Continental Stock Transfer
 

 

Annual Meeting Guide
2008

Next Page
Opening Page
Introduction
Stage 1: Preparation
Stage 2: Mailing
Stage 3:
Vote Tabulation and
Annual Meeting

Glossary of Terms

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Introduction

You may recall that we introduced our 2007 Annual Meeting Guide by emphatically stating: “No single corporate event is as important or as visible as the Annual Meeting of Shareholders. The event takes months of planning, involves countless hours for the preparation of the related financial documents, the arrangements for the Meeting, and the effort involved in the various stages required to secure the necessary shareholder votes in connection with the items on the proxy ballot.”

Proxy and Annual Meeting ServicesFor 2008, the above statement certainly continues to be absolutely true. It is, however, impacted by the introduction of new regulations in the form of Notice and Access requirements.

The SEC, prompted by advances in technology which will allow corporations the potential to realize significant cost savings while offering shareholders desirable options, has instituted new regulations related to the delivery of Annual Meeting materials.

We have thoroughly reviewed the options now available to our corporate clients and have developed a menu of services and capabilities that allow our clients to take full advantage of the potential cost savings possible under the regulations and, at the same time, provide shareholders with a rich array of options to obtain materials and cast their ballots.

As always, preparation is key. Our revised Annual Meeting Guide is designed to serve as an educational blueprint to be used in conjunction with your in-house Annual Meeting outline. The specific Notice and Access supplemental information and related updated exhibits describe the new requirements and processes in full detail. Our goal is to have you understand Notice and Access regulations and your choices under it. We also want you to have the tools you need to profit from this regulation. Hence, we ask you to review thoroughly the technology and capabilities we offer directly or through our industry-savvy partners.

Continental’s tools continue to include state-of-the-art, sophisticated Internet and telephonic capabilities. Expanded resources include online document conversion and web hosting, print-on-demand, warehousing, consulting services and more – all designed to allow you, our client, the best possible alternative under Notice and Access.

The 2008 Annual Meeting Guide is presented as an outline for our clients to assist in ensuring the success of their meetings. It contains several updated forms that will provide us with the information we need to position our resources to meet your specific needs and timeframes. As always, you are asked to complete the appropriate forms and provide us with the information we require. We urge you to involve us in your Meeting planning as soon as possible.

Continental is well prepared to provide experience, resources and insight to ensure that you meet your goals in an informed, timely, and cost-effective manner. Our goal is to make your Meeting a success. We begin by summarizing the Notice and Access regulations.

Notice and Access

The SEC rules can be viewed in their entirety at www.sec.gov (Release No. 34-56135). All large accelerated filers must use the Notice & Access Model by January 1, 2008. All other issuers have until January 1, 2009 to comply. We strongly recommend that our clients review all options available this year. The “Notice” part of the rule has options for compliance but the “Access” part has requirements that apply to all.

The “Notice” provisions allow two options: Notice Only and Full Set Delivery.

The “Access” requirements include Web Hosting of proxy materials and fulfillment of requests for hardcopy.

Notice Only

Under the Notice Only option a one-page document must be mailed to shareholders at least 40 days prior to the Meeting date. This document must inform the shareholders that the company’s proxy materials are electronically available at a specified web site; the letter must also explain how the proxy materials can be accessed.

The initial Notice cannot be accompanied by any other material, except for a notice of a Meeting, as required by State corporate law. Following the Notice mailing, issuers may elect to mail the proxy card beginning 10 or more days after. The proxy card mailing must also contain another copy of the original Notice.

Full Set Delivery

Annual MeetingUnder the Full Set Delivery option the issuer will follow the traditional method of providing proxy material. Shareholders will receive the proxy statement, Annual Report, proxy card and return envelope. In addition, shareholders must also receive a notice indicating that the materials may be obtained electronically.

This notice may be provided separately or incorporated into the proxy statement and proxy card. Another provision requires that the material must be posted on a publicly accessible and dedicated web site no later than the date the notice is sent to shareholders. This requirement eliminates the need to respond to requests for hard copy sets.

Combination of Both Models

The commission permits issuers to choose to use both models of delivery. A company can use Notice Only for certain categories of shareholders and Full Set Delivery for other categories. For example, a company can adopt Notice Only for its larger holders and Full Set for its smaller shareholders (e.g., 100 shares or less). If a company opts to use this option it must then follow the 40-day deadline.

Web Hosting

The regulation requires issuers to post their proxy material on a dedicated web site that provides a navigational toolbar and components to facilitate the viewing, downloading and printing of the Annual Meeting materials. The proxy material must be:
• Readable.
• Printable.
• Searchable.
• Essentially the same as the hard copy.

The dedicated web site must be cookie-free, i.e., no tracking of any kind (not the Issuer’s home page or the SEC Edgar address). This site must be accessible to shareholders by the date the mailing commences.

Fulfillment

The regulations mandate that hardcopy materials must be provided to any shareholder
making a verbal, written or electronic request for them. Requested materials must be sent via first class mail within three business days of the receipt of the request. Additionally, all materials must be retained on a web site and hard copy must be available for one year after the Annual Meeting. The three-day and first class delivery requirements do not apply to requests received after the meeting, however.

Proxy and Annual Meeting Services

Continental’s Proxy and Annual Meeting service offerings are the best in the industry. Not only do we “do it all,” we do it by employing full-time specialists year round to ensure that you and your staff deal only with knowledgeable personnel who are dedicated to specific tasks and available when you require them most. Assigning all Annual Meeting-related service functions to our specialized Proxy Department allows your regular Account Administrator to be available to you for crucial day-to-day needs without diversion. Having full-time Meeting specialists available to our clients distinguishes Continental from most, if not all, other agents.

Our services are supported by technology embedded in our Sungard processing system. In addition to the mailing and tabulation services you would expect, we are able to offer directly a number of other critical capabilities, including:
• DTC linkage.
• Electronic Broadridge linkage.
• Electronic distribution of Annual Meeting materials through ContinentaLink, our Internet connection.
• Householding of shareholder positions.
• Intuitive Internet voting.
• Telephonic voting.
• Incorporation of Employee Plan share positions.
• Interface with all outside solicitors.
• Reconcilement of “over-voted” positions, and, of course, the variety of services previously cited as now required under Notice and Access, including Fulfillment, online document conversion and Web hosting.

Clients needing specific assistance or expertise may choose to work with one of our expert partners with whom we coordinate. Among these are:
• Printing: Scotti Graphics, Inc.
• Proxy Solicitation: Morrow & Co.
• Shareholder Meeting Consultancy: Alliance Advisors, LLC.
• Online Document Conversion and Web Hosting: EZ-Online Documents.

Click here for a list of Continental Key Employee Contacts and Partners.

Annual MeetingContinental works closely with our clients and all of their outside vendors to coordinate the development of a proxy card and to manage required supplies. We also monitor the timing of key events to be certain all mailings are timely, and that street materials are properly managed. Partnership is a key to our approach to the entire Meeting cycle.

It will be critically important in 2008 to make decisions under Notice and Access and establish timelines and vendor relationships as soon as possible. Please direct any inquiry or question you may have to us as soon as possible.

Your experience tells you that a successful vote outcome depends on the cooperation and resources of a number of industry participants. DTC, Broadridge, a solicitor, a printer, and now in 2008, several others, may also be employed. This Meeting Guide outlines the roles each of these plays in the Meeting process and it provides sample letters, required forms, and detailed instructions to perform these important tasks.

Regulatory changes, which allow for majority voting on Director elections, have raised the bar to achieving a desired voting percentage. Your firm may need the special capabilities of a proxy solicitor in order to get the votes you need – even for a quorum. This may be true especially if any one of your proposals is controversial or is opposed by a known block or activist group. We work closely with all the major proxy solicitors, but we recommend Morrow & Co. because we find that they offer the best combination of expertise, responsive service, and technology.

Broadridge Financial Solutions, Inc. (Formerly ADP)

Broadridge plays a major role in facilitating communication between a corporate issuer and its shareholders. Since this communication is extremely important, the basic information we are providing on Broadridge’s role should help this communication process.

Five days after Broadridge has been informed of your record date and Meeting date, it will have an estimate of the material requirement to mail to beneficial shareholders. Three business days after the record date, Broadridge will provide a record date Position Report and Confirmation, indicating the exact material requirement to mail to your beneficial shareholders. Continental can provide you with these numbers, or, if you would like, you can visit Broadridge directly at www.broadridge.com, or use their automated system at 631.254.7067. Have your CUSIP number available to use the system.

For fulfillment under Notice and Access, intermediaries (Broadridge) must prepare their own Notice and customize it to indicate how clients can provide voting instructions to the intermediary. Please note that Broadridge must receive the link to your proxy materials no later than 5 business days prior to your mailing date. Hence, issuers will have to provide the Notice information to these intermediaries or their agents in advance of the 40-day mailing deadline.

The intermediary has three business days from receipt of the request from the investor for hard copy material to forward it to the company or its agent, which, in turn, has three business days from its receipt to forward it back to the intermediary, which again has three business days from its receipt of the materials to forward the request to the investor.

Obviously, when the various three day periods are totaled – with mailing times added – the cumulative time from investor request to the receipt of the requested package may be three weeks or longer. In this scenario, there may be very little time for the investor to vote or to vote in an informed manner.

Our View – Broadridge’s Proxy Services

You may be aware that Broadridge is offering its proxy distribution services for both registered and beneficial (street) holders. While the concept of “1-stop shopping” may seem appealing at first glance, experience over the past several years indicates that this approach results in a number of significant problems. Most notably, Broadridge does not provide the scope of services that we at Continental do. Additionally, using the Broadridge services for your registered shareholders will increase your costs.

Broadridge services fall short in several areas, as follows:
• Broadridge does not return address change information to the transfer agent. In this regard, their practice does not comport with SEC requirements, which mandate that issuers and their transfer agents record the “last date of contact.” This information must be maintained by your agent to comply with lost-shareholder search and escheatment requirements.
• Broadridge does not furnish the issuer with any shareholder comments. As an issuer, you are not able to address shareholders’ questions or concerns in a timely fashion.
• Broadridge does not forward any shareholder-appended information regarding transfers,
lost certificates, or other matters critical to maintaining pristine records and reducing escheatment costs.
• Broadridge requires transfer agents to supply registered information to them via tapes and lists, services which will result in additional costs.

Finally, many clients have contracts which already include the services Broadridge will offer. Contracting with Broadridge will merely double the cost without the issuer deriving additional benefit.

Continental is in the best position to distribute materials to your registered shareholders and to tally their votes in an accurate manner. We encourage you to use Broadridge for your beneficial holders only.

Overview

Continental’s experienced staff is available to assist you in achieving a smooth and cost-effective Meeting. However, there are several key tasks and recommended timelines for you to consider:
• Continental must be notified of the model you will employ under Notice and Assess when the record date and meeting date are set.
• Have the proxy card approved by Continental for printing by the record date.
• Establish and have the web site available on the mail date.
• Allow 4 to 5 weeks between the proxy mail date and the Meeting date (41 days under the Notice Only option).

The Annual Meeting project can best be viewed in a number of stages: Preparation, Mailing, and the Meeting/Tabulation. These stages are outlined on the following pages.

Directory of Exhibits

For a clear overview of the Annual Meeting process, click to view:
Exhibit: Proxy Department – Annual/Special Meeting Sequence (Flow Chart)
Exhibit: Typical Annual Meeting Timeline

Other helpful exhibits include:
Exhibit: Annual/Special Meeting Checklist
Exhibit: Glossary of Terms
Exhibit: Letter of Instruction to Continental
Exhibit: DTC Security Position Reports (SPRs)
Exhibit: Internet Setup Form
Exhibit: Online Proxy Information Access
Exhibit: Proxy Cards: Card 1 | Card 2 | Card 3 | Card 4
Exhibit: Sample Proxy Vote Totals
Exhibit: Sign Up Form
Contact Information for Continental and Our Partners

 

Next Page | Opening Page | Introduction | Stage 1: Preparation
Stage 2: Mailing | Stage 3: Vote Tabulation and Annual Meeting
Glossary of Terms