Ann: AFL enters into an agreement to acquire Watts McCray, page-22

MQ,

There are a number of possible strategies to prevent the vendor's senior lawyers departing:

• restraints - that commit sernior lawyers to working for AFL / WM for an agreed period and / or prevent the senior lawyers from working for a competitor and / or poaching staff or clients for a period of time after their employment with AFL / WM ceases;
• conditional consideration - In this case, part of the consideration is shares to be issued in the future conditional on the business achieving agreed targets. If senior lawyers leave this should reduce what they get later;
• incentives - part of the consideration is in the form of AFL shares - this should create an incentive to remain and maximise overall value. Not sure if there are restrictions on how soon these shares can be sold?
• employment terms - hopefully the promise of working for AFL is attractive - in terms of remuneration and working for a large player that has resources and a strong admin function that allows lawyers to be lawyers and not business managers.

There is a lot of speculation on my part in relation to the above as I am not privy to the agreed terms and motivations.

However, AFL management seem to have experience in acquiring legal practices and should be on top of this risk.

L2