What is "Notice and Access?"

.“Notice and Access” generally refers to rules of the Securities and Exchange Commission governing how companies must provide proxy materials.  Under the notice and access model, a company may select either of the following two options for making proxy materials available to stockholders:   
·        The full set delivery option; or
·        The notice only option.
 A company may use a single method for all its stockholders, or use full set delivery for some while adopting the notice only option for others.

 What is the Full Set Delivery Option?
 Under the full set delivery option, a company delivers all proxy materials to its stockholders.  This delivery can be by mail or, if a stockholder has previously agreed, by e-mail.  In addition to delivering proxy materials to stockholders, the company must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website.   

What is the Notice Only Option? 
Under the notice only option, a company must post all its proxy materials on a publicly accessible website. However, instead of delivering its proxy materials to stockholders, the company instead delivers a “Notice of Internet Availability of Proxy Materials.”  The notice includes, among other matters:  

Information regarding the date and time of the meeting of stockholders as well as the items to be considered at the meeting; 
Information regarding the website where the proxy materials are posted; and various means by which a stockholder can request paper or e-mail copies of the proxy materials.
 If a stockholder requests paper copies of the proxy materials, these materials must be sent to the stockholder within three business days.  Additionally, paper copies must be sent via first class mail. 

SEC postpones implementation of shareholder proxy access

In the Order granting the postponement, the SEC granted a request by the Business Roundtable and the U.S. Chamber of Commerce to delay the effective date of the SEC’s new Rule 14a-11. The Business Roundtable and Chamber of Commerce had filed a petition on September 29 with the Court of Appeals for the District of Columbia Circuit seeking a review of the rule and alleging that the rule is unlawful. 

The SEC did not address the merits of that challenge, but agreed to exercise its discretion to postpone Rule 14a-11 and related amendments.The challenged rules, adopted on August 25, 2010, afford shareholders of public companies that have held more than a three percent stake for at least three years, the right to use the company's proxy materials to nominate their own candidates to the board of directors.

The SEC determined that a postponement would avoid “potentially unnecessary costs, regulatory uncertainty, and disruption” that might occur if the rules became effective during the Court’s consideration of the challenge. The rules were to have become effective on November 15, 2010. As a result of this postponement, in the upcoming proxy season companies most likely will not have to address the new shareholder proxy access rules.

 Although the SEC and the Business Roundtable and Chamber of Commerce will seek expedited review of the challenge in Court, a resolution is not expected before late spring 2011. Consequently, companies do not need to take the actions suggested in our September 1, 2010 alert because their proxy materials will not need to be made available to shareholders for board nominees this year

.

Proxy Access Final Rules