Virtual Shareholder Meetings: The Legal Aspects

Our guests – Covington & Burling’s Kerry Burke, Sullivan & Cromwell’s Cathy Clarkin and Richard Layton’s Mark Gentile – walk us through all the potential legal issues you might face with a “virtual annual meeting” including:

1. What do you need to consider with your bylaws – eg. who calls the meeting to order?
2. What should press releases about the meeting say? Stockholder list, replays, access, file the press release as soliciting material, etc.
3. What language should be in the official meeting notice?
4. What should the disclosure in the proxy say about the meeting?
5. What about the proxy card?
6. What about director attendance? Is attending virtually count towards Item 407 disclosure requirement?
7. Can the inspector of elections attend virtually? What about the independent auditors? Shareholder proponents?
8. What about making stockholder lists available? What is required by Delaware law – redact addresses, registered holders only?
9. How do you ensure your virtual annual meeting is a FD compliant meeting? –
10. What legal issues might arise about the Q&A session – legally required to allow, length, how many questions to answer, cherry picking questions, including Q&A in the replay
11. Are there any legal issues with pre-recording a CEO’s presentation?
12. How might you distribute a “rules of conduct”? And how do you decide whether to boot someone out of a meeting for violating those rules?
13. What are the possible legal ramifications of a technological glitch? Do you need to postpone or adjourn the meeting?
14. What if shareholders not receiving their materials timely in the postal mail – Broadridge or US Post office issues – do you need to postpone the meeting?

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