Proxy and Mailing
Annual Meeting Procedures
When the Company notifies Corporate Stock Transfer of its intention to hold a proxy vote, Corporate Stock Transfer will send a Meeting Questionnaire to the Company outlining Corporate Stock Transfer's Procedures to implement the proxy. This questionnaire will give Corporate Stock Transfer the information necessary to initiate the broker search and start the process for your meeting. Step-by-step instructions are included.
An annual meeting for a publicly held company allows management the opportunity to present audited and general information regarding the status of the corporation to its shareholders. The meeting may include the election of the Board of Directors and other such matters that require shareholder approval. A quorum is required to hold a valid meeting, and is determined by the Company's bylaws.
If a company is subject to the SEC's proxy rules, the requirements for notification and proxy solicitation for an annual shareholders meeting are very complex and demand considerable planning, coordination, and follow up. Therefore, the Company's SEC attorney, auditors, public relations firm, Corporate Stock Transfer, and the printing and mailing services must be extensively involved in the preparation and mailing of the annual meeting notice.
Timeline For Setting Annual Meeting Dates
Generally, the dates should be set within a 90-day period, depending on Corporate Bylaws and/or State of Incorporation. Please check with your legal counsel to verify your particular time frame.
- 1. Record date - make sure that you allow enough time to send out your Broker Search. SEC Proxy Rules 14a-13 stipulates that notice be given to all brokers at least 20 business daysprior to the record date. So if a broker search goes out today, the earliest you can set your record date is 20 business days from today.
- 2. Mail date - allow 7 - 14 calendar days between your record date and your mail date. In case SEC approval is held up or there are printing problems, this will allow time for such problems to be rectified without having to re-establish dates. The earliest you can mail, is one business day after the record date.
- 3. Meeting date - allow at least 30 days between your mail date and your meeting date. Corporate Stock Transfer always recommends mailing 40 - 45 days in advance. See below what you need to consider when setting your dates.
In the cases where shareholder approval is necessary to reach quorum and pass non-routine proposals, you need to allow enough time for proxies to reach shareholders and the turnaround time for sending proxies back for tabulation. For routine proposals, such as voting on directors and auditors, mailing 30 days in advance is usually enough. With routine proposals, brokers have the discretionary voting power/authority to vote their share position "for" management up front, without receiving instructions from their beneficial owners. Non-routine proposals, such as increasing your authorized outstanding shares, name change, mergers, adding another class of stock, splits, etc., require mailing 40 - 45 days in advance, because brokers do not have the discretionary authority to vote their positions up front "for" management. For non-routine proposals, the broker must physically wait for the beneficial owners voting instructions to come in, and report the results to Broadridge or Corporate Stock Transfer as they come in.
Keep in mind that even if you are voting on routine proposals, Broadridge/Brokers are required to have the material mailed to their beneficial owners 15 calendar days prior to your meeting date, or the proposals will fall into a "non-routine" category.
If they are not able to mail 15 days prior, the brokers must then wait to receive instructions from their beneficial owners, indicating how they actually want to vote, jeopardizing the passing of your proposals. Once Broadridge has received the proxy material, they are allowed up to 5 days before they mail, so you have to get material to Broadridge at least 20 days prior to the meeting date. It is highly recommended that you allow extra time to accommodate such circumstances. (The SEC and NYSE stipulate whether or not a proposal is "routine" or "non-routine".)
It is always recommend that you allow extra time, so these types of things do not happen.
CLIENT COMPANY RESPONSIBILITY:
- Establish the annual meeting date. Scheduling is usually done by the officers of the company and should begin approximately 90 days prior to the record date.
- Establish a record date based upon the meeting date, the corporate bylaws and SEC proxy regulations. The record date is the "cutoff date" used to determine those shareholders who are entitled to vote at the meeting.
- Coordinate the printing of the annual report or 10-K and related proxy materials. NOTE: When ordering proxy materials from the printer, it is very important to keep in mind that an additional quantity will be required to satisfy broker requests. If the quantity is insufficient, a reprinting will result in higher costs and possible delays.
- Notify Corporate Stock Transfer by telephone of the intent to start procedures for your meeting, and a representative will fax a "Meeting Questionnaire", asking pertinent information/dates in relation to the meeting. Complete this form, and fax back to Corporate Stock Transfer, which will provide CST with information needed to initiate a "Broker Search".
- Deliver the mailing materials to the designated mailing service (Gemisys, Inc.) as soon as possible, but no later than one business day prior to the mailing date.
- Forward Omnibus Proxies with participant position listings received from the clearing corporations and broker requests to Corporate Stock Transfer. NOTE: An Omnibus Proxy is a document whereby a nominee holder (i.e., Cede & Co.) assigns its right to vote to participant brokers, banks or beneficial shareholders.
CORPORATE STOCK TRANSFER RESPONSIBILITY
- Solicit Brokers: NOTE: SEC Proxy Rules (SEC Rule 14a-13) stipulate that notice be given to all brokers at least 20 business days prior to the record date for any annual meeting of shareholders. These advance notices enables brokers and Broadridge Proxy Services (Broadridge) to compile a listing of shareholders entitled to vote, set up their proxy file, and submit an accurate request for materials in a timely manner. The depositories produce a listing comprised of their participant brokers, banks and trust companies. (Omnibus proxy - Refer to note above.)
- Prepare shareholder listing and mailing labels.
Clearing Corporations and Depositories Security Position Reports Information
Clearing Corporations act as depositories for securities and effect computerized book-entry transfers for their participant brokerage firms, banks and trust companies (i.e., The Depository Trust & Clearing Corporation ["Cede & Co."]). Consequently, the clearing corporations are not entitled to vote the shares registered in their nominee names, since they have no beneficial interest in those shares. As an example of their routine procedure, The Depository Trust & Clearing Corporation will mail an Omnibus Proxy and an accompanying list of participants' share positions (as of the record date) to the Client Company within 5 days after the record date. At the same time, they will also notify each participant of the applicable dates and the shares they will be entitled to vote. As a result, each participant will be responsible for requesting proxy materials directly, or they may elect to utilize the services of Broadridge.
- CORPORATE STOCK TRANSFER RESPONSIBILITY
- Notify the clearing corporations of the record and meeting dates, the anticipated mailing date, and the security's Cusip number(s).
- CLEARING CORPORATION RESPONSIBILITY
- Mail an Omnibus Proxy and accompanying listing of participants' share positions, printed as of the record date, to the Client Company. (Usually to the Corporate Secretary.)
- Notify each participant broker of the applicable dates and the share amounts that they will be entitled to vote.
- CLIENT COMPANY RESPONSIBILITY
- Forward original or a copy of the depositories' omnibus proxy and position listings to Corporate Stock Transfer for use in proxy tabulation.
Broadridge Proxy Services Non-Objecting Beneficial Owners List Request Form
Broadridge is a private company who distributes materials on behalf of a significant number of brokerage firms, banks and trust companies. The information file (maintained by Broadridge) concerning a company is created at the time a Cusip number is assigned by Standard & Poors to that issue of stock.
- CLIENT COMPANY RESPONSIBILITY:
- Complete the Year-End Questionnaire provided by Broadridge, indicating the projected annual meeting date. (This will occur immediately after January 1st of the year following assignment of the Cusip number(s).)
- Complete follow-up questionnaires from Broadridge to provide updates and corrections to the information on file. (This will occur each following year after fiscal year-end.)
- Broadridge RESPONSIBILITY:
- Mail a Fiscal Year-End Questionnaire and request for the projected annual meeting date to the Client Company, immediately after January 1st of the year following assignment of the Cusip number(s).
- Provide follow-up questionnaires each year within four weeks following the fiscal year-end.
- Generate a proxy material request by the 3rd business day following the record date, based on beneficial owner data supplied by Broadridge's financial industry clients (brokers, banks and trust companies).
- Provide Corporate Stock Transfer or the Client Company with proxy material requirements, including the number of shareholders per participant and the total number of proxy sets required for the mailing.
- Mail proxy material to beneficial shareholders, to include Broadridge's Vote Authorization Form (VAF). Consequently, Broadridge requires only ten proxy cards from the Client Company for their files.
- Provide Corporate Stock Transfer with a summary of votes received from each participant ten days prior to the meeting date, plus and revisions to that vote beginning on the fourth day prior to the meeting date.
- BENEFICIAL SHAREHOLDER RESPONSIBILITY:
- Return the Voting Instruction Form (VIF) to Broadridge upon receipt of proxy information. NOTE: If a shareholder wishes to attend the meeting and vote in person, he/she must check the appropriate box on the VIF and return it to Broadridge. Broadridge will then issue a special ballot or Legal Proxy authorizing the shareholder to vote at the meeting.
The Company, the financial printer, the mailing service and Corporate Stock Transfer must work together to facilitate mailings as soon as possible following the record date to allow shareholders and broker sufficient time to vote and return their proxies. If proxy materials are available, the mailing can occur as soon as one day following the record date.
- CLIENT COMPANY RESPONSIBILITY:
- Provide the required proxy materials to the appropriate mailing house (TCA Financial/Gemisys, Inc.) at least one business day prior to the anticipated mailing date.
- CORPORATE STOCK TRANSFER RESPONSIBILITY:
- With the mailing service (Gemisys, Inc.), arrange and coordinate the mailing of proxy materials to shareholders, brokers, and Broadridge. Corporate Stock Transfer will deliver shareholder labels to the mailing house (Gemisys, Inc.) on or before the mailing date.
- Corporate Stock Transfer /Gemisys will provide the Client Company with an Affidavit of Mailing.
- Receive requests from brokers regarding the number of sets of proxy materials required, and forward the requests to the mailing service.
Proxy Preparation and Reporting Results
As the tabulating agent for the annual meeting, Corporate Stock Transfer maintains and on-line proxy file, which benefits the Company for general monitoring of the proxy votes.
- CORPORATE STOCK TRANSFER RESPONSIBILITY
- Input proxy votes received on a daily basis.
- Provide a progress summary of the votes, via facsimile, to the Client Company upon request. The Client may also go online to monitor votes.
- Generate the final tabulation listing for use at the meeting, to include:
- List of all shareholders of record.
- Proxy Detail report-indicating how each shareholder voted.
- Summary of all votes cast by proxy.
- CLIENT COMPANY RESPONSIBILITY
- Solicit votes from shareholders, whether by telephone or written confirmation.
- Forward to Corporate Stock Transfer any proxies received at the company offices.
The certification of shareholder list is sent to the Company prior to the proxy. It represents, as Inspectors of the Elections, Corporate Stock Transfer's certification of the list of securities as of the record date that are to be sent proxies.
The Oath of Inspector of Election is sent to the Company indicating that, As Inspectors of the Election, Corporate Stock Transfer will observe strict impartiality and execute the proxy to the best of its ability.
After tabulating the proxy, Corporate Stock Transfer will send to the Company a Report and Certification of Inspector of Election. The Report and Certification of Inspectors of Election indicates the voting results of the proxy and whether a quorum has been reached.
The certification of Mailing is sent to the Company certifying that the proxies were mailed.
You must submit a mailing questionnaire for all non-proxy mailings. Please contact Corporate Stock Transfer.
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