Top Banner
The Atlanta Chapter of NIRI Proudly Presents a Discussion About Notice and Access and Emerging Proxy Issues

AGENDA Overview of the Notice and Access Regulation

Jan 14, 2016



Simona Fircoiu

The Atlanta Chapter of NIRI Proudly Presents a Discussion About Notice and Access and Emerging Proxy Issues. AGENDA Overview of the Notice and Access Regulation Important Compliance Dates, Content of Messaging, Web /Voting Abilities Considerations of Notice and Access - PowerPoint PPT Presentation
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
  • The Atlanta Chapter of NIRI Proudly Presents a Discussion AboutNotice and Access and Emerging Proxy Issues


    Overview of the Notice and Access Regulation Important Compliance Dates, Content of Messaging, Web /Voting Abilities

    Considerations of Notice and Access Developing your Strategy, Mechanics, Action Steps and Web Demo

    Proxy Considerations Involving Notice and Access Proxy Implications, proposal Trends and Recommendations for your Meeting


  • *



    (Corporate Counseling

    (Corporate Finance and Securities

    (Corporate Responsibility

    (Mergers and Acquisitions

    (Public Finance

    (Venture Capital and Private Equity


    (J.D., Harvard Law School, cum laude, 1998

    (B.A., with highest honors, University of Texas at Austin, 1995




    (American Bar Association

    (Atlanta Bar Association

    (Georgia Bar Association

    Partner, Atlanta


    Phone 1.404.527.4647Fax 1.404.527.4198

    Stacy Ingram focuses on securities, corporate finance and mergers and acquisitions, along with providing general corporate counsel. She advises public companies on their reporting obligations under federal securities laws and the requirements of national stock exchanges. She also counsels public companies on governance matters and in particular Sarbanes-Oxley. Stacy serves as an editor of the McKenna Long & Aldridge Corporate Governance Quick Reference Guide, originally published in June 2004 and regularly updated as new rules and regulations are adopted.

    Stacys practice includes representing companies in a wide variety of financings, including public and private equity, convertible and debt securities offerings, venture capital financings, merger and acquisition transactions and related aspects of federal and state securities laws.

    Law & Politics and Atlanta Magazine recognized Stacy on their 2005 list of Georgia Super Lawyers Rising Stars.


    Co-Authored Tell Us About Executive Compensation NOW: The New Form 8-K Requirements under the SEC's New Executive Compensation Disclosure Rules, Financier Worldwide, December 2006.

    Co-Authored New Securities Litigation Hazards: The Ripple Effects of Sarbanes-Oxley, Washington Legal Foundation (Vol.18, No.19), May 23, 2003


    Speaker, What You Need to Know About E-Proxies: The SECs New E-Proxy Rules, ICLE Advanced Securities Law, March, 2007.

    Panelist, Dont Forget Your Warranty Obligations: Disclosure & Compliance Under Sarbanes-Oxley, 2007 Warranty Chain Management Conference, March 14, 2007.

    Panelist, Expanded Compensation Disclosure and Other Proxy Process ChangesAre You Prepared? National Investor Relations Institute, Atlanta Chapter, November 2006.

    Panelist, 60 Minutes Is Calling and You Dont Have a Crisis Plan Yet. Now What? Audit Committee Seminar, January 26, 2006.

    Panelist, Proxy Season Lessons from 05, Trends for 06 National Investor Relations Institute, Atlanta Chapter, November 2005.

    Speaker, Difficult Disclosure Issues MD&A and Form 8-K, ICLE Advanced Securities Law, March 25, 2005.

  • *


    Vice President & Product Manager at BNY Mellon Shareowner Services

    Specific focus is on the Meeting Services product portfolio

    Nearly 25 years of experience including product development, client management, transfer agency and annuity operations, process re-engineering and regulatory control.

    Current member of Stock Transfer Associations Proxy Committee.

    Frequent speaker at industry events on a variety of Meeting Services topics

    Robert M. Folinus

    Vice President & Product Manager

    BNY Mellon Shareowner Services

    480 Washington Boulevard

    Jersey City, NJ 07310


    Phone: (201) 680-3569

    Fax: (201) 680-4607

    Robert M. Folinus is Vice President and Product Manager at BNY Mellon Shareowner Services. In this role, Rob oversees the ongoing development and enhancement of Meeting Services, a comprehensive product portfolio that includes proxy tabulation, solicitation, financial printing, and member services for associations and non-profit organizations.

    Rob has been with BNY Mellon Shareowner Services for seven years. During this time, he has managed several Service Delivery business groups, worked in Client Management, and in 2005, transitioned into his present Product Manager role. Prior to joining The Bank of New York Mellon organization, Rob was with Prudential Investments, where he managed annuity operations. He also has 17 years of prior experience with Merrill Lynch, where he served in various capacities, including managing process re-engineering, overseeing a call center, and serving as the regulatory control manager for retirement plans.

    Rob is a member of the Stock Transfer Associations Proxy Committee and has served as president of the Securities Industry Associations Customer Account Transfer Division. He has a bachelors degree from Kean University and a masters degree from Rowan University. He has also been awarded business certificates from New York University and Rutgers University.

    Rob and his wife Sue have two sons, Jeff and Kevin. He enjoys boating, fishing and other outdoor activities.

  • *

    28 years experience with proxy solicitation, M&A and investor activism

    Member, National Investor Relations Institute (NIRI); Board member of NIRIs Service Provider Advisory Group

    Member, Society of Corporate Secretaries and Governance Professionals (formerly ASCS)

    Frequent speaker at industry events

    Regular guest lecturer at the NYU School of Continuing and Professional Studies Investor Relations: Issues in Corporate Disclosure

    Author of numerous articles and white papers, including most recently Flexible Proxy Voting in an Era of Disclosure (IR Update, May 2005)

    Ron Schneider

    Director, Business Development

    Proxy Solicitation and Meeting Services

    Mellon Investor Services

    480 Washington Boulevard

    Jersey City, NJ 07310


    Phone: (201) 680-5251

    Ron and his team provide their extensive expertise to clients faced with difficult and sensitive proxy solicitations involving compensation, corporate governance, shareowner activism and control issues. In addition to public companies in all industries and of all sizes, his clients include stock exchanges, private healthcare organizations and other mutual or member-owned organizations.

    He has personally managed more than 1,500 proxy solicitations and 200 tender or exchange offers. With success in greater than 76 percent of his over 30 proxy fight assignments, Ron has what is believed to be the highest winning percentage in the industry on behalf of clients facing such issues.

    Ron joined the Mellon organization in July 2000 as Senior Analyst in its proxy solicitation group, was named Senior Manager for the group in 2002, and in 2004 became Product Manager. In his business development role, he serves his clients as senior consultant on proxy-related issues.

    Prior to joining Mellon, Ron spent four years at The Financial Relations Board, a leading investor relations agency. There he managed its proxy solicitation, corporate governance and stock surveillance practice. Before that, he was a consultant to important proxy intermediary ADP Investor Communication Services, where he served as its first Issuer Liaison with responsibility for its relationships with issuer companies. Additionally, Ron has held increasingly senior positions at major proxy solicitation firms Morrow & Company, D.F. King and Georgeson & Company, where he served on its first Board of Directors.

    Ron earned a B.A. in Economics from Princeton University in 1978.

  • The New E-Proxy Rules:The Notice & Access ModelProvides companies with the alternative of mailing a one page Notice of Internet Availability of Proxy Materials (Notice) and providing proxy materials electronically through an Internet web site instead of traditional paper delivery of all proxy materials.

    Three Options for Compliance:Notice-Only DeliveryProxy materials posted on web site and only the Notice mailed to shareholdersFull Set DeliveryHard copies of all proxy materials mailed to shareholders, with Notice information incorporated in proxy statement and proxy card and proxy materials posted on web siteHybrid DeliveryNotice-only delivery to some shareholders and Full Set delivery to others.

  • Notice & Access ModelSend Notice (or full set of proxy materials) to shareholdersFileproxy materials, including Notice, with the SECPostproxy materials on a specified web siteOn the same day

  • Compliance DatesVoluntary Compliance Use of the Notice-only model is permitted for mailings on or after July 1, 2007 for any companyMandatory ComplianceLarge Accelerated Filers must use one of the three new methods (Notice-only, Full Set delivery or Hybrid) for any mailing on or after January 1, 2008All other filers must use one of the three new methods (Notice-only, Full Set delivery or Hybrid) for any mailing on or after January 1, 2009

  • Who Can Use Notice & Access?Available for issuers, intermediaries and soliciting persons other than the issuer Specific model used is at the election of the issuer or soliciting person election is meeting specificIntermediary must use the method selected by the issuer or soliciting personNot permitted in connection with business combination transactions

  • Delivery of the NoticeIf Notice-only or Hybrid delivery is used, the Notice must be sent at least 40 calendar days prior to the meeting dateNote that the Notice must actually be completed 45-47 days prior to the meeting date to give intermediaries time to create the voting instruction cards for beneficial holdersOnly two things can accompany (or be combined with) the Notice:Notice of meeting required by state law (if permitted under state law)Reply card to request paper or e-mail copies of proxy materialsFor any Notice-only deliveries, a proxy card cannot be sent with the first Notice

  • Ability to VoteConcurrently with delivery of the Notice, the issuer must provide a means of voting but not without access to proxy materialsElectronic voting platform linked to the Web siteTelephone number on the Web siteFor Notice-only delivery hard copy of proxy card can be sent 10 calendar days or more after the NoticeMust be accompanied with another copy of the Notice or with the proxy materials

  • Content of the Notice RequiredPlain English textBold-face legend with web site address and recommended deadline for requesting paper copiesDate, time and location of the meetingDescription of matters to be voted on and issuers recommendations but no supporting statementsList of proxy materials available on the web siteToll-free phone number, e-mail address and Internet address for requesting paper or e-mail copies (not required for Full Set delivery)Any control/identification numbers needed to voteInstructions on how to access the proxy card no execution of proxy without access to proxy materialsInformation about attending the meeting and voting in person

  • Content of the Notice OptionalState law meeting noticeAdvisory statement that no personal information is requiredPictures/logos/designs if not misleading

  • Web Site PostingDirect access to materials on publicly accessible web siteMaterials accessible on the site at no charge from the time the Notice (or full set of materials) is sent until the end of the meeting Materials must be:Readable and readily searchable on screenPrintable like a paper copyAmended/additional materials posted (and filed) no later than the day they are first made public

  • Opting OutUpon request, paper or e-mail copies must be sent to shareholders who receive Notice-only delivery:Until the conclusion of the meeting, materials must be sent within 3 business days of request and, if paper is requested, they must be sent by first class mail (or similar prompt service)Paper or email copies can be requested up to one year after the meeting but only prompt delivery is requiredRequest can be for the particular meeting or for all future solicitations

  • 33 Rule of Delivery for Beneficial OwnersIntermediary must request materials from issuer within 3 business days of owners requestIssuer must send to intermediary within 3 business days of intermediarys requestIntermediary must send to owner within 3 business days of receipt

    IssuerIntermediaryOwner333Request for Materials

  • Concerns Raised by the Notice & Access ModelMisuse of shareholder informationOver/Underestimation of number of printed copiesTiming and coordinationAdditional solicitation effortsNew or uncertain costs

  • Other Items on the 2008 Proxy AgendaExecutive Compensation DisclosureResults of SEC review of 350 public companies now availableISS (RiskMetrics) has released best practices reportExpecting revisions to disclosures in Year 2 to reflect SEC commentary and best practicesShareholder access to the proxy with respect to director electionsCompeting proposed SEC rulesSEC says it will adopt one for the 2008 proxy season, but so far, no indication of when (or if) that will occur

  • Elimination of Broker Discretionary Vote in Director ElectionsProposed change to NYSE Rule 452 to eliminate the discretion of brokers to vote shares beneficially owned by their clients for the election of directors if the client does not provide voting instructionsWould change director elections from:A routine matter, on which brokers have discretion to vote if the beneficial owner does not provide voting instructionsTO A non-routine matter, on which brokers cannot vote without beneficial owner instructionWould apply to any company publicly traded in the U.S.The majority of U.S. brokerage firms are regulated by the NYSE

  • Elimination of Broker Discretionary Vote in Director ElectionsWhat issues/concerns does the proposed rule change raise?Difficulty obtaining a quorum for meetings need for a routine matter on the ballotInteraction with Majority Voting requirements difficulty in obtaining a majority vote for directorsDifficulty and cost of reaching investors to encourage voting

    When will it go into effect?NYSE approved the rule in 2006 but determined to table the rule change for 2007 proxy season to allow companies to prepareNYSE filed its proposed rule change with the SEC with an expectation of approval by the SEC for shareholder meetings on or after January 1, 2008 due to other ongoing developments in 2008 (proxy access, notice & access, executive compensation disclosures) SEC has delayed approval so that effectiveness will not occur before January 1, 2009

  • Meeting Services OfferingCore Competencies Comprehensive, integrated solutions Highly experienced staff Industrial strength Highly scalable You already know and trust us

    Services Solicitation Printing and Logistics Tabulation

    Market Segments Public Corporations Shareholders/dissidents Mutual Funds Open end Closed End Member organizations Health Care Academic Non-profits


  • Notice-only Mailing Model Available to all issuers, effective July 1, 2007 Voluntary to use any aspect of the Notice and Access model

    Mandatory Notice Mailing Model For Large Accelerated Filers Mandatory compliance will be effective January 1, 2008 Allows for issuers to mail full set of compliance materials to shareowners as long as the following conditions are met: Compliance materials must still be housed online as per the voluntary model requirements Notice language must be included with the mailing

    The Notice and Access Rule*

  • Mailing of physical Notice to shareowners announcing availability of proxy materials on a specific web siteUnique shareowner voter control number is printed on noticeMailing cannot include proxy card or links to voting sitesNotice and Access web site must include:Online proxy materialsOption to link to online votingOption to request printed material Shareowners may request paper proxy materials & opt-out of future Notice mailings Shareowners consented to electronic delivery will receive email as usual -- no Notice needs to be mailedBNY Mellon Shareowner Services is prepared to help you maximize the benefits by leveraging systems and processes weve built to support this rule.*Mechanics of Notice and Access - Overview

  • Notice must include:

    URL to Web site where materials are posted

    Date, time & location of shareowner meeting

    Identification of proposals

    Toll-free #, e-mail address and URL to request hard copy proxy materials (provided by BNY Mellon)

    Complete list of materials posted to Web site

    Materials must be posted 40 calendar days prior to the meeting and for 12 months total

    *Mechanics of Notice and Access Overview (continued)

  • Determine with your legal counsel the date by which you are required to comply with the mandatory model and communicate this date with your Relationship Manager Large accelerated filers are required to comply with all mailings commencing on or after January 1, 2008 All other companies are required to comply with all mailings commencing on or after January 1, 2009

    Work with your Disclosure Committee to formulate a compliance timeline as necessary, noting that the 40-days before meeting mail date requirement is firm (translates to having materials completed at least 45 days before the meeting)

    Work with your Relationship Manager to analyze likely requirements for hard copy delivery requests *Client Action Steps

  • Decide on delivery method, and if Notice is chosenCommunicate this information with your Relationship Manager Fulfillment set-up for opt-out requests Mailing Notice-only vs. Notice of -plus full package (Mandatory option)Finalize all compliance materials 45 days prior to meetingCreate a PDF version for Mobular to add to websiteApprove Notice card and Proxy cardShip stock to mailing facility*Client Action Steps (continued)

  • URL for our test site:*Web Prototype Materials Presentation

  • *Web Prototype Materials Presentation

  • Will it result in decreased retail vote participation and less support for managements recommendations versus assertive institutional voters?

    If so, will other (costly?) measures be required to restore this lost vote?(e.g. NOBO list, telephone calls, reminder mailings)

    Related proxy considerations:

    NYSE proposes to eliminate broker discretionary voting on directors. All proposal types? Quorum? Reprieve for 2008 proxy seasonIncreasing frequency and degree of director withhold votes (perceived poor pay practices; ignored shareholder-proposals)Pressure to switch to majority from plurality election standardSpecific proposals on the proxy agenda (management versus shareholder sponsored)? Vote requirements? Your unique owner/voter profile?*Notice and Access Not in a Vacuum

  • *Companies Unique Ownership Profiles Proxy Implications

  • * Thus far in 2007, there were also 43 management-sponsored proposals of this type.*Trends in Shareholder-sponsored Resolutions



    Director withhold recommendations38%32%29%

    Against auditors recommendations7%4%2%

    Against option plans recommendations32%28%30%

    Type of Proposal2002200320042005200620072008


    Separate Chair/CEO23036295139

    Board independence12513310



    Declassify board424846484336*

    Redeem/vote on poison pill50845223126


    Executive Compensation

    Expensing of options269341100

    Review/limit executive compensation8288268272

    Performance-based/indexed options4605281328

    Approve/restrict golden parachutes191826221612


    New Issues

    Majority vote to elect directors12628738

    Advisory Vote on Compensation743



  • Approach holistically, giving equal consideration to potential cost-savings, investor preferences, and potential vote impactInternal collaboration: IR; Corporate Secretary; HRExternal collaboration: IR agency; Stock Watch provider; Proxy Solicitor (know your owner/voter profile)Consider stratified approach in year one (still mailing to the larger holders), and analyze those results before taking the full plungeReview the % of instructed vs discretionary votes (Broadridge)Continue to learn from the early adopters!!

    *Recommendations in Response

  • *We Are Here to Help You