Reed Smith Client Alerts

In the midst of the COVID-19 pandemic, Delaware’s governor issued an Executive Order on April 6, 2020, clarifying the obligation of publicly traded Delaware corporations to provide notice to stockholders when the location, date, and/or time of an in-person stockholder meetings is changed to be held remotely. The Delaware General Assembly is considering more expansive amendments to the Delaware General Corporation Law to further assist Delaware corporations with responding to the COVID-19 pandemic.

The Executive Order

One reason Delaware is the epicenter of business law is the fact that Delaware swiftly responds to unforeseen and unprecedented circumstances that impact companies in the state. A recent executive order from Delaware Governor John Carney, in response to the ongoing COVID-19 pandemic, continues Delaware’s tradition of responding quickly to help Delaware corporations manage unforeseen circumstances.

Recognizing the need for swift action to combat the COVID-19 pandemic, and to promote compliance with social-distancing orders across the globe, Governor Carney signed the Tenth Modification of the Declaration of a State of Emergency for the State of Delaware Due to a Public Health Threat on April 6, 2020. The Tenth Modification clarifies, among other things, the notice requirements for boards of directors of Delaware corporations subject to reporting obligations with the Securities and Exchange Commission (SEC), and confirms such Delaware corporations can change the location, date, and time of stockholders’ meetings that were scheduled to be held in person, but will now be held remotely.

Under the Tenth Modification, Delaware corporations that are subject to the reporting requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 that seek to change the location of a stockholder meeting currently scheduled at a physical location to a remote location will satisfy the notice requirement by: (i) filing a notice with the SEC of the change in location (from a physical to remote location); and (ii) posting a press release of the notice on the corporation’s website.