The 2007 amendments to the eProxy delivery rules promulgated by the Securities Exchange Commission ("SEC") present potential cost and time savings for reporting financial institutions that elect to follow them to furnish proxy materials, including the proxy statement, proxy card and annual report, to shareholders.
Essentially, the eProxy delivery rules significantly reduce the paper delivery requirements by providing a "notice and access" method that consists of (1) posting the proxy materials on an internet website; and (2) mailing shareholders a written notice of availability of the proxy materials.
The notice of availability ("Notice") must comply with the following provisions:
I. Mandatory Legend
The Notice must include a prominent legend in bold-face type that states the following statements:
• Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Held on [insert meeting date].
• This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.
• The [proxy statement][information statement][annual report to security holders] [is/are] available at [insert Internet website address].
• If you want to receive a paper or e-mail copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before [insert date] to facility timely delivery. [put the instruction for making the hard copy request].
II. Mandatory Information
The Notice must also include the following information in understandable terms.
• The date, time and location of the meeting or, if action is to be taken by written consent, the earliest date on which the action may be effected;
• A clear and impartial identification of each separate matter intended to be acted on and the issuer's recommendations, if any, regarding those matters, but no supporting statements;
• A list of the materials being made available on the website;
• A toll-free telephone number, and email address and a web address where the shareholder can request a copy of the proxy materials, for all meetings and for the particular meeting to which the Notice relates;
• Any control/identification numbers that the shareholder needs to access his or proxy card;
• Instructions on how to access the proxy card, provided that the instructions do not enable a shareholder to execute a proxy without having access to the proxy statement and annual report;
• Information on how to obtain directions to be able to attend the meeting and vote in person; and
• A telephone number that the shareholder can call to ask questions about the solicitation process.
The reference to the web address must clearly indentify the location where the proxy materials are located. It must be specific enough to lead shareholders directly to the proxy material, rather than to the home page or other section of the web site, so that the shareholders do not have to browse to find the materials. All proxy materials to be furnished through the notice and access model for delivery of proxy materials, other than additional soliciting materials, must be posted on the Internet by the time the Company sends the Notice to the shareholders. The Notice must be sent to shareholders at least 40 calendar days in advance of the shareholder meeting.
Darlene D. Chiang, Esq. is the author of this post and may be contacted at dchiang@lpslaw.com Ms. Chiang counsels business clients and financial institutions on corporate and regulatory matters.
