Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits. (b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic (c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan. (d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent. (e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code. (f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 4 contracts
Samples: Agreement and Plan of Merger (Alaska Communications Systems Group Inc), Agreement and Plan of Merger (Alaska Communications Systems Group Inc), Merger Agreement (Alaska Communications Systems Group Inc)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 3 contracts
Samples: Merger Agreement (Alaska Communications Systems Group Inc), Merger Agreement (ATN International, Inc.), Merger Agreement (Alaska Communications Systems Group Inc)
Employee Benefit Plan Matters. As of and subsequent to the Effective Time, Parent shall: (a) As of the Closing Date, cause the Surviving Corporation to assume and honor the Management Retention Agreements, employee bonus plans and other retention plans and agreements listed in Section 7.05(a) of the Company Disclosure Schedule; (b) for a period of twelve months following the Effective Time, Parent shall or one of its Subsidiaries will continue shall cause the Surviving Corporation to employ either (i) provide the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries who are employed immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, the “Excluded BenefitsCovered Employees”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of who remain employed during such period by Parent, the Surviving Corporation or any of their respective Subsidiaries with base pay and benefits (collectivelyexcluding equity based compensation) which are substantially comparable, in the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participateaggregate, but solely to the extent service was credited to such employee for such purposes under a comparable base pay and benefits provided by the Company Employee Plan immediately prior to and its Subsidiaries as of the Closing Date and to the extent such credit would not result in a duplication of benefits.
date hereof or (bii) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by provide or cause the Surviving Corporation or its Subsidiaries)to provide Covered Employees who remain employed during such period by Parent, the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation their respective Subsidiaries with base pay and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefitsexcluding equity based compensation) that are no less favorable substantially comparable, in the aggregate than aggregate, to those provided to similarly situated employees of the Company Parent and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
Subsidiaries; (c) From and after the Closing Date, provide all Covered Employees with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that service credit for purposes of clarityvacation accruals, to the extent such benefit coverage includes eligibility conditions based on and for eligibility, participation and vesting in any 401(k) plan of Parent or any of its Subsidiaries for all periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective continuous employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause or its Subsidiaries not to discourage, (or any such employees from consulting with Parent.
(epredecessor entities) Immediately prior to the Effective Time, and with Parent, the Surviving Corporation and any of their Subsidiaries or Affiliates on and after the Effective Time; and (d) to the extent permitted by virtue of the Merger applicable Parent employee benefit plan, cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any Parent employee benefit plan to be waived with respect to the Covered Employees and without any action on their eligible dependents, to the part of extent waived under the holders thereof, each 2018 Cash Award and Deferred Cash Award, corresponding plan in each case that is outstanding as of which the applicable Covered Employee participated immediately prior to the Effective Time. For the period commencing at the Effective Time and ending on the first anniversary thereof, Parent shall, and shall be canceled cause its Subsidiaries to, honor in accordance with their terms as in effect immediately prior to the Effective Time the severance plans maintained by the Company, or any of its Subsidiaries. Unused vacation days accrued by Continuing Employees under the plans and extinguished and, in exchange therefor, each holder policies of any such award the Company and its Subsidiaries shall have the right carry over to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of extent administratively practicable, and each such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award Continuing Employee shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified paid by the Company prior in cash for any accrued and unused vacation days that Parent determines are not administratively practicable to the Effective Timecontinue to honor. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 7.05 is intended to create any third-party beneficiaries to this Agreement. Notwithstanding anything in this Agreement to the contrary, no provision of this Agreement shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, Parent or the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Covered Employee for following the Effective Time or (ii) require the Surviving Corporation to continue any reasonCompany Employee Plan or prevent the amendment, (iii) constitute modification or termination thereof after the establishment or Effective Time in each case in accordance with the terms of such Company Employee Plan. Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall be construed as an amendment of any employee benefit plan or compensation plan, policy, agreement or other arrangement on policy of the part of ParentCompany, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation Parent or any of their respective Affiliates, or any other Person.
Appears in 3 contracts
Samples: Merger Agreement, Merger Agreement (Palm Inc), Merger Agreement (Hewlett Packard Co)
Employee Benefit Plan Matters. (a) As of For a period beginning on the Closing DateDate and ending on December 31, 2019, Parent shall provide, or shall cause to be provided, to each Continuing Employee (i) base salary and base wages in an amount no less favorable than that in effect immediately prior to the execution of this Agreement and (ii) short-term cash incentive compensation opportunities, severance benefits and other employee benefits (other than equity compensation, long-term cash incentive compensation opportunities and retention or transaction bonuses) that are substantially comparable in the aggregate to the benefits provided to such Continuing Employees immediately prior to the execution of this Agreement and pursuant to the same Company Employee Plans if those arrangements are listed on Schedule 6.06(a) or otherwise adopted in compliance with Section 6.01(b) (the “Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. Benefit Plans”).
(b) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participateCorporation, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Surviving Corporation Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Surviving Corporation Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Surviving Corporation Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Surviving Corporation Benefit Plan; provided, however, that for purposes of clarity, Plan but only to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes permitted under the comparable Company Employee Planterms and conditions of Parent’s applicable insurance Contracts in effect as of the Closing Date.
(d) The Prior to the Closing Date, the Company shall permit, and cause its Subsidiaries to permit, will reasonably cooperate with Parent to contact and make arrangements with provide updates to the Company’s or its Subsidiary’s employees regarding employment or prospective employment with Section 280G Information, if any, following the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, date hereof and to cause its Subsidiaries not to discourage, any provide such employees from consulting with other related information as reasonably requested by Parent.
(e) Immediately prior With respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the Effective Timepersonal, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall depositshall, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than to and instruct its Affiliates to, as applicable (and without duplication of benefits), assume the next regularly scheduled payroll date that is at least two Business Days following liability for such accrued personal, sick or vacation time and allow such Continuing Employee to use such accrued personal, sick or vacation time in accordance with the Closing Datepractice and policies of the Company, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments as they may be made at such other amended from time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Codetime.
(f) Parent, the Company and the Surviving Corporation acknowledge and agree that all provisions contained in this Section 6.06 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or Surviving Corporation Benefit Plan or any beneficiary thereof or any right to continued employment with Parent, Company, the Surviving Corporation or any of their Affiliates. Nothing in this Section 6.07 6.06 shall be deemed to (i) amend any Parent Company Employee Plan, any Surviving Corporation Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 2 contracts
Samples: Merger Agreement (Gurnet Holding Co), Merger Agreement (Corium International, Inc.)
Employee Benefit Plan Matters. (a) As Effective as of the Closing DateEffective Time and for a period of one (1) year thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, to each employee of the Company or any of the Company Subsidiaries who continues to be employed by the Surviving Corporation or one of its Subsidiaries will continue to employ the employees any of the Company Subsidiaries (collectively, the “Affected Employees”), (i) a base salary or regular hourly wage, whichever is applicable, and its cash incentive compensation opportunities (including for sales representatives, but excluding all retention, transaction, change in control, special bonus and other special compensation opportunities) that, in each case, are no less favorable than what was provided to such Affected Employee by the Company or any of the Company Subsidiaries immediately prior to the Effective Time, and (ii) employee benefits (excluding change in control, defined benefit pension and retiree health and welfare benefits) and perquisites that are, in the aggregate, substantially comparable to those provided to such Affected Employee (including all dependents) by the Company or any of the Company Subsidiaries immediately prior to the Effective Time (excluding change in control, defined benefit pension and retiree health and welfare benefits).
(b) Effective as of the Effective Time and thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, that periods of employment with the Company or any of the Company Subsidiaries (including any current or former Affiliate of the Company or any predecessor of the Company or any of the Company Subsidiaries) and any other periods of service recognized under any Company Benefit Plan shall be taken into account for purposes of determining, as applicable, the eligibility for participation of each Affected Employee in, the vesting of rights and benefits by each Affected Employee under, and the determination of level or amount of benefits payable to or accrued by each Affected Employee under all employee benefit plans maintained or contributed to by Parent or any Affiliate of Parent for the benefit of the Affected Employees (other than defined benefit pension plans and retiree health and welfare plans), to the same extent recognized by the Company or any of the Company Subsidiaries under comparable Company Benefit Plans immediately prior to the Effective Time; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit for the same period of service. From Effective as of the Effective Time and after thereafter, Parent shall, and shall cause the Closing DateSurviving Corporation to, use commercially reasonable efforts to (i) eliminate any period of limitation on health benefits coverage of Affected Employees due to pre-existing conditions (or actively at work or similar requirements) under the applicable health benefits plan of Parent or any Affiliate of Parent (except to the extent such condition limitations or actively-at-work or similar requirements would not have been satisfied or waived under the comparable Company Benefit Plan prior to the Effective Time), (ii) waive any and all eligibility waiting periods and evidence of insurability requirements with respect to employees such Affected Employees to the extent that any applicable eligibility waiting periods or evidence of insurability requirements under similar health benefit plans were waived or satisfied (or deemed to be satisfied) with respect to the Affected Employees under such health benefit plans (except to the extent such eligibility waiting periods and evidence of insurability requirements would not have been satisfied or waived under the comparable Company Benefit Plan prior to the Effective Time), and (iii) credit each Affected Employee with all deductible payments, co-payments, and other out-of-pocket payments paid by such employee under the health benefit plans of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee Affiliates prior to the Effective Time during the year in which the Closing occurs for the purpose of determining the extent to be recognized which any such employee has satisfied his or her deductible and whether he or she has reached the out-of-pocket maximum under any health benefit plan of Parent or an Affiliate of Parent for purposes such year. Neither the Merger nor any of eligibility the other Transactions shall affect any Affected Employee’s accrual of, or right to participate intake, and levels of benefits any accrued but unused personal, sick or vacation policies applicable to such Affected Employee immediately prior to the Effective Time.
(but not for purposes of c) Nothing in this Agreement shall confer upon any equity Affected Employee or equity-based compensation, long-term incentive, change any other Person any right to continue in control, retention the employ or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement service of Parent, the Surviving Corporation or any Affiliate of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shallParent, or shall cause interfere with or restrict in any way the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement rights of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any Affiliate of their Affiliates Parent, which rights are hereby expressly reserved, to continue discharge or amend terminate the services of any particular benefit plan before Affected Employee or after any other Person at any time for any reason whatsoever, with or without cause. Notwithstanding any provision in this Agreement to the consummation of the transactions contemplated contrary, nothing in this Agreement, and whether express or implied, shall (i) be deemed or construed to be an amendment or other modification of any such plan may be amended Company Benefit Plan or terminated in accordance with its terms and Applicable LawParent employee benefit plan, (ii) guarantee employment for create any period third-party beneficiary rights or other rights in any current or former employee or service provider of time for, the Company or preclude its Affiliates (or any beneficiaries or dependents thereof) or (iii) alter or limit the ability of Parent, Parent or the Surviving Corporation or any of their respective Affiliates to amend, modify or terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policyprogram, agreement or other arrangement on the part of Parentat any time assumed, the Surviving Corporation established, sponsored or maintained by any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personthem.
Appears in 2 contracts
Samples: Merger Agreement (AdTheorent Holding Company, Inc.), Merger Agreement (AdTheorent Holding Company, Inc.)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits other than pension arrangements (collectively, “Excluded Enumerated Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe fringe, pension arrangement, study fund, severance or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 twelve months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash and equity incentive compensation opportunities (including commissions and other than the Excluded Enumerated Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), ) and (ii) employee benefits (other than including the Excluded Enumerated Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and or its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicClosing.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, actively-at-work requirement, required physical examinations with respect to and any other restriction that would prevent immediate or full participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, actively-at-work requirement, required physical examinations and other restriction would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) use commercially reasonable efforts to provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) Parent shall comply with the covenant and acknowledgement set forth in Section 6.07(d) of the Company Disclosure Schedule with respect to the 2021 NEO Bonuses. Following the Effective Time, Continuing Employees shall participate in Parent’s bonus plans and programs and earn pro-rated bonus payments for the period commencing on the Closing Date and ending at the end of Parent’s fiscal year 2022.
(e) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 2 contracts
Samples: Merger Agreement (DSP Group Inc /De/), Merger Agreement (DSP Group Inc /De/)
Employee Benefit Plan Matters. (a) As From and after the Effective Time, Parent shall honor, and shall cause the Surviving Corporation to honor all Company Employee Plans in effect immediately before the Effective Time that by their terms provide a contractual entitlement to any employee or service provider party to or participating in such arrangements. Notwithstanding the foregoing, nothing herein, other than Section 6.05(b) and Section 6.05(d) and the terms of such arrangements, including the contractual rights of such participants, shall prevent Parent from amending or terminating any Company Employee Plan or providing compensation or benefits in its discretion.
(b) For a period of one (1) year following the Effective Time, Parent shall provide, or shall cause to be provided, to each Continuing Employee who remains employed, base salary (or base wages, as the case may be) and short-term cash incentive compensation opportunities, each of which is no less favorable than that in effect for such Continuing Employee as of immediately prior to the Effective Time. Until December 31, 2020, Parent shall provide, or shall cause to be provided, to each Continuing Employee who remains employed, welfare benefits (other than severance benefits) that are substantially comparable in the aggregate to, at Parent’s election in its sole discretion, the welfare benefits provided to such Continuing Employees immediately prior to the Effective Time or the welfare benefits provided to similarly situated employees of Parent. Nothing herein shall require Parent to continue the employment of any Continuing Employee for any period of time following the Closing.
(c) In the event that the Closing occurs prior to the Company paying annual cash incentives in respect of 2020, the Company shall pay to each participant in an annual bonus plan or program of the Company who is terminated by Parent or one of its Affiliates without cause following the Closing but prior to the payment date a bonus in respect of 2020 equal to such participant’s target annual bonus, multiplied by a fraction, the numerator of which is the number of days between January 1, 2020 and the date on which the termination occurs (or, if earlier, December 31, 2020), and the denominator of which is 365, subject to such participant’s execution of an effective release of claims, payable either, in Parent’s discretion, at the same time as all such other annual bonuses or following the effective date of the release of claims. For the avoidance of doubt, any bonuses paid pursuant to this Section 6.05(c) shall not be paid to the extent a bonus payment is already payable to a participant with respect to the same period of time pursuant to any severance agreements, arrangements, policies or otherwise entered into with the Company or Parent.
(d) Prior to the Effective Time, unless otherwise directed by Parent in writing not less than ten (10) Business Days prior to the Closing Date, to the Surviving Corporation or one of its Subsidiaries will continue to employ extent permitted by Applicable Law and the employees terms of the applicable plan or arrangement, the Company and its Subsidiaries as of shall cause the Company 401(k) Plan (the “Company 401(k) Plan”) to be terminated effective immediately prior to the Effective Time. The Company shall provide Parent with evidence that the Company 401(k) Plan has been terminated (the form and substance of which shall be subject to review and approval by Parent) not later than the day immediately preceding the Effective Time. Prior to the termination of the Company 401(k) Plan, each participant in the Company 401(k) Plan who has not yet been credited with the full five percent (5%) Company matching contribution for the plan year will be credited with a “true-up” contribution, such that after the making of such contribution, the participant will have received an amount equal to the full matching contribution. Commencing on the 120th day following the Effective Time, Parent shall permit the “rollover” of amounts held in Company 401(k) Plan accounts, as well as any notes evidencing loans under the Company 401(k) Plan, into a tax-qualified 401(k) plan maintained by Parent.
(e) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall use its reasonable best efforts to cause the service of each such Continuing Employee with the Acquired Companies prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical benefits, subsidized early retirement benefits, or any other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries its Affiliates (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
. From and after the Closing Date, with respect to Continuing Employees, Parent shall use its reasonable best efforts to cause any deductible, co-insurance and covered out-of-pocket expenses paid on or before the Closing Date by any Continuing Employee (bor eligible dependent thereof) For a period to be taken into account for purposes of 12 months satisfying the corresponding deductible, coinsurance and maximum out-of-pocket provisions from and after the Closing Date (or, if shorter, for so long as under any applicable Parent Benefit Plan in the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), same plan year in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to which the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicoccurs.
(cf) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or use its applicable Subsidiary to, use commercially reasonable best efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided.
(g) Parent, howeverthe Company and the Surviving Corporation acknowledge and agree that all provisions contained in this Section 6.05 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, that for purposes of clarityincluding any Company Employee, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing any participant in any Company Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Plan or Parent Benefit Plan in satisfying or any applicable co-payment beneficiary thereof or deductible requirements under such Parent Benefit Plan for the applicable calendar year, any right to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective continued employment with Parent, Company, the Surviving Corporation after the Effective Time and for the purpose or any of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”)their Affiliates. From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 6.05 shall be deemed to (i) amend any Company Employee Plan, any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Alexion Pharmaceuticals, Inc.), Merger Agreement (Portola Pharmaceuticals Inc)
Employee Benefit Plan Matters. (a) As of From and after the Closing DateEffective Time, Parent shall honor, and shall cause the Surviving Corporation to honor all Company Employee Plans in effect immediately before the Effective Time that by their terms provide a contractual entitlement to any employee or service provider party to or participating in such arrangements. Notwithstanding the foregoing, nothing herein, other than Section 6.5(b) and the terms of such arrangements, including the contractual rights of such participants, shall prevent Parent from amending or terminating any Company Employee Plan or providing compensation or benefits in its discretion.
(b) For a period of one (1) year following the Effective Time, Parent shall provide, or shall cause to be provided, to each Continuing Employee (who is not covered by a collective bargaining agreement) who remains employed (i) base salary or base wages and short-term cash incentive compensation opportunities and discretionary bonus opportunities (other than equity-based or other long-term incentive compensation opportunities) that are no less favorable in the aggregate than those provided to such Continuing Employee as of its Subsidiaries will continue the Effective Time, and (ii) health and welfare benefits and other employee benefits (other than severance payments and benefits and deferred compensation) that are substantially comparable in the aggregate than those provided to employ such Continuing Employee as of the Effective Time.
(c) If the Effective Time occurs prior to the date in 2021 that annual bonus payments in respect of calendar year 2020 are paid to employees of the Company and its the Company Subsidiaries as in the ordinary course of business consistent with past practice (the “Ordinary 2020 Bonus Payment Date”) pursuant to the terms of the Effective Time. Company’s Amended and Restated Performance-Based Bonus Plan, effective January 1, 2016, short-term incentive bonus arrangements for Vice President-level employees and the Acquired Companies’ discretionary cash bonus practices (collectively, the “Company Bonus Plans”), then Parent shall (or cause the Surviving Corporation to) pay to each Continuing Employee who participates in one or more of the Company Bonus Plans an annual bonus in respect of calendar year 2020 pursuant to the Company Bonus Plans on the Ordinary 2020 Bonus Payment Date in accordance with the terms of the applicable Company Bonus Plan; provided, that all individual performance measures in respect of calendar year 2020 shall be assessed at one-hundred percent (100%).
(d) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall use its reasonable best efforts to cause the service of each such Continuing Employee with the Acquired Companies prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree medical health or similar benefits (collectively, “Excluded Benefits”)welfare plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries its Affiliates (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(ce) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; Plan and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in by the calendar year that, and Continuing Employee or his or her dependents prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan Closing Date in satisfying any applicable codeductible or out-payment or deductible of-pocket requirements under such any Parent Benefit Plan for covering such Continuing Employees or his or her dependents on or after the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee PlanClosing Date.
(df) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior Prior to the Effective Time, if requested by virtue Parent in writing not less than ten (10) Business Days prior to the Closing Date, to the extent permitted by Applicable Law and the terms of the Merger and without any action on applicable plan or arrangement, the part of Company shall cause the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of Company 401(k) Plan (the “Company 401(k) Plan”) to be terminated effective immediately prior to the Effective Time. In the event that Parent requests that the Company 401(k) Plan be terminated, (i) the Company shall provide Parent with evidence that such plan has been terminated (the form and substance of which shall be canceled subject to review and extinguished andapproval by Parent) not later than the day immediately preceding the Effective Time and (ii) Parent shall cause a tax-qualified defined contribution retirement plan designated by Parent (the “Parent 401(k) Plan”) to permit each Continuing Employee to make rollover contributions of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code, including loans) in the form of cash, notes or a combination thereof, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of account balance distributed or distributable to such award Continuing Employee from the Company 401(k) Plan to the Parent 401(k) Plan.
(such amounts payable hereunderg) Parent, the “Cash Award Payments”). From Company and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described Surviving Corporation acknowledge and agree that all provisions contained in this Section 6.07(e) 6.5 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or Parent Benefit Plan or any beneficiary thereof or any right to continued employment with respect to (i) the 2018 Cash Awards shall be made by Parent, Company, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms any of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) their Affiliates. Nothing in this Section 6.07 6.5 shall be deemed to (i) amend any Company Employee Plan, any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 2 contracts
Samples: Merger Agreement (Goldfield Corp), Merger Agreement (Goldfield Corp)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries Effective as of the Effective TimeTime and for a period of one (1) year thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, to each employee of the Company who continues to be employed by the Company or the Surviving Corporation (the “Affected Employees”), (i) a base salary or regular hourly wage, whichever is applicable, and bonus opportunities and sales and service incentive award compensation opportunities (excluding all equity-based compensation) that are substantially comparable in the aggregate to what was provided to such Affected Employee by the Company immediately prior to the Effective Time and (ii) employee benefits (excluding severance, retention, change in control, transaction bonus, and defined benefit pension benefits and retiree health and welfare benefits) that are, in the aggregate, substantially comparable to those provided to such Affected Employee (including all dependents) by the Company immediately prior to the Effective Time (excluding severance, retention, change in control, transaction bonus, and defined benefit pension benefits and retiree health and welfare benefits). From Effective as of the Effective Time and after thereafter, Parent shall provide, or shall cause the Closing DateSurviving Corporation to provide, that periods of employment with the Company (including, without limitation, any current or former Affiliate of the Company or any predecessor of the Company) and any other periods of service recognized under any Company Benefit Plan shall be taken into account for purposes of determining, as applicable, the eligibility for participation of each Affected Employee in, the vesting of rights and benefits by each Affected Employee under, and the determination of level or amount of benefits payable to or accrued by each Affected Employee under all employee benefit plans maintained or contributed to by Parent or an Affiliate of Parent for the benefit of the Affected Employees, other than defined benefit pension plans, severance plans and retiree health and welfare plans; provided, that no such service credit shall be recognized to the extent that it would result in a duplication of benefits with respect to employees the same period of services. Effective as of the Effective Time and thereafter, Parent shall, and shall cause the Surviving Corporation to, use commercially reasonable efforts to (x) reduce any period of limitation on health benefits coverage of Affected Employees due to pre-existing conditions (or actively at work or similar requirements) under the applicable health benefits plan of Parent or an Affiliate of Parent, (y) waive any and all eligibility waiting periods and evidence of insurability requirements with respect to such Affected Employees to the extent that any applicable eligibility waiting periods or evidence of insurability requirements under similar health benefit plans were waived or satisfied (or deemed to be satisfied) with respect to the Affected Employees under such health benefit plans and (z) credit each Affected Employee with all deductible payments, co-payments, and other out-of-pocket payments paid by such employee under the health benefit plans of the Company or its Subsidiaries immediately before Affiliates prior to the Effective Time who continue employment with Parent, Closing Date during the Surviving Corporation year in which the Closing occurs for the purpose of determining the extent to which any such employee has satisfied his or her deductible and whether he or she has reached the out-of-pocket maximum under any Subsidiary health benefit plan of Parent or an Affiliate of Parent for such year. Neither the Surviving Corporation following the Closing Date (“Continuing Employees”)Merger nor any other transaction contemplated hereby shall affect any Affected Employee’s accrual of, Parent shall cause the service of each or right to take, any accrued but unused personal, sick or vacation policies applicable to such Continuing Affected Employee immediately prior to the Effective Time Time.
(b) Nothing in this Agreement shall confer upon any Affected Employee any right to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity continue in the employ or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement service of Parent, the Surviving Corporation or any Affiliate of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shallParent, or shall cause interfere with or restrict in any way the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability rights of Parent, the Surviving Corporation or any Affiliate of their respective Affiliates Parent, which rights are hereby expressly reserved, to discharge or terminate the employment of, services of any Continuing Affected Employee at any time for any reasonreason whatsoever, (iii) constitute with or without cause, except to the establishment or amendment of any benefit or compensation plan, policy, extent expressly provided otherwise in a written agreement or other arrangement on the part of between Parent, the Surviving Corporation Corporation, the Company or any Affiliate of their Affiliates Parent and the Affected Employee. Notwithstanding any provision in this Agreement to the contrary, nothing in this Section 6.07(b) shall (x) be deemed or construed to be an amendment or other modification of any Company Benefit Plan or Parent employee benefit plan, or (ivy) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor current or former employee or service provider of Parent, the Surviving Corporation Company or its Affiliates (or any of their respective Affiliates, beneficiaries or any other Persondependents thereof).
Appears in 2 contracts
Samples: Merger Agreement (Del Taco Restaurants, Inc.), Merger Agreement (Jack in the Box Inc /New/)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries Effective as of the Effective Time. From and Closing, Buyer shall cause the appropriate Transferred Company to (i) continue the employment immediately after the Closing Date, with respect to employees of each person who is a U.S. Business Employee as of the Company Closing, whether or its Subsidiaries immediately before the Effective Time not then actively at work, including any U.S. Business Employees who continue employment with Parentare on vacation leave, the Surviving Corporation leave of absence or any Subsidiary of Parent or the Surviving Corporation following the Closing Date disability leave (“Continuing EmployeesU.S. Employee”), Parent shall cause (ii) provide each Continuing U.S. Employee (other than Continuing Employees who are represented by unions or whose services are performed pursuant to an employment agreement) with compensation, benefits and other terms of employment which are substantially equivalent to the compensation, benefits and other terms of employment in effect for similarly situated employees of Buyer and (iii) recognize the service of each such Continuing U.S. Employee prior to with the Effective Time to be recognized Transferred Companies or any Affiliate of the Transferred Companies before the Closing Date as service with Buyer and its Affiliates for purposes of eligibility to participate in, and levels of benefits vesting (but not for purposes any other purpose, such as benefit accrual or level of benefits) under the benefit plans provided to Continuing U.S. Employees by Buyer and its Affiliates on and after Closing (but only to the extent such service was recognized under similar plans maintained by Seller and its Affiliates prior to Closing).
(b) Effective as of the Closing, Seller shall amend its Benefit Plans to the extent necessary to provide that the Transferred Companies shall withdraw from participation in all Benefit Plans maintained by Seller for Continuing Employees, and Buyer, or the appropriate Transferred Company, shall continue to be responsible for any Benefit Plan that is maintained by one or more of the Transferred Companies solely for Continuing Employees (and former employees of the Business) (“Company Benefit Plans”).
(c) Effective as of the Closing, Buyer shall cause the appropriate Transferred Companies to honor the terms of any equity collective bargaining agreement covering any of the Continuing U.S. Employees and to continue to provide any compensation or equity-based compensationemployee benefits required to be provided under the terms of any such collective bargaining agreement.
(d) Buyer shall credit, long-term incentiveor cause to be credited, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) underand pay if and when due, each compensationContinuing U.S. Employee with the unused vacation days and any personal days and sick days accrued in accordance with applicable Law and the vacation and personnel policies and labor agreements applicable to Continuing U.S. Employees as of the Closing Date. All such amounts shall be reflected as liabilities in the determination of Closing Working Capital.
(e) Effective as of the Closing, retirementBuyer shall (i) establish or maintain, vacationor cause to be established or maintained, paid time off, fringe one or other welfare benefit plan, program or arrangement of Parent, more group health plans which shall cover all Continuing U.S. Employees and dependents who immediately prior to the Surviving Corporation Closing were covered under any group health plan maintained by Seller or any of their Subsidiaries its Affiliates, (collectively, the “Parent Benefit Plans”ii) in which waive any Continuing Employee is waiting period and any exclusion or becomes eligible to participate, limitation for preexisting conditions under any such group health plan (but solely only to the extent service was credited to such employee waiting period and pre-existing condition limitation were satisfied) under any group health plan maintained by Seller or any of its Affiliates as of the Closing Date and (iii) grant credit (for purposes of annual deductibles, co-payments and out-of-pocket limits) for the dollar amount of such purposes under a comparable Company Employee Plan immediately similar amounts satisfied by such individual prior to the Closing Date and to during the extent such credit would not result calendar year in a duplication of benefits.
(b) For a period of 12 months after which the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed occurs under any group health plan maintained by the Surviving Corporation Seller or any of its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeAffiliates.
(f) Nothing Seller shall be responsible for providing continuation of group health coverage required by Section 4980B of the Code or Sections 601 through 608 of ERISA (“COBRA”) or other similar applicable Laws to any U.S. Business Employee, former employee of the Business conducted in this the United States or any “qualified beneficiary” (within the meaning of Section 6.07 4980B of the Code) of any such U.S. Business Employee or former employee of the Business conducted in the United States who incurs a “qualifying event” (within the meaning of Section 4980B of the Code) prior to the Closing Date. Buyer shall be responsible on and after the Closing Date for providing continuation of group health coverage required by COBRA or other similar applicable Laws to any Continuing U.S. Employee, or any “qualified beneficiary” (within the meaning of Section 4980B of the Code) of any such U.S. Business Employee who incurs a “qualifying event” (within the meaning of Section 4980B of the Code) on or after the Closing Date.
(g) Seller shall be responsible for any covered claims incurred prior to the Closing by U.S. Business Employees under any Benefit Plan (other than under any U.S. Company Benefit Plan), and Buyer shall be responsible for any covered claim incurred under any U.S. Company Benefit Plan (whether before or after the Closing) or under any employee benefit plan maintained by Buyer or its Affiliates on and after the Closing. For purposes of the foregoing, a claim shall be deemed to be incurred at the time services, with respect to such claim, are rendered and not at the time claim for payment is made. Seller shall be responsible for providing long term disability benefits to any U.S. Business Employee who is receiving long term disability benefits under Seller’s long term disability plan as of the Closing; and Buyer shall be responsible for providing long term disability benefits to any U.S. Business Employee who has incurred an injury or illness prior to Closing but has not qualified for long term disability benefits under Seller’s long term disability plan as of the Closing (including any requirement to complete a waiting or elimination period).
(h) Buyer shall take all steps necessary to permit each U.S. Continuing Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from Seller’s Profit Sharing/401(k) Plan for the Employees of Rockwood Specialties, Inc. to roll over such eligible rollover distribution, including any associated loans, as part of any lump sum cash distribution into an account(s) under a 401(k) plan maintained by Buyer or a Transferred Company.
(i) amend any Parent Benefit Plan or to require ParentSeller shall, as promptly as practicable following the Surviving Corporation or any date of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, notify U.S. Business Employees who have health care spending accounts or dependent care spending accounts under any Benefit Plan that claims under such plans will not be allowed following the Closing.
(j) Buyer shall take all steps necessary to permit each Continuing US. Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from Seller’s Profit Sharing/401(k) Plan for Employees of Rockwood Specialties, Inc. to roll over such eligible rollover distribution as part of any lump sum cash distribution into an account(s) under a 401(k) plan maintained by Buyer or a Transferred Company and any will use reasonable efforts to permit the rollover of outstanding loan balances of Continuing U.S. Employees who elect to roll over their distributions.
(k) Upon request, Seller shall provide to Buyer, and Buyer shall provide to Seller, such plan documents, data and information as may reasonably be amended or terminated in accordance with its terms necessary to implement the provisions of this Section 9.2 and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of to administer their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personplans.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Om Group Inc), Stock Purchase Agreement (Rockwood Specialties Group Inc)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its the Company Subsidiaries immediately before the Effective Time who continue employment with Parent, are employed by the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and the Company Subsidiaries prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation Corporation, but not including any sabbatical or any of their Subsidiaries equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after immediately following the Closing Date Date, Parent shall provide benefits (orexcluding any equity or equity-based plan, if shorter, program or arrangement) for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee Employees who are not covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount labor agreement at least equal to as favorable in the level aggregate as the benefits (excluding any equity or opportunity equity-based plan, program or arrangement) that was provided to each such Continuing Employee Employees had at the Company immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicDate.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, Plan but only to the extent such benefit coverage includes eligibility permitted under the terms and conditions based on periods of employment, Section 6.07(a) shall control; Parent’s applicable insurance contracts in effect as of the Closing Date and (ii) provide each Continuing Employee and their eligible dependents with to the extent permitted under the applicable Parent Benefit Plan, credit for any co-payments and or deductibles paid by Continuing Employees in the calendar plan year that, and prior to in which the date that, such Continuing Employee commences participation in such Parent Benefit Plan in Closing occurs for purposes of satisfying any applicable deductible or co-payment or deductible requirements under such the applicable Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The No later than twenty (20) Business Days following the date of this Agreement, with respect to each “officer” of the Company (as defined in Rule 16a-1 promulgated under the Exchange Act) (each a “Section 16 Officer”) and any other “disqualified individual” of the Company (as defined in Section 280G(c) of the Code), the Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with furnish a schedule that sets forth (i) the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity reasonable, good faith estimate of the businessmaximum amount (separately identifying single and double-trigger amounts and any tax gross-up payments) that could be paid to such Section 16 Officer or other disqualified individual as a result of any of the Transactions (alone or in combination with any other event), (ii) the “base amount” (as defined in Section 280G(b)(3) of the Code) for each such Section 16 Officer or other disqualified individual, and (iii) underlying documentation on which such calculations are based. The schedules and underlying documentation required by this Section 6.06(d) shall be updated and delivered to Parent not later than five (5) Business Days prior to the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parentanticipated Closing Date.
(e) Immediately prior to Parent, the Effective Time, by virtue of the Merger Company and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From acknowledge and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described agree that all provisions contained in this Section 6.07(e) 6.06 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or Parent Benefit Plan or any beneficiary thereof or any right to continued employment with respect to (i) the 2018 Cash Awards shall be made by Parent, Company, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms any of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) their Affiliates. Nothing in this Section 6.07 6.06 shall be deemed to (i) amend any Company Benefit Plan, any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law.
(f) Following the Closing, (iiParent shall take the actions set forth on Section 6.06(f) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonCompany Disclosure Schedules.
Appears in 2 contracts
Samples: Merger Agreement (Actuate Corp), Merger Agreement (Open Text Corp)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to all employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Company Subsidiary of Parent or the Surviving Corporation following at the Closing Date (“Continuing Employees”), Parent Buyer shall cause the service of each such Continuing Employee prior to with the Effective Time Company, the Company Subsidiaries and all of their respective predecessors to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits benefits, vesting and benefit accrual (but not for purposes of excluding benefit accrual under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plans) under, under each compensation, retirement, vacation, paid time off, fringe or other welfare employee benefit plan, program or arrangement of Parentthe Company, the Surviving Corporation Buyer or any of their Subsidiaries respective Affiliates (collectively, the “Parent Buyer Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely participate to the extent such service was credited to such employee for such purposes recognized under a comparable Company Employee Plan immediately prior to the Closing Date and Closing, except to the extent such credit would not result in a duplication of benefits. Additionally, each Continuing Employee shall be immediately eligible to participate, without any waiting time, in any and all Buyer Benefit Plans to the extent coverage under such Buyer Benefit Plan replaces coverage under a comparable Company Employee Plan in which such Continuing Employee participated immediately before the replacement.
(b) For a period of 12 twelve (12) months after immediately following the Closing Date (orDate, if shorterBuyer shall, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or shall cause its Subsidiaries)Affiliates to, the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide to each Continuing Employee (other than Employee, while employed with Buyer or any employee covered by a Collective Bargaining Agreementof its Affiliates, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual the hourly wage or base salary or base hourly rate and target bonus opportunity (B) cash incentive compensation opportunities (including commissions and other than excluding, for the Excluded Benefitsavoidance of doubt, equity based compensation), in each case case, that are no less than those in an amount at least equal to the level or opportunity that was provided to each effect for such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefitsparticipation in a defined benefit pension plan) that are no less at least as favorable in the aggregate than to such Continuing Employee as those provided to similarly situated employees of the Company and its Subsidiaries such Continuing Employee immediately prior to the Closing to under the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicCompany Employee Plans.
(c) From Without limiting the generality of Section 7.06(a), from and after the Closing Date, with respect to each Parent Buyer Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent Buyer shall, or shall cause the Surviving Corporation or its applicable Subsidiary Affiliates to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, actively-at-work requirements, required physical examinations and other conditions and exclusions with respect to participation and coverage requirements applicable under such Parent Buyer Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods periods, requirements and required physical examinations exclusions would not have applied or would have been satisfied or waived under the corresponding Company Employee Plan in which such Continuing Employee (or eligible dependent) was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; Closing and (ii) provide each credit all co-payments, deductibles and other expenses paid by Continuing Employee Employees and their eligible dependents with credit for any co-payments and deductibles paid under the corresponding Company Employee Plan in the calendar plan year that, and prior to the date that, such Continuing Employee commences in which their participation in such Parent Buyer Benefit Plan in begins for purposes of satisfying any applicable deductible, co-payment or deductible payment, co-insurance and maximum out-of-pocket requirements under such Parent Buyer Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permitFrom and after the Closing Date, Buyer will honor, and will cause the Company and its Subsidiaries to permithonor, Parent to contact in accordance with their terms as in effect on the Closing Date, all existing employment, retention, incentive, change in control and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and severance agreements between the Company agrees not to discourage, or any Company Subsidiary and to cause its Subsidiaries not to discourage, any such employees from consulting with ParentContinuing Employee.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any Parent shall take all action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) necessary with respect to (ithe Parent Plan’s listed on Section 7.06(e) of the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date Seller Disclosure Schedules to cause each award or benefit under any such Parent Plan that is at least two Business Days following held by a Continuing Employee to vest in full as of the Closing Date, and (ii) the Deferred Cash Awards . Parent shall be made within five Business Days following the Closing Date; provided, that solely responsible for all obligations with respect to such payments may be made at such other time awards or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, benefits granted to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeContinuing Employees.
(f) Nothing Buyer, Parent and Seller acknowledge and agree that all provisions contained in this Section 6.07 7.06 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any right to continued employment or service with Buyer, the Company or any of their respective Affiliates. Without limiting the generality of the foregoing, nothing in this Section 7.06 shall be deemed to (i) amend any Parent Company Employee Plan or Buyer Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period limit the right of time for, or preclude the ability of Parentrequire Buyer, the Surviving Corporation Company or any of their respective Affiliates to amend, merge or terminate the employment of, any Continuing Company Employee for any reason, (iii) constitute the establishment Plan or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonBuyer Benefit Plan.
Appears in 1 contract
Samples: Membership Interest Purchase Agreement (Actua Corp)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Acceptance Time who continue employment with Parent, are employed by the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Control Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and its ERISA Affiliates prior to the Effective Control Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation Corporation, but not including any sabbatical or any of their Subsidiaries equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date Acceptance Time and to the extent such credit would not result in a duplication of benefits.
(b) For a period of not less than 12 months after immediately following the Closing Date Acceptance Time, Parent shall provide Continuing Employees, considered in the aggregate, with base salary, annual bonus opportunity and employee benefits (orexcluding any equity or equity-based plan, if shorter, for so long as program or arrangement) in the applicable Continuing Employee remains employed aggregate no less favorable than those provided by the Surviving Corporation or its Subsidiaries), Company and the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal Company Subsidiaries to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent Employees as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicthis Agreement.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, employment Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their his eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The At least ten (10) days prior to the Closing Date, the Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with provide the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity reasonable, good faith estimate of the business, and amount that could be paid to each “disqualified individual” of the Company agrees not to discourage(as defined in Section 280G(e) of the Code) as a result of any of the transactions contemplated by this Agreement (alone or in combination with any other event) and a copy of the estimated calculations and reasonable supporting documentation in connection therewith, and to cause its Subsidiaries not to discourage, any including the “base amount” (as defined in Section 280G(b)(3) of the Code) for each such employees from consulting with Parentdisqualified individual.
(e) Immediately prior to Parent, the Effective Time, by virtue of the Merger Company and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From acknowledge and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described agree that all provisions contained in this Section 6.07(e) 6.07 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or any beneficiary thereof or any right to continued employment with respect to (i) the 2018 Cash Awards shall be made by Parent, Company, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms any of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) their Affiliates. Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Merger Agreement (Zoll Medical Corp)
Employee Benefit Plan Matters. (a) As Effective immediately prior to the Closing, Parent and the Acquired Company shall execute any documents necessary to effectuate the removal of the Closing Date, Acquired Company as a participating employer in the Surviving Corporation 401(k) plan maintained by Parent or one of its Subsidiaries will continue Affiliates (the “Parent 401(k) Plan”), and the Acquired Company shall not make any further contributions to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, Parent 401(k) Plan with respect to employees any Acquired Company employees, other than (i) contributions made on behalf of the Company or its Subsidiaries immediately such participants that are based on compensation earned before the Effective Time who continue employment with Parent, the Surviving Corporation or Closing and (ii) any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior corrective contributions that relate to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, period ending on the Surviving Corporation or any of their Subsidiaries (collectively, day before the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefitsClosing.
(b) For a period of 12 months after Effective immediately prior to the Closing Date (orClosing, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) Parent and the Acquired Company shall execute any documents necessary to effectuate the removal of the Acquired Company as a participating employer in the respective health and welfare plans maintained by Parent or one of its Affiliates (Athe “Parent Health and Welfare Plans”) annual base salary or base hourly rate and (Bii) cash incentive compensation opportunities any Acquired Company employees (including commissions and other than their eligible dependents and beneficiaries) who are enrolled in any of the Excluded Benefits)respective Parent Health and Welfare Plans shall cease to be eligible for continued coverage under such plans, in each case in an amount at least equal except to the level extent such Acquired Company employees did not receive or opportunity that was provided to each such Continuing Employee accept an offer of employment with Buyer or is not otherwise transferring with the Business. For the avoidance of doubt, any claims incurred prior to the Closing Date under a Parent Health and Welfare Plan by an Acquired Company employee (or his or her dependent or beneficiary) shall be submitted and subject to the extent disclosed to Parent as terms and conditions of the date hereof applicable Parent Health and Welfare Plan.
(c) Parent shall be responsible for providing COBRA continuation coverage to all (i) employees with respect to the Business (and their eligible dependents) who experience a COBRA qualifying event on or modified hereafter in accordance with Section 6.01), prior to the Closing and timely elect COBRA coverage and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, former employees with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to Business (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was dependents) who experience a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based COBRA qualifying event on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective TimeClosing, Parent shall depositincluding any “M&A qualified beneficiary” (as defined in Treasury Regulation Section 54.4980-9, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing DateQ&A-4(a)), and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time who timely elect or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Codeelected COBRA continuation coverage.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits. Parent shall assume any and all vacation balances of Continuing Employees, and shall assume all costs and notice obligations incurred in connection with terminations of non-Continuing Employees.
(b) For a period of not less than 12 months after the Closing Date (orDate, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) shall provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities target opportunity (including commissions and other than but excluding specified performance goals for any cash incentive compensation in respect of any calendar year after the Excluded Benefits2017 calendar year), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)Date, and (ii) employee benefits (other than the Excluded Benefitsequity awards) that are no less favorable substantially comparable in the aggregate than to those provided to similarly situated employees of the Company and its Subsidiaries each such Continuing Employee immediately prior to the Closing Date. Parent shall also honor the Company’s annual cash incentive bonus plans in effect for the 2017 calendar year, and shall provide each Continuing Employee with a cash incentive bonus for 2017 which shall be paid consistent with the Company’s prior bonus payment timing, but in no event later than March 15, 2018. Each Person listed on Schedule 6.07(b) shall receive his or her pro-rated target cash bonus with respect to 2017 in connection with and at the Effective Time of the Merger, and the bonus amount payable to such Person following the conclusion of the 2017 fiscal year shall be reduced by any pro-rated target cash bonus paid with respect to 2017 at the Effective Time. In addition, Parent shall (i) assume and honor the terms of the severance agreements listed on Schedule 6.07(b) and provide the severance payments and benefits required thereunder to be provided to any employee of the Company or any of its Subsidiaries, subject to the extent disclosed terms and conditions of such agreements and (ii) for a period of 12 months after the Closing Date, honor the terms of Company’s and its Subsidiaries’ severance policies generally applicable to Parent all employees as in effect as of the Closing Date. Between the date hereofhereof and the Closing Date, the Company may, subject to Parent’s consent, and the Parent and the Company will work in each case without giving effect good faith to, implement changes to any reduction in annual base salary, base hourly rate, the Company’s 2017 cash incentive compensation opportunities or employee benefits in response bonus plan for VP and director level employees to or otherwise related be effective as of the Closing Date, which changes will be designed to facilitate the coronavirus (COVID-19) pandemicretention of such employees.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable best efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company From and after the Closing Date, Parent shall permithonor, and shall cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not their respective Subsidiaries to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Awardhonor, in accordance with its terms, (i) each case that is outstanding existing (as of immediately prior to the Effective Time) employment, shall be canceled change in control, retention, severance and extinguished andtermination protection plan, in exchange thereforpolicy or agreement of or between the Company or any of its Subsidiaries and any current or former officer, each holder director or employee of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal that company to the full amount of such award (such amounts payable hereunderextent set forth on Schedule 6.07(b), the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following all obligations in effect as of the Effective Time consistent with the terms under any “Merger Bonus Agreement” as defined and set forth in Part 4.16(d) of the 2018 Cash Award or Deferred Cash AwardCompany Disclosure Schedule, (iii) all obligations in effect as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeEffective Time under any bonus or bonus deferral plans, programs or agreements of the Company or its Subsidiaries and (iv) all vested and accrued benefits under any Company Employee Plan. Parent acknowledges that the transaction contemplated hereby shall constitute a “change in control” for purposes of each Company Employee Plan set forth on Schedule 6.07(d) that uses such term.
(fe) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law. The provisions of this Section 6.07 are for the sole benefit of the parties hereto and nothing herein, express or implied, is intended or shall be construed to confer upon or give to any person (ii) guarantee including any Continuing Employee), other than the parties to this Agreement and their respective successors and permitted assigns, any legal or equitable or other rights or remedies under or by reason of any provision of this Section 6.07. Nothing contained herein, express or implied is intended to confer upon any Continuing Employee any right to employment or continued employment for any period of time forby reason of this Agreement, or preclude the ability any right to a particular term or condition of Parent, the employment.
(f) The Surviving Corporation or any its Subsidiaries (as applicable) shall continue to abide by the terms of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights Union Agreements while such Union Agreements are in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personeffect.
Appears in 1 contract
Employee Benefit Plan Matters. Subject to Section 7.8(c), Parent agrees as follows:
(a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date Effective Time (the “Continuing Employees”), subject to the ability to do so under the terms of each Parent Benefit Plan and applicable Law, with respect to each Parent Benefit Plan in which any Continuing Employees will participate after the Closing Date, Parent shall, or shall cause the Surviving Corporation and its Subsidiaries to, recognize all service of each such the Continuing Employee prior to Employees with the Effective Time to be recognized Company or any of its Subsidiaries, as the case may be, for purposes of eligibility to participate ineligibility, participation and levels vesting and, in the case of any Parent Benefit Plan that provides vacation benefits or any other form of paid time-off benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar plan), for purposes of levels of benefits (collectivelyand benefit accrual, “Excluded Benefits”)) under, in each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement case subject to the terms of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “applicable Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefitsapplicable Law.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents dependents, other than limitations or waiting periods that are already in effect with respect to such Employees and that have not been satisfied as of the Closing Date under any corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan, to the same extent that such pre-existing conditions, waiting periods and required physical examinations exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanBenefit, Plan but solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date; provided, however, provided that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, employment Section 6.07(a7.8(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(dc) The Parent, the Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time acknowledge and agree that all provisions contained in this Section 7.8 are included for the purpose of ensuring the continuity sole benefit of the businessrespective parties to this Agreement and shall not create any right in any other Person, and the Company agrees not to discourageincluding any employees, and to cause its Subsidiaries not to discourageformer employees, any such employees from consulting participant in any Company Employee Plan or any beneficiary thereof or any right to continued employment with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereofCompany, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount or any of such award (such amounts payable hereunder, the “Cash Award Payments”)their Affiliates. From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 7.8 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As From and after the Effective Time, Tempranillo shall honor, and shall cause the Surviving Corporation to honor all Lafite Employee Plans in effect immediately before the Effective Time that by their terms provide a contractual entitlement to any employee or service provider party to or participating in such arrangements. Notwithstanding the foregoing, nothing herein, other than Section 7.03(b) and the terms of such arrangements, including the Closing Datecontractual rights of such participants, shall prevent Tempranillo from amending or terminating any Lafite Employee Plan or providing compensation or benefits in its discretion.
(b) For a period of one (1) year following the Effective Time, Tempranillo shall provide, or shall cause to be provided, to each Continuing Employee who remains employed with the Surviving Corporation or one any Subsidiary of the Surviving Corporation (i) base salary and base wages and short-term cash incentive compensation opportunities that are, in each case, no less favorable than those in effect for such Continuing Employee as of immediately prior to the Effective Time, and (ii) other employee compensation and benefits(excluding long-term incentive, equity and equity-based compensation and deferred compensation) that, in each case, are substantially similar to the employee compensation and benefits provided to such Continuing Employee by Lafite or any of its Subsidiaries will continue immediately prior to employ the employees of the Company and its Subsidiaries as of the Effective Time. .
(c) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent Tempranillo shall cause the service of each such Continuing Employee with Lafite and its Subsidiaries prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits benefits, benefit accruals (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or similar benefits (collectivelybenefits, “Excluded Benefits”)) undersubsidized early retirement benefits, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”other similar benefits) and vesting under each Tempranillo Employee Plan in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee Continuing Employee for such purposes under a comparable Company Lafite Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(cd) From and after the Closing Date, with respect to each Parent Benefit Tempranillo Employee Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or Tempranillo shall cause the Surviving Corporation or use its applicable Subsidiary to, use commercially reasonable best efforts to cause each such Parent Benefit Tempranillo Employee Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Tempranillo Employee Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Lafite Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Tempranillo Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries Effective as of the Effective Time. From Time and after for a period of one (1) year thereafter, Parent shall provide, or shall cause the Closing DateSurviving Corporation to provide, with respect to employees each employee of the Company or its Subsidiaries immediately before who continues to be employed by the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent Company or the Surviving Corporation following (the Closing Date (“Continuing Affected Employees”), Parent shall cause (i) a base salary or regular hourly wage, whichever is applicable, and bonus opportunities and sales and service incentive award compensation opportunities (excluding all equity-based compensation) that are substantially comparable in the service of each aggregate to what was provided to such Continuing Affected Employee by the Company immediately prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of (ii) employee benefits (but not for purposes of any equity or equity-based compensationexcluding severance, long-term incentiveretention, change in control, retention or other one-time or special incentive compensationtransaction bonus, and defined benefit pension benefits and retiree health and welfare benefits) that are, in the aggregate, substantially comparable to those provided to such Affected Employee (including all dependents) by the Company immediately prior to the Effective Time (excluding severance, retention, change in control, transaction bonus, and defined benefit pension benefits and retiree health and welfare benefits). Effective as of the Effective Time and thereafter, Parent shall provide, or retiree medical shall cause the Surviving Corporation to provide, that
(b) Nothing in this Agreement shall confer upon any Affected Employee any right to continue in the employ or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement service of Parent, the Surviving Corporation or any Affiliate of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shallParent, or shall cause interfere with or restrict in any way the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability rights of Parent, the Surviving Corporation or any Affiliate of their respective Affiliates Parent, which rights are hereby expressly reserved, to discharge or terminate the employment of, services of any Continuing Affected Employee at any time for any reasonreason whatsoever, (iii) constitute with or without cause, except to the establishment or amendment of any benefit or compensation plan, policy, extent expressly provided otherwise in a written agreement or other arrangement on the part of between Parent, the Surviving Corporation Corporation, the Company or any Affiliate of their Affiliates Parent and the Affected Employee. Notwithstanding any provision in this Agreement to the contrary, nothing in this Section 6.07(b) shall (x) be deemed or construed to be an amendment or other modification of any Company Benefit Plan or Parent employee benefit plan, or (ivy) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor current or former employee or service provider of Parent, the Surviving Corporation Company or its Affiliates (or any of their respective Affiliates, beneficiaries or any other Persondependents thereof).
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date Effective Time (“"Continuing Employees”"), Parent shall cause the service of each such Continuing Employee with the Company and its ERISA Affiliates prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries ERISA Affiliates, but not including any sabbatical or equity compensation plans, programs, agreements or arrangements (collectively, the “"Parent Benefit Plans”") in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “"employee welfare benefit plan” " as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent's applicable insurance contracts in effect as of the Closing Date; provided, however, provided that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, employment Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(dc) The Parent, the Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time acknowledge and agree that all provisions contained in this Section 6.07 are included for the purpose of ensuring the continuity sole benefit of the businessrespective parties to this Agreement and shall not create any right in any other Person, and the Company agrees not to discourageincluding any employees, and to cause its Subsidiaries not to discourageformer employees, any such employees from consulting participant in any Company Employee Plan or any beneficiary thereof or any right to continued employment with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereofCompany, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount or any of such award (such amounts payable hereunder, the “Cash Award Payments”)their Affiliates. From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Merger Agreement (Phase Forward Inc)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with With respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectivelySubsidiaries, the “Parent Benefit Plans”) but not including any defined benefit pension, nonqualified deferred compensation, post-termination welfare or equity-based compensation plans, programs, agreements or arrangements in which any Continuing Employee is or becomes eligible to participateparticipate in the year in which the Effective Time occurs (collectively, the “Parent Benefit Plans”), but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefitsbenefits or compensation.
(b) For a period of 12 not less than six (6) months after the Closing Date (or, if shorterearlier, for so long as until the applicable Continuing Employee remains employed by termination of employment of the Surviving Corporation or its Subsidiariesrelevant employee), the Surviving Corporation Parent shall provide or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide to be provided each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits)opportunities, in each case in an amount at least equal to the same level or opportunity that was provided to each such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)Date, and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing equity-based, defined benefit pension, post-termination welfare or nonqualified deferred compensation benefits, except to the extent disclosed to Parent provided for in any agreements or arrangements existing as of the date hereof, ) that are substantially similar in the aggregate to those provided to each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related such Continuing Employee immediately prior to the coronavirus (COVID-19Closing Date under the Company Employee Plans set forth in Section 4.16 of the Company Disclosure Schedule. Any obligation of Parent under this Section 6.07(b) pandemicis subject to Section 6.07(d).
(c) From and after the Closing Date, with With respect to each Parent Benefit Plan that is an “employee welfare a health benefit plan” as defined in Section 3(1) of ERISA plan in which any Continuing Employee is or becomes eligible to participateparticipate in the plan year in which the Effective Time occurs, Parent shall, shall use or shall cause the Surviving Corporation or its applicable any Subsidiary to, of Parent or the Surviving Corporation to use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall (i) be deemed to (i) establish, amend or modify any Parent Benefit Plan or to require Parentany other benefit or compensation plan, the Surviving Corporation program, agreement, Contract, policy or any of their Affiliates to continue arrangement or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude limit the ability of Parent, the Surviving Corporation or any of their respective Affiliates to amend, modify or terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policyprogram, agreement agreement, Contract, policy or other arrangement on at any time, (ii) confer upon any Person not a party to this Agreement any rights or remedies of any nature or kind whatsoever, including any third-party beneficiary rights, or any right to employment or continued employment or any term or condition of employment, or (iii) restrict the part ability of Parent, the Surviving Corporation or any of their Affiliates or to terminate the employment of any Person (iv) create any third party beneficiary rights in including any Continuing Employee, ) at any other employee, officer, director, independent contractor of Parent, the Surviving Corporation time and for any or any of their respective Affiliates, or any other Personno reason.
Appears in 1 contract
Samples: Agreement and Plan of Merger (RMG Networks Holding Corp)
Employee Benefit Plan Matters. (a) As of and subsequent to the Closing DateEffective Time, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees Parent shall: (i) assume and honor employee bonus plans, change in control and severance plans and agreements and other retention plans and agreements listed in Section 4.17(a) of the Company Disclosure Schedule; provided that nothing herein shall prohibit Parent from amending, suspending or terminating any such plan or arrangement to the extent permitted by its terms and its Subsidiaries as Applicable Law; (ii) for a period of not less than twelve (12) months after the Effective Time. From and after , provide the Closing Date, with respect to employees of the Company or its Subsidiaries as of immediately prior to the Effective Time during the period they continue to be employed by Parent, the Surviving Corporation and/or its Subsidiaries on and after the Effective Time (the “Covered Employees”) base compensation, incentive opportunities (other than equity incentive compensation opportunities, which in all cases will be consistent with the opportunities, policies and plans applicable to similarly situated employees of Parent and its Subsidiaries), severance (based on severance arrangements as in effect on the date of this Agreement and listed on Section 4.17(a) of the Company Disclosure Schedule) and employee benefits (including retirement, group health, life, disability, vacation and severance plans) that are not less favorable in the aggregate to each Covered Employee than were provided by the Company or its Subsidiaries to such Covered Employee immediately prior to the Effective Time; (iii) provide all Covered Employees with service credit for purposes of eligibility, participation, vesting and levels of benefits under any employee benefit or compensation plan, program or arrangement adopted, maintained or contributed to by Parent or the Surviving Corporation and/or their Subsidiaries in which Covered Employees are eligible to participate (the “Parent Plans”) for all periods of employment with the Company or its Subsidiaries (or any predecessor entities) prior to the Effective Time to the same extent as such Covered Employee was entitled, before the Effective Time who continue employment Time, to credit for such service under any similar Employee Plan in which such Covered Employee participated or was eligible to participate immediately prior to the Effective Time, and with Parent, the Surviving Corporation and any of their Subsidiaries or Affiliates on and after the Effective Time; provided that the foregoing shall not apply (A) for any Subsidiary purpose under any defined benefit pension plan or retiree welfare plan, (B) for purposes of any Parent Plan under which similarly-situated employees of Parent and its Subsidiaries do not receive credit for prior service, (C) for purposes of any Parent Plan that is grandfathered or frozen, either with respect to level of benefits or participation or (D) to the extent that its application would result in a duplication of benefits with respect to the same period of service; (iv) use commercially reasonable efforts to cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any Parent Plan to be waived with respect to the Covered Employees and their eligible dependents, to the extent waived under the corresponding plan in which the applicable Covered Employee participated immediately prior to the Effective Time; and (v) use commercially reasonable efforts to give the Covered Employees and their eligible dependents credit for the plan year in which the Effective Time (or commencement of participation in a plan of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee Corporation) occurs towards applicable deductibles and annual out-of-pocket limits for expenses incurred prior to the Effective Time (or the date of commencement of participation in any Parent Plan).
(b) If requested by Parent not less than ten (10) Business Days before the Closing Date, the Company shall adopt resolutions and take such corporate action as is necessary to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equityterminate the Employee Plans that are United States Tax-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, qualified defined benefit pension or retiree medical or similar benefits contribution plans (collectively, the “Excluded BenefitsCompany DC Plan”), effective as of the day prior to the Closing Date. The form and substance of such resolutions and any other actions taken in connection with the foregoing termination shall be subject to the reasonable review and approval of Parent. Upon the distribution of the assets in the accounts under the Company DC Plan to the participants, Parent shall permit the Covered Employees who are then actively employed by Parent or its Subsidiaries to make rollover contributions of “eligible rollover distributions” (within the meaning of Section 401(a)(31) underof the Code), each compensationin the form of cash, retirementfrom the Company DC Plan to the applicable tax-qualified defined contribution plans of Parent or its Subsidiaries.
(c) As soon as reasonably practicable following the date hereof (and in any event prior to the Closing Date), vacationthe Company shall, paid time offor shall cause its applicable Subsidiary to, fringe take all action necessary to fulfill all consultation and notification requirements, and obtain all approvals from, any unions, works councils or other welfare labor organizations, whether required pursuant to Applicable Law or otherwise. Any written or oral communications to the employees, officers or directors of the Company or any of its Subsidiaries pertaining to compensation or benefit matters that relate to or are affected by the transactions contemplated by this Agreement shall be previously approved in writing by Parent, it being agreed that Parent and the Company shall cooperate, including by providing Parent a reasonable period of time to review and approve any such communication, in providing any such mutually agreeable communication.
(d) Without limiting the generality of Section 11.07, the provisions of this Section 7.03 are solely for the benefit of the parties to this Agreement, and no current or former employee or other service provider or other individual associated therewith shall be regarded for any purpose as a third party beneficiary of this Agreement. Nothing contained in this Agreement shall (i) constitute or be deemed to be an amendment to any Employee Plan or any other compensation or benefit plan, program or arrangement of Parentthe Company, the Surviving Corporation Parent or any of their respective Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Datepurpose; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time fortime, or preclude the ability of Parent, Parent or the Surviving Corporation and its Subsidiaries to terminate any employee of the Company or any of its Subsidiaries for any reason; or (iii) require Parent or the Surviving Corporation or any of their respective Affiliates Subsidiaries to terminate continue any Employee Plan, employee benefits plans or arrangements or prevent the employment ofamendment, any Continuing Employee for any reasonmodification or termination thereof, (iii) constitute in accordance with the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personterms thereof and Applicable Law.
Appears in 1 contract
Samples: Merger Agreement (Fei Co)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to all employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following at the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to with the Effective Time Company, the Surviving Corporation, the Company Subsidiaries, the Subsidiaries of the Surviving Corporation and all of their respective predecessors to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits, vesting, and, with respect to paid time off benefits only, benefit accrual (but not other than for purposes of any equity or equity-based compensationbased, longdeferred compensation or post-term incentive, change in control, retention retirement welfare plans or other one-time or special incentive compensation, for purposes of benefit accrual under any defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, under each compensation, retirement, vacation, paid time off, fringe or other welfare employee benefit plan, program or arrangement of Parentthe Surviving Corporation, the Surviving Corporation Parent or any of their Subsidiaries respective Affiliates (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participateparticipate to the same extent such service was recognized under the corresponding Company Employee Plan, but solely except to the extent service was credited such credit would result in a duplication of benefits. Additionally, Parent shall use commercially reasonable efforts to permit each Continuing Employee to be immediately eligible to participate, without any waiting time, in any and all Parent Benefit Plans that are health and welfare plans to the extent coverage under such employee for such purposes Parent Benefit Plan replaces coverage under a comparable Company Employee Plan in which such Continuing Employee participated immediately prior to before the Closing Date replacement and to the extent such credit would not result in a duplication of benefitswaiting time requirement was met under such Company Employee Plan.
(b) For a period of 12 twelve (12) months after immediately following the Closing Date (orDate, if shorterParent shall provide, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or cause its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) Affiliates to provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual the base hourly wage or base salary or base hourly rate and (B) annual cash incentive compensation opportunities (including commissions and other than the Excluded Benefits)target bonus opportunity for each Continuing Employee that, in each case case, are no less than those in an amount at least equal to the level or opportunity that was provided to each effect for such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee all other material benefits (other than the Excluded Benefitsparticipation in any equity or equity-based, deferred compensation, post-retirement medical, dental, vision or life insurance, or defined benefit pension plan) that are no less favorable substantially similar in the aggregate than to such Continuing Employee as those provided to similarly situated employees of the Company and its Subsidiaries such Continuing Employee immediately prior to the Closing to Date under the extent disclosed to Parent as Company Employee Benefit Plans. In addition to, and without limiting, the foregoing provisions of this Section 6.06(b), in the event of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) termination of ERISA in which employment of any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause during the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to twelve (i12) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant month period immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, Parent shall provide such Continuing Employee with severance payments and (ii) benefits that are no less favorable, in the Deferred Cash Awards shall be made within five Business Days following aggregate, than the Closing Date; provided, that severance payments and benefits to which such payments may be made at such other time Continuing Employee would have been entitled under the severance plan or times following the Effective Time consistent with the terms policy of the 2018 Cash Award Company or Deferred Cash Award, as applicable, Company Subsidiary applicable to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personimmediately prior to Closing.
Appears in 1 contract
Samples: Merger Agreement (Cdi Corp)
Employee Benefit Plan Matters. (a) As Each of Parent and Merger Sub acknowledges that the consummation of the Closing Datetransactions contemplated by this Agreement will constitute a change in control of the Company and/or a sale event or similar transaction of the Company (to the extent such concepts are applicable) for purposes of the Company Employee Plans, including under the severance agreements with the members of management of the Company listed in Schedule 6.07(a) (such members of management, the “Executive Employees” and such agreements, the “Severance Agreement”). The Surviving Corporation or one of its Subsidiaries will continue Parent shall pay to employ the applicable employees of the Company and its Subsidiaries as any amounts with respect to any severance obligations or other amounts that are payable under the Severance Agreements in accordance with their terms in the event of a qualified termination upon or within 24 months after the consummation of the Effective Time. From and after Merger, provided, however, that Parent or the Surviving Corporation shall, as soon as practicable following the Closing Date(and in no event later than the next regular payroll date immediately following the Closing), with pay to each Executive Employee, and to each employee covered under the Severance Policy, in each case whose employment is terminated on the Closing Date at the direction of Parent or the Surviving Corporation, the full cash change in control and/or severance amounts payable to such employee under the Severance Agreement or the Severance Policy, as applicable.
(b) With respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries ERISA Affiliates, but not including any equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(bc) For a period of 12 not less than twelve (12) months after the Closing Date (orDate, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) shall provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits)opportunities, in each case in an amount at least equal to the same level or opportunity that was provided to each such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)Date, and (ii) employee benefits (other than the Excluded Benefitsequity awards or other equity-based compensation or benefits) that are no less favorable substantially similar in the aggregate than to those provided to similarly situated employees of the Company and its Subsidiaries each such Continuing Employee immediately prior to the Closing to Date under the extent disclosed to Parent as Company Employee Plans set forth on Section 4.16 of the date hereofCompany Disclosure Schedule, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to and (iii) honor the coronavirus (COVID-19) pandemicprovisions of the Severance Policy.
(cd) From and after the Closing Date, with With respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability, life insurance benefits and other non-health coverages, solely to the extent permitted under the terms and conditions of Parent’s applicable plans and insurance contracts in effect as of the Closing Date; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a6.07(b) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable such calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately Parent agrees that, prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall Company shall, at the Company’s sole discretion, be made within five Business Days following permitted to pay to the Company’s employees bonuses in an aggregate amount not to exceed the amount detailed on Schedule 6.07(e), including all bonuses payable under or pursuant to any cash bonus plan, incentive plan or other similar plan or practice of the Company. To the extent such payments do not occur prior to the Closing Date; provided, that Parent shall pay or cause the Surviving Corporation to pay such amounts as directed by the Company in the Company’s sole discretion, such payments may be made at such other time or times following to occur as promptly as practicable, but in any event no later than the Effective Time consistent with first payroll period after the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeClosing Date.
(f) If directed in writing by Parent at least ten (10) Business Days prior to the Closing Date, the Company shall adopt written resolutions and a plan amendment to terminate the Company’s 401(k) plan and to fully (100%) vest all participants under such plan, such termination and vesting to be effective no later than one (1) Business Day preceding the Closing Date (but may be contingent on the Closing). The form and substance of such written resolutions and plan amendment must be preapproved by Parent, such approval not to be unreasonably withheld. The Company shall use its reasonable best efforts to take such other actions in furtherance of terminating any such 401(k) plan as Parent may reasonably request.
(g) Nothing in this Section 6.07 shall create any third-party beneficiary or other rights in any current or former employee, director or other service provider of the Company or any of its Subsidiaries in respect of employment, continued employment, any benefits that may be provided, directly or indirectly, under any Company Employee Plan or Parent Benefit Plan. Nothing in this Section 6.07 or elsewhere in this Agreement shall be deemed to (i) amend be an amendment to any employee benefit plan or arrangement of any party, including any Company Employee Plan or Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonPlan.
Appears in 1 contract
Samples: Merger Agreement (Mac-Gray Corp)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall use commercially reasonable efforts to cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of vesting and, with respect to any equity vacation or equity-based compensationseverance plan only, long-term incentivebenefit accrual, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries Subsidiaries, but not including any equity or equity-based compensation plans, programs, agreements or arrangements, long-term incentive plans, defined benefit pension plans or retiree medical plans (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits. To the extent reflected on financial statements of the Company, Parent shall assume any and all vacation and paid time off balances of Continuing Employees.
(b) For a period of 12 not less than 18 months after the Closing Date (or, or if shorter, for so long as the applicable period of employment of the relevant Continuing Employee remains employed by Employee) (the Surviving Corporation or its Subsidiaries“Continuation Period”), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) shall provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary salaries or base hourly rate rates and (B) annual target cash incentive compensation opportunities (including commissions cash bonuses and other than the Excluded Benefits)commissions) at least equal, in each case in an amount at least equal the aggregate, to the level or opportunity that was those provided to each such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)Date, and (ii) employee benefits (other than the Excluded Benefitsequity, equity-based or nonqualified deferred compensation benefits, defined benefit plan benefits and retiree welfare benefits) that are no less favorable substantially comparable in the aggregate than to those provided to similarly situated employees of the Company and its Subsidiaries such Continuing Employee immediately prior to the Closing Date under the applicable Company Employee Plans. In addition, during the Continuation Period, Parent shall assume and honor, and shall cause the Surviving Corporation and their respective Subsidiaries to assume and honor, the extent disclosed to Parent as terms of the date hereof, Company’s severance guidelines outlined in each case without giving effect Schedule 6.07(b) and provide the severance compensation and benefits required thereunder to be provided to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicContinuing Employee who incurs a qualifying termination during such Continuation Period.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) during the plan year in which the Closing Date occurs, provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar such plan year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company From and after the Closing Date, Parent shall permithonor, and shall cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after and their respective Subsidiaries to honor, in accordance with its terms, (i) each existing (as of the date hereof) employment, change in control, retention, severance and termination protection plan, policy or agreement of or between the Company or any of its Subsidiaries and any current or former officer, director or employee of the Company Made Available to Parent, and (ii) all obligations in effect as of the Effective Time and for the purpose of ensuring the continuity under any equity-based, bonus or compensation deferral plans, programs or agreements of the business, and the Company agrees not to discourage, and to cause or its Subsidiaries not Made Available to discourage, any Parent. Parent acknowledges that the transaction contemplated hereby shall constitute a “change in control” for purposes of each Company Employee Plan that uses such employees from consulting with Parentterm or a similar term.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following Following the Closing Date, Parent shall, and (ii) shall cause the Deferred Cash Awards shall be made within five Business Days following the Closing Date; providedSurviving Corporation and their respective Subsidiaries to, that such payments may be made at such other time or times following the Effective Time consistent comply with the terms federal Worker Adjustment and Retraining Notification Act, including any notice or filing requirements thereunder, and any similar Applicable Law affecting any site of employment of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeSurviving Corporation and their respective Subsidiaries.
(f) Nothing This Section 6.07 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 6.07, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever (including any third-party beneficiary rights) under or by reason of this Section 6.07. No provision of this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, Employee or any other employee, officer, director, independent contractor current or former director or consultant of the Parent, the Surviving Corporation Company or any of their respective Affiliates, Subsidiaries in respect of continued employment (or resumed employment) or any other Personmatter, except with respect to Section 6.11. Nothing contained in this Section 6.07 or any other provision of this Agreement, express or implied, is intended to confer upon any Continuing Employee any right to employment or continued employment for any period or continued receipt of any specific benefit or compensation, shall constitute an establishment of or amendment to or any other modification of, or shall limit the ability of Parent or any of its Affiliates (including, following the Closing, the Company or any of its Subsidiaries) from amending or terminating, any benefit or compensation plan, program, agreement, contract or arrangement.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As For a period of one (1) year following the Effective Time, Parent shall cause the Surviving Corporation or applicable Company Subsidiary to provide to each Continuing Employee (i) base salary or base wage, as applicable, in an amount no less favorable than that in effect for such Continuing Employee immediately prior to the Effective Time, and (ii) (A) target short term cash incentive compensation opportunities, (B) severance benefits and (C) other employee compensation and benefits (excluding equity or equity-based, long-term incentives, retention, change in control, nonqualified deferred compensation, defined benefit pension and post-employment welfare benefits (the “Excluded Benefits”)) that, in each case, are either (y) substantially comparable in the aggregate to those (other than the Excluded Benefits) provided to such Continuing Employee immediately prior to the Effective Time under the Employee Plans listed on Section 6.05(a) of the Company Disclosure Letter or (z) no less favorable in the aggregate to those (other than the Excluded Benefits) provided to similarly situated employees of Parent.
(b) Each Continuing Employee who participates in the annual bonus program in respect of the Company’s 2025 fiscal year shall, to the extent not paid prior to the Closing Date, the Surviving Corporation or one receive a cash bonus in respect of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. such 2025 fiscal year based on actual performance.
(c) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the Surviving Corporation or other applicable Subsidiary to recognize service of each such Continuing Employee with the Acquired Companies prior to the Effective Time to be recognized Closing Date for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries its Affiliates (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(cd) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA providing group health benefits in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to Parent, the Effective Time, by virtue of the Merger Company and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From acknowledge and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described agree that all provisions contained in this Section 6.07(e) 6.05 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan, Diamond Employee Plan or Parent Benefit Plan or any beneficiary thereof or any right to continued employment with respect to (i) the 2018 Cash Awards shall be made by Parent, Company, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms any of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) their Affiliates. Nothing in this Section 6.07 6.05 shall be deemed to (i) amend any Company Employee Plan, any Diamond Employee Plan or any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit or compensation plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan or compensation plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Merger Agreement (SecureWorks Corp)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with With respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectivelySubsidiaries, the “Parent Benefit Plans”) but not including any defined benefit pension, nonqualified deferred compensation, post-termination welfare or equity-based compensation plans, programs, agreements or arrangements in which any Continuing Employee is or becomes eligible to participateparticipate in the year in which the Effective Time occurs (collectively, the “Parent Benefit Plans”), but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) benefits or compensation. For a period of 12 not less than twelve (12) months after the Closing Date (or, if shorterearlier, for so long as until the applicable Continuing Employee remains employed by termination of employment of the Surviving Corporation or its Subsidiariesrelevant employee), the Surviving Corporation Parent shall provide or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide to be provided each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits)opportunities, in each case in an amount at least equal to the same level or opportunity that was provided to each such Continuing Employee immediately prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)Date, and (ii) additional cash or equity incentives comparable to each such Continuing Employee’s level of equity compensation prior to the Closing Date, and (iii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing equity-based, defined benefit pension, post-termination welfare or nonqualified deferred compensation benefits, except to the extent disclosed to Parent provided for in any agreements or arrangements existing as of the date hereof, ) that are substantially similar in the aggregate to those provided to each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related such Continuing Employee immediately prior to the coronavirus Closing Date under the Company Employee Plans set forth in Section 4.16 of the Company Disclosure Schedule. In addition and notwithstanding the foregoing, Parent acknowledges that the Surviving Corporation shall assume liability for the obligations set forth on Schedule 6.07(b), including the Company’s Amended and Restated Change of Control Plan and the other Company employee arrangements and benefits enumerated thereon (COVID-19) pandemic
(c) From which Contracts listed thereon are assumed by operation of Applicable Law), and after shall honor and comply with the Closing Date, requirements of such obligations in accordance with their applicable terms. With respect to each Parent Benefit Plan that is an “employee welfare a health benefit plan” as defined in Section 3(1) of ERISA plan in which any Continuing Employee is or becomes eligible to participateparticipate in the plan year in which the Effective Time occurs, Parent shall, shall use or shall cause the Surviving Corporation or its applicable any Subsidiary to, of Parent or the Surviving Corporation to use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.pre-
Appears in 1 contract
Samples: Merger Agreement (Lionbridge Technologies Inc /De/)
Employee Benefit Plan Matters. i. The Purchaser or any of the Purchasing Subsidiaries (aas applicable) As shall adopt and assume at and as of the Closing each of the Employee Benefit Plan/Schemes, and each trust, insurance contract, annuity contract or other funding arrangement with respect thereto, of the Seller or any of the Selling Subsidiaries set forth on Schedule 8.14 as such plans relate to employees employed immediately prior to Closing (the “Assumed Benefit Plans/Schemes”), and shall assume and exercise any and all rights, authorities, discretions and obligations as sponsor, named fiduciary and plan administrator of the Assumed Benefit Plans/Schemes. Such sponsor shall cause the Assumed Benefit Plans/Schemes to be amended, as applicable, to treat employment with the Seller or any of the Selling Subsidiaries prior to the Closing the same as employment with such sponsor from and after the Closing Date for purposes of eligibility and vesting and the respective Assumed Benefit Plans/Schemes shall be responsible for group health plan continuation coverage required under Applicable Law for any qualified beneficiary under such Assumed Benefit Plans/Schemes as of the Closing Date.
ii. Other than with respect to the Non-U.S. Employees, the Surviving Corporation or one of its Purchaser and the Purchasing Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From hereby agree that, from and after the Closing Date, the Purchaser or the Purchasing Subsidiaries shall grant all employees hired in connection with respect to employees the transactions contemplated in this Agreement credit for any service with the Seller or any of the Company or its Selling Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following earned prior to the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized a) for eligibility and vesting purposes of eligibility to participate in, and levels of benefits (but not for purposes of no other purpose) under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare employee benefit plan, program or arrangement of Parent, established or maintained by the Surviving Corporation Purchaser or any of their the Purchasing Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is such employees participate on or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to after the Closing Date and to the extent Date, whether or not such credit would not result in a duplication of benefits.
plan, program or arrangement is an Employee Benefit Plan/Scheme, (b) For a period for purposes of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation vacation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01)severance benefits, and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From for any other purpose as required under Applicable Law.
iii. On and after the Closing Date, to the extent legally applicable, the Seller or any of the Selling Subsidiaries shall (or cause each of its applicable affiliates to) have all responsibility and Liability for meeting all requirements under “COBRA” with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee person who is or becomes eligible to participatean “M & A qualified beneficiary,” within the meaning of Treas. Reg. Sec. 54.4980B-9, Parent shall, or shall cause Q/A-4(b) (including any individual who has a qualifying event as a result of the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plantransactions contemplated by this Agreement).
(d) The Company shall permit, and cause its Subsidiaries iv. Prior to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards Seller shall be made within five Business Days following deliver to the Closing Date; provided, that such payments may be made at such other time or times following Purchaser the Effective Time consistent with the material terms of any Employee Benefit Plan/Scheme maintained by the 2018 Cash Award Seller or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A any Selling Subsidiary in which employees of the CodeBusiness participated immediately prior to Closing and with respect to which the Purchaser and the Purchasing Subsidiary are not assuming any Liabilities.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As From and after the Effective Time, Tempranillo shall honor, and shall cause the Surviving Corporation to honor all Lafite Employee Plans in effect immediately before the Effective Time that by their terms provide a contractual entitlement to any employee or service provider party to or participating in such arrangements. Notwithstanding the foregoing, nothing herein, other than Section 7.03(b) and the terms of such arrangements, including the Closing Datecontractual rights of such participants, shall prevent Tempranillo from amending or terminating any Lafite Employee Plan or providing compensation or benefits in its discretion.
(b) For a period of one (1) year following the Effective Time, Tempranillo shall provide, or shall cause to be provided, to each Continuing Employee who remains employed with the Surviving Corporation or one any Subsidiary of the Surviving Corporation (i) base salary and base wages and short-term cash incentive compensation opportunities that are, in each case, no less favorable than those in effect for such Continuing Employee as of immediately prior to the Effective Time, and (ii) other employee compensation and benefits(excluding long-term incentive, equity and equity-based compensation and deferred compensation) that, in each case, are substantially similar to the employee compensation and benefits provided to such Continuing Employee by Lafite or any of its Subsidiaries will continue immediately prior to employ the employees of the Company and its Subsidiaries as of the Effective Time. .
(c) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent Tempranillo shall cause the service of each such Continuing Employee with Lafite and its Subsidiaries prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits benefits, benefit accruals (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or similar benefits (collectivelybenefits, “Excluded Benefits”)) undersubsidized early retirement benefits, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”other similar benefits) and vesting under each Tempranillo Employee Plan in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee Continuing Employee for such purposes under a comparable Company Lafite Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(cd) From and after the Closing Date, with respect to each Parent Benefit Tempranillo Employee Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or Tempranillo shall cause the Surviving Corporation or use its applicable Subsidiary to, use commercially reasonable best efforts to cause each such Parent Benefit Tempranillo Employee Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Tempranillo Employee Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Lafite Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Tempranillo Employee Plan.
(de) The Company shall permitTempranillo, Lafite and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time acknowledge and agree that all provisions contained in this Section 7.03 are included for the purpose of ensuring the continuity sole benefit of the businessrespective parties to this Agreement and shall not create any right in any other Person, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourageincluding any Lafite Employee, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without participant in any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of Lafite Employee Plan or Tempranillo Employee Plan or any such award shall have the beneficiary thereof or any right to receive from Parent or continued employment with Tempranillo, Lafite, the Surviving Corporation an amount in cash equal to the full amount or any of such award (such amounts payable hereunder, the “Cash Award Payments”)their Affiliates. From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 7.03 shall be deemed to (i) amend any Parent Benefit Lafite Employee Plan, any Tempranillo Employee Plan or to require ParentTempranillo, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Tempranillo or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Agreement and Plan of Merger (Livongo Health, Inc.)
Employee Benefit Plan Matters. (a) As Prior to the Closing Date, the Seller shall take any and all actions as may be necessary or required to establish on behalf of the Company such employee benefit plans, programs and arrangements as are mutually agreed upon by the Company and the Seller and set forth on Schedule 6.09(a) hereto (the "New Company Plans"), with such plans, programs and arrangements to be maintained by the Company and to be effective and operational before or as of the Closing Date. Except as otherwise provided in subsection (b) below, the Company and its Subsidiaries shall cease to participate in the Seller's employee benefit plans as of the Closing Date.
(b) In the event that any of the New Company Plans is not established, effective and operational before or as of the Closing Date, the Surviving Corporation Seller shall take any and all actions as may be necessary or one of its Subsidiaries will required to permit all Employees to continue to employ participate in the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare equivalent employee benefit plan, program or arrangement of Parent, maintained by the Surviving Corporation or any of their Subsidiaries Seller (collectively, the “Parent Benefit Plans”) and in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately Employees participated prior to the Closing Date and to the extent Date) until such credit would not result in a duplication of benefits.
(b) For a period of 12 months after time following the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries)New Company Plan is established, the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation effective and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicoperational.
(c) From and after the Closing DateClosing, subject to applicable law and except as contemplated hereby, Buyer and its Affiliates will honor, in accordance with respect to each Parent their terms, all Employee Benefit Plan Plans that is an “employee welfare benefit plan” as defined in Section 3(1are sponsored solely by the Company (and not by Seller) of ERISA in which any Continuing Employee is or becomes eligible to participate(the "Company Plans"). Notwithstanding the foregoing, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents subject to the same extent that such pre-existing conditionsterms of the Company Plans, waiting periods and required physical examinations would not have applied nothing herein shall preclude Buyer from (x) making, on a prospective basis, any change in or would have been waived under (y) terminating any Company Plan after the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee PlanClosing.
(d) The Employees who remain employed by the Company shall permitor are transferred to the Company by the Seller following the Closing will receive credit for years of service with the Company or any of its Subsidiaries or predecessors prior to the Closing for purposes of determining eligibility to participate and vesting under employee benefit plans maintained by Buyer and its Affiliates ("Buyer Employee Plans"), and cause its Subsidiaries shall not be subject to permitpre-existing conditions or actively-at-work exclusions under Buyer Employee Plans that provide medical or dental welfare benefits. Medical and dental expenses incurred by such Employees on or before the Closing shall be taken into account under deductible, Parent to contact coinsurance and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose maximum out-of-pocket provisions of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with ParentBuyer Employee Plans.
(e) Immediately prior The Company and its Subsidiaries shall cease to participate in the Effective Time, by virtue Xxxxxx-Xxxxxx Employees' Profit Sharing and Retirement Savings Plan (the "Seller's 401(k) Plan") as of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding Closing Date. As soon as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days practicable following the Closing Date, Buyer shall establish (or cause to be established) a new 401(k) plan or other defined contribution plan and trust on behalf of the Company that contains provisions such that the transfer of account balances contemplated in subsection (iif) below will not violate Section 411(d)(6) of the Deferred Cash Awards shall be made within five Business Days following Code (the "Buyer's 401(k) Plan"). Employees will not accrue additional benefits after the Closing Date; provided, that such payments may be made at such other time or times following under defined contribution plans maintained by the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeSeller.
(f) Nothing As soon as practicable after the establishment of Buyer's 401(k) Plan, assets of Seller's 401(k) Plan equal to the account balances (whether or not vested) of Employees under Seller's 401(k) Plan will be transferred to Buyer's 401(k) Plan. The transfer will be made in this Section 6.07 cash, provided that any outstanding plan loans to Employees shall be deemed transferred with the underlying accounts. The account balances of Employees in Seller's 401(k) Plan will be valued as of the date on which the transfer is made (the "Transfer Date"). The account balances ees in Seller's 401(k) Plan shall share in the earnings, appreciation and depreciation of Seller's 401(k) Plan for the period between the Closing and the Transfer Date. For the period between the Closing and the Transfer Date, Seller shall cause the trustee of Seller's 401(k) Plan to continue to administer any outstanding loans under Seller's 401(k) Plan on behalf of any Employee, and shall accept from Buyer as a credit against any such outstanding loans amounts transmitted by Buyer on behalf of any Employee for the purpose of continued loan repayment.
(g) Any benefits that are payable to Employees from Seller's 401(k) Plan after the Closing and before the assets are transferred shall be paid from Seller's 401(k) Plan in the ordinary course. The amount to be transferred to Buyer's 401(k) Plan shall be reduced by the amount of such payments.
(h) The account balances to be credited for Employees under Buyer's 401(k) Plan shall not be less than the account balances of Employees under Seller's 401(k) Plan as of the date on which the transfer is made. Effective on the date of the transfer of Seller's 401(k) Plan assets, (i) amend Buyer and Buyer's 401(k) Plan shall assume all liabilities in connection with the account balances of Employees under Seller's 401(k) Plan, and (ii) Seller, its Affiliates and Seller's 401(k) Plan shall have no further liability with respect to the account balances of Employees.
(i) Buyer shall request that the Internal Revenue Service issue a favorable determination letter with respect to the qualification under Sections 401 and 501 of the Internal Revenue Code of Buyer's 401(k) Plan and its related trust. Buyer shall make such changes to Buyer's 401(k) Plan as may be required by the Internal Revenue Service in order for the Internal Revenue Service to issue a favorable determination letter. Buyer shall provide Seller with a copy of the determination letter received from the Internal Revenue Service with respect to Buyer's 401(k) Plan as soon as the determination letter is received.
(j) Buyer and Seller shall each make their appropriate employees available to the other at such reasonable times as may be necessary for the proper administration by the other of any Parent Benefit and all matters relating to employee benefits affecting Employees.
(k) The Buyer shall be responsible for providing group health plan coverage under COBRA for (i) each person who is entitled to receive COBRA coverage under a Company Plan or and (ii) each Employee and each qualified beneficiary with respect to require Parent, the Surviving Corporation or any of their Affiliates an Employee who is entitled to continue or amend any particular COBRA coverage under an employee benefit plan before of Seller as described in subsection (b), if applicable, as a result of a "qualifying event" (as defined under COBRA) that occurs prior to, on or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonClosing Date.
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Employee Benefit Plan Matters. (ai) As of Holdings agrees that AFC will continue in effect, without amendment (except with respect to any amendment required by the Closing DateCode, ERISA or other applicable law or required to carry out Holdings' undertakings hereinafter set out), until December 31, 1997, the Surviving Employee Plans (other than the Employee Stock Ownership Plan of American Filtrona Corporation (the "ESOP")) covering employees who continue employment with Holdings or one an affiliate of its Subsidiaries Holdings.
(ii) With respect to the American Filtrona Corporation 401(k) Savings and Profit Sharing Plan (the "Profit Sharing Plan"), Holdings will continue obtain and enforce an agreement by Purchaser to employ make a contribution for 1997 to a substantially comparable profit sharing plan for the employees of the Company and its Subsidiaries Fibers Business (the "Purchaser Profit Sharing Plan") equal to the amount accrued on the books of the Fibers Business as of the Effective TimeClosing Date as a liability (computed in accordance with past practices) for a profit sharing contribution with respect to the employees who accept employment with the purchaser of the Fibers Business (the "Purchaser") (the "Transferred AFC Employees") (such liability is hereafter referred to as the "Fibers Profit Sharing Liability"). From and after Holdings agrees that AFC will make a profit sharing contribution to the Profit Sharing Plan equal to at least the excess of (A) the amount accrued on the books of AFC as of the Closing DateDate as a liability (computed in accordance with past practices) for a profit sharing contribution to the Profit Sharing Plan over (B) the amount of the Fibers Profit Sharing Liability and will make a total contribution comparable to the 1996 contribution for employees of the Plastics Business if the 1997 earnings before interest and taxes of the Plastics Business approximate such earnings in 1996. Holdings agrees to obtain and enforce an agreement by Purchaser that the Purchaser Profit Sharing Plan shall have a salary 37 reduction arrangement under which all Transferred AFC Employees will have all service credited under the Profit Sharing Plan credited under the Purchaser Profit Sharing Plan for all plan purposes, including eligibility and vesting, and to cause AFC to transfer to the Purchaser Profit Sharing Plan the account balances under the Profit Sharing Plan of all Transferred AFC Employees.
(iii) Holdings agrees to obtain and enforce an agreement by Purchaser to contribute to the Purchaser Profit Sharing Plan an amount equal to the liability (computed in accordance with past practices) accrued on the books of the Fibers Business as of the Closing Date for a contribution to the ESOP with respect to Transferred AFC Employees (the "Purchaser ESOP Contribution"). Holdings agrees to cause AFC to contribute to the ESOP an amount equal to the excess of (A) the liability (computed in accordance with past practices) accrued on the books of AFC as of the Closing Date over (B) the amount of the Purchaser ESOP Contribution, and to amend the ESOP to provide that all AFC employees, including all Transferred AFC Employees, are 100% vested in their accrued benefits thereunder.
(iv) Holdings agrees to use its best efforts to cause Purchaser to assume sponsorship of the following plans covering employees employed in the Fibers Business: the American Filtrona Corporation Pension Plan for Hourly Employees and the American Filtrona Corporation 401(k) Plan for Hourly Employees. Holdings agrees to use its best efforts to cause Purchaser to establish a defined benefit plan that (A) covers AFC's salaried employees who become salaried Transferred AFC Employees; (B) meets the requirements of Section 401(a) of the Code (the "Purchaser Retirement Plan"); and (C) provides that all service of such salaried Transferred AFC Employees credited with the American Filtrona Corporation Retirement Plan (the "AFC Retirement Plan") shall be credited under the Purchaser Retirement Plan for all plan purposes, including eligibility, vesting and benefit accrual. Holdings agrees to cause an amount to be transferred from the trust maintained under the AFC Retirement Plan to the trust under the Purchaser Retirement Plan calculated pursuant to the applicable provisions of Section 414(l) of the Code, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing salaried Transferred AFC Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(bv) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or Holdings agrees to use its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will best efforts to cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) Purchaser (A) annual base salary or base to establish and maintain through December 31, 1997 employee benefit plans (as defined in Section 3(3) of ERISA) for Purchaser's employees that are in the aggregate approximately equal to the Employee Plans sponsored and maintained by AFC for its salaried and hourly rate employees; and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity ensure that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as any of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “Purchaser's employee welfare benefit plan” plans (as defined in Section 3(1) of ERISA in which ERISA) credit Transferred AFC Employees with any Continuing Employee is internal limits, deductibles or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or co- payments satisfied by such employees under AFC's employee welfare benefit plans.
(vi) Holdings will use its applicable Subsidiary to, use commercially reasonable best efforts to cause each such Parent Benefit Plan Purchaser to (i) waive offer employment to all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s AFC employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such who are active employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries Effective as of the Effective Time. From Time and after the Closing Datefor a period of one year thereafter (or, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parentif earlier, the Surviving Corporation or any Subsidiary date of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”a Affected Employee’s termination), Parent shall provide, or shall cause the service Surviving Corporation to provide, to each employee of each such Continuing Employee prior to the Effective Time Company who continues to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parentemployed by the Company, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan Affiliates immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries“Affected Employees”), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual a base salary or base regular hourly rate wage, whichever is applicable, and (B) target short-term cash bonus opportunities and target sales and service cash incentive award compensation opportunities (including commissions excluding all deferred compensation, retention, change in control, transaction bonus, equity and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefitsequity-based compensation) that are no less favorable in the aggregate than to what was provided to such Affected Employee by the Company immediately prior to the Effective Time and (ii) employee benefits (excluding deferred compensation, severance, retention, change in control, transaction bonus, long-term bonus or incentive, equity and equity-based compensation and defined benefit pension benefits and retiree health and welfare benefits (the “Excluded Benefits”)) that are, in the aggregate, substantially comparable to those provided to similarly situated employees such Affected Employee (including all dependents) by the Company immediately prior to the Effective Time (excluding the Excluded Benefits under the Company Benefit Plans set forth on Section 4.13(a) of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent Disclosure Schedule). Effective as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From Effective Time and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participatethereafter, Parent shallshall provide, or shall cause the Surviving Corporation to provide, that periods of employment with the Company (including, without limitation, any current or its applicable Subsidiary former Affiliate of the Company or any predecessor of the Company) and any other periods of service recognized under any Company Benefit Plan shall be taken into account for purposes of determining, as applicable, the eligibility for participation of each Affected Employee in, the vesting of rights and benefits by each Affected Employee under, and the determination of level or amount of benefits under any paid time off plan payable to or accrued by each Affected Employee under the analogous employee benefit plans maintained or contributed to by Parent or an Affiliate of Parent for the benefit of the Affected Employees, other than defined benefit pension plans, severance plans and retiree health and welfare plans; provided, that no such service credit shall be recognized to the extent that it would result in a duplication of benefits with respect to the same period of services. Parent shall, and shall cause the Surviving Corporation to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (ix) waive all limitations as reduce any period of limitation on health benefits coverage of Affected Employees due to pre-existing conditionsconditions (or actively at work or similar requirements) under the corresponding health benefits plan of Parent or an Affiliate of Parent, (y) waive any and all eligibility waiting periods and required physical examinations evidence of insurability requirements to the extent not applicable under the corresponding plans with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Affected Employees and their eligible dependents to the same extent that such pre-existing conditions, any applicable eligibility waiting periods and required physical examinations would not have applied or would have been waived evidence of insurability requirements under the corresponding health benefit plans were waived or satisfied (or deemed to be satisfied) with respect to the Affected Employees under such health benefit plans and (z) credit each Affected Employee with all deductible payments, co-payments, and other out-of-pocket payments paid by such employee under the corresponding health benefit plans of the Company Employee Plan or its Affiliates prior to the Closing Date during the year in which the Closing occurs for the purpose of determining the extent to which any such Continuing Employee was a participant immediately prior to employee has satisfied his or her commencement deductible and whether he or she has reached the out-of-pocket maximum under any health benefit plan of participation Parent or an Affiliate of Parent for such year, in such Parent Benefit Plan; provided, however, that for purposes of clarityeach case, to the extent such benefit coverage includes pre-existing condition limitation or eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any requirement was met or otherwise not applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable corresponding Company Employee Benefit Plan.
(d) The Company . Neither the Merger nor any other transaction contemplated hereby shall permitaffect any Affected Employee’s accrual of, and cause its Subsidiaries or right to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discouragetake, any accrued but unused personal, sick or vacation time applicable to such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of Affected Employee immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(fb) Nothing in this Section 6.07 Agreement shall be deemed confer upon any Affected Employee any right to (i) amend any Parent Benefit Plan continue in the employ or to require service of Parent, the Surviving Corporation or any Affiliate of their Affiliates Parent, or shall interfere with or restrict in any way the rights of Parent, the Surviving Corporation or any Affiliate of Parent, which rights are hereby expressly reserved, to continue discharge or amend terminate the services of any particular Affected Employee at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between Parent, the Surviving Corporation, the Company or any Affiliate of Parent and the Affected Employee. Notwithstanding any provision in this Agreement to the contrary, nothing in this Section 6.08(b) shall (x) be deemed or construed to be an amendment or other modification of any Company Benefit Plan or Parent employee benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude limit the ability of Parent, the Surviving Corporation or any Affiliate of their respective Affiliates Parent to amend, modify or terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, program, policy, contract, agreement or other arrangement on the part of Parentat any time, the Surviving Corporation or any of their Affiliates or (ivy) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor current or former employee or service provider of Parent, the Surviving Corporation Company or its Affiliates (or any of their respective Affiliates, beneficiaries or any other Persondependents thereof).
Appears in 1 contract
Employee Benefit Plan Matters. (a) As Parent will provide to each employee of the Closing Date, Company who continues to be employed by Parent or any subsidiary of Parent (including the Surviving Corporation Corporation) (i) annual base salary or base wages for a period of one (1) year following the Merger (or any earlier termination of its Subsidiaries will continue employment) and (ii) benefits (including severance benefits) for a period of six (6) months following the Merger (or any earlier termination of employment) that are, in each case, no less favorable than the annual base salary or base wages and benefits provided to employ such employee by the employees Company immediately prior to the Merger. Parent has also agreed to, following the Merger, honor all employment, severance and change of control arrangements entered into between the Company and its Subsidiaries as of the Effective Timeemployees. From and after the Closing Date, Prior employment with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parentwill, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to extent recognized by the Company, be recognized taken into account in determining the eligibility for purposes of eligibility to participate in, participation and levels of benefits (but not for purposes of benefit accrual under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree medical or similar benefits (collectivelyvesting under any plan) under all employee benefit plans maintained by Parent and any subsidiary of Parent for the benefit of the employees who continue to be employed after the Merger, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely except to the extent service was credited doing so would result in duplication of benefits. Parent has agreed to such employee use its commercially reasonable efforts to waive any and all eligibility waiting periods for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date all health and welfare benefit plans and all pre-existing condition exclusions and actively-at-work requirements to the extent such conditions were inapplicable or waived under the comparable benefit plans of the Company. Additionally, Xxxxxx has agreed to credit would not result in a duplication each employee with all deductible payments, out-of-pocket or other co-payments paid by such employee under the health benefit plans of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee Company prior to the Closing Date to Merger during the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA year in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and Merger occurs for the purpose of ensuring determining deductible and out-of-pocket maximums under the continuity health benefit plans of the business, and Parent for that year. The Merger Agreement also provides that the Company agrees not to discourage, and to cause will terminate its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e401(k) Immediately retirement plan effective prior to the Effective Time, by virtue closing date of the Merger. Rule 14d-10. The Merger and without any action Agreement also provides for certain covenants on the part of the holders thereof, each 2018 Cash Award Company relating to Rule 14d-10 under the Exchange Act and Deferred Cash Award, in each case approvals that is outstanding as of immediately prior are to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than Company’s compensation committee with respect to employment-related arrangements entered into after the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the CodeMerger Agreement.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Offer to Purchase (Bgi-Shenzhen)
Employee Benefit Plan Matters. (a) As of and subsequent to the Closing DateEffective Time, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees Parent shall: (i) assume and honor, employee bonus plans, change in control and severance plans and agreements and other retention plans and agreements listed in Section 4.17(a) of the Company Disclosure Schedule, provided that nothing herein shall prohibit Parent from amending, suspending or terminating any such plan or arrangement to the extent permitted by its terms and its Subsidiaries as Applicable Law; (ii) for a period of not less than twelve (12) months after the Effective Time. From and after , provide the Closing Date, with respect to employees of the Company or its Subsidiaries as of immediately before prior to the Effective Time who continue to be employed by Parent, the Surviving Corporation and/or its Subsidiaries on and after the Effective Time (the “Covered Employees”) base compensation, incentive opportunities, severance and employee benefits (including retirement, group health, life, disability, vacation and severance plans) that are not less favorable in the aggregate to each Covered Employee than were provided by the Company or its Subsidiaries to such Covered Employee immediately prior to the Effective Time; (iii) provide all Covered Employees with service credit for purposes of eligibility, participation, vesting and levels of benefits under any employee benefit or compensation plan, program or arrangement adopted, maintained or contributed to by Parent or the Surviving Corporation and/or their Subsidiaries in which Covered Employees are eligible to participate (the “Parent Plans”) for all periods of employment with the Company or its Subsidiaries (or any predecessor entities) prior to the Effective Time to the same extent as such Covered Employee was entitled, before the Effective Time, to credit for such service under any similar Employee Plan in which such Covered Employee participated or was eligible to participate immediately prior to the Effective Time, and with Parent, the Surviving Corporation and any of their Subsidiaries or Affiliates on and after the Effective Time, provided that the foregoing shall not apply (A) for any Subsidiary purpose under any defined benefit pension plan or retiree welfare plan, (B) for purposes of any Parent Plan under which similarly-situated employees of Parent and its Subsidiaries do not receive credit for prior service, (C) for purposes of any Parent Plan that is grandfathered or frozen, either with respect to level of benefits or participation, or (D) to the extent that its application would result in a duplication of benefits with respect to the same period of service; (iv) use commercially reasonable efforts to cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any Parent Plan to be waived with respect to the Covered Employees and their eligible dependents, to the extent waived under the corresponding plan in which the applicable Covered Employee participated immediately prior to the Effective Time; and (v) use commercially reasonable efforts to give the Covered Employees and their eligible dependents credit for the plan year in which the Effective Time (or commencement of participation in a plan of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee Corporation) occurs towards applicable deductibles and annual out-of-pocket limits for expenses incurred prior to the Effective Time to be recognized for purposes (or the date of eligibility to participate in, and levels commencement of benefits (but not for purposes of participation in any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”Parent Plan)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period Notwithstanding the foregoing provisions of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries)this Section 7.03, the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary toprovisions of Section 7.03(a) provide each Continuing shall apply only with respect to Covered Employees who are covered under Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) Plans that are no less favorable in maintained primarily for the aggregate than those provided to similarly situated benefit of employees of the Company and its Subsidiaries prior to employed in the Closing United States (including Covered Employees regularly employed outside the United States to the extent disclosed they participate in such Employee Plans). With respect to Parent as of Covered Employees not described in the date hereofpreceding sentence, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From from and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participateEffective Time, Parent shall, or shall cause the Surviving Corporation or and its applicable Subsidiary Subsidiaries to, use commercially reasonable efforts comply with all applicable Laws relating to cause each employees and employee benefits matters applicable to such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Planemployees.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Merger Agreement (Affymetrix Inc)
Employee Benefit Plan Matters. (a) As With respect to any employee benefits that are provided to an individual who is an employee of Company or any Water Subsidiary (including any individual on layoff, disability or leave of absence, paid or unpaid) immediately before the Closing Date("Company Employees") under any employee benefit plan, the Surviving Corporation program, arrangement or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and agreement maintained after the Closing Dateby Buyer or its Affiliates ("Buyer Plans"), Buyer shall cause service accrued by Company Employees during employment with respect to employees of the Company or its Water Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to be recognized for all purposes to the same extent disclosed to Parent as of the date hereof (recognized by Company or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Water Subsidiaries immediately prior to the Closing Date, except to the extent disclosed necessary to Parent prevent duplication of benefits. Notwithstanding the foregoing, with respect to any Buyer Plan which did not benefit Company Employees prior to Closing, service accrued by Company Employees for employment with Company or a Water Subsidiary prior to Closing need not be recognized for purposes of benefit accrual, except as required by applicable Law. With respect to any medical, dental or other welfare benefits that are provided at any time to Company Employees under Buyer Plans, any applicable pre-existing condition exclusions and waiting periods (except to the extent such limitations or waiting periods are already in effect with respect to such employees and have not been satisfied under the comparable Employee Plan/Agreement immediately prior to the Closing Date) shall be waived, and each Company Employee shall be provided with credit for any copayments and deductibles paid prior to the Closing Date in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such employees are eligible to participate in after the Closing Date.
(b) Buyer shall cause to be provided and be solely responsible for any continuation coverage required under Section 4980B of the date hereofCode, in each case without giving effect Sections 601-608 of ERISA or applicable state Law ("COBRA") with respect to any reduction current or former employee of Company or any Water Subsidiary whose "qualifying event" (as that term is defined in annual base salary, base hourly rate, cash incentive compensation opportunities COBRA) occurs or employee benefits occurred at or before the Closing or in response to or otherwise related to connection with the coronavirus (COVID-19) pandemictransactions contemplated by this Agreement.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or Buyer shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods Company and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Water Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated honor in accordance with its terms the Company Retention and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights Severance Plan referenced in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonSection 5.11(b).
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its the Company Subsidiaries immediately before the Effective Time who continue employment with Parent, are employed by the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and the Company Subsidiaries (or predecessor employers, but only if such service with a predecessor employer is recognized as of the date of this Agreement in a corresponding Company Employee Plan) prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or Parent or any of their Subsidiaries respective Affiliates (collectively, the “Parent Benefit Plans”) (but in any event not for purposes of any accrual under any cash balance or defined benefit plan or vesting under any equity-based compensation plan or arrangement) in which any Continuing Employee is or becomes eligible to participate, but solely to the same extent that such service was recognized under a similar plan, program, policy, or arrangement of the Company or any of its Affiliates, except that no such prior service 62 credit will be required or provided to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result that it results in a duplication of benefits.
(b) For a period of 12 months after immediately following the Closing Date (oror if earlier, if shorter, for so long as the applicable date of the Continuing Employee remains employed by Employee’s termination of employment with the Surviving Corporation or its SubsidiariesParent or any Affiliate thereof), the Surviving Corporation Parent shall provide or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide to be provided to each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual a base salary and target bonus opportunity (or base hourly rate and (Bpay for non-salaried employees) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level base salary and target bonus opportunity (or opportunity base pay) that was provided to each such Continuing Employee had at the Company for the fiscal year in which the Closing Date occurs and (ii) all other compensation and benefits, that are, in the aggregate, no less favorable than those provided by the Company and the Company Subsidiaries immediately prior to the Closing Date to the extent disclosed to Parent (excluding, in all cases, equity-based compensation defined benefit pension benefits and, except as provided in a Contract existing as of the date hereof of this Agreement (or modified hereafter in accordance with Section 6.01including any Company Employee Plan), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicretiree medical benefits).
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, to the extent permitted by Applicable Laws, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to will cause each such Parent Benefit Plan to (i) waive all limitations as to preexisting conditions, exclusions and service conditions (other than with respect to any Parent Benefit Plan that is a retiree medical plan) with respect to participation and coverage requirements applicable to Continuing Employees, other than (A) limitations applicable to a particular Continuing Employee under the corresponding Company Employee Plan or (B) to the extent that such pre-existing conditionscondition limitations, exclusions, actively-at-work requirements and waiting periods have not already have been satisfied or waived under the corresponding Company Employee Plan, except, in the cases of both (A) and (B), to the extent required by Applicable Laws, (ii) waive all waiting periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied applied, would have already been satisfied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that Plan and (iii) credit co-payments or deductibles paid by Continuing Employees in the plan year in which the Closing occurs for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable deductible or co-payment or deductible requirements under such the applicable Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permitFrom and after the Closing Date, Parent will honor, and will cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after to honor, in accordance with their terms, all existing employment, retention, incentive, change in control and severance agreements between the Company or the Company Subsidiaries and any Company Employee. Prior to the Closing Date, the Company will use commercially reasonable efforts (which, for the avoidance of doubt, shall not require the providing or withholding of any compensation or other benefits or privileges) to enter into the letter agreements with those employees identified on Section 6.06(d) of the Company Disclosure Schedules pursuant to which such employee’s employment agreement will be amended as of the Effective Time and for in accordance with the purpose of ensuring the continuity terms set forth on Section 6.06(d) of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.Disclosure Schedules. 63
(e) Immediately prior to Parent, the Effective Time, by virtue of the Merger Company and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From acknowledge and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described agree that all provisions contained in this Section 6.07(e) 6.06 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or Parent Benefit Plan or any beneficiary thereof or any right to continued employment with respect to (i) Parent, the 2018 Cash Awards shall be made by Company, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms any of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) their Affiliates. Nothing in this Section 6.07 6.06 shall be deemed to (i) amend any Company Employee Plan, any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, or to continue employment after the Closing Date with the Company, Parent or the Surviving Corporation, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of by Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of ParentCompany, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights through an action separate and distinct from the actions contemplated by this Agreement in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personaccordance with its terms and Applicable Law.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As Effective as of the Closing DateEffective Time and for a period of one (1) year thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, to each employee of the Company or any of its Subsidiaries who continues to be employed by the Surviving Corporation or one any of its Subsidiaries will continue (the “Affected Employees”), (i) a base salary or regular hourly wage, whichever is applicable, regular cash incentive compensation opportunities (including for sales representatives) but excluding all equity-based, retention, transaction and change in control compensation opportunities) that are substantially comparable in the aggregate to employ the employees of what was provided to such Affected Employee by the Company and or any of its Subsidiaries immediately prior to the Effective Time and (ii) employee benefits (excluding severance, retention, change in control, defined benefit pension benefits and retiree health and welfare benefits) and perquisites that are, in the aggregate, substantially comparable to those provided to such Affected Employee (including all dependents) by the Company or any of its Subsidiaries immediately prior to the Effective Time (excluding severance, retention, change in control, defined benefit pension benefits and retiree health and welfare benefits).
(b) Effective as of the Effective Time and thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, that periods of employment with the Company or any of its Subsidiaries (including any current or former Affiliate of the Company or any predecessor of the Company or any of its Subsidiaries) and any other periods of service recognized under any Company Benefit Plan shall be taken into account for purposes of determining, as applicable, the eligibility for participation of each Affected Employee in, the vesting of rights and benefits by each Affected Employee under, and the determination of level or amount of benefits payable to or accrued by each Affected Employee under all employee benefit plans maintained or contributed to by Parent or any Affiliate of Parent for the benefit of the Affected Employees (other than defined benefit pension plans, severance plans and retiree health and welfare plans), to the same extent recognized by the Company or any of its Subsidiaries under comparable Company Benefit Plans immediately prior to the Effective Time; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit for the same period of service. From Effective as of the Effective Time and after thereafter, Parent shall, and shall cause the Closing DateSurviving Corporation to, use commercially reasonable efforts to (i) reduce any period of limitation on health benefits coverage of Affected Employees due to pre-existing conditions (or actively at work or similar requirements) under the applicable health benefits plan of Parent or any Affiliate of Parent (except to the extent such condition limitations or actively-at-work or similar requirements would not have been satisfied or waived under the comparable Company Benefit Plan prior to the Effective Time), (ii) waive any and all eligibility waiting periods and evidence of insurability requirements with respect to employees such Affected Employees to the extent that any applicable eligibility waiting periods or evidence of insurability requirements under similar health benefit plans were waived or satisfied (or deemed to be satisfied) with respect to the Affected Employees under such health benefit plans (except to the extent such eligibility waiting periods and evidence of insurability requirements would not have been satisfied or waived under the comparable Company Benefit Plan prior to the Effective Time) and (iii) credit each Affected Employee with all deductible payments, co-payments, and other out-of-pocket payments paid by such employee under the health benefit plans of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee Affiliates prior to the Effective Time during the year in which the Closing occurs for the purpose of determining the extent to be recognized which any such employee has satisfied his or her deductible and whether he or she has reached the out-of-pocket maximum under any health benefit plan of Parent or an Affiliate of Parent for purposes such year. Neither the Merger nor any of eligibility the other Transactions shall affect any Affected Employee’s accrual of, or right to participate intake, any accrued but unused personal, sick or vacation policies applicable to such Affected Employee immediately prior to the Effective Time.
(c) Prior to the Effective Time, the Company shall (i) take all such necessary actions to terminate the Company NQDC Plan effective no later than the day immediately preceding the Effective Time and levels (ii) provide Parent with evidence that the Company NQDC Plan has been terminated, with the termination of benefits the Company NQDC Plan effective no later than the day immediately preceding the Effective Time, pursuant to a duly adopted resolution of the Company, in form and substance reasonably acceptable to Parent.
(but not for purposes of d) Nothing in this Agreement shall confer upon any equity Affected Employee or equity-based compensation, long-term incentive, change any other Person any right to continue in control, retention the employ or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement service of Parent, the Surviving Corporation or any Affiliate of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shallParent, or shall cause interfere with or restrict in any way the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement rights of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any Affiliate of their Affiliates Parent, which rights are hereby expressly reserved, to continue discharge or amend terminate the services of any particular benefit plan before Affected Employee or after any other Person at any time for any reason whatsoever, with or without cause. Notwithstanding any provision in this Agreement to the consummation of the transactions contemplated contrary, nothing in this Agreement, and whether express or implied, shall (i) be deemed or construed to be an amendment or other modification of any such plan may be amended Company Benefit Plan or terminated in accordance with its terms and Applicable LawParent employee benefit plan, (ii) guarantee employment for create any period third party beneficiary rights or other rights in any current or former employee or service provider of time for, the Company or preclude its Affiliates (or any beneficiaries or dependents thereof) or (iii) alter or limit the ability of Parent, Parent or the Surviving Corporation or any of their respective Affiliates to amend, modify or terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policyprogram, agreement or other arrangement on the part of Parentat any time assumed, the Surviving Corporation established, sponsored or maintained by any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Personthem.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits other than pension arrangements (collectively, “Excluded Enumerated Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe fringe, pension arrangement, study fund, severance or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 twelve months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash and equity incentive compensation opportunities (including commissions and other than the Excluded Enumerated Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), ) and (ii) employee benefits (other than including the Excluded Enumerated Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and or its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicClosing.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, actively-at-work requirement, required physical examinations with respect to and any other restriction that would prevent immediate or full participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, actively-at-work requirement, required physical examinations and other restriction would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) use commercially reasonable efforts to provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) Parent shall comply with the covenant and acknowledgement set forth in Section 6.07(d) of the Company Disclosure Schedule with respect to the 2021 NEO Bonuses. Following the Effective Time, Continuing Employees shall participate in Parent’s bonus plans and programs and earn ACTIVE/110954383.28 pro-rated bonus payments for the period commencing on the Closing Date and ending at the end of Parent’s fiscal year 2022.
(e) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Samples: Merger Agreement (SYNAPTICS Inc)
Employee Benefit Plan Matters. (a) As of From and after the Closing DateEffective Time, Parent shall honor, and shall cause the Surviving Corporation to honor, all Company Employee Plans and all employment, severance and termination plans and agreements, in each case in accordance with their terms as in effect immediately before the Effective Time and shall assume any Company Employee Plans that require or contemplate assumption by their terms by an acquirer or successor. For a period of one (1) year following the Effective Time, Parent shall provide, or shall cause to be provided, to each Continuing Employee (i) base salary and base wages, short-term cash incentive compensation opportunities and severance payments and severance benefits (in the case of its Subsidiaries will continue to employ severance plans and benefits, in each case, in accordance with the employees severance plans and guidelines described on Section 6.06 of the Company and its Subsidiaries Disclosure Schedules, as amended pursuant to item 9 of Section 6.01(b)(xix) of the Effective Time. Company Disclosure Schedules), in each case in an amount no less favorable than that in effect immediately prior to the execution of this Agreement and (ii) other benefits (other than equity compensation) that are substantially comparable in the aggregate to the other such benefits provided to such Continuing Employees immediately prior to the execution of this Agreement.
(b) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and the Company Subsidiaries prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation Corporation, but not including any sabbatical or any of their Subsidiaries equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, Plan but only to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes permitted under the comparable Company Employee Planterms and conditions of Parent’s applicable insurance Contracts in effect as of the Closing Date.
(d) The Prior to the Closing Date, the Company shall permit, and cause its Subsidiaries to permit, will reasonably cooperate with Parent to contact and make arrangements with provide updates to the Company’s or its Subsidiary’s employees regarding employment or prospective employment with Section 280G Information, if any, following the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, date hereof and to cause its Subsidiaries not to discourage, any provide such employees from consulting with other related information as reasonably requested by Parent.
(e) Immediately prior With respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the Effective Timepersonal, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall depositshall, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than to and instruct its Affiliates to, as applicable (and without duplication of benefits), assume the next regularly scheduled payroll date that is at least two Business Days following the Closing Dateliability for such accrued personal, sick or vacation time and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; providedallow such Continuing Employee to use such accrued personal, that such payments may be made at such other sick or vacation time or times following the Effective Time consistent in accordance with the terms practice and policies of the 2018 Cash Award or Deferred Cash AwardCompany, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan they may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of from time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Persontime.
Appears in 1 contract
Samples: Merger Agreement (Bioverativ Inc.)
Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and its ERISA Affiliates prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)plan) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries ERISA Affiliates, but not including any sabbatical or equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit PlanPlan but, with respect to long-term disability and life insurance benefits and coverage, solely to the extent permitted under the terms and conditions of Parent’s applicable insurance contracts in effect as of the Closing Date; provided, however, provided that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, employment Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(dc) The Parent, the Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time acknowledge and agree that all provisions contained in this Section 6.07 are included for the purpose of ensuring the continuity sole benefit of the businessrespective parties to this Agreement and shall not create any right in any other Person, and the Company agrees not to discourageincluding any employees, and to cause its Subsidiaries not to discourageformer employees, any such employees from consulting participant in any Company Employee Plan or any beneficiary thereof or any right to continued employment with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger and without any action on the part of the holders thereofCompany, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount or any of such award (such amounts payable hereunder, the “Cash Award Payments”)their Affiliates. From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing Date, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of The Sellers, PNIC and the Closing Date, the Surviving Corporation Employee Plans shall remain responsible for any employee benefits earned or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company accrued on or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee prior to the Effective Time to be recognized for purposes of eligibility to participate in, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and for any liabilities arising out of the operation of the Employee Plans on or before the Closing Date. Buyer shall have no responsibility or obligation under or to or arising out of the extent such credit would not result in a duplication of benefitsEmployee Plans or to any participant or beneficiary thereunder.
(b) For a period None of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation Front Royal or any of its Subsidiaries), the Surviving Corporation Subsidiaries or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits Affiliates shall be governed by obligated to offer employment to any of the applicable Collective Bargaining Agreement) with Employees of Americlaim, Unamark or Wycon. In the event Buyer or any Affiliate of Buyer offers employment to any such Employee, Buyer shall cause (i) each such Employee employed by Buyer or Affiliate thereof (A"Hired Employees") annual base salary to be immediately eligible for participation in the Buyer's or base hourly rate Affiliate's, as the case may be, medical, life, disability, or similar employee welfare benefit plans ("Buyer's Welfare Plans"), (ii) preexisting condition rules under Buyer's Welfare Plans shall be waived, and (Biii) cash incentive compensation opportunities application of deductibles under Buyer's health insurance plan shall take into account the status of each Hired Employee (including commissions and other than his or her eligible dependents) under deductible rules of the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent Plans as of the date hereof (or modified hereafter in accordance immediately preceding the Hired Employee's employment with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicBuyer.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or Buyer shall cause Hired Employees to be credited with service for employment with the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods Companies for vesting and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee PlanBuyer's qualified retirement plans. Buyer shall take all actions reasonably necessary to provide that Hired Employees can rollover Sellers' qualified plan distributions to Buyer's qualified plans.
(d) The Company Buyer agrees that it shall permit, offer to all Employees who are not Hired Employees (the "Non-Hired Employees") and cause its Subsidiaries to permit, Parent to contact and make arrangements with their respective "qualified beneficiaries" within the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time and for the purpose meaning of ensuring the continuity Section 607(3) of the business, and the Company agrees not to discourageERISA, and to cause its Subsidiaries not to discourage, each former employee of any such employees from consulting with Parent.
(e) Immediately prior to the Effective Time, by virtue of the Merger Companies who is as at the Closing Date participating in the Sellers' health insurance plans pursuant to COBRA (the "COBRA Participants") and without any action on their respective "qualified beneficiaries," the part of opportunity to participate in Buyer's health insurance plan upon the holders thereof, each 2018 Cash Award Buyer's plan's terms and Deferred Cash Award, in each case that is outstanding conditions implementing COBRA as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to though (i) in the 2018 Cash Awards shall be made by case of each Non-Hired Employee, the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following Non-Hired Employee experienced a "qualifying event" under Section 603(2) of ERISA as of the Closing Date, and (ii) in the Deferred Cash Awards shall be made within five Business Days following case of each COBRA Participant, the Closing Date; provided, that such payments may be made qualifying event rendering him or her eligible for COBRA under Sellers' plan took place at such other a time when he or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined she was covered by Parent, to avoid the imposition of additional tax under Section 409A of the CodeBuyer's plan.
(fe) Nothing in this Section 6.07 Sellers shall be deemed provide to (i) amend any Parent Benefit Plan or Buyer such records concerning the Employee Plans as Buyer may reasonably require to require Parentadminister Buyer's Welfare Plans with respect to the Hired Employees, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after Non-Hired Employees and the consummation of COBRA Participants. Sellers' obligations hereunder shall survive the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other PersonClosing.
Appears in 1 contract
Samples: Stock and Asset Purchase and Sale Agreement (Front Royal Inc)
Employee Benefit Plan Matters. (a) As Effective as of the Closing, Buyer shall cause the applicable Company or Included Entity to offer to employ or continue the employment of all persons who are designated on the records of such Company, Included Entity or Realty as of the Closing Dateas employees, whether or not then actively at work, including, without limitation, any employees who are on vacation leave, leave of absence, sick leave or disability leave ("COMPANY EMPLOYEES"). Buyer shall also cause the Surviving Corporation applicable Company or one Included Entity to honor any re-employment rights of its Subsidiaries will continue to employ the any current or former employees of the such Company and its Subsidiaries or Included Entity, including, but not limited to, any such persons who are receiving long-term disability benefits as of the Effective TimeClosing. From and after Nothing contained herein shall be deemed to require the Closing Date, with respect Buyer to employees of the employ or cause any Company or Included Entity to employ any individual for any period of time following the Closing.
(b) Each employee benefit plan, fund, policy or arrangement established or maintained by Buyer or its Subsidiaries immediately before Affiliates for Company Employees ("BUYER PLAN") shall grant vesting and eligibility credit (for initial participation purposes), to the Effective Time who continue employment with Parentextent such credit was given under the Benefit Plans, the Surviving Corporation to each Company Employee for all service on or any Subsidiary of Parent or the Surviving Corporation following prior to the Closing Date with any Company or Included Entity or any predecessor or Affiliate of any of the foregoing, for all purposes other than benefit accrual under a "defined benefit plan," within the meaning of Section 3(35) of ERISA; provided, that any 41 42 Buyer Plan may be designed to offset, or otherwise avoid duplication of, any benefits to which a Company Employee is entitled under any comparable Benefit Plan or any amount payable under a Benefit Plan may be reduced to the extent paid under a Buyer Plan.
(“Continuing Employees”)c) Effective as of the Closing, Parent Buyer shall establish, or shall cause the service of each such Continuing Employee prior appropriate Companies and/or Included Entities, to the Effective Time to continue, or be recognized for purposes of eligibility to participate included in, a group health plan which shall cover all Company Employees and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan family members who immediately prior to the Closing Date and to the extent were covered under any group health plan maintained by any Company or Included Entity. Any such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed group health plan established or maintained by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits Buyer shall be governed by the applicable Collective Bargaining Agreement) with (i) waive any waiting period, (Aii) annual base salary waive any exclusion or base hourly rate limitation for preexisting conditions which were covered (generally and/or specifically as to any individual) under any group health plan maintained by the Companies and Included Entities prior to the Closing and (Biii) cash incentive compensation opportunities grant credit (including commissions for purposes of annual deductibles, copayments and other than the Excluded Benefits), in each case in an amount at least equal to the level out-of-pocket limits) for any covered claims incurred or opportunity that was provided to each such Continuing Employee payments made prior to the Closing Date to during the extent disclosed to Parent as of the date hereof (or modified hereafter plan year in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to which the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicDate occurs.
(cd) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent Buyer shall, or shall cause the Surviving Corporation applicable Company or its applicable Subsidiary Included Entity to, use commercially reasonable efforts recognize and honor the terms of (including, but not by way of limitation, making contributions or benefit payments as may be required by) the ERP Bonus Program, the Fel-Pro Incorporated Management Deferred Compensation Plan and the Fel-Pro Incorporated Voluntary Deferral Plan, and shall not allow such plans to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and required physical examinations with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent be amended or terminated in any way that such pre-existing conditions, waiting periods and required physical examinations would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Planadversely affects any participant's benefits thereunder; provided, however, that for purposes such deferred compensation plans may be amended so that no further accruals or additions to participant's benefits thereunder shall be required from the date of clarity, the adoption of such amendment (other than earnings or similar credits pursuant to the extent terms of such plans as currently in effect). In addition, Buyer shall cause the Companies and Included Entities to maintain in effect the benefit coverage includes eligibility conditions based programs set forth on SECTION 9.1(D) OF THE DISCLOSURE SCHEDULE as currently in effect for the periods set forth on SECTION 9.1(D) OF THE DISCLOSURE SCHEDULE. Except as set forth in this SECTION 9.1(D) or the terms of employmentany such Benefit Plan, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for Seller recognizes Buyer's right to amend or terminate any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying or substitute any applicable co-payment or deductible requirements under such Parent Benefit Buyer Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permit, and cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation at any time after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, and to cause its Subsidiaries not to discourage, any such employees from consulting with ParentClosing.
(e) Immediately prior Buyer shall, or shall cause the applicable Company or Included Entity to, make the severance payments listed on Part A of SECTION 9.1(E) OF THE DISCLOSURE SCHEDULE to any Company Employee (except for those Company Employees set forth on Part B of SECTION 9.1(E) OF THE DISCLOSURE SCHEDULE), who are terminated by the Effective Time, by virtue of the Merger and without any action applicable Company or Included Entity other than for "cause" (as hereafter defined) on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following one year after the Closing Date. For purposes of this paragraph (e) "CAUSE" shall mean such Company Employee's theft, and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; providedfraud, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.willful and
Appears in 1 contract
Employee Benefit Plan Matters. (a) As of From and after the Closing DateEffective Time, Parent shall honor, and shall cause the Surviving Corporation to honor, all Company Employee Plans and all employment, severance and termination plans and agreements, in each case in accordance with their terms as in effect immediately before the Effective Time and shall assume any Company Employee Plans that require or contemplate assumption by their terms by an acquirer or successor. For (i) a period of one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of (1) year following the Effective Time. , Parent shall provide, or shall cause to be provided, to each Continuing Employee base salary and base wages, short-term cash incentive compensation opportunities and severance payments and severance benefits, each in an amount no less favorable than that in effect immediately prior to the execution of this Agreement and (ii) the calendar year 2017, other benefits (other than equity compensation) that are substantially comparable in the aggregate to the benefits provided to such Continuing Employees immediately prior to the execution of this Agreement.
(b) From and after the Closing Date, with respect to employees of the Company or its Subsidiaries immediately before the Effective Time who continue employment with Parent, the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation following the Closing Date (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and the Company Subsidiaries prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of benefit accruals or participation eligibility under any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension plan or retiree plan providing post-retirement medical or other similar benefits (collectively, “Excluded Benefits”)benefits) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation Corporation, but not including any sabbatical or any of their Subsidiaries equity compensation plans, programs, agreements or arrangements (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent that service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent that such credit would not result in a duplication of benefits.
(b) For a period of 12 months after the Closing Date (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will (or Parent will cause the Surviving Corporation or its applicable Subsidiary to) provide each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level or opportunity that was provided to each such Continuing Employee prior to the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), and (ii) employee benefits (other than the Excluded Benefits) that are no less favorable in the aggregate than those provided to similarly situated employees of the Company and its Subsidiaries prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemic
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, Plan but only to the extent such benefit coverage includes eligibility conditions based on periods of employment, Section 6.07(a) shall control; and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and deductibles paid in the calendar year that, and prior to the date that, such Continuing Employee commences participation in such Parent Benefit Plan in satisfying any applicable co-payment or deductible requirements under such Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes permitted under the comparable Company Employee Planterms and conditions of Parent’s applicable insurance Contracts in effect as of the Closing Date.
(d) The Prior to the Closing Date, the Company shall permit, and cause its Subsidiaries to permit, will reasonably cooperate with Parent to contact and make arrangements with provide updates to the Company’s or its Subsidiary’s employees regarding employment or prospective employment with Section 280G Information, if any, following the Surviving Corporation after the Effective Time and for the purpose of ensuring the continuity of the business, and the Company agrees not to discourage, date hereof and to cause its Subsidiaries not to discourage, any provide such employees from consulting with other related information as reasonably requested by Parent.
(e) Immediately prior With respect to any accrued but unused personal, sick or vacation time to which any Continuing Employee is entitled pursuant to the Effective Timepersonal, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of sick or vacation policies applicable to such Continuing Employee immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall depositshall, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to (i) the 2018 Cash Awards shall be made by the Surviving Corporation not later than to and instruct its Affiliates to, as applicable (and without duplication of benefits), assume the next regularly scheduled payroll date that is at least two Business Days following the Closing Dateliability for such accrued personal, sick or vacation time and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; providedallow such Continuing Employee to use such accrued personal, that such payments may be made at such other sick or vacation time or times following the Effective Time consistent in accordance with the terms practice and policies of the 2018 Cash Award or Deferred Cash AwardCompany, as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under Section 409A of the Code.
(f) Nothing in this Section 6.07 shall be deemed to (i) amend any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to continue or amend any particular benefit plan before or after the consummation of the transactions contemplated in this Agreement, and any such plan they may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of from time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Persontime.
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Employee Benefit Plan Matters. (a) As of the Closing Date, the Surviving Corporation or one of its Subsidiaries will continue to employ the employees of the Company and its Subsidiaries as of the Effective Time. From and after the Closing Date, with respect to employees of the Company or its the Company Subsidiaries immediately before the Effective Time who continue employment with Parent, are employed by the Surviving Corporation or any Subsidiary of Parent or the Surviving Corporation immediately following the Closing Date Effective Time (“Continuing Employees”), Parent shall cause the service of each such Continuing Employee with the Company and the Company Subsidiaries (or predecessor employers) prior to the Effective Time Closing Date to be recognized for purposes of eligibility to participate inparticipate, and levels of benefits (but not for purposes of any equity or equity-based compensation, long-term incentive, change in control, retention or other one-time or special incentive compensation, defined benefit pension or retiree medical or similar benefits (collectively, “Excluded Benefits”)) under, and vesting under each compensation, retirement, vacation, paid time off, fringe or other welfare benefit plan, program or arrangement of Parent, the Surviving Corporation or any of their Subsidiaries (collectively, the “Parent Benefit Plans”) in which any Continuing Employee is or becomes eligible to participate, but solely to the extent service was credited to such employee for such purposes under a comparable Company Employee Plan immediately prior to the Closing Date and to the extent such credit would not result in a duplication of benefitsbenefits or in benefit accrual under a defined benefit plan. Additionally, each Continuing Employee shall be immediately eligible to participate, without any waiting time, in any and all Parent Benefit Plans to the extent coverage under such Parent Benefit Plan replaces coverage under a comparable Company Employee Plan in which such Continuing Employee participated immediately before the replacement.
(b) For a period of 12 twelve (12) months after immediately following the Closing Date Date, Parent shall provide (or, if shorter, for so long as the applicable Continuing Employee remains employed by the Surviving Corporation or its Subsidiaries), the Surviving Corporation or its applicable Subsidiary will i) salary and target bonus opportunity (or Parent will cause the Surviving Corporation or its applicable Subsidiary tobase pay for non-salaried employees) provide for each Continuing Employee (other than any employee covered by a Collective Bargaining Agreement, whose compensation and benefits shall be governed by the applicable Collective Bargaining Agreement) with (i) (A) annual base salary or base hourly rate and (B) cash incentive compensation opportunities (including commissions and other than the Excluded Benefits), in each case in an amount at least equal to the level salary and target bonus opportunity (or opportunity base pay) that was provided to each such Continuing Employee prior to had at the Company for the fiscal year in which the Closing Date to the extent disclosed to Parent as of the date hereof (or modified hereafter in accordance with Section 6.01), occurs and (ii) employee benefits (other than the Excluded Benefitsexcluding any equity plans, but including profit sharing plans, severance plans and health and welfare benefit plans) that are no less favorable at least as favorable, in the aggregate than those aggregate, to each Continuing Employee as benefits (excluding any equity plans, but including profit sharing plans, severance plans and health and welfare benefit plans) provided to similarly situated employees of the Company and its Subsidiaries such Continuing Employee immediately prior to the Closing to the extent disclosed to Parent as of the date hereof, in each case without giving effect to any reduction in annual base salary, base hourly rate, cash incentive compensation opportunities or employee benefits in response to or otherwise related to the coronavirus (COVID-19) pandemicClosing.
(c) From and after the Closing Date, with respect to each Parent Benefit Plan that is an “employee welfare benefit plan” as defined in Section 3(1) of ERISA in which any Continuing Employee is or becomes eligible to participate, Parent shall, or shall cause the Surviving Corporation or its applicable Subsidiary to, use commercially reasonable efforts to cause each such Parent Benefit Plan to (i) waive all limitations as to pre-existing conditions, waiting periods and periods, required physical examinations and exclusions with respect to participation and coverage requirements applicable under such Parent Benefit Plan for such Continuing Employees and their eligible dependents to the same extent that such pre-existing conditions, waiting periods and periods, required physical examinations and exclusions would not have applied or would have been waived under the corresponding Company Employee Plan in which such Continuing Employee was a participant immediately prior to his or her commencement of participation in such Parent Benefit Plan; provided, however, that for purposes of clarity, Plan but only to the extent such benefit coverage includes eligibility permitted under the terms and conditions based on periods of employment, Section 6.07(a) shall control; Parent’s applicable insurance contracts in effect as of the Closing Date and (ii) provide each Continuing Employee and their eligible dependents with credit for any co-payments and or deductibles paid by Continuing Employees in the calendar plan year that, and prior to in which the date that, such Continuing Employee commences participation in such Parent Benefit Plan in Closing occurs for purposes of satisfying any applicable deductible or co-payment or deductible requirements under such the applicable Parent Benefit Plan for the applicable calendar year, to the extent that such expenses were recognized for such purposes under the comparable Company Employee Plan.
(d) The Company shall permitFrom and after the Closing Date, Parent will honor, and will cause its Subsidiaries to permit, Parent to contact and make arrangements with the Company’s or its Subsidiary’s employees regarding employment or prospective employment with the Surviving Corporation after the Effective Time to honor, in accordance with their terms, all existing employment, retention, incentive, change in control and for the purpose of ensuring the continuity of the business, and severance agreements between the Company agrees not to discourage, or the Company Subsidiaries and to cause its Subsidiaries not to discourage, any such employees from consulting with ParentCompany Employee.
(e) Immediately No later than ten (10) days prior to the Effective TimeClosing, by virtue of the Merger and without any action on the part of the holders thereof, each 2018 Cash Award and Deferred Cash Award, in each case that is outstanding as of immediately prior to the Effective Time, shall be canceled and extinguished and, in exchange therefor, each holder of any such award shall have the right to receive from Parent or the Surviving Corporation an amount in cash equal to the full amount of such award (such amounts payable hereunder, the “Cash Award Payments”). From and after the Effective Time, the holder of any canceled 2018 Cash Award or Deferred Cash Award shall be entitled to receive only the Cash Award Payment in respect of such canceled award. At or prior to the Effective Time, Parent shall deposit, or shall cause to be deposited, by wire transfer, immediately available funds sufficient to pay the aggregate Cash Award Payments to an account identified by the Company prior to the Effective Time. The Cash Award Payments described in this Section 6.07(e) with respect to each “officer” of the Company (as defined in Rule 16a-1 promulgated under the Exchange Act) (each a “Section 16 Officer”) and any other “disqualified individual” of the Company (as defined in Section 280G(c) of the Code), the Company shall furnish a schedule that sets forth (i) the 2018 Cash Awards shall Company’s reasonable, good faith estimate of the maximum amount that could be made by paid to such Section 16 Officer or other disqualified individual as a result of any of the Surviving Corporation not later than the next regularly scheduled payroll date that is at least two Business Days following the Closing DateTransactions (alone or in combination with any other event), and (ii) the Deferred Cash Awards shall be made within five Business Days following the Closing Date; provided, that such payments may be made at such other time or times following the Effective Time consistent with the terms of the 2018 Cash Award or Deferred Cash Award, “base amount” (as applicable, to the extent necessary, as determined by Parent, to avoid the imposition of additional tax under defined in Section 409A 280G(b)(3) of the Code) for each such Section 16 Officer or other disqualified individual, and (iii) underlying documentation on which such calculations are based.
(f) Parent, the Company and the Surviving Corporation acknowledge and agree that all provisions contained in this Section 6.06 are included for the sole benefit of the respective parties to this Agreement and shall not create any right in any other Person, including any Company Employee, any participant in any Company Employee Plan or Parent Benefit Plan or any beneficiary thereof or any right to continued employment with Parent, Company, the Surviving Corporation or any of their Affiliates. Nothing in this Section 6.07 6.06 shall be deemed to (i) amend any Company Employee Plan or any Parent Benefit Plan or to require Parent, the Surviving Corporation or any of their Affiliates to permit any Person to participate in any particular benefit plan sponsored or maintained by Parent or any of its Affiliates, or to continue or amend any particular benefit plan plan, before or after the consummation of the transactions contemplated in this AgreementTransactions, and any such plan may be amended or terminated in accordance with its terms and Applicable Law, (ii) guarantee employment for any period of time for, or preclude the ability of Parent, the Surviving Corporation or any of their respective Affiliates to terminate the employment of, any Continuing Employee for any reason, (iii) constitute the establishment or amendment of any benefit or compensation plan, policy, agreement or other arrangement on the part of Parent, the Surviving Corporation or any of their Affiliates or (iv) create any third party beneficiary rights in any Continuing Employee, any other employee, officer, director, independent contractor of Parent, the Surviving Corporation or any of their respective Affiliates, or any other Person.
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