Page 364 - מיזוגים ורכישות - פרופ' אהוד קמר תשפב

narrow the window of opportunity for any such artificial pricing pressure during
important measurement periods. Election deadlines can either occur before or after the
shareholder meeting. Where there is significant value riding on the choice of an election,
it is important to provide ample time for shareholders to make an effective and informed
election. Mailing proxy and election materials at the same time should generally be
avoided; typically it is best to leave at least a week between the two mailings to reduce
shareholder confusion. Proxy solicitation firms and information/exchange agents should
also work closely with brokers to make sure everyone understands the choices to be made
and the significance of each choice or of failing to make a timely election.

The timing of the election deadline relative to the date of the target’s shareholder
meeting may raise issues under the securities laws involving whether the cash election
feature is viewed by the SEC staff as a de facto "tender offer" that requires compliance
with the SEC’s tender offer rules. This issue has arisen where there may be a significant
time lag between shareholder approval and closing (for example, due to the regulatory
approval process) and where the parties wish to have the election deadline close to the
closing in order to permit elections to be made on more timely information regarding
acquiror stock trading values. The SEC staff has not insisted on compliance with the
tender offer rules in these situations where there is a plausible reason for the delay
between shareholder approval and closing (often regulatory approval), where the parties
agree to give at least five business days public notice of the election deadline and to keep
the S-4 registration statement "current" through the election deadline by incorporating
into it periodic filings under the Exchange Act made prior to that time.

Another timing-related issue that must be considered carefully is the period that
the acquiror will be unable to repurchase its own shares under Regulation M and the
limited availability of the 10b-18 repurchase safe harbor during the proxy solicitation
period, any election period and any valuation period (plus a period prior to the start of
such periods, which for most companies will add an additional business day). Acquirors
that wish to make stock repurchases may negotiate for a shorter election period that
overlaps with the proxy solicitation period to minimize the Regulation M blackout; targets
may wish to have the election period end close to the closing. If there is expected to be
a significant amount of time between the shareholder meeting and closing, as is often the
case in bank mergers due to the time required to receive regulatory approvals, these
interests may conflict and this may become an issue in the drafting of the merger
agreement.

Targets and acquirors will also need to sort out timing issues relating to stock held
in any qualified employee benefit plans such as 401(k) plans and employee stock
ownership plans. Plan administrators will need to calculate participant elections with
respect to employer stock held in plan accounts. Blackout periods are almost universally
imposed on plan participants under ERISA and directors and executive officers under

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