Important Information About Continental Stock Transfer
Proxy and Annual Meeting Guide
2011 Proxy Season Update
As is our custom, Continental Stock Transfer has prepared this updated summary of key regulatory changes to the proxy process for our 2011 Annual Meeting Guide. You should adapt these changes in planning for your 2011 Annual Meeting.
On October 18, 2010, the SEC issued proposed rules in response to the Dodd-Frank Wall Street Reform and Consumer Protection Act ("The Act"). These rules included requirements to implement voting on issues known as "Say-on-Pay," "Say-on-Frequency," and say on "Golden Parachutes" (in the event of a merger). The final rules were released on January 25, 2011. To view the rules in their entirety go to http://sec.gov/rules/final/2011/33-9178.pdf.
The requirements to hold shareholder advisory votes on these matters is in force and applies to Annual or other shareholder meetings held on or after January 21, 2011.
Consequently, all U.S. Public companies, excluding smaller reporting companies (public float of less than $75 million), are required to submit a non-binding Say on Pay proposal for a shareholder vote at least once every three years starting in 2011. This advisory only vote relates to the compensation of a company's executive officers. The outcome of the vote does not negate or otherwise change compensation decisions made by the Board of Directors or by the compensation committee.
Likewise, the result of the Say When On Pay, ("frequency") vote will be non-binding. Issuers may ignore the expressed preference of their shareholders; however, in doing so they may invite criticism and lead to possible future shareholder sponsored "frequency" proposals.
In fashioning a corporate recommendation, you must decide what frequency should be recommended, and, of course, you should consider shareholders' reaction.
One, Two or Three Years
Considerations
One Year An annual vote on this issue is the expressed preference of most investors surveyed.
Two Years A two year vote on Say on Pay indicates that investors wish to grant management a greater degree of faith and/or trust on decisions related to this issue. Companies with reasonably positive compensation, governance and performance histories might wish to choose this option.
Three Years This option is probably the appropriate recommendation for companies with the strongest compensation, governance and performance stories.
With these regulatory changes in mind, we are providing several reminders. These are some simple steps that can be taken to help ensure that your shareholder meeting is a success.
Early Planning Have a timeline of dates for each event leading to the meeting. Make certain that the timing of pertinent dates (record date, mailing date and meeting date) can be met by your staff, attorneys and vendors. Involve everyone in all planning discussions.
Contact the Proxy Department As soon as your dates are determined, notify Continental's Proxy Department so we can begin the broker search and provide notification to Depository Trust Company.
Notice & Access Consider an analysis of fees and review the timeline to determine if Notice & Access (N&A) is feasible and economical for your company. Our staff can assist you with this analysis.
Employee Plans Be certain that your Plan trustees are notified. If Continental will be the mailing agent and tabulator for your plans, be certain that you allow ample time for the conversion of the files and for the suppression of mailing duplicate sets of material.
Solicitor Your decision to hire a Proxy solicitor will depend on two factors: whether a non-routine proposal is on the ballot and/or if a large percentage of your shares are held in street name. Your experience in recent proxy contests may be helpful here. Continental can assist you in working with a solicitor and in determining whether you should retain one.
Printing Material Order enough material and make sure that your financial printer has enough time to complete the printing/shipment of materials to avoid errors and rush fees.
More information regarding the preparation for your Annual Shareholder meeting can be found in this Guide. You can contact Gail Schweda, directly at 212.845.3241 gschweda@continentalstock.com or Bruce Jacoby at 212.845.3240 bjacoby@continentalstock.com to assist in planning this.
Next Page | Opening
Page | Introduction| Stage
1: Preparation
Stage 2: Mailing | Stage
3: Vote Tabulation and Annual Meeting
Glossary
of Terms