On November 9, 2016, the SEC’s Division of Corporation Finance issued revised Question 240.11 and new Questions 240.15 and 240.16 of its Compliance and Disclosure Interpretations (the “C&DIs”), pertaining to Securities Act Rule 457(p) and Form S-8 registration statements. Rule 457(p) allows an issuer to utilize previously-paid filing fees relating to unsold securities under an earlier registration statement to offset against the filing fees due for a subsequent registration statement filed within five years of the filing of the earlier registration statement. Within the context of shares of common stock being registered under Form S-8 that are issuable upon the exercise of outstanding options granted under an issuer’s equity compensation plan, the main takeaways of the C&DIs are as follows:

  • Rule 457(p) permits filing fees to be transferred only after the registered offering has been completed or terminated or the registration statement has been withdrawn.
  • An offering registered on Form S-8 is only completed or terminated when no additional securities will be issued pursuant to the plan covered by the Form S-8, including through the exercise of any outstanding awards.
  • An issuer that wishes to: (i) roll over, from one equity compensation plan to a new plan, (a) shares remaining under the earlier plan that are not subject to outstanding options and (b) shares subject to outstanding options under the earlier plan that would expire, be terminated or canceled under the new plan, and (ii) register shares newly authorized for issuance under the new plan, can register all these shares on a new Form S-8. However, because the offering is not yet completed under the earlier plan, Rule 457(p) does not permit the issuer to claim the filing fees associated with the shares from the earlier plan as an offset against the filing fees due for the new Form S-8. Alternatively, the issuer can file (without the need to pay new filing fees), a post-effective amendment to the earlier Form S-8 for the early plan, indicating that such Form S-8 will also cover the issuance of shares under the new plan once they are no longer issuable pursuant to the old plan and instead become authorized for issuance under the new plan, but a new and separate S-8 covering the new shares to be issued under the new plan must be filed.

A copy of the C&DIs is available at: https://media2.mofo.com/documents/161111-new-cdis-on-rule457p.pdf