The following Letter Type A, or variations thereof, was submitted by individuals or entities.
Letter Type A:
Mr. Jonathan G. Katz
Re: Proposed Rule for Internet Availability of Proxy Materials (Release No. 34-52926; File No. S7-10-05; 70FR74598, 12/15/05)
Dear Mr. Katz,
____________________________ is concerned with the Securities and Exchange Commission's proposed rule (File No. S7-10-05) that would permit the replacement of the current paper-based proxy materials process with an electronic system of notification and balloting. Under this proposed rule, companies could choose to provide shareholders with annual reports and proxy voting materials electronically, rather than on paper, and offer shareholders the option to receive the appropriate information on paper only if requested. As a company that manufacturers envelopes, --___________________________ is concerned about the negative impacts this proposed rule could have on our industry, as well as the industry's supply chain business, including printers, merchants and converters.
The paper products industry, like most U.S. manufacturing industries, faces significant challenges in the marketplace. _____________________________ believes that the proposed rule would represent another difficulty and could lead to further job losses in paper manufacturing and allied industries. A decrease in corporate dependency on envelopes would significantly impact our business, resulting in a likely 5% to 10% labor force reduction. These numbers are significant and would have a negative effect on our company and our employees.
Another concern with the proposed rule is that electronic balloting may not be fully utilized by those without internet access and the elderly. Studies show that only 22% of Americans 65 and older use the Internet; therefore more than 75% of elderly shareholders may not participate in the proxy voting process and would not receive their annual reports. Furthermore, some consumer research indicates that nearly 45% of Americans rely on the confidence, reliability, privacy and safety of receiving information on paper.
One option that could mitigate these concerns would be to offer an "Opt In" process in which shareholders would continue to receive paper-based materials unless specifically choosing to receive electronic documents, rather than the "Opt Out" process proposed in this rule that provides the company the ability to make that decision. Under an :Opt In" process, shareholder would continue to receive proxy materials in paper-based form and would only receive the electronic versions if requested. An "Opt In" program would strike an appropriate balance between reducing costs for financial companies while minimizing the negative impacts on the paper products and related industries.
_____________________ appreciates the ability to express its views on this proposed rule. Should you have any comments or questions, please contact ____________________