June 24, 2019

June 24, 2019

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Is The NYSE Confused About The Meaning of "Adjourn"?

Last month the New York Stock Exchange issued its annual corporate governance memorandum.  The memorandum provides useful updates and reminders for companies with securities listed on the exchange, including the following:

"Section 302 of the Listed Company Manual states that a listed company must have an annual shareholders’ meeting during each fiscal year.  Please note that if a meeting is postponed or adjourned, the Exchange does not consider the company to have met the Section 302 requirement to hold an annual meeting."

Surely, this statement should not be taken literally - a meeting fails to satisfy Section 302 merely because it has been postponed or adjourned.  Meetings commonly end with an adjournment.  If the meeting is not be continued, the adjournment is "sine die" (without a day).  I don't think the NYSE intended to say that all annual meetings that end in an adjournment do not meet the requirement of Section 302.  Nor do I believe that the NYSE intended to disqualify meetings simply because they have been postponed or adjourned.   A postponed or adjourned meeting may be eventually convened or reconvened.  In those instances, there is no reason to conclude that the annual meeting requirement has not been met.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...