On April 6, 2020, the Governor of the State of Delaware, John C. Carney, issued an executive order (the “Order”) that provides relief to public companies incorporated in Delaware holding physical stockholder meetings during the COVID-19 pandemic. The Order provides two limited forms of relief as described below. The Order applies to companies incorporated in Delaware regardless of whether their stockholder meeting was expected to occur in Delaware or another state; however, the Order does not apply to companies that, as of the date of the Order, had not yet given notice of their stockholder meeting or had already given notice of a meeting to be held by remote communication.
- The Order's first relief provision applies to publicly traded companies that, as of April 6, 2020, have already sent to stockholders notice of an upcoming physical stockholder meeting. The General Corporation Law of the State of Delaware (DGCL) generally requires notice to stockholders of the place, if any, date and hour of the stockholders meeting, among other things, not less than 10 nor more than 60 days before the meeting date. The Order provides that if the board decides to change to meeting by means of remote communication (i.e., a virtual 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.
- The Order’s second relief provision provides that, if it is impracticable, due to the COVID-19 pandemic, for a public company to convene a currently noticed meeting of stockholders at a physical location, the company may adjourn the meeting to another date or time, to be held by remote communication, by providing notice of the date and time and the means of remote communication for the meeting in a document filed with the SEC and a press release, which must be promptly posted on the company's website.
The Order also includes a severability provision stating that, if either provision relating to stockholder meetings 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 of the declaration.
You can access the Order here.
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