Employee and Benefit Matters. (a) Except as set forth in the Transition Services Agreement (to the extent applicable), on or before the Closing, Seller shall take all actions necessary, if any, to cause (i) the Companies to cease to be adopting or participating employers under all Seller Plans and (ii) Seller and the Non-Company Affiliates to cease to be sponsors or adopting or participating employers under all Company Plans (and, if Seller or a Non-Company Affiliate is a sponsor of a Company Plan, Seller shall cause OPOS to assume such sponsorship). Seller and the Non-Company Affiliates shall not, from and after the Closing, have any responsibility or liability with respect to the Company Plans; provided, that, with respect to the Retirement Plan, Seller shall timely file or cause the appropriate Non-Company Affiliate to timely file (to the extent the following forms have not been filed prior to the Closing) (A) the annual report on Form 5500 for 2004 with the Employee Benefits Security Administration and (B) PBGC Form 1 or PBGC Form 1-EZ (as applicable) for 2005 with the PBGC. Buyer shall cooperate, and Buyer shall cause its Affiliates to cooperate, with Seller with respect to the filings described in the preceding sentence, and Buyer shall provide to Seller such information as Seller may reasonably request in respect of such filings. (b) Buyer acknowledges and agrees that (i) certain employees of the Companies are represented by the Utility Workers Union of America, AFL-CIO and its Local Union No. 1-2 (the “Union”) pursuant to the terms of the Collective Bargaining Contract, (ii) OPOS will continue to recognize the Union as the exclusive bargaining representative of the employees whose employment is covered by the Collective Bargaining Contract, (iii) the Collective Bargaining Contract will continue to be effective until it expires by its own terms or is renegotiated, and (iv) OPOS will continue to be bound by the terms, conditions and provisions of the Collective Bargaining Contract. Buyer further acknowledges that, subject to the terms of the Collective Bargaining Contract and applicable Law, the employees covered by the Collective Bargaining Contract will continue to be employed by the Companies following the Closing. (c) Within 45 days after the Execution Date, but effective as of the Closing Date, Buyer or an Affiliate of Buyer shall offer employment (which shall be contingent on the occurrence of the Closing) to each individual listed on Schedule 6.14(c) (each, an “Affiliate Employee”). Each such offer of employment shall be consistent with the provisions of this Section 6.14 and shall remain open for a period of at least 10 days. For a period of at least one year beginning on the Closing Date and subject to the remaining paragraphs of this Section 6.14 and an individual’s continued employment with a Company or an Affiliate of a Company, Buyer shall cause each Continuing Employee to be provided with base salary and wages, bonus opportunity (including annual incentive compensation but excluding any equity based arrangements) and health, welfare and 401(k) benefits on a basis substantially similar in the aggregate to the compensation and health, welfare and 401(k) benefits provided to such Continuing Employee by Seller and its Affiliates (including the Companies) immediately prior to the Closing; provided, that with respect to Continuing Employees whose employment is covered by the Collective Bargaining Contract, Buyer shall cause the compensation and benefits provided to such employees from and after the Closing Date to also be consistent with the terms of the Collective Bargaining Contract. (d) To the extent consistent with the Collective Bargaining Contract, as applicable, Buyer shall cause, or shall cause the Companies to cause, each Continuing Employee and his or her eligible dependents (including all such Continuing Employee’s dependents covered immediately prior to the Closing Date by a Company Plan or a Seller Plan that is a group health plan) to be offered coverage under a group health plan maintained by Buyer or an Affiliate of Buyer that (i) provides medical and dental benefits to the Continuing Employee and such eligible dependents effective immediately upon the Closing Date or such other time as set forth in the Transition Services Agreement and (ii) credits such Continuing Employee, for the year during which such coverage under such group health plan begins, with any deductibles and co-payments already incurred during such year under a Company Plan or a Seller Plan that is a group health plan. (e) Buyer shall cause, or shall cause the Companies to cause, the employee benefit plans and programs maintained after the Closing Date for the benefit of the Continuing Employees to recognize each Continuing Employee’s years of service and level of seniority prior to the Closing Date with Seller, the Companies and their Affiliates (including service and seniority with any other employer that was recognized by Seller, the Companies or their Affiliates for purposes of any applicable Company Plan or Seller Plan) for purposes of terms of compensation and benefits under such plans and programs. Buyer shall cause, or shall cause the Companies to cause, each employee welfare benefit plan or program sponsored by Buyer or one of its Affiliates that a Continuing Employee may be eligible to participate in on or after the Closing Date to waive any preexisting condition exclusion with respect to participation and coverage requirements applicable to such Continuing Employee to the same extent such preexisting condition exclusion was not applicable under the Company Plan or Seller Plan immediately prior to the Closing Date. (f) Buyer agrees that it assumes all obligations to provide any required notice under the WARN Act or other applicable Laws, and, except as otherwise provided herein, to pay all severance payments, damages for wrongful dismissal and related costs, with respect to the termination of any employee of the Companies that occurs on or after the Closing Date. (g) As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of the Seller Savings Plans to the trustee of a defined contribution plan maintained by Buyer (the “Buyer Savings Plan”) an amount in cash equal to the aggregate account balances of the Company Participants under the Seller Savings Plans determined as of the transfer date; provided, that to the extent any Company Participant owes any amount to a Seller Savings Plan pursuant to the terms of a loan (provided such loan is not in default) from such plan to such Company Participant, an in-kind transfer of such loan shall be made in lieu of the transfer of cash. From and after the date of such transfer, Buyer shall cause the Buyer Savings Plan to assume the obligations of the Seller Savings Plans with respect to benefits accrued by the Company Participants under the Seller Savings Plans, and the Seller Savings Plans shall cease to be responsible therefor. The Companies shall be responsible for, and shall contribute to each Seller Savings Plan as soon as practicable after the Closing Date and prior to the transfer described in this paragraph, all unpaid (A) pre-tax and after-tax contributions to such Seller Savings Plan attributable to withholdings from the compensation of employees of the Companies with respect to periods ending on or before the Closing Date and (B) employer matching contributions due with respect to pre-tax and after-tax contributions to such Seller Savings Plan by employees of the Companies for periods ending on or before the Closing Date. For purposes of determining the amount of such employer matching contributions under each Seller Savings Plan, the Closing Date shall be deemed to be the last day of a payroll period. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. Further, Buyer and Seller shall cooperate and take such actions as are necessary to permit the continuation of loan repayments by Continuing Employees to the Seller Savings Plans by payroll deductions during the period beginning on the Closing Date and ending on the date of the transfer described in this paragraph. Seller represents, covenants and agrees with respect to each Seller Savings Plan, and Buyer represents, covenants and agrees with respect to the Buyer Savings Plan, that, as of the date of the transfer described in this paragraph, such plan will satisfy the requirements of Sections 401(a), (k), and (m) of the Code and will have received, or shall timely file for, a favorable determination letter from the IRS regarding such qualified status and covering amendments required to have been adopted prior to the expiration of the applicable remedial amendment period. (h) Claims of Continuing Employees and their eligible beneficiaries and dependents for medical, dental, prescription drug, life insurance, and/or other welfare benefits (“Welfare Benefits”) (other than disability benefits) and/or workers compensation benefits that are incurred on or before the Closing Date shall be the sole responsibility of Seller, whether pursuant to a Seller Plan, a Company Plan or otherwise. Claims of Continuing Employees and their eligible beneficiaries and dependents for Welfare Benefits (other than disability benefits) and/or workers compensation benefits that are incurred after the Closing Date shall be the sole responsibility of Buyer and the Companies. For purposes of the preceding provisions of this paragraph, a medical/dental claim shall be considered incurred on the date when the medical/dental services are rendered or medical/dental supplies are provided, and not when the condition arose or when the course of treatment began, and a claim for workers’ compensation benefits shall be considered incurred when the injury occurred. Seller and Buyer hereby agree that any employee of the Companies or any Affiliate Employee who (i) as of the day immediately preceding the Closing Date is receiving or entitled to receive short-term disability benefits under a Seller Plan and who subsequently becomes eligible to receive long-term disability benefits, or (ii) as of the day immediately preceding the Closing Date is receiving or entitled to receive long-term disability benefits, shall become eligible or continue to be eligible, as applicable, to receive long-term disability benefits under a Seller Plan that is a long-term disability plan unless and until such employee is no longer disabled (subject to the terms of such Seller Plan). Claims of Continuing Employees and their eligible beneficiaries and dependents for short-term or long-term disability benefits that arise from disabling events that occur on or after the Closing Date shall be the sole responsibility of Buyer and the Companies. (i) With respect to all employees who terminated from employment with a Company prior to the Closing Date and who are listed on Schedule 6.14(i) (which schedule shall be updated no later than 30 days following the Closing Date to reflect an inclusive list of such former employees) and who have been, or are eligible to be, provided with post-retirement medical, dental, life insurance and/or other welfare benefit coverage as of the Closing Date under a Seller Plan or Company Plan, the Companies shall assume and/or retain any and all liability with respect to the provision of such coverages to such terminated employees and their eligible dependents and beneficiaries on and after the Closing Date. In addition, the Companies shall extend post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages to all Continuing Employees (and their eligible dependents and beneficiaries) who are, or who are hereafter found to be or have been, eligible for such coverages; provided, however, that nothing contained herein shall be construed as limiting or restricting Buyer’s or a Company’s ability to amend, modify or terminate such post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages after the Closing Date. Neither Seller nor any of the Non-Company Affiliates shall have any liability on or after the Closing Date with respect to the provision of post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages for those persons described in the preceding sentences of this paragraph. (j) Except to the extent required by applicable Law, Seller shall not pay Continuing Employees (other than Affiliate Employees who are Continuing Employees, who will be paid by Seller their accrued and unused vacation as of the Closing Date) their accrued and unused vacation, and a Company, Buyer or an Affiliate of Buyer, as applicable, shall provide, without duplication of benefits, all such Continuing Employees with vacation time rather than cash in lieu of vacation time for all accrued and unused vacation through the Closing Date to the extent the liability for such accrued but unused vacation is reflected in the Closing Date Working Capital Amount. (k) As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of the master trust that holds the assets of the Retirement Plan as of the Closing Date to the trustee of a trust established or maintained by Buyer or a Company to hold the assets of the Retirement Plan after the Closing Date an amount equal to the Retirement Plan’s share of the assets of the master trust as determined as of the transfer date in accordance with such master trust, the Code, ERISA, and the Retirement Plan by the Reliant Energy, Inc. Benefits Committee (the “Benefits Committee”) (which determination shall be based on the books and records maintained by the trustee of the master trust). Such transfer shall be made in cash or in-kind as agreed to by the Benefits Committee and Buyer or the Companies. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. In addition, (i) effective as of the Closing Date, Seller shall cause the Benefits Committee to cease to be the plan administrator and to otherwise administer any aspect of the Retirement Plan as of the Closing Date, and (ii) on the Closing Date, Buyer shall cause one of the Companies to appoint a new plan administrator for the Retirement Plan effective as of such date. (l) If, within the one-year period beginning on the Closing Date, (i) a Continuing Employee (other than a Continuing Employee whose employment is covered by the Collective Bargaining Contract) voluntarily terminates his or her employment with Buyer and its Affiliates within 30 days after the date upon which he or she is notified that the principal place of his or her employment is changing to a location that is 25 miles or more from the location of such employee’s principal place of employment immediately prior to the Closing Date, or (ii) the employment of a Continuing Employee (other than a Continuing Employee whose employment is covered by the Collective Bargaining Contract) is terminated by Buyer or an Affiliate of Buyer for a reason other than cause (as that term is defined in the Severance Plan, but based on the terms of such plan as in effect on the Execution Date), then, in any such case, Buyer shall provide such Continuing Employee with severance benefits at least equal to the severance benefits which such Continuing Employee would have received under the Severance Plan had the employment of such Continuing Employee been terminated under circumstances entitling him or her to benefits under such plan. Such severance benefits shall be determined based on the terms of the Severance Plan in effect on the Execution Date, but Buyer shall take into account such Continuing Employee’s aggregate service with Buyer and its Affiliates and his or her pre-Closing Date service recognized pursuant to Section 6.14(e). (m) Except as specifically set forth in this Section 6.14 or in the Transition Services Agreement, Seller agrees to indemnify and hold harmless Buyer, the Companies and their Affiliates with respect to all claims and liabilities under any Seller Plan.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Reliant Energy Inc), Purchase and Sale Agreement (US Power Generating CO)
Employee and Benefit Matters. (a) Except as set forth in the Transition Services Agreement (to the extent applicable), on On or before the Closing, Seller shall take all actions necessary, if any, to cause (i) the Companies to cease to be adopting or participating employers under all Seller Plans and (ii) Seller and the Non-Company Affiliates to cease to be sponsors or adopting or participating employers under all Company Plans (and, if Seller or a Non-Company Affiliate is a sponsor of a Company Plan, Seller shall cause OPOS Coldwater to assume such sponsorship). Except as otherwise specifically provided in this Section 6.13, from and after the Closing, (i) the Companies shall not have any responsibility or liability with respect to the Seller Plans and (ii) Seller and the Non-Company Affiliates shall not, from and after the Closing, not have any responsibility or liability with respect to the Company Plans; provided, however, that, with respect to the Retirement Plan, Seller shall timely file or cause the appropriate Non-Company Affiliate to timely file (to the extent the following forms have not been filed prior to the Closing) (A) the annual report on Form 5500 for 2004 2003 with the Employee Benefits Security Administration and (B) PBGC Form 1 or PBGC Form 1l-EZ (as applicable) for 2005 2003 with the PBGC. Buyer shall cooperate, and Buyer shall cause its Affiliates to cooperate, with Seller with respect to the filings described in the preceding sentence, and Buyer shall provide to Seller such information as Seller may reasonably request in respect of such filings.
(b) Buyer acknowledges and agrees that (i) certain employees of the Companies are represented by Local Union 97 of the Utility Workers Union International Brotherhood of AmericaElectrical Workers, AFL-CIO and its Local Union No. 1-2 (the “Union”"UNION") pursuant to the terms of the Collective Bargaining Contract, (ii) OPOS Coldwater will continue to recognize the Union as the exclusive bargaining representative of the employees whose employment is covered by the Collective Bargaining Contract, (iii) the Collective Bargaining Contract will continue to be effective until it expires by its own terms or is renegotiated, and (iv) OPOS Coldwater will continue to be bound by the terms, conditions and provisions of the Collective Bargaining Contract. Buyer further acknowledges that, subject to the terms of the Collective Bargaining Contract and applicable LawContract, the employees covered by the Collective Bargaining Contract will continue to be employed by the Companies following the Closing.
(c) Within 45 days after the Execution Date, but effective as of the Closing Date, Buyer or an Affiliate of Buyer shall offer employment (which shall be contingent on the occurrence of the Closing) to each individual listed on Schedule 6.14(c) (each, an “Affiliate Employee”). Each such offer of employment shall be consistent with the provisions of this Section 6.14 and shall remain open for a period of at least 10 days. For a period of at least one year beginning on the Closing Date and subject to the remaining paragraphs of this Section 6.14 and an individual’s continued employment with a Company or an Affiliate of a Company, Buyer shall cause each Continuing Employee to be provided with base salary and wages, bonus opportunity (including annual incentive compensation but excluding any equity based arrangements) and health, welfare and 401(k) benefits on a basis substantially similar in the aggregate to the compensation and health, welfare and 401(k) benefits provided to such Continuing Employee by Seller and its Affiliates (including the Companies) immediately prior to the Closing; provided, that with respect to Continuing Employees whose employment is covered by the Collective Bargaining Contract, Buyer shall cause the compensation and benefits provided to such employees from and after the Closing Date to also be consistent with the terms of the Collective Bargaining Contract.
(d) To the extent consistent with the Collective Bargaining Contract, as applicable, Buyer shall cause, or shall cause the Companies to cause, each Continuing Employee and his or her eligible dependents (including all such Continuing Employee’s dependents covered immediately prior to the Closing Date by a Company Plan or a Seller Plan that is a group health plan) to be offered coverage under a group health plan maintained by Buyer or an Affiliate of Buyer that (i) provides medical and dental benefits to the Continuing Employee and such eligible dependents effective immediately upon the Closing Date or such other time as set forth in the Transition Services Agreement and (ii) credits such Continuing Employee, for the year during which such coverage under such group health plan begins, with any deductibles and co-payments already incurred during such year under a Company Plan or a Seller Plan that is a group health plan.
(e) Buyer shall cause, or shall cause the Companies to cause, the employee benefit plans and programs maintained after the Closing Date for the benefit of the Continuing Employees to recognize each Continuing Employee’s years of service and level of seniority prior to the Closing Date with Seller, the Companies and their Affiliates (including service and seniority with any other employer that was recognized by Seller, the Companies or their Affiliates for purposes of any applicable Company Plan or Seller Plan) for purposes of terms of compensation and benefits under such plans and programs. Buyer shall cause, or shall cause the Companies to cause, each employee welfare benefit plan or program sponsored by Buyer or one of its Affiliates that a Continuing Employee may be eligible to participate in on or after the Closing Date to waive any preexisting condition exclusion with respect to participation and coverage requirements applicable to such Continuing Employee to the same extent such preexisting condition exclusion was not applicable under the Company Plan or Seller Plan immediately prior to the Closing Date.
(f) Buyer agrees that it assumes all obligations to provide any required notice under the WARN Act or other applicable Laws, and, except as otherwise provided herein, to pay all severance payments, damages for wrongful dismissal and related costs, with respect to the termination of any employee of the Companies that occurs on or after the Closing Date.
(g) As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of the Seller Savings Plans to the trustee of a defined contribution plan maintained by Buyer (the “Buyer Savings Plan”) an amount in cash equal to the aggregate account balances of the Company Participants under the Seller Savings Plans determined as of the transfer date; provided, that to the extent any Company Participant owes any amount to a Seller Savings Plan pursuant to the terms of a loan (provided such loan is not in default) from such plan to such Company Participant, an in-kind transfer of such loan shall be made in lieu of the transfer of cash. From and after the date of such transfer, Buyer shall cause the Buyer Savings Plan to assume the obligations of the Seller Savings Plans with respect to benefits accrued by the Company Participants under the Seller Savings Plans, and the Seller Savings Plans shall cease to be responsible therefor. The Companies shall be responsible for, and shall contribute to each Seller Savings Plan as soon as practicable after the Closing Date and prior to the transfer described in this paragraph, all unpaid (A) pre-tax and after-tax contributions to such Seller Savings Plan attributable to withholdings from the compensation of employees of the Companies with respect to periods ending on or before the Closing Date and (B) employer matching contributions due with respect to pre-tax and after-tax contributions to such Seller Savings Plan by employees of the Companies for periods ending on or before the Closing Date. For purposes of determining the amount of such employer matching contributions under each Seller Savings Plan, the Closing Date shall be deemed to be the last day of a payroll period. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. Further, Buyer and Seller shall cooperate and take such actions as are necessary to permit the continuation of loan repayments by Continuing Employees to the Seller Savings Plans by payroll deductions during the period beginning on the Closing Date and ending on the date of the transfer described in this paragraph. Seller represents, covenants and agrees with respect to each Seller Savings Plan, and Buyer represents, covenants and agrees with respect to the Buyer Savings Plan, that, as of the date of the transfer described in this paragraph, such plan will satisfy the requirements of Sections 401(a), (k), and (m) of the Code and will have received, or shall timely file for, a favorable determination letter from the IRS regarding such qualified status and covering amendments required to have been adopted prior to the expiration of the applicable remedial amendment period.
(h) Claims of Continuing Employees and their eligible beneficiaries and dependents for medical, dental, prescription drug, life insurance, and/or other welfare benefits (“Welfare Benefits”) (other than disability benefits) and/or workers compensation benefits that are incurred on or before the Closing Date shall be the sole responsibility of Seller, whether pursuant to a Seller Plan, a Company Plan or otherwise. Claims of Continuing Employees and their eligible beneficiaries and dependents for Welfare Benefits (other than disability benefits) and/or workers compensation benefits that are incurred after the Closing Date shall be the sole responsibility of Buyer and the Companies. For purposes of the preceding provisions of this paragraph, a medical/dental claim shall be considered incurred on the date when the medical/dental services are rendered or medical/dental supplies are provided, and not when the condition arose or when the course of treatment began, and a claim for workers’ compensation benefits shall be considered incurred when the injury occurred. Seller and Buyer hereby agree that any employee of the Companies or any Affiliate Employee who (i) as of the day immediately preceding the Closing Date is receiving or entitled to receive short-term disability benefits under a Seller Plan and who subsequently becomes eligible to receive long-term disability benefits, or (ii) as of the day immediately preceding the Closing Date is receiving or entitled to receive long-term disability benefits, shall become eligible or continue to be eligible, as applicable, to receive long-term disability benefits under a Seller Plan that is a long-term disability plan unless and until such employee is no longer disabled (subject to the terms of such Seller Plan). Claims of Continuing Employees and their eligible beneficiaries and dependents for short-term or long-term disability benefits that arise from disabling events that occur on or after the Closing Date shall be the sole responsibility of Buyer and the Companies.
(i) With respect to all employees who terminated from employment with a Company prior to the Closing Date and who are listed on Schedule 6.14(i) (which schedule shall be updated no later than 30 days following the Closing Date to reflect an inclusive list of such former employees) and who have been, or are eligible to be, provided with post-retirement medical, dental, life insurance and/or other welfare benefit coverage as of the Closing Date under a Seller Plan or Company Plan, the Companies shall assume and/or retain any and all liability with respect to the provision of such coverages to such terminated employees and their eligible dependents and beneficiaries on and after the Closing Date. In addition, the Companies shall extend post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages to all Continuing Employees (and their eligible dependents and beneficiaries) who are, or who are hereafter found to be or have been, eligible for such coverages; provided, however, that nothing contained herein shall be construed as limiting or restricting Buyer’s or a Company’s ability to amend, modify or terminate such post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages after the Closing Date. Neither Seller nor any of the Non-Company Affiliates shall have any liability on or after the Closing Date with respect to the provision of post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages for those persons described in the preceding sentences of this paragraph.
(j) Except to the extent required by applicable Law, Seller shall not pay Continuing Employees (other than Affiliate Employees who are Continuing Employees, who will be paid by Seller their accrued and unused vacation as of the Closing Date) their accrued and unused vacation, and a Company, Buyer or an Affiliate of Buyer, as applicable, shall provide, without duplication of benefits, all such Continuing Employees with vacation time rather than cash in lieu of vacation time for all accrued and unused vacation through the Closing Date to the extent the liability for such accrued but unused vacation is reflected in the Closing Date Working Capital Amount.
(k) As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of the master trust that holds the assets of the Retirement Plan as of the Closing Date to the trustee of a trust established or maintained by Buyer or a Company to hold the assets of the Retirement Plan after the Closing Date an amount equal to the Retirement Plan’s share of the assets of the master trust as determined as of the transfer date in accordance with such master trust, the Code, ERISA, and the Retirement Plan by the Reliant Energy, Inc. Benefits Committee (the “Benefits Committee”) (which determination shall be based on the books and records maintained by the trustee of the master trust). Such transfer shall be made in cash or in-kind as agreed to by the Benefits Committee and Buyer or the Companies. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. In addition, (i) effective as of the Closing Date, Seller shall cause the Benefits Committee to cease to be the plan administrator and to otherwise administer any aspect of the Retirement Plan as of the Closing Date, and (ii) on the Closing Date, Buyer shall cause one of the Companies to appoint a new plan administrator for the Retirement Plan effective as of such date.
(l) If, within the one-year period beginning on the Closing Date, (i) a Continuing Employee (other than a Continuing Employee whose employment is covered by the Collective Bargaining Contract) voluntarily terminates his or her employment with Buyer and its Affiliates within 30 days after the date upon which he or she is notified that the principal place of his or her employment is changing to a location that is 25 miles or more from the location of such employee’s principal place of employment immediately prior to the Closing Date, or (ii) the employment of a Continuing Employee (other than a Continuing Employee whose employment is covered by the Collective Bargaining Contract) is terminated by Buyer or an Affiliate of Buyer for a reason other than cause (as that term is defined in the Severance Plan, but based on the terms of such plan as in effect on the Execution Date), then, in any such case, Buyer shall provide such Continuing Employee with severance benefits at least equal to the severance benefits which such Continuing Employee would have received under the Severance Plan had the employment of such Continuing Employee been terminated under circumstances entitling him or her to benefits under such plan. Such severance benefits shall be determined based on the terms of the Severance Plan in effect on the Execution Date, but Buyer shall take into account such Continuing Employee’s aggregate service with Buyer and its Affiliates and his or her pre-Closing Date service recognized pursuant to Section 6.14(e).
(m) Except as specifically set forth in this Section 6.14 or in the Transition Services Agreement, Seller agrees to indemnify and hold harmless Buyer, the Companies and their Affiliates with respect to all claims and liabilities under any Seller Plan.6.13
Appears in 1 contract
Employee and Benefit Matters. (a) Except as set forth in the Transition Services Agreement (to the extent applicable), on On or before the Closing, Seller shall take all actions necessary, if any, to cause (i) the Companies to cease to be adopting or participating employers under all Seller Plans and (ii) Seller and the Non-Company Affiliates to cease to be sponsors or adopting or participating employers under all Company Plans (and, if Seller or a Non-Company Affiliate is a sponsor of a Company Plan, Seller shall cause OPOS Coldwater to assume such sponsorship). Except as otherwise specifically provided in this Section 6.13, from and after the Closing, (i) the Companies shall not have any responsibility or liability with respect to the Seller Plans and (ii) Seller and the Non-Company Affiliates shall not, from and after the Closing, not have any responsibility or liability with respect to the Company Plans; provided, however, that, with respect to the Retirement Plan, Seller shall timely file or cause the appropriate Non-Company Affiliate to timely file (to the extent the following forms have not been filed prior to the Closing) (A) the annual report on Form 5500 for 2004 2003 with the Employee Benefits Security Administration and (B) PBGC Form 1 or PBGC Form 1-EZ (as applicable) for 2005 2003 with the PBGC. Buyer shall cooperate, and Buyer shall cause its Affiliates to cooperate, with Seller with respect to the filings described in the preceding sentence, and Buyer shall provide to Seller such information as Seller may reasonably request in respect of such filings.
(b) Buyer acknowledges and agrees that (i) certain employees of the Companies are represented by Local Union 97 of the Utility Workers Union International Brotherhood of AmericaElectrical Workers, AFL-CIO and its Local Union No. 1-2 (the “UnionUNION”) pursuant to the terms of the Collective Bargaining Contract, (ii) OPOS Coldwater will continue to recognize the Union as the exclusive bargaining representative of the employees whose employment is covered by the Collective Bargaining Contract, (iii) the Collective Bargaining Contract will continue to be effective until it expires by its own terms or is renegotiated, and (iv) OPOS Coldwater will continue to be bound by the terms, conditions and provisions of the Collective Bargaining Contract. Buyer further acknowledges that, subject to the terms of the Collective Bargaining Contract and applicable LawContract, the employees covered by the Collective Bargaining Contract will continue to be employed by the Companies following the Closing.
(c) Within 45 days after the Execution Date, but effective as of the Closing Date, Buyer or an Affiliate of Buyer shall offer employment (which shall be contingent on the occurrence of the Closing) to each individual listed on Schedule 6.14(c6.13(c) (each, an “Affiliate EmployeeAFFILIATE EMPLOYEE”). Each such offer of employment shall be consistent with the provisions of this Section 6.14 6.13(c) and shall remain open for a period of at least 10 days. For a period of at least one year beginning on the Closing Date and subject to the remaining paragraphs of this Section 6.14 6.13 and an individual’s continued employment with a Company or an Affiliate of a Company, Buyer shall cause each Continuing Employee to be provided with base salary and wages, bonus opportunity (i) compensation (including annual incentive compensation but excluding any equity based arrangementscompensation) and health, welfare and 401(k) benefits on a basis substantially similar in the aggregate to that provided by Seller and its Affiliates to such employee immediately prior to the compensation Closing and health, welfare and 401(k(ii) benefits that are substantially similar to those provided to such Continuing Employee employee under the Company Plans and Seller Plans, as applicable (and worker’s compensation benefits that are substantially similar to those provided to such employee), by Seller and its Affiliates (including the Companies) immediately prior to the ClosingClosing (other than the Reliant Resources, Inc. 2002 Long-Term Incentive Plan, Reliant Resources, Inc. 2002 Stock Plan and Reliant Resources, Inc. Employee Stock Purchase Plan); provided, however, that with respect to Continuing Employees whose employment is covered by the Collective Bargaining Contract, Buyer shall cause the compensation and benefits provided to such employees from and after the Closing Date also to also be consistent with the terms of the Collective Bargaining Contract. Notwithstanding anything to the contrary in this Section 6.13, subject to the terms of the Collective Bargaining Contract, each Company or an Affiliate of a Company shall have the right to dismiss any or all of the Continuing Employees at any time on or after the Closing Date, with or without cause, and, subject to this Section 6.13 and the terms of the Collective Bargaining Contract, to change the terms and conditions of their employment (including compensation and employee benefits provided to them).
(d) To the extent consistent with the Collective Bargaining Contract, as applicable, Buyer shall cause, or shall cause the Companies to cause, each Continuing Employee and his or her eligible dependents (including all such Continuing Employee’s dependents covered immediately prior to the Closing Date by a Company Plan or a Seller Plan that is a group health plan) to be offered coverage covered under a group health plan maintained by Buyer or an Affiliate of Buyer that (i) provides medical and dental benefits to the Continuing Employee and such eligible dependents effective immediately upon the Closing Date or such other time as set forth in the Transition Services Agreement and (ii) credits such Continuing Employee, for the year during which such coverage under such group health plan begins, with any deductibles and co-payments already incurred during such year under a Company Plan or a Seller Plan that is a group health plan.
(e) Buyer shall cause, or shall cause the Companies to cause, the employee benefit plans and programs maintained after the Closing Date for by Buyer, the benefit Companies and the Affiliates of the Continuing Employees Buyer to recognize each Continuing Employee’s years of service and level of seniority prior to the Closing Date with Seller, the Companies and their Affiliates (including service and seniority with any other employer that was recognized by Seller, the Companies or their Affiliates Affiliates) for purposes of any applicable eligibility, vesting, level of benefits, and, solely for purposes of the Retirement Plan, benefit accrual to the same extent such service was recognized under the corresponding Company Plan or Seller Plan) for purposes Plan and provided that such recognition does not result in any duplication of terms of compensation and benefits under such plans and programsbenefits. Buyer shall cause, or shall cause the Companies to cause, each employee welfare benefit plan or program sponsored by Buyer or one of its Affiliates that a Continuing Employee may be eligible to participate in on or after the Closing Date to waive any preexisting condition exclusion with respect to participation and coverage requirements applicable to such Continuing Employee to the same extent such preexisting condition exclusion was not applicable waived under the corresponding Company Plan or Seller Plan immediately Plan. Seller and its Commonly Controlled Entities shall be exclusively responsible for complying with COBRA with respect to employees of the Companies and their eligible dependents by reason of such employee’s termination of employment prior to the Closing Date, and Buyer, the Companies and their Affiliates shall not have any obligation or liability to provide COBRA on account of any such termination of employment.
(f) Buyer expressly agrees that it assumes all obligations to provide any required notice under the WARN Act Worker Adjustment and Retraining Notification Act, as amended, or other applicable Laws, and, except as otherwise provided herein, and to pay all severance payments, damages for wrongful dismissal and related costs, with respect to the termination of any employee of the Companies that occurs on or after the Closing Date.
(g) Effective as of the Closing Date, Seller shall take all necessary action, if any, to cause the Continuing Employees to be fully vested in their account balances under the Reliant Resources, Inc. Union Savings Plan and the Orion Power Holdings, Inc. 401(k) Savings Plan (collectively, the “SELLER SAVINGS PLANS”) (to the extent not then fully vested) on the Closing Date. As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of each of the Seller Savings Plans to the trustee of a defined contribution plan maintained by Buyer (the “Buyer Savings PlanBUYER SAVINGS PLAN”) an amount in cash equal to the aggregate account balances of the Company Participants under the each respective Seller Savings Plans Plan determined as of the transfer date; provided, however, that (i) to the extent any Company Participant owes any amount to a Seller Savings Plan pursuant to the terms of a loan (provided such loan is not in default) from such plan to such Company Participant, an in-kind transfer of such loan shall be made in lieu of the transfer of cash, and (ii) to the extent any Company Participant’s account is invested in mutual fund shares that can be transferred to the Buyer Savings Plan, an in-kind transfer of such shares shall be made in lieu of the transfer of cash. From and after the date of such transfer, Buyer shall cause the Buyer Savings Plan to assume the obligations of the Seller Savings Plans with respect to benefits accrued by the Company Participants under the Seller Savings Plans, and the Seller Savings Plans shall cease to be responsible therefor. The Companies shall be responsible for, and shall contribute to each Seller Savings Plan as soon as practicable after the Closing Date and prior to the transfer described in this paragraph, all unpaid (A) pre-tax and after-tax contributions to such Seller Savings Plan attributable to withholdings from the compensation of employees of the Companies with respect to periods ending on or before the Closing Date and (B) employer matching contributions due with respect to pre-tax and after-tax contributions to such Seller Savings Plan by employees of the Companies for periods ending on or before the Closing Date. For purposes of determining the amount of such employer matching contributions under each the Seller Savings PlanPlans, the Closing Date shall be deemed to be the last day of a payroll period. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. Further, Buyer and Seller shall cooperate and take such actions as are necessary to permit the continuation of loan repayments by Continuing Employees to the Seller Savings Plans by payroll deductions during the period beginning on the Closing Date and ending on the date of the transfer described in this paragraph. Seller represents, covenants and agrees with respect to each of the Seller Savings PlanPlans, and Buyer represents, covenants and agrees with respect to the Buyer Savings Plan, that, as of the date of the transfer described in this paragraph, such plan will satisfy the requirements of Sections 401(a), (k401(a),(k), and (m) of the Code and will have received, or shall a pending application has been timely file filed for, a favorable determination letter from the IRS regarding such qualified status and covering amendments required to have been adopted prior to the expiration of the applicable GUST remedial amendment period.
(h) Claims of Continuing Employees and their eligible beneficiaries and dependents for medical, dental, prescription drug, life insurance, and/or other welfare benefits (“Welfare BenefitsWELFARE BENEFITS”) (other than disability benefits) and/or workers compensation benefits that are incurred on or before the Closing Date shall be the sole responsibility of Sellerthe Seller Plans or the Company Plans, whether pursuant to a Seller Plan, a Company Plan or otherwiseas applicable. Claims of Continuing Employees and their eligible beneficiaries and dependents for Welfare Benefits (other than disability benefits) and/or workers compensation benefits that are incurred on or after the Closing Date shall be the sole responsibility of Buyer and the Companies. For purposes of the preceding provisions of this paragraph, a medical/dental claim shall be considered incurred on the date when the medical/dental services are rendered or medical/dental supplies are provided, and not when the condition arose or when the course of treatment began, and a claim for workers’ compensation benefits shall be considered incurred when the injury occurred. Seller and Buyer hereby agree that any employee Claims of the Companies or any Affiliate Employee who (i) as of the day immediately preceding the Closing Date is individuals receiving or entitled to receive short-term disability benefits under a Seller Plan and who subsequently becomes eligible to receive long-term disability benefits, or (ii) as of the day immediately preceding the Closing Date is receiving or entitled to receive long-term disability benefits, shall become eligible or continue to be eligible, as applicable, to receive long-term disability benefits under a Seller Plan that is a long-term disability plan unless and until such employee is no longer disabled (subject to as of the terms Closing Date shall be the sole responsibility of such the Seller Plan). Claims Except as provided in the preceding sentence, claims of Continuing Employees and their eligible beneficiaries and dependents for short-term or long-term disability benefits that arise from disabling events that occur on or and after the Closing Date shall be the sole responsibility of Buyer and the CompaniesCompanies (without regard to whether the circumstances giving rise to such claim occurred before, on or after the Closing Date).
(i) With respect to all employees who terminated from employment with a Company prior to the Closing Date and who are listed on Schedule 6.14(i) (which schedule shall be updated no later than 30 days following the Closing Date to reflect an inclusive list of such former employees) and who have been, or are eligible to be, provided with post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverage as of the Closing Date under a Seller Plan or Company Plan, the Companies shall assume and/or retain any and all liability with respect to the provision of such coverages to such terminated employees and their eligible dependents and beneficiaries on and after the Closing Date. In addition, the Companies shall extend post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages to all Continuing Employees (and their eligible dependents and beneficiaries) who are, or who are hereafter found to be or have been, eligible for such coverages; providedcoverages and subject to such terms and conditions as set forth in the Collective Bargaining Contract, howeverCompany Plan or plan maintained by Buyer or an Affiliate of Buyer, that nothing contained herein shall be construed as limiting or restricting Buyer’s or a Company’s ability to amend, modify or terminate such post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages after the Closing Dateapplicable. Neither Seller nor any of the Non-Company Affiliates shall have any liability on or after the Closing Date with respect to the provision of post-retirement medical, dental, disability, life insurance and/or other welfare benefit coverages for those persons described in the preceding sentences of this paragraph.
(j) Except to the extent required by applicable Law, Seller shall not pay Continuing Employees (other than Affiliate Employees who are Continuing Employees, who will be paid by Seller their accrued and unused vacation as of the Closing Date) their accrued and unused vacation, and a the Company, Buyer or an Affiliate of Buyer, as applicable, shall provide, without duplication of benefits, all such Continuing Employees with vacation time rather than cash in lieu of vacation time for all accrued and unused vacation through the Closing Date to the extent the liability for such accrued but unused vacation is reflected in the Closing Date Working Capital AmountDate.
(k) As soon as practicable following the Closing Date, Seller shall cause to be transferred from the trustee of the master trust that holds the assets of the Retirement Plan as of the Closing Date to the trustee of a trust established or maintained by Buyer or a Company to hold the assets of the Retirement Plan after the Closing Date an amount of cash equal to the Retirement Plan’s share of the assets of the master trust as determined as of the transfer date in accordance with such master trust, the Code, ERISA, and the Retirement Plan by the Reliant Energy, Inc. Benefits Committee (the “Benefits CommitteeBENEFITS COMMITTEE”) (which determination shall be based on the books and records maintained by the trustee of the master trust). Such transfer shall be made in cash or in-kind as agreed to by the Benefits Committee and Buyer or the Companies. Buyer and Seller shall cooperate in making all appropriate arrangements and filings, if any, in connection with the transfer described in this paragraph. In addition, (i) effective as of on or before the Closing Date, Seller shall cause the Benefits Committee to cease to be the plan administrator and to otherwise administer any aspect of the Retirement Plan as of the Closing Date, and (ii) on the Closing Date, Buyer shall cause one of the Companies OPOS Coldwater to appoint a new plan administrator for the Retirement Plan effective as of such date.
(l) If, within . Buyer shall cause the one-year period beginning on Retirement Plan to be maintained in accordance with its current terms for the Closing Date, (i) a benefit of Continuing Employee (other than a Continuing Employee Employees whose employment is not covered by the Collective Bargaining Contract) voluntarily terminates his or her employment with Contract until at least July 29, 2006; provided, however, that if changes in the Laws require any such terms to be modified, then Buyer and its Affiliates within 30 days after the date upon which he or she is notified that the principal place of his or her employment is changing to a location that is 25 miles or more from the location of may change such employee’s principal place of employment immediately prior terms to the Closing Date, or (ii) the employment of a extent necessary to comply with such Laws. Such Continuing Employee (other than a Continuing Employee whose employment is covered by the Collective Bargaining Contract) is terminated by Buyer or an Affiliate of Buyer for a reason other than cause (as that term is defined in the Severance Plan, but based on the terms of such plan as in effect on the Execution Date), then, in any such case, Buyer Employees shall provide such Continuing Employee with severance benefits at least equal to the severance benefits which such Continuing Employee would have received be given credit under the Severance Retirement Plan had the employment of such Continuing Employee been terminated under circumstances entitling him or her to benefits under such plan. Such severance benefits shall be determined based on the terms of the Severance Plan in effect on the Execution Date, but Buyer shall take into account such Continuing Employee’s aggregate for all service with Buyer and its Affiliates and his or her pre-compensation earned through the Closing Date service recognized pursuant to Section 6.14(e).
(m) Except as specifically set forth in this Section 6.14 or in the Transition Services Agreement, Seller agrees to indemnify and hold harmless Buyerfrom Seller, the Companies and their Affiliates (including service and compensation with respect to all claims any other employer that was recognized by Seller, the Companies or their Affiliates) for purposes of determining eligibility for benefits, the amount of any benefits or benefit accruals, vesting, and liabilities service related levels of benefits under any Seller the Retirement Plan.
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