The SEC staff issued guidance today to help companies that are changing or contemplating changing their annual shareholder meeting date, location or format (to virtual-only or hybrid) to do so without incurring additional proxy mailing expenses, and to promote shareholder proponents' ability to present their proposals remotely.
The guidance provides that companies that have already mailed and filed their definitive proxy materials can notify shareholders of a change in the date, time, location, or format of their annual meeting without mailing additional soliciting materials or amending their proxy materials if they - promptly after making the decision and with sufficient advance notice to alert the market:
- Issue a press release announcing the change(s)
- File the announcement as definitive additional soliciting material on EDGAR
- Take all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change(s)
Companies that have not yet mailed and filed their definitive proxy materials are asked to consider whether to include disclosures regarding the possibility that their annual meeting date, time, or location will change due to the coronavirus based on their particular facts and circumstances, and the reasonable likelihood of such a change. Companies that have not yet mailed and filed their definitive proxy materials and that plan to conduct a “virtual” or “hybrid” meeting are expected to disclose in their definitive proxy statement and other soliciting materials instructions and logistical details, including how shareholders can remotely access, participate in, and vote at the meeting.
The guidance also provides that if a shareholder proponent or representative is unable to attend the meeting and present their proposal due to the inability to travel or other coronavirus-related hardships, SEC staff would consider this to be “good cause” under Rule 14a-8(h) if a company seeks to exclude a proposal submitted by the shareholder proponent for any meetings held in the following two calendar years on the basis of Rule 14a-8(h)(3). Rule 14a-8(h)(3) provides that a company may exclude a shareholder's proposals for two years if the company included one of the shareholder's proposals in its proxy materials for a shareholder meeting, neither the shareholder nor the shareholder's qualified representative appeared and presented the proposal, and the shareholder did not demonstrate "good cause" for failing to attend the meeting or present the proposal.
See the SEC's release, and additional relevant resources on our Annual Meeting/Proxy Statement page here and Virtual Meetings page.