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Stock Appreciation Rights under Earn-out buyout


RockyMountain

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Hello,

My company I work for is currently undergoing asset purchase. In the company there are number of employees fully vested in Stock Appreciation Rights. 

In our case buyer will payout all debt and wants specific amount of left over proceeds to be paid as an earn-out based on company performance in the next year.

My questions is how Stock Appreciation Rights should be treated in case like this? Do you pay them out in full or they become part of earn-out. This is a bit confusing since company is doing asset purchase rather than stock buy.

Any advice is much apricated.

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RockyMountain, I think Bob the Swimmer is correct that the plan language would be important, but in general this can be done either way you can do either way. It looks like here they want the employees to have similar terms to the investors, which may make sense, but every deal is somewhat different.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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