The following Share Incentives guidance note Produced in partnership with Sarah Cohen of Lewis Silkin provides comprehensive and up to date legal information covering:
Groups of companies undertake reorganisations for many and varied reasons. Reorganisations will often have an impact on existing share plans and other employee equity arrangements. In some cases the impact will be commercial in nature. Examples of this are where:
the reorganisation causes early vesting, exercise and/or lapse of awards as the relevant share plan provisions dealing with change of control of the parent company or termination of the participant’s employment have been triggered, and
there is a need for awards over shares in an existing parent company to be exchanged for awards over shares in a new parent company
In other cases, if the appropriate action isn’t taken within a specified time, valuable tax advantages can be lost.
The most common types of reorganisation are:
putting a new group holding or parent company on top of an existing company or group, usually to facilitate an initial public offering (IPO) or a new third party investment, without any immediate change to the ultimate ownership of the group
transferring the business of one group company to another group company, often as a consequence of an acquisition or in order to facilitate a sale of a particular part of a company's business and assets
transferring the shares of one subsidiary to another
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