Executive and Incentive Compensation

Executive and incentive compensation issues will continue to be one of the most scrutinized issues facing both private and public companies.  When your company is facing these issues, Haynes and Boone is one of the best places to turn to for counseling and guidance.  Our lawyers provide clients with knowledge and experienced counseling in all aspects of executive compensation issues.  When there are changes made to the law or new government enforcement efforts are underway, our lawyers will make sure you are kept up to date. 

Plan Compliance and Documents 
Our lawyers can assist with the review and revision of existing executive employment agreements, severance agreements, equity grants and other nonqualified deferred compensation agreements to ensure compliance with Section 409A of the Internal Revenue Code. We also draft executive bonus and equity arrangements to ensure compliance with the “performance-based” compensation exception under Section 162(m) of the Internal Revenue Code. 

409A Concerns
The recent attention placed on nonqualified deferred compensation is not likely to dissipate anytime soon.  IRS audits and public scrutiny of executive compensation plans including equity plans, severance arrangements and executive employment agreements, have taken on increased importance for both publicly and privately-held companies.  Over the past several years our executive compensation lawyers authored numerous articles, gave countless speeches and sent news alerts to clients on 409A issues and changes.  We have experience drafting and updating nonqualified deferred compensation plans, severance plans and change in control agreements to comply with requirements of Section 409A.  Should your company be faced with similar issues, our executive compensation lawyers are already well versed in the law and its nuances, and ready to provide a plan of action tailored to your specific situation.  We have ample experience in the evaluation of Section 409A concerns and making sure plans are in compliance. 

Drafting and Negotiation of Agreements
Haynes and Boone has helped many companies with employment and benefit plan arrangements designed to keep and retain key executives.  Among the types of executive contracts we draft are:

  • Equity Incentive Plans
  • Employment Agreements
  • Severance/Retention Agreements
  • Employee Non-Compete/Confidentiality Agreements
  • Consulting and Director Fee Arrangements
  • Equity Grant Agreements with executives, including “clawbacks” and other “bad boy” clauses
  • Supplemental Executive Retirement Plans

Disclosures Relating To Executive Compensation
We also help companies comply with SEC reporting regulations by drafting proxy disclosures in order to submit equity plans to shareholders.  Additionally, we provide documents detailing the tax consequences of tender offers associated with the repricing of improperly priced stock options.  Our lawyers advise on the implementation of Top Hat plans and are familiar with the government reporting requirements for such plans.

Advice in Mergers and Acquisitions
Compensation issues arising from mergers and acquisitions oftentimes are complex issues that require lawyers with knowledge of the specifics of executive compensation.  Haynes and Boone executive compensation and benefits lawyers are adept at working within the framework of mergers and acquisitions to see that potentially troublesome issues are identified and addressed.  Issues we have help address include:

  • Working with actuarial consultants in identifying and determining the amount of any “excess parachute payments” associated with a change in control
  • Assisting with acceleration of vesting and “cashing-out” of equity grants in connection with a merger.
  • Drafting change in control bonus and severance plans for executives and non-executive employee

Assistance With Global Executive Compensation Issues
Haynes and Boone represents companies that do business in many countries outside the United States.  Those clients may be based in the United States and have operations in other countries or they might be companies based outside of the United States but have a significant operations center here or list their stock on a U.S.-based exchange.  Our lawyers have experience working with both types of companies.  In cases where there is an international presence, we are members of a global network of firms and can easily recommend legal service providers in other countries to ensure that executive compensation programs are in compliance with local regulations.  For local executives of international companies we will ensure their compensation programs meet all U.S. requirements.