Mergers

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Mergers Acquisitions A Checklist from the
Employment Benefits Law Perspective
William L. Scogland, Esq. David G. Gabor, Esq.
The Wagner Law Group
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William L. Scogland

• Represents clients in
• Benefit and compensation issues in transactions
• Qualified plan matters
• Multiemployer plan matters
• ERISA fiduciary issues
• Plan investments

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David G. Gabor

• Represents clients in
• Litigation
• Negotiating and drafting contracts
• Handling compliance issues
• Creating corporate infrastructure
• Drafting employee manuals, handbooks and policies
  
• Training management and employees
• Leading companies toward organizational
  excellence
• Skilled negotiator, mediator and investigator

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Introduction

• Discuss how to approach mergers and acquisitions
• Overview of different potential issues to
  address.
• Analysis of potential risk
• Potential business issues that can arise

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1. Defined Benefit Pension Plan

• Determine whether the employees of the business
  being acquired participate in a defined benefit
  pension plan
• If so, we need to know its funded status.
  Liability for underfunding could be a liability
  for the acquirer because of the controlled group
  rules
• Actuaries can check assumptions for
  reasonableness

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2. Retiree Medical

• Determine whether the target business provides
  retiree welfare benefits (health, disability,
  life)
• Determine whether the plan documents adequately
  reserve to the employer the right to amend or
  terminate the plan
• Verify reasonableness of assumptions provided.
• Determine whether the benefits are funded

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3. Multiemployer Pension Plan

• Confirm whether the employees in the business to
  be acquired participate in a Multiemployer
  pension plan
• Distinguish this from a multiple employer plan
  (more than one employer and maintained pursuant
  to a collective bargaining agreement)

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Exploration of Multiemployer Plan

• Evaluate potential withdrawal liability
• Potential controlled group liability
• Possible successor liability
• Strategy on if and when to trigger withdrawal
  liability

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4. Golden Parachutes

• Determine whether the golden parachutes are
  opened by the acquisition
• There is the risk that large payments to
  executives will be triggered by transaction and
  separation from service (single trigger or double
  trigger)
• Negotiation strategy and potential liability to
  executives
• Potential tax liability and planning strategies

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5. Employee Stock Ownership Plan

• Confirm whether the target business sponsors an
  employee stock ownership plan (ESOP). The ESOP
  could be a significant stockholder.
• Review
• Pass through voting issues
• Compliance issues
• Employee relations issues

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6. Employer-Employee

• Ensure compatibility of employment policies
• Review compensation practices
• Compare benefit structures
• Address the potential need for reorganization
• Properly structure retention/stay packages
• Review statutes, rules and regulations in all
  jurisdictions governing employer-employee issues

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7. Legal Compliance and Audit

• Tax qualification of plans
• Immigration
• Employee classification
• Recordkeeping
• Open investigations/litigation
• Recent investigations/litigation
• History of internal complaints

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8. The Flip Side

• Questions to ask of the acquiring company
• Documentation that you require of acquiring
  company
• Review how to respond to questions asked of your
  company
• Steps to protect executives of target company

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The Checklist

1. Defined benefit pension plan
2. Retiree medical
3. Multiemployer pension plan
4. Golden parachute
5. Employer stock ownership plan
6. Employer-employee issues
7. Compliance and audit
8. The flipside

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Thank You

• We are available to discuss these and other
  issues that may arise when considering a possible
  merger and acquisition. Experience dictates that
  the earlier we are involved in the process the
  more value that can be added.

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Contact Information
William L. Scogland wscogland_at_wagnerlawgroup.com D
avid G. Gabor dgabor_at_wagnerlawgroup.com www.wagner
lawgroup.com
Boston Office 99 Summer Street, 13th
Floor Boston, MA 02110 Tel [phone] Fax
[phone] San Francisco Office 315
Montgomery Street, Suite 902 San Francisco, CA
94104 Tel [phone] Fax (415)
829-4385 Illinois Office 414 West Deerpath
Road Lake Forest, IL  60045 Tel
[phone] Fax [phone] Florida
Office 7108 Fairway Drive, Suite 125 Palm
Beach Gardens, FL 33418 Tel [phone] Fax
[phone]