Delaware Issues Modified Order Relating to Remote Meeting of Shareholders and Shareholder Notices
On April 6, 2020, Delaware Governor John Carney issued his tenth modification to the Delaware State of Emergency Declaration, under which Section 4(a) of the order permits a company that is incorporated in Delaware and subject to Sections 13(a) or 15(d) of the Exchange Act—the sections pertaining to the filing of periodic documents, reports and information with the Securities and Exchange Commission (SEC)—to allow its board of directors to change a shareholder meeting currently noticed for a physical location to a meeting conducted solely by means of remote communication. Under the modified order, these companies can meet their notice obligations to shareholders without having to mail additional soliciting materials or amend their proxy materials. Instead, Delaware-incorporated companies may notify shareholders of the change solely by a document that has been publicly filed by the company with the SEC in accordance with Sections 13, 14 or 15(d) of the Exchange Act and a press release posted promptly to the company’s website after release.
Section 4(a) of the modified order also permits companies incorporated in Delaware who have notified their shareholders of the physical place and time of their annual meeting to adjourn the meeting to another date or time, to be held by remote communication, if it is impracticable to convene such a meeting at the physical location due to the public health threat caused by COVID-19. These companies can meet their shareholder notice obligations by providing notice of the adjournment with the date, time, and means for remote communication in a document filed by the company with the SEC in accordance with Sections 13, 14 or 15(d) of the Exchange Act and a press release published promptly to the company’s website after release.
For corporations incorporated in jurisdictions other than Delaware, the company should review the applicable provisions of the state corporation statute and the company’s governing documents with respect to the permissibility of remote shareholder meetings and shareholder notice requirements.
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