Effective March 29, 2010, issuers and other soliciting persons will have additional flexibility in posting their proxy materials on their websites. Under the SEC’s new amendments to its “notice and access” model rules for proxy materials, both issuers and other soliciting persons (1) have greater flexibility with regard to the form and content of the Notice of Internet Availability of Proxy Materials (“Notice”) that they must provide to shareholders, and (2) can better explain to shareholders the importance and reasons for use of the notice and access proxy rules. Soliciting persons other than issuers also have more time for delivery of a Notice to shareholders.
More specifically, the SEC amendments to its notice and proxy access rules include the following:
- Format of Notice. The amendments provide additional flexibility in formatting and selecting the language to be used in the Notice. The information appearing in the Notice is required to address certain topics, without specifying the exact language to be used.
- Notice is Not a Form for Voting. The amendments require that the Notice indicate that it is not a form for voting.
- Explanation of Notice and Access. The amendments permit issuers and other soliciting persons to include with the Notice an explanation of not only the notice and access model, but also of (1) the process of receiving and reviewing the proxy materials and voting, and (2) the reasons for the use of the notice and access rules. However, the new rules still prohibit the distribution of materials that are designed to persuade shareholders to vote in a particular manner or change the method of delivery of proxy materials.
- Notice Need Not Mirror Proxy Card. The SEC has confirmed that it is not necessary for the Notice to directly mirror the proxy card. The Notice must still clearly and impartially identify each separate matter intended to be acted on that will be considered at the meeting, but the Notice does not have to conform to the specific formatting and content requirements for disclosure matters on the proxy card set forth in Exchange Act Rule 14a-4.
- Timing of Soliciting Person’s (Non-Issuer) Notice. The amendments now require soliciting persons other than the issuer to file a preliminary proxy statement within 10 calendar days after the issuer files its definitive proxy statement and to send their Notice to shareholders no later than the date on which they file their definitive proxy statement with the SEC. The effect of this amendment is to increase the time allowed for non-issuer soliciting persons to comply with the notice and access rules delivery requirement. While the rule does not provide for a specific period of time before the meeting by which a soliciting person is required to mail the Notice, the soliciting person should, and generally it would be in the best interest to, make the Notice and proxy materials available to shareholders with sufficient time for shareholders to review the materials and make an informed voting decision.
The new rules become effective 30 days after being published in the Federal Register.
The release does not address whether a company is permitted to follow the amended notice and access rules in advance of the effective date on a voluntary basis.