SEC Permits Distribution Of Proxy Materials Via Internet Posting

The Securities and Exchange Commission (SEC) recently amended the proxy rules to permit issuers and other persons to distribute proxy materials and annual reports by posting them on a publicly accessible Internet site and sending shareholders a notice of the posting. This "notice and access" model is intended to provide issuers a streamlined and cost-effective process of proxy distribution. However, because the process also provides a cost-effective means for other persons to solicit proxies, it reduces the potential cost of waging a proxy contest and may make proxy contests more likely. In addition to adopting rules permitting the voluntary use of the notice and access model, the SEC also proposes requiring Internet availability of proxy materials. The rules permit use of the notice and access model beginning July 1, 2007, for shareholders meetings to be held not earlier than August 10, 2007.