Internet Availability of Proxy Materials (as amended 3/23/2010)

A Small Entity Compliance Guide^*

Introduction

Section 14(a) of the Exchange Act subjects any solicitation of proxies in connection with securities that are registered under Section 12 of the Exchange Act to the filing and disclosure requirements of the SEC's proxy rules, unless an exemption is available. Under the Internet Availability of Proxy Materials rules, companies and other soliciting parties are required to make their proxy materials available on an Internet site (other than the SEC's EDGAR web site).¹ A company or other party that is soliciting proxies has two options for providing the proxy materials to its shareholders—the "notice only" option or the "full set delivery" option. The "notice only" option and the "full set delivery" options are discussed in more detail below.

Notice Only Option

Under the "notice only" option, a company or other soliciting party must post its proxy materials on an Internet Web site and send a Notice of Internet Availability of Proxy Materials to its shareholders to inform them of the electronic availability of the proxy materials at least 40 days before the shareholder meeting to which the proxy materials relate.² The soliciting party must provide paper or electronic copies of the proxy materials to a requesting shareholder and allow shareholders to make an election to receive paper or electronic copies of proxy materials for future shareholder meetings. In addition, the Notice of Internet Availability of Proxy Materials must meet the following requirements:

• It must be written in plain English and contain an explanation how the Internet materials may be accessed;

• Contain the date, time and location of the meeting or date of corporate action;

• Include a clear and impartial identification of each matter the shareholder is voting on; and

• Contain a toll-free number, e-mail address and Web site address that shareholders may use to request copies of proxy materials (which must be provided at no charge), and include information about attending the shareholder meeting and voting in person.

Soliciting persons must also provide shareholders with a means to vote the proxy, such as electronic voting, voting by phone via a toll-free telephone number or a printable or downloadable proxy card, at the time the Notice is sent to shareholders.

In addition, soliciting persons are permitted to include with the Notice of Internet Availability of Proxy Materials:

• explanatory materials relating to the reasons for the use of the Notice and the process of receiving and reviewing proxy materials and voting; and

• in the case of mutual funds, a summary prospectus.

Full Set Delivery Option

The "full set delivery" option is similar to the traditional proxy delivery process. It allows a company or other soliciting party to deliver a full set of proxy materials to shareholders along with the Notice of Internet Availability of Proxy Materials. A soliciting party is not required to send a separate notice to inform shareholders of the electronic availability of its proxy materials if it has included all of the required information in a prominent place in the proxy materials delivered to shareholders. Under the "full set delivery" option, a soliciting party is not required to provide paper or e-mail copies of its proxy materials upon the request of a shareholder since shareholders would already have the full set of proxy materials. In addition, soliciting parties are not required to send the Notice of Internet Availability of Proxy Materials and a full set of proxy materials at least 40 days before the shareholder meeting date.

The following table compares some of the key differences between the notice only and full set delivery options:

Other Resources

The adopting release requiring the Internet Availability of Proxy Materials can be found on the SEC's website at http://www.sec.gov/rules/final/
2007/34-56135.pdf and amendments to those rules can be found on the SEC's website at http://www.sec.gov/rules/final/2010/33-9108.pdf.

The SEC's proxy rules can be accessed through the "Corporation Finance" section of the SEC's website at http://www.sec.gov/divisions/corpfin/
ecfrlinks.shtml.

Additional materials regarding the application of the proxy rules generally are available at http://www.sec.gov/divisions/corpfin/cfguidance.shtml.

Contacting the SEC

The SEC's Division of Corporation Finance is happy to assist small companies with questions regarding the Internet Availability of Proxy Materials rules and the SEC's proxy rules generally. You may contact the Division for this purpose at https://www.sec.gov/forms/corp_fin_interpretive or by telephone at (202) 551-3500. Questions on other corporate finance matters concerning small companies may be directed to the Division's Office of Small Business Policy through the above online form or by telephone at (202) 551-3460.

* This guide was prepared by the staff of the U.S. Securities and Exchange Commission as a "small entity compliance guide" under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules adopted by the SEC, but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements.

¹ The rules requiring Internet availability of proxy materials were adopted in July 2007 and were phased-in over two years. See Shareholder Choice Regarding Proxy Materials, Release No. 34-56135 (July 26, 2007) [72 FR 42222]. The rules were amended on February 22, 2010 to clarify and provide additional flexibility regarding the format of the Notice that is sent to shareholders, and to permit issuers and other soliciting persons to include certain explanatory materials relating to the rules with the Notice. See Amendments to Rules Requiring Internet Availability of Proxy Materials, Release No. 33-9108 (Feb. 22, 2010) [75 FR 9074].

² A soliciting person other than the issuer is not required to send a Notice 40 days prior to a shareholders' meeting, provided the soliciting person files a preliminary proxy statement within 10 calendar days after the issuer files its definitive proxy statement and the soliciting person sends its Notice to shareholders no later than the date on which it files its definitive proxy statement with the Commission.

http://www.sec.gov/rules/final/2010/33-9108-secg.htm