Jenner & Block

Employee Benefits and Executive Compensation

Transactions & Cases

General Dynamics Corp. (Defense and Aerospace)

Defense Sector Transactions.  Members of our Employee Benefits and Executive Compensation Practice worked on the benefit aspects of all of General Dynamics’ recent defense sector acquisitions including:

  • The acquisition of Advanced Technical Products, Inc., a publicly traded defense company.
  • The acquisition of AxleTech International, a global manufacturer of heavy duty vehicle components.
  • The acquisition of Primex Technologies, a publicly-traded munitions company.
  • The acquisition of the National Steel and Shipbuilding Co., the largest west coast privately owned shipyard, from its management and ESOP owners.
  • The acquisitions of numerous small defense businesses, each involving an interesting mix of executive compensation and traditional benefits issues.

Information Technology Acquisitions.  The practice has worked on all recent information technology deals for General Dynamics:

  • The $225 million acquisition of ViPS, Inc., a leading provider of high-end healthcare technology solutions.
  • The $643 million acquisition of Axsys Technologies, Inc., a global leader in the design and manufacture of high-performance electro-optical and infrared sensors and systems and multi-axis stabilized cameras.
  • The $2.2 billion acquisition of Anteon Corporation, a leading defense and intelligence technology services company.
  • The $1.5 billion acquisition of Veridian Corporation, a defense and intelligence community consulting and systems engineering firm.
  • The $1 billion acquisition of three communications divisions from GTE.
  • The $825 million acquisition of Motorola’s Integrated Information Systems Group.
  • The acquisitions of numerous small information technology businesses, each involving an interesting mix of executive compensation and traditional benefits issues.

Aerospace Acquisitions.

  • In the commercial area, our Employee Benefits and Executive Compensation Practice lawyers also worked on the executive compensation and benefit issues related to the $5 billion acquisition of premier jet manufacturer Gulfstream Aerospace Corp.
  • The acquisition of Jet Aviation, one of the world’s leading business aviation services companies.
  • The purchase of Galaxy Aerospace, a maker of mid-sized business jets.

Employee Benefits and ERISA Counseling.  We serve as regular benefits counsel to General Dynamics on various day-to-day qualified plan, executive compensation, and health and welfare benefit issues.

Tenneco Inc. (International Conglomerate)

  • Handled the complex benefit aspects of Tenneco’s six-year, $25 billion, corporate restructuring which included numerous acquisitions, mergers, spin-offs and divestitures and ultimately resulted in the creation of several separate public companies, including Case Corporation, Newport News Shipbuilding (now a part of Northrop Grumman) and Pactiv Corporation. The group worked on the creation of entirely new compensation and benefit structures for each spun-off entity.

General Motors Corporation

  • Advised on the benefit aspects of GM’s 2009 sale of substantially all of its assets to a new entity sponsored by the U.S. Treasury as part of a sale process under Section 363 of the U.S. Bankruptcy Code.
  • Advised on the benefit aspects of GM’s $5.6 billion sale of its Allison Transmission commercial and military business to The Carlyle Group and Onex Corporation.

RCN Corporation

  • Worked on the benefit aspects of RCN’s agreement to be acquired by an investment fund managed by ABRY Partners for total consideration of approximately $1.2 billion, including the assumption of debt.

Olin Corporation

  • Advises Olin on various day-to-day qualified plan, executive compensation and health and welfare benefit issues.

SPX Corporation (Industrial Products)

  • Serves as general benefits counsel for this industrial company, advising SPX on benefit issues in corporate transactions, including the $1.83 billion acquisition of United Dominion Industries, and counseling on day-to-day retirement and health and welfare benefit issues

KPS Capital Partners

  • Advised on benefits matters in Hephaestus Holdings, Inc.’s, a KPS portfolio company,  acquisition of a forged metal component provider, FormTech Industries.
  • Advised on benefit aspects for KPS in its formation of North American Breweries, Inc., a national platform for investments and growth in the beer and malt beverage industries.
  • Advised on benefit matters in Hephaestus Holdings, Inc.’s, a KPS portfolio company, acquisition of the North American Bearings Business of Delphi Corporation, the leading supplier of wheel bearings and roller clutches to GM.

Honeywell International

  • Represented Honeywell on the benefit aspects of its $720 million agreement to acquire Metrologic Instruments, Inc., a leading manufacturer of data capture and collection hardware and software.

Takeda Pharmaceutical Company Limited

  • Advised on the benefit aspects in connection with Takeda’s multi-billion dollar split-off transaction involving the company’s TAP Pharmaceutical Products joint venture with Abbott Laboratories.

Alcan Inc.

  • Represented Alcan with respect to the employee benefits aspects of its $200M sale of its plastic bottles business to Ball Corporation.

Wolters Kluwer

  • Advised on the benefits aspects of many of Wolters Kluwer’s recent corporate transactions, including the recent acquisition of tax software company, ATX/Kleinrock, as well as its agreement to acquire TaxWise Corporation.

Finance Projects

Lawyers in the Jenner & Block Employee Benefits and Executive Compensation Practice contribute to the financial bottom lines of their clients through unique and innovative finance projects:

Uses of Company Stock and ESOPs for Tenneco Inc.:

  • Sale of $400 million worth of company stock to a Stock Employee Compensation Trust (“SECT”).  The SECT was used to fund medical benefits through a VEBA, which required a prohibited transaction exemption from the U.S. Department of Labor.
  • Sale of $100 million worth of a client’s common stock to its pension plan.
  • Establishment and representation of numerous ESOPs, including Newport News Shipbuilding, Rath Packing Co., Pactiv Corporation and SPX.
  • Representation of numerous clients with respect to investment of plan assets in employer stock, including Continental Materials Corp.,Case Corporation, Pactiv, General Dynamics and SPX.
  • Represented buyers in acquisitions of employer stock from ESOPs, including the purchase of east and west coast shipyards.

420 Transfers

  • The practice has experience in the intricacies and traps for the unwary in this finance technique that allows a company to pay retiree medical costs from an overfunded pension plan pursuant to Code Section 420.

Other Financial Transactions:

  • Client’s contribution of its 9% stock ownership interest in another large publicly-traded company (valued at approximately $160 million) to an underfunded pension plan.  This transaction required a prohibited transaction exemption from the U.S. Department of Labor.  This is one of the largest transactions ever covered by a prohibited transaction exemption.
  • Advised a client on the termination of its overfunded pension plan and subsequent transfer of excess assets to fund its contributions to its defined contribution plan.
  • Elimination or reduction with meaningful FAS 106 savings of retiree medical benefits at several major corporations.  This was achieved with only one lawsuit, which was defended successfully.

Outsourcing Arrangements

  • The Employee Benefits and Executive Compensation Practice regularly advises clients on the outsourcing of administration functions, including the negotiation and documentation of total benefit outsourcing arrangements for General Dynamics.

Reductions in Force (RIF) Programs

  • The Employee Benefits and Executive Compensation Practice regularly advises on the design and implementation of early retirement open windows and other downsizing strategies involving employee benefit programs.

Executive Agreements

  • Employee Benefits and Executive Compensation Practice members work with companies, board committees and incoming executives in negotiating and documenting compensation and equity packages, including severance, option rights and shareholder issues.

Litigation

  • Several cases handled by the practice have led to important published decisions.  For additional information on our ERISA litigation, click here.