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Securities Regulation and Corporate Governance > Posts > Delaware Governor Issues Limited Relief for Public Company Shareholder Meetings Impacted by COVID-19
Delaware Governor Issues Limited Relief for Public Company Shareholder Meetings Impacted by COVID-19

Today the Governor of the State of Delaware issued an executive order (the “Order")[1] that provides two limited forms of relief for publicly traded companies[2] hosting shareholder meetings during the coronavirus (COVID-19) pandemic. 

The Order's first relief provision applies to publicly traded companies that, as of April 6, 2020, have already sent shareholders a notice of an upcoming physical shareholder meeting.  Section 222 of the General Corporation Law of the State of Delaware (DGCL) generally requires notice to shareholders of (among other things) the place, if any, date and hour of the stockholders meeting not less than 10 nor more than 60 days before the meeting date.  The Order provides that if the board decides to change to a virtual (remote communication only) meeting due to the public health threat caused by COVID-19, the company need not mail a new state law notice to stockholders announcing the change in the meeting location.  Instead, the company can provide such notice in a document filed with the Securities and Exchange Commission (SEC) and a press release, which must be promptly posted on the company's website.  This relief is limited in that it only applies to companies that previously distributed proxy materials that contemplated a physical meeting and did not include in the meeting notice the website address to be used in the event the company switched to a virtual meeting.  Notably, this provision in the Order does not relieve companies from the timing requirement in Section 222, meaning that companies must file the notice and issue the press release announcing the new meeting location at least ten days in advance of the meeting. 

The Order's second relief provision applies in the event a company is unable to convene a previously noticed meeting of stockholders at a physical location due to the public health threat caused by COVID-19.  The Order provides that the company may at any time adjourn the meeting to another date or time, to be held by remote communication, and may provide notice of the meeting (including the new date and time and the means of attending by remote communication) in a document filed with the SEC and a press release, which must be promptly posted on the company's website.  This relief is limited because it only applies to companies attempting to hold a physical meeting and does not authorize adjournment in the event a virtual meeting encounters technological difficulties that prevent it from being convened. 

Finally, the Order carries the caveat that if either of the relief provisions is held to be invalid under the Constitution of the State of Delaware, to violate Delaware law or to be unenforceable in any respect, such invalidity, violation or unenforceability shall not affect any other provision in the Order. 



   [1]   See Tenth Modification of the Declaration of A State of Emergency for the State of Delaware Due to a Public Health Threat, available at https://governor.delaware.gov/health-soe/tenth-state-of-emergency/

   [2]   The Order applies to a corporation subject to the reporting requirements of § 13(a) or § 15(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 

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