Monday, November 14, 2016

SEC updates Form S-8 C&DIs

By Mark S. Nelson, J.D.

The SEC’s Division of Corporation Finance issued several new Compensation and Disclosure Interpretations and revised some existing C&DIs. The latest guidance primarily deals with the transfer of filing fees and Form S-8.

For one, the Division revised existing Question 240.11 and added Question 126.42 in the Securities Act Rules and Forms C&DIs, respectively. The updated guidance (Rules C&DIs; Forms C&DIs) deals with the transfer of filing fees regarding unneeded securities. The staff said this is barred because Rule 457(p) limits when fees can be transferred to a new registration statement. The revised C&DIs largely track the prior text, but the staff has added some additional information about the use of a post-effective amendment to Form S-8.

Another set of Securities Act Rules and Forms C&DIs (Questions 240.15 and 126.43) deals with the use of Form S-8 in the context of equity compensation plans that are separated by a period of years. The guidance suggests two options: (i) use a new Form S-8 but, under the specific circumstances presented, there can be no offset of fees under Rule 457(p); or (ii) file a post-effective amendment to an earlier Form S-8 with specified disclosures on the cover page along with an explanation that the shares issued under an earlier plan may become authorized under a later plan. The staff noted that the second option applies only in the context of Form S-8.

Yet another pair of new C&DIs (Questions 240.16 and 126.44) explain that if an issuer uses fees paid regarding an earlier registration statement to offset fees due on a later one, the issuer should: (i) include the note to the table required by Rule 457(p); (ii) quantify the amount of unsold securities from the prior registration statement; and (iii) disclose that the prior registration statement was withdrawn or that any offering of the unsold securities was terminated or completed.

The Division also updated Securities Act Forms Question 126.06. The change alters the first sentence of the answer to clarify that the full title of each plan should appear on the face of the registration statement. The question, dealing with the registration of two plans on the same registrations statement, previously had been answered by stating that a company may file a registration statement with a table identifying both plans and other information about the amount of securities involved.

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