Search the Community

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.

Company A is a professional corporation with a Safe Harbor 401k Plan. The son of Company A's owner is interested in buying the practice via an asset sale, mid-year, and he would like to acquire the 401kSH Plan with the purchase, as all employees will continue on with the "new company" or successor employer. It is my understanding the transfer of the Plan should be addressed in the buy / sell agreement, including service to be credited, contributions/deductions for year of purchase. Questions/Concerns: With it being a "401k Safe Harbor" plan is there any problem with the new company amending the Plan to reflect the successor Plan Sponsor's Name, EIN mid-year, coincident with the buy/sell? The new company does not intend to "change" any of the Plan's provisions -- simply wants to become the successor plan sponsor. I am not familiar with any "mid-year" Safe Harbor Notice provisions. Other than providing an SMM to participants, is there any other Notice requirement? My concern here is the SHMatch -- Company A will fund the SHM for all payroll through Company A; the successor Company will fund the SHM for all of its payroll -- is this considered an impermissible change mid-year. They do not anticipate a PS contribution for this year. Assuming the new company is permitted to Amend the Plan mid-year to reflect its successor sponsorship, Name and EIN (no other changes are intended), is there anything further necessary to affect this transfer of Plan from old sponsor to new sponsor? Thank you