When I taught my law school classes, I would always touch on the “Race to the Bottom” among states competing for corporate franchise dollars and mention that New Jersey had the early lead in the competition in which Delaware ultimately prevailed. Exxon – f/k/a Standard Oil of New Jersey – was always my example of a company that chose The Garden State early on and that has remained there for more than a century. However, Exxon’s not likely to be a New Jersey corporation much longer, since it recently filed a preliminary proxy statement with the SEC asking shareholder to approve a move to Texas.

Exxon also filed soliciting materials containing the following talking points to explain the redomiciliation proposal to its shareholders:

Key message: Texas, as you likely are aware, is ExxonMobil’s home. After careful evaluation, our Board has determined that aligning our legal domicile with our operational home – Texas – benefits both shareholders and the Company, all while preserving shareholder rights.

– ExxonMobil is a Texas corporation in all but name, with most senior corporate executives and all corporate functions based in the state for the last 35 years. Our global headquarters are in Texas; approximately 30% of our global employees are based in Texas. Of the company’s U.S. employees, approximately 75% work in Texas and our U.S.-based research facilities are in Texas.

– We work in a long-cycle, complex industry where legal stability and certainty are critical. We believe Texas legislators, judges, and juries that are more familiar with our business are more likely to provide legal certainty.

– Texas has been deliberate in offering businesses a predictable and common-sense regulatory environment designed to support innovation, job creation, and economic growth, strengthening shareholder value over the long-term.

– The move would in no way alter our commitment to protecting shareholder rights. The Board compared shareholders’ rights under New Jersey and Texas law and believes the economic and voting rights of shareholders are comparable, and stronger in some areas. Importantly, the Company is not adopting any elective provisions of the Texas corporate statute that could be viewed as weakening shareholder rights as compared to New Jersey law.

I’ve got a couple of thoughts about Exxon’s proposed move. First, these talking points seem to check all of the investor relations boxes that FTI recommended in the memo I just blogged about. Second, like Sal Tessio, I understand that this is “just business,” and Exxon wants New Jersey to know that it’s always liked it.

That being said, I’m a little melancholy about the decision, because it represents the closing of a very long and storied chapter in American corporate history.  In that regard, check out Article FIFTH of Exxon Mobil’s current certificate of incorporation, which continues to list all of its founding shareholders, including John D. Rockefeller and the other trustees of The Standard Oil Trust.

– John Jenkins