Full Benefits of E-Proxy Now Available to Florida Public Companies
June 25, 2009
Laurie L. Green- Ft Lauderdale
On June 2, 2009, Florida Governor Charlie Crist approved amendments to the Florida Business Corporation Act (FBCA) that permit Florida public companies to satisfy their obligation to furnish annual financial statements to shareholders by complying with the SEC’s electronic proxy rules, or e-proxy rules. The e-proxy rules permit companies to deliver their proxy statement and annual report to shareholders via posting on an Internet website. By using e-proxy, companies have been able to realize cost savings by printing and mailing fewer copies of the proxy materials.
Historically, Florida companies were required to mail their annual financial statements to shareholders. As a result, Florida public companies could not achieve the full benefits of the e-proxy rules because they still had to mail their annual financial statements to shareholders. With the adoption of these amendments, Florida public companies now are able to achieve the full cost-saving benefits of the SEC’s e-proxy rules.
“Furnish” Not “Mail” Statements
The FBCA previously required that Florida companies “mail” annual financial statements to each shareholder within 120 days after the close of each fiscal year.1 “Mail” means “the United States mail, facsimile transmissions, and private mail carriers handling nationwide mail services.”2 Since the term “mail” does not include posting on a website or furnishing through electronic transmission, Florida companies were limited as to how they could send their annual financial statements to shareholders. The new amendments require that Florida companies “furnish,” rather than mail, the annual financial statements.3
The new amendments allow Florida companies with securities registered under the Securities Exchange Act of 1934, as amended, to satisfy their obligation to furnish annual financial statements by complying with the SEC’s e-proxy rules.4 The new amendments also provide that in addition to mailing the annual financial statements, companies can furnish the financial statements by electronic transmission.5
E-Proxy Rules
In 2007, the SEC amended the proxy rules to permit electronic delivery of proxy materials, including the proxy statement, proxy card and annual report to shareholders.6 Under the e-proxy rules,7 companies conducting proxy solicitations, other than solicitations involving business combinations, have a choice on how to provide proxy materials to shareholders. Companies can use the “notice and access” method by posting their proxy materials on a publicly available website (other than the SEC’s EDGAR website) and sending a notice of Internet availability of proxy materials to shareholders informing them of the electronic availability of the materials. Alternatively, companies can continue to use the traditional method of delivering printed copies to shareholders, but they must also post those materials on a publicly available website and inform shareholders of the electronic availability of the materials.
Effective Date
The amendments to the FBCA become effective immediately and apply to all fiscal years ending on or after December 31, 2008.
For more information, contact:
Laurie L. Green
954.468.7808 | laurie.green@hklaw.com
1 Section 607.1620(3) of the FBCA.
2 Section 607.01401(17) of the FBCA.
3 Section 607.1620(3) of the FBCA.
4 Section 607.1620(5) of the FBCA.
5 Section 607.1620(5) of the FBCA.
6 Release 34-56135 (July 26, 2007).
7 Rule 14a-16 under the Securities Exchange Act of 1934, as amended.
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