Maryland Modifies Shareholder Meeting Requirements for Publicly-Traded Corporations and REITs
On April 14, 2020, Maryland Governor Larry Hogan issued Executive Order Number 20-04-14-02 as part of the ongoing state of emergency and catastrophic health emergency order that was renewed on April 10, 2020 (the “Executive Order”). The Executive Order is aimed at assisting publicly-traded Maryland corporations and real estate investment trusts with facilitating already noticed annual or special meetings of stockholders and shareholders by allowing for remote communication.
Notwithstanding any provision in its charter, declaration of trust or bylaws, the Executive Order allows a publicly-traded Maryland company, including a Maryland real estate investment trust, to:
- Change a shareholders’ meeting currently noticed for a physical location to be a meeting to be held only or in part by remote communication; and/or
- Postpone or adjourn a shareholders’ meeting currently noticed for a physical location to another date or time, whether to be held in person or only or in part by remote communication.
Pursuant to the Executive Order, a publicly-traded Maryland company may change, postpone or adjourn a shareholders’ meeting if:
- The board of directors or trustees of the company determines that, as a result of the public health threat posed by the COVID-19 pandemic in the United States, it is reasonable, prudent and advisable to do so; and
- The company notifies its shareholders of the change, postponement or adjournment by (a) publicly filing a document with the U.S. Securities and Exchange Commission; and (b) a press release, which must be posted on the company’s website after release.
The Executive order also suspends the applicability of Sections 2-502.1, 2-503, 2-504 and 2-511 of the Maryland General Corporation Law and Section 8-202(b)(1)(iv) of the Maryland REIT Law to the extent necessary to give full effect to the Executive Order.
Saul Ewing Arnstein & Lehr LLP has significant experience with counseling boards of directors and trustees of publicly-held Maryland corporations and REITs. For more information about the Executive Order or its impact on Maryland publicly-owned companies, please contact the authors or the attorneys at the Firm with whom you are regularly in contact.