Spansion Employee FAQs re Deal Closing
by Renzulli, Carmine on 2/18/2015 2:57 PM
by: Carmine Renzulli
The executive team and I have been doing our best to keep you informed of potential changes, timelines for closing, etc as decisions are made through the merger process. In light of that, I have put together an updated FAQ to provide additional information that will help answer some of your questions. The integration teams are working diligently to streamline the processes, organizations and direction so that we have a solid foundation for our future success starting day one of the new merged company. With that being said, we will try to update you as new information becomes available.
When will the Spansion RSUs and Stock Options convert into Cypress RSUs and Stock Options?
US Employees: Spansion RSUs and Stock Options will convert automatically into Cypress RSUs and Stock Options on the Closing Date. We will publicly announce closing.
Non-US Employees: For most employees located outside of the United States, your equity grants will convert into Cypress equity grants the same as for U.S. employees. Equity may be paid out in cash prior to closing instead of being converted to Cypress equity - you will be provided with more information specific to your location at a later date.
When is the Closing Date?
The Shareholder Meeting has been set for 3/12/15 at 8 a.m. and we will try to close the transaction as soon as possible after the meeting.
How will I be notified of the stock conversion?
You may not receive a separate notice of conversion. As noted above, once closing occurs your equity will have been automatically converted.
Does the conversion of my Spansion RSUs to Cypress RSUs create another taxable event like having to pay the capital gains from the original basis at exercise to the new price?
US Employees: No. Conversion of Spansion RSUs to Cypress RSUs does not create a taxable event. However, if you have Spansion RSUs that will accelerate at the same time they are converted to Cypress RSUs, you will recognize ordinary income in connection with their settlement in Cypress shares. Generally, RSU grants made prior to April 29, 2014 will accelerate on the Closing Date.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
Is it correct that there is no taxable event of converted options until they are exercised?
US Employees: Yes, that is correct. There will be no tax until the converted option is exercised. However, at that time you will be to subject to ordinary income.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
Does the stock that I own and have held for over one year remain eligible for long term capital gain treatment after it converts to Cypress stock (i.e., can I tack the holding periods rather than having it re-set)?
US Employees: Yes it does, and yes you can tack the holding periods.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
If I have an E*TRADE account will my RSUs and Stock Options remain in the same E*TRADE account?
No. They will be in a different E*TRADE account. There will be a new E*TRADE account for Cypress stock set up for you.
US Employees: You will only need a single sign-on to access your accounts. Once you sign into your E*TRADE account you will be able to see the historical Spansion grants and the new Cypress grants. This will be similar to how people can view their different accounts when they switch jobs and have stock plans from different companies.
Non-US employees: For employees located outside the United States you will be provided with more information specific to your location at a later date.
Do I need to give any instructions on where the Cypress shares are to be deposited? For example, all my options/RSUs are in my E*TRADE account set up by Spansion, so will the Cypress shares be automatically deposited?
The Cypress shares will be automatically deposited into your new E*TRADE account which will be set up as part of the closing.
Who will be my contact post-closing in the event I have questions on the conversion process or tax reporting?
Your contact will be Gina Christopher who will be the Corporate/Securities attorney of the combined entities.
Will I be an insider for purposes of the Cypress Insider Trading Policy post-closing?
Employees who are designated insiders under the Cypress Insider Trading Policy will be subject to the Cypress trading policies including their trading window after the Closing Date. Some employees who are Designated Insiders under the Spansion Insider Trading Policy may not be insiders for purposes of the Cypress Insider Trading Policy. That said, all individuals are subject to the law on insider trading. So in so far as you continue to have material non-public information you should not trade Cypress shares. In addition, it is typical in a merger transaction that insiders refrain from trading until after the earnings announcement following the closing.
We will provide more information on the Cypress Insider Trading Policy as we get closer to the closing of the merger.
Who will alert E*TRADE when my shares no longer have restricted status and we are able to openly trade?
For purposes of the Insider Trading Policy and the trading restrictions under the policy, Cypress will alert E*TRADE when the trading window has opened.
Who will I report to after the Closing Date?
Cypress has not yet determined the organization structures and employee reporting relationships for the combined company. You will receive more information from your local human resources group when it becomes available.
Where do I show up for work after the Closing Date?
After the Closing Date you should show up to work at your normal location. If this location changes, you will receive more information from your local human resources group.
Do employees need to sign a new contract with the new company?
Leadership teams from each company are developing a comprehensive integration plan for the merger. Given the structure of the transaction, offers letters do not need to be provided to employees. You will receive more information from your local human resources group.
Does our service time carry over when we become Cypress?
Yes, Cypress will recognize the prior service with Spansion of each Spansion employee in connection with most employee benefit plans, programs and policies. Again we will provide more information regarding benefits as we get closer to the closing of the merger.
What is the timeline for a reduction-in-force (“RIF”)? For any employees affected by a RIF due to the integration of the two companies, the combined company will provide for a severance package and proper treatment of other employment benefits under local laws?
For any employees affected by a RIF due to the integration of the two companies, the combined company will provide for a severance package and proper treatment of other employment benefits under local laws.
What will happen to our employee stock purchase plan? I enrolled in August will I still be receiving Spansion Stock?
Outstanding purchase rights under the Spansion ESPP in connection with the recently completed offering period were automatically exercised in February. The plan will terminate after the February purchase and no additional purchase rights shall be offered to employees under the Spansion ESPP. Cypress has an ESPP as well and Spansion employees will become eligible to purchase under this plan at some point after the Closing Date.
Does Cypress pay annual or quarterly bonuses?
Cypress will announce their bonus procedures after the Closing Date.
Will the Spansion holiday schedule apply after the Closing Date?
Cypress has not yet determined if Spansion employees will continue on the Spansion holiday schedule or adopt the Cypress holiday schedule. You will receive more information from your local human resources group when it becomes available.
Will my title and job change after the Closing Date?
Cypress has not yet determined the organization structures and employee reporting relationships for the combined company. In most cases, they have also not yet determined the titles for the employees who will continue to work for the combined company. You will receive more information from your local human resources group when it becomes available.
Spansion provides an employer match for the 401(k) plan, but I understand that the Cypress 401(k) plan does not provide a similar employer match? Will there be any employer match going forward under the 401(k) plan?
Cypress has not yet determined how to combine the 401(k) plans of both companies. You will receive more information from your local human resources group when it becomes available.
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Spansion Employee FAQs re Deal Closing
by Renzulli, Carmine on 2/18/2015 2:57 PM
by: Carmine Renzulli
The executive team and I have been doing our best to keep you informed of potential changes, timelines for closing, etc as decisions are made through the merger process. In light of that, I have put together an updated FAQ to provide additional information that will help answer some of your questions. The integration teams are working diligently to streamline the processes, organizations and direction so that we have a solid foundation for our future success starting day one of the new merged company. With that being said, we will try to update you as new information becomes available.
When will the Spansion RSUs and Stock Options convert into Cypress RSUs and Stock Options?
US Employees: Spansion RSUs and Stock Options will convert automatically into Cypress RSUs and Stock Options on the Closing Date. We will publicly announce closing.
Non-US Employees: For most employees located outside of the United States, your equity grants will convert into Cypress equity grants the same as for U.S. employees. Equity may be paid out in cash prior to closing instead of being converted to Cypress equity - you will be provided with more information specific to your location at a later date.
When is the Closing Date?
The Shareholder Meeting has been set for 3/12/15 at 8 a.m. and we will try to close the transaction as soon as possible after the meeting.
How will I be notified of the stock conversion?
You may not receive a separate notice of conversion. As noted above, once closing occurs your equity will have been automatically converted.
Does the conversion of my Spansion RSUs to Cypress RSUs create another taxable event like having to pay the capital gains from the original basis at exercise to the new price?
US Employees: No. Conversion of Spansion RSUs to Cypress RSUs does not create a taxable event. However, if you have Spansion RSUs that will accelerate at the same time they are converted to Cypress RSUs, you will recognize ordinary income in connection with their settlement in Cypress shares. Generally, RSU grants made prior to April 29, 2014 will accelerate on the Closing Date.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
Is it correct that there is no taxable event of converted options until they are exercised?
US Employees: Yes, that is correct. There will be no tax until the converted option is exercised. However, at that time you will be to subject to ordinary income.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
Does the stock that I own and have held for over one year remain eligible for long term capital gain treatment after it converts to Cypress stock (i.e., can I tack the holding periods rather than having it re-set)?
US Employees: Yes it does, and yes you can tack the holding periods.
Non-US Employees: For employees located outside the United States you will be provided with tax information specific to your location at a later date.
If I have an E*TRADE account will my RSUs and Stock Options remain in the same E*TRADE account?
No. They will be in a different E*TRADE account. There will be a new E*TRADE account for Cypress stock set up for you.
US Employees: You will only need a single sign-on to access your accounts. Once you sign into your E*TRADE account you will be able to see the historical Spansion grants and the new Cypress grants. This will be similar to how people can view their different accounts when they switch jobs and have stock plans from different companies.
Non-US employees: For employees located outside the United States you will be provided with more information specific to your location at a later date.
Do I need to give any instructions on where the Cypress shares are to be deposited? For example, all my options/RSUs are in my E*TRADE account set up by Spansion, so will the Cypress shares be automatically deposited?
The Cypress shares will be automatically deposited into your new E*TRADE account which will be set up as part of the closing.
Who will be my contact post-closing in the event I have questions on the conversion process or tax reporting?
Your contact will be Gina Christopher who will be the Corporate/Securities attorney of the combined entities.
Will I be an insider for purposes of the Cypress Insider Trading Policy post-closing?
Employees who are designated insiders under the Cypress Insider Trading Policy will be subject to the Cypress trading policies including their trading window after the Closing Date. Some employees who are Designated Insiders under the Spansion Insider Trading Policy may not be insiders for purposes of the Cypress Insider Trading Policy. That said, all individuals are subject to the law on insider trading. So in so far as you continue to have material non-public information you should not trade Cypress shares. In addition, it is typical in a merger transaction that insiders refrain from trading until after the earnings announcement following the closing.
We will provide more information on the Cypress Insider Trading Policy as we get closer to the closing of the merger.
Who will alert E*TRADE when my shares no longer have restricted status and we are able to openly trade?
For purposes of the Insider Trading Policy and the trading restrictions under the policy, Cypress will alert E*TRADE when the trading window has opened.
Who will I report to after the Closing Date?
Cypress has not yet determined the organization structures and employee reporting relationships for the combined company. You will receive more information from your local human resources group when it becomes available.
Where do I show up for work after the Closing Date?
After the Closing Date you should show up to work at your normal location. If this location changes, you will receive more information from your local human resources group.
Do employees need to sign a new contract with the new company?
Leadership teams from each company are developing a comprehensive integration plan for the merger. Given the structure of the transaction, offers letters do not need to be provided to employees. You will receive more information from your local human resources group.
Does our service time carry over when we become Cypress?
Yes, Cypress will recognize the prior service with Spansion of each Spansion employee in connection with most employee benefit plans, programs and policies. Again we will provide more information regarding benefits as we get closer to the closing of the merger.
What is the timeline for a reduction-in-force (“RIF”)? For any employees affected by a RIF due to the integration of the two companies, the combined company will provide for a severance package and proper treatment of other employment benefits under local laws?
For any employees affected by a RIF due to the integration of the two companies, the combined company will provide for a severance package and proper treatment of other employment benefits under local laws.
What will happen to our employee stock purchase plan? I enrolled in August will I still be receiving Spansion Stock?
Outstanding purchase rights under the Spansion ESPP in connection with the recently completed offering period were automatically exercised in February. The plan will terminate after the February purchase and no additional purchase rights shall be offered to employees under the Spansion ESPP. Cypress has an ESPP as well and Spansion employees will become eligible to purchase under this plan at some point after the Closing Date.
Does Cypress pay annual or quarterly bonuses?
Cypress will announce their bonus procedures after the Closing Date.
Will the Spansion holiday schedule apply after the Closing Date?
Cypress has not yet determined if Spansion employees will continue on the Spansion holiday schedule or adopt the Cypress holiday schedule. You will receive more information from your local human resources group when it becomes available.
Will my title and job change after the Closing Date?
Cypress has not yet determined the organization structures and employee reporting relationships for the combined company. In most cases, they have also not yet determined the titles for the employees who will continue to work for the combined company. You will receive more information from your local human resources group when it becomes available.
Spansion provides an employer match for the 401(k) plan, but I understand that the Cypress 401(k) plan does not provide a similar employer match? Will there be any employer match going forward under the 401(k) plan?
Cypress has not yet determined how to combine the 401(k) plans of both companies. You will receive more information from your local human resources group when it becomes available.
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