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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    ERISA

Date & Time
  • event Date

    Thursday, January 18, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE course will provide counsel with guidance on structuring change in control (CIC) arrangements in executive employment agreements. The panel will discuss strategies for negotiating and drafting CIC agreements that minimize employee taxes and protect employer deductions while furthering company and shareholder interests.

Faculty

Anthony J. Eppert
Partner
Hunton Andrews Kurth LLP

Mr. Eppert's multi-disciplinary legal practice focuses on executive compensation, ESOPs and employee benefit arrangements (including their related tax, accounting, securities and corporate governance issues) in the United States and abroad.

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Marshall Mort
Partner
Fenwick & West LLP

Mr. Mort focuses his practice on representation of public and private technology and life sciences companies in a wide variety of corporate transactions. He advises on the issues that regularly arise with equity plans, executive compensation agreements and other employment benefit arrangements when clients are involved in mergers, acquisitions, public securities offerings, onboarding and terminations.

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Description

CIC agreements are an essential component of executive agreements and compensation packages, encouraging CEOs and executives to pursue opportunities for mergers, acquisitions, and other corporate transactions even when those opportunities may result in the loss of the executive's position. Although CIC agreements are intended to protect companies' interests, shareholders, the IRS, and the SEC closely scrutinize excessive golden parachutes that far exceed salaries or don't reflect performance.

Counsel should be mindful of shareholder expectations, market practice, and the legal landscape when structuring these CIC agreements. Notably, Section 409A (which regulates deferred compensation) and Section 280G (which penalizes certain golden parachutes in M&A transactions) often must be carefully navigated to avoid adverse tax outcomes, all while reaching the business intent of the parties. Counsel should also be careful to analyze how the investing public might view certain of the compensation elements and how those could trigger adverse disclosures under SEC reporting rules. Buyers conducting due diligence in an M&A must carefully examine the target company's executive compensation plans to be aware of CIC triggering events and may ask them to be waived or modified.

Listen as our authoritative panel of executive compensation attorneys provides guidance on structuring CIC arrangements in executive employment agreements. The panel will discuss strategies for negotiating and drafting golden parachute provisions that withstand regulator and shareholder scrutiny and minimize adverse tax consequences while furthering company and shareholder interests.

Outline

  1. Overview of change in control agreements
  2. Potential compensation upon a change in control
  3. Tax implications
    • Section 280G golden parachute excise tax
    • Section 409A restrictions on deferred compensation
  4. Drafting and negotiating strategies
  5. Market practices
  6. Disclosure considerations
  7. Thoughts from institutional advisory services such as ISS

Benefits

The panel will review these and other key issues:

  • Common features of a CIC agreement or policy
  • 280G constraints and solutions
  • 409A constraints and solutions
  • Renegotiating the arrangement in an M&A transaction
  • What CIC issues should buyers conducting M&A due diligence consider?