Proposed E-Proxy Amendments

Originally published October 20, 2009

Keywords: Proxy materials, e-proxy, notice and access, Securities and Exchange Commission, SEC

On October 14, 2009, the US Securities and Exchange Commission proposed amendments to its rules requiring Internet availability of proxy materials, often referred to as the e-proxy rules, and provided guidance concerning certain requirements under the present rules. The e-proxy rules give issuers and other soliciting persons the option to provide proxy materials to shareholders under a notice and access option, where shareholders receive a notice that proxy materials are available on the Internet (with printed copies delivered only upon request), or under a full set delivery option, where shareholders are mailed the complete set of proxy materials. For a more detailed description of the SEC's current e-proxy rules, see our August 24, 2007, Securities Update, "E-Proxy: Understanding the New Delivery Options for the 2008 Proxy Season".

Summary of Proposed Rule Changes The proposed rule changes would:

Improve clarity of the notice of Internet availability of proxy materials — The proposed amendments would eliminate the specific wording of the current detailed legend requirement (other than the single line "Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting To Be Held on [insert meeting date]"). Instead, the proposal would require that the notice address specific topics, without mandating the exact language for such disclosure. Provide guidance regarding identification of matters to be acted upon — The SEC has provided further flexibility for the design of the notice of Internet availability of proxy materials by clarifying that while the notice must identify each matter that will be considered at the meeting (such as election of directors, ratification of auditors, approval of a stock option plan, etc.), the notice does not have to directly mirror the formatting and content of the proxy card. Allow for explanatory materials — The proposed amendments would also permit the notice of Internet availability to be accompanied by an explanation of the process for receiving or reviewing the proxy materials. These explanatory materials could be separately prepared by issuers, but the SEC expects that many issuers will use standardized materials prepared by proxy professionals. Revise deadlines for soliciting persons, other than the issuer — Currently, a soliciting person, other than...