Electronic Delivery

GENERAL INFORMATION

Publicly-held companies are required to deliver their annual report and proxy statements to all shareholders. Several years ago, the definition of “delivery” was expanded to include delivery by electronic means. Simply put, companies can now provide shareholders access to their annual meeting materials via the Internet rather than printing and mailing the annual report and proxy statement. Shareholders with access to the Internet can view and download the material instead of receiving these bulky documents. We are pleased to provide a simple and effective electronic delivery service for registered shareholders.

The Service

R&T provides our clients with the ability to allow their registered shareholders to request electronic delivery of annual meeting material. When electronic delivery is requested, the issuer will provide these shareholders with the Internet address of their annual report and proxy statement. The URL (Uniform Resource Locator, better known as the web address) is provided on the proxy card or other enclosure mailed with the proxy card. Using this approach, most companies can significantly reduce printing and postage expenses associated with the annual meeting process. Soliciting registered shareholders for electronic delivery can be accomplished in any number of ways. Companies may elect to send a direct, “dedicated” solicitation to shareholders. Companies can include the option for electronic delivery as a question on the proxy card, similar to the “attendance” question many companies now include on their proxies. The question can also be included on the telephone and Internet voting sites. In fact, companies can include the question on just about any printed matter that is sent to the shareholder, even items that don’t have return envelopes. Issuers can even provide R&T’s e-mail address, info@rtco.com, on quarterly reports, on dividend check stubs and instruct the shareholder to e-mail the request to R&T.

Beneficial Shareholder Electronic Delivery

Electronic delivery by ADP to beneficial shareholders is different from that which R&T provides for registered shareholders. When beneficial shareholders vote through ADP’s web site, proxyvote.com, they are asked if they want to receive company annual meeting materials via the Internet. If they respond, then their e-mail address is recorded. If the issuer elects to deliver material electronically, ADP will use the e-mail address on file to send a notice to the beneficial holder with the information needed to access the annual report and vote their proxy on-line. Clearly this delivery method has some advantages. However, there are also some disadvantages. Investors change their e-mail addresses frequently as well as their brokerage relationship. ADP records the e-mail on the basis of the brokerage account. In addition, many Internet users are reluctant to leave e-mail addresses for privacy reasons. A recent survey indicated that over ninety percent of all Internet voting is performed during business hours from work. This may account for why only a fraction of shareholders leave an e-mail address.

GUIDE TO ELECTRONIC DELIVERY

Issuers should anticipate the timing of the annual meeting and make provisions to provide shareholders with the opportunity to indicate that they want electronic delivery. You should start this process at least three to four months in advance of your anticipated annual meeting mailing date. Here are the simple steps required to implement electronic delivery for registered shareholders:

1. Notify Your Account Executive: Call and inform your account executive that you want to offer electronic delivery for registered and beneficial shareholders three to four months in advance of mailing.
2. Review and Sign the Fee Schedule: Upon receiving your call, your account executive will send or fax a fact sheet listing the services and fees for electronic delivery. This needs to be signed and returned prior to initiating the process.
3. Select the Solicitation Format: You can solicit your registered shareholders for electronic delivery as often as you like. The first solicitation should be performed at least two months in advance of your annual meeting mailing date. A separate mailing is more effective for the first solicitation and we also recommend that you solicit on the proxy by including the option as a voting selection.

    View a sample report

4. Upload the Material: Issuers are responsible for the uploading of the annual report and proxy statement to a web site. Since this may require some effort, we advise that you begin your planning of this at least three to four months in advance of your Annual Meeting mailing date.
5. Communicate the Web Site Address: You must provide the web address to your shareholders if you want to use electronic delivery. Therefore, you must notify ADP at least four days before the mailing date, instruct the printer to include the address and instructions on the registered shareholder proxy cards and confirm the web address with your account executive at least five days in advance of your mailing date.

ONE CAVEAT: Loading The Material On The Web Can Be Tricky!

The ADP and R&T electronic delivery methods have one common element - both require that the issuer load the material to a web site and provide us the web address in advance of the mailing of the material. Loading the information can be tricky. We’ve heard some horror stories about getting this done, on time and in a user-friendly format. For example, care must be taken to ensure that access to the annual report and proxy statement is available directly from the proxy voting sites and that the material links back to the correct voting site. In some instances, registered shareholders have gotten “linked” to the ADP site and vice versa. This really discourages the shareholder from voting. Also, the annual report and proxy statement should be indexed and easy to search. Issuers should use caution in selecting vendors to perform the load-out service. Experience, understanding of the material and its uses are important factors as well as price when selecting a support partner in this area.