Equity Plans, Mergers, Acquisitions, and Sales of Companies

Seminar A: Taking Stock of Equity Based Compensation

In this participatory presentation, we address the issues involved in determining which equity-based compensation plan is most appropriate to motivate an executive management team, as well as selecting and designing the most effective plan for a particular organization. When companies grant stock or stock equivalents to key employees, they must have an appropriate plan to maximize the motivational value of the equity granted and to retain the appropriate flexibility with respect to adding future key employees and other organizational changes. The presentation includes an examination of a range of equity-based compensation plans, with practical guidelines for when each type is appropriate. The presentation focuses on varying business exit strategies, including retention of the business for future generations and the related succession planning goals, and the importance of tailoring an equity-based compensation plan to maximize the value of the particular strategic plan of the business owners.

For many companies, the lack of a carefully prepared, clear plan prevents equity grants from achieving their purposes. Often, key employees do not understand the value they receive and the actions that need to be taken to increase enterprise value. In other cases, the grant is disproportionate to the incentive value or inhibits future organizational changes, such as adding future key employees. This seminar focuses executives on issues of value and incentive design, with a methodology for evaluating the company's objectives, and the most effective mechanisms for achieving those objectives. Executives will be prompted to focus on the important issues of cost and exit strategy and their importance to the entire management incentive area.

Seminar B: Buying and Selling Companies - Tips for the First Timer

For many companies, the road to internal expansion may be too slow without the synergy of a strategic acquisition. Similarly, there are times when the best solution to a company's growth problems are sale to a company for whom the purchase is a strategic acquisition. The 1980's saw a significant amount of merger and acquisition activity. This activity has continued into the '90's and will likely continue into the next millennium. When a company is sold, it is frequently the first time that the company's owners have sold a company. This discussion is for the company which is facing its first acquisition or sale. The discussion covers the important points that a first time buyer or seller should know before testing the waters of sales or purchases of businesses. Topics covered include choosing your advisors, making sure the company is "clean," structuring the deal, protecting the deal, closing the deal, and what to do once the deal is consummated.

Seminar C: Keeping Your Company Saleable

The owner-operated company is frequently run on a month-to-month or a year-to-year basis with an eye towards maximizing immediate cash flow. Very little thought is given to the way an outsider would view the company. Many owners who seek to value their companies for one reason or another or to sell them are frequently surprised when they find that various problems raised by appraisers or potential purchasers could have been avoided had the management of the company been aware that these issues might be raised. Many businesses could benefit from a discussion of areas in which some attention and care could enable the business to have its best foot forward when reviewed by an outsider such as an appraiser or potential purchaser. Topics covered include choosing your advisors, stockholder relationships, financing reporting and control, tax issues, antitrust issues, long-term commitments, and avoiding litigation.