November 6, 2020

Reg S-K Modernization: Corp Fin Issues 3 Transitional FAQs

Yesterday, Corp Fin issued three FAQs to address transitional issues that companies have been wondering about in light of the recent amendments of Regulation S-K Items 101, 103 and 105, which are effective for filings made after today. Thanks to the Staff for addressing these questions – and it was also great that the SEC sent out a separate email showing exactly which interpretations had been added. Here are the topics that are covered (also see this Cooley blog):

1. Whether a Form S-3 prospectus supplement that’s filed after November 9th, relating to a registration statement that became effective before that date, has to comply with the new rules.

2. Whether new Item 101 requires companies to disclose info in the Form 10-K for more than the fiscal year covered by the report.

3. Whether a company must always provide a full discussion of the general development of its business in an annual report or registration statement that requires Item 101 disclosure.

Tesla D&O Coverage Gets an “Elon Exclusion”

Earlier this year, John blogged that Tesla struck a deal in which CEO Elon Musk would personally provide D&O coverage to the board. Last week, the company’s latest Form 10-Q reported that the coverage came with a $3 million price tag for 90 days of coverage – which apparently was a 50% discount from the market quotes that Tesla received!

Tesla says that it’s now decided to line up a customary policy with third-party carriers. You’ve gotta wonder whether they’ve been able to negotiate a more reasonable price, since according to this article, the new policy has an “Elon exclusion.”

Will Mr. Musk play it safe without the safety net of insurance coverage? We’ll see, but my guess is he feels fine being self-insured. He now has $3 million more to cover mishaps, and that’s just pocket change for the fourth-richest man in the world.

Visit Our “Proxy Season Blog”

We continue to share daily posts on our “Proxy Season Blog” – which is available to members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Emerging Shareholder Proposal: B-Corp Conversions
– ISS to Cease Providing Draft Reports to S&P 500
– 14a-8 No-Action Letters: Key Points for Next Year
– Investors’ Letter-Writing Campaigns Just Got Easier
– Trends in Audit Committee Disclosures

Liz Dunshee