Just When You Thought You Were Done: Modifications After Grant

Slides from presentation given at the Global Equity Organization Annual Conference, Miami, FL.

Panelists: Nathan O’Connor, Equity Methods June Anne Burke, Baker & McKenzie Richard Reilly, Baker & McKenzie

Session Description: Occasionally, it is necessary or desirable to change the terms of an outstanding award for reasons ranging from changes in the law, reassignment to another country, enforcement of clawback provisions, or due to Say-on-Pay requirements. However required or desirable changes to award terms may be, modifications can have significant negative consequences for the company, the employing entity and/or the participant, including IRC Code section 162(m) and 409A problems, adverse accounting implications, plan disqualification outside the US, labor law concerns such as liability for termination indemnities and works council problems and onerous regulatory filings. This session will address various award modification triggers, the accounting, tax, legal and administrative implications of implementing the change in question and what strategies companies can adopt to prevent catastrophes. Actual examples will be discussed and concrete recommendations to prevent adverse consequences or mitigate risk will be provided.