In case you missed it, we discussed virtual annual meetings at our recent Public Company Town Hall Webinar: Securities Law Guidance for First Quarter Reporting Season. Access the recording here.

Among the numerous considerations related to upcoming annual stockholder meetings being hosted solely using remote (virtual) communication as a result of the novel coronavirus (COVID-19) pandemic, one question that several clients and colleagues have raised is whether management must host a “live” question and answer (Q&A) session on the webcast or whether stockholders must submit their questions in advance (i.e., no “real-time” submission of questions at the meeting).

Based on our survey of company practices in the Fortune 100 (as discussed further below), most companies in our survey are allowing shareholders to ask questions during the virtual annual meeting, with 58% permitting stockholders to submit questions only during the virtual annual meeting and another 32% also permitting stockholders to submit questions in advance of the virtual annual meeting.
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In a previous blog post, we discussed the availability of virtual shareholder meetings (i.e., “virtual-only” and “hybrid” meetings) as a potential alternative to the traditional in-person meeting during the 2020 proxy season in light of the emerging public health and safety crisis posed by the coronavirus pandemic (COVID-19). The Staff of the U.S. Securities and Exchange Commission’s Division of Corporation Finance and Division of Investment Management subsequently issued guidance for conducting virtual annual meetings under these unprecedented circumstances.

Post-Proxy Filing

The Staff confirmed that if a company has already mailed and filed its proxy materials, the company can notify shareholders of a change in the date, time or location of the annual meeting without amending its definitive proxy materials or mailing additional soliciting materials if the company issues a press release announcing the change, files the announcement as definitive additional soliciting material on EDGAR, and takes all reasonable steps necessary to inform other interested parties in the proxy solicitation process (e.g., any proxy service providers and applicable national securities exchanges) of the change. These actions should be taken promptly after the decision to hold a virtual meeting is made and, in any case, sufficiently in advance of the annual meeting. Therefore, companies that have already filed and mailed their definitive proxy materials would not need to mail additional soliciting materials (including new proxy cards) solely to switch to a “virtual” or “hybrid” meeting if they follow the steps described above for announcing a change in the meeting date, time, or location.


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Across the globe, the coronavirus pandemic (COVID-19) is causing governments, companies, associations and colleges and universities to take unprecedented steps to address the spread and transmission of COVID-19. These steps include imposing restrictions on travel and public life; closing physical offices or campuses; canceling conferences, meetings and other scheduled group activities; restricting the size of gatherings; and encouraging or requiring employees and students to telecommute.

With increasing COVID-19 concerns in the United States and proxy season underway, public companies, including those that have already mailed proxy materials, may need to consider alternatives to conducting in-person shareholder meetings in light of the emerging public health crisis posed by the COVID-19 pandemic. Specifically, companies should assess whether or not a virtual meeting format is a viable alternative to the customary in-person meeting. Virtual meetings are generally divided into the following two categories:

  1. Virtual-only meetings conducted solely using remote communication.
  2. Hybrid meetings conducted in-person with concurrent participation by remote communication.


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Jay Knight (far right) discusses disclosure challenges for public companies at the 2020 Securities Regulation Institute.

The Bass, Berry & Sims Corporate & Securities Practice Group kicked off the new year by participating as a sponsor of the 47th Annual Securities Regulation Institute, which is held annually in San Diego by Northwestern University. Jay Knight, head of the firm’s Capital Market Subgroup, was featured as a speaker in a well-attended panel discussing recurring disclosure challenges faced by public companies and their advisors. Each year, the conference draws SEC staffers and many of the leading practitioners of the public company industry, and the keynote speaker for this year’s conference was SEC Commissioner Jay Clayton.

Our key takeaways from the conference follow:
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With many year-end companies working on initial drafts of their 2020 proxy statements, we thought it might be worth sending a quick reminder of two recent rule changes – briefly summarized below – that will (modestly) impact this year’s proxy statement.

  • Compliance with Section 16(a) of the Exchange Act: Item 405 of Regulation S-K previously required companies to disclose information about late Section 16 filings under the caption “Section 16(a) Beneficial Ownership Reporting Compliance.” As part of the recent FAST Act amendments, the disclosure header is now “Delinquent Section 16(a) Reports” and companies are encouraged to exclude this heading altogether when they have no Section 16(a) delinquencies to report.  Since this is one item that is typically specifically incorporated by reference into Part III of Form 10-K, to the extent the heading is retained, companies should also update the header cross-reference in the Form 10-K.


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In a previous blog post, we discussed the Delaware Chancery Court’s decision in Saba Capital Master Fund, Ltd. v. Blackrock Credit Allocation Income Trust and its relevance to the interpretation of advance notice bylaw provisions. On appeal, the Delaware Supreme Court reversed the decision of the Chancery Court and strictly applied the deadlines set forth in the defendants’ unambiguous advance notice bylaw provisions.

Background of the Chancery Court Decision

In Saba, the defendants were two affiliated closed-end funds who sought to disqualify the director nominees of an activist shareholder because the activist shareholder did not strictly comply with the requirements of the advance notice provisions of the defendants’ bylaws. As allowed pursuant to the bylaws of the funds, the defendants had requested a response to a supplemental information request from the activist shareholder before a five-business day deadline.


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This is a friendly reminder to our clients and friends that 2020 is a leap year, which means there is an extra day in the calendar: February 29, 2020.

Therefore, when updating your internal SEC reporting and proxy calendars, please keep this added day in mind.  For example, instruction G(3) of Form 10-K provides that the information required by Part III (Items 10, 11, 12, 13 and 14) may be incorporated by reference from the registrant’s definitive proxy statement, if such definitive proxy statement is filed with the Commission no later than 120 days after the end of the fiscal year covered by the Form 10-K.

In typical years, that 120-day date is April 30 for December 31 fiscal year end companies.  However, this year the cut-off date is Wednesday, April 29, 2020, as a result of leap day.


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Glass Lewis recently posted its comprehensive 2020 voting guidelines, which are summarized on the first page of the 2020 voting guidelines as well as on the Glass Lewis blog. Among other things, the 2020 voting guidelines update Glass Lewis’ voting guidance regarding excluded shareholder proposals. The updates are in response to the September 2019 guidance by the Staff of the Division of Corporation Finance (the Staff) regarding potential oral rather than written responses to 14a-8 no-action letter requests, as further outlined in recent our blog post.

As a general matter, Glass Lewis believes companies should only exclude a shareholder proposal when the Staff has explicitly concurred with a company’s argument for the exclusion of such shareholder proposal.

Staff Declines to Articulate a View on the Exclusion of a Shareholder Proposal

In instances where the Staff has declined to provide a view on whether the shareholder proposal is ripe for exclusion, Glass Lewis believes such a shareholder proposal should be included in the company’s proxy statement. In the event a company excludes such a shareholder proposal from its proxy statement, Glass Lewis will likely recommend that shareholders vote against the members of the company’s governance committee.


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On November 5, the Securities and Exchange Commission (SEC) in a 3-2 decision voted to propose amendments to rules governing shareholder proposals in companies’ proxy statements.  These proposed amendments – which seek to revise Rule 14a-8’s eligibility requirements, one-proposal limit, and resubmission thresholds – follow on the heels of recent guidance issued by the Staff of the Division of Corporation Finance related to the no-action letter process for shareholder proposals.

The press release announcing the proposed changes noted that the changes are part of the SEC’s ongoing focus on improving proxy access and the ability of shareholders to exercise their rights to vote. SEC Chairman Jay Clayton commented in the release that the proposed changes are designed to “facilitate constructive engagement by long-term shareholders in a manner that would benefit all shareholders and our public capital markets.”  Not without controversy though, the rule revisions are receiving criticism from shareholder advocacy groups, while business-minded groups like the U.S. Chamber of Commerce have come out in support of the proposed changes.

Eligibility Requirements for Shareholders

The current eligibility requirements require that a shareholder proponent hold at least $2,000 or 1% of a company’s securities for at least a year to be eligible to submit a proposal.  The proposed revisions, eliminate the 1% threshold and replace the $2,000 threshold with the following three alternatives:


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Register for the Corporate & Securities Counsel Public Company Forum on December 12Bass, Berry & Sims invites you to join us for our inaugural Corporate & Securities Counsel Public Company Forum on Thursday, December 12.

This half-day program will feature timely and practical guidance on the latest developments in corporate and securities matters impacting public company in-house counsel.

Panel discussion topics will include:

  • Upcoming proxy season
  • Financial