On March 13, the SEC staff issued helpful guidance to companies considering switching from a conventional annual meeting to a virtual or “hybrid” meeting due to travel and other concerns arising from the coronavirus pandemic. The guidance states that a company that has distributed its proxy materials can notify shareholders of a change in the date, time, or location of its annual meeting without amending its materials or mailing additional materials if it (1) issues a press release, (2) files the release as definitive additional soliciting material, and (3) “takes all reasonable steps… to inform… relevant market participants… in a timely manner.” Companies that have not yet distributed proxy materials should consider disclosing that the meeting location and other details may change.
The guidance also points out the importance of virtual or “hybrid” meeting logistics and of disclosing those logistics, and addresses how companies should consider dealing with the presentation of shareholder proposals given travel difficulties and other complications that may prevent proponents from attending the meeting.
As noted in the guidance, there are other important considerations associated with holding a virtual or hybrid meeting, including the need to check state corporate law and a company’s governing instruments to determine if a virtual meeting is permissible.
If you have any questions, please contact Gunster securities law and corporate governance practice leader Bob Lamm.
