Benefit Arrangements. (a) Sellers shall ensure that as of immediately prior to the Effective Time, each employee or other service provider of Sellers and their Affiliates whose responsibilities consist primarily of providing services to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates prior to the Effective Time and service with Purchaser and its Affiliates after the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Time. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Purchase and Sale Agreement (Capital One Financial Corp)

Benefit Arrangements. (a) ~~Sellers~~ Subject to the other provisions of this paragraph, Parent agrees that all full-time employees of the Company and its Subsidiaries who continue employment with the Final Surviving Entity after the Effective Time (the “Continuing Employees”) shall ~~ensure~~ have the opportunity to participate, or to continue to participate, in employee benefit plans and arrangements of the Final Surviving Entity or, at the Parent’s election, of the Parent, that provide the following benefits: medical/dental/vision insurance, life insurance and short-term and long-term disability insurance (the “Plans”). Parent intends to transition the Continuing Employees into Plans maintained by Parent or its Subsidiaries effective no later than January 1, 2006. Participation of the Continuing Employees in such Plans shall be in accordance with the terms and conditions of the Plans; provided, however, that nothing in this Section 7.12 or elsewhere in this Agreement shall limit the right of Parent or the Final Surviving Entity to amend or terminate any such benefit at any time. Nothing in this Section 7.12 or elsewhere in this Agreement shall be construed to create a right in any employee to employment with Parent, the Interim Surviving Corporation, the Final Surviving Entity or any other Subsidiary of Parent, and the employment of each Continuing Employee shall be “at will” employment, if permitted under applicable Law. (b) Parent will cause Continuing Employees (i) to have benefits (excluding equity compensation) that are substantially similar or more advantageous, in the aggregate, to the benefits provided by either, at Parent’s election, (x) the Company or any of its Subsidiaries to the Continuing Employees (and their eligible dependents) immediately prior to the Closing Date, or (y) Parent or its subsidiaries to employees of Parent or its subsidiaries (and their eligible dependants) serving in comparable positions. To the extent Parent elects to have Continuing Employees and their eligible dependents participate in its Plans following the Closing Date, (i) Parent will allow such Continuing Employees and their eligible dependents to participate in such Plans on terms no less favorable than those provided to similarly situated employees of Parent or its subsidiaries, (ii) each such Continuing Employee will receive credit for purposes of eligibility to participate and vesting under such for years of service with the Company (or any of its Subsidiaries) prior to the Closing Date, and (iii) subject to any third party insurer’s consent, Parent will cause any and all pre-existing condition limitations, eligibility waiting periods and evidence of insurability requirements under any group health plans of Parent in which such employees and their eligible dependents will participate to be waived (to the extent not applicable under the Company’s Plans) and will provide credit for any co-payments and deductibles prior to the Closing Date but in the plan year which includes the Closing Date for purposes of satisfying any applicable deductible, out-of-pocket or similar requirements under any such plans that may apply for such plan year after the Closing Date. Notwithstanding the foregoing, after the Closing Date the Continuing Employees (i) shall no longer accrue paid time off in accordance with the Company’s paid time off (including vacation) policy and (ii) shall accrue paid time off in accordance with Parent’s paid time off (including vacation) policy as in effect on the date hereof and as it may be amended from time to time thereafter as to employees generally, with full credit under the Company’s policy for any accumulated but unused paid time off as of ~~immediately~~ the Closing Date. No payment in lieu of paid time off shall be made in connection with the Closing, except to the extent otherwise required by Law. (c) The Company agrees that it will take all reasonably necessary actions to cause its 401(k) plan to be terminated prior to the Effective Time, ~~each employee or other service provider~~ including without limitation having the Company’s board of ~~Sellers and their Affiliates whose responsibilities consist primarily of providing services~~ directors vote to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially so terminate the ~~Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law~~Company’s 401(k) plan. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices As soon as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year practicable after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates prior to the Effective Time and service with Purchaser and its Affiliates after the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Time. (h) Prior to the Closing Date, ~~US HoldCo~~ Parent shall ~~take all necessary actions~~ permit the Continuing Employees to ~~assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h~~enroll in Parent’s 401(k) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Timeplan. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Merger Agreement (Citrix Systems Inc)

Benefit Arrangements. (a) ~~Sellers~~ Subject to the other provisions of this Section 6.8, Parent agrees that all full-time Employees of the Company and its Subsidiaries who continue employment with the Interim Surviving Corporation after the Effective Time (the “Continuing Employees”) shall ~~ensure~~ have the opportunity to participate, or to continue to participate, in employee benefit plans and arrangements of the Interim Surviving Corporation or, at Parent’s election, of Parent, that provide the following benefits: (i) with respect to those Continuing Employees in the United Kingdom — PHI cover (permanent health cover), pension scheme, holiday, life assurance, BUPA medical cover and eye cover; and (ii) with respect to those Continuing Employees outside of the United Kingdom — medical/dental/vision insurance, life insurance and short-term and long-term disability insurance (collectively, clauses (i) and (ii), the “Plans”). Parent intends to transition the Continuing Employees into Plans maintained by Parent or its Subsidiaries as follows: (x) with respect to those Continuing Employees in the United Kingdom, effective no later than January 1, 2008 or, if the Closing has not occurred by such date on the next open enrollment or renewal date with respect thereto (other than with respect to life assurance, BUPA medical coverage and eye cover, which shall be effective on the later of January 1, 2008 or on the next renewal date with respect thereto); and (y) with respect to those Continuing Employees outside of the United Kingdom, effective January 1, 2008 or, if the Closing has not occurred by such date on the next open enrollment or renewal date with respect thereto. Participation of the Continuing Employees in such Plans shall be in accordance with the terms and conditions of the Plans; provided, however, that nothing in this Section 6.8 or elsewhere in this Agreement shall limit the right of Parent or the Interim Surviving Corporation to amend or terminate any such benefit at any time. Nothing in this Section 6.8 or elsewhere in this Agreement shall be construed to create a right in any employee to employment with Parent, the Interim Surviving Corporation or any other Subsidiary of Parent, and the employment of each Continuing Employee shall be “at will” employment, if permitted under applicable Law. (b) Parent will cause the Continuing Employees (i) to have benefits (excluding equity compensation) that are substantially similar, in the aggregate, to the benefits provided by either, at Parent’s election, (x) the Company or any of its Subsidiaries to the Continuing Employees (and their eligible dependents) immediately prior to the Closing Date, or (y) Parent or its Subsidiaries to employees of Parent or its Subsidiaries (and their eligible dependents) serving in comparable positions. Upon the completion of the transition of the Continuing Employees and their eligible dependents to participation in its Plans following the Closing Date as set forth in Section 6.8(a), (i) Parent will allow such Continuing Employees and their eligible dependents to participate in such Plans on terms no less favorable than those provided to similarly situated employees of Parent or its Subsidiaries, (ii) each such Continuing Employee will receive credit for purposes of eligibility to participate and vesting under such Plan (excluding any stock option or equity incentive plans of Parent) for years of service with the Company (or any of its Subsidiaries) prior to the Closing Date, and (iii) subject to any required third party insurer’s consent, Parent will cause any and all pre-existing condition limitations, eligibility waiting periods and evidence of insurability requirements under any group health plans of Parent in which such employees and their eligible dependents will participate to be waived (to the extent not applicable under the Company’s plans) and will provide credit for any co-payments and deductibles prior to the Closing Date but in the plan year which includes the Closing Date for purposes of satisfying any applicable deductible, out-of-pocket or similar requirements under any such plans that may apply for such plan year after the Closing Date. (c) The Company shall take all necessary actions to cause its 401(k) plan to be terminated prior to the Effective Time, ~~each employee or other service provider~~ including having the Company’s board of ~~Sellers and their Affiliates whose responsibilities consist primarily of providing services~~ directors vote to so terminate the ~~businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged~~Company’s 401(k) ~~by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries~~plan. ~~For the period from and~~ As soon as practicable after the ~~Effective Time until December 31~~Closing Date, ~~2012 (the “Continuation Period”), Purchaser~~ Parent shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to permit the Continuing Employees ~~and Retirees pursuant~~ to ~~this Section 6.07(b~~enroll in Parent’s 401(k) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreementplan. (d) ~~For a period of one year after~~ Upon written notice from Parent to the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates Company prior to the ~~Effective Time~~ Closing and ~~service with Purchaser and~~ subject to applicable Law as determined by the Company in its ~~Affiliates after~~ sole reasonable discretion, the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees Company shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis effective immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain terminate the employment of any ~~particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Time. (h) Prior~~ Employee who has not executed and delivered to the ~~Closing Date~~Company an Option Reset Agreement and a Vesting Continuation Agreement (each such Employee, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a ~~legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions~~ “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(BTerminated Employee”).

Appears in 1 contract

Samples: Merger Agreement (Citrix Systems Inc)

Benefit Arrangements. (a) ~~Sellers~~ Subject to the other provisions of this Section 6.7, Parent agrees that all full-time Employees of the Company and its Subsidiaries who continue employment with the Surviving Corporation after the Effective Time (the “Continuing Employees”) shall ~~ensure~~ have the opportunity to participate, or to continue to participate, in employee benefit plans and arrangements of the Surviving Corporation or, at the Parent’s election, of the Parent, that as provide the following benefits: medical/dental/vision insurance, life insurance and short-term and long-term disability insurance (the “Plans”). Parent intends to transition the Continuing Employees into Plans maintained by Parent or its Subsidiaries effective no later than January 1, 2007. Participation of the Continuing Employees in such Plans shall be in accordance with the terms and conditions of the Plans; provided, however, that nothing in this Section 6.7 or elsewhere in this Agreement shall limit the right of Parent or the Surviving Corporation to amend or terminate any such benefit at any time. Nothing in this Section 6.7 or elsewhere in this Agreement shall be construed to create a right in any employee to employment with Parent, the Surviving Corporation or any other Subsidiary of Parent, and the employment of each Continuing Employee shall be “at will” employment, if permitted under applicable Law. (b) Parent will cause Continuing Employees (i) to have benefits (excluding equity compensation) that are substantially similar, in the aggregate, to the benefits provided by either, at Parent’s election, (x) the Company or any of its Subsidiaries to the Continuing Employees (and their eligible dependents) immediately prior to the Closing Date, or (y) Parent or its Subsidiaries to employees of Parent or its Subsidiaries (and their eligible dependants) serving in comparable positions. To the extent Parent elects to have Continuing Employees and their eligible dependents participate in its Plans following the Closing Date, (i) Parent will allow such Continuing Employees and their eligible dependents to participate in such Plans on terms no less favorable than those provided to similarly situated employees of Parent or its Subsidiaries, (ii) each such Continuing Employee will receive credit for purposes of eligibility to participate and vesting under such Plan (excluding any stock option or equity incentive plans of Parent) for years of service with the Company (or any of its Subsidiaries) prior to the Closing Date, and (iii) subject to any required third party insurer’s consent, Parent will cause any and all pre-existing condition limitations, eligibility waiting periods and evidence of insurability requirements under any group health plans of Parent in which such employees and their eligible dependents will participate to be waived (to the extent not applicable under the Company’s plans) and will provide credit for any co-payments and deductibles prior to the Closing Date but in the plan year which includes the Closing Date for purposes of satisfying any applicable deductible, out-of-pocket or similar requirements under any such plans that may apply for such plan year after the Closing Date. (c) The Company shall take all necessary actions to cause its 401(k) plan to be terminated prior to the Effective Time, ~~each employee or other service provider~~ including having the Company’s board of ~~Sellers and their Affiliates whose responsibilities consist primarily of providing services~~ directors vote to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially so terminate the ~~Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law~~Company’s 401(k) plan. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices As soon as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year practicable after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates prior to the Effective Time and service with Purchaser and its Affiliates after the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Time. (h) Prior to the Closing Date, ~~US HoldCo~~ Parent shall ~~take all necessary actions~~ permit the Continuing Employees to ~~assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h~~enroll in Parent’s 401(k) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Timeplan. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Merger Agreement (Citrix Systems Inc)

Benefit Arrangements. Parent agrees that all employees of the Company and any of its Subsidiaries who continue employment with Parent or any subsidiary of Parent after the Effective Time (a"CONTINUING EMPLOYEES") ~~Sellers~~ shall be eligible to continue to participate in the Company's (or its Subsidiary's, as applicable) health, vacation, welfare and retirement benefit plans; provided, however, that (i) nothing in this Section 5.18 or elsewhere in this Agreement shall limit the right of Parent to amend or terminate any such benefit plan or arrangement at any time, and (ii) if Parent terminates any such plan, then (upon expiration of any appropriate transition period), the Continuing Employees shall be eligible to participate in Parent's benefit plans and vacation policies, in each case to the same extent as employees of Parent in similar positions and at compensation grade levels. Notwithstanding the foregoing, for a period of one year following the Closing Date, Parent shall ensure that each of the Continuing Employees shall, so long as such employee continues to remain employed with the Surviving Corporation (or any of its Subsidiaries), continue to be paid base salary at no lower a rate than that in effect on the Closing Date and be entitled to receive health, vacation, welfare and retirement benefits on terms, in the aggregate, at least as favorable as those in effect on the Closing Date. Continuing Employees shall receive credit for service time as an employee of the Company for purposes of eligibility to participate, vesting, and eligibility to receive benefits under any such Parent benefit plan and for purposes of vacation accrual for service accrued or deemed accrued prior to the Effective Time. Additionally, any life, health and disability benefits available to Continuing Employees and their eligible dependents under Parent's benefit plans shall not be subject to any insurability requirement or pre-existing condition exclusion that would not apply to the corresponding benefit provided under a plan maintained by the Company or any of its Subsidiaries immediately prior to the Effective Time, each employee or other service provider of Sellers and their Affiliates whose responsibilities consist primarily of providing services to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. ~~For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser~~ Parent shall further provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee with credit for any co-payments and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates deductibles paid prior to the Effective Time ~~and service with Purchaser and its Affiliates after~~ for the ~~Effective Time). (e) If~~ plan year in which the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on satisfying any applicable deductibles or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained corresponding Parent benefit plans. Nothing in this Section ~~6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein~~ 5.18 or elsewhere in this Agreement, shall ~~(i)~~ be construed ~~as an amendment~~ to ~~any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii)~~ create ~~any third-party beneficiary or other rights~~ a right in any ~~other person, including any~~ employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Timecontinuing employment. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Agreement and Plan of Merger (Echo Healthcare Acquisition Corp.)

Benefit Arrangements. (a) Sellers shall ensure that as of immediately prior to the Effective Time, each employee or other service provider of Sellers and their Affiliates whose responsibilities consist primarily of providing services to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until Until December 31, ~~2012 (~~2014, Acquiror will cause the ~~“Continuation Period”), Purchaser shall provide or cause its Affiliates~~ Surviving Corporation to provide to each ~~employee of any~~ of the ~~Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “~~Continuing ~~Employee”): (i)~~ Employees annual base salary and base wages ~~or salaries, as applicable,~~ and target bonus opportunities that are at least ~~equal to those~~ as favorable as such annual base salary and base wages and target bonus opportunities provided to such Continuing Employee immediately prior to the ~~Effective Time;~~ Closing Date. Until December 31, 2014, or such longer period of time as is required by applicable Legal Requirements, Acquiror will cause the Surviving Corporation to continue to maintain employee benefits for each of the Continuing Employees which are at least as favorable as those employee benefit plans, programs, arrangements and ~~(ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity~~ policies provided to such Continuing ~~Employee~~ Employees immediately prior to the ~~Effective Time~~Closing Date; provided, that nothing in this sentence shall require Acquiror, the Company or the Surviving Corporation to continue any specific employee benefit plans during such period. (b) ~~Notwithstanding anything in Section 6.07(a)~~ To the extent permitted by applicable Legal Requirements, Acquiror will, and will cause the Surviving Corporation to, credit service rendered by the Continuing Employees prior to the ~~contrary~~Closing for all purposes (including for purposes of participation, ~~for the period from~~ coverage, vesting and ~~after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b~~level of benefits) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in under all ~~material respects to the~~ employee benefit plans, programs, policies and ~~arrangements, including Health~~ arrangements of the Surviving Corporation from and ~~Welfare Benefits, provided~~ after the Closing to the same extent as such service was taken into account under corresponding plans of the Company for such purposes. Without limiting the foregoing, Acquiror shall use commercially reasonable efforts to provide that the Continuing Employees will (and with respect to insurance arrangements with third parties, Acquiror will provide, or cause any third party insurance provider to provide, that the Continuing Employees will) not be subject to any pre-existing condition or other limitation under any health or welfare plans of the Surviving Corporation for any condition for which such Continuing Employee ~~or Retiree~~ would have been entitled to coverage under the corresponding plan of the Company in which such Continuing Employee participated immediately prior to the ~~date of this Agreement (collectively~~Closing, ~~the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided~~ all to the extent permitted by applicable Legal Requirements. To the extent permitted by applicable Legal Requirements, Acquiror will cause such 43 WA 4941984.13 WCSR 32390522v12 Continuing Employees to be given credit under such plans for co-payments and ~~Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e.~~other out-of-pocket expenses made, ~~the same in all material respects)~~and deductibles satisfied, dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the ~~Pre-Closing Benefit Arrangements during the three calendar years prior to the~~ plan year ~~during~~ in which the ~~Effective Time~~ Closing occurs. (c) ~~Notwithstanding anything in~~ This Section ~~6.07(a) or 6.07(b)~~ 6.9 shall be binding upon and inure solely to the ~~contrary~~benefit of the Parties, ~~if a Continuing~~ and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person, any right, benefit or remedy of any nature whatsoever under or by reason of this Section 6.9. In no event shall the terms of this Section 6.9 be deemed to (i) establish, amend or modify any employee benefit plan sponsored by the Company or the Surviving Corporation; (ii) alter or limit the ability of Acquiror or the Surviving Corporation, to amend, modify or terminate any of the Employee ~~is eligible to receive sabbatical benefits immediately prior to~~ Plans or any other benefit or employment plan, program, agreement or arrangement after the ~~Effective Time~~Closing, ~~the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant~~ subject to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates prior to the Effective Time and service with Purchaser and its Affiliates after the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof thereof; or (iii) ~~otherwise obligate Purchaser~~ confer upon any current or ~~Group~~ former employee or ~~any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any~~ other service provider of the ~~Direct Sale Companies~~ Company, any right to employment or ~~their respective Subsidiaries following~~ service or continued employment or continued service with Acquiror or the ~~Effective Time~~Surviving Corporation, or constitute or create an employment or agreement with, or modify the at-will status of, any employee or other service provider. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Merger Agreement (Heartland Payment Systems Inc)

Benefit Arrangements. Parent agrees that all employees of the Company and any of its Subsidiaries who continue employment with Parent or any subsidiary of Parent after the Effective Time (a“Continuing Employees”) ~~Sellers~~ shall be eligible to continue to participate in the Company’s (or its Subsidiary’s, as applicable) health, vacation, welfare and retirement benefit plans; provided, however, that (i) nothing in this Section 5.18 or elsewhere in this Agreement shall limit the right of Parent to amend or terminate any such benefit plan or arrangement at any time, and (ii) if Parent terminates any such plan, then (upon expiration of any appropriate transition period), the Continuing Employees shall be eligible to participate in Parent’s benefit plans and vacation policies, in each case to the same extent as employees of Parent in similar positions and at compensation grade levels. Notwithstanding the foregoing, for a period of one year following the Closing Date, Parent shall ensure that each of the Continuing Employees shall, so long as such employee continues to remain employed with the Surviving Corporation (or any of its Subsidiaries), continue to be paid base salary at no lower a rate than that in effect on the Closing Date and be entitled to receive health, vacation, welfare and retirement benefits on terms, in the aggregate, at least as favorable as those in effect on the Closing Date. Continuing Employees shall receive credit for service time as an employee of the Company for purposes of eligibility to participate, vesting, and eligibility to receive benefits under any such Parent benefit plan and for purposes of vacation accrual for service accrued or deemed accrued prior to the Effective Time. Additionally, any life, health and disability benefits available to Continuing Employees and their eligible dependents under Parent’s benefit plans shall not be subject to any insurability requirement or pre-existing condition exclusion that would not apply to the corresponding benefit provided under a plan maintained by the Company or any of its Subsidiaries immediately prior to the Effective Time, each employee or other service provider of Sellers and their Affiliates whose responsibilities consist primarily of providing services to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. ~~For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser~~ Parent shall further provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee with credit for any co-payments and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates deductibles paid prior to the Effective Time ~~and service with Purchaser and its Affiliates after~~ for the ~~Effective Time). (e) If~~ plan year in which the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on satisfying any applicable deductibles or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained corresponding Parent benefit plans. Nothing in this Section ~~6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein~~ 5.18 or elsewhere in this Agreement, shall ~~(i)~~ be construed ~~as an amendment~~ to ~~any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii)~~ create ~~any third-party beneficiary or other rights~~ a right in any ~~other person, including any~~ employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Timecontinuing employment. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Merger Agreement (Echo Healthcare Acquisition Corp.)

Benefit Arrangements. (a) ~~Sellers~~ Parent agrees that all employees of the Company and CEA who continue employment with the CEA Surviving Corporation or the Surviving Corporation or Parent or any Affiliate thereof after the Effective Time (“Continuing Employees”) shall be eligible to continue to participate in the Company’s and CEA’s health, vacation, welfare and retirement benefit plans through at least December 2010, and that Parent shall ensure that the CEA Surviving Corporation, the Surviving Corporation, Parent or an Affiliate thereof maintains the previously adopted 2010 Incentive Compensation Plan, the 2010 Hospital Sales Incentive Plan — Account Management Positions, the 2010 Sales Incentive Plan — RVP, Business Development, and the Sales Incentive Plan — VP, New Markets including the thresholds, targets and other provisions through at least December 2010, and that all payments due thereunder shall be made in accordance therewith; provided, however, that nothing in this Section 4.9 or elsewhere in this Agreement shall limit the right of Parent or any Affiliate thereof, including the CEA Surviving Corporation or the Surviving Corporation, to amend or terminate any such benefit plan or arrangement at any time after December 2010, and if Parent or any Affiliate thereof, including the CEA Surviving Corporation or the Surviving Corporation, terminates any such plan, then (upon expiration of any appropriate transition period), the Continuing Employees shall be eligible to participate in Parent’s benefit plans and vacation policies, in each case to the same extent as employees of Parent in similar positions and compensation grade levels. Continuing Employees shall receive credit for service time as an employee of the Company and CEA for purposes of eligibility to participate, vesting, and eligibility to receive benefits under any such Parent benefit plan and for purposes of vacation accrual for service accrued or deemed accrued prior to the Effective Time to the extent past service was recognized for such Continuing Employees under the comparable Company Plans immediately prior to the Effective Time, ~~each employee~~ and to the same extent past service is credited under such plans or ~~other~~ arrangements for similarly situated employees of Parent. Notwithstanding the foregoing, nothing in this Section 4.9(a) shall be construed to require crediting of service ~~provider~~ that would result in (A) duplication of ~~Sellers~~ benefits, (B) service credit for benefit accruals under a defined benefit pension plan, or (C) service credit under a newly established plan for which prior service is not taken into account for employees of Parent and its Affiliates generally. Additionally, any life, health and disability benefits available to Continuing Employees and their ~~Affiliates whose responsibilities consist primarily of providing services~~ eligible dependents under Parent’s benefit plans shall not be subject to any insurability requirement or pre-existing condition exclusion that would not apply to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, corresponding benefit provided under a ~~“Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee~~ Company Plan immediately prior to the Effective Time~~; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such~~ . Parent shall further provide each Continuing ~~Employee immediately prior~~ Employee, to the ~~Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary~~extent commercially practicable, with credit for ~~the period from~~ any co-payments and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates deductibles paid prior to the Effective Time ~~and service with Purchaser and its Affiliates after~~ for the ~~Effective Time). (e) If~~ plan year in which the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on satisfying any applicable deductibles or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance with the terms of the ING Direct Short-Term Incentive Plan. (f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser, as applicable, shall (i) with respect to Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under ~~the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan)~~corresponding Parent benefit plans. (gb) ~~Notwithstanding~~ Immediately prior to the ~~foregoing~~Closing Date, ~~Purchaser~~ the Company and CEA shall cease contributions to, and terminate the ~~Sellers~~ Xxxxxxxxxx Xxxxxxx & Associates Inc. 401(k) Plan (the “401(k) Plan”). In connection therewith, the Company and CEA shall (i) cause their respective board of directors to adopt written resolutions, to be delivered pursuant to Section 5.3(f), to terminate the 401(k) Plan and one hundred percent (100%) vest all participants under the 401(k) Plan, such termination and vesting to be effective immediately prior to the Closing Date; and (ii) deliver, prior to Closing, notice of the 401(k) Plan termination to any trustees and custodians of the 401(k) Plan and/or its assets. Parent reserves the right to suspend the distribution of benefits from the 401(k) Plan until the later of the receipt of a favorable determination letter from the IRS with respect to the termination of the 401(k) Plan or the completion of final testing and record keeping for the 401(k) Plan. (c) The parties hereto acknowledge and agree that all provisions contained in this Section ~~6.07~~ 4.9 are included for the sole benefit of ~~Purchaser~~ the parties hereto, and ~~the Sellers and~~ that nothing ~~contained herein~~ in this Agreement, whether express or implied, shall ~~(i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii)~~ create any ~~third-~~third party beneficiary or other rights (i) in any other ~~person~~Person, ~~including~~ including, without limitation, any ~~employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries~~Continuing Employees, any participant in ~~the US HoldCo Benefit Plans~~any Parent benefit plan, or any dependent or beneficiary ~~thereof~~ thereof, or (~~iii~~ii) ~~otherwise obligate Purchaser or Group~~ to continued employment with Parent or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries following the Effective Timeits Affiliates. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective Time; provided, however, that to the extent that the termination of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt of a legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “will not” trigger income inclusion and additional tax for any participant under Section 409A of the Code) take such actions as are reasonably necessary to provide for such terminations and distributions in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B).

Appears in 1 contract

Samples: Agreement and Plan of Merger (Emdeon Inc.)

Benefit Arrangements. (a) Sellers shall ensure that as of immediately prior to the Effective Time, each employee or other service provider of Sellers and their Affiliates whose responsibilities consist primarily of providing services to the businesses of the Sales Package Companies is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries and that no other individual is employed (or, in the case of independent contractors, engaged) by the Direct Sale Companies and their Subsidiaries. For the period from and after the Effective Time until December 31, 2012 (the “Continuation Period”), Purchaser shall provide or cause its Affiliates to provide to each employee of any of the Direct Sale Companies or their respective Subsidiaries who continues employment with Purchaser or any of its Subsidiaries following the Effective Time (each, a “Continuing Employee”): (i) base wages or salaries, as applicable, at least equal to those provided to such Continuing Employee immediately prior to the Effective Time; and (ii) an annual cash bonus opportunity that is no less favorable than the annual cash bonus opportunity provided to such Continuing Employee immediately prior to the Effective Time. (b) Notwithstanding anything in Section 6.07(a) to the contrary, for the period from and after the Effective Time until December 31, 2012, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee and Retiree employee benefits (for clarity, this Section 6.07(b) relates solely to employee pension benefit and employee welfare benefit plans and does not relate to compensatory arrangements or individual agreements) which are, subject to the final sentence of this Section 6.07(b), the same in all material respects to the employee benefit plans, programs, policies and arrangements, including Health and Welfare Benefits, provided to the Continuing Employee or Retiree immediately prior to the date of this Agreement (collectively, the “Pre-Closing Benefit Arrangements”). In determining whether the benefits provided to the Continuing Employees and Retirees pursuant to this Section 6.07(b) meet the applicable standard (i.e., the same in all material respects), dependent coverage shall be considered. For the period beginning on the date of this Agreement and ending on the Effective Time, the Sellers shall not amend, terminate or partially terminate the Pre-Closing Benefit Arrangements in any manner that adversely affects such employees except to the minimum extent required to comply with any applicable Law. Notwithstanding the foregoing provisions of this paragraph, Purchaser may increase employee cost levels to reflect additional costs of maintenance of the Pre-Closing Benefit Arrangements above the levels in effect on the date hereof; provided, that such changes shall not be greater in the aggregate than the average of the aggregate annual increases in employee cost levels for the Pre-Closing Benefit Arrangements during the three calendar years prior to the year during which the Effective Time occurs. (c) Notwithstanding anything in Section 6.07(a) or 6.07(b) to the contrary, if a Continuing Employee is eligible to receive sabbatical benefits immediately prior to the Effective Time, the Continuing Employee shall be entitled to receive such sabbatical benefits following the Effective Time during the five year post-eligibility period provided pursuant to the terms of the sabbatical practices as it applied immediately prior to the date of this Agreement. In addition, if a Continuing Employee would have been eligible to receive sabbatical benefits if the Closing had not occurred during the Continuation Period, the Continuing Employee shall be entitled to receive the sabbatical benefits that would have been provided to the Continuing Employee pursuant to the terms of the sabbatical practice as it applied immediately prior to the date of this Agreement. (d) For a period of one year after the Effective Time, Purchaser shall provide or cause its Affiliates to provide to each Continuing Employee severance compensation and benefits that each such Continuing Employee is eligible to receive upon a qualifying termination of employment under the terms of the severance plan listed on Section 6.07(d) of the Seller Disclosure Schedule (taking into account service with Group and its Affiliates prior to the Effective Time and service with Purchaser and its Affiliates after the Effective Time). (e) If the Effective Time occurs before December 31, 2011, then Purchaser agrees that the 2011 annual bonuses under the ING Direct Short-Term Incentive Plan (the “2011 Bonuses”) for Continuing Employees shall be determined as follows: (i) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 through the Effective Time shall be determined on a pro-rata basis immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011 through the Effective Time and (ii) the portion of the 2011 Bonus to which each participant in such plan shall be entitled based on services performed in 2011 after the Effective Time shall be determined on a pro-rata basis in accordance with Section 6.07(a)(ii). If the Effective Time occurs on or after December 31, 2011, but before the 2011 Bonuses are paid, the amount of the 2011 Bonuses shall be determined immediately prior to the Effective Time based on the actual performance level taking into account the financial performance of the Bank in the normal course of business achieved in 2011. In all cases, 2011 Bonuses for Continuing Employees shall be payable at the same time as annual bonuses for 2011 are paid to employees of Purchaser and its Subsidiaries generally (but in no event later than March 15, 2012), so long as the applicable employee remains employed through such date, provided that an employee terminated subsequent to the Effective Time under circumstances entitling such employee to severance benefits under Section 6.07(d) shall be entitled to receive a prorated bonus for the portion of the year served, payable based on actual performance at the time 2011 bonuses are payable generally. Subject to the foregoing provisions of this Section 6.07(e), the 2011 Bonuses shall otherwise be determined and payable in accordance Parent will consult with the ~~terms of the ING Direct Short-Term Incentive Plan.~~ Founders (~~f) With respect to any Purchaser Benefit Plans in which any Continuing Employee becomes eligible to participate on or after the Effective Time, Purchaser,~~ as ~~applicable, shall (i~~defined herein) with respect to ~~Health and Welfare Benefits, waive all preexisting conditions, actively at work requirements, exclusion and waiting periods with respect to participation and coverage requirements under~~ determining the Purchaser Benefit Plans to the extent they were inapplicable to, or were satisfied under, the US HoldCo Benefit Plans, (ii) for purposes of (A) eligibility, (B) vesting and (C) benefit level, solely with respect to any severance or paid time off plans or policies (but not for purposes of benefit accrual under a defined benefit pension plan) recognize the service that was credited to each such Continuing Employee under the corresponding US HoldCo Benefit Plan prior to the Effective Time, under the Purchaser Benefit Plans (except to the extent it would result in a duplication of benefits or is not provided for Company employees of Purchaser and its Subsidiaries for the same period of service), as if such service were with Purchaser and its Subsidiaries and (iii) with respect to Health and Welfare Benefits, cause any deductible, coinsurance and out-of-pocket expenses incurred by any such Continuing Employee and his or her covered dependents under the US HoldCo Benefit Plans during the portion of the plan year ending on the Closing Date to be taken into account for purposes of satisfying deductible, coinsurance and maximum out-of-pocket requirements under the applicable Purchaser Benefit Plan (to the same extent as they would be taken into account if incurred under such Purchaser Benefit Plan). (g) Notwithstanding the foregoing, Purchaser and the Sellers acknowledge and agree that all provisions contained in this Section 6.07 are included for the sole benefit of Purchaser and the Sellers and nothing contained herein shall (i) be construed as an amendment to any US HoldCo Benefit Plan or Purchaser Benefit Plan, (ii) create any third-party beneficiary or other rights in any other person, including any employee or former employee of any of the Direct Sale Companies or their respective Subsidiaries, any participant in the US HoldCo Benefit Plans, or any dependent or beneficiary thereof or (iii) otherwise obligate Purchaser or Group or any of their Affiliates to maintain any particular US HoldCo Benefit Plan, Purchaser Benefit Plan or retain the employment of any particular employee of any of the Direct Sale Companies or their respective Subsidiaries retained by Parent following the Effective Time. (h) Prior to the Closing Date, US HoldCo shall take all necessary actions to assign to Purchaser the US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule, and Purchaser shall assume such US HoldCo Benefit Plans listed on Section 6.07(h) of the Seller Disclosure Schedule at the Effective Time and be responsible for any Liabilities under such plans following the Effective Time. (i) The Sellers shall be solely responsible for any Controlled Group Liabilities. (j) US Holdco or its applicable Affiliate shall take such actions as are reasonably necessary to provide for termination within the 30-day period prior to the Effective Time, contingent upon the occurrence of the Effective Time, of the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule, but only to the extent that such terminations can be effectuated in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B) (it being understood and agreed, however, that US Holdco or its applicable Affiliate shall in any case effectuate such termination if requested by Purchaser subsequent to the date hereof, so long as Purchaser consents to accelerated vesting prior to such termination of the amounts referenced on Section 6.07(j) of the Seller Disclosure Schedule) and, in connection with such terminations, if any, all distributions under the US Holdco Benefit Plans listed on Section 6.07(j) of the Seller Disclosure Schedule are to be made to participants in such plans at or prior to the Effective TimeClosing; provided, however, that Parent shall make employment offers only to those Company employees as Parent determines in its business discretion and shall not have any obligation to make an offer to any particular employee or employees of the Company. Such employees of the Company who have continued as employees of Parent or the Surviving Corporation following the Closing Date are referred to hereinafter as "CONTINUING EMPLOYEES." Terms of employment offered to Continuing Employees will include compensation and options to purchase Parent Common Stock commensurate with each person's education and experience levels relative to Parent's current employees, and shall be contingent upon the Closing. Employment of any Company employees by Parent or the Surviving Corporation following the Closing shall be subject to Parent's established policies generally applicable to new employees. The Company will use its best efforts to cooperate with Parent to ensure that Company employees that Parent wishes to retain become employees of Parent. (b) Upon the Closing, certain Continuing Employees will be eligible for grants of options to purchase an aggregate of 500,000 shares of Parent Common Stock at a price per share of at least eighty-five percent (85%) of the fair market value per share of Parent Common Stock as established by the Board of Directors of Parent as of the Closing. As a condition to such a grant, each Continuing Employee shall execute a release of any and all claims against the Company, the Surviving Corporation and Parent arising out of such employee's employment by the Company prior to the ~~extent that the termination~~ Effective Time. Subject to continuous employment with Parent, thirty-three and one-third percent (33-1/3%) of such plans and the related distributions, if any, cannot be effectuated or made prior to or at the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), but such terminations and distributions can be effectuated and made after the Effective Time in accordance with Treas. Regs. Section 1.409A-3(j)(4)(ix)(B), Purchaser or its applicable Affiliate shall (if in receipt options of a ~~legal opinion from the law firm of Xxxxxxxxxx Xxxxxxxx & Xxxxxxxx LLP that such actions “~~Continuing Employee will ~~not” trigger income inclusion and additional tax for any participant under Section 409A~~ vest on each one-year anniversary of the ~~Code) take~~ applicable grant date, so that all of such ~~actions as are reasonably necessary~~ options of a Continuing Employee will be vested on the third anniversary of the grant date (subject to ~~provide for such terminations and distributions in accordance with Treas~~continuous employment). ~~Regs. Section 1.409A-3(j)(4)(ix)(B).~~Such options will cease

Appears in 1 contract

Samples: Agreement and Plan of Reorganization (Niku Corp)

Common use of Benefit Arrangements Clause in Contracts