Employee Benefits and Labor Clauses
(Stock Purchase Agreement) (Pro-buyer)

Summary

Use these stock purchase agreement clauses to address employee benefits and labor and employment matters when negotiating on behalf of the buyer in a corporate transaction involving a purchase of stock. It may be adapted in the event the transaction is a merger as opposed to a direct stock purchase by the buyer. These clauses include seller representations and warranties pertaining to the stock of the company being acquired, seller covenants concerning conduct of the business for the interim period between the signing of the agreement and the closing of the transaction, and post-closing employee-related covenants. These clauses are written to favor the buyer and provide guidance on the most common provisions. This template contains drafting notes and alternate and optional clauses. Use this template in conjunction with the Stock Purchase Agreement (Pro-Buyer) (DE), available in Practical Guidance's Corporate and M&A practice area, which contains all provisions of the pro-buyer stock purchase agreement. The article and section numbering provided in this template correspond to the article and section numbering in that form. For seller-friendly employee benefits and labor and employment clauses for a stock purchase agreement, see Employee Benefits and Labor Clauses (Stock Purchase Agreement) (Pro-seller) and Employee Benefits and Labor Clauses (Stock Purchase Agreement) (Pro-seller Auction). For similar provisions in deals structured as asset acquisitions, see Employee Benefits and Labor Clauses (Asset Purchase Agreement) (Pro-seller) and Employee Benefits and Labor Clauses (Asset Purchase Agreement) (Pro-buyer). See also Market Trend Report: Employee Benefits and Executive Compensation in Corporate Transactions (First Quarter, 2019). For a full listing of key content covering the treatment of employee benefits and executive compensation in the context of a corporate transaction, like a merger or acquisition, see Corporate Transactions EBEC Resource Kit.