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National Investor Relations Institute (NIRI)

PondelWilkinson is attending the National Investor Relations Institute’s annual meeting in San Diego. Tune in to our Twitter feed to learn what’s going on with new governance requirements, changing markets and ever-evolving media.
 
 

PondelWilkinson Turns 40

Firm Spreads Insight with Formal Launch of Blog
 
In 1968, when Mel Rifkind launched his then eponymous specialty public relations firm on April fool’s day, some of his friends looked askance.
 
Mel may have been a bit nervous that day, but he was no fool. He opened his doors in a small office on mid-Wilshire, with a goal of building a firm that would stick to several guiding principles:  operate with the highest degree of integrity; provide thoughtful counsel; hire smart people; take on quality clients slowly and selectively; and always deliver results—guidelines that the firm continues steadfastly to follow today.
 
More than half of the current staff, including Principals Roger Pondel and Rob Whetstone, were students when Mel founded the company—Roger was in high school, Rob was finishing kindergarten. The other half were either in diapers or not yet born. One of Mel’s first clients, Bell Industries, is still active with us today.
 
In commemoration of the firm’s anniversary, we are launching pwinsight.com, our new blog that will focus on items of relevance for those who are employed by, and advise, publicly traded companies. We hope you find some of the items useful in the months to come and that you will click on the Subscribe button to automatically receive new postings.
 
To all of our clients and friends, thank you.  We deeply appreciate your business, are grateful for your friendship and support, and will continue to work diligently to maintain your loyalty and trust.

 

Roger Pondel and the entire team at PondelWilkinson
 
 

E-Proxy Solicitations – Navigating the Rules

What’s all the fuss about? After all, the SEC is only trying to provide shareholders with more options to access proxy materials, leverage technology and reduce costs for corporate issuers. While the SEC’s motivation to revise and modernize proxy solicitation procedures is commendable, navigating through the rules and how they apply to corporate issuers takes time.
 
In January 2007, the SEC adopted the Internet Availability of Proxy Materials rule, better known as the “Notice and Access Model,” which became effective March 30, 2007. This was a voluntary rule that leaves it up to the corporate issuer to decide whether or not to adopt e-proxy solicitations.
 
The rule incorporates guidance on a myriad of issues including but not limited to, householding, security and privacy issues, State Law Notices, the role of intermediaries, the mechanics of proxy solicitations, etc. Up to this point, the rule was voluntary
 
Then in June 2007 the SEC adopted additional amendments to the proxy rules under the Exchange Act, as well as approved the Shareholder Choice Regarding Proxy Materials rule. This is a mandatory rule that goes into effect January 1, 2008 for large accelerated filers (LAF) and January 1, 2009 for second tier filers and registered investment companies.
 
The SEC noted that it chose to adopt the proposal to “provide shareholders with enhanced choices without changing significantly the obligations of an issuer or other soliciting person.” In other words, the new rules should be no big deal to implement.
 
So what are a company’s obligations under the Shareholder Choice Regarding Proxy Materials rule? In simple terms, they are:
 

  1. If an issuer is required to furnish proxy materials to shareholders, then the issuer must also post its proxy materials on a specified, publicly-accessible Internet Web site (EDGAR does not apply here) and provide shareholders with a notice informing them that the materials are available as well as explain how to access those materials.NOTE: This rule does not apply to a proxy solicitation related to a business combination transaction.
     

  2. An issuer has two options to make proxy materials available to shareholder:
     

      A – The “notice only option” – requires an issuer to post its proxy materials on an Internet Web site and send a Notice to shareholders to inform them of electronic availability of the proxy materials at least 40 days before the shareholders meeting. If an issuer opts to use this option, it must respond to shareholder requests for paper copies and must offer shareholders the option to permanently request paper or email copies of proxy materials for all shareholder meetings

     

      B – The “full set delivery option” – an issuer can deliver a full set of proxy materials to shareholders, along with the notice. A separate notice does not need to be prepared if an issuer incorporates all of the information required to appear in the Notice into its proxy statement and proxy card. And the issuer does not need to respond to requests for copies as required under the notice only option.

     

  3. Within the “notice only option” and “full set delivery option,” the SEC provides issuers with details related to the timing of when notices need to be sent, what information needs to be included in the notice, the use of plain English, the design of the publicly accessible Web site, the means to vote, how to handle requests for paper or email copies of the proxy, Web site confidentiality, and other details.

 
The SEC should be commended for its work in crafting the new rule, providing corporate counsel with a level of detail to help ensure that issuers understand the new requirements. But conceptually understanding the new rules does not equate to knowing which e-proxy option to follow. While your corporate counsel will be able to navigate you, the issuer, through the legal framework, PondelWilkinson stands ready to guide you through the strategic decision-making that will lead to the right solution for your company.

 

PondelWilkinson, investor@pondel.com