Now Trending: Using Market Standards for EBEC Considerations in Corporate Transactions: 2023 Q1 Report

Corporations involved in mergers and other corporate transactions vary their treatment of outstanding equity awards to their C-suite executives. This includes how they handle vested and unvested outstanding equity-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units (RSU), RSUs subject to performance criteria, and deferred stock units. Read this practice note to see the trends in what’s been done in the first quarter of 2023, and the accompanying language.

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Related Content

• Equity Award Treatment in Corporate Transactions
  Learn more about how to handle outstanding equity in a corporate transaction. In broad terms, outstanding target equity awards may be handled in two ways: (1) the acquiror can assume them and they can remain outstanding following the closing of the transaction, or (2) they can be cancelled at the closing of the transaction, presumably in exchange for a cash payment.
• Corporate Transactions EBEC Resource Kit
  Refer to this resource kit and review how corporate transactions, regardless of size, implicate various employee benefits and executive compensation issues.

Practical Guidance Updates 
Featuring the latest updates from your Practical Guidance account.    

• Employee Benefits & Executive Compensation Key Legal Developments Tracker
  Stay informed on new developments.
  • Retirement Plans. IRS provides interim guidance on expansion of its EPCRS program as provided under the SECURE 2.0 Act (Pub. L. No. 139-22, Div. T). SECURE 2.0 expanded the IRS’s self-correction program to permit plan sponsors to self-correct “eligible inadvertent failures” unless the plan or plan sponsor is under IRS examination and has failed to demonstrate a commitment to self-correct (outside of insignificant failures). IRS Notice 2023-43.
  • Health and Welfare Plans. The Federal Trade Commission issues a compulsory order to a third group purchasing organization (GPO) that negotiates drug rebates on behalf of pharmacy benefit managers (PBMs). The compulsory order will require the GPO to provide information and records on its business practices. FTC News.
• Generative Artificial Intelligence (AI) Resource Kit is a collection of current guidance on generative AI, ChatGPT, and similar tools.
• Public Interest, Pro Bono, and Non-Profit Resource Kit provides an overview of guidance for those working in the public interest space seeking resources to assist with a variety of issues, including Tenant's Rights, Fair Housing, Discrimination, Immigration, plus best practices when providing pro bono legal services and when working with nonprofit organizations.
• Document alerts allow you to stay current on legal developments that affect your practice. Find out how to set up your document alerts. 
• The Practical Guidance Journal Second Edition 2023 includes legal developments on generative AI, cautions related to the use of AI in hiring and assessing, and the new challenges long COVID presents for employers.
• Check out the new Practical Guidance Author Center! Learn about the 1750+ leading attorney authors contributing to our 23 practice areas and find out how you can Become a Practical Guidance Author. 
• Legal Developments provide the latest updates and analyses of emerging topics impacting your practice area. Visit the Legal Developments page to see the latest topics, which also include breaking legal news and related Practical Guidance content. 
• Listen Up! The Practical Guidance and Law360 Podcasts Resource Kit features interviews with industry-leading attorneys on cutting edge issues in the law: NFTs, Cannabis, COVID and more.
• New and Updated Practical Guidance Content
  • Partnership and LLC Equity Compensation Resource Kit
  • Section 404(c) Participant-Directed Investment Resource Kit
  • Employee Benefits and Compensation Issues in Corporate Transactions Training Presentation
  • Market Trends 1Q 2023: Executive Employment Agreements
  • Taxation of Compensatory Transfers of Property (IRC § 83)
  • Healthcare Reform Preventive Services
  • Round-up of Selected State Health Developments, First-Quarter 2023

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