On December 3, the Securities and Exchange Commission released final rules (effective upon publication in the Federal Register), adopting two exemptions for registration under the Securities Exchange Act of 1934 of compensatory employee stock options. The first exemption will apply to private non-reporting issuers and the second to issuers that have registered a class of securities under Exchange Act Section 12 or are required to file reports pursuant to Exchange Act Section 15(d). The exemptions apply only to the options themselves, not to the underlying stock.

Under Section 12(g) of the Exchange Act, an issuer with 500 or more holders of record of a class of equity securities and assets in excess of $10 million at the end of its most recently ended fiscal year must register that class of equity securities, unless there is an available exemption from registration. Stock options are a separate class of equity securities for purposes of the Exchange Act and there previously was no exemption from registration resulting solely from the issuance of compensatory employee stock options. The new Rule 12h-1(f) exemption is available, among other limitations, only for options issued to a limited class of optionees, pursuant to a written plan, subject to written, enforceable transfer restrictions and subject to certain information requirements. The exemption terminates once the issuer otherwise becomes subject to reporting requirements of the Exchange Act.

Initially, the proposed Exchange Act registration exemption for certain options of public reporting issuers (Rule 12h-1(g)) would have been available only for an issuer that had registered the class of equity security underlying the compensatory employee stock options under the Exchange Act Section 12; however, the eligibility for this exemption has been expanded to include any issuer required to file periodic reports under Exchange Act Section 13 or 15(d).

 http://www.sec.gov/rules/final/2007/34-56887.pdf