On April 14, 2020, Maryland Governor Larry Hogan issued Executive Order 20-04-14-02 intended to provide publicly traded Maryland corporations and real estate investment trusts with greater flexibility in holding stockholder meetings by remote communication. Applicable to Maryland corporations and REITs that are subject to the reporting requirements of the ’34 Act, the Executive Order will remain in effect until Maryland’s state of emergency has been terminated and the proclamation of the catastrophic health emergency has been rescinded.

The Executive Order will be useful to any publicly traded Maryland company that had, as of April 14, noticed a stockholder meeting to be held at a physical location and wishes to change to a virtual meeting. Such a company may now (a) change that meeting “to be a meeting conducted solely or in part by remote communication” and/or (b) postpone or adjourn that meeting “to another date or time, whether to be held in person or solely or in part by remote communication.”

While the Executive Order is in effect, a publicly traded Maryland company may make such a change, postponement or adjournment of a stockholders’ meeting, notwithstanding contrary provisions of its governing documents or obstacles in Maryland General Corporation Law or the Maryland REIT law, if:

1. the company’s board of directors or trustees determines that it is “reasonable, prudent, and advisable to do so,” and
2. the company notifies its stockholders by publicly filing a document with the Securities and Exchange Commission and by a press release that is promptly posted on the company’s website.

We have advised clients with respect to virtual meetings during the COVID-19 disruption and have navigated such issues as timing of notices and responding to stockholders who request a physical place to attend a virtual meeting. By broadly suspending certain sections of the Corporations and Associations Article of the Maryland Code “to the extent necessary to give full effect” to his Executive Order, the governor has resolved some of those issues—at least for the benefit of companies that, as of April 14, had noticed meetings for a physical location and had not already altered their plans or that had lingering concerns about complying with technical requirements. The Executive Order gives companies comfort that they can avoid the expense of re-noticing meetings, but they still must provide stockholders with information to access and participate in the meetings. Overall, we think the governor has been helpful—at least for companies that convene their meetings while the order is still in effect. For others, we refer to our prior analysis.

This alert was written by Emily A. Higgs, Scott R. Wilson and J.W. Thompson Webb, lawyers in the Corporate, Securities & Tax practice group at Miles & Stockbridge.

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