On April 6, 2020, Governor John Carney of the State of Delaware issued the Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat (the “Declaration”). The initial declaration was issued on March 12, 2020. Among other matters relevant as a result of the COVID-19 pandemic, the Declaration touches on a change in shareholder meetings related to publicly traded companies organized in the State of Delaware.
In line with the social distancing principles adopted by all businesses, the Declaration allows the board of directors of companies that issued notices for annual or special meetings of stockholders to be held at a physical location before the public health threat of COVID-19 became apparent, to have those meetings conducted solely by remote communication. The Declaration also allows for notice of the change to be given by making a filing with the Securities and Exchange Commission (“SEC”) under sections 13, 14, or 15(d) of the Securities Exchange Act of 1934 (the “Act”), and issuing a press release to be posted on the corporation’s website. If it is not possible for the meeting to be held on the date and time initially noticed for, then the corporation may adjourn such meeting to a new date and time and give notice by making the filings and press release indicated above. Sections 13, 14, and 15 of the Act covers required filings regarding beneficial ownership of companies, proxy requirements, and broker dealer registration requirements, respectively.
In this respect, the Declaration follows guidance issued by the SEC on March 13 on the same topic. In its March guidance, the SEC indicated that issuers that had already mailed and filed its definitive proxy materials could notify shareholders of a change in the date, time, or location of its meeting without mailing additional soliciting materials or amending its proxy materials as long as the company:
- issued a press release announcing such change;
- filed the announcement as a definitive additional soliciting material on EDGAR; and
- took all reasonable steps necessary to inform other intermediaries in the proxy process and other relevant market participants of such change.
Publicly traded companies formed in the State of Delaware need to be aware of and comply with this change in shareholder meetings to ensure their SEC obligations are met. If you have questions about this topic or need assistance, attorneys in PilieroMazza’s Business & Transactions Group are adept at handling corporate law matters and others on behalf of Firm clients. For additional resources related to COVID-19, please visit PilieroMazza’s COVID-19 Client Resource Center.
Melissa Rodriguez, the author of this blog, is a member of the Firm’s Business & Transactions Group.