Back-End Plan
Categories: Company Management, Regulations
A back-end plan is kind of like when a card shark is dealing from the bottom of the deck, only in your favor.
In days of old, otherwise known as the 80s, company mergers would be structured to "Shark Tank" you into cheaper shares (less money) once the new company controlled the bulk of the shares. The buying company would entice you with a higher price for the first 60% of the shares at $100/share. Once the Shark was in control of a majority of the shares, they would lower the price paid per share to $40/share. With a back-end plan, the Shark's evil plans are thwarted, and the higher price per share is maintained, as long as the price was fair.
