Parsing the Form S-8 / Rule 701 Proposals

Our guests – Compensia’s Mark Borges, Ropes & Gray’s Keith Higgins and Fenwick & West’s Scott Spector – explain all you need to know about the SEC’s recent proposals to revise Form S-8 and Rule 701, including the “temporary rule” for gig workers (aka “platform workers”). Topics include:

Proposed amendments to S-8 (and 701 where applicable):

• Entity eligibility (ie. expansion of “alter ego” doctrine with specific requirements)
• Grants of compensation to former employees/service provider within 12 months of termination or services
• Application to former employees & service providers to apply to assumed awards after merger
• Application to controlled subsidiaries
• Use of single S-8 for multiple plans
• Consideration of simplification of rules for 423 plans at IPO

Proposed amendments to 701:

• Raising 701 dollar/percentage limits
• Age of financial statements (180-day rule)
• Prospective application of $10M information delivery requirements
• 409A report to be permitted for disclosure of financial information in lieu of financials
• RSU recipients and the “no-sale” theory

Extension of 701/S-8 to platform workers:

• Definition/eligibility of platform worker
• Limitations of proposal
• Reporting requirements to SEC
• Time period for extension to platform workers