Practice Areas & Industries: Jones Day

Practice/Industry Group Overview

Jones Day is a worldwide leader in merger and acquisition activity. A critical part of M&A transactions is the people element: employees and their compensation and benefits.

Our employee benefits and executive compensation lawyers handle the compensation and benefits aspects of M&A deals, working closely with the entire Jones Day deal team. Our experience and substantive knowledge are unsurpassed: collectively, we have been involved in thousands of transactions. We know that a lot is at stake, both in hard dollars (e.g., benefits under "golden parachute" contracts and pension underfunding) and in human capital (e.g., transition of key management and other employees). We understand the issues and get positive and creative results.

The Jones Day approach on compensation and benefits deal issues is both exacting and pragmatic. Where liabilities need to be identified or allocated, precision is the goal, with special attention in the transaction agreement to: (i) representations and warranties; (ii) itemized allocations between the parties of liabilities and responsibilities; and (iii) coordinating these items with balance sheet accruals, postclosing adjustments, and indemnification provisions. Where the focus is postclosing employment and benefit arrangements, including equity compensation and employment arrangements (always a focus in merger transactions), we design sensible solutions to difficult issues, consistent with the theory of the deal. Once found, the solutions are expressed in the transaction documents in a manner that provides flexibility and protection for our clients.

Our lawyers excel in due diligence and contract drafting in the deal process. We find "hidden" costs and legal issues in employment contracts, benefit plan documents, and the disclosures of these arrangements in the transaction documents. We know how equity and benefit plans and employment contracts work, where the liabilities are, and how to negotiate their allocation in any type of transaction.

Each deal tends to have its own key compensation and/or benefits issue or issues. The issues for which we need to find solutions most often relate to: (i) severance obligations, particularly executives' rights under "golden parachute" employment or severance agreements; (ii) treatment of equity compensation arrangements; (iii) pension liabilities and funding issues; (iv) postclosing medical and other benefit plan coverage; (v) treatment of target or seller stock held in employee benefit plans of the target or seller; (vi) continuing employment arrangements with key employees of the seller or target; and (vii) ESOP participation in the transaction.

Our services extend beyond the closing of a transaction, as we have assisted hundreds of companies in the sensitive task of integrating employees of acquired businesses into our clients' equity, retirement, and welfare plans. We are highly experienced in combining plans of acquired companies into our clients' programs, a process that can entail difficult legal and administrative issues.

Contact(s)

Daniel C. Hagen
Cleveland
Tel: 1.216.586.3939