Making Proxy Materials Available Through the Internet

The Securities and Exchange Commission (“SEC”) recently decided to allow issuers and other soliciting persons to furnish proxy materials to shareholders by posting them on an Internet website (other than EDGAR) and providing shareholders with a Notice of Internet Availability of Proxy Materials in a prescribed form. This “notice and access” model is voluntary, not mandatory; does not replace other methods of furnishing proxy materials in paper or email form; and can be used for all proxy solicitations except those relating to business combinations.  Unless a shareholder has already consented to electronic communications, issuers electing to follow the “notice and access” model must mail the Notice at least 40 calendar days prior to the shareholder meeting (other requirements apply to soliciting persons other than the issuer).  The Notice must include a prominent legend in bold-face type that states: “Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on [insert meeting date]” and must also include the following information mandated by the rules and requirements promulgated by the SEC:

  • A statement that the communication presents only an overview of more complete proxy materials available to shareholders on the Internet and a statement that shareholders are encouraged to access and review all of the important information contained in the proxy materials before voting.
  • A statement that proxy materials are available at a specified Internet Web site.
  • A notification to shareholders that if they want to receive a paper or e-mail copy of the documents, they must request one, a statement that there is no charge for requesting a copy, and a notice that a request for a copy must be made in the manner described in the Notice on or before a specified date in order to facilitate timely delivery.
  • The date, time, and location of the meeting, or if corporate action is to be taken by written consent, the earliest date on which the corporate action may be effected.
  • A clear and impartial identification of each separate matter intended to be acted on and the soliciting person’s recommendations regarding those matters, but no supporting statements.
  • A list of the materials being made available at the specified Internet Web site.
  • A toll-free telephone number, an e-mail address, and an Internet Web site where the security holder can request a copy of the proxy statement, annual report to security holders, and form of proxy, relating to all of the registrant’s future security holder meetings and for the particular meeting to which the proxy materials being furnished relate.
  • Any control/identification numbers that the security holder needs to access his or her form of proxy.
  • Instructions on how to access the form of proxy, provided that such instructions do not enable a security holder to execute a proxy without having access to the proxy statement and, if required, the annual report to security holders.
  • Information on how to obtain directions to be able to attend the meeting and vote in person.

Companies that send a Notice of Internet Availability of Proxy Materials must use plain English principles in the organization, language, and design of the notice including short sentences; definite, concrete, everyday words; active voice; tabular presentation or bullet lists for complex material, whenever possible; no legal jargon or highly technical business terms; and no multiple negatives.

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