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Annual
Meeting Guide Next Page
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Introduction
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.
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.
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.
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.
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.
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: 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.
The regulations
mandate that hardcopy materials must be provided
to any shareholder
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: Clients needing specific
assistance or expertise may choose to work
with one of our expert partners with whom we
coordinate. Among these are: Click here for a list of Continental Key Employee Contacts and Partners.
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 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.
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: 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.
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: 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.
For
a clear overview of the Annual Meeting process,
click to view: Other helpful exhibits include:
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For 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.
Under 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.
Continental
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.
Directory of Exhibits