Regulatory Relief for Private Company Stock Option Plans
| January 15, 2008 |
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SEC simplifies reporting requirements for certain plans
Effective Dec. 7, 2007 the U.S. Securities & Exchange Commission (SEC) adopted a rule making it easier for larger private companies to use certain types of compensatory stock option plans. The rule exempts such plans of qualifying non-reporting companies from Exchange Act registration.
The exemption under the SEC’s new Rule 12h-1(f) affects private companies with more than $10 million in assets that have a class of equity securities, with stock options treated as a separate class, held by more than 500 persons. The rule also will impact certain subsidiaries of public companies.
Qualifying companies with stock option plans may reduce their compliance burden by ensuring their plans are properly structured. Qualifying companies that would like to establish stock option plans now have a clear path to doing so with greatly reduced regulatory obligations. Continue reading...
