Impacts of COVID-19: Annual Meeting Changes & SEC Relief Granted to Certain Registrants
March 12, 2020
On February 10, 2020, Seward & Kissel LLP sent out a Front Page Focus alert on “The Rise of the Coronavirus” which outlined some of the ways in which COVID-19, or the coronavirus could potentially impact companies in the areas of Employment, Contracts, Shipping, Capital Markets and Investment Management. The February 10, 2020 Front Page Focus alert can be found here.
Annual Meeting Changes
As the virus continues to spread, the annual meetings of some companies may be impacted. The following discusses our recommendations for the measures a company should take when the date or location of an annual meeting must be changed. Please note that these recommendations are based on Delaware law.
- If the location or date of the meeting must be changed and proxy statements have already been mailed, the company should, at its earliest opportunity, issue a press release and file this release with the SEC as supplemental proxy materials. This applies to changes to virtual, as well as in-person meetings.
- If a proxy statement has not yet been mailed and the company is considering a change to the location or date of the meeting, the company should disclose this possibility in the proxy statement.
- The proxy card does not need to be changed either to a) add a voting item that would authorize a change or b) generally add the possibility of a change of the location or date of the meeting.
45-Day Filing Extension
Further, on March 4, 2020, the Securities and Exchange Commission (the “SEC”) issued Release No. 34-88318 (the “Order”). For those registrants, both foreign and domestic, impacted by COVID-19 in demonstrable ways, the Order granted a 45-day extension for companies required to make filings between March 1, 2020 and April 30, 2020 and granted relief to companies with regard to the required furnishing of certain materials to security holders.
Requirements for Using the 45-Day Extension
Any registrant seeking to make use of this extension must:
- be unable to meet the original filing deadline due to circumstances related to COVID-19 (the coronavirus); and
- furnish a Form 8-K or 6-K as applicable to the SEC by the later of March 16 or the original deadline for the relevant filing, which states the following:
- the registrant is relying on the Order;
- a brief description of why the report cannot be filed within the original deadline;
- the estimated date of expected filing;
- a risk factor explaining the business impact of COVID-19 (if applicable); and
- if the inability to meet the original deadline is based on the inability of another party to furnish materials to the registrant, then that party must provide a statement, citing specific reasons why they are unable to furnish the materials on or before the original deadline, and this statement must be included as an exhibit
- when the filing is made, the registrant must disclose that it is relying on the Order and state the reasons why it could not make the filing within the original timeframe.
Furnishing of Information
The SEC also recognizes that registrants may experience difficulties in complying with requirements to furnish information to investors. In circumstances where delivery is not possible, the SEC has granted an exemption from the requirements of the Exchange Act for the furnishing of proxy statements, annual reports, other soliciting materials, information statements or annual reports, as applicable.
Requirements for Reliance on the Exemption
To utilize this exemption, a registrant must meet the following conditions:
- the security holder of the registrant must have a mailing address in an area that, due to COVID-19, the common carrier has suspended delivery service of the type or class that is customarily used by the registrant (or other person making the solicitation); and
- the registrant has made a good faith effort to furnish the materials to the security holder, as required by the method of delivery.
The SEC has stated that it may extend the time period for relief and implement any additional conditions or relief measures as warranted. Any registrant in need of additional assistance with regard to either of these relief options should contact the SEC’s Division of Corporate Finance.