Staying Afloat in a Sea Of HR Changes

BLYTH, INC.April 20, 2009

BLYTH IS THE WORLD’S LARGESTCANDLE COMPANY

A holding company of candle, gift and general merchandise businesses

A global direct selling leader A top 100 direct marketing company The 800 pound gorilla (on a diet) in the

premium wholesale gift and decorative accessories channel

$1 billion+ NYSE:BTH publicly traded company

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BLYTH IS A SMALL CORPORATE ENTITY; THE ACTION IS IN THE BUSINESS UNITS

Approx. 3,500 employees WW; 2,692 U.S. Stand-alone business units with full P&L

responsibility Blyth Corporate is an accounting, reporting,

tax, legal and HR group of ~45 Legal team serves all Blyth companies Blyth HR responsible for policies, benefits,

compensation and all executive matters Business units supported by local HR teams

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WE RECOGNIZED EARLY ON THAT 2009 WAS GOING TO BE A DIFFERENT YEAR

New administration with a mandate for change

White House and Congress controlled by same party

Recent, painful economic news fueled fire for activism Credit crisis, increasing unemployment, bailouts Record high commodity costs Excessive executive pay Continued job losses in manufacturing sector

It’s all about the first 100 days 4

WE ESTABLISHED GUIDING PRINCIPLES TO APPROACH UNPRECEDENTED CHANGES

We will not be surprised Our management teams will not be surprised We will be proactive in understanding

legislative proposals, their multi-faceted implications and our options for dealing with them

We will be protagonists in making necessary changes in our operations

We will take a zero-sum approach to cost implications 5

FOR MOST LEGISLATIVE PROPOSALS, WE FORMED CROSS-FUNCTIONAL TEAMS

Blyth Corp HR Legal Finance Payroll Business Unit HR External Partners: medical broker, medical

carrier, COBRA administrator, outside counsel, etc.

Excellent opportunity for HR to lead organization, but reinforce that entire management team is responsible for compliance 6

WE CREATED SUMMARY PRESENTATIONS FORHR AND SENIOR MANAGEMENT TEAMS

Pulled from every resource possible: outside counsel, SHRM, business groups, media, external partners

Took the lead in training our division HR partners

Adapted our presentation for division HR to use with senior leadership and lower level management

Educated senior executives Value in moving early far outweighed the

risks of guessing wrong on some of the outcomes 7

BEFORE YOU PRESENT TO SENIOR MANAGEMENT …

Be sure you are speaking the same language … it’s Card Check, not EFCA

Be able to summarize the issue in only a couple of slides, them move promptly to implications and action steps

Know your stuff, but make clear that the information you are sharing is based on what you know today

Articulate (at a high level) accounting implications Recommend a management team philosophy Explain next steps, get buy-in Keep them informed Don’t think for a minute that any of this has job

preservation implications 8

WE ARE CURRENTLY DEALING WITH …

Card Check/Employee Free Choice Act Paycheck Fairness Act COBRA provisions within Economic Stimulus

Package Lilly Ledbetter Fair Pay Act Healthy Families Act Working Families Flexibility Act Make Work Pay Credit Genetic Information Non-Discrimination Act Future federal/state initiatives

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…USING THE FOLLOWING TACTICS

Ensuring compliance with new labor legislation Supporting SHRM and other business organization’s

activities to influence outcome of pending legislation Monitoring pending legislation to ensure ‘no surprises’ of

new requirements upon passage Proactively adapting plans to address shortfalls or bridge

funding gaps between current and pending regulations Briefing our CEO, CFO, OOC and business unit leadership as

needed on current or pending legislation Leading and championing proactive processes throughout

the company to maintain Blyth’s positive employee relations status

Developing presentations and training materials in cooperation with Blyth legal to ensure appropriate managerial and supervisory training on regulatory matters

Updating policies company-wide to ensure compliance with new legislation

Auditing new company’s employment policies to ensure compliance with labor regulations

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WHAT ARE OUR IMMEDIATE ACTIONS AND NEXT STEPS FOR KEY COBRA PROVISIONS?

Identification of all former employees who are required to receive the notice HRMS Report

Will consult with each business unit to ensure we have captured all appropriate former employees

Follow up step: Await the DOL release of Special Notice in order to send out Special Election paperwork Anthem/Conexis heavily involved in process Copy of Special Notice will be circulated to HR Team when

available Revise and update COBRA communication materials for

involuntary terminated employees after effective date Anthem/Conexis updating their materials Work with business units to ensure their communication

materials include appropriate updates

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WHAT ARE OUR IMMEDIATE ACTIONS?

Coordinate with Anthem/Conexis to revise procedures for crediting the 65% share of the COBRA premium for involuntarily terminated employees while applicable

Coordinate with HRMS/Payroll to revise systems/procedures for obtaining reimbursement of credits from the federal government

Work with Finance to determine how the new rules affect claims experience and budget

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LEDBETTER ACTION PLAN

Evaluate pay policies and performance management processes

Ensure well documented process relating to hiring, promotion and pay decisions Retention of benchmarking information for new hires Objective, clear performance appraisals with appropriate

documentation Consistently applied pay increases based on performance

data Ongoing coaching for our leaders to ensure they are

using performance management and compensation tools consistently

Revise document retention policy regarding documents concerning compensation decisions

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CARD CHECK/EFCA ACTIONS TO TAKE

Company executives, managers and supervisors should have common philosophy towards unionization, and should be comfortable articulating it

Consider including language in new employee orientation materials, employee handbooks, workforce training programs and other communications Pass language by legal to ensure the language passes

NLRB and applicable state labor laws Conduct Employee Issue and Satisfaction audits

Analyze information and communicate results and action items

Review employment policies Visitors in the workplace, open door policy, alternative

dispute policy, non solicitation policies, ensure everyone is aware and enforces the policies

Get involved – contact your senators and representatives using SHRM HR Voice as a conduit

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CARD CHECK/EFCA ACTIONS TO TAKE

Strengthen positive employee relations stance and educate leaders and employees Show employees what the union authorization card

is, what it means when it is signed, and provide examples

Let employees know that organizers might approach them at home, on property, in public places and in the presence of others employees, pressuring them to sign the card

Discuss the fact that the union will provide little information about their track records in other workplaces, or about their business in general

Educate them so they can ask the right questions before deciding whether to sign

Let them know they will NOT have a chance to change their minds later, and the company will not be able to intervene 15

HFA ACTIONS WE ARE TAKING NOW

Review existing sick leave or other paid time off policies to determine how they align with proposed HFA requirements

Determine potential cost impact to the business if HFA passes as proposed

Draft changes that will minimize cost implications to business

Review recommendations with Legal, Finance, and technology and determine impact

Review impact and interface between HFA and STD policy

Make any desired adjustments to sick leave or paid time off policies prior to enactment of the statute

Finalize the updated Policy and be ready to put it in place if the bill moves closer to signing 16

RESOURCES

Your businesses National SHRM legal issues and employment law

areas Workplace law bulletin HR Voice

Local SHRM National and local law firms National print media American Benefits Counsel (www.appwp.org) http://www.govtrack.us http://thomas.loc.gov/

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QUESTIONS