As the Internet era progresses, all of us, to some extent or another, have begun to lose tolerance for old-fashioned mail. Having shifted all its billing to the web, the CC now lets regular mail pile up for weeks before summarily discarding most of it. And lately, that has included proxy solicitations and annual reports. Those bulky packages seem anachronistic (not to mention environmentally disastrous) in a web age. For the average investor, it seems a long shot that any of the flashy, and not so flashy, materials get read. And whether anyone votes the little red and white pieces of paper is another matter, although web voting has been around for a while, which renders that process less objectionable. Wouldn't it just be easier if notice of proxies came to your favorite email address and you could go to the company's website to look at them?

As the Internet era progresses, all of us, to some extent or another, have begun to lose tolerance for old-fashioned mail. Having shifted all its billing to the web, the CC now lets regular mail pile up for weeks before summarily discarding most of it. And lately, that has included proxy solicitations and annual reports. Those bulky packages seem anachronistic (not to mention environmentally disastrous) in a web age. For the average investor, it seems a long shot that any of the flashy, and not so flashy, materials get read. And whether anyone votes the little red and white pieces of paper is another matter, although web voting has been around for a while, which renders that process less objectionable. Wouldn't it just be easier if notice of proxies came to your favorite email address and you could go to the company's website to look at them? Well, since July of last year, the SEC has allowed companies to post proxy materials on the web instead of mailing them. That's nice, but once a move to the Internet begins, it tends to beget a tidal wave of support. Hence, your clients will soon be required to do so for investors who want to receive e-proxies.

Yes, e-proxy has arrived and, as of January 1 for some of your larger clients, there has been mandatory website posting of proxy materials. But don't think the rest of your clients will escape the requirement. Next January 1 is the target date for other public companies. This is a good thing, even if it means a lot of work setting up web pages and increasing server capacity to ensure your clients can handle the traffic. But in the end, it may end the days of wholesale dumping of proxy materials, as investors will be able to peruse them as they do the rest of the communications in their lives. And it will surely save your clients money in printing costs if nothing else. The question for now is how to get your clients that aren't currently subject to e-proxy up to speed by next January. Do you have the moxie to set up e-proxy?

Internet Proxy Solicitations: Shareholder Choice Means Companies Must Prepare Early, by Matthew C. Dallett and Brendan J. Radigan of Edwards Angell Palmer & Dodge LLP is a client advisory that was part of the program materials for the recent PLI briefing Shareholder Communications in an Electronic World: E-proxy and Other Developments. The sense is that not only will e-proxy result eventually in cost savings, but that it may "facilitate proxy contests over director elections and other shareholder proposals and may result in more effective opposition to management proposals." So e-proxy is another leg in the shareholders' rights movement. The authors set out the new e-proxy rules for you in concise form. Of course, the bottom line is that proxy materials must be posted on a website and notice of availability sent to shareholders in compliance with Rule 14a-16 of the Securities Act. Companies may rely solely on e-proxy or may choose to use the Internet and continue regular mailings or emails (called "the Full Set Model") or use a combination of the two for different groups of shareholders. If a company decides to discontinue mailings (called the "Notice and Access Model"), it may stop regular mail delivery to all but those who request to continue to receive traditional proxy materials. But note there are exceptions to the Notice and Access Model for solicitations related to mergers and other combinations. The devil is in the details, of course, but the CC trusts you know where to find those. (Ok, notice and access—they're in the download.)