Treasury Reg Clause Samples

Treasury Reg. Sec.Sec.1.368-1(b), -2(a). First Banks America Common Stock qualifies as the type of consideration that will satisfy the foregoing test. With regard to whether the fair market value of the aggregate amount of First Banks America Common Stock to be exchanged pursuant to the Plan will be sufficient, the Service generally has required, as a condition to issuing a favorable advance ruling under Section 368(a)(1)(A), that the former stockholders of the target corporation receive stock in the acquiring corporation having a value on the effective date of the merger equal to at least 50 percent of the value of the formerly outstanding stock of the target corporation as of the same date, including, for purposes of determining shares outstanding, shares redeemed as part of the (or to facilitate the plan of) reorganization (the 50 percent continuity test). Rev. Proc. 77-37, 1977-2 C.B. 568; Rev. Proc. 86-42, 1986-2 C.B. 722. The 50 percent continuity test will be satisfied if the First Banks America Common Stock received by First Commercial stockholders in the Merger and retained by them following the Merger has a value at least equal to 50 percent of the aggregate fair market value of the issued and outstanding First Commercial Common Stock on the Effective Date. For the purpose of our opinions, we have assumed that the fair market value of the First Banks America Common Stock issued as consideration in the Merger will be in excess of 50 percent of the aggregate fair market value of the issued and outstanding First Commercial Common Stock on the Effective Date, and the structure of the pricing mechanism in the Plan supports this assumption. If this assumption is incorrect, or if First Commercial stockholders dispose of First Banks America Common Stock following the Merger so as to cause the retained First Banks America Common Stock to have a value less than 50 percent of the value of the issued and outstanding First Commercial Common Stock, the 50 percent continuity test will not be satisfied, and the merger may fail to qualify as a reorganization described in Section 368(a)(1)(A) of the Code. Existing judicial decisions suggest that a lesser percentage of continuity will satisfy the continuity of interest requirement. See, for example, Jo▇▇ ▇. ▇▇▇▇▇▇ ▇o. v. ▇▇▇▇▇▇▇▇▇, 29▇ ▇.▇. ▇▇▇ (1935). Thus, failure to meet the Service's advance ruling guidelines is not necessarily critical and does not necessarily render the reorganization taxable. We recommend, however, that t...

Treasury Reg. 409A-1(i) and shall include, without limitation, (1) an officer of the Bank or the Company having annual compensation greater than $130,000 (as adjusted for inflation under the Code), (2) a five percent owner of the Bank or the Company, or (3) a one percent owner of the Bank or the Company having annual compensation of more than $150,000. The determination of whether the Executive is a “specified employee” shall be made by the Bank in good faith applying the applicable Treasury regulations.

Treasury Reg. Section 1.1502-6 (or any comparable provision of state, local or foreign law), or is bound by or has any obligation under any Tax sharing arrangement, Tax indemnification arrangement or similar contract or arrangement, except as would not reasonably be expected to have a Material Adverse Effect on GlobespanVirata and its Subsidiaries.

Treasury Reg. Sec. 1.170A-9(e)(11)(v)(B)(1). In such event, to the extent practicable and permitted under then existing law, the Foundation shall endeavor to make distributions from the Fund to carry out those charitable purposes most closely aligned with the Charitable Purpose for which the Fund was originally created and subsequently supported through distributions.