Alert January 22, 2008

SEC Publishes Adopting Release for Proxy Rule Amendments Designed to Encourage Electronic Shareholder Forums

The SEC published the formal release adopting amendments to the proxy rules that address issues raised under the proxy rules by electronic shareholder forums.  The amendments are designed to clarify that participation in an electronic shareholder forum, which could potentially constitute a solicitation that requires compliance with applicable proxy rules, will be exempt from most of the proxy rules provided certain conditions are met.  Those conditions relate in part to the timing of communications by a participant in an electronic shareholder forum relative to the date announced by a company for its annual or special meeting of shareholders.  In addition, the amendments provide that a shareholder company or third party acting on behalf of a shareholder or a company, that establishes, maintains or operates an electronic shareholder forum will not be liable under the federal securities laws for any statement or information provided by another person participating in the forum.  The rule amendments will take effect 30 days after the adopting release is published in the Federal Register.