Delaware Provides Emergency Relief from Requirements for Meetings of Stockholders
As discussed in our previous alert, Annual Meetings in a World Without Meetings: The Impact of COVID-19 on Public Companies, on March 13, 2020, the Staff of the Division of Corporation Finance of the Securities and Exchange Commission (SEC) issued guidance permitting public companies that have already filed and mailed their definitive proxy materials to change the date, time and location of their meetings without mailing additional soliciting materials to stockholders so long as they (i) issue a press release announcing such change, (ii) file the announcement as definitive additional soliciting material on EDGAR and (iii) take all reasonable steps necessary to inform intermediaries in the proxy process and other relevant market participants (including the appropriate national securities exchanges) of the change.
The SEC Staff’s guidance, however, does not preempt state corporate law requirements related to the proper means to provide notice of, and to postpone or adjourn, meetings of stockholders. Therefore, as discussed in our prior alert, public companies availing themselves of the SEC Staff’s guidance are still required to comply with the applicable requirements of state corporate law.
On April 6, 2020, the Governor of the State of Delaware made these compliance obligations simpler for publicly traded Delaware corporations by declaring as follows:
- Change to Virtual-Only Meeting: A publicly traded Delaware corporation may change a meeting currently noticed for a physical location to a meeting conducted solely by means of remote communication (a virtual-only meeting) by notifying stockholders of the change solely by issuing a press release, posting the press release promptly on its website, and filing disclosure with the SEC (i.e., complying with the SEC Staff’s guidance described above).
- Adjournment of an In-Person Meeting: If it is impracticable to convene a currently noticed meeting of stockholders at a physical location due to the public health threat from COVID-19, a publicly traded Delaware corporation may adjourn the meeting to another date or time, to be held by remote communication, by providing notice of the date and time and the means of remote communication by issuing a press release, posting the press release promptly on its website, and filing disclosure with the SEC (i.e., notifying stockholders of the change in the same manner as described above).
The order is a welcome clarification for Delaware corporations with upcoming meetings of stockholders that may need to be held virtually or adjourned in light of the ongoing COVID-19 pandemic.
If you have any questions related to this alert, please do not hesitate to contact any member of the Public Companies group or your regular Smith Anderson lawyer. Please visit and bookmark our firm’s Coronavirus (COVID-19) Business Resource Center, which is continuously updated with useful materials and resources related to COVID-19. This tool has been made available to ensure that our clients and the broader business community stay informed on key issues that may impact their operations and to navigate the related business and legal issues during these challenging times.