California's new board gender quota law places great weight on the location of a corporation's principal executive offices. The law applies to a publicly held foreign corporation when its principal executive offices, according to its Form 10-K, are located in California. Cal. Corp. Code § 301.3(a). The law also applies to a publicly held domestic corporations, but it is not clear whether it applies only when their principal executive offices are located in California. Id.
The Securities and Exchange Commission, however, has not defined "principal executive offices" for purposes of Form 10-K and it most certainly did not have California's statute in mind when it designed the Form 10-K. As a result, it seems that public companies have exercised some latitude in designating the location of their principal executive offices. For example, I came across the following in the paper by Professor Moon mentioned in last Friday's post:
"Consider, for instance, Theravance Biopharma, Inc., a biopharmaceutical company incorporated in the Cayman Islands. The company declares a P.O. Box in Georgetown [sic], Cayman Islands, as its headquarter [sic] in its SEC filings. But even a cursory examination of the company’s disclosed real estate holdings in the same filings indicates that its physical headquarter [sic] is located in San Francisco, California."
William Moon, Delaware's New Competition (May 28, 2019). Northwestern University Law Review, Forthcoming; Univ. of Md. Legal Studies Research Paper No. 2019-09. Available here (footnotes omitted).
The location of a company's principal executive offices does have some significance under the SEC's rules. Rule 14a-8, for example, requires that a shareholder's proposal must be received at the company's principal executive offices not less than 120 calendar days before the date of the company's proxy statement released to shareholders in connection with the previous year's annual meeting. Similarly, Rule 14d-3(a)(2)(i) requires a bidder in a tender offer to deliver a copy of its Schedule TO to the subject company at its principal executive offices.
Numerous references to a corporation's "principal executive office" in the California Corporations Code predate last year's enactment of Section 301.3. See, e.g., Cal. Corp. Code §§ 177, 213, 1500, 1503, 1508, 1602, 1702, 2105, and 2107. Unlike Section 301.3, these statutes do not refer to a corporation's Form 10-K and do not otherwise define the term. This creates the possibility that a corporation's "principal executive office" for purposes of these statutes could differ from its "principal executive offices" for purposes of Section 301.3.