Practical Advice for Upcoming Annual Meetings of Shareholders amid Coronavirus Pandemic
Companies may choose to delay their 2020 annual meetings of shareholders, but should review their governing documents before doing so. SEC filers must be mindful of the requirement to file their proxy statements or amend their annual reports on Form 10-K by April 29 and to notify their shareholders if the date of the annual meeting is delayed more than thirty days from the anniversary of the prior year's meeting. Companies may also consider switching to a virtual-only or hybrid annual meeting, but should carefully review the corporate statutes of their state of incorporation.
Delaware allows for virtual-only annual meetings. On April 6, the governor of Delaware entered an emergency order stating that if the board of a public company wishes to change a meeting that has already been noticed for a physical location to a virtual-only meeting, it may notify stockholders of that change solely by a document publicly filed by the company with the SEC and a press release. The press release must also be posted on the company’s website. The order also provides that if it is impracticable to convene a physical meeting due to public health concerns, the company may adjourn the meeting to another date or time, to be held virtually, by providing notice of the date and time and the means of virtual attendance in a document filed with the SEC and a press release, with the press release to be posted on the company’s website.
The North Carolina Business Corporation Act does not allow for virtual-only annual meetings. However, on April 1, 2020, Governor Roy Cooper issued an executive order permitting virtual-only annual meetings for North Carolina-chartered corporations until May 31, 2020 or until the date of a subsequent executive order rescinding the Covid-19 state of emergency. Shareholders must be allowed to particulate in, and vote at, a virtual-only meeting. If a physical meeting is held, the board of directors may limit the number of attendees in accordance with restrictions on mass gatherings in North Carolina.
Virtual-only annual meetings are not permitted for South Carolina-chartered corporations. South Carolina has not yet taken any action to permit virtual meetings in light of the Covid-19 pandemic.