Further Reading in this Issue:
Pros vs. Cons 
Staying Connected Under Any Rules
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On December 8, 2005, the SEC proposed amendments to the proxy rules under the Securities Exchange Act of 1934. If the proposals on Internet availability of proxy materials are adopted, issuers will be able to eliminate their obligation to print and mail hard copies of documents such as annual reports and proxy statements by posting the materials on the Internet and notifying shareholders of their availability. Shareholders who want hard copies would still be able to receive them at no cost, but they would need to request the documents.
Dubbed the “notice and access” model, the proposal is intended to take advantage of technological advances, the growth of the Internet and increased use of electronic communications to lower the costs of proxy solicitations which, ultimately, are borne by shareholders. And, since the new rule also would apply to soliciting persons other than issuers, they could also lower the cost of engaging in a proxy fight.
The SEC published the proposed rule in the Federal Register on December 15, 2005, and requested public comments by February 13, 2006. Although it is uncertain if and when Rule S7-10-05 will be adopted, it’s not too soon to be thinking about the best course of action for your company. Before you do, read on to find out who is on each side of the issue and what they’re saying.
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