Common use of Defined Benefit Pension Plans Clause in Contracts

Defined Benefit Pension Plans. (i) Prior to and effective on the Closing Date, the Buyer shall adopt a Plan that corresponds to the Del Monte Corporation Retirement System for Hourly Employees (the “Buyer’s Pension Plan”), which shall provide for benefits to Transferred Union Employees covered by the Pittsburgh UFCW Contract and their respective alternate payees that are substantially similar in all Material Features to those provided under the Del Monte Corporation Retirement System for Hourly Employees (the “Company Pension Plan”). On the Closing Date, Business Employees shall cease accruing any benefits under the Company Pension Plan. The Company shall retain all Liabilities under the Company Pension Plan with respect to all periods prior to the Closing. The Buyer’s Pension Plan shall provide a benefit for all periods of service completed and compensation earned by such Transferred Union Employees on and after the Closing who prior to the Closing were covered by the Company Pension Plan and the Buyer shall be responsible for all Liabilities associated therewith; provided, however, that the benefit accrual formula under the Buyer’s Pension Plan shall (A) recognize all periods of service and compensation taken into account under the Company Pension Plan and (B) determine such Transferred Union Employee’s accrued benefit based on: (1) the sum of service and compensation taken into account under the Company Pension Plan for periods prior to the Closing and service and compensation taken into account under the Buyer’s Pension Plan on and after the Closing less (2) such Transferred Union Employee’s accrued benefit under the Company Pension Plan. The Buyer shall not be obligated to establish or maintain a defined benefit pension plan with respect to any Transferred Mendota Union Employees. (ii) The Company currently contributes on behalf of certain employees to the Western Pennsylvania Teamsters and Employers Trust Fund (the “Union Pension Fund”). The Buyer agrees to assume the Pittsburgh Teamsters Contract, and to make contributions after the Closing to the Union Pension Fund with respect to Transferred Employees participating in the Union Pension Fund for substantially the same number of contribution base units (as defined in Section 4001 of ERISA) for which the Company had an obligation, prior to the Closing, to contribute to the Union Pension Fund, as described in Section 4204(a)(1)(A) of ERISA. (A) The Buyer and the Company will take steps, including complying with the provisions of Section 4204 of ERISA, to prevent the transactions contemplated by this Agreement from being treated as a full or partial withdrawal from the Union Pension Fund. (B) Prior to the Union Pension Fund’s first plan year beginning after the Closing, the Buyer and the Company jointly shall seek a variance from the requirement of Section 4204(a)(1)(B) of ERISA that a bond be obtained or an amount be held in escrow as provided in said Section. In the event the Union Pension Fund determines that the request does not qualify for a variance, the Buyer shall obtain any required bond or establish any required escrow as of the first plan year beginning after the Closing and shall maintain such bond or escrow until the earliest of (1) the date a variance is obtained from the Union Pension Fund;

Defined Benefit Pension Plans. (i) Effective as of the day prior to the Closing Date, all Business Personnel then actively participating in the SEMCO Energy, Inc. Non-Union Employees’ Retirement Plan (“SEMCO Non-Union Pension Plan”) will cease active participation in such plan. No service or compensation earned by Business Personnel on or after the Closing Date will be recognized under the SEMCO Non-Union Pension Plan for any purpose, and no employer contributions on behalf of service and compensation earned by Business Personnel on or after the Closing Date will be accepted under the SEMCO Non-Union Pension Plan. (ii) Effective as of the Closing Date, Buyer and its Subsidiaries (or the Conveyed Entities), will have established a U.S. tax-qualified defined benefit pension plan (“New Non-Union Pension Plan”) to provide retirement benefits to then active eligible non-union Business Personnel (the “Current Pension Eligible Employees”) and frozen benefits to inactive non-union Business Personnel and their beneficiaries, as applicable in pay status or with deferred vested benefits as of the Closing Date under the SEMCO Non-Union Pension Plan (together with the Current Pension Eligible Employees, the “NewCo Pension Participants”). No later than thirty (30) days prior to the transfer of assets from the SEMCO Non-Union Pension Plan to the New Non-Union Pension Plan, Vendor and NewCo shall, to the extent necessary, file or cause to be filed an IRS Form 5310-A regarding the transfer of assets and liabilities provided below in this Section 11.4(g). As soon after the Closing Date as is reasonably practicable, and after the applicable 5310-A Form(s) have been timely filed with the IRS, (i) liabilities under the SEMCO Non-Union Pension Plan on behalf of NewCo Pension Participants as of the Closing Date will be assumed by the New Non-Union Pension Plan, and (ii) the portion of the assets held under the Trust between SEMCO Energy, Inc. and Comerica Bank, Trustee Under the Non-Union Employees’ Retirement Plan dated December 29, 2008 (the “SEMCO Non-Union Pension Plan Trust”) covering the NewCo Pension Participants, in accordance with Code Section 414(l), Treasury Regulation Section 1.414(l)-1, and Section 208 of ERISA so that no participant’s or beneficiary’s accrued benefit on a plan termination basis under the New Non-Union Pension Plan immediately after the transfer will be less than the participant’s or beneficiary’s accrued benefit on a plan termination basis immediately prior to the transfer under the SEMCO Non-Union Pension Plan. The asset allocation for the transfer will be based on the priority categories for non-de minimis transfers under Section 4044 of ERISA, incorporating the Pension Benefit Guaranty Corporation (PBGC) actuarial assumptions for all accrued benefit calculation purposes, including mortality, interest, expected retirement assumptions (using the “XRA Table”) and expense loading (the methodology and assumptions contemplated by this sentence, the “Pension Transfer Assumptions”). (iii) Prior to the Closing Date (or such later time as mutually agreed by the Parties), Vendor shall have caused an independent actuary, selected by SEMCO (the “SEMCO Actuary”) to determine the estimated value as of the Closing Date, of the assets to be transferred from the SEMCO Non-Union Pension Plan Trust to the trust for the New Non-Union Pension Plan (the “New Pension Trust”) in accordance with the Pension Transfer Assumptions (the “Estimated Pension Plan Transfer Amount”). (iv) On or about the Closing Date (or such later time as mutually agreed by the Parties), Vendor and effective NewCo shall cooperate in good faith to cause an initial transfer of assets from the SEMCO Non-Union Pension Plan Trust to the New Pension Trust in an amount to be approximately 90% of the Estimated Pension Plan Transfer Amount (such amount, the “Initial Transfer Amount”). SEMCO shall satisfy its obligation pursuant to this Section 11.4(g)(iv) by causing the SEMCO Non-Union Pension Plan Trust to transfer assets equal to the Initial Transfer Amount to the New Pension Trust. Assets may be transferred in cash, cash equivalents or securities, or a combination of the foregoing or, if acceptable to Buyer (or, after Closing, to NewCo), in kind. (v) Within 60 days (or such later time as mutually agreed by the Parties) following the Closing Date, Vendor shall cause the SEMCO Actuary to provide NewCo with a revised calculation of the value, as of the Closing Date, of the assets of the SEMCO Non-Union Pension Plan Trust to be transferred to the New Pension Trust determined in accordance with the Pension Transfer Assumptions (the “Revised Pension Plan Transfer Amount”). NewCo may submit, at its sole cost and expense, the Revised Pension Plan Transfer Amount to an independent actuary selected by NewCo (the “NewCo Actuary”) for verification; provided, that, such verification process and any calculation performed by the NewCo Actuary in connection therewith shall be performed solely on the basis of the Pension Transfer Assumptions. In order to perform such verification, upon request from NewCo, the SEMCO Actuary shall provide the NewCo Actuary with the data and additional detailed methodology used to calculate the Initial Transfer Amount and the Final Pension Plan Transfer Amount. NewCo will be responsible for the cost and expenses of the NewCo Actuary and SEMCO will be responsible for the cost and expenses for the SEMCO Actuary. If the NewCo Actuary so determines that the value, as of the Closing Date of the assets to be transferred to the New Pension Trust differs from the Revised Pension Plan Transfer Amount, the NewCo Actuary shall identify in writing to the SEMCO Actuary all objections to the SEMCO Actuary’s determination within 60 days following provision of the revised value calculation to SEMCO pursuant to the first sentence of this Section 11.4(g)(v), and the SEMCO Actuary and the NewCo Actuary shall use good faith efforts to reconcile any such difference. The Revised Pension Plan Transfer Amount shall be deemed final if the NewCo Actuary does not submit written objections to the SEMCO Actuary within such 60 days period. If the NewCo Actuary and the SEMCO Actuary fail to reconcile such differences, the NewCo Actuary and the SEMCO Actuary shall jointly designate a third, independent actuary whose calculation of the value, as of the Closing Date, of the assets to be transferred to the New Pension Trust shall be final and binding; provided that such value must be between the value determined by the NewCo Actuary and the Revised Pension Plan Transfer Amount or equal to either such value. Such calculation shall be performed within a reasonable period of time, but no more than 120 days following designation of such third actuary and in accordance with the Pension Transfer Assumptions. NewCo and SEMCO shall each pay one half of the costs incurred in connection with the retention of such independent actuary. The final, verified value, as of the Closing Date, of the assets to be transferred to the New Pension Trust as determined in accordance with this Section 11.4(g)(v) shall be referred to herein as the “Final Pension Plan Transfer Amount.” (vi) Within 45 days (or such later time as mutually agreed by the Parties) following the determination of the Final Pension Plan Transfer Amount, SEMCO shall cause the SEMCO Non-Union Pension Plan Trust to transfer to the New Pension Trust (the date of such transfer, the “Final Transfer Date”) the amounts in cash, cash equivalents, securities, a combination of the foregoing, or, if acceptable to NewCo, in kind, equal to (A) the Final Pension Plan Transfer Amount minus (B) the Initial Transfer Amount (such difference, as adjusted to reflect earnings or losses as described in this Section 11.4(g)(vi), the “True-Up Amount”); provided, that, if the True-Up Amount is negative, SEMCO shall not be required to cause any such additional transfer and instead NewCo shall be required to cause a transfer of cash, cash equivalents or securities, a combination of the foregoing or, if acceptable to SEMCO, assets in kind, from the New Pension Trust to the SEMCO Non-Union Pension Plan Trust as required in an amount equal to the absolute value of the True-Up Amount. The True-Up Amount, if any, shall be adjusted to reflect fees or charges paid or incurred, and earnings or losses, during the period from the Closing Date to the Final Transfer Date. Such earnings or losses shall be determined based on the actual rates of return of the SEMCO Non-Union Pension Plan for the period commencing as of the Closing Date and ending as close as administratively practicable to the Final Transfer Date. If NewCo is obligated to cause the New Pension Trust to reimburse the SEMCO Non-Union Pension Plan pursuant to this Section 11.4(g)(vi), such reimbursements shall be performed in accordance with the same principles set forth herein with respect to the payment of the True-Up Amount. (vii) As soon as is reasonably practicable after the Closing Date, the Buyer shall adopt a ENSTAR Union Pension Plan that corresponds to assets held under the Del Monte Corporation Trust Agreement between SEMCO Energy, Inc. and Comerica Bank, Trustee under the ENSTAR Natural Gas Company Retirement System Plan for Hourly Operating Unit Employees and Clerical Unit Employees dated December 29, 2008 (the “Buyer’s ENSTAR Union Pension PlanPlan Trust”) shall be transferred in kind to the new U.S. tax-qualified Trust to be established by Buyer to hold the assets under the ENSTAR Union Pension Plan in accordance with Code Section 414(l), which shall provide for benefits to Transferred Union Employees covered by the Pittsburgh UFCW Contract and their respective alternate payees that are substantially similar in all Material Features to those provided under the Del Monte Corporation Retirement System for Hourly Employees (the “Company Pension Plan”). On the Closing Date, Business Employees shall cease accruing any benefits under the Company Pension Plan. The Company shall retain all Liabilities under the Company Pension Plan with respect to all periods prior to the Closing. The Buyer’s Pension Plan shall provide a benefit for all periods of service completed and compensation earned by such Transferred Union Employees on and after the Closing who prior to the Closing were covered by the Company Pension Plan and the Buyer shall be responsible for all Liabilities associated therewith; provided, however, that the benefit accrual formula under the Buyer’s Pension Plan shall (A) recognize all periods of service and compensation taken into account under the Company Pension Plan and (B) determine such Transferred Union Employee’s accrued benefit based on: (1) the sum of service and compensation taken into account under the Company Pension Plan for periods prior to the Closing and service and compensation taken into account under the Buyer’s Pension Plan on and after the Closing less (2) such Transferred Union Employee’s accrued benefit under the Company Pension Plan. The Buyer shall not be obligated to establish or maintain a defined benefit pension plan with respect to any Transferred Mendota Union Employees. (ii) The Company currently contributes on behalf of certain employees to the Western Pennsylvania Teamsters and Employers Trust Fund (the “Union Pension Fund”). The Buyer agrees to assume the Pittsburgh Teamsters ContractTreasury Regulation Section 1.414(l)-1, and to make contributions after the Closing to the Union Pension Fund with respect to Transferred Employees participating in the Union Pension Fund for substantially the same number of contribution base units (as defined in Section 4001 of ERISA) for which the Company had an obligation, prior to the Closing, to contribute to the Union Pension Fund, as described in Section 4204(a)(1)(A) 208 of ERISA. (A) The Buyer and the Company will take steps, including complying with the provisions of Section 4204 of ERISA, to prevent the transactions contemplated by this Agreement from being treated as a full or partial withdrawal from the Union Pension Fund. (B) Prior to the Union Pension Fund’s first plan year beginning after the Closing, the Buyer and the Company jointly shall seek a variance from the requirement of Section 4204(a)(1)(B) of ERISA that a bond be obtained or an amount be held in escrow as provided in said Section. In the event the Union Pension Fund determines that the request does not qualify for a variance, the Buyer shall obtain any required bond or establish any required escrow as of the first plan year beginning after the Closing and shall maintain such bond or escrow until the earliest of (1) the date a variance is obtained from the Union Pension Fund;

Defined Benefit Pension Plans. (ia) Prior to and effective on the Closing Date, the Buyer shall adopt a Plan that corresponds to the Del Monte Corporation Retirement System for Hourly Employees (the “Buyer’s Pension Plan”), which shall provide for benefits to Transferred Union Employees covered by the Pittsburgh UFCW Contract and their respective alternate payees that are substantially similar in all Material Features to those provided under the Del Monte Corporation Retirement System for Hourly Employees (the “Company Pension Plan”). On the Closing Date, Business Employees shall cease accruing any benefits under the Company Pension Plan. The Company shall retain all Liabilities under the Company Pension Plan with respect to all periods prior to Effective as of the Closing. The Buyer’s Pension Plan shall provide a benefit for all periods of service completed and compensation earned by such Transferred Union Employees on and after the Closing who prior to the Closing were covered by the Company Pension Plan and the Buyer shall be responsible for all Liabilities associated therewith; provided, howeverPurchaser shall, that the benefit accrual formula under the Buyer’s Pension Plan shall (A) recognize all periods of service and compensation taken into account under the Company Pension Plan and (B) determine such Transferred Union Employee’s accrued benefit based on: (1) the sum of service and compensation taken into account under the Company Pension Plan for periods prior to the Closing and service and compensation taken into account under the Buyer’s Pension Plan on and after the Closing less (2) such Transferred Union Employee’s accrued benefit under the Company Pension Plan. The Buyer shall not be obligated to establish or maintain a defined benefit pension plan with respect to any Transferred Mendota Union Employees. Employee whose defined benefit pension obligation in one or more of the defined benefit pension plans maintained by the Seller Group is required to be assumed or retained by Purchaser or its Affiliates (iiincluding the Transferred Entities) The Company currently contributes on behalf under applicable Law as a result of certain employees to the Western Pennsylvania Teamsters and Employers Trust Fund (the “Union Pension Fund”). The Buyer agrees to assume the Pittsburgh Teamsters Contract, and to make contributions after the Closing to the Union Pension Fund with respect to Transferred Employees participating in the Union Pension Fund for substantially the same number of contribution base units (as defined in Section 4001 of ERISA) for which the Company had an obligation, prior to the Closing, to contribute to the Union Pension Fund, as described in Section 4204(a)(1)(A) of ERISA. (A) The Buyer and the Company will take steps, including complying with the provisions of Section 4204 of ERISA, to prevent the transactions contemplated by this Agreement (collectively, the “Transferor Pension Plans”), establish or designate defined benefit pension plans (collectively, the “Transferee Pension Plans”) for the benefit of such Transferred Employees. The Transferred Employees whose defined benefit pension obligation is required to be assumed or retained by Purchaser or its Affiliates (including the Transferred Entities) are referred to hereinafter as the “Transferred Pension Plan Employees.” The Transferred Pension Plan Employees shall be given credit under the respective Transferee Pension Plan for all service with and compensation from being treated Seller and its Affiliates and their respective predecessors as if it were service with and compensation from Purchaser or its Affiliates for purposes of determining eligibility, vesting and the amount of any benefits or benefit accruals under each respective Transferee Pension Plan. Each Transferee Pension Plan shall provide, upon the transfer of assets referred to below (or, if there is no transfer of assets with respect to a full or partial withdrawal from particular plan because the Union plan is not funded, as of the Closing), that the accrued benefits for the Transferred Pension FundPlan Employees under such Transferee Pension Plan shall in no event be less than their accrued benefits under the corresponding Transferor Pension Plan as of the Closing. (Bb) Prior With respect to any Transferor Pension Plan that is funded (other than any Transferor Pension Plan maintained in Germany), Seller shall cause to be transferred from the trusts (or in the case of other funding vehicles, transferred from such funding vehicles) under such Transferor Pension Plan to the Union trusts or other funding vehicles under the corresponding Transferee Pension FundPlan assets in the form of cash, cash equivalents, marketable securities or insurance contracts (to the extent allowable under the terms of such contracts and exclusively intended to cover plan benefits), the value of which shall be equal to: (x) the actuarial present value of accumulated benefits (that is, the “accumulated benefit obligation” as defined in Topic 715 in the FASB’s first Accounting Standards Codification, “ABO”) under such Transferor Pension Plan as of the Closing that are attributable to the Transferred Pension Plan Employees divided by the ABO of all participants in such Transferor Pension Plan as of the Closing, multiplied by the market value of the assets of such Transferor Pension Plan at the Closing, provided that such transferred amount shall not, in any event, exceed the ABO under such Transferor Pension Plan of all Transferred Pension Plan Employees as of the date of Closing or (y) such greater amount as is required by applicable Law or the applicable Governmental Entity having jurisdiction over the Transferor Pension Plan in order to obtain approval for the transfer. (c) The amounts determined in accordance with Section 6.4(b) are collectively referred to as the “Pension Transfer Amounts”. The transfer of the Pension Transfer Amounts, and the assumption by Purchaser and its Affiliates of Liabilities with respect to or relating to the Transferred Pension Plan Employees under the applicable Transferor Pension Plans, shall be subject to such consents and other requirements as may apply under applicable Law, including the consent of the Transferred Pension Plan Employees to the extent required by applicable Law. Purchaser shall cause the corresponding Transferee Pension Plans to accept the Pension Transfer Amounts. To the extent a Transferor Pension Plan is not required to be funded by applicable Law and is not voluntarily funded as of the Closing, there shall be no transfer of assets by the Transferor Pension Plan or by Seller or its Affiliates. Actuarial determinations shall be made in accordance with Section 6.4(g) below. (d) As of the Closing, Seller shall cause the Transferred Employees to cease further accrual of benefits under the pension plans sponsored by the Seller Group. (e) The Pension Transfer Amount, if any, from each Transferor Pension Plan and, if applicable, the corresponding benefit accruals Purchaser is obligated to assume shall be equitably adjusted to take into account benefit payments made from the Transferor Pension Plan to the Transferred Pension Plan Employees after the Closing but prior to the date of transfer and for any earnings and losses on such amount during such period. The Pension Transfer Amount, if any, shall be determined pursuant to Section 6.4(g) below. (f) At the times of the transfers of the Pension Transfer Amounts, Purchaser and the Transferee Pension Plans shall assume all Liabilities for all accrued benefits, including all disability, part-time, early retirement and other ancillary benefits, under the corresponding Transferor Pension Plans in respect of the Transferred Pension Plan Employees whose benefits are transferred, and the Seller Group and the corresponding Transferor Pension Plans shall be relieved of all Liabilities to provide benefits under the Transferor Pension Plans to the Transferred Pension Plan Employees whose benefits are transferred. From and after the date of such applicable transfer of the Pension Transfer Amounts (or if there is no transfer of assets with respect to a particular plan year beginning because the plan is not required to be funded under applicable Law and is not voluntarily funded as of the Closing, from and after the Closing), Purchaser agrees to indemnify and hold harmless the Buyer Seller Group and its officers, directors, employees, and agents from and against any and all costs, damages, losses, expenses, or other Liabilities arising out of or related to the Company jointly benefits of the Transferred Pension Plan Employees that are transferred to the Transferee Pension Plans, or the transfer of benefits, assets and Liabilities pursuant to this Section 6.4, or the cessation of participation in the Transferor Pension Plans in connection therewith. (g) For purposes of this Section 6.4, actuarial determinations shall seek a variance from be based upon the requirement actuarial assumptions and methodologies used in preparing the most recent audited financial statements of Section 4204(a)(1)(B) of ERISA that a bond be obtained or an amount be held in escrow as provided in said Section. In the event the Union Pension Fund determines that the request does not qualify for a variance, the Buyer shall obtain any required bond or establish any required escrow Seller as of the first date of the determination. The applicable plan year beginning after sponsor of the Transferor Pension Plans shall cause the plan actuary or administrator to provide a report of its determination of such amount within ninety (90) days of the Closing Date and any back-up information reasonably required by Purchaser to confirm the accuracy of such determination. If Purchaser disputes the accuracy of the calculation, Purchaser and Seller shall maintain cooperate to identify the basis for such bond or escrow until disagreement and act in good faith to resolve such dispute. To the earliest extent that a dispute is unresolved after a forty-five (45) day period following identification of (1) such dispute, the date a variance is obtained from calculations shall be verified by an independent third party benefits consulting firm selected by the Union Pension Fund;mutual agreement of Seller and Purchaser. The decision of such consulting firm shall be final, binding and conclusive on Seller and Purchaser. Seller and Purchaser shall share equally the costs of such consulting firm.