Delaware Governor Authorizes Changes to Noticed Stockholder Meetings
Order addresses notice for annual stockholder meetings to be held virtually.
Before the spread of the novel coronavirus (COVID-19) in the United States, many Delaware corporations had set their annual meetings for the spring. In light of governmental restrictions on public gatherings, corporations need flexibility to adjourn physical meetings in favor of virtual meetings and to notify stockholders of such changes.
On April 6, 2020, the Governor of Delaware authorized Delaware public corporations to adjourn previously noticed annual stockholder meetings from physical locations, where convening those meetings is now impracticable due to the public health threat caused by the coronavirus crisis. During the current state of emergency, a Delaware public company may postpone its stockholder meeting at a physical location to another date and time and hold the meeting virtually.
Stockholders must be notified of such a change, and the Governor's order provides that reporting companies may provide notice by (i) a public filing with the Securities and Exchange Commission in accordance with applicable federal law, and (ii) a press release, which must be promptly posted to a company's website.
The Governor's order clarifies the means by which Delaware reporting companies may hold their annual meetings and how such companies may communicate certain changes to their stockholders. The order does not change statutory requirements, including as to the stocklist or the timing of annual meetings. Companies that wish to adjourn annual meetings should consult with counsel and consider timing and other requirements.
The order leaves undisturbed the authority of boards of directors under Section 110 of the Delaware General Corporation Law to take actions that may be practical and necessary under the circumstances to address emergency conditions.
Federal Securities Law Proxy Requirements. Companies should confirm that a planned virtual shareholder meeting conforms to the recent guidance from the SEC on shareholder meetings in light of COVID-19. This Jones Day Commentary provides more information.
Other State Law Changes. For information about similar changes regarding virtual meetings under Georgia law, see this Jones Day Commentary, or New York law, see this Jones Day Commentary, or California law, see this Jones Day Commentary.