Unlike other situations where agreements may be terminated, the exception to terminate control does not appear to restrict the participation of participants in the future agreement and does not require the termination of all plans of the same type. On the contrary, it appears to apply only to “substantially similar” agreements, although the proposed regulations do not contain a definition of the term. While not entirely clear, it would appear that an employer`s “substantially similar” agreements are defined at the time the plan is terminated. Therefore, the date of termination (whether before or after the control event) may affect agreements that are “substantially similar” and agreements to be terminated. In general, the proposed regulations provide for specific rules for deferrals of benefit-related earnings, which apply where the worker has provided continuously from a date corresponding at the latest to the date of determination of the performance criteria until the date of the first deferral choice. The proposed rules do not provide for specific rules on elections relating to performance-based remuneration in a corporate transaction. In addition, the proposed regulations do not address how the rules are to be applied where the worker was employed at the time the applicable performance criteria were determined by an undertaking which will subsequently be part of the same controlled group as the undertaking which will pay the remuneration on the basis of performance. Assuming that employee 1 is employed without interruption by employer X from 1 January of a year and that employer X will be employed on 1 January of a year. February a subsidiary of employer Z.
Also assume that employer Z has a performance bonus plan covering employees of employer X from the closing date and that the targets have been set from 1 January. The rules do not address the question whether worker 1 would have the right to make a deferral choice according to Employer Z`s plan, in accordance with the special rules on benefit-based remuneration, with respect to Employer Z`s plan, given that he has not been employed by Employer Z (or by his controlled group before graduation) for the entire duration of the period. . . .