Mergers & Acquisitions: A Checklist from the Employment & Benefits Law Perspective

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

2. William L. Scogland • Represents clients in: • Benefit and compensation issues in transactions • Qualified plan matters • Multiemployer plan matters • ERISA fiduciary issues • Plan investments

3. 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

4. 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

5. 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

6. 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

7. 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)

8. Exploration of Multiemployer Plan • Evaluate potential withdrawal liability • Potential controlled group liability • Possible successor liability • Strategy on if and when to trigger withdrawal liability

9. 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

10. 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

11. 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

12. 7. Legal Compliance and Audit • Tax qualification of plans • Immigration • Employee classification • Recordkeeping • Open investigations/litigation • Recent investigations/litigation • History of internal complaints

13. 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

14. The Checklist • Defined benefit pension plan • Retiree medical • Multiemployer pension plan • Golden parachute • Employer stock ownership plan • Employer-employee issues • Compliance and audit • The flipside

15. 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.

16. Contact Information William L. Scogland wscogland@wagnerlawgroup.com David G. Gabor dgabor@wagnerlawgroup.com www.wagnerlawgroup.com • Boston Office • 99 Summer Street, 13th Floor • Boston, MA 02110 • Tel: (617) 357-5200 Fax: (617) 357-5250 • San Francisco Office • 315 Montgomery Street, Suite 902 • San Francisco, CA 94104 • Tel: (415) 625-0002 Fax: (415) 829-4385 • Illinois Office • 414 West Deerpath Road • Lake Forest, IL  60045 • Tel: (847) 250-1365 Fax: (847) 250-1367 • Florida Office • 7108 Fairway Drive, Suite 125 Palm Beach Gardens, FL 33418 • Tel: (561) 293-3590 Fax: (561) 293-3591