

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Award Timing

 

Ÿ  

The Compensation Committee grants incentive awards to the Company’s senior executives at their regular November meeting, which is held either the day of or the day before the regularly scheduled November Board of Directors meeting.

 

   

The Board of Directors meeting is scheduled over a year in advance and is held on the last Wednesday of the month (or on Tuesday if the last Wednesday immediately precedes Thanksgiving).

 

   

This firm timing of award grants is reinforced through a decision-making process in which the Corporation does not grant awards by written consent.

 

Ÿ  

A committee comprising ExxonMobil’s Chairman and Senior Vice Presidents grants incentive awards to other eligible managerial, professional, and technical employees, within the parameters of the bonus and equity award ceilings approved by the Compensation Committee. The schedule of the November meeting of the Compensation Committee as described above determines when this committee meets to approve the annual incentive grants for employees under its purview.

 

Ÿ  

The Company has not granted stock options since 2001.

 

Ÿ  

Previously granted stock options that remain outstanding were granted on the same annual schedule described above except for grants in 1999. Due to the fact that the merger of Exxon Corporation and Mobil Corporation closed on November 30 of that year, the regular annual grant meeting date was moved to December 8. Grants to other managerial, professional, and technical employees were made on December 8, and also to additional grantees on April 26, 2000, after employee data for the two companies had been more fully integrated.

 

Ÿ  

The exercise price for each stock option grant was the average of the high and low sale prices reported on the NYSE on the date of the grant meeting.

Tax Matters

 

Ÿ  

U.S. income tax law limits the amount ExxonMobil can deduct for compensation paid to the CEO and the other three most highly paid executives other than the Principal Financial Officer (PFO). Performance-based compensation that meets Internal Revenue Service requirements is not subject to this limit.

 

   

The short term awards and restricted stock grants described above are intended to meet these requirements so that ExxonMobil can deduct the related expenses. Under the material terms of performance goals previously approved by shareholders, the Corporation must achieve positive net income (earnings) in order to make any incentive awards to the covered executives. If positive earnings are achieved, individual awards to these executives are subject to a maximum cap of 0.2 percent of earnings in the case of short term awards, and 0.5 percent of earnings in the case of long term awards. Restricted stock awards to the covered executives for purposes of Section 162(m) of the Internal Revenue Code are only made under the “performance stock” provisions of the 2003 Incentive Program, which include the shareholder-approved goal and cap. The Compensation Committee has no authority to amend or change the shareholder-approved goals.

 

  Ÿ  

These terms have been established to meet tax regulations and do not represent the actual operational goals we expect our senior executives to achieve. Actual award levels are determined based on a subjective consideration of all the factors previously discussed in this report and have been significantly less than the shareholder-approved caps.

 

   

Salaries for senior executives may be set at levels that exceed the U.S. income tax law limitation on deductibility. The primary drivers for determining the amount and form of executive compensation are the retention and motivation of superior executive talent rather than the Internal Revenue Code.

 

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Ÿ  

In 2005, the Compensation Committee eliminated the ability of executives to defer payment of incentive awards. No element of compensation for executives can be deferred prior to retirement.

 

Ÿ  

Tax assistance is not provided by the Company for either the short term or long term incentive awards discussed above.

 

Ÿ  

The Company has designed all nonqualified pension and other benefits in a manner intended to avoid tax penalties that potentially could be imposed on the recipients of such amounts by Section 409A of the Code by fixing the form and timing of distributions to eliminate executive and Company discretion.

 

Ÿ  

The above discussion of tax consequences is based on the Company’s interpretation of current tax laws.

 

Ÿ  

As discussed in the Litigation section on page 16, a purported shareholder complaint has been filed alleging, among other things, that certain incentive compensation awarded to the Named Executive Officers is not tax deductible by the Company.

 

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EXECUTIVE COMPENSATION TABLES

Summary Compensation Table for 2009

 

Name and

Principal Position

  Year  

Salary

($)

 

Bonus

($)

 

Stock

Awards

($)

 

Option

Awards

($)

 

Non-

Equity
Incentive
Plan
Compen-

sation

($)

 

Change in

Pension

Value and

Nonqualified

Deferred

Compen-

sation

Earnings

($)

 

All

Other

Compen-

sation

($)

 

Total

($)

R.W. Tillerson

  2009   2,057,000   2,400,000   16,963,875   0   0   5,466,517   280,925   27,168,317

Chairman and CEO

  2008   1,870,000   4,000,000   17,604,000   0   0   8,290,253   446,826   32,211,079
    2007   1,750,000   3,360,000   16,120,900   0   0   5,511,588   429,792   27,172,280

D.D. Humphreys

  2009   1,010,000   1,418,000   8,022,028   0   0   1,296,163   124,403   11,870,594

PFO; Senior Vice President

  2008   910,000   2,364,000   8,324,736   0   0   4,599,191   108,989   16,306,916
    2007   830,000   1,859,000   7,912,312   0   0   3,919,806   86,689   14,607,807

M.J. Dolan

Senior Vice President

  2009   845,000   1,046,997   5,805,415   0   0   1,902,652   94,733   9,694,797

H.R. Cramer

  2009   882,500   1,046,997   5,805,415   0   0   2,537,500   90,219   10,362,631

Vice President;

President, ExxonMobil Fuels Marketing Company

  2008   843,333   1,744,598   6,024,480   0   0   3,215,127   87,522   11,915,060
  2007   807,917   1,586,000   6,709,780   0   0   2,294,584   86,202   11,484,483
                                   

S.D. Pryor

  2009   940,000   1,046,997   5,805,415   0   0   2,644,266   119,858   10,556,536

Vice President; President, ExxonMobil Chemical Company

  2008   905,000   1,744,598   6,024,480   0   0   3,571,656   311,614   12,557,348

Leadership Structure

 

Ÿ  

The disclosure regulations result in a roster of Named Executive Officers different from the most senior management team leading the Company, which is referred to as the Management Committee. The Management Committee comprises the following:

 

   

Chairman and CEO: R.W. Tillerson

 

   

Senior Vice Presidents who report directly to the CEO:

 

  Ÿ  

D.D. Humphreys;

 

  Ÿ  

M.W. Albers;

 

  Ÿ  

M.J. Dolan; and,

 

  Ÿ  

A.P. Swiger.

 

Ÿ  

All members of the Management Committee are shown as Named Executive Officers except for Messrs. Albers and Swiger. Consistent with our career orientation, which is supported by a career-based compensation strategy, their individual compensation levels do not currently place them among the Named Executive Officers.

 

Ÿ  

Although each member of the Management Committee is responsible for specific business activities, together they share responsibility for the performance of the Company.

Employment Arrangements

ExxonMobil’s Compensation Committee believes senior executives should be “at will” employees of the Corporation. Accordingly, the CEO and other executive officers, including the other officers named in these tables, do not have employment contracts, severance agreements, or change-in-control arrangements with the Company.

 

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Table of Contents

Salary

 

Ÿ  

Effective January 1, 2010, the annual salary of the Named Executive Officers increased as follows: Mr. Tillerson’s to $2,207,000, Mr. Humphreys’ to $1,085,000, and Mr. Pryor’s to $955,000. Effective April 1, 2010, the annual salary for Mr. Dolan increased to $935,000.

 

Ÿ  

The 2009 and 2010 salary increases reflect adjustments to the competitive position of the base salary program for U.S. executives, taking into account individual experience and level of responsibility.

 

Ÿ  

Salary (together with other compensation related to fringe benefits or perquisites) is not deductible by the Corporation to the extent that it exceeds $1 million for any Named Executive Officer.

Bonus

 

Ÿ  

As described in more detail in the “Compensation Discussion and Analysis” (CD&A), the 2009 bonus shown was paid half in cash at the time of grant. The Company delays payment of the balance until cumulative earnings reach $5.75 per share.

 

Ÿ  

Delayed bonus amounts do not earn interest.

 

Ÿ  

The bonus and the stock awards described below are intended to meet the requirements of Section 162(m) of the Internal Revenue Code. See “Tax Matters” on page 38.

Stock Awards

 

Ÿ  

In accordance with disclosure regulations, the valuation of “Stock Awards” in this table represents the grant date fair value which is equal to the number of shares awarded times the grant price, which is deemed to be the average of the high and low sale prices on the NYSE on the grant date ($75.40 on November 24, 2009; $78.24 on November 25, 2008; and $87.14 on November 28, 2007).

 

Ÿ  

See the narrative accompanying the “Grants of Plan-Based Awards” table for information regarding the terms of restricted stock.

 

Ÿ  

Dividends on stock awards are not shown in the table because those amounts are reflected in the grant date fair value.

Change in Pension Value and Nonqualified Deferred Compensation Earnings

The amounts shown in this column in the “Summary Compensation Table” for years 2009 and 2008 represent the change in pension value. For year 2007, the amount also includes nonqualified deferred earnings for Messrs. Tillerson, Humphreys, and Cramer.

Pension Value

 

Ÿ  

The change in pension value shown in the table for 2009 is the increase between year-end 2008 and year-end 2009 in the present value of each executive’s pension benefits under the plans described in more detail in the text following the “Pension Benefits” table on page 47.

 

Ÿ  

For each year end, the data reflect an annuity beginning at age 60 (or current age if over 60) equal to 1.6 percent of the participant’s covered compensation multiplied by year-end service. These values are converted to lump sums using the plan’s applicable factors and then discounted in the case of employees under age 60 to present values based on the time difference between the individual’s age at year-end 2008 and age 60 (and at year-end 2009 and age 60) using the interest rates for financial reporting of pension obligations as of each year end. The difference between the two year-end amounts represents the annual increase in the value of the pension shown in the “Summary Compensation Table.”

 

Ÿ  

The lump sum interest rate applied for an employee who worked through the end of 2008 was 4.25 percent. The lump sum interest rate applied for an employee who worked through the end of 2009 was 4 percent.

 

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Ÿ  

The discount rate for determining the present value of benefits was 6.25 percent as of year-end 2008 and 6 percent as of year-end 2009. The reduction in the lump sum interest rate and the discount rate results in an increase in the present value of age 60 benefits shown for the Named Executive Officers.

Nonqualified Deferred Earnings

 

Ÿ  

The portion of annual earnings on each executive’s principal balance under the Corporation’s nonqualified supplemental savings plan that exceeds 120 percent of the long-term Applicable Federal Rate, compounded monthly, as prescribed under Section 1274(d) of the Internal Revenue Code, is required to be disclosed. As of January 1, 2008, the basis for the interest rate during the term of a participant’s employment was changed from the Citibank prime lending rate to 120 percent of the long-term Applicable Federal Rate. As a result, reportable earnings on nonqualified deferred compensation have not been incurred since 2007.

All Other Compensation

The following table breaks down the amounts included in the “All Other Compensation” column of the “Summary Compensation Table.” Note the table has been changed from last year as follows: removed the columns “Relocation” and “Tax Assistance” since the Named Executive Officers did not have any relocation costs or receive any tax assistance in 2009.

 

Name   

Life

Insurance

($)

  

Savings
Plan

($)

  

Personal
Security

($)

   Personal Use of
Company
  

Financial
Planning

($)

  

Total

($)

           

Aircraft

($)

  

Properties

($)

  

Car

($)

     

R.W. Tillerson

   42,135    143,990    63,550    21,222    578    0    9,450    280,925

D.D. Humphreys

   31,733    70,700    3,201    6,441    2,872    6    9,450    124,403

M.J. Dolan

   17,234    59,150    7,971    0    903    25    9,450    94,733

H.R. Cramer

   18,163    61,775    831    0    0    0    9,450    90,219

S.D. Pryor

   29,687    65,800    14,801    0    0    1,170    8,400    119,858

Life Insurance

 

Ÿ  

The Company offers senior executives term life insurance or a Company-paid death benefit.

 

Ÿ  

Coverage under either option equals four times base salary until age 65, and a declining multiple thereafter until age 75, at which point the multiple remains at 2.5 times salary.

 

Ÿ  

For executives with life insurance coverage, the premium cost in any year depends on overall financial and mortality experience under the group policy.

 

Ÿ  

For executives electing the death benefit, there is no cash cost until the executive dies, as benefits are paid directly by the Company.

 

Ÿ  

The amount shown is based on Internal Revenue Service tables used to value the term cost of such coverage. This valuation is applied since the actual life insurance premium is a single payment for a large group of executives that does not represent the cost of insuring one specific individual and because several of the Named Executive Officers have elected the death benefit, the long-term cost of which is comparable to the insurance.

 

Ÿ  

The Company eliminated the executive term life insurance and Company-paid death benefit for all newly eligible executives as of October 1, 2007, and retained it for all current participants, including the Named Executive Officers.

 

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Savings Plan

 

Ÿ  

The amount shown is the value of Company-matching contributions under ExxonMobil’s tax-qualified defined contribution (401(k)) plan and Company credits under the related nonqualified supplemental plan. The Company credit was previously 6 percent and was increased to 7 percent effective January 1, 2008.

 

Ÿ  

The nonqualified supplemental plan provides all affected employees with the 7-percent Company credit to which they would otherwise be entitled as a matching contribution under the qualified plan but for limitations under the Internal Revenue Code. All affected employees participate in the nonqualified supplemental plan on the same basis.

 

Ÿ  

The value of the credits to the nonqualified supplemental plan is also disclosed in the “Nonqualified Deferred Compensation” table on page 49.

Personal Security

 

Ÿ  

The Company provides security for its employees as appropriate based on an assessment of risk. The assessment includes consideration of the employee’s position and work location.

 

Ÿ  

The Company does not consider any such security costs to be personal benefits since these costs arise from the nature of the employee’s employment by the Company; however, the disclosure regulations require certain security costs to be reported as personal benefits.

 

Ÿ  

The amounts shown in the table include the following types of security-related costs: security systems at executive residences; security services and personnel (at residences and/or during personal travel); car and personal security driver; and Company mobile phones. Costs of security relating to travel for business purposes are not included.

 

Ÿ  

Cars provided for security reasons and used primarily for commuting are valued based on the annualized cost of the car plus maintenance and fuel. Reported costs for rental cars utilized due to security concerns during personal travel are the actual incremental costs.

 

Ÿ  

For security personnel employed by the Company, the cost is the actual incremental cost of expenses incurred by the security personnel. Total salary, wages, and benefits for security personnel are not allocated because the Company already incurs these costs for business purposes.

 

Ÿ  

For security contractors, the cost is the actual incremental cost of such contractors associated with the executive’s personal time.

 

Ÿ  

For Mr. Tillerson, the amount shown includes $27,440 for car and $30,822 for residential security. The remainder is for mobile phones and other communications equipment for conducting business in a secure manner, and cost of security relating to personal travel.

Aircraft

 

Ÿ  

Incremental cost for personal use of the aircraft is based on direct operating costs (fuel, airport fees, incremental pilot costs, etc.) and does not include capital costs of the aircraft since the Company already incurs these capital costs for business purposes.

 

Ÿ  

For security reasons, the Board requires the Chairman and CEO to use Company aircraft for both business and personal travel.

 

Ÿ  

The Committee considers these costs to be necessary, security-related business expenses rather than perquisites, but per the disclosure regulations, we report the incremental cost of aircraft usage for personal travel.

Properties

 

Ÿ  

The Company owns or leases various venues for the purpose of business entertainment, including boxes and season tickets to sporting events and recreation and conference retreat properties. When

 

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these venues are not otherwise in use for business entertainment, the tickets and properties may be available for use by Company executives and other personnel.

 

Ÿ  

The table shows the incremental cost incurred for any personal use of these venues by the Named Executive Officers.

 

Ÿ  

Cost for this purpose is based solely on incremental operating costs (catering, transportation, incremental employee or contractor costs, etc.) and does not include annual or capital costs of these venues since the Company already incurs these costs for business purposes.

Car

 

Ÿ  

Incremental cost for personal use of company car by executives other than Mr. Tillerson (whose car-related expenses are included under “Personal Security”) is based on an assumed cost in 2009 of $0.55 per mile. Driver personnel costs are not allocated because the Company already incurs these costs for business purposes.

Financial Planning

 

Ÿ  

The Company provides financial planning services to senior executives, which includes tax preparation. This benefit is valued based on the actual charge for the services.

Grants of Plan-Based Awards for 2009

 

Name   Grant Date  

Estimated Future
Payouts

Under Non-Equity
Incentive

Plan Awards

 

Estimated Future
Payouts

Under Equity
Incentive

Plan Awards

 

All Other

Stock

Awards:

Number

of Shares

of Stock

or Units

(#)

 

All Other

Option

Awards:

Number
of

Securities

Under-

lying

Options

(#)

 

Exercise
or

Base
Price

of
Option

Awards

($/Sh)

  Grant Date
Fair Value of
Stock and
Option
Awards ($)
   

Thresh-

old

($)

 

Tar-

get

($)

 

Maxi-

mum

($)

 

Thresh-

old

(#)

 

Tar-

get

(#)

 

Maxi-

mum

(#)

       

R.W. Tillerson

  11/24/2009   0   0   0   0   0   0   225,000   0   0   16,963,875

D.D. Humphreys

  11/24/2009   0   0   0   0   0   0   106,400   0   0   8,022,028

M.J. Dolan

  11/24/2009   0   0   0   0   0   0   77,000   0   0   5,805,415

H.R. Cramer

  11/24/2009   0   0   0   0   0   0   77,000   0   0   5,805,415

S.D. Pryor

  11/24/2009   0   0   0   0   0   0   77,000   0   0   5,805,415

The awards granted in 2009 are in the form of restricted stock.

Restrictions and Forfeiture Risk

 

Ÿ  

These grants are restricted (1) for half the shares, until five years after the grant date; and, (2) for the balance, until 10 years after the grant date or retirement, whichever occurs later. These restricted periods are not subject to acceleration, except upon death, and thus, shares may remain subject to restriction for many years after an executive’s retirement.

 

Ÿ  

During the restricted period, the executive receives the same cash dividends as a holder of regular common stock and may vote the shares; however, the executive may not sell or transfer the shares, or use them as collateral.

 

Ÿ  

The shares also remain subject to forfeiture during the restricted period in case of an unapproved early termination of employment or in case the executive is found to have engaged in activity that is detrimental to the Company. Detrimental activity may include conduct that violates the Company’s Ethics or Conflicts of Interest policies.

 

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Grant Date

 

Ÿ  

The grant date is the same as the date on which the Compensation Committee of the Board met to approve the awards, as described beginning on page 38.

 

Ÿ  

Grant date fair value is equal to the number of shares awarded times the grant price, which is deemed to be the average of the high and low sale prices on the NYSE on the grant date (November 24, 2009; $75.40).

Outstanding Equity Awards at Fiscal Year-End for 2009

 

     Option Awards   Stock Awards
Name   Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
  Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
 

Option

Exercise

Price ($)

 

Option
Expiration

Date

  Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
 

Market

Value of
Shares or
Units of
Stock That
Have Not
Vested ($)

 

Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,
Units or
Other

Rights That
Have Not
Vested (#)

 

Equity

Incentive
Plan

Awards:

Market or
Payout
Value of
Unearned
Shares,
Units or
Other

Rights That
Have Not

Vested ($)

R.W. Tillerson

  130,000

197,307

  0   0   45.21875

37.12000

  11/28/2010

11/27/2011

  1,161,000   79,168,590   0   0

D.D. Humphreys

  87,790

87,307

  0   0   45.21875

37.12000

  11/28/2010

11/27/2011

  519,150   35,400,839   0   0

M.J. Dolan

  59,998   0   0   37.12000   11/27/2011   343,150   23,399,399   0   0

H.R. Cramer

  80,000

170,000

  0   0   45.21875

37.12000

  11/28/2010

11/27/2011

  540,688   36,869,515   0   0

S.D. Pryor

  170,000

180,000

  0   0   45.21875

37.12000

  11/28/2010

11/27/2011

  529,641   36,116,220   0   0

Option Awards

 

Ÿ  

The option awards shown are exercisable and outstanding as of year end. The actual gain on an option exercise, if any, will depend on the market price of ExxonMobil stock at the time of exercise. ExxonMobil has not granted stock options since 2001.

Stock Awards (Restricted Stock/Units)

 

Ÿ  

See the narrative accompanying the “Grants of Plan-Based Awards” table for more information regarding the terms of restricted stock.

 

Ÿ  

For Mr. Dolan, the table also includes 10,000 shares granted prior to the time he became an executive officer in 2004. Restrictions will lapse on those shares on November 26, 2010. The remaining shares have the same restriction periods as described in the “Grants of Plan-Based Awards” table. The restriction periods are not subject to acceleration, except upon death.

 

Ÿ  

For Messrs. Cramer and Pryor, the table above also includes the retention awards granted by Mobil Corporation before the merger. Retention awards are stock units settled in cash after retirement. During employment, dividend equivalents are credited and reinvested in additional units up to the total dollar amount of the retention award. Both Messrs. Cramer and Pryor reached the dividend equivalent cap in 2007, and therefore did not receive any further dividend equivalents on these awards in 2008 or 2009.

 

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Ÿ  

The table below shows the dates on which the respective restricted periods for the restricted stock shown in the previous table expire, assuming the awards are not forfeited and the executive is alive when the restrictions lapse.

 

     Date Restrictions Lapse and Number of Shares
Name   11/26/2010   11/30/2010   11/28/2011   11/28/2012   11/25/2013   11/24/2014   10 Years
or
Retirement,
Whichever
Occurs
Later
  Retirement*

R.W. Tillerson

  0   75,000   92,500   92,500   112,500   112,500   658,000   18,000

D.D. Humphreys

  0   28,000   40,000   45,400   53,200   53,200   279,350   20,000

M.J. Dolan

  10,000   23,400   27,500   32,200   35,350   38,500   176,200   0

H.R. Cramer

  0   38,500   38,500   38,500   38,500   38,500   293,700   54,488

S.D. Pryor

  0   38,500   38,500   38,500   38,500   38,500   298,900   38,241

 

  * Restrictions lapse on Career Shares on the first day of the calendar year following retirement with the exception of the restricted stock units granted to Messrs. Cramer and Pryor by Mobil Corporation under the Management Retention Plan, which are converted to a cash value at retirement and then paid in a single lump sum (36,488 units for Mr. Cramer and 18,241 units for Mr. Pryor).

Option Exercises and Stock Vested for 2009

 

     Option Awards   Stock Awards
Name  

Number of Shares

Acquired on Exercise

(#)

 

Value Realized

on Exercise

($)

 

Number of Shares
Acquired on Vesting

(#)

 

Value Realized

on Vesting

($)

R.W. Tillerson

  0   0   66,000   4,992,240

D.D. Humphreys

  0   0   24,200   1,830,488

M.J. Dolan

  0   0   29,250   2,204,670

H.R. Cramer

  208,000   6,001,045   38,500   2,912,140

S.D. Pryor

  179,090   5,441,068   38,500   2,912,140

Option Awards

 

Ÿ  

The value realized on option awards represents the difference between the option exercise price and the market price of ExxonMobil stock on date of exercise.

 

Ÿ  

The net number of shares acquired as a result of all exercises during 2009: 85,747 for Mr. Cramer; and 103,982 for Mr. Pryor.

Stock Awards/Restriction Lapse in 2009

 

Ÿ  

Restrictions lapsed on 50 percent of stock awards that were granted in 2004. Mr. Dolan also had restrictions lapse on 50 percent of stock awards that were granted in 2002.

 

Ÿ  

The number of shares acquired on vesting is the gross number of shares to which the award relates.

 

Ÿ  

The value realized is the gross number of shares times the market price, which is the average of the high and low sale prices on the NYSE on the date that restrictions lapse.

 

Ÿ  

The net number of shares acquired (gross number of shares less shares withheld for taxes): 41,943 for Mr. Tillerson; 15,972 for Mr. Humphreys; 19,410 for Mr. Dolan; 22,253 for Mr. Cramer; and, 24,466 for Mr. Pryor.

 

Ÿ  

Refer to the “Equity” section beginning on page 29 for additional information on restricted stock awards.

 

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Pension Benefits for 2009

 

Name   Plan Name  

Number of
Years Credited
Service

(#)

 

Present Value of
Accumulated
Benefit

($)

 

Payments During

Last Fiscal Year

($)

R.W. Tillerson

  ExxonMobil Pension Plan   34.58   1,558,307   0
    ExxonMobil Supplemental Pension Plan   34.58   11,917,263   0
    ExxonMobil Additional Payments Plan   34.58   24,327,689   0

D.D. Humphreys

  ExxonMobil Pension Plan   33.40   1,608,155   0
    ExxonMobil Supplemental Pension Plan   33.40   5,139,516   0
    ExxonMobil Additional Payments Plan   33.40   14,974,672   0

M.J. Dolan

  ExxonMobil Pension Plan   29.42   1,223,043   0
    ExxonMobil Supplemental Pension Plan   29.42   2,795,558   0
    ExxonMobil Additional Payments Plan   29.42   7,652,554   0

H.R. Cramer

  ExxonMobil Pension Plan   36.58   1,850,974   0
    ExxonMobil Supplemental Pension Plan   36.58   5,194,026   0
    ExxonMobil Additional Payments Plan   36.58   13,926,451   0

S.D. Pryor

  ExxonMobil Pension Plan   38.17   1,960,893   0
    ExxonMobil Supplemental Pension Plan   38.17   5,985,944   0
    ExxonMobil Additional Payments Plan   38.17   14,715,685   0

Pension Plan

 

Ÿ  

The tax-qualified pension plan provides a benefit calculated as an annual annuity beginning at age 65 (the Plan’s normal retirement age) equal to 1.6 percent of the participant’s final average salary multiplied by years of credited service, minus an offset for Social Security benefits.

 

   

Final average salary is the average of the highest 36 consecutive months in the 10 years of service prior to retirement.

 

   

Final average salary included and benefits paid are subject to the limits on compensation ($245,000 for 2009) and benefits prescribed under the Internal Revenue Code.

 

Ÿ  

The benefit is available as a lump sum or in various annuity forms.

 

Ÿ  

The defined benefit pension arrangements (qualified and nonqualified) help to attract and retain employees at all levels of the Corporation.

 

Ÿ  

The defined benefit pension plan provides a strong incentive for employees to stay until retirement age.

 

Ÿ  

The plan uses final average pay applied to all years of service, and thus, the increase in pension values is greatest late in career, when compensation tends to be highest. This retention feature is strong for high performers, whose compensation increases as their job responsibilities continue to expand throughout their career, making their level of retirement income performance-based.

Supplemental Pension Plan

 

Ÿ  

The nonqualified Supplemental Pension Plan provides a benefit calculated as an annuity on salary above the Internal Revenue Code limit.

 

Ÿ  

It is calculated as an annual annuity beginning at age 65 equal to 1.6 percent of the participant’s final average salary over the Internal Revenue Code limit multiplied by years of credited service.

 

Ÿ  

To help meet the retention and performance objectives described for U.S. salaried employees, the Supplemental Pension Plan provides pension benefits to the extent annual pay exceeds the amount that can be considered in determining qualified pension benefits ($245,000 for 2009, adjusted each year based on inflation).

 

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Ÿ  

Without the Supplemental Pension Plan, the retention power of the overall pension plan would be greatly reduced for employees earning more than that amount, since the increase in their pension values in mid- to late-career would be based on relatively flat final average pay.

Additional Payments Plan

 

Ÿ  

The nonqualified Additional Payments Plan provides a benefit calculated as an annual annuity beginning at age 65 equal to 1.6 percent of the participant’s average annual bonus multiplied by years of credited service.

 

   

The plan uses the average of the annual bonus for the three highest grants of the last five prior to retirement (including the portion of the annual bonus that is paid at time of grant and the portion that is paid on a delayed basis as described on page 32).

 

Ÿ  

Benefits under the Additional Payments Plan are forfeited if an employee resigns prior to completion of 15 years of service and attainment of age 55. All of the Named Executive Officers have satisfied these conditions.

 

Ÿ  

The objective of the Additional Payments Plan is to support retention and performance objectives in light of the Compensation Committee’s practice of putting higher percentages of annual cash compensation at risk at higher executive levels.

 

Ÿ  

The Compensation Committee believes that even though a large percentage of annual cash compensation is discretionary and based on Corporate business performance, it should not be excluded from the pension calculation. Inclusion of discretionary bonuses in the pension formula strengthens the performance basis of such bonuses.

 

Ÿ  

By limiting bonuses to those granted in the five years prior to retirement, there is a strong motivation for executives to continue to perform at a high level.

 

Ÿ  

The Additional Payments Plan is designed to be a powerful retention tool, since benefits are forfeited if the employee resigns prior to completion of 15 years of service and attainment of age 55. The plan applies on the same terms to all U.S. salaried employees who receive a bonus.

Present Value Pension Calculations

 

Ÿ  

The present value of accumulated benefits shown in the “Pension Benefits” table is determined by converting the annuity values earned as of year end to lump sum values payable at age 60 (or at the employee’s actual age, if older) using the mortality tables and interest rate (4 percent) that would apply to a participant who worked through the end of 2009, and retired in the first quarter of 2010.

 

Ÿ  

The actual lump sum conversion factors that will apply when each executive retires could be different. For executives who were not yet 60, the present value as of year-end 2009 of each executive’s age 60 lump sum is determined using a discount rate of 6 percent, the rate used for valuing pension obligations for purposes of the Corporation’s financial statements for 2009.

Other Plan Terms

 

Ÿ  

All three pension plans require attainment of age 55 and completion of 15 years of service to be eligible for early retirement. All Named Executive Officers have satisfied this requirement.

 

Ÿ  

The Named Executive Officers have not received any additional service credit. Actual service is reflected in the above table.

 

Ÿ  

The early retirement benefit consists of an annuity that is undiscounted for retirement ages of 60 years or over, with a discount of 5 percent for each year under age 60.

 

Ÿ  

In addition the Social Security offset is waived for annuity payments scheduled to be paid prior to age 62.

 

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Ÿ  

Because early retirement benefits are subject to a smaller discount than a full actuarial equivalent discount, they can be more valuable than the present value of the executives’ earned normal retirement age benefits.

 

Ÿ  

Messrs. Tillerson, Dolan, and Cramer were eligible for early retirement prior to age 60 under the plans as of year-end 2009.

 

Ÿ  

The table below shows the lump sum early retirement benefits under the three plans for the Named Executive Officers who are under age 60 as of year-end 2009. The lump sum early retirement benefits for Messrs. Humphreys and Pryor as of year-end 2009 are the amounts shown in the “Pension Benefits” table.

 

Name   Plan Name   Lump Sum
Early  Retirement
Benefit ($)

R.W. Tillerson  

  ExxonMobil Pension Plan   1,666,590
    ExxonMobil Supplemental Pension Plan   12,617,272
    ExxonMobil Additional Payments Plan   25,756,674

M.J. Dolan

  ExxonMobil Pension Plan   1,350,721
    ExxonMobil Supplemental Pension Plan   3,038,323
    ExxonMobil Additional Payments Plan   8,317,098

H.R. Cramer

  ExxonMobil Pension Plan   1,866,968
    ExxonMobil Supplemental Pension Plan   5,232,630
    ExxonMobil Additional Payments Plan   14,029,957

Nonqualified Deferred Compensation for 2009

 

Name  

Executive
Contributions in
Last FY

($)

 

Registrant
Contributions in
Last FY

($)

 

Aggregate

Earnings in

Last FY

($)

 

Aggregate
Withdrawals/
Distributions

($)

 

Aggregate

Balance at

Last FYE

($)

R.W. Tillerson

  0   126,840   31,745   0   774,951

D.D. Humphreys

  0   53,550   18,955   0   453,202

M.J. Dolan

  0   42,000   14,619   0   351,521

H.R. Cramer

  0   44,625   59,012   0   1,332,938

S.D. Pryor

  0   48,650   48,729   0   1,108,029

 

Ÿ  

The table above shows the value of the Company credits under ExxonMobil’s nonqualified supplemental savings plan. The Company credits for 2009 are also included in the “Summary Compensation Table” under the column labeled “All Other Compensation.”

 

Ÿ  

The amounts in the “Summary Compensation Table” include both Company contributions to the tax-qualified plan and Company credits to the nonqualified plan, whereas the registrant contributions in the table above represent only the Company credits to the nonqualified plan.

 

Ÿ  

The amount of Company contributions to the tax-qualified savings plan was limited to the Internal Revenue Service contribution and salary maximums. For this reason, $17,150 was the maximum Company match in 2009 to the qualified savings plan.

 

Ÿ  

The aggregate balance at the last fiscal year end shown above includes amounts reported as Company contributions in the “Summary Compensation Table” of the current statement and in prior-year proxy statements as follows: $580,090 for Mr. Tillerson; $170,300 for Mr. Humphreys; $42,000 for Mr. Dolan; $155,708 for Mr. Cramer; and, $95,900 for Mr. Pryor.

 

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Ÿ  

The nonqualified savings plan provides employees with the 7-percent Company-matching contribution to which they would otherwise be entitled under the qualified plan but for limitations on covered compensation and total contributions under the Internal Revenue Code.

 

   

All eligible employees participate in the nonqualified plan on the same basis.

 

   

The rate at which the nonqualified savings plan account bears interest during the term of a participant’s employment is 120 percent of the long-term Applicable Federal Rate.

 

Ÿ  

The tax-qualified and nonqualified savings plans are designed to help attract and retain employees. The matching design is intended to encourage employees to contribute their own funds to the plan to receive the tax benefits available under the Internal Revenue Code. The supplemental savings plan serves similar purposes for salary or contributions in excess of the Internal Revenue Code limits referenced above.

Administrative Services for Retired Employee Directors

 

Ÿ  

The Company provides certain administrative support to retired employee directors.

 

Ÿ  

The support provided generally involves, but is not limited to, assistance with correspondence and travel arrangements relating to activities the retired directors are involved with that continue from their employment, such as board positions with nonprofit organizations. Given the nature of the support provided, a retired director’s spouse may also benefit from the support provided.

 

Ÿ  

The Company also allows retired employee directors to use otherwise vacant office space at the Company’s headquarters.

 

Ÿ  

It is not possible to estimate the future cost that may be incurred by the Company for providing these services to Mr. Tillerson, who is currently the only employee director.

 

Ÿ  

The aggregate incremental cost of providing these services for all currently covered persons is approximately $150,000 per year.

 

   

This amount represents the compensation and benefit cost for support personnel allocated based on their estimated time dedicated to providing this service, as well as other miscellaneous office support costs.

Health Care Benefits

 

Ÿ  

ExxonMobil does not provide any special executive health care benefits.

 

Ÿ  

Executives and their families are eligible to participate in the Company’s health care programs, including medical, dental, prescription drug, and vision care, on the same basis as all other U.S. salaried employees.

 

Ÿ  

The terms and conditions of the programs for both current employees and retirees do not discriminate in scope, terms, or operation in favor of executive officers.

Unused Vacation

 

Ÿ  

All U.S. salaried employees are entitled to payment of salary for any accumulated but unused vacation days at retirement or other termination of employment.

 

Ÿ  

Payment for unused vacation is included in final payments of earned salary.

Termination and Change in Control

 

Ÿ  

ExxonMobil executive officers are not entitled to any additional payments or benefits relating to termination of employment other than the retirement benefits previously described in the preceding compensation tables and narrative.

 

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Ÿ  

Executives are “at-will” employees of the Company. They do not have employment contracts, a severance program, or any benefits triggered by a change in control.

 

Ÿ  

As discussed in greater detail above, unexercised stock options, unvested restricted stock, and any unpaid portion of an annual bonus are subject to forfeiture at the discretion of the Compensation Committee if an executive:

 

   

Engages in detrimental activity; or,

 

   

Terminates employment prior to standard retirement age (currently age 65 for U.S. executives), whether such termination is voluntary or involuntary.

 

Ÿ  

The Board has a policy to recoup compensation in the event of a material negative restatement of the Corporation’s reported financial or operating results as described on page 29.

Payments in the Event of Death

The only event that results in acceleration of the normal payment or vesting schedule of any benefit is death. In that event, the vesting period of outstanding restricted stock awards would be accelerated. Also in the event of death, the executive’s estate or beneficiaries would be entitled to payment of the life insurance or death benefit as described beginning on page 42. At year-end 2009, the amount of that life insurance benefit for each Named Executive Officer is as follows:

 

Name    Life Insurance Benefit ($)

R.W. Tillerson

   8,228,000

D.D. Humphreys

   4,040,000

M.J. Dolan

   3,500,000

H.R. Cramer

   3,520,000

S.D. Pryor

   3,760,000

AUDIT COMMITTEE REPORT

The primary function of our Committee is oversight of the Corporation’s financial reporting process, public financial reports, internal accounting and financial controls, and the independent audit of the annual consolidated financial statements. Our Committee acts under a charter, which can be found on the ExxonMobil Web site at exxonmobil.com/governance. We review the adequacy of the charter at least annually. All of our members are independent, and all are audit committee financial experts under SEC rules. We held 11 meetings in 2009 at which, as discussed in more detail below, we had extensive reports and discussions with the independent auditors, internal auditors, and other members of management.

In performing our oversight function, we reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP (PwC), the independent auditors. Management and PwC indicated that the Corporation’s consolidated financial statements were fairly stated in accordance with generally accepted accounting principles. We discussed significant accounting policies applied by the Corporation in its financial statements, as well as alternative treatments. We discussed with PwC matters covered by Public Company Accounting Oversight Board (PCAOB) standards, AU Section 380 Communication with Audit Committees. In addition we reviewed and discussed management’s report on internal control over financial reporting and the related audits performed by PwC, which confirmed the effectiveness of the Corporation’s internal control over financial reporting.

We also discussed with PwC its independence from the Corporation and management, including the communications PwC is required to provide us under applicable PCAOB rules. We considered the non-audit services provided by PwC to the Corporation, and concluded that the auditors’ independence has been maintained.

 

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We discussed with the Corporation’s internal auditors and PwC the overall scope and plans for their respective audits. We met with the internal auditors and PwC at each meeting, both with and without management present. Discussions included the results of their examinations, their evaluations of the Corporation’s internal controls, and the overall quality of the Corporation’s financial reporting.

We discussed with the Corporation’s management the comprehensive, long-standing risk management processes and reviewed several topics of interest.

Based on the reviews and discussions referred to above, in reliance on management and PwC, and subject to the limitations of our role described below, we recommended to the Board, and the Board has approved, the inclusion of the audited financial statements in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2009, for filing with the SEC.

We have also appointed PwC to audit the Corporation’s financial statements for 2010, subject to shareholder ratification of that appointment.

In carrying out our responsibilities, we look to management and the independent auditors. Management is responsible for the preparation and fair presentation of the Corporation’s financial statements and for maintaining effective internal control. Management is also responsible for assessing and maintaining the effectiveness of internal control over the financial reporting process in compliance with Sarbanes-Oxley Section 404 requirements. The independent auditors are responsible for auditing the Corporation’s annual financial statements, and expressing an opinion as to whether the statements are fairly stated in conformity with generally accepted accounting principles. In addition the independent auditors are responsible for auditing the Corporation’s internal controls over financial reporting and for expressing an opinion on the effectiveness of internal control over financial reporting. The independent auditors perform their responsibilities in accordance with the standards of the PCAOB. Our members are not professionally engaged in the practice of accounting or auditing, and are not experts under the Securities Act of 1933 in either of those fields or in auditor independence.

 

Michael J. Boskin, Chair    Steven S Reinemund
Larry R. Faulkner   

ITEM 2 – RATIFICATION OF INDEPENDENT AUDITORS

The Audit Committee has appointed PricewaterhouseCoopers LLP (PwC) to audit ExxonMobil’s financial statements for 2010. We are asking you to ratify that appointment.

Total Fees

The total fees for PwC professional services rendered to ExxonMobil for the year ended December 31, 2009, were $33.5 million, a decrease of $1.4 million from 2008. The Audit Committee reviewed and pre-approved all services in accordance with the service pre-approval policies and procedures, which can be found on the ExxonMobil Web site at exxonmobil.com/governance. The Audit Committee did not use the “de minimis” exception to pre-approval that is available under SEC rules. The following table summarizes the fees, which are described in more detail below.

 

         2009            2008    
     (millions of dollars)

Audit Fees

   26.2    24.8

Audit-Related Fees

   5.4    6.1

Tax Fees

   1.9    4.0

All Other Fees

     
         

Total

   33.5    34.9

 

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Audit Fees

The aggregate fees for PwC professional services rendered for the annual audits of ExxonMobil’s financial statements for the year ended December 31, 2009, and for the reviews of the financial statements included in our quarterly reports on Form 10-Q for that year were $26.2 million (versus $24.8 million for 2008).

Audit-Related Fees

The aggregate fees for PwC Audit-Related services rendered to ExxonMobil for the year ended December 31, 2009, were $5.4 million (versus $6.1 million in 2008). These services were mainly related to asset dispositions, benefit plan and joint venture audits, and attestation procedures related to cost certifications.

Tax Fees

The aggregate fees for PwC Tax services rendered to ExxonMobil for the year ended December 31, 2009, were $1.9 million (versus $4.0 million for 2008). These services are described below.

 

Ÿ  

PwC assisted various ExxonMobil affiliates with the preparation of local tax filings and related tax services. These fees were $1.6 million for 2009 (versus $1.4 million in 2008).

 

Ÿ  

PwC also assisted in preparing tax returns for individual ExxonMobil expatriate employees. These fees were $0.3 million for 2009 (versus $2.6 million for 2008). The transition of tax return preparation assistance to another service provider is under way.

All Other Fees

The aggregate fees for PwC services rendered to ExxonMobil, other than the services described above under “Audit Fees,” “Audit-Related Fees,” and “Tax Fees,” for the year ended December 31, 2009, were zero (also zero in 2008).

PwC has been ExxonMobil’s independent auditing firm for many years, and we believe they are well-qualified for the job. A PwC representative will be at the annual meeting to answer appropriate questions and to make a statement if he desires.

The Audit Committee recommends you vote FOR this proposal.

SHAREHOLDER PROPOSALS

We expect Items 3 through 13 to be presented by shareholders at the annual meeting. Following SEC rules, other than minor formatting changes, we are reprinting the proposals and supporting statements as they were submitted to us. We take no responsibility for them. On oral or written request to the Secretary at the address listed under “Contact Information” on page 3, we will provide information about the sponsors’ shareholdings, as well as the names, addresses, and shareholdings of any co-sponsors.

The Board recommends you vote AGAINST Items 3 through 13 for the reasons we give after each one.

 

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ITEM 3 – SPECIAL SHAREHOLDER MEETINGS

This proposal was submitted by Mr. Kenneth Steiner, 14 Stoner Avenue, 2M, Great Neck, NY 11021.

“3 – Special Shareowner Meetings

RESOLVED, Shareowners ask our board to take the steps necessary to amend our bylaws and each appropriate governing document to give holders of 10% of our outstanding common stock (or the lowest percentage allowed by law above 10%) the power to call a special shareowner meeting. This includes that a large number of small shareowners can combine their holdings to equal the above 10% of holders. This includes that such bylaw and/or charter text will not have any exception or exclusion conditions (to the fullest extent permitted by state law) that apply only to shareowners but not to management and/or the board.

A special meeting allows shareowners to vote on important matters, such as electing new directors, that can arise between annual meetings. If shareowners cannot call a special meeting investor returns may suffer. Shareowners should have the ability to call a special meeting when a matter merits prompt attention. This proposal does not impact our board’s current power to call a special meeting.

This proposal topic also won more than 60% support at the following companies in 2009: CVS Caremark (CVS), Sprint Nextel (S), Safeway (SWY), Motorola (MOT) and R. R. Donnelley (RRD). William Steiner and Nick Rossi sponsored these proposals.

The merit of this Special Shareowner Meeting proposal should also be considered in the context of the need for improvements in our company’s 2009 reported corporate governance status:

The Corporate Library www.thecorporatelibrary.com, an independent investment research firm, rated our company ‘D’ with ‘High Governance Risk,’ and ‘Very High Concern’ for executive pay—$22 million for our CEO Rex Tillerson.

The Corporate Library said that with Mr. Tillerson’s $4 million bonus, it is important for our company to describe the specific achievement levels so that shareholders can evaluate the effectiveness of executives’ annual incentives. Our compensation discussion and analysis says: ‘The intent of the earnings per share trigger is to tie the timing of the bonus payment to the rate of the Corporation’s future earnings and not to decrease the amount of the payment.’ In other words, our company’s target was set so low that it was virtually a foregone conclusion.

Our company gave restricted stock to our CEO and other executives. The vesting of such restricted stock was time-based rather than contingent on the achievement of specified performance goals.

Mr. Tillerson’s pension increased by $8.3 million and was more than our CEO’s salary, bonus, and all other compensation combined. Currently, Mr. Tillerson has three pension plans with a lump sum early retirement benefit of more than $35 million.

The above concerns show there is need for improvement. Please encourage our board to respond positively to this proposal: Special Shareowner Meetings – Yes on 3.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil’s Corporate Governance Guidelines posted on our Web site indicate that a special meeting of shareholders may be called by a holder of not less than 10 percent of outstanding shares in accordance with New Jersey law upon a showing of good cause. The Board believes this proposal is therefore unnecessary and redundant.

By requiring a showing of good cause to call a special meeting, the existing New Jersey statute better balances the interests of all shareholders by allowing shareholders of 10 percent or more of outstanding common stock to call a meeting for a legitimate purpose while protecting against the potential for a minority shareholder group to abuse this right.

 

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ITEM 4 – INCORPORATE IN NORTH DAKOTA

This proposal was submitted by Mr. Chris Rossi, P.O. Box 249, Boonville, CA 95415.

4 – Reincorporate in a Shareowner-Friendly State

Resolved: That shareowners hereby request that our board of directors take the necessary steps to reincorporate our company in North Dakota with articles of incorporation that provide that our company is subject to the North Dakota Publicly Traded Corporations Act.

This proposal requests that the board initiate the process to reincorporate our company in North Dakota under the new North Dakota Publicly Traded Corporations Act. If our company were subject to the North Dakota act there would be additional benefits:

 

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There would be a right of proxy access for shareowners who owned 5% of our company’s shares for at least two years.

 

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Shareowners would be reimbursed for their expenses in proxy contests to the extent they are successful.

 

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The ability of the board to adopt a poison pill would be limited.

 

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Shareowners would vote each year on executive pay practices.

These provisions, together with others in the North Dakota act, would give us as shareowners more rights than are available under any other state corporation law. By reincorporating in North Dakota, our company would instantly have the best governance system available.

Reincorporation in North Dakota is the best alternative for achieving the rights of proxy access and reimbursement of proxy expenses. And at the same time those rights would become available to us as shareowners in a North Dakota corporation, our Company would also shift to cumulative voting, ‘say on pay,’ and other best practices in governance.

Reincorporation in North Dakota provides a way to switch to a vastly improved system of governance in a single step. And reincorporation in North Dakota does not require a major capital investment or layoffs to improve financial performance.

Please encourage our board to respond positively to this proposal to reincorporate in North Dakota – Yes on 4”

The Board recommends you vote AGAINST this proposal for the following reasons:

Exxon Mobil Corporation has been incorporated in New Jersey for over 125 years. New Jersey corporate law is well-developed and has served the Company and its shareholders well over this period. The North Dakota statute referenced by the proposal is new and untested, thereby potentially subjecting the Company and our shareholders to substantial legal uncertainty. Therefore the Board does not support this proposal.

Reincorporation would also require a proxy solicitation for shareholders to approve a merger of the Company into a North Dakota corporation. This would require expenditure of Company time and money without commensurate benefit.

New Jersey law currently supports a wide range of sound governance practices such as those already implemented by ExxonMobil. Reincorporation under the new North Dakota law is unnecessary. Each of the governance measures mentioned by the proponent as a reason to reincorporate can already be effected under New Jersey law if the Board determines such measures to be in the best interests of shareholders.

 

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ITEM 5 – SHAREHOLDER ADVISORY VOTE ON EXECUTIVE COMPENSATION

This proposal was submitted by The Needmor Fund, 1270 North Wolcott Street, Chicago, IL 60622, as lead proponent of a filing group.

“RESOLVED – the shareholders of Exxon Mobil Corporation recommend that the board of directors adopt a policy requiring that the proxy statement for each annual meeting contain a proposal, submitted by and supported by Company Management, seeking an advisory vote of shareholders to ratify and approve the board Compensation’s Committee Report and the executive compensation policies and practices set forth in the Company’s Compensation Discussion and Analysis.

SUPPORTING STATEMENT

Investors are increasingly concerned about mushrooming executive compensation especially when it is insufficiently linked to performance.

In 2009 shareholders filed close to 100 ‘Say on Pay’ resolutions. Votes on these resolutions averaged more than 46% in favor, and close to 25 companies had votes over 50%, demonstrating strong shareholder support for this reform. Investor, public and legislative concerns about executive compensation have reached new levels of intensity.

An Advisory Vote establishes an annual referendum process for shareholders about senior executive compensation. We believe this vote would provide our board and management useful information from shareholders on the company’s senior executive compensation especially when tied to an innovative investor communication program.

In 2008 Aflac submitted an Advisory Vote resulting in a 93% vote in favor, indicating strong investor support for good disclosure and a reasonable compensation package. Chairman and CEO Daniel Amos said, ‘An advisory vote on our compensation report is a helpful avenue for our shareholders to provide feedback on our pay-for-performance compensation philosophy and pay package.’

Over 30 companies have agreed to an Advisory Vote, including Apple, Ingersoll Rand, Microsoft, Occidental Petroleum, Pfizer, Prudential, Hewlett-Packard, Intel, Verizon, MBIA and PG&E. And nearly 300 TARP participants implemented the Advisory Vote in 2009, providing an opportunity to see it in action.

Influential proxy voting service RiskMetrics Group, recommends votes in favor, noting: ‘RiskMetrics encourages companies to allow shareholders to express their opinions of executive compensation practices by establishing an annual referendum process. An advisory vote on executive compensation is another step forward in enhancing board accountability.’

A bill mandating annual advisory votes passed the House of Representatives, and similar legislation is expected to pass in the Senate. However, we believe companies should demonstrate leadership and proactively adopt this reform before the law requires it.

We believe existing SEC rules and stock exchange listing standards do not provide shareholders with sufficient mechanisms for providing input to boards on senior executive compensation. In contrast, in the United Kingdom, public companies allow shareholders to cast a vote on the ‘directors’ remuneration report,’ which discloses executive compensation. Such a vote isn’t binding, but gives shareholders a clear voice that could help shape senior executive compensation.

We believe voting against the election of Board members to send a message about executive compensation is a blunt, sledgehammer approach, whereas an Advisory Vote provides shareowners a more effective instrument.

We believe that a company that has a clearly explained compensation philosophy and metrics, reasonably links pay to performance, and communicates effectively to investors would find a management sponsored Advisory Vote a helpful tool.”

 

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The Board recommends you vote AGAINST this proposal for the following reasons:

Input from shareholders should play an important role in the design of executive compensation programs. The Board has put in place a thorough, thoughtful, and transparent approach to executive compensation – including a number of effective ways for shareholders to express their views on these matters. The Board does not believe the advisory vote suggested by the proponent would be helpful or effective for this purpose.

As described in detail in the “Compensation Discussion and Analysis” and accompanying tables in this proxy statement, ExxonMobil’s executive compensation program consists of a number of elements that support ExxonMobil’s specific circumstances and goals. A simple up or down vote on this program would not convey useful information to the Board.

Widespread adoption of the advisory vote on compensation could have the negative effect of encouraging companies to take a “one size fits all” approach to compensation under which programs would be designed with reference to standardized voting guidelines of proxy advisory firms, rather than to the particular facts and circumstances of the business.

From a practical standpoint, shareholders are not able to review the full range of information concerning a company – including information on business strategy and outlook, competitive positioning, corporate culture, and employee performance – taken into account by the Board in making executive compensation decisions. Substituting the judgment of shareholders for the judgment of the Board on these matters would result in a less-informed decision-making process, and would circumvent the role of the Board in representing shareholders – a role that has been fundamental to the long-term success and competitive advantage of ExxonMobil.

The Board and management recognize the importance of improving the public’s understanding of ExxonMobil’s executive compensation program, addressing disclosure issues, and improving shareholder involvement. Public awareness and understanding are essential; therefore, we describe in the “Compensation Discussion and Analysis” of the proxy statement how executive compensation links to and supports the business strategies and long-term success of the Company. The “Compensation Discussion and Analysis” also includes a conceptual model and summary description to illustrate how business and people strategies are fully integrated to achieve superior results and create shareholder value.

We believe the Company’s approach to executive compensation and the existing communication channels provide shareholders the ability to share input directly with the Board on specific concerns relating to compensation. Shareholders who wish to express their views to the Board have several effective ways to do so – all of which are considerably clearer, and, therefore, more effective than an up or down advisory vote. Shareholders can:

 

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Write to any Board member or group of Board members and describe their views specifically on executive compensation or on any other material matter;

 

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E-mail any Board member or group of Board members through the communication portal on the Company’s Web site;

 

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Write or e-mail Company management representatives and discuss specific concerns with the appropriate department managers and/or staff; and,

 

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Attend the annual meeting of shareholders and express their views in that forum.

ITEM 6 – AMENDMENT OF EEO POLICY

This proposal was submitted by the New York State Common Retirement Fund, 633 Third Avenue – 31st Floor, New York, NY 10017.

“Whereas: Exxon Mobil Corporation (‘ExxonMobil’) does not explicitly prohibit discrimination based on sexual orientation and gender identity in its written employment policy;

 

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Over 84% of the Fortune 500 companies have adopted written nondiscrimination policies prohibiting harassment and discrimination on the basis of sexual orientation, as have more than 93% of Fortune 100 companies, according to the Human Rights Campaign; over 34% now prohibit discrimination based on gender identity;

We believe that corporations that prohibit discrimination on the basis of sexual orientation and gender identity have a competitive advantage in recruiting and retaining employees from the widest talent pool;

According to an October, 2009 survey by Harris Interactive and Witeck-Combs, 44% of gay and lesbian workers in the United States reported an experience with some form of job discrimination related to sexual orientation; an earlier survey found that almost one out of every 10 gay or lesbian adults also stated that they had been fired or dismissed unfairly from a previous job, or pressured to quit a job because of their sexual orientation;

Twenty states, the District of Columbia and more than 180 cities and counties, have laws prohibiting employment discrimination based on sexual orientation; 12 states and the District of Columbia have laws prohibiting employment discrimination based on sexual orientation and gender identity;

Minneapolis, San Francisco, Seattle and Los Angeles have adopted legislation restricting business with companies that do not guarantee equal treatment for gay and lesbian employees;

Our company has operations in, and makes sales to institutions in states and cities that prohibit discrimination on the basis of sexual orientation;

National public opinion polls consistently find more than three quarters of the American people support equal rights in the workplace for gay men, lesbians and bisexuals; for example, in a Gallup poll conducted in May 2009, 89% of respondents favored equal opportunity in employment for gays and lesbians;

Resolved: The Shareholders request that ExxonMobil amend its written equal employment opportunity policy to explicitly prohibit discrimination based on sexual orientation and gender identity and to substantially implement the policy.

Supporting Statement: Employment discrimination on the basis of sexual orientation and gender identity diminishes employee morale and productivity. Because state and local laws are inconsistent with respect to employment discrimination, our company would benefit from a consistent, corporate wide policy to enhance efforts to prevent discrimination, resolve complaints internally, and ensure a respectful and supportive atmosphere for all employees. ExxonMobil will enhance its competitive edge by joining the growing ranks of companies guaranteeing equal opportunity for all employees.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil is committed to having a workplace that facilitates the maximum contribution from all of our employees. While there are many factors that are important to creating this type of environment, one of the most significant is having a workplace that is free from any form of harassment or discrimination.

The Board has reviewed in detail ExxonMobil’s existing global policies that prohibit all forms of discrimination, including those based on sexual orientation and gender identity, in any Company workplace, anywhere in the world. In fact ExxonMobil’s policies go beyond the law and prohibit any form of discrimination. Based on these existing all-inclusive, zero-tolerance policies, the Board believes the proposal is unnecessary.

The Corporation’s Equal Employment Opportunity (EEO) and Harassment in the Workplace policies, which are included in the Standards of Business Conduct (Standards), constitute the foundational documents of our employment nondiscrimination policy. The EEO communication initiatives, training programs, and investigating and stewardship processes explicitly state that any form of discrimination or harassment in the workplace based on sexual orientation will not be tolerated, and more broadly, that no form of discrimination or harassment in the workplace will be tolerated. It is these elements, as a totality, that constitute ExxonMobil’s policies.

 

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As stated in the EEO portion of the Standards, the Corporation administers its personnel policies, programs, and practices in a nondiscriminatory manner in all aspects of the employment relationship, including recruitment, hiring, work assignment, promotion, transfer, termination, wage and salary administration, and selection for training. ExxonMobil is a meritocracy, with programs and policies designed to employ the best people, recognize and reward superior job performance, and to create an environment in which employees can maximize their contributions and reach their full potential. A discrimination-free environment is essential to meet these objectives.

Where we operate in countries in which the national laws require specific language regarding nondiscrimination based on sexual orientation or gender identity be included in policies, we have amended our policies as appropriate.

A written statement by our Chairman regarding ExxonMobil’s commitment to nondiscrimination, including that based on sexual orientation, is widely accessible to all employees on the Company intranet, and we provide training programs for new employees and refresher courses for existing employees. The harassment training material included in our Working Together booklet includes an example specifically based on sexual orientation. As a part of our ongoing policy compliance stewardship, ExxonMobil also has annual reporting and compliance procedures, which include a letter to all senior managers emphasizing their responsibilities regarding maintaining work environments free from harassment and discrimination.

ITEM 7 – POLICY ON WATER

This proposal was submitted by NorthStar Asset Management, 43 St. John Street, Jamaica Plain, MA 02130, as lead proponent of a filing group.

“Policy on the human right to water

WHEREAS, water is a key resource used in production of our Company’s product, and therefore water quality and quantity is vital for ExxonMobil’s success;

Through oilfield injection, oil extraction uses nearly 60 million gallons of water annually in the Canadian province of Alberta alone. This water is not returned to the local community and is ultimately unusable for other purposes;

The EPA reports that US oil refineries use 1 to 2 million gallons of water daily (up to 730 million gallons annually) to produce fuel;

Over-consuming and depleting community groundwater is a direct violation of the human right to water that the UN Committee on Economic, Social and Cultural Rights defines as all people’s right to safe, sufficient, acceptable, physically accessible and affordable water for personal and domestic use;

In 2003, the UN Commission on Human Rights issued a report on the scope of the human rights obligations which clearly states that ‘transnational corporations and other business enterprises, their officers and persons working for them are also obligated to respect generally recognized responsibilities and norms contained in United Nations treaties and other international instruments.’ Regarding equitable access to safe drinking water and sanitation, this report means that the responsibility for ensuring this level of access is not only on governments, but also on private water providers and corporations that utilize water resources;

Our Corporate Citizenship Report touts our Company’s commitment ‘actively promot[ing] respect for human rights, which is essential for helping to create a stable business environment;’

We believe that it is the obligation of our Company to adhere to the UN’s declaration in General Comment 15 which describes that ‘the human right to water entitles everyone to sufficient, safe, acceptable, physically accessible and affordable water.’ The best way for us to ‘ensur[e] sustainable access to water resources’ is through a comprehensive company policy on the human right to water, using General Comment 15 as a sound and appropriate model;

 

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We believe that global corporations operating without strong human rights and environmental policies face serious risks to their reputation and share value if they are seen to be responsible for or complicit in human rights violations, specifically the violation or erosion of the human right to water;

We believe that significant commercial advantages may accrue to our company by adopting a comprehensive human right to water policy, including enhanced corporate reputation, improved employee recruitment and retention, improved community and stakeholder relations, and reduced risk of adverse publicity, consumer boycotts, divestment campaigns, and lawsuits;

BE IT RESOLVED that the shareholders request the Board of Directors to create a comprehensive policy articulating our company’s respect for and commitment to the human right to water.

SUPPORTING STATEMENT

Proponents believe the policy should elucidate ExxonMobil’s commitment to ensuring sustainable access to water resources, entitling everyone to sufficient, safe, acceptable, physically accessible and affordable water while operating our business in global communities.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board agrees ExxonMobil has a responsibility to surrounding communities and the environment for managing our freshwater use in a sustainable manner, and to respect human rights. The Board believes ExxonMobil already has sound policies and processes in place, as part of our Standards of Business Conduct, which address the water and human rights issue. Therefore, a specific policy on water and human rights is unnecessary.

ExxonMobil is committed to operating in a way that protects the environment and takes into account the economic and social needs of the communities where we operate. Our environmental policy commits us to continuous efforts to improve environmental performance; and requires our facilities to be designed, operated, and managed with the goal of preventing incidents and reducing adverse impacts to the environment and society, including impacts to society of our freshwater use.

To address the growing global concern for freshwater quality and availability, we continue to assess our current and planned activities to identify where freshwater may become a scarce resource, to better understand our freshwater use patterns, and to assess opportunities to reduce our use. This includes analysis of the social and economic impact of our new projects. For example, at our Singapore chemical plant expansion, we are installing innovative wastewater treatment technology which increases re-use, thereby reducing our water use by about 2 million cubic meters per year compared to conventional technology.

Recognizing that water is essential in oil and gas production and processing, ExxonMobil tracks and manages freshwater use. We seek opportunities in our operations to reduce freshwater consumption, especially in areas of freshwater scarcity. For example, Imperial Oil’s (an ExxonMobil affiliate) Cold Lake operation has made process improvements to recycle about 95 percent of the water produced during oil recovery operations, resulting in a significant reduction in freshwater consumption.

ExxonMobil operations integrate water improvement targets in their Environmental Business Planning efforts. These Environmental Business Plans drive technological and operational innovations, as well as strategic community investments to enhance freshwater use efficiency and reduce freshwater quality deterioration.

ITEM 8 – WETLANDS RESTORATION POLICY

This proposal was submitted by the Presbyterian Church (USA) Pension Plan, 100 Witherspoon Street, Louisville, KY 40202, as lead proponent of a filing group.

 

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“WHEREAS, it is irrefutable that oil and gas-related activities have had a major impact on Louisiana’s fragile coastal environment and are directly linked to wetland loss in coastal Louisiana. Studies have empirically demonstrated that the direct and indirect effects of oil and gas exploration, recovery and processing are together responsible for 40 to 60 percent of documented wetland loss;

Oil and gas-related activities, as well as the 10,000 miles of canals dredged throughout the coastal zone of Louisiana, have resulted in the disruption of the natural hydrologic regime of the Mississippi delta, in enhanced subsidence, in deterioration of vegetation habitats, in increases in turbidity and in decreases in the nursery grounds for estuarine consumers (i.e. fish and shrimp).

In Louisiana alone, 1.3 million acres of coastal wetlands has been lost since the 1930’s; it is estimated that every 38 minutes a wetlands area the size of a football field is lost. If nothing is done to prevent the rapid loss of wetlands and restore Louisiana’s coast, another 500-700 acres will be lost over the next 50 years;

The loss of wetlands combined with the resulting hydrologic isolation of the remaining local marshes has robbed the two million residents of coastal Louisiana of the vital storm protection provided by wetlands. As a result, Louisiana cities, like New Orleans, are now almost completely exposed to the Gulf of Mexico. Consequently, minor storms that had relatively little effect 20 to 30 years ago now cause serious flooding and storm-related damage due to the continuous encroachment of the Gulf of Mexico and the loss of the storm protection afforded by wetlands.

The cost of a wetlands restoration plan for Louisiana is estimated to be at least $50 billion and will take over three decades to complete.

From 1981 to present, ExxonMobil has obtained 169 coastal use permits for oil and gas exploration in coastal Louisiana and has dredged 2,091,584 cubic yards. Of the land dredged, reports from the Louisiana Department of Natural Resources have documented that 949.60 acres of wetlands have been destroyed as a result of the company’s oil and gas related activities with only 61.11 acres of required mitigation involving 13 of ExxonMobil’s permits.

We believe that ExxonMobil, which represents itself as a socially and environmentally responsible company concerned about Louisiana’s coastal wetlands crisis, has an obligation to adopt policies that will prevent future damage to wetland and that will assist in the amelioration of past harm.

RESOLVED, that the shareholders request that the Board of Directors of ExxonMobil adopt environmental policies to address the environmental hazards of its oil and gas-related activities in coastal Louisiana by devising and implementing business practices that will prevent future harms to coastal Louisiana and by aiding in the restoration of wetlands lost through past actions of ExxonMobil.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Board agrees ExxonMobil has a responsibility to surrounding communities and the environment for managing our operations in a sustainable manner, including with respect to wetlands. The Board believes ExxonMobil already has sound policies and processes in place, as part of our Standards of Business Conduct, which address the environment. Therefore, a specific policy on wetlands restoration is unnecessary.

ExxonMobil is committed to operating in a way that protects the environment and takes into account the economic and social needs of the communities where we operate. Our environmental policy commits us to continuous efforts to improve environmental performance; and requires our facilities to be designed, operated, and managed with the goal of preventing incidents and reducing adverse impacts, including impacts to wetland environments.

ExxonMobil assesses environmental sensitivities and develops appropriate mitigation steps using the tools in our Environmental Aspects Guide. Our Environmental Business Planning identifies objectives for environmental protection, including wetland protection, and drives improvement actions that are specific to each location.

 

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Mitigation actions include adjusting siting and routes, and modifying engineering designs, construction plans, and operating practices to protect specific species and habitats, including wetlands. For example, careful planning for the layout of the Golden Pass LNG terminal and pipeline route in Sabine Pass, Texas, allowed for the preservation of 20 acres of wetlands.

In addition, we undertake extensive reclamation efforts to restore degraded sites to environmentally acceptable conditions. For example, our redevelopment actions at the Florham Park research campus in New Jersey included restoration of 80 acres of wetlands that support local wildlife, area flood control, and groundwater recharge.

We have also reclaimed over 90 percent of the 5200 hectare site of a former phosphate mine in Fort Meade, Florida, including restoration of wetlands. This work began in 1992 and is expected to be completed by about 2011.

ExxonMobil is actively involved with numerous environmental conservation organizations, such as the American Wetlands Foundation, Wildlife Habitat Council, Ducks Unlimited, The Nature Conservancy and others, contributing over $300,000 annually. These organizations educate on the importance of wetlands, and conserve and restore these critical habitats.

ITEM 9 – REPORT ON CANADIAN OIL SANDS

This proposal was submitted by Green Century Capital Management, 114 State Street, Suite 200, Boston, MA 02109, as lead proponent of a filing group.

“WHEREAS:

ExxonMobil has significant investments in the Canadian oil sands.

ExxonMobil owns 69.6% of Imperial Oil, one of Canada’s largest oil companies. Imperial is 100% owner of the Cold Lake oil sands project and also owns 25% of Syncrude. ExxonMobil and Imperial jointly own and operate 100% of the Kearl oil sands project.

According to ExxonMobil’s FY2008 10-K, 1.1 billion barrels (over 50%) of our company’s additional proven reserves come from Kearl, demonstrating our company’s dependence on Canada’s oil sands for long term growth.

There are significant environmental, social and economic challenges associated with the oil sands.

The resource-intensive and environmentally damaging nature of oil sands development may introduce regulatory, operational, liability and reputational risks to oil sands companies.

 

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Water scarcity is a growing operational concern for oil sands development. Local annual water flows are projected to decrease 24-68% over the coming century. According to the Petroleum Technology Alliance of Canada, ‘rapidly growing demands for water... will drive and limit development.’

 

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The persistence of tailing ponds, which are known to leak toxic pollutants into groundwater, may present risks along with significant reclamation costs not currently carried on our balance sheet.

Lawsuits filed by Aboriginal peoples against the Canadian government challenge oil sands and pipeline projects even after approval.

Mining the oil sands’ tar-like bitumen is expensive, with multi-decade payback horizons. Volatile oil prices and changing demand can impact the viability of these projects. The International Energy Agency found that since oil prices peaked in July 2008, 85% of deferred or cancelled non-OPEC production capacity was in the oil sands. According to Ernst & Young’s 2009 Business Risk Report: Oil and Gas, ‘[c]ompanies that invest in long term oil projects with a high marginal cost of production, such as... oil sands, are likely to be the most vulnerable.’

 

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Nexen, another oil company, dedicates over three pages of its FY2008 10-K to risks associated specifically with its ‘heavy oil’ (oil sands) projects.

Shareholders believe ExxonMobil has not adequately reported on how possible risks associated with oil sands projects may impact our company’s long term financial performance, given our company’s significant investments in this area.

RESOLVED:

Shareholders request that the Board prepare a report discussing possible long term risks to the company’s finances and operations posed by the environmental, social and economic challenges associated with the oil sands. The report should be prepared at reasonable cost, omit proprietary and legal strategy information, address risks other than those associated with or attributable to climate change, and be available to investors by August 2010.

SUPPORTING STATEMENT:

The Board shall determine the scope of the report. Proponents believe risk information of interest to shareholders could include, among other things, assessing the impact of worst-case along with reasonably likely scenarios regarding:

 

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Environmentally-related restrictions that might hinder or penalize operations, including those associated with water, land and tailings;

 

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Potential effects of Aboriginal lawsuits against the Canadian government;

 

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Vulnerabilities to market forces that might lead to oil sands project cancellations.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Corporation communicates with shareholders and the public about our financial, environmental and social performance, and the risk factors associated with our business through a number of publications, including The Outlook for Energy – A View to 2030, Summary Annual Report, Financial and Operating Review, Annual Report on Form 10-K, and Corporate Citizenship Report of ExxonMobil and of its Canadian affiliate, Imperial Oil Limited, as well as numerous other publications, speeches, and news releases.

The Board believes these communications provide shareholders with sound and thorough information on the Corporation and its activities and, therefore, the additional report requested by this proposal would be duplicative to information already available.

ExxonMobil’s Outlook for Energy anticipates 2030 energy demand to be almost 35 percent higher than 2005 demand, and estimates that oil and gas will account for about 60 percent of the total demand in 2030. The International Energy Agency notes that “Canadian oil sands represent one of the few growth areas among non-OPEC countries” and that “oil sands have the potential to make a significantly greater contribution to global energy security.”

As an oil sands developer, ExxonMobil’s oil sands represent 11 percent of the Company’s net proved reserves, including interests in Syncrude, Cold Lake, and Kearl.

ExxonMobil is committed to operating in a way that protects the environment, complies fully with all laws and regulations, and takes into account the economic and social needs of the communities where we operate. Our environmental policy commits us to continuous efforts to improve environmental performance; and requires our facilities to be designed, operated, and managed with the goal of preventing incidents and reducing adverse impacts, including potential impacts associated with oil sands development.

Extracting bitumen from oil sands uses water, and we are steadily reducing the quantity required. For example, at the Cold Lake operation in Alberta, Imperial Oil now recycles about 95 percent of the produced water, significantly reducing freshwater requirements. Promising research is underway on

 

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non-aqueous extraction processes that could significantly reduce water use and lead to production of dry tailings, eliminating the need for large tailings ponds.

Imperial Oil is committed to building positive, mutually beneficial relationships with local communities, and was recently honored with the Canadian Association of Petroleum Producers Steward of Excellence Award for its Cold Lake operation’s Native Internship Program.

The oil and gas industry is a long-term, capital intensive business and ExxonMobil has strong policies and management systems in place to assess, plan, and address the environmental, social, and economic challenges of oil and gas development.

ITEM 10 – REPORT ON NATURAL GAS PRODUCTION

This proposal was submitted by The Park Foundation, 311 California St., Suite 510, San Francisco, CA 94104, as lead proponent of a filing group.

“Whereas,

Onshore ‘unconventional’ natural gas production requiring hydraulic fracturing, which injects a mix of water, chemicals, and particles underground to create fractures through which gas can flow for collection, is estimated to increase by 45% between 2007 and 2030. An estimated 60-80% of natural gas wells drilled in the next decade will require hydraulic fracturing.

Fracturing operations can have significant impacts on surrounding communities including the potential for increased incidents of toxic spills, impacts to local water quantity and quality, and degradation of air quality. Government officials in Ohio, Pennsylvania and Colorado have documented methane gas linked to fracturing operations in drinking water. In Wyoming, the US Environmental Protection Agency (EPA) recently found a chemical known to be used in fracturing in at least three wells adjacent to drilling operations.

There is virtually no public disclosure of chemicals used at fracturing locations. The Energy Policy Act of 2005 stripped EPA of its authority to regulate fracturing under the Safe Drinking Water Act and state regulation is uneven and limited. But recently, some new federal and state regulations have been proposed. In June 2009, federal legislation to reinstate EPA authority to regulate fracturing was introduced. In September 2009, the New York State Department of Environmental Conservation released draft permit conditions that would require disclosure of chemicals used, specific well construction protocols, and baseline pre-testing of surrounding drinking water wells. New York sits above part of the Marcellus Shale, which some believe to be the largest onshore natural gas reserve.

Media attention has increased exponentially. A search of the Nexis Mega-News library on November 11, 2009 found 1807 articles mentioning ‘hydraulic fracturing’ and environment in the last two years, a 265 percent increase over the prior three years.

Because of public concern, in September 2009, some natural gas operators and drillers began advocating greater disclosure of the chemical constituents used in fracturing.

In the proponents’ opinion, emerging technologies to track ‘chemical signatures’ from drilling activities increase the potential for reputational damage and vulnerability to litigation. Furthermore, we believe uneven regulatory controls and reported contamination incidents compel companies to protect their long-term financial interests by taking measures beyond regulatory requirements to reduce environmental hazards.

Therefore be it resolved,

Shareholders request that the Board of Directors prepare a report by October 1, 2010, at reasonable cost and omitting proprietary information, summarizing 1. the environmental impact of fracturing operations of ExxonMobil; 2. potential policies for the company to adopt, above and beyond regulatory requirements, to reduce or eliminate hazards to air, water, and soil quality from fracturing.

 

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Supporting statement:

Proponents believe the policies explored by the report should include, among other things, use of less toxic fracturing fluids, recycling or reuse of waste fluids, and other structural or procedural strategies to reduce fracturing hazards.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil’s Environmental Policy states that we will comply with all applicable laws and regulations and apply responsible standards where laws do not exist, including precautions specific to hydraulic fracturing. The Board believes the minimal environmental impacts of hydraulic fracturing have been well-documented and regulatory protections are well-established; therefore, an additional report is not necessary.

Hydraulic fracturing provides significant environmental benefits compared to conventional drilling to include drilling fewer wells to access equivalent reserves; lower drilling waste volumes; smaller environmental footprints; less land disturbance; and, reduced air emissions.

Hydraulic fracturing technology has been used for more than 60 years in nearly one million wells drilled in the United States. The Groundwater Protection Council and the U.S. Environmental Protection Agency have both stated that there exists no significant risk to groundwater as a result of proper hydraulic fracturing.

Hydraulic fracturing is highly regulated at the state level to effectively protect drinking water wells and groundwater aquifers while achieving the economic and energy security benefits of natural gas resource development. In 2009, the Groundwater Protection Council surveyed the regulatory frameworks of 27 states, representing over 99.9 percent of U.S. oil and natural gas production, and concluded that “state regulations are adequately designed to directly protect water resources.”

ExxonMobil has had detailed guidelines in place since 1998 for the assessment and mitigation of potential environmental impacts. In the case of hydraulic fracturing, these assessments inform drilling plans, well design, and permit applications.

The American Petroleum Institute has published guidance on well construction and integrity for those wells that will be hydraulically fractured, and is developing guidance on industry best practices to minimize environmental impacts associated with the use, management, treatment, and disposal of water and other fluids used in hydraulic fracturing.

ExxonMobil supports the disclosure of the identity of the ingredients being used in fracturing fluids at each site. While we understand the intellectual property concerns of service companies when it comes to disclosing the proprietary formulations in their exact amounts, we believe the concerns of community members can be alleviated by the disclosure of all ingredients used in these fluids.

We understand that some communities and homeowners new to drilling operations may have concerns. We are committed to working with them to demonstrate that we can address environmental concerns they may have, while providing good jobs and income associated with the safe and efficient production of natural gas.

ITEM 11 – REPORT ON ENERGY TECHNOLOGY

This proposal was submitted by the Province of St. Joseph of the Capuchin Order, 1015 North Ninth Street, Milwaukee, WI 53233, as lead proponent of a filing group.

WHEREAS, in its 2009 World Energy Outlook, the International Energy Agency warned about the ‘dangerous increase in global temperatures and sharply higher oil and gas bills for consuming nations’ if the world doesn’t change its present fossil fuel-based energy economy. It stated: ‘Continuing on today’s energy path, without any changes in government policy, would mean rapidly increasing dependence on fossil fuels, with alarming consequences for climate change and energy security.’ It said ‘the world is now on track for a six-degree-Celsius increase in global temperatures by later in this century’ and that, in

 

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order to ensure that global temperatures be ‘around two degrees Celsius above pre-industrial levels . . . demand for fossil fuels would have to peak by 2020’ (WSJ 11.11.09).

Against the IEA view, ExxonMobil’s future seems wedded to ‘continuing on today’s energy path.’ XOM’s Outlook for Energy: A View to 2030 mentions nothing about changing its energy mix so that ‘demand for fossil fuels’ will decline after 2020. Instead it supports increased demand for fossil fuels.

Even with its present fossil fuel stress, XOM faces difficulty in meeting future demand. In 2007 it replaced just 76% of oil and gas it produced. Its reserve-replacement in 2007 was its lowest in 14 years.’ WSJ, 02.16-17.08

In July, 2007 XOM announced a $300 million investment for studies and ‘potentially more’ than another $300 million if research and development milestones for creating fuel from algae would be successful (07.14.09). However commendable this initiative, it pales compared to the billions it said (around the same time) it would pay for rights to develop Iraqi oil fields (11.06.09) or the $4 billion it agreed to pay for a stake in an oil field off the Ghana coast (10.07.09). Furthermore, this ‘baby-step into biofuels’ seems miniscule compared to the $45.22 billion it earned in 2008.

Besides harming the environment, burning XOM’s fossil fuels contributes to $ billions in health expenses. According to the National Academy of Sciences, burning fossil fuels costs the United States about $120 billion a year in health expenses, mostly because of thousands of premature deaths from air pollution (NYT, 10.20.09).

John Hess, CEO of Hess Corporation, has stated that an oil crisis is coming and sooner than most people think. ‘Resolving the issue through greater global collaboration can be a model for managing other future shortages, such as water [in a way that will] benefit the global community. The more interdependent we are the greater our chances of having a sustainable future together.’ CERA Week, 02.15.08

RESOLVED: shareholders request ExxonMobil’s Board of Directors to establish a Committee to study steps and report to shareholders within six months of the annual meeting (barring competitive information and disseminated at a reasonable expense), on how ExxonMobil, within a reasonable timeframe, can become the recognized industry leader in developing and making available the necessary technology (such as enhanced sequestration, engineered geothermal and the development of other renewable energy sources) to enable the U.S.A. to become energy independent in an environmentally sustainable way.”

The Board recommends you vote AGAINST this proposal for the following reasons:

As part of its normal business ExxonMobil routinely communicates concerning research and commercialization of technologies; consequently, the Board sees no need to publish a separate report aimed narrowly at the role of selected technologies in promoting U.S. energy independence.

ExxonMobil is an industry leader in technology. To identify and develop energy options and improve efficiency, ExxonMobil maintains industry-leading capabilities in research and development spanning many areas. Efforts include proprietary research as well as support for and collaboration with leading academic and government laboratories. Technology applications and research include investigations of algae for advanced renewable biofuels, consideration of geothermal and other renewable energy sources, utilization of carbon capture and storage to reduce emissions, as well as efforts to use fossil fuels more efficiently in a variety of end uses.

ExxonMobil actively contributes to energy security throughout the world by broadening the portfolio of commercially viable energy resources and by extending the life of identified resources through improvements in efficiency of energy supply and use. The Outlook for Energy – A View to 2030 (available on our Web site) provides an extensive, up-to-date discussion of the Company’s views and efforts on various technology options to produce and use energy.

Whether or not to commercialize particular options is a business decision, based on ExxonMobil’s capabilities, market analyses and anticipated returns to shareholders. In this regard, over the past three years ExxonMobil announced the development of a new technology for on-board hydrogen reforming to power fuel cell vehicles, deployment of new battery separator films for use in lithium-ion batteries in

 

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hybrid and electric vehicles, a major pilot project to demonstrate more efficient means to capture carbon-dioxide from produced gas, and a significant investment in research on renewable, algae-based fuels.

The extent and magnitude of future investments in these areas will depend on the results achieved through this research and the shareholder returns through broad commercialization.

In opinion editorials and executive speeches, ExxonMobil strongly argues that the best way for the United States, or any country, to successfully manage its energy needs is through interdependence, not energy independence. As we have stated before, energy independence is not a realistic possibility. The last line of the proponent’s supporting statement, “The more interdependent we are the greater our chances of having a sustainable future together,” appears to support our view.

ITEM 12 – GREENHOUSE GAS EMISSIONS GOALS

This proposal was submitted by the Sisters of St. Dominic of Caldwell New Jersey, 40 South Fullerton Avenue, Montclair, NJ 07042, as lead proponent of a filing group.

“WHEREAS:

The Intergovernmental Panel on Climate Change calls for 80-95% GHG emissions reductions in developed countries by 2050 in order to achieve 450ppm of CO2 levels that are predicted to stave off catastrophic climate changes. In its 2009 World Energy Outlook, the International Energy Agency (IEA) states that ‘in the 450 Scenario, demand for fossil fuels peaks by 2020, and by 2030 zero-carbon fuels make up a third of the world’s primary sources of energy demand.’ The IEA further notes that ‘the past 12 months have seen enormous upheavals in energy markets around the world, yet the challenges of transforming the global energy system remain urgent and daunting.’

Energy markets expert Daniel Yergin, Chairman of Cambridge Energy Research Associates, notes that ‘climate change and putting a price on carbon will change the dynamics of the energy marketplace.’

Shareholders’ consistent requests for GHG emission reduction goals reiterates ExxonMobil’s own Environmental Business Planning process, which is used ‘to identify key environmental drivers …, set targets in key focus areas, and identify projects and actions to achieve those targets.’ (Carbon Disclosure Project 6 [CDP6], 3(a) iii)

ExxonMobil has not sufficiently explained to shareholders why setting carbon reduction goals for its operations and products would be negative for the Company or its business performance. ExxonMobil already sets specific targets for many aspects of financial performance, and increasingly, non-financial performance, such as operations and refinery energy efficiency (10% by 2012), VOCs (5% reductions per year), upstream flaring volumes (20% cuts from 2008 baseline), NOx and SO2 (70% reduction by 2012 from 2000 baseline).

There have been marked improvements in ExxonMobil’s latest CSR report, and our Company has made solid investments in energy efficiency, the low hanging fruit. Our Company is very successful in developing clear business goals and strategies for their implementation. ExxonMobil has the capacity for bold responses to climate change, as it does with tanker spills and safety. However, shareholders were disappointed by the company’s tone at the last annual meeting and the continued resistance to articulate a business plan for aggressively addressing emissions challenges. Proponents believe our Board has never sufficiently responded to shareholders in their request for a cohesive vision for dealing with climate risk and opportunity, including articulating goals for reducing GHG emissions from ExxonMobil’s products AND operations.

It is widely agreed that research has understated the enormity of the problem of GHG emissions. Investors and stakeholders expect this Company to take leadership in developing solutions as it plays such a critical role in energy markets; setting clear strategies and goals in the context of a comprehensive emissions response is long overdue.

 

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THEREFORE, BE IT RESOLVED: shareholders request that the Board of Directors adopt quantitative goals, based on current technologies, for reducing total greenhouse gas emissions from the Company’s products and operations; and that the Company report to shareholders by September 30, 2010, on its plans to achieve these goals. Such a report will omit proprietary information and be prepared at reasonable cost.”

The Board recommends you vote AGAINST this proposal for the following reasons:

ExxonMobil’s technical and management capabilities will be essential to meet growing global demand for energy and to address greenhouse gas emissions. That said, the Board does not believe that setting absolute goals to reduce emissions from operations and product use is the most effective way for the Company to manage greenhouse gas emissions or climate risks. Rather, we believe that ExxonMobil will make an effective contribution to this challenge by helping to meet growing demand for our products efficiently and economically and by promoting longer-term improvements in emissions from our operations and end-uses of our products through advanced technology.

In general, it requires energy to produce and process oil and gas, so increases in production volumes lead to increases in emissions. Energy efficiency improvements and other steps such as flare reduction can help to offset emissions growth. However, other factors lead to higher emissions; these include the more energy-intensive efforts required to produce some new resources, to process heavier, more sour crude oil, and to manufacture cleaner products. To be useful as a tool, goals for greenhouse gas emissions would need to reflect accurately the coincident impact of largely unforeseeable year-to-year changes in external market demand, weather, internal production growth, changing patterns of investment, regulation, technological advancements, efforts of business partners, efforts of National Oil Company partners, and demand volume by product type – all calculated across the many countries in which ExxonMobil operates. Goals set against these many variables would be extremely difficult to promote as realistic.

The Company’s approach to greenhouse gas emissions reductions is workable, sustainable, and effective; it would not be enhanced by the publication of a goal such as has been suggested here. Therefore, the Board does not support this proposal.

In the recent report, The Outlook for Energy – A View to 2030 (available on our Web site), ExxonMobil provides a comprehensive discussion of the Company’s views and actions to manage its business in the face of ever-changing conditions. Outlooks by the International Energy Agency and other major governmental institutions continue to forecast growing demand for fossil fuels in coming decades, even after allowing for major efficiency gains. ExxonMobil seeks to contribute responsibly to meeting growing global demand through ongoing efforts to improve efficiency and reduce emissions from operations in the near term as production grows, for instance through flare reduction. At the same time, the Company also invests in research and development to create effective, affordable, game-changing technologies with lower emissions that can be deployed on a large scale in the future.

Emissions from customers’ use of products are determined both by their need for energy services, such as transport, and the efficiency with which they use energy, for example through vehicle choice. For years the Company has maintained research to identify and develop technologies that improve the efficient use of its products. Over the past three years, ExxonMobil announced the development of a new technology for on-board hydrogen reforming to power fuel cell vehicles, deployment of new battery separator films for use in lithium-ion batteries in hybrid and electric vehicles, a major pilot project to demonstrate more efficient means to capture carbon dioxide from produced gas, and a significant investment in research on renewable, algae-based fuels.

ExxonMobil seeks to increase production of oil and gas efficiently and economically to meet growing global energy demand and to maintain leadership in return to shareholders. In doing so the Company will continue to take steps to improve efficiency, reduce emissions, and contribute to effective long-term solutions to manage climate risks.

 

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ITEM 13 – PLANNING ASSUMPTIONS

This proposal was submitted by Ms. Neva Rockefeller Goodwin, 30 Rockefeller Plaza, Room 5600, New York, NY 10112, as lead proponent of a filing group.

“RESOLVED that shareholders of Exxon Mobil Corporation (‘ExxonMobil’) ask the board of directors to consider in its strategic planning process the risk that demand for fossil fuels in the next 20 years could be significantly lower than ExxonMobil has projected, and report to shareholders (at reasonable cost and omitting proprietary information), no later than November 30, 2010, on how such demand reduction would affect ExxonMobil’s long-term strategic plan.

SUPPORTING STATEMENT

ExxonMobil has based its strategic direction, emphasizing oil and gas production, on the assumption that fossil fuel demand will rise substantially between now and 2030. ExxonMobil predicts that global energy demand will rise on average by 1.2% per year between now and 2030, propelled by demographics and economic growth. ExxonMobil counts on demand rising much more rapidly in the developing world, especially in the Asia Pacific region. (ExxonMobil, The Outlook for Energy: A View to 2030 5-7 (2008) (available at http://www.exxonmobil.com/corporate/files/news_pub_2008_energyoutlook.pdf)

In the transportation sector, ExxonMobil assumes that energy demand will increase by 40% by 2030, and that oil will account for 94% of transportation energy use in 2030. In China, ExxonMobil predicts that transportation fuel demand is likely to triple by 2030, as economic growth will lead to an increase in the currently low rate of vehicle ownership. (Id. at 7-8, 10)

Under some scenarios, however, such as the International Energy Agency’s ACT Map 2050 and BLUE Map 2050 scenarios, ExxonMobil’s optimistic predictions will not hold. First, developing countries may seek to head off the effects of climate change by funding non-carbon-based energy technologies. China’s announced plan to become the world leader in manufacturing electric and hybrid cars and buses, in order to reduce urban pollution and dependence on oil, illustrates this possibility. (See Keith Bradsher, ‘China Vies to be World’s Leader in Electric Cars,’ New York Times, Apr. 1, 2009)

Second, the devastating physical and social effects of climate change could inhibit developing nations’ economic growth, blunting energy demand. As stated by The Prince Of Wales Corporate Leaders Group on Climate Change in a November 30th, 2007 Communique: ‘The economic and geopolitical costs of unabated climate change could be very severe and globally disruptive. All countries and economies will be affected, but it will be the poorest countries that will suffer earliest and the most’.

To the extent that ExxonMobil’s growth relies on the sale of hydrocarbon energy to emerging markets, it faces a painful paradox, and distances itself from its true legacy. Part of John D. Rockefeller’s genius was in recognizing early on the need and opportunity for a transition to a better and cheaper fuel. Recognizing the risk that demand may not increase as projected will allow ExxonMobil’s board to begin reframing the company’s identity as an energy company, rather than an oil and gas company, and to become part of the solution to the climate and energy crisis.

We urge shareholders to vote for this proposal.”

The Board recommends you vote AGAINST this proposal for the following reasons:

The Outlook for Energy – A View to 2030, released by ExxonMobil in December 2009, and available on our Web site at exxonmobil.com/energyoutlook, outlines the magnitude of the world’s economic, energy, and environmental challenges. Growing populations and expanding prosperity will drive global energy demand almost 35 percent higher from 2005 to 2030 – even with substantial energy-efficiency gains. While all viable sources of energy should be pursued, the scale and nature of the outlook means that the Corporation’s traditional business focus areas will remain indispensable for decades.

The methodology used to develop The Outlook for Energy includes a detailed assessment of energy trends, as well as a broad range of assumptions regarding future demand, sources of supply, and a wide variety of technologies. This ongoing assessment process takes advantage of decades of experience in

 

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conducting this analysis, and utilizes in-house expertise as well as input from a wide variety of third-party organizations. Preparing separate reports dealing with particular proponents’ or advocates’ beliefs would not be a productive use of our shareholders’ investment. Therefore, the Board does not support this proposal.

Oil will remain the largest energy source through 2030, reflecting the fact that it remains the only fuel with the scale, infrastructure, and energy density needed to meet the majority of the world’s transportation demands. Natural gas will be the fastest growing major fuel, aided by new technologies that have unlocked supplies trapped in dense rock formations, and its properties as a clean-burning fuel for power generation that can serve economic progress while helping mitigate environmental impacts.

The International Energy Agency also recognizes the world’s growing needs for oil and natural gas, and recently estimated that related supply investments will need to average about $480 billion a year over 2008 to 2030. This signals a significant call on the capabilities of the Corporation and the opportunity to provide tremendous value.

The Corporation is committed to providing sensible, broad-based solutions to help meet these challenges, consistent with long-term fundamentals and ExxonMobil’s proven business approach. The Corporation’s active involvement in research on alternative energy technologies enables it to readily assess new developments for possible commercialization and investment to improve shareholder value.

ADDITIONAL INFORMATION

Other Business

We are not currently aware of any other business to be acted on at the meeting. Under the laws of New Jersey, where ExxonMobil is incorporated, no business other than procedural matters may be raised at the meeting unless proper notice has been given to the shareholders. If other business is properly raised, your proxies have authority to vote as they think best, including to adjourn the meeting.

People with Disabilities

We can provide reasonable assistance to help you participate in the meeting if you tell us about your disability and your plans to attend. Please call or write the Secretary at least two weeks before the meeting at the telephone number, address, or fax number listed under “Contact Information” on page 3.

Outstanding Shares

On February 28, 2010, there were 4,713,657,041 shares of common stock outstanding. Each common share has one vote.

How We Solicit Proxies

In addition to this mailing, ExxonMobil officers and employees may solicit proxies personally, electronically, by telephone, or with additional mailings. ExxonMobil pays the costs of soliciting this proxy. We are paying D.F. King & Co. a fee of $30,000 plus expenses to help with the solicitation. We also reimburse brokers and other nominees for their expenses in sending these materials to you and getting your voting instructions.

Shareholder Proposals for Next Year

Any shareholder proposal for the annual meeting in 2011 must be sent to the Secretary at the address or fax number of ExxonMobil’s principal executive office listed under “Contact Information” on page 3. The deadline for receipt of a proposal to be considered for inclusion in the proxy statement is 5:00 p.m., Central Time, on December 14, 2010. The deadline for notice of a proposal for which a shareholder will conduct his or her own solicitation is February 25, 2011. On request the Secretary will provide instructions for submitting proposals.

 

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Duplicate Annual Reports

Registered shareholders with multiple accounts may authorize ExxonMobil to discontinue mailing extra annual reports by marking the “discontinue annual report mailing for this account” box on the proxy card. If you vote via the Internet or by telephone, you will also have the opportunity to indicate that you wish to discontinue receiving extra annual reports. At least one account must continue to receive an annual report. Eliminating these duplicate mailings will not affect receipt of future proxy statements and proxy cards.

You may discontinue duplicate mailings by calling ExxonMobil Shareholder Services at the toll-free telephone number listed at the top of page 4 at any time during the year. Beneficial holders can contact their banks, brokers, or other holders of record to discontinue duplicate mailings.

Shareholders with the Same Address

If you share an address with one or more ExxonMobil shareholders, you may elect to “household” your proxy mailing. This means you will receive only one annual report and proxy statement at that address unless one or more shareholders at that address specifically elect to receive separate mailings. Shareholders who participate in householding will continue to receive separate proxy cards. Householding will not affect dividend check mailings. We will promptly send a separate annual report and proxy statement to a shareholder at a shared address on request. Shareholders with a shared address may also request us to send separate annual reports and proxy statements in the future, or to send a single copy in the future, if we are currently sending multiple copies to the same address.

Requests related to householding should be made by calling ExxonMobil Shareholder Services at the telephone number listed at the top of page 4. Beneficial shareholders can request information about householding from their banks, brokers, or other holders of record.

Financial Statements

The year 2009 consolidated financial statements and auditors’ report, management’s discussion and analysis of financial condition and results of operations, information concerning the quarterly financial data for the past two fiscal years, and other information, including stock performance graphs, are provided in Appendix A.

SEC Form 10-K

Shareholders may obtain a copy of the Corporation’s Annual Report on Form 10-K to the Securities and Exchange Commission without charge by writing to the Secretary at the address listed under “Contact Information” on page 3, or by visiting ExxonMobil’s Web site at exxonmobil.com/financialpublications.

 

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APPENDIX A

FINANCIAL SECTION

TABLE OF CONTENTS

 

Business Profile

   A-2

Financial Summary

   A-3

Frequently Used Terms

   A-4

Quarterly Information

   A-6

Management’s Discussion and Analysis of Financial Condition and Results of Operations

    

Functional Earnings

   A-7

Forward-Looking Statements

   A-8

Overview

   A-8

Business Environment and Risk Assessment

   A-8

Review of 2009 and 2008 Results

   A-11

Liquidity and Capital Resources

   A-12

Capital and Exploration Expenditures

   A-15

Taxes

   A-16

Environmental Matters

   A-16

Market Risks, Inflation and Other Uncertainties

   A-17

Recently Issued Statements of Financial Accounting Standards

   A-18

Critical Accounting Policies

   A-18

Management’s Report on Internal Control Over Financial Reporting

   A-22

Report of Independent Registered Public Accounting Firm

   A-22

Consolidated Financial Statements

    

Statement of Income

   A-24

Balance Sheet

   A-25

Statement of Cash Flows

   A-26

Statement of Changes in Equity

   A-27

Statement of Comprehensive Income

   A-28

Notes to Consolidated Financial Statements

    

1. Summary of Accounting Policies

   A-29

2. Accounting Changes

   A-30

3. Miscellaneous Financial Information

   A-31

4. Cash Flow Information

   A-31

5. Additional Working Capital Information

   A-31

6. Equity Company Information

   A-32

7. Investments, Advances and Long-Term Receivables

   A-33

8. Property, Plant and Equipment and Asset Retirement Obligations

   A-33

9. Accounting for Suspended Exploratory Well Costs

   A-34

10. Leased Facilities

   A-36

11. Earnings Per Share

   A-36

12. Financial Instruments and Derivatives

   A-37

13. Long-Term Debt

   A-37

14. Incentive Program

   A-42

15. Litigation and Other Contingencies

   A-44

16. Pension and Other Postretirement Benefits

   A-46

17. Disclosures about Segments and Related Information

   A-52

18. Income, Sales-Based and Other Taxes

   A-54

Supplemental Information on Oil and Gas Exploration and Production Activities

   A-56

Operating Summary

   A-68

Stock Performance Graphs

   A-69

 

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BUSINESS PROFILE

 

Financial


   Earnings After
Income Taxes

   Average  Capital
Employed

  Return on
Average Capital
Employed

   Capital  and
Exploration
Expenditures

   2009

   2008

   2009

   2008

  2009

  2008

   2009

   2008

     (millions of dollars)   (percent)    (millions of dollars)

Upstream

                                                 

United States

   $ 2,893     $ 6,243     $ 15,865     $ 14,651    18.2    42.6     $ 3,585     $ 3,334 

Non-U.S.

     14,214       29,159       57,336       51,413    24.8    56.7       17,119       16,400 
    

  

  

  

 
 
  

  

Total

   $ 17,107     $ 35,402     $ 73,201     $ 66,064    23.4    53.6     $ 20,704     $ 19,734 
    

  

  

  

 
 
  

  

Downstream

                                                 

United States

   $ (153)    $ 1,649     $ 7,306     $ 6,963    (2.1)   23.7     $ 1,511     $ 1,636 

Non-U.S.

     1,934       6,502       17,793       18,664    10.9    34.8       1,685       1,893 
    

  

  

  

 
 
  

  

Total

   $ 1,781     $ 8,151     $ 25,099     $ 25,627    7.1    31.8     $ 3,196     $ 3,529 
    

  

  

  

 
 
  

  

Chemical

                                                 

United States

   $ 769     $ 724     $ 4,370     $ 4,535    17.6    16.0     $ 319     $ 441 

Non-U.S.

     1,540       2,233       12,190       9,990    12.6    22.4       2,829       2,378 
    

  

  

  

 
 
  

  

Total

   $ 2,309     $ 2,957     $ 16,560     $ 14,525    13.9    20.4     $ 3,148     $ 2,819 
    

  

  

  

 
 
  

  

Corporate and financing

     (1,917)      (1,290)      10,190       23,467    —      —         44       61 
    

  

  

  

 
 
  

  

Total

   $ 19,280     $ 45,220     $ 125,050     $ 129,683    16.3    34.2     $ 27,092     $ 26,143 
    

  

  

  

 
 
  

  

See Frequently Used Terms for a definition and calculation of capital employed and return on average capital employed.

 

Operating


   2009

     2008

     (thousands of barrels daily)

Net liquids production

           

United States

   384      367

Non-U.S.

   2,003      2,038
    
    

Total

   2,387      2,405
    
    
     (millions of cubic feet daily)

Natural gas production available for sale

           

United States

   1,275      1,246

Non-U.S.

   7,998      7,849
    
    

Total

   9,273      9,095
    
    
     (thousands of oil-equivalent barrels daily)

Oil-equivalent production (1)

   3,932      3,921
     (thousands of barrels daily)

Refinery throughput

           

United States

   1,767      1,702

Non-U.S.

   3,583      3,714
    
    

Total

   5,350      5,416
    
    
     (thousands of barrels daily)

Petroleum product sales

           

United States

   2,523      2,540

Non-U.S.

   3,905      4,221
    
    

Total

   6,428      6,761
    
    
     (thousands of metric tons)

Chemical prime product sales

           

United States

   9,649      9,526

Non-U.S.

   15,176      15,456
    
    

Total

   24,825      24,982
    
    

 

(1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels.

 

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Table of Contents

FINANCIAL SUMMARY

 

     2009

    2008

    2007

    2006

    2005

 
   (millions of dollars, except per share amounts)  

Sales and other operating revenue (1) (2)

   $ 301,500      $ 459,579      $ 390,328      $ 365,467      $ 358,955   

Earnings

                                        

Upstream

   $ 17,107      $ 35,402      $ 26,497      $ 26,230      $ 24,349   

Downstream

     1,781        8,151        9,573        8,454        7,992   

Chemical

     2,309        2,957        4,563        4,382        3,943   

Corporate and financing

     (1,917     (1,290     (23     434        (154
    


 


 


 


 


Net income attributable to ExxonMobil

   $ 19,280      $ 45,220      $ 40,610      $ 39,500      $ 36,130   
    


 


 


 


 


Earnings per common share

   $ 3.99      $ 8.70      $ 7.31      $ 6.64      $ 5.74   

Earnings per common share – assuming dilution

   $ 3.98      $ 8.66      $ 7.26      $ 6.60      $ 5.70   

Cash dividends per common share

   $ 1.66      $ 1.55      $ 1.37      $ 1.28      $ 1.14   

Earnings to average ExxonMobil share of equity (percent)

     17.3        38.5        34.5        35.1        33.9   

Working capital

   $ 3,174      $ 23,166      $ 27,651      $ 26,960      $ 27,035   

Ratio of current assets to current liabilities (times)

     1.06        1.47        1.47        1.55        1.58   

Additions to property, plant and equipment

   $ 22,491      $ 19,318      $ 15,387      $ 15,462      $ 13,839   

Property, plant and equipment, less allowances

   $ 139,116      $ 121,346      $ 120,869      $ 113,687      $ 107,010   

Total assets

   $ 233,323      $ 228,052      $ 242,082      $ 219,015      $ 208,335   

Exploration expenses, including dry holes

   $ 2,021      $ 1,451      $ 1,469      $ 1,181      $ 964   

Research and development costs

   $ 1,050      $ 847      $ 814      $ 733      $ 712   

Long-term debt

   $ 7,129      $ 7,025      $ 7,183      $ 6,645      $ 6,220   

Total debt

 &n