TheCorporateCounsel.net

March 16, 2007

Corp Fin Interpretive Letter: Form S-8 and SARs

A few days ago, Corp Fin issued this Beazer Homes USA interpretive letter that deals with the availability of Form S-8 for the exercise of stock appreciation rights and subsequent resale of underlying equity securities. General Instruction A.1(a)(5) of Form S-8 makes the Form available for the exercise of employee benefit plan options and the subsequent resale of the underlying securities by certain family members of an employee who acquired the options from the employee through a gift or domestic relations order.

The Staff was asked whether stock appreciation rights that may be settled in equity securities of the registrant may also be registered on Form S-8 in these situations. Given that the stock settlement of a stock appreciation right is economically equivalent to the cashless exercise of an option for the same number of shares, the Staff indicated that for purposes of General Instruction A.1(a)(5), in its view, the term “option” includes a stock appreciation right that may be settled in equity securities of the registrant.

Accordingly, when the other conditions of General Instruction A.1(a)(5) are satisfied, Form S-8 would be available for the exercise of stock appreciation rights and subsequent resale of underlying equity securities. This position is limited to stock appreciation rights that may be settled in equity securities of the registrant. All of this is not too much of a big deal as most practitioners haven’t questioned whether SSARs were covered under an S-8 – as we have written about in The Corporate Executive in the past – but it’s nice to have it clearly stated in an interpretive letter.

Tackling Global Warming: Even Corporate Lawyers Need to Take Heed

With climate control becoming an inevitable issue that we all will have to deal with – both in our personal and professional lives – we have launched a new website to help you navigate how global warming will impact the corporate & securities laws. Sponsored by TheCorporateCounsel.net and the National Council for Science and the Environment, this full-day June 12th webconference is free to all – and the agenda is listed on TacklingGlobalWarming.com. Here is a snapshot of that agenda:

– What the Studies Show: A Tutorial
– The Business Case for Tackling Global Warming
– The Board’s Perspective: Strategic Opportunities and Fiduciary Duties
– Why You Need to Re-Examine Your D&O Insurance Policy
– The Investor’s Perspective: What They Seek and Their Own Duties
– Disclosure Obligations under SEC and Other Regulatory Frameworks
– How (and Why) to Modify Your Contracts: Force Majeure and Much More
– Due Diligence Considerations When Doing Deals

It is notable that law firms are ramping up their climate control practices (see this recent NY Times article) and that an environment group recently hired an investment banker to help them negotiate their interests in an energy merger.

2500! A Blistering Pace

In our “Q&A Forum,” we have blown right through query #2500 (and even #2600) – which is really a higher number since many of these have follow-ups queries. As the pace has been blistering, I’m not sure if we can keep up with the growing pace of questions – you are reminded that we welcome your own input into any query you see. And remember there is no need to identify yourself if you are inclined to remain anonymous when you post a reply…