2013.Jan.28 Stock Option M&A Cash-outs and Deduction Timing . . . IRS Advice
The IRS has published generic legal advice (GLAM 2012-010) with respect to stock options and SARs that a target company cashes-out within several days after an acquisition closes (using its own funds or those received from the acquiring company). The IRS advises that "these deductions are governed by the end-of-the-day rule [under Treas. Reg. 1.1502-76(b)(1)(ii)(A)] and are properly reported on Target's short-year return for the taxable year".
2012.Aug Ohio Sup Ct Reconsidering Acordia Decision. See 2012.May.24 Non-compete Limited on Post-Merger Basis (Ohio Ruling). The closing date of a merger triggered a termination of employment with the target company, for purposes of measuring a non-competition agreement's two year post-employment period. The merged company was accordingly not entitled to enforce the non-competition agreement beyond that two-year period, because the agreement omitted a "successors and assigns" provision and referred to service with "the Company" alone. That was the Ohio court's conclusion in Accordia of Ohio v. Frankel.
Change-in-Control Severance and Non-Compete Insights.
Recent 1st and 5th Circuit decisions provide healthy reminders about two often underappreciated M&A issues, namely:
2013.Oct.25 Equity Issues in Spin-offs. See this PowerPoint titled "A Tale of Two Spin-offs" by Global Equity.
2012.Mar.12 Motorola's Split-up of Equity Awards. See page 12-13 of MOT's 2012 proxy statement for a description of the equitable adjustment for equity awards that adjusted them to reflect the common stock of each award holder's employer after the split-up.
See Phelps v. Gilbraith, Arizona Court of Appeals 2nd Div. (10/29/2010) in which an Arizona court addresses the damages payable for the breach of a non-competition provision in a sale of business context, and cites the following authority.
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