Following up on last week’s blog about the SEC’s e-delivery proposal, here’s an excerpt from this Cooley Alert penned by Brad Goldberg, Beth Sasfai, Michael Mencher, Luci Altman, Justin Kisner and Reid Hooper:
“Impact on proxy season
For public companies, the proposal’s most immediate practical impact falls on the annual proxy process. Transitions to default electronic delivery of proxy statements and annual meeting materials could meaningfully reduce printing and mailing costs and lessen the administrative burden associated with annual meeting preparation.
Current delivery framework
Currently, issuers may satisfy proxy delivery obligations either by mailing a full set of proxy materials (on paper or electronically, for shareholders who previously opted in) or by using the SEC’s notice-and-access model, under which shareholders receive a paper Notice of Internet Availability directing them to proxy materials posted online.
Replacing the paper notice
The proposal would eliminate the paper Notice of Internet Availability as a stand-alone delivery method. In its place, shareholders with an electronic address who have not opted out would receive an electronic statement of availability, delivered to their electronic address and including a direct link to the proxy materials posted online. Shareholders would retain the right to opt out and receive a full paper set of materials at any time.
Related amendments to Exchange Act Rule 14a-16
The proposed changes to Rule 14a-16 under the Securities Exchange Act of 1934, as amended (Exchange Act), would also eliminate the long-standing 40-calendar-day e-proxy deadline. Because that deadline was specifically designed to give shareholders sufficient time to receive the paper notice, request paper copies of the materials, if desired, and review the proxy materials prior to executing a proxy, its removal follows naturally from the elimination of the paper notice itself. The proposal would also extend the electronic delivery framework to business combination proxy solicitations, which have historically required delivery of a full paper set of materials.”
Authored by
Broc Romanek