Category

Mergers & Acquisitions

Category

In M&A transactions, it is common for companies to cash out the vested equity awards of the target company and convert any unvested portion of the award into an award that will pay out in the future. In our latest guest blog post for the NASPP, we look at the various global tax and regulatory considerations and flag potential risks ranging from unfavorable tax treatment to compliance issues under local rules and regulations.  To read…

One of the most important issues that arises in any M&A transaction from a compensation perspective is the treatment of stock options, restricted stock, restricted stock units (RSUs) or other compensatory equity awards, whether vested or unvested, held by executives and other employees in the transaction. Below is a high-level summary of key issues to consider in managing equity awards in the transaction.1 Scope of Outstanding Equity Awards. The first step to determining the treatment…

How do the specified employee rules under Code Section 409A apply when two public companies merge and both partners use the default rules to identify specified employees based on officer status within the respective company? The Case Study The merger closed after December 31, 2016 and before April 1, 2017.  Per the regulations, the acquiring entity’s next specified employee identification date and specified employee effective date govern, which is not an issue since both companies use the…