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.

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