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Michael J. Francese

As a partner in Covington’s employee benefits practice group, Mike Francese focuses on counseling clients in matters arising under their employee benefit plans and executive compensation arrangements with respect to ERISA, the Internal Revenue Code, and related federal and state laws. He also represents clients before agencies and courts on both the federal and state level, and consults with them in connection with mergers, acquisitions, and other corporate transactions.

Mike's practice covers a broad spectrum of employee benefit plans and programs, as well as a variety of executive compensation arrangements, such as:

  • tax-qualified defined benefit and defined contribution plans, including traditional and hybrid pension plans, 401(k) plans, profit-sharing plans, and ESOPs;
  • non-qualified deferred compensation arrangements, including top-hat plans, 457(f) arrangements for employees of non-profit employers, and other types of nonqualified deferred compensation arrangements;
  • equity-based compensation arrangements, including stock options, restricted stock, and phantom equity awards;
  • health and welfare plans, including cafeteria, medical, disability, and severance plans and arrangements; and
  • executive employment and consulting agreements, including change in control, and parachute payment arrangements.

Employers are deluged with annual reporting requirements for their compensation and benefit plans.  One requirement that often flies under the radar is the obligation to furnish and file Form 3921 for exercises of incentive stock options (“ISOs”) and Form 3922 for certain shares purchased under an employee stock purchase plan (“ESPP”).  The deadline for furnishing these forms to employees is right around the corner: January 31, 2013.  The deadline for filing these forms with the IRS is a month or two later.
Continue Reading Statutory Stock Options: We Have To Report What? And When?

Private equity and other investment fund managers can exhale (at least a little bit) following a recent court ruling that investment funds are not liable for the ERISA obligations of their portfolio companies.  The ruling expressly rejects a 2007 Pension Benefit Guaranty Corporation (“PBGC”) letter ruling and contradicts an earlier court decision that supported the PBGC’s position that a private equity fund could be liable for the pension liabilities of one of its portfolio companies.  While the new ruling by no means settles the issue, investment fund managers should welcome this development.
Continue Reading Investment Funds Not Liable for Pension Plans of Portfolio Companies, Court Rules

If widespread news reports are any indication, many people—employers and employees alike—are thinking about increased taxes in 2013 and what can be done to minimize their impact.

Some tax increases in 2013 are a sure thing.  For example, the employee share of Medicare taxes will increase to 2.35% for wages in excess of $250,000 (for married individuals filing jointly), $125,000 (for married individuals filing separately), and $200,000 (in any other case).

But, even as the end of the year looms, it is unclear whether other potential tax increases will take effect.  If the so-called Bush tax cuts expire, income tax rates will increase.  If the “payroll tax holiday” is not extended, the employee share of Social Security taxes will increase to 6.2% from its current 4.2%.

Due to the uncertain tax landscape for 2013, employers may wish to consider accelerating certain payments and awards into 2012 when taxes will generally be lower.  However, in so doing, employers should be careful to avoid certain potential pitfalls. 
Continue Reading Accelerating Compensation into 2012 to Avoid 2013 Tax Increases