On March 13, 2020, in response to the recent outbreak of the coronavirus disease (COVID-19), the Securities and Exchange Commission released guidance providing regulatory flexibility to reporting companies seeking to change the date, time, or location of annual shareholder meetings and use new technologies, such as “virtual” shareholder meetings, that avoid the need for in-person meetings. Given the public health and safety concerns related to COVID-19, the Commission provided guidance for reporting companies on how to meet their obligations under the federal proxy rules.
In light of difficulties arising from COVID-19 related to holding in-person annual shareholder meetings, the Commission has taken the position that a reporting company that has already mailed and filed its definitive proxy materials can notify shareholders of a change in date, time or location of the meeting (including to a “virtual” meeting) without mailing additional soliciting materials or amending its proxy materials if the reporting company:
- Issues a press release announcing such change
- Files the press release on EDGAR as definitive additional soliciting material
- Takes all reasonable steps necessary to inform other relevant parties of the change, including intermediaries in the proxy process (such as any proxy service provider) and the appropriate securities exchange
These actions should be taken promptly after making the change so the market is alerted to the change in a timely manner. To the extent that reporting companies have not already mailed and filed definitive proxy materials, they should consider including disclosures regarding the possibility that the date, time, or location of the meeting will change due to COVID-19.
Reporting companies considering a change to the meeting date or location should also consult with counsel regarding applicable state law and the company’s governance documents prior to making such a change.
Information about COVID-19 and its impact on local, state and federal levels is changing rapidly. This article may not reflect updates to news, executive orders, legislation and regulations made after its publication date. Visit our COVID-19 resource page to find the most current information.