In light of the still uncertain public health impact of the coronavirus outbreak (COVID-19), companies incorporated in Maryland should be aware of the option to hold virtual annual stockholder meetings and, if advisable, to postpone scheduled annual meetings.
Under the Maryland General Corporation Law (the “MGCL”), the board of directors of a Maryland corporation, if it is otherwise authorized to determine the place of a meeting of stockholders (as is the case with most boards), may determine that “the meeting not be held at any place, but instead may be held solely by means of remote communication.” A virtual meeting is subject to certain notice and procedural requirements set forth in the statute. One such requirement is to provide, if requested by a stockholder, a place where the requesting stockholder may access the meeting on the internet. Several clients have proactively addressed this by stating in the proxy statement that such place is at Venable’s office but have also disclosed that directors and management will not be at the location.
We recommend that any company considering the possible need to convert a physical meeting into a virtual meeting refer to that possibility in the notice of the meeting and include the means of remote communication, if known, or the method the company will undertake to communicate the change and the means of remote communication, such as a press release. If the notice has been sent without such a reference but a determination is later made to convert the meeting to one where remote communication is permitted, the company will need to either send a supplemental notice or take steps to maintain the original location of the meeting and provide remote access for the board, management and stockholders to attend.
Given the fluid nature of the COVID-19 outbreak, companies may determine to postpone the annual meeting. Under the MGCL, a meeting may be postponed to a date not more than 120 days after the record date, subject to any procedures or limitations set forth in the bylaws. While the announcement of the postponement may be by press release, a new notice of the new time, place, if any, or means of remote access, if any, must be given not less than 10 days before the new meeting date.
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We are available to discuss any questions you may have concerning Maryland law as it applies to virtual meetings or the meeting notice, proxy statement, proxy card or voting instruction form and the conduct of the meeting.