The SEC recently announced that it has adopted amendments to the proxy rules, which will require companies to make their proxy materials available to shareholders on an Internet website. Large accelerated filers (excluding registered investment companies) must comply with the amendments starting January 1, 2008 and registered investment companies, soliciting persons other than issuers, and issuers that are not large accelerated filers must comply with the amendments starting January 1, 2009.
Companies and other soliciting persons may choose one of two options in order to provide shareholders with proxy materials: (1) the “notice only option”; or (2) the “full set delivery option.”
The “notice only option” requires companies to send a Notice of Internet Availability of Proxy Materials to its shareholders 40 calendar days or more in advance of a meeting. Notably, no other materials (including a proxy card) may be sent with the Notice, except for the notice of a shareholder meeting required by state corporation law. The “notice only option” also requires all proxy materials to be posted on a specified Internet website (other than EDGAR) by the time the company sends the Notice to shareholders. Under this option, companies are required, upon request from a shareholder, to deliver a hard copy of all proxy materials, at no charge to the requesting shareholder.
Under the “full set delivery option,” a company may continue to deliver its proxy materials to shareholders the traditional way – by sending them a hard copy of the materials. Two requirements, however, have been added to this option: (1) the company must provide the same information required in a Notice of Internet Availability of Proxy Materials with the proxy materials or in a separate notice; and (2) the company must post the proxy materials on a specified Internet website (other than EDGAR).
The amendments to the proxy rules do not apply to business combination transactions.