Excerpt: In a stunning reversal of its previous opinion in Xilinx, Inc. v. Commissioner, the U.S. Court of Appeals for the Ninth Circuit held on March 22, 2010 that stock option compensation costs need not be shared by participants in a cost sharing arrangement where such costs would not be shared at arm's length between unrelated parties. In its highly controversial prior opinion, the Ninth Circuit had held on May 27, 2009, that Xilinx's stock option compensation was subject to cost sharing, even if such costs would not be shared at arm's length. The Ninth Circuit withdrew that prior opinion on January 10, 2010, and has now reversed its position, affirming that the arm's-length standard is paramount in cost-sharing, as in other areas of transfer pricing.