(May 21, 2020) - Audio technology company Knowles Corp. and mortgage insurance provider MGIC Investment Corp. have joined other companies during the COVID-19 pandemic in adopting new bylaw provisions that relax requirements for boards to act in an emergency.
Knowles Corp. Form 8-K, 2020 WL 02526314 (May 19, 2020).
MGIC Investment Corp. Form 8-K, 2020 WL 02529446 (May 19, 2020).
Both companies adopted new bylaws May 19 that make it easier to call board meetings during emergencies, according to Forms 8-K filed with the Securities and Exchange Commission the same day.
In April, real estate investment company New York Mortgage Trust Inc. and tech company Digi International Inc. announced new standards for board meetings and other company actions during catastrophes.
Knowles’ quorum requirements
Knowles’ new bylaw provides that any director or senior executive officer can call a board meeting to be held “by any feasible means” in case of an “emergency, disaster or catastrophe.” The participation of at least one-third of directors would provide a quorum under such circumstances.
The new bylaw incorporates portions of Section 110 of the Delaware General Corporation Law, 8 Del. C. § 110, which authorizes boards to adopt emergency bylaws.
Another new provision says that during an emergency, Knowles’ directors have “maximum authority possible under the DGCL” to run the company’s interim affairs in the manner they deem best.
Other new bylaws
Similarly, MGIC’s new bylaw provides that in an emergency, a director or specified officer can call a meeting and a majority of directors “who can be readily assembled” will form a quorum.
Both Knowles’ and MGIC’s new bylaws relieve directors of liability for good-faith actions taken to manage the companies’ affairs under emergency circumstances.
Last month, Digi adopted new bylaw provisions on board quorum requirements, lines of management, office relocation and other details in case of an emergency. Digi International Inc. Form 8-K, 2020 WL 02077654 (Apr. 30, 2020).
New York Mortgage Trust changed its bylaws to expressly allow the company to conduct shareholder meetings remotely and to reduce board quorum and meeting notice requirements in emergency circumstances.
New York Mortgage Trust Inc. Form 8-K, 2020 WL 01950045 (Apr. 23, 2020).