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    HR Due Diligence Checklist   (Page 8 of 14)

    The following pages contain a detailed due diligence checklist that has been compiled from many years of M&A projects.


    While this is one of the most extensive and comprehensive due diligence checklists available for free on the internet, you should consult your lawyer and investment banker as they will likely have a few additional suggestions.


    1. All management employment contracts, “golden parachute agreements,” severance agreements, consulting agreements, “stay” agreements, and agreements not to compete to which the Company is a party.
    2. All labor contracts, collective bargaining agreements, union agreements, and any consents, waivers or amendments.
    3. An organizational chart which lists the name and title of each divisional Vice President and Director. Include the number of direct reports by functional area under each Manager.
    4. A list of the executive employees of the Company, and employees of the Company whose total annual compensation is in excess of $100,000, including the dollar amount of each such employee’s total annual compensation.
    5. With respect to each employee benefit plan:

      a) copies of such Employee Benefit Plan and any related trust, insurance policy, annuity contract, or other funding vehicle;


      b) the most recent favorable determination letter or tax exemption letter issued by the Internal Revenue Service (“IRS”);

      c) all applications for IRS determination or tax-exemption with respect to which a favorable determination letter has not yet been received;

      d) the most recent summary plan description and any subsequent summaries of material modifications;

      e) the three most recently filed Forms 5500, including all attached schedules;


      f) a description of the funding status and non-funded liability of each Employee Benefit Plan, including but not limited to executive compensation, severance pay, and retiree medical plans; and

      g) all actuarial and financial reports prepared during the last three years with respect to such Employee Benefit Plans.

    6. A summary of liability for termination payments to employees.
      Copies of all bonus, severance, employee option and employee equity participation plans or agreements.
    7. Details of all other employee plans and arrangements that do not constitute Employee Benefit Plans.
    8. List of employees including both active and inactive employees employed by the company for the last three years.
    9. A description of any order or decree to which any senior executive of the Company is subject that does or could impact the business or the Company as currently conducted or contemplated to be conducted in the future.
    10. Discuss number of employees and average tenure.



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