Minnesota Gov. Tim Walz issued Emergency Executive Order 20-43 on April 24, 2020 to facilitate virtual shareholder meetings while promoting the health and safety of participants amid the COVID-19 pandemic. The Order applies to Minnesota public companies that seek to change or adjourn a shareholder meeting currently noticed for a physical location to a meeting conducted solely by remote communication (i.e., virtually), and permits those companies to provide notice of the change to a virtual meeting by a public filing and announcement, rather than a new written notice. The Order modifies the notice requirements under the Minnesota Business Corporation Act, which allows virtual shareholder meetings, so long as proper notice of the meeting location is given to shareholders.
The Order applies to Minnesota corporations subject to the reporting requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934. Section 1(a) of the Order provides that if, as a result of the public threat caused by the COVID-19 pandemic, a corporation’s board of directors seeks to change a shareholder meeting currently noticed for a physical location to a virtual meeting, the corporation may notify shareholders of the change at least 10 days before the meeting by:
- Publicly filing a document with the Securities and Exchange Commission (SEC) pursuant to Section 13, 14 or 15(d) of the Exchange Act
- Issuing a press release, which must be promptly posted on the corporation’s website after release
- Simultaneously sending an email with the notice to the shareholders, if those email addresses are known to the corporation
Section 1(b) of the Order further provides that, in the event it is impracticable to convene a currently noticed meeting of shareholders at the location for which it has been noticed due to the COVID-19 pandemic, a corporation may adjourn the meeting to another date or time, to be held virtually, by providing notice of the date and time and the means of remote communication in a document filed by the corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act, and a press release, which must be promptly posted on the corporation’s website after release. In addition, the notice must simultaneously be provided to shareholders by email, if those email addresses are known to the corporation.
The Order is effective immediately and will remain in effect until Minnesota’s COVID-19 emergency is terminated or the Order is otherwise rescinded.
The Order was issued after the SEC’s Division of Corporate Finance released its guidance on April 7, 2020 to help public companies navigate federal proxy rules in connection with annual meetings during the COVID-19 pandemic. Consistent with the Order, the SEC guidance permits an issuer that has already mailed and filed its definitive proxy materials to notify shareholders of a change in the date, time, or location of a shareholder meeting without mailing additional soliciting materials or amending its proxy materials, so long as the issuer first makes a press release announcing the change, files the announcement as definitive additional soliciting material with the SEC, and takes 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 the change.
As the number of cases around the world grows, Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.