SEC gives Issuers Added Flexibility to Adjust Annual Meetings in Light of COVID-19

As efforts to contain the spread of COVID-19 gain steam, companies may consider whether to hold a virtual annual meeting rather than a traditional in-person meeting.

To that end, the SEC staff has offered public companies flexible options to switch to a virtual meeting (or otherwise reschedule or relocate a meeting), even if they have already filed proxy materials and given notice of the meeting at a particular time, date and location.  Of course, these options do not address any state law requirements that may apply, such as formal requirements for advance notice of stockholder meetings under relevant corporate law.

Specifically, an issuer that has already filed and mailed its definitive proxy materials may change the date, time and location of its annual meeting, including a switch to a virtual meeting format, without mailing additional soliciting materials or amending its proxy materials if it:

  • announces the change by press release;
  • files the announcement as definitive additional soliciting material on EDGAR; and
  • takes all reasonable steps necessary to disclose the change to proxy service providers, other intermediaries, the relevant stock exchange and other relevant market participants.

The staff encourages issuers that have not yet mailed definitive proxy materials to consider disclosure in those materials regarding possible changes in the date, time, place and manner of the meeting.  In the case of virtual meetings, the staff expects clear disclosure of how shareholders can access, participate

in and vote at the meeting. An issuer switching to a virtual format after filing would generally not need to recirculate revised proxy materials or revised proxy cards.

The staff also encouraged issuers to provide a means for proponents of shareholder proposals to present their proposals by means other than in person, such as by telephone.  The staff offered these proponents relief from future exclusion of their proposals under Rule 14a-8(h) if they are unable to attend a

meeting as a result of travel restrictions or other hardships related to COVID-19.

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