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Update: SEC Extends Filing Extension Relief to Form 10-K Part III Information; Delaware’s Governor Issues Revised Emergency Order Permitting Change in Annual Meeting Location Without Additional Mailing

On April 6, 2020, the Securities and Exchange Commission (SEC) provided a compliance and disclosure interpretation (C&DI) extending relief provided in its prior COVID-19 order to the filing of required Part III information in a public company’s Form 10-K.

In addition, on April 6, 2020, Delaware’s governor, John C. Carney, signed a modification to Delaware’s state of emergency in response to the COVID-19 public health crisis allowing Delaware public companies that have sent a notice of annual meeting to change the meeting’s location by providing notice of the change in a press release, including posting to its website, and through its SEC filings, rather than sending a new written notice.

SEC C&DI Extends Filing Extension Relief to Form 10-K Part III Information

As we previously reported here, the SEC has issued a COVID-19 order giving public companies a 45-day extension to file certain disclosure reports otherwise due between March 1 and July 1, 2020, subject to specified conditions. On April 6, 2020, the SEC clarified in C&DI Question 104.18 available here that the relief provided by its prior COVID-19 order extends to the filing of the information required by Part III of Form 10-K.

Part III information is frequently omitted from a company’s annual report on Form 10-K since companies are permitted to incorporate such information by reference from the company’s definitive proxy statement (or information statement) if filed within 120 days after the end of the fiscal year.[1] Under normal circumstances, if the company is unable to file its proxy statement by the 120th day, the company must amend its Form 10-K no later than the 120th day to include all of the Part III information previously omitted.

New C&DI Question 104.18 allows a company to rely on the conditional relief from reporting deadlines provided by the COVID-19 order for the filing of the Part III information as long as the 120-day deadline falls between March 1 and July 1, 2020, and the company meets the conditions of the COVID-19 order. C&DI Question 104.18 specifically provides the following:

  • A company that timely filed its Form 10-K without relying on the COVID-19 order should furnish a Form 8-K with the disclosures required in the order by the 120-day deadline. The company would then need to provide the Part III information within 45 days[2] of the 120-day deadline by including it in a Form 10-K/A or definitive proxy or information statement.

  • A company may invoke the COVID-19 order with respect to both the Form 10-K and the Part III information by furnishing a single Form 8-K by the original deadline for the Form 10-K that provides the disclosures required by the order, indicates that the company will incorporate the Part III information by reference, and provides the estimated date by which the Part III information will be filed. The Part III information must then be filed no later than 45 days following the 120-day deadline.

  • A company that properly invoked the COVID-19 order with respect to its Form 10-K by furnishing a Form 8-K but was silent on its ability to timely file Part III information may (1) include the Part III information in its Form 10-K filed within 45 days of the original Form 10-K deadline, or (2) furnish a second Form 8-K with the disclosures required in the order by the original 120-day deadline and then file the Part III information no later than 45 days following the 120-day deadline by including it in a Form 10-K/A or definitive proxy or information statement.

The SEC’s COVID-19 order can be found here.

Delaware Emergency Order Provides Relief from Additional Notice Mailing for Change in Location of Meeting

On April 6, 2020, Delaware’s governor, John C. Carney, signed a modification to Delaware’s state of emergency (the Emergency Order), which can be found here, in response to the COVID-19 public health crisis, allowing Delaware public companies that have sent a notice of annual meeting to change the meeting’s location, subject to certain specified conditions outlined below, in what seems to be a harmonization with the SEC’s COVID-19 guidance (which we previously reported here). As discussed, state laws require companies to hold annual meetings of their shareholders to elect directors and to allow their shareholders to vote on matters that require shareholder approval. Due to the COVID-19 public health crisis, many public companies are evaluating the use of remote technology to host a virtual meeting, either in addition to or in place of their in-person shareholder meeting.

When evaluating the ability to change the location of the annual meeting to a virtual meeting, companies need to be cognizant of the notice requirements under state law and (as applicable) the SEC rules, with respect to both timing and content. As we previously noted, companies that, after mailing and filing their proxy materials, elect to move to a virtual meeting may follow the SEC’s guidance we outlined in our previous alert, but would need to evaluate whether, under applicable state law, an updated notice would need to be provided and whether such notice must be sent by mail or may be transmitted electronically such that a press release would suffice. Delaware’s Emergency Order provides a response and allows, at least for Delaware public companies that have already given notice of an in-person meeting, the means to switch to a virtual meeting by providing notice of the change in a press release and its SEC filings, rather than giving a new written notice.

The Emergency Order provides that if as a result of the COVID-19 public health crisis, a company’s board of directors wishes to change a meeting currently noticed for a physical location to a virtual-only meeting, it may notify shareholders of the change solely by publicly filing a document with the SEC and issuing a press release, which must be promptly posted on the company’s website — presumably the company could file the press release as definitive additional solicitation material and post such press release on its website to fulfill both requirements of the Emergency Order. In addition, the Emergency Order provides that if it is impracticable to convene a currently noticed meeting of shareholders at the physical location due to the COVID-19 public health crisis, the company may adjourn the meeting to another date or time, to be held by remote communication (a virtual meeting), by providing notice of the date and time and the means of remote communication in a publicly filed a document with the SEC and by issuing a press release, which shall be promptly posted on the company’s website — again, presumably the company could file the press release as definitive additional solicitation material and post such press release on its website to fulfill both requirements of the Emergency Order.

Notably, the Emergency Order applies only to companies that have already sent a notice of meeting to be held at a physical location and remains silent as to companies that, as of the date of the Emergency Order, have not given notice of their annual meeting or have already given notice of a meeting to be held by remote communication.

© 2020 Jones Walker LLPNational Law Review, Volume X, Number 99

TRENDING LEGAL ANALYSIS


About this Author

Alexandra Clark Layfield Corporate Attorney Jones Walker Law Firm
Partner

Alexandra Layfield joined Jones Walker's Corporate & Securities Practice Group in 2008. Ms. Layfield's practice is exclusively transactional, concentrating principally on the areas of securities law, mergers and acquisitions, general corporate law and corporate governance matters.

Ms. Layfield's principal area of focus is counseling corporations on corporate governance matters and the related disclosure requirements of the securities laws and trading markets, including reviewing annual, quarterly, and current reports, proxy statements, and...

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Victoria Bagot Corporate Attorney Jones Walker New Orleans, LA
Associate

Victoria Bagot is an associate in the Corporate Practice Group. She represents clients on corporate, securities, mergers and acquisitions, and private equity matters.


Victoria advises public and private companies on a range of corporate matters, including finance, capital markets, mergers and acquisitions, and private equity.

Victoria represents issuers and underwriters in a variety of corporate finance transactions, including tender offers, public and private securities offerings of debt and equity securities, and initial public offerings. She also works with private equity investors, their portfolio companies, and other public and private companies in connection with mergers, acquisitions, dispositions, internal reorganizations, and strategic investments.

In the area of corporate governance, Victoria advises clients on disclosure and reporting requirements of securities laws and capital markets, and regularly reviews annual, quarterly, and current reports, proxy statements, and other SEC filings. She coordinates periodic reviews and compliance with internal company policies such as insider trading policies and ethics and business conduct policies.

Prior to joining Jones Walker, Victoria was an associate in the capital markets and mergers and acquisitions practice group at the Houston office of an Am Law 100 firm.

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