Thanksgiving 701 and S-8 Revisions: Tasty Treats and a Turducken

1 December 2020
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Key takeaways: On the eve of Thanksgiving, the SEC proposed two sets of revisions to Rule 701 and Form S-8.
  • One of the proposals would address some longstanding mechanical issues arising under the current rules, including allowing acquiring entities to issue substitute compensatory awards to former employees of an acquired company who had received their awards while employees of the acquired company; easing the potential disclosure burden for issuers relying on Rule 701, including requiring delivery of the mandated disclosure only after the triggering threshold of $10 million has been met; and simplifying the process for registering shares offered under defined contribution plans, by allowing the issuer to pay registration fees annually in arrears based on the shares actually purchased.
  • The second proposal establishes a specified path for offering compensatory equity awards under Rule 701 or in reliance on Form S-8 to so-called “platform workers” in the GIG economy within reasonably narrow limits and subject to semiannually reporting to the SEC.