Company Interim Operations. The Company covenants and agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as otherwise (i) expressly contemplated by any other section of this Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of the equity of a Subsidiary of the Company is owned, directly or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth in Section 6.1 of the Company Disclosure Letter): (a) it and its Subsidiaries shall conduct their businesses in the ordinary course, consistent with past practice, and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with material customers, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice); (b) neither it nor its Subsidiaries shall (i) amend its articles of incorporation or bylaws or comparable governing instruments; (ii) split, combine or reclassify its outstanding shares; (iii) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly owned Subsidiaries; (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiaries, in the ordinary course, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; and (C) regular quarterly cash dividends on Common Shares in amounts to the extent disclosed in Section 6.1 of the Company Disclosure Letter, and with record and payment dates consistent with past practice; or (iv) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock; (c) neither it nor its Subsidiaries shall (i) except for issuances, sales or dispositions of capital stock of Subsidiaries to the Company or a wholly owned Subsidiary of the Company, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, or the value of which is determined in reference to, any shares of its capital stock of any class or any Company Voting Debt (other than (1) Common Shares issued pursuant to the existing terms as of the date hereof of the Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case outstanding on the date hereof and previously disclosed in writing to Parent, (2) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to the terms of the Company Stock Plans in the ordinary course, consistent with past practice, to newly hired key employees in an amount not to exceed 50,000 Common Shares per person or 500,000 Common Shares in the aggregate (provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests), and (3) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" of those Company Options outstanding as of the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, material to the Company and its Subsidiaries taken as a whole; (iii) incur any indebtedness in excess of $100,000,000 in the aggregate or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year), (C) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrence, (x) the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1, and (y) floating rate indebtedness represents no less than 35%, and no more than 40%, of total indebtedness related to the consumer finance division), provided, that no new issuance under clauses (A) through (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law; (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi), make or authorize or commit for any capital expenditures other than in amounts less than $100,000,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person (other than investments (q) in the ordinary course of its insurance, annuity, asset management or investment businesses consistent with past practice, (r) in customer accounts held in the ordinary course consistent with past practice, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) in excess of $50,000,000 in the aggregate; provided, however, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (y) be reasonably likely to cause a material rating held by the Company to be modified, qualified, lowered or placed under surveillance for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price in excess of $1,200,000,000 since January 1, 2001 (provided, that (A) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of the Company and be in the ordinary course of business consistent with past practice); (d) except to the extent required to maintain compliance with applicable Law, or as required by a collective bargaining agreement, neither it nor any of its Subsidiaries shall (i) terminate, establish, implement, adopt, amend, enter into, make any new, or accelerate the vesting or payment of any existing grants or awards under, amend or otherwise modify any Company Plans (including the funding arrangements in respect thereof) or contractual obligations in effect as of the date of this Agreement or as contemplated by this Agreement, (ii) except as described in Section 6.1(d) of the Company Disclosure Letter, increase the commissions, compensation or benefits payable or accrued or that could become payable by the Company or any of its Subsidiaries or accrue to or in respect of any employee, director or consultant who is an individual (a "Consultant" (except a consultant who is not a former employee and is an outside legal or other professional advisor (an "Advisor")), other than increases in commissions, base salary or wages granted to Advisors or employees (other than the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in the ordinary course, consistent with past practice, (iii) waive any debts due to the Company from any officer or director of the Company, (iv) otherwise take any action that would reasonably be expected to materially increase any funding liability with respect to any Company Plan, or (v) take, or permit to be taken, any action described on Section 6.1(d)(v) of the Company Disclosure Letter or exercise any discretion or authority under the terms of any Company Plan or contractual obligation in any manner that would result in an acceleration, increase or modification of the rights of or payments or benefits to any employee, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will not result in a material increase in the aggregate annual costs to the Company and/or any Subsidiary in respect of such Company Plans, (2) grant options or Company Restricted Shares to any current directors, officers or employees to the extent permitted by clauses (c)(i)(2) and (c)(i)(3) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing to Parent to the extent required under their terms in effect as of the date hereof, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and any other necessary amendments in accordance with Section 6.19(l) hereof, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary course, consistent with past practice, prior to the Effective Time (other than to any of the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultant, and (6) terminate the Company Employee Stock Purchase Plan in accordance with Section 6.19(m) hereof;
Appears in 2 contracts
Samples: Merger Agreement (American General Corp /Tx/), Merger Agreement (American General Corp /Tx/)
Company Interim Operations. The Except as set forth in the document entitled "Schedule 7.1" furnished to the Company by Parent prior to the execution and delivery of this Agreement, the Company covenants and agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve consent in writing (such consent not to be unreasonably withheld or delayed) and except as otherwise (i) expressly contemplated by any other section of this Agreement and the Stock Option Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of the equity of a Subsidiary of the Company is owned, directly or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth in Section 6.1 of the Company Disclosure Letter):
(a) the business of it and its Subsidiaries shall conduct their businesses be conducted, in all material respects, in the ordinary course, consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company it and its Subsidiaries shall use its their respective commercially reasonable best efforts to preserve its business organization substantially intact and substantially maintain its existing relations and goodwill with material customers, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice);
(b) neither it nor its Subsidiaries shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its articles of incorporation certificate or bylaws or comparable governing instrumentsamend, modify or terminate the Rights Agreement, except as set forth in Section 6.1(s) hereof; (iiiii) split, combine or reclassify its outstanding sharesshares of capital stock; (iiiiv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly owned Subsidiaries; (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiariesstock, in the ordinary course, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; and (C) regular quarterly cash dividends on Common Shares in amounts to the extent disclosed in Section 6.1 of the Company Disclosure Letter, and with record and payment dates consistent with past practice; or (ivv) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;except in connection with the
(c) neither it nor any of its Subsidiaries shall (i) except for issuances, sales or dispositions of capital stock of Subsidiaries to the Company or a wholly owned Subsidiary of the Company, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, or the value of which is determined in reference to, any shares of its capital stock of any class or any Company Voting Debt or any other property or assets (other than (1A) Common the issuance of Shares issued pursuant to the existing terms as of the date hereof of the Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case options outstanding on the date hereof and previously disclosed in writing to Parent, (2) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to this Agreement under the terms of the Company Stock Plans in and the ordinary course, consistent with past practice, to newly hired key employees in an amount not to exceed 50,000 Common issuance of Shares per person or 500,000 Common Shares in under the aggregate (provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests), Company's Employee Stock Purchase Plan and (3B) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" upon conversion of those Company Options Convertible Preferred Stock outstanding as of on the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interestsAgreement); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties property or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, incur or modify any material to the Company and its Subsidiaries taken as a wholeindebtedness or other liability; or (iii) incur make any indebtedness in excess of $100,000,000 in the aggregate or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year), (C) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrence, (x) the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1, and (y) floating rate indebtedness represents no less than 35%, and no more than 40%, of total indebtedness related to the consumer finance division), provided, that no new issuance under clauses (A) through (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law; (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi)commitments for, make or authorize or commit for any capital expenditures other than in amounts less than $100,000,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person (other than investments (q) or entity in the ordinary course of its insuranceeach case, annuity, asset management or investment businesses consistent with past practice, (r) in customer accounts held in the ordinary course consistent with past practice, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) involving amounts in excess of $50,000,000 100,000 in the aggregate; provided, however, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (y) be reasonably likely to cause a material rating held by the Company to be modified, qualified, lowered or placed under surveillance for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price in excess of $1,200,000,000 since January 1, 2001 (provided, that (A) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of the Company and be other than in the ordinary course of business consistent with past practice)and usual course;
(d) except to the extent Except as may be required to maintain compliance with applicable Law, by existing contractual commitments or as required by a collective bargaining agreementapplicable law, neither it nor any of its Subsidiaries shall (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into employment or severance agreement with, any of its directors, officers or employees, including adding new participants to the Company's Management Change of Control Plan or (ii) terminate, establish, implement, adopt, amend, enter into, make any new, or accelerate the vesting or payment of any existing new grants or awards under, amend or otherwise modify modify, any Company Compensation and Benefit Plans or increase or accelerate the salary, wage, bonus or other compensation of any employees, officers or directors (including except for increases in salaries, wages and cash bonuses of nonexecutive employees made in the funding arrangements in respect thereofordinary course of business consistent with past practice) or contractual obligations pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of its material Contracts or waive, release or assign any material rights or claims;
(f) neither it nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in effect as the ordinary and usual course of the date of this Agreement or as contemplated by this Agreement, business;
(iig) except as described may be required as a result of a change in Section 6.1(d) law or in generally accepted accounting principles, neither it nor any of its Subsidiaries shall change any of the Company Disclosure Letteraccounting practices or principles used by it;
(h) neither it nor any of its Subsidiaries shall adopt a plan of complete or partial liquidation, increase the commissionsdissolution, compensation merger, consolidation, restructuring, recapitalization, or benefits payable or accrued or that could become payable by other reorganization of the Company or any of its Subsidiaries or accrue to or in respect of any employee, director or consultant who is subsidiaries not constituting an individual (a "Consultant" (except a consultant who is not a former employee and is an outside legal or other professional advisor (an "Advisor")), other than increases in commissions, base salary or wages granted to Advisors or employees inactive Subsidiary (other than the 41 employees listed in Section 5.2(h)(viiiMerger);
(i) of the Company Disclosure Letter) in the ordinary course, consistent with past practice, (iii) waive any debts due to the Company from any officer or director of the Company, (iv) otherwise take any action that would reasonably be expected to materially increase any funding liability with respect to any Company Plan, or (v) take, it shall not suffer or permit to be taken, any action described on Section 6.1(d)(v) of the Company Disclosure Letter capital expenditures made or exercise any discretion or authority under the terms of any Company Plan or contractual obligation in any manner that would result in an acceleration, increase or modification of the rights of or payments or benefits to any employee, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will not result in a material increase in the aggregate annual costs to the Company and/or any Subsidiary in respect of such Company Plans, (2) grant options or Company Restricted Shares to any current directors, officers or employees to the extent permitted incurred by clauses (c)(i)(2) and (c)(i)(3) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing to Parent to the extent required under their terms in effect as of the date hereof, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and its Subsidiaries for any other necessary amendments period to exceed $100,000 except for expenses incurred in accordance connection with Section 6.19(lthe transactions contemplated by this Agreement; and
(j) hereofneither it nor any of its Subsidiaries will offer to, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary courseor enter into an agreement to, consistent with past practice, prior to the Effective Time (other than to do any of the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultant, and (6) terminate the Company Employee Stock Purchase Plan in accordance with Section 6.19(m) hereof;foregoing.
Appears in 2 contracts
Samples: Merger Agreement (Merck & Co Inc), Agreement and Plan of Merger (Merck & Co Inc)
Company Interim Operations. The Company covenants and -------------------------- agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve consent in writing (such consent not to be unreasonably withheld or delayed) and except as otherwise (i) expressly set forth in Schedule 7.1 attached hereto or expressly contemplated by any other section of this Agreement and the Stock Option Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of the equity of a Subsidiary of the Company is owned, directly or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth in Section 6.1 of the Company Disclosure Letter):
(a) the business of it and its Subsidiaries shall conduct their businesses be conducted, in all material respects, in the ordinary course, consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company it and its Subsidiaries shall use its their respective commercially reasonable best efforts to preserve its business organization substantially intact and substantially maintain its existing relations and goodwill with material customers, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice);
(b) neither it nor its Subsidiaries shall not (i) amend issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its articles of incorporation or bylaws or comparable governing instrumentsSubsidiaries; (ii) amend its certificate or bylaws; (iii) split, combine or reclassify its outstanding sharesshares of capital stock; (iiiiv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly owned Subsidiaries; (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiariesstock, in the ordinary course, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; and (C) regular quarterly cash dividends on Common Shares in amounts to the extent disclosed in Section 6.1 of the Company Disclosure Letter, and with record and payment dates consistent with past practice; or (ivv) repurchase, redeem or otherwise acquire, except in connection with the Stock Plans or employment arrangements, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock;
(c) neither it nor any of its Subsidiaries shall (i) except for issuances, sales or dispositions of capital stock of Subsidiaries to the Company or a wholly owned Subsidiary of the Company, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, or the value of which is determined in reference to, any shares of its capital stock of any class or any Company Voting Debt or any other property or assets (other than (1) the issuance of shares of Common Shares issued Stock pursuant to the existing terms as of ESPP, the date hereof of the Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case outstanding on the date hereof and previously disclosed in writing to Parent, (2) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to the terms of the Company Stock Plans in the ordinary course, consistent with past practice, to newly hired key employees in an amount not to exceed 50,000 Common Shares per person or 500,000 Common Shares in the aggregate (provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests), and (3) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" of those Company Options outstanding as of the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interestsWarrants); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties property or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, incur or modify any material to the Company and its Subsidiaries taken as a wholeindebtedness or other liability; or (iii) incur make any indebtedness in excess of $100,000,000 in the aggregate or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year), (C) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrence, (x) the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1, and (y) floating rate indebtedness represents no less than 35%, and no more than 40%, of total indebtedness related to the consumer finance division), provided, that no new issuance under clauses (A) through (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law; (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi)commitments for, make or authorize or commit for any capital expenditures other than in amounts less than $100,000,000 in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person (other than investments (q) in the ordinary course of its insuranceeach case, annuity, asset management or investment businesses consistent with past practice, (r) in customer accounts held in the ordinary course consistent with past practice, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) involving amounts in excess of $50,000,000 50,000 in the aggregate; provided, however, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (y) be reasonably likely to cause a material rating held by the Company to be modified, qualified, lowered or placed under surveillance for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price in excess of $1,200,000,000 since January 1, 2001 (provided, that (A) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of the Company and be in the ordinary course of business consistent with past practice);
(d) except to the extent as may be required to maintain compliance with applicable Law, by existing contractual commitments or as required by a collective bargaining agreementapplicable law, neither it nor any of its Subsidiaries shall (i) enter into any new agreements or commitments for any severance or termination pay to, or enter into employment or severance agreement with, any of its directors, officers or employees or (ii) terminate, establish, implement, adopt, amend, enter into, make any new, or accelerate the vesting or payment of any existing new grants or awards under, amend or otherwise modify modify, any Company Compensation and Benefit Plans or increase or accelerate the salary, wage, bonus or other compensation of any employees, officers or directors (including except for increases in salaries, wages and cash bonuses of nonexecutive employees made in the funding arrangements in respect thereofordinary course of business consistent with past practice) or contractual obligations in effect as pay or agree to pay any pension, retirement allowance or other employee benefit not required by any existing Compensation and Benefit Plan;
(e) neither it nor any of its Subsidiaries shall settle or compromise any material claims or litigation or modify, amend or terminate any of the date Company Material Contracts or waive, release or assign any material rights or claims;
(f) neither it nor any of this Agreement its Subsidiaries shall make any Tax election or permit any insurance policy naming it as contemplated by this Agreementa beneficiary or loss- payable payee to be canceled or terminated, except in the ordinary and usual course of business;
(iig) except as described may be required as a result of a change in Section 6.1(d) law, neither it nor any of its Subsidiaries shall change any of the Company Disclosure Letteraccounting practices or principles used by it;
(h) neither it nor any of its Subsidiaries shall adopt a plan of complete or partial liquidation, increase the commissionsdissolution, compensation merger, consolidation, restructuring, recapitalization, or benefits payable or accrued or that could become payable by other reorganization of the Company or any of its Subsidiaries or accrue to or in respect of any employee, director or consultant who is subsidiaries not constituting an individual (a "Consultant" (except a consultant who is not a former employee and is an outside legal or other professional advisor (an "Advisor")), other than increases in commissions, base salary or wages granted to Advisors or employees inactive Subsidiary (other than the 41 employees listed Merger);
(i) it shall not suffer or permit capital expenditures made or incurred by the Company and its Subsidiaries to exceed $50,000 except for expenses incurred in Section 5.2(h)(viiiconnection with the transactions contemplated by this Agreement;
(j) neither it nor any of its Subsidiaries will offer to, or enter into an agreement to, do any of the Company Disclosure Letterforegoing; and
(k) in the ordinary courseit shall not, consistent with past practiceand shall not permit any of its Subsidiaries to, (iii) waive any debts due to the Company from any officer or director of the Company, (iv) otherwise take any action that would would, or that could reasonably be expected to materially increase to, result in any funding liability with respect to any Company Plan, of the representations or (v) take, or permit to be taken, any action described on Section 6.1(d)(v) warranties of the Company Disclosure Letter or exercise any discretion or authority under the terms of any Company Plan or contractual obligation in any manner that would result in an acceleration, increase or modification of the rights of or payments or benefits to any employee, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will not result in a material increase in the aggregate annual costs to the Company and/or any Subsidiary in respect of such Company Plans, (2) grant options or Company Restricted Shares to any current directors, officers or employees to the extent permitted by clauses (c)(i)(2) and (c)(i)(3) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing to Parent to the extent required under their terms in effect as of the date hereof, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and any other necessary amendments in accordance with Section 6.19(l) hereof, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary course, consistent with past practice, prior to the Effective Time (other than to any of the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultant, and (6) terminate the Company Employee Stock Purchase Plan in accordance with Section 6.19(m) hereof;becoming untrue.
Appears in 2 contracts
Samples: Merger Agreement (Dupont E I De Nemours & Co), Merger Agreement (Dupont E I De Nemours & Co)
Company Interim Operations. The Company and Buyer, solely with respect to Sections 6.1(b), (c), (g) and (j), each covenants and agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time Closing (unless Parent Buyer or the Company, as the case may be, shall otherwise approve in writing writing, which approval shall not be unreasonably withheld or delayed, and except as otherwise (i) expressly contemplated by any other section of this Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of Agreement and the equity of a Subsidiary of the Company is owned, directly Other Transaction Agreements or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth in Section 6.1 of the Company Disclosure LetterSchedule or the Buyer Disclosure Schedule, as the case may be):
(a) it the business of the Company and its Subsidiaries shall conduct their businesses be conducted in the ordinary course, consistent with past practice, and usual course and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its respective commercially all reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with material customers, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice);
(b) neither it nor its Subsidiaries each of the Company and Buyer shall not (i) amend issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its articles Subsidiaries; provided, however, for purpose of incorporation or bylaws or comparable governing instrumentsthis clause (i), in the case of Buyer, Subsidiaries shall include only those Subsidiaries engaged in the insurance and reinsurance business; (ii) amend its certificate of incorporation or by-laws (other than as contemplated in Section 2.1(b) in the case of the Company); (iii) (A) in the case of the Company, split, combine or reclassify its outstanding sharesshares of capital stock and (B) in the case of Buyer, reclassify its outstanding shares of capital stock; (iiiiv) authorize, declare, set aside or pay any dividend or other distribution payable in cash, stock stock, rights or other securities or property in respect of any capital stock other than (A) dividends from by its direct or indirect wholly owned Subsidiaries; Subsidiaries to it or its other direct or indirect wholly owned subsidiaries and provided, that this Section 6.l shall not prohibit (A) in the case of the Company, (1) 1997 annual cash dividends declared by the Company prior to the date of this Agreement and paid by the Company to its stockholders in an aggregate amount not in excess of $4.5 million (it being understood and accepted that the Company may pay additional amounts under Ten-Year Contracts not in excess of $12.5 million in the aggregate) and (2) cash distributions to be made by the Company to such current and former stockholders of the Company, to the extent permitted under Section 6.17 and (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiaries, in the ordinary coursecase of Buyer, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; and (C1) regular quarterly cash dividends on Buyer Common Shares Stock (subject to increases only in amounts to the extent disclosed ordinary course) and (2) dividends payable in Section 6.1 shares of the Company Disclosure Letter, and with record and payment dates consistent with past practiceBuyer Common Stock; or (ivv) repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its capital stock or any securities convertible into or exchangeable or exercisable for any shares of its capital stock, other than (A) in the case of the Company, repurchases of shares of Company Common Stock held by Persons other than Sellers for cash in an amount not in excess of $10 per share and (B) in the case of Buyer, pursuant to the Buyer Stock Plans or by Buyer in the ordinary course consistent with past practice;
(c) neither it the Company nor any of its Subsidiaries, on the one hand, or Buyer or any of its Subsidiaries (to include only those Subsidiaries engaged in insurance and reinsurance brokerage business), on the other hand, shall (i) except for issuances, sales or dispositions of capital stock of Subsidiaries to (A) in the Company or a wholly owned Subsidiary case of the Company, issue, sell, pledge, dispose of or encumber any shares ofof its capital stock, or any securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, directly or the value of which is determined in reference toindirectly, any shares of its capital stock of any class class, or (B) in the case of Buyer, other than for fair value or pursuant to Buyer Stock Plans, as Deferred Stock Units or to another wholly- owned Subsidiary of Buyer, issue, sell, pledge, dispose of or encumber any shares of its capital stock, or any securities convertible into or exchangeable or exercisable for, or options warrants, calls, commitments or rights of any kind to acquire, directly or indirectly, any shares of its capital stock of any class, (ii) with respect to the Company Voting Debt (only, other than (1) Common Shares issued pursuant to the existing terms as of the date hereof of the Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case outstanding on the date hereof and previously disclosed in writing to Parent, (2) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to the terms of the Company Stock Plans in the ordinary courseand usual course of business, consistent with past practice, to newly hired key employees in an amount not to exceed 50,000 Common Shares per person or 500,000 Common Shares in the aggregate (provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests), and (3) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" of those Company Options outstanding as of the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties property or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, incur or modify any material to the Company and its Subsidiaries taken as a wholeindebtedness or other liability; (iii) incur any indebtedness in excess of $100,000,000 in the aggregate or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness with respect to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditionsonly, but in make any event in excess of one year), (C) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrence, (x) the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1, and (y) floating rate indebtedness represents no less than 35%, and no more than 40%, of total indebtedness related to the consumer finance division), provided, that no new issuance under clauses (A) through (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law; (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi)commitments for, make or authorize or commit for any capital expenditures other than in amounts less than $100,000,000 in the aggregate ordinary course of business consistent with past practice or, by any means, make any acquisition of, or investment in, assets or stock of any other Person (other than investments (q) in the ordinary course of its insurance, annuity, asset management or investment businesses consistent with past practice, (r) in customer accounts held in the ordinary course consistent with past practice, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) entity in excess of $50,000,000 10 million in the aggregate; provided, however, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (yiv) be reasonably likely with respect to cause a material rating held by the Company to be modifiedonly, qualified, lowered or placed under surveillance incur additional indebtedness for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price borrowed money in excess of $1,200,000,000 since January 1, 2001 30 million;
(provided, that (Ad) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of neither the Company nor any of its Subsidiaries shall terminate, establish, adopt, enter into, make any new grants or awards under, amend or otherwise modify, any Company Compensation and be Benefit Plans or increase the salary, wage, bonus or other compensation of any employees except increases occurring in the ordinary course of business consistent with past practicepractice (which shall include normal periodic performance reviews and related compensation increases); neither the Company nor any of its Subsidiaries shall make any change in the membership of pension trustee bodies outside the U.S.;
(de) neither the Company nor any of its Subsidiaries shall settle or compromise any material claims or litigation or, except in the ordinary and usual course of business, modify, amend or terminate any of the Company Material Contracts or waive, release or assign any material rights or claims;
(f) neither the Company nor any of its Subsidiaries shall make any Tax election or permit any insurance policy naming the Company as a beneficiary or loss payable payee to be cancelled or terminated except in the extent required to maintain compliance with applicable Law, or as required by a collective bargaining agreement, ordinary and usual course of business;
(g) neither it nor any of its Subsidiaries shall (i) terminate, establish, implement, adopt, amend, enter into, make knowingly take any new, action or accelerate the vesting or payment of any existing grants or awards under, amend or otherwise modify any Company Plans (including the funding arrangements in respect thereof) or contractual obligations in effect as of the date of this Agreement or as contemplated by this Agreement, (ii) except as described in Section 6.1(d) of the Company Disclosure Letter, increase the commissions, compensation or benefits payable or accrued or that could become payable by the Company or any of its Subsidiaries or accrue omit to or in respect of any employee, director or consultant who is an individual (a "Consultant" (except a consultant who is not a former employee and is an outside legal or other professional advisor (an "Advisor")), other than increases in commissions, base salary or wages granted to Advisors or employees (other than the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in the ordinary course, consistent with past practice, (iii) waive any debts due to the Company from any officer or director of the Company, (iv) otherwise take any action that would reasonably be expected cause any of its representations and warranties herein to materially increase become untrue in any funding material respect; and
(h) neither the Company nor any of its Subsidiaries will change any of the accounting or tax principles, practices or methods (except as required by GAAP);
(i) neither the Company nor any of its Subsidiaries will settle or compromise any Tax liability or agree to any adjustment of any Tax attribute; and
(j) neither the Company nor any of its Subsidiaries (nor Buyer or its Subsidiaries engaged in the insurance or reinsurance brokerage business, with respect to any Company Plan, or subsections (v) take, or permit to be taken, any action described on Section 6.1(d)(v) of the Company Disclosure Letter or exercise any discretion or authority under the terms of any Company Plan or contractual obligation in any manner that would result in an acceleration, increase or modification of the rights of or payments or benefits to any employee, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will not result in a material increase in the aggregate annual costs to the Company and/or any Subsidiary in respect of such Company Plans, (2) grant options or Company Restricted Shares to any current directors, officers or employees to the extent permitted by clauses (c)(i)(2b) and (c)(i)(3c)(i)) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing will authorize or enter into an agreement to Parent to the extent required under their terms in effect as of the date hereof, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and any other necessary amendments in accordance with Section 6.19(l) hereof, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary course, consistent with past practice, prior to the Effective Time (other than to do any of the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultant, and (6) terminate the Company Employee Stock Purchase Plan in accordance with Section 6.19(m) hereof;foregoing.
Appears in 1 contract
Samples: Stock Purchase Agreement (Marsh & McLennan Companies Inc)
Company Interim Operations. The Company covenants and agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as otherwise (i) expressly contemplated by any other section of this Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of the equity of a Subsidiary of the Company is owned, directly or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth as disclosed in Section 6.1 5.1 of the Company Disclosure Letter)::
(a) it its and its Subsidiaries Subsidiaries' business shall conduct their businesses be conducted in the ordinary and usual course, consistent with past practicepractice (it being understood and agreed that nothing contained herein shall permit the Company to enter into or engage in (through acquisition, product extension or otherwise) the business of selling any products or services materially different from existing products or services of the Company and its Subsidiaries or entering into or engaging in new lines of business without Parent's prior written approval), and, to the extent consistent therewith, each of the Company it and its Subsidiaries shall use its their respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with material customers, clients, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees creditors and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice)employees;
(b) neither it nor and its Subsidiaries shall not (i) issue, sell, pledge, dispose of or encumber any capital stock owned by it in any of its Subsidiaries; (ii) amend its articles of incorporation charter or bylaws or comparable governing instruments; (iiiii) split, combine or reclassify its outstanding sharesshares of stock; (iiiiv) authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly owned Subsidiaries; (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiaries, in the ordinary course, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; Subsidiaries and (C) other than regular quarterly cash dividends on Common Shares in amounts to the extent disclosed in Section 6.1 of paid by the Company Disclosure Letter, and with record and payment dates consistent with past practicenot in excess of $0.20 per Common Share; or (ivv) repurchase, redeem or otherwise acquire, except in connection with cashless exercise of Company Options, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(c) neither it nor its Subsidiaries shall (i) except for issuances, sales or dispositions of capital stock of Subsidiaries to the Company or a wholly owned Subsidiary of the Company, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, or the value of which is determined in reference to, any shares of its capital stock of any class or any Company Voting Debt or any other material property or assets (other than (1) Common Shares issued issuable pursuant to the existing terms as of the date hereof of the Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case options outstanding on the date hereof under the Stock Plans and previously disclosed in writing to Parent, as contemplated by Section 5.9); or (2ii) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to the terms of the Company Stock Plans in the ordinary courseand usual course of business, consistent with past practice, to newly hired key employees in an amount not to exceed 50,000 Common Shares per person or 500,000 Common Shares in the aggregate (provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests), and (3) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" of those Company Options outstanding as of the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of interests); (ii) transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties property or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, incur or modify any material to the Company and its Subsidiaries taken as a wholeindebtedness or other liability; or (iii) incur any long-term indebtedness (other than replacement debt as it matures and other than borrowing for working capital purposes under the Company's revolving credit agreement not in excess of $100,000,000 in the aggregate 5 million); or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year), (C) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrence, (x) the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1, and (y) floating rate indebtedness represents no less than 35%, and no more than 40%, of total indebtedness related to the consumer finance division), provided, that no new issuance under clauses (A) through (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law; (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi), make or authorize or commit for any capital expenditures to be paid out of the Company's revenue share other than in amounts less than $100,000,000 2 million in the aggregate or, by any means, make any acquisition of, or investment in, assets or stock of any other Person or entity to be paid out of the Company's revenue share (other than investments (q) in the ordinary course of its insurance, annuity, asset management or investment businesses consistent with past practice, (r) in customer accounts held in the ordinary course consistent with past practice, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) seed money not in excess of $50,000,000 in the aggregate2 million); providedPROVIDED, howeverHOWEVER, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (y) be reasonably likely to cause a material rating held by the Company to be modified, qualified, lowered or placed under surveillance for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price in excess of $1,200,000,000 since January 1, 2001 (provided, that (A) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of the Company and be a controlling interest in the ordinary course of business consistent with past practice)any other Person;
(d) it shall not establish, adopt or enter into, Compensation and Benefit Plans except to as may be required by law, or contractual obligations in effect as of the extent required to maintain compliance with applicable Lawdate of this Agreement, or as required contemplated by a collective bargaining agreement, neither this Agreement;
(e) it nor any of its Subsidiaries shall (i) terminate, establish, implement, adopt, amend, enter into, not terminate or make any new, or accelerate the vesting or payment of any existing existing, grants or awards under, or amend or otherwise modify modify, any Compensation and Benefit Plans except in the ordinary course of business to persons other than officers and directors of the Company Plans (including the funding arrangements in respect thereof) or its Subsidiaries consistent with past practice or as may be required by law, or contractual obligations in effect as of the date of this Agreement Agreement, or as contemplated by this Agreement;
(f) it shall not increase the salary, wage, bonus or other compensation of any employees other than normal base wage and base salary increases (but not as to officers and directors of the Company) in the ordinary and usual course of business or increases in connection with promotions in the normal course of business;
(g) neither it nor any of its Subsidiaries shall (i) settle or compromise any material claims or litigation; (ii) pay, discharge, settle or satisfy any material claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction of claims, liabilities or obligations in the ordinary and usual course of business; (iii) except as described in Section 6.1(d) the ordinary and usual course of the Company Disclosure Letterbusiness, increase the commissionsmodify, compensation amend or benefits payable terminate any of its Material Contracts or accrued waive, release or that could become payable by assign any non-competes in favor of the Company or any of its Subsidiaries or accrue to or in respect of any employeeSubsidiaries, director or consultant who is an individual (a "Consultant" (except a consultant who is not a former employee and is an outside legal or other professional advisor material rights or claims; or (an "Advisor"))iv) make or change a Tax or accounting principle, practice or method unless required by U.S. GAAP or other than increases Appli- cable Law, make or revoke any Tax election unless required by Applicable Law, or resolve any Tax audit or other similar proceeding;
(h) neither it nor any of its Subsidiaries shall permit any insurance policy naming it as a beneficiary or loss-payable payee to be canceled or terminated except in commissions, base salary the ordinary and usual course of business;
(i) neither it nor any of its Subsidiaries shall enter into any agreement containing any provision or wages granted to Advisors or employees (other than covenant limiting in any material respect the 41 employees listed in Section 5.2(h)(viii) ability of the Company Disclosure Letteror any Subsidiary or affiliate to (i) sell any products or services of or to any other person, (ii) engage in the ordinary courseany line of business, consistent with past practice, or (iii) waive compete with any debts due to the Company from person;
(j) neither it nor any officer or director of the Company, (iv) otherwise its Subsidiaries shall take any action that would reasonably be expected to materially increase cause any funding liability with respect to any Company Plan, representation or (v) take, or permit to be taken, any action described on Section 6.1(d)(v) warranty of the Company Disclosure Letter or exercise any discretion or authority under the terms of any Company Plan or contractual obligation herein to become untrue in any manner that would result in an accelerationmaterial respect;
(k) it shall not enter into any new agreements, increase or modification modify or amend any existing agreements, with any of its Subsidiaries, including re-equitization or marketing support agreements or other contracts of the rights Company to finance or otherwise support the operations of its Subsidiaries or payments or benefits to any employeecompensate employees of its Subsidiaries, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger except as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will may not result in a material increase in the aggregate annual costs to contemplate obligations of the Company and/or any Subsidiary (including in respect of such Company Plans, waiving any revenue-sharing) in excess of $3.3 million per year;
(2l) grant options neither it nor any of its Subsidiaries shall authorize or Company Restricted Shares enter into an agreement to any current directors, officers or employees to the extent permitted by clauses (c)(i)(2) and (c)(i)(3) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing to Parent to the extent required under their terms in effect as of the date hereof, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and any other necessary amendments in accordance with Section 6.19(l) hereof, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary course, consistent with past practice, prior to the Effective Time (other than to do any of the 41 employees listed in Section 5.2(h)(viii) of the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultant, and (6) terminate the Company Employee Stock Purchase Plan in accordance with Section 6.19(m) hereof;foregoing.
Appears in 1 contract
Company Interim Operations. The Company covenants and agrees as to itself and each of its Subsidiaries that, from and after the date hereof and prior to the Effective Time (unless Parent shall otherwise approve in writing and except as otherwise (i) expressly contemplated by any other section of this Agreement, (ii) required by applicable Law (it being understood that, insofar as less than 100% of the equity of a Subsidiary of the Company is owned, directly or indirectly, by the Company, nothing in this Section 6.1 shall be deemed to require any such Subsidiary to take any action, or fail to take any action, which action or failure would result in a violation of fiduciary duty under applicable Law) or (iii) set forth in Section 6.1 of the Company Disclosure Letter):
(a) it and its Subsidiaries shall conduct their businesses in the ordinary course, consistent with past practice, and, to the extent consistent therewith, each of the Company and its Subsidiaries shall use its respective commercially reasonable best efforts to preserve its business organization intact and maintain its existing relations and goodwill with material customers, suppliers, reinsurers, distributors, agents, regulators, creditors, rating agencies, lessors, employees and business associates; provided, that the Company and its Subsidiaries may take any action or omit to take any action, to the fullest extent permitted by any proviso or exception contained in this Section 6.1 (whether or not such action or omission would be considered taken in the ordinary course, consistent with past practice);
(b) neither it nor its Subsidiaries shall (i) except as required to effect the transactions contemplated by this Agreement, amend its articles of incorporation or bylaws or comparable governing instruments; (ii) split, combine or reclassify its outstanding shares; (iii) except as permitted under Section 6.20 below, authorize, declare, set aside or pay any dividend payable in cash, stock or property in respect of any capital stock other than (A) dividends from its direct or indirect wholly wholly-owned Subsidiaries; (B) dividends by a Subsidiary that is partially owned by the Company or any of its Subsidiaries, in the ordinary course, consistent with past practice; provided, that the Company or any such Subsidiary receives or is to receive its proportionate share thereof; and (C) subject to Section 6.20 below, regular quarterly cash dividends on Common Shares in amounts (including increases) to the extent disclosed in Section 6.1 of the Company Disclosure Letter, and with record and payment dates consistent with past practice; or (iv) other than repurchases in the ordinary course, consistent with past practice as approved by the board of directors of the Company (with notice to, and consultation with, Parent prior to seeking such authorization), not to exceed the lesser of (x) $200,000,000 and (y) 4,000,000 Common Shares, in the aggregate, repurchase, redeem or otherwise acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock;
(c) neither it nor its Subsidiaries shall (i) except for the issuance of hybrid securities as permitted under Section 6.1(c)(iii) below and except for issuances, sales or dispositions of capital stock of Subsidiaries to the Company or a wholly owned Subsidiary of the Company, issue, sell, pledge, dispose of or encumber any shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights or agreements of any kind to acquire, or the value of which is determined in reference to, any shares of its capital stock of any class or any Company Voting Debt (other than (1) Common Shares issued pursuant to the existing terms as of the date hereof of the three Company deferred compensation plans described in Section 5.2(b) of the Company Disclosure Letter and the deferral elections thereunder as in effect as of the date hereof or issued pursuant to Company Options or as results from the vesting of Company Restricted Shares, in each case Shares outstanding on the date hereof and previously disclosed in writing to Parent, (2) subject to prior consultation with Parent, issuances of options to acquire Common Shares or grants of Company Restricted Shares (other than Performance Based Restricted Stock Awards that contain Performance Awards) pursuant to the terms of the Company Stock Plans in the ordinary course, consistent with past practice, to newly hired executives or key employees in an amount not to exceed 50,000 Common Shares per person or 500,000 Common Shares in the aggregate (aggregate, provided, that options or Company Restricted Shares issued pursuant to this clause (2) shall be pursuant to grants that are fully consistent with treatment not (A) provide for reload options or (B) vest or otherwise become unrestricted as a result of the Merger as a pooling consummation of interests)the transactions contemplated by this Agreement, and (3) the issuance of additional options to acquire Common Shares pursuant to the "reload provisions" of those Company Options outstanding as of the date hereof which contain such provisions as of the date hereof, such issuances in all cases to be in accordance with their present terms (provided, that options issued pursuant to this clause (3) shall be pursuant to grants that are fully consistent with treatment of the Merger as a pooling of intereststerms); (ii) other than in the ordinary course, consistent with past practice, transfer, lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any other properties property or assets (including capital stock of any of its Subsidiaries) that are, individually or in the aggregate, material in relation to the Company and its Subsidiaries Subsidiaries, taken as a wholewhole (including capital stock of any of its Subsidiaries); (iii) incur any indebtedness or issue hybrid securities in excess of $100,000,000 in the aggregate or having a maturity of one year or greater from the date of issuance except (A) for incurrences of short term indebtedness to refinance outstanding indebtedness which outstanding indebtedness has a maturity date within twelve months of such refinancing, (B) for incurrences of corporate indebtedness in an amount not to exceed $250,000,000 in the aggregate with maturities of up to five years from the date of issuance except (provided that, in consultation with Parent, the Company will seek to issue such indebtedness with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year), (CA) for issuances of commercial paper or bank indebtedness with maturities of not more than one year from the date of issuance to finance payments due to Prudential pursuant to the Tri-Party Agreement (provided, that indebtedness with maturities of not less than one year nor more than five years may be issued in lieu of such commercial paper or bank indebtedness in an amount not to exceed 50% of the payments to Prudential referred to in this clause (C), provided, further, that, in consultation with Parent, the Company will seek to issue the indebtedness referred to in the first proviso to this clause (C) with maturities as short as is commercially reasonable under then-current market conditions, but in any event in excess of one year) and (D) for incurrences of indebtedness in the ordinary course, consistent with past practice, to support (B) in the management of the Company's and its Subsidiaries' consumer finance business (provided, that after giving effect to any such incurrencecapital structure consistent with past practice, (xC) for borrowings under credit facilities or lines of credit existing on the consumer finance division maintains a debt to tangible net worth ratio of no greater than 7.5 to 1date hereof and disclosed hereunder (or replacements refinancings thereof), and (yD) floating rate for long-term indebtedness represents no less than 35%, and no more than 40%, or hybrid securities incurred in connection with the refinancing of total existing indebtedness related to the consumer finance division), or hybrid securities (provided, that no new issuance under clauses (A), (B) through or (D) shall contain any covenant that would require the Company or any Subsidiary to make periodic reports in addition to those required under applicable Law); (iv) modify the terms of any indebtedness in any respect that would impose additional material obligations or costs on the Company or any of its Subsidiaries; (v) other than as permitted by Section 6.1(c)(vi), make or authorize or commit for any capital expenditures other than in amounts less than $100,000,000 in the aggregate or, or by any means, make any acquisition of, or investment in, assets or stock of any other Person (other than investments (q) in the ordinary course of its insurance, annuity, asset management or investment businesses consistent with past practicebusinesses, (r) in customer accounts held in the ordinary course consistent with past practicecourse, or (s) in any general account or otherwise in the ordinary course consistent with past practice to offset insurance liabilities) in excess of $50,000,000 500,000,000 in the aggregate; provided, however, that no such acquisition or investment shall (x) meaningfully and adversely impair its ability to consummate, or meaningfully delay the consummation of, the transactions contemplated by this Agreement, or (y) be reasonably likely to cause a material rating held by the Company to be modified, qualified, lowered or placed under surveillance for a possible downgrade; or (vi) make or authorize or commit for the acquisition of receivables with an aggregate purchase price in excess of $1,200,000,000 since January 1, 2001 (provided, provided that (A) any such acquisition with a purchase price in excess of $100,000,000 shall be subject to prior consultation with Parent, and (B) all such acquisitions shall be made consistent with the consumer finance risk management policies and strategic plan of the Company and be in the ordinary course of business consistent with past practiceCompany);
(d) except to the extent required to maintain compliance with applicable Law, or as required by a collective bargaining agreement, neither it nor any of its Subsidiaries shall (i) terminate, establish, implement, adopt, amend, enter into, make any new, or accelerate the vesting or payment of any existing grants or awards under, amend or otherwise modify any Company Plans or Plans (including the funding arrangements in respect thereof) or contractual obligations in effect as of the date of this Agreement or as contemplated by this Agreement, (ii) except as described in Section 6.1(d) of the Company Disclosure Letter, increase the commissions, compensation or benefits payable or accrued or that could become payable by the Company or any of its Subsidiaries or accrue to or in respect of any employee, director or consultant who is an individual (a "ConsultantCONSULTANT" (except a consultant who is not a former employee and is an outside legal or other professional advisor (an "AdvisorADVISOR")), other than increases in commissions, base salary or wages granted to Advisors or employees (other than the 41 employees listed in Section 5.2(h)(viii5.2(h)(vii) of the Company Disclosure Letter) in the ordinary course, consistent with past practice, (iii) waive any debts due to the Company from any officer or director of the Company, (iv) otherwise take any action that would reasonably be expected to materially increase any funding liability with respect to any Company Plan, or (v) take, or permit to be taken, any action described on Section 6.1(d)(v) of the Company Disclosure Letter or exercise any discretion or authority under the terms of any Company Plan or contractual obligation in any manner that would result in an acceleration, increase or modification of the rights of or payments or benefits to any employee, director or Consultant; notwithstanding the foregoing provisions of this Section 6.1(d), the Company shall be permitted but only to the extent consistent with accounting for the Merger as a pooling of interests, to (1) after prior consultation with Parent, make amendments to the Company Plans that will not result in a material increase in the aggregate annual costs to the Company and/or any Subsidiary in respect of such Company Plansplans, (2) grant options or Company Restricted Shares to any current or former directors, officers or employees to the extent permitted by clauses (c)(i)(2) and (c)(i)(3) above, (3) accelerate the vesting and payment of the Company Stock Options and the Company Restricted Shares outstanding on the date hereof and previously disclosed in writing to Parent to the extent required under their terms in effect as of the date hereofexisting terms, including the vesting and payment in Common Shares of Performance Awards contained in Performance Based Restricted Stock Awards at the maximum performance level to the extent so required, the vesting and payment in Common Shares of the restricted share units and the conversion of each such Common Share into the Merger Consideration pursuant to Section 6.19 6.18 hereof, and any vesting and payment in Common Shares which is incident to a termination of employment prior to the Effective Time, (4) amend the Benefit Trust Agreement made as of February 8, 2001 between the Company and The Chase Manhattan Bank and any other necessary amendments in accordance with Section 6.19(l6.18(l) hereof, (5) make payments of cash and other benefits (other than equity-based benefits) incident to terminations of employment in the ordinary course, consistent with past practice, prior to the Effective Time (other than to any of the 41 employees listed in Section 5.2(h)(viii) of accordance with the Company Disclosure Letter) in such amounts as the Company shall deem necessary or appropriate (so long as the cost of the benefits payable do not exceed the costs of the benefits that would be payable to the employee in question under the terms of the 2001 American General Corporation Job Security Plan, effective April 12, 2001 (the "Job Security Plan") were it applicable to such termination), or, in the ordinary course, consistent with past practice, enter into appropriate agreements with terminating employees (other than any employees or former employees provided severance or termination payments as permitted under the preceding portion of this clause (5)) to provide for continued services (at a rate of compensation not in excess of that currently payable to such employee) as a consultantPlans, and (6) terminate the Company Company's Employee Stock Purchase Plan in accordance with Section 6.19(m6.18(m) hereof;
Appears in 1 contract
