SEC has proposed exemptions from Exchange Act registration requirements for compensatory employee stock options

• Would add new subsections (f) and (g) to Rule 12h-1

• Rule 12h-1 provides exemptions from Exchange Act §12(g)registration requirements

• First exemption -- new subsection (f) -- would be available to issuers that are not required to file periodic reports under the Exchange Act

• Would apply only to the issuers compensatory employee stock options
• Would not extend to the class of securities underlying those options

• Second exemption -- new subsection (g) -- would be available to issuers that are required to file periodic reports under the Exchange Act because they have registered under Exchange Act Section 12 the class of securities underlying the compensatory employee stock options

Federal Register PDF  72 FR 37608  7.10.07

Top of release ++

• Introduction and Background  I.

• Introduction I.A.
• Overview of Applicable Exchange Act Provisions I.B.
• Historical Treatment of Compensatory Employee Stock Options under Exchange Act Section 12(g) I.C.
• Recommendation of the Advisory Committee on Smaller Public Companies I.D.
• Overview of the Proposed Exemptions I.E.

•  Discussion of Proposals II.

• Proposed Exemption For Compensatory Employee Stock Options of Issuers That Are Not Exchange Act Reporting Issuers II.A.
• Proposed Exemption for Compensatory Employee Stock Options of Exchange Act Reporting Issuers II.B.
• Transition Provisions II.C.
• General Request for Comment II.D.

• Paperwork Reduction Act Analysis III.

• Background III.A.
• Summary of Collection of Information III.B.
• Paperwork Reduction Act Burden Estimates III.C.
• Request for Comment III.D.

• Cost-Benefit Analysis IV.

• Background IV.A.
• Summary of Proposed Amendments IV.B.

• Consideration of Impact on the Economy, Burden on Competition and Promotion of Efficiency, Competition and Capital Formation Analysis V.
• Initial Regulatory Flexibility Analysis VI.

• Reasons for the Proposed Action VI.A.
• Objectives VI.B.
• Legal Basis VI.C.
• Small Entities Subject to the Proposed Rules VI.D.
• Reporting, Recordkeeping and Other Compliance Requirements VI.E.
• Duplicative, Overlapping or Conflicting Federal Rules VI.F.
• Significant Alternatives VI.G.

• Small Business Regulatory Enforcement Fairness Act VII.
• Statutory Basis and Text of Proposed Rule Amendments VIII.

• The authority citation for Part 240 continues to read in part as follows: VIII.1.
• Amend 240.12h-1 to add paragraphs (f) and (g) to read as follows: VIII.2.

Comment letters to SEC

• SEC webpage
• Due by 9.10.07

Rule 12h-1