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Common use of Employee Benefit Programs Clause in Contracts

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a) of the Seller Disclosure Schedule, none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 3 contracts

Samples: Merger Agreement (Kenexa Corp), Merger Agreement (Kenexa Corp), Merger Agreement (Kenexa Corp)

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Employee Benefit Programs. (a) Except as set forth in Section 5.13(a) of the Seller Disclosure Schedule, none of Seller, neither the Seller nor any of the Seller its Subsidiaries or any other ERISA Affiliate maintains, contributes to or maintains (or is obligated to contribute to contribute) to, or maintain), and none of Selleris party to, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “‘‘employee pension benefit plan’’ (the ‘‘Seller Pension Plans’’), as such term is defined in Section 3(2) of ERISA, ‘‘employee welfare benefit plan’’ (the ‘‘Seller Benefit Plans’’), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan plan, policy, program, agreement, or arrangement for current or former employees of the Seller Personnel or their respective dependents or beneficiariesany of its Subsidiaries, or any other plan, program program, policy, agreement, or arrangement of the same or similar nature that provides benefits to current or former non-employee directors or other non-employee service providers of Seller, any the Seller Subsidiary or any of its Subsidiaries (all such other ERISA Affiliate (plans, policies, programs, agreements, and arrangements for current or former employees or service providers, collectively, the ‘‘Seller Other Plans’’). (b) The Seller has made available to the Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, the Seller Benefit Plans and the Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingthereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the two most recent annual report reports on Form 5500 for the three most recent plan years5500; (v) the two most recent financial and/or actuarial reportreports, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, each of the Seller Benefit Plans and each of the Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of the Seller or any other ERISA Affiliateof its Subsidiaries, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Lawslaws and regulations. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and the Seller is not aware of any reason why any such opinion letter remains in effect and has would reasonably be expected to be revoked or not been revokedbe reissued. (e) The Seller has made or provided for all contributions to the Seller Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e5.13(f) of the Seller Disclosure Schedule, neither the Seller nor any Subsidiary of its Subsidiaries is a party to or maintains any contract or other arrangement with any employee or group of employees that provides for any kind of severance payments. (g) Except as set forth in Section 5.13(g) of the Seller Disclosure Schedule, neither the Seller nor any of its Subsidiaries or ERISA Affiliates contributes to, or in the six (6) years prior to the date hereof has contributed to (i) any ‘‘multiemployer plan’’ within the meaning of Section 4001(a)(3) of ERISA, or (ii) any plan subject to Title IV of ERISA. No circumstances exist which could reasonably be expected to result in any liability to the Seller or any of its Subsidiaries under Title IV of ERISA. (h) Except as set forth in Section 5.13(h) of the Seller Disclosure Schedule, neither the Seller nor any of its Subsidiaries provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Lawslaws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (fi) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no No lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of the Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) There is no material correspondence between the Seller or any subsidiary of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any other Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could would result in any material liability to the Parent, the Surviving Corporation, Seller, Seller or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. None of the Seller and its Subsidiaries nor any other Person, including any fiduciary, has engaged in any ‘‘prohibited transaction’’ (as defined in Section 4975 of the Code or Section 406 of ERISA), which could subject any of the Seller Pension Plans, Seller Benefit Plans or Seller Other Plans or their related trusts, the Seller, any of its Subsidiaries or any Person that the Seller or any of its Subsidiaries has an obligation to indemnify, to any material tax or penalty imposed under Section 4975 of the Code or Section 502 of ERISA. (gj) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a ‘‘nonqualified deferred compensation plan’’ within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, the proposed regulations issued thereunder and the regulations Internal Revenue Services Notices 2005-1 and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance2006-79. (hk) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of the Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans Plans, (collectively, the ‘‘Arrangements”), ’’) to certain holders of Seller Common Stock and other securities of Seller (the ‘‘Covered Securityholders’’). The Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. The Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members the adoption, approval, amendment or modification of each Arrangement since the discussions relating to the transactions contemplated hereby between the Seller Compensation Committee were present, duly adopted resolutions approving and Parent began has been approved as an employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment arrangement solely by independent directors of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect and the instructions thereto and (ii) the ‘‘safe harbor’’ provided pursuant to Rule 14d-10(d)(2) is otherwise applicable thereto assuming that the foregoing arrangementsboard of Parent has taken all necessary actions by it to cause such safe harbor to be applicable. (il) Except as set forth in Section 5.13(i) All Seller Other Plans subject to the laws of any jurisdiction outside of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will United States (i) result have been maintained in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Selleraccordance with all applicable requirements in all material respects, (ii) result in the acceleration of the time of paymentif they are intended to qualify for special tax treatment meet all material requirements for such treatment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, and (iii) increase any amount of benefits under any Seller Pension Planif they are intended to be funded and/or book-reserved are fully funded and/or book-reserved, Seller Benefit Plan or Seller Other Planas appropriate, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Codebased upon reasonable actuarial assumptions. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 2 contracts

Samples: Merger Agreement (Digitas Inc), Merger Agreement (Digitas Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a) of the Seller Disclosure Schedule, none of Seller, any of the Seller its Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller its Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiariesPersonnel, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary of its Subsidiaries or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan yearsannual reports on Form 5500; (v) the two most recent financial and/or actuarial reportreports, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller its Subsidiaries or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of SellerNo Seller Benefit Plan, Seller Pension Plan or Seller Other Plan is or was at any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan time subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be is subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revokedIRS. (e) Seller has made or provided for all contributions to Seller Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e5.13(f) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller its Subsidiaries provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (fg) Except as set forth in Section 5.13(f5.13(g) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f5.13(g) of the Seller Disclosure Schedule, there is no material written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could would result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (gh) Except as set forth in Section 5.13(h) of the Seller Disclosure Schedule, neither Seller nor any of its Subsidiaries is a party to any employment or consulting agreements with any current or former manager, director, officer or employee which require payment (which payment has not been made in full as of the date of this Agreement) of cash compensation in fiscal year 2008 in excess of $250,000. (i) Except with respect to the agreements disclosed in Section 5.13(i) of the Seller Disclosure Schedule, neither Seller nor any of its Subsidiaries is a party to (i) any oral or written agreement with any stockholder, director, officer or employee of Seller or any of its Subsidiaries the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of the transactions contemplated by this Agreement; (ii) any agreement or plan binding Seller or any of its Subsidiaries, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan or severance benefit plan, any of the benefits of which shall be increased, or the vesting of the benefits of which shall be accelerated, by the occurrence of any of the transactions contemplated by this Agreement; (iii) any agreement, plan or other arrangement with any officer or employee of Seller or its Subsidiaries that could reasonably be expected to give rise directly or indirectly to the payment of any amount that would be characterized as an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code; or (iv) any agreement, plan or arrangement with any officer of Seller or its Subsidiaries that could reasonably be expected to give rise directly or indirectly, but without regard to the transactions contemplated by this Agreement, to the payment of any amount that would not be deductible under Section 162(m) of the Code. (j) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (hk) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (iA) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly and unanimously adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A1) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B2) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units Options in accordance with the terms set forth in this Agreement, and (C3) the terms of Section Sections 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (iiB) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 2 contracts

Samples: Merger Agreement (BladeLogic, Inc.), Merger Agreement (BMC Software Inc)

Employee Benefit Programs. (a) Except Company Pension Plans, Company Benefit Plans and Company Other Plans shall be referred to individually as set forth a “Company Plan” and collectively as “Company Plans”. (b) The Company has made available to Parent true, correct and complete copies of: (i) all material documents embodying each Company Plan, including all amendments thereto and all related trust documents, administrative service agreements, group annuity contracts, group insurance contracts, and policies pertaining to fiduciary liability insurance covering the fiduciaries for each such plan; (ii) the most recent annual actuarial valuations, if any, prepared for each Company Plan; (iii) the three (3) most recent annual reports (Form Series 5500 and all schedules and financial statements attached thereto), if any, required under ERISA and/or the Code in Section 5.13(aconnection with each Company Plan; (iv) if a Company Plan is funded, the most recent annual and periodic accounting of each such Company Plan’s assets; (v) the most recent summary plan description together with the summary(ies) of material modifications thereto, if any, required under ERISA with respect to each Company Plan; (vi) the Seller Disclosure Schedulemost recent IRS determination, none opinion, notification and advisory letters, as applicable; (vii) all material communications to any Company Personnel relating to any Company Plan and any proposed Company Plan, in each case, relating to any amendments, terminations, establishments, increases or decreases in benefits, acceleration of Sellerpayments or vesting schedules, or other events which would result in any material liability to the Company; (viii) all correspondence to or from any Governmental Authority relating to any Company Plan including top-hat notices filed with the DOL and filings with the Pension Benefit Guaranty Corporation; and (ix) the three (3) most recent plan years discrimination tests for each Company Plan. (c) None of the Company, any of the Seller its Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Sellerthe Company, any of the Seller its Subsidiaries or any other ERISA Affiliate may will incur any material liability under under, any “employee pension benefit plan” (the “Seller Company Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Company Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance retention, severance, change of control, or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other material employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate for Company Personnel (collectively, the “Seller Company Other Plans”). (bd) Seller has made available to Parent complete and accurate copies of each Each of the following with respect to each of the Seller Pension Plans, Seller Benefit Company Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan which is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller the Company or any other ERISA Affiliate, of its Subsidiaries has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable LawsLaw. Each Company Plan described in Section 3.13 of the Company Disclosure Schedule can be amended, terminated or otherwise discontinued by the Company or Parent (as of and after the Effective Time) without material liability to the Company, Parent or any Affiliate thereof (other than ordinary administration expenses and run-outs on any self-insured or self-funded arrangements, and other than pursuant to a collective bargaining agreement). (de) None of Seller, No Company Pension Plan is or was at any of time within the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan last six (6) years subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller the Company nor any ERISA Affiliate could be is subject to any material liability under Title IV or Part 3 of Title I of ERISA. No Company Pension Plan is or was at any time within the last six (6) years a multiemployer plan as described in Section 3(37) of ERISA and Section 414(f) of the Code, or a multiple employer plan as described in Section 4063(a) of ERISA and Section 413 of the Code, and neither the Company nor any ERISA Affiliate has ever within the last six (6) years contributed or had an obligation to contribute to any such plan. Each of the Seller Company Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) of the Code has received a favorable determination or and/or opinion letter from the IRS and which was issued within the current remedial amendment period (or for which a timely request is currently pending with the IRS) and, to the Company’s Knowledge, nothing has occurred that could reasonably be expected to cause the loss or denial of such letter remains in effect and has not been revokedtax-favored status. (ef) Except as set forth in Section 5.13(e) of Neither the Seller Disclosure Schedule, neither Seller Company nor any Subsidiary of Seller its Subsidiaries provides or has agreed to provide healthcare health or any other non-pension coverage or benefits to any employees Company Personnel after their his/her employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (fg) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no No lawsuits, governmental administrative proceedings, proceedings or written claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of SellerCompany’s Knowledge, threatened with respect to any Seller Pension PlanCompany Plan concerning any matter that would reasonably be expected to result in any material liability to Parent (after the Effective Time), Seller Benefit Plan the Company, any ERISA Affiliate or Seller Other any Company Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written correspondence between Sellerthe Company, any Subsidiary of Seller its Subsidiaries or any other ERISA Affiliate Affiliate, on the one hand, and any Governmental Authority Authority, on the other hand, related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Company Plan concerning any matter that could would reasonably be expected to result in any material liability to Parent, the Company, the Surviving Corporation, Seller, Corporation or any Seller Pension Company Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made Neither the execution, delivery or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery performance of this Agreement and nor the performance consummation of the transactions contemplated herebyhereby will, will not (either alone or upon the occurrence of any additional or subsequent events) , constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will or may result in any payment, acceleration of payment, forgiveness of Indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any Company Personnel. (i) result in any payment (whether There is no voluntary employees’ beneficiary association within the meaning of severance pay or otherwiseSections 501(c)(9) becoming due and 505 of the Code maintained with respect to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Company Benefit Plan, Seller . No Company Benefit Plan or Seller Other Plan, (iiiis a “multiple employer welfare arrangement” within the meaning of Section 3(40) increase any amount of benefits under any Seller Pension Plan, Seller ERISA. No Company Benefit Plan that provides post-retirement medical coverage has unfunded material liabilities that will not be offset by insurance or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations accrued on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the CodeCompany Balance Sheet. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 2 contracts

Samples: Merger Agreement (Clearwater Paper Corp), Merger Agreement (Cellu Tissue Holdings, Inc.)

Employee Benefit Programs. (a) Except of the Disclosure Schedule sets forth all employee benefit plans as set forth defined in Section 5.13(a3(3) of the Seller Disclosure ScheduleEmployee Retirement Income Security Act of 1974, none as amended ("ERISA"), maintained by the Company under which the Company has any present or future obligations or liability (the "Benefit Plans"). The Company does not sponsor nor participate in any "defined benefit plan" as defined in section 3(35) of Seller, ERISA or any "multiemployer plan" as defined in Section 3(37) of ERISA or any "multiemployer plan" as defined in Section 3(37) of ERISA. To the best knowledge of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains Company and the Shareholders: (or i) each Benefit Plan which is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “an "employee pension benefit plan” (the “Seller Pension Plans”), " as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (ERISA has received a favorable determination letter from the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingInternal Revenue Service; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) all of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans have been maintained and Seller Other Plansadministered, which are maintained or contributed to by Sellerin all material respects, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance accordance with its their terms and has been and is in material compliance with the applicable provisions of ERISA and the Code; (including, but not limited to, iii) no facts exist which would adversely affect the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None qualified status of Seller, any of the Seller Subsidiaries nor Benefit Plans; (iv) no prohibited transaction under ERISA has occurred under any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, Benefit Plans for which there exists neither a statutory nor a regulatory exception and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could which would result in any material liability to Parentthe Buyer; (v) all contributions required under the Benefit Plans have been made, the Surviving Corporation, Seller, and all contributions made to or any Seller Pension Plan, Seller accrued with respect to all Benefit Plan Plans are deductible under Section 404 or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A 162 of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, ; (vi) no facts exist which could result in documentary and operational compliance with Section 409A a material increase in premium costs of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained Benefit Plans for which benefits are insured or a material increase in documentary and operational compliance with Section 409A benefit costs of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) which provide self-insured benefits; and (iivii) are not calculated based on the number of shares tendered no Benefit Plan provides (or has any obligation or commitment to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”provide) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were presenthealth, duly adopted resolutions approving as an “employment compensationmedical, severance disability, life or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act similar benefits with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, employees (or consultants to, Seller, (iiany beneficiary thereof) result in the acceleration of the time Company beyond their retirement or other termination of paymentservice (other than coverage mandated by Title I, funding Subtitle B, Part 6 of ERISA, which coverage is fully paid by the former employee or vesting of any his dependents). Other than claims for benefits under any Seller Pension Plansubmitted by participants or beneficiaries or appeals from denial thereof, Seller Benefit Plan there is no litigation, legal action, suit, investigation, claim, counterclaim or Seller Other Planproceeding pending or, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G best knowledge of the CodeCompany or the Shareholders, threatened against any Benefit Plan. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Monarch Dental Corp)

Employee Benefit Programs. (a) Except as set Schedule 3.11(a) sets forth a list of each Employee Benefit Program maintained, sponsored in Section 5.13(a) of whole or in part, or contributed to by the Seller Disclosure Schedule, none of Seller, any of the Seller Subsidiaries Company or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”)Subsidiary. (b) Seller The Company has made available available, or caused to be made available, to Parent true, correct and complete and accurate copies of each of the following with respect to each of the Seller Pension PlansEmployee Benefit Program listed on Schedule 3.11(a), Seller Benefit Plans and Seller Other Plans: including (as applicable) (i) the plan document document, including all amendments thereto, and any amendments thereto and a description if such Seller Pension Planall related trust documents, Seller Benefit Plan insurance contracts, or Seller Other Plan is not in writing; other funding arrangements, (ii) trust agreement or insurance contract (including a written description of any fiduciary liability policy or fidelity bond)Employee Benefit Program that is not set forth in a written document, if any; (iii) the most recent IRS determination or opinion lettersummary plan description, if any; (iv) the annual report on Form 5500 for the three most recent plan years; favorable determination or opinion letter issued by the IRS and (v) the financial and/or actuarial report, if any, for the three most recent plan years; annual report (Form 5500 series and (vi) summary plan descriptionall schedules and financial statements attached thereto). 2 If any issues or disclosures, any summary of material modifications thereto, and any material employee communicationsadd to Disclosure Schedule. (c) Except as set forth described in Schedule 3.11(c), the terms and operation of each Employee Benefit Program have complied in all material respects with all applicable Laws and regulations relating to that Employee Benefit Program. Except as described in Schedule 3.11(c), neither the Company nor any Subsidiary is required to make any payments or contributions to any Employee Benefit Program pursuant to any collective bargaining agreement or any applicable labor relations Law. Except as described in Schedule 3.11(c), no Employee Benefit Program provides or promises any health or other welfare benefits (other than severance benefits) to employees after their employment terminates other than as required by part 6 of subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or pursuant to requirements of applicable Law. With respect to any Employee Benefit Program, there has occurred no “prohibited transaction,” as defined in Section 5.13(c) 406 of ERISA or Section 4975 of the Seller Disclosure ScheduleCode, each or breach of any duty under ERISA or other applicable Law which could result in any material Taxes, penalties or other liability to the Company or any Subsidiary. As of the Seller Pension Plansdate hereof, Seller no litigation, arbitration or governmental administrative proceeding (other than those relating to routine claims for benefits) is pending or, to the Knowledge of the Company, threatened with respect to any Employee Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, Program. The Company has been and is administered in material compliance with its terms and has been complied and is in compliance in all material compliance respects with the applicable provisions requirements of ERISA (includingpart 6 of subtitle B of Title I of ERISA. The Company has not incurred and is not reasonably expected to incur any material Tax, but not limited topenalty or other liability imposed under the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended and including the funding regulations and prohibited transactions provisions thereof), the Code and all other applicable Lawsguidance issued thereunder. (d) Each Employee Benefit Program intended to qualify under Section 401(a) or 501(c)(9) of the Code (i) has received a favorable determination or approval letter from the IRS regarding its qualification under the applicable Code Section or (ii) is maintained under a prototype or volume submitter plan and may rely upon a favorable opinion or advisory letter issued by the IRS with respect to such prototype or volume submitter plan. No event or omission has occurred that would reasonably be expected to cause any such Employee Benefit Program to lose its qualification under Code Section 401(a). (e) None of Seller, the Company nor any of the Seller its Subsidiaries nor any other ERISA Affiliate sponsorhas maintained, maintain or contribute contributed to, has ever sponsored, maintained or contributed been required to contribute to (i) a plan subject to Section 302 or Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be (ii) a qualified plan “multi-employer plan” within the meaning of Code Section 401(a3(37) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation LawsSection 4001(a)(3) of ERISA, (iii) a plan with two or more contributing sponsors at least two of whom are not under common control, within the meaning of Section 4063 of ERISA, or (iv) a multiple employer welfare arrangement as defined in ERISA Section 3(40). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (f) Except as set forth in Section 5.13(f) All contributions due from the Company or any of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened its Subsidiaries with respect to any Seller Pension Plan, Seller Employee Benefit Plan Program have been timely made or Seller Other Plan. Except have been accrued as set forth in Section 5.13(f) liabilities of the Seller Disclosure Schedule, there is no written correspondence between Seller, Company and properly reflected in the financial statements of the Company in accordance with applicable Law. Neither the Company nor any Subsidiary of Seller or any other ERISA Affiliate and its Subsidiaries (i) have been required to report to any Governmental Authority related any corrections made or taxes due as a result of a failure to comply with Section 409A of the Code, and (ii) have any Seller Pension Plan, Seller Benefit Plan indemnity or Seller Other Plan concerning gross-up obligation for any matter that could result in any material liability to Parent, taxes or interest imposed or accelerated under Section 409A of the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other PlanCode. (g) Each Seller Pension Planagreement, Seller Benefit Plan and Seller Other Plan contract, plan or other arrangement to which the Company or any of its Subsidiaries is a party that is a “nonqualified deferred compensation plan” within subject to Section 409A of the meaning Code complies with the requirements of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and any IRS guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of on Schedule 3.11(h), neither the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance consummation of the transactions contemplated hereby, hereby nor the execution of this Agreement will not (either alone or upon in combination with any other event), (i) increase the occurrence of any additional compensation or subsequent events) constitute an event benefits payable under any Seller Pension PlanEmployee Benefit Program or otherwise to any current or former employee, Seller Benefit Plan officer, director or Seller Other Plan that will other service provider of the Company or any of its Subsidiaries, (iii) result in any payment (whether in cash, property or the vesting of severance pay property) or otherwisegive rise to any liability under any Employee Benefit Program or (iii) becoming accelerate the time of payment, funding or vesting, or increase the amount or require the funding of, compensation or benefits due to any current or former employee, officer, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller the Company or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Codeits Subsidiaries. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Merger Agreement (Resmed Inc)

Employee Benefit Programs. (a) Except as set forth in Neither the Company nor any of its Subsidiaries sponsors, maintains, or contributes to an Employee Benefit Program. Parent does not sponsor, maintain or contribute to any employee benefit plan within the meaning of Section 5.13(a3(3) of the Seller Disclosure ScheduleEmployee Retirement Income Security Act of 1974, none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains as amended (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any employee pension benefit plan” (the “Seller Pension PlansERISA”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policyany fringe benefit, stock option planoption, restricted stock planequity-based compensation, stock purchase plan, deferred compensation planphantom stock, bonus or incentive plan, severance pay policy or agreement, vacation policy, retirement, pension, profit sharing or deferred compensation plan or agreement, or any similar plan or agreement or any plan or arrangement providing compensation or benefits (including individual employment, severance, change in control agreements or arrangements) to the Company’s or any Subsidiary’s employees (an “Employee Benefit Program”) other employee benefit plan for Seller Personnel than the Employee Benefit Programs identified and described in Section 3.19 of the Company Disclosure Schedule attached hereto. The terms and operation of each such Employee Benefit Program materially comply and have heretofore complied in all material respects with all applicable Laws relating to each such Employee Benefit Program. There are no unfunded obligations of the Company or any of its Subsidiaries under any Employee Benefit Program. Neither the Company nor any of its Subsidiaries is required to make any payments or contributions to any Employee Benefit Program pursuant to any collective bargaining agreement or any applicable labor relations Law. After the Effective Date, neither Buyer nor the Surviving Entity shall have any liability with respect to COBRA relating to the termination of employment of any employees of Parent, the Company or their respective dependents or beneficiaries, or any other plan, program or arrangement of Subsidiaries prior to the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”)Effective Time. (b) Seller has made available to Each Employee Benefit Program which is currently maintained by Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed intended to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of qualify under Section 3(37) of ERISA)401(a) or Part 3 of Title I of ERISA or Section 412 501(c)(9) of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion approval letter from the IRS regarding its qualification under such section or is stated on a prototype plan document and can rely on the opinion letter issued to the prototype plan sponsor, as applicable, or the time period for submitting a determination letter request and adopting retroactive amendments under Code Section 401(b) and the corresponding regulations is open as of the Closing Date. To the Knowledge of Parent, no event or omission has occurred which would cause any such letter remains Employee Benefit Program to lose its qualification under the applicable Code section. None of Parent, the Company or any of its Subsidiaries has ever maintained any Employee Benefit Program which has been subject to Title IV of ERISA or Code Section 412, including any “multiemployer plan” (as defined in effect and has not been revokedSection 3(37) or Section 4001(a)(3) of ERISA). (ec) Except as set forth Each reference to “Company” in this Section 5.13(e3.19 also refers to any other entity which would have ever been considered a single employer with the Company or any of its Subsidiaries under ERISA Section 4001(b) or part of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare same “Controlled Group” as the Company or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I its Subsidiaries for purposes of ERISA or state health continuation LawsSection 302(d)(8)(C). No Seller Benefit Plan is a self-funded An entity employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedulemaintains” an Employee Program if such entity sponsors, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints contributes to, or by, any Person provides benefits under or Governmental Authority have been filed, are pendingthrough such Employee Program, or has any obligation (by agreement or under applicable Law) to contribute to or provide benefits under or through such Employee Program, or if such Employee Program provides benefits to or otherwise covers employees of such entity (or their spouses, dependents, or beneficiaries). (d) No amount or benefits (including equity compensation) shall be required by the knowledge of SellerCompany to be paid or payable to or accelerated, threatened or provided with respect to any Seller Pension Plan, Seller Benefit Plan employee or Seller Other Plan. Except as set forth in Section 5.13(f) other service provider of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller Company or any of its Subsidiaries (including amounts and benefits payable under Employee Benefit Programs) (any such amounts or benefits including those provided under Employee Benefit Programs, “Change in Control Payments”) in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with any other ERISA Affiliate and event), nor could any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result such Change in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (gControl Payment(s) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a be an nonqualified deferred compensation planexcess parachute payment” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. Code (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event corresponding provision of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the CodeTax Law). (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Merger Agreement (Utstarcom Inc)

Employee Benefit Programs. Other than the Contactica Retirement and Death Benefit Scheme dated August 25, 1994 (a) Except as set forth in Section 5.13(a) the "Pension Scheme"), there are no pension or similar schemes or arrangements for any employees or directors of the Seller Disclosure Schedule, none of Seller, any of the Seller Subsidiaries Company or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain)Subsidiary, and none of Seller, neither the Company nor any of the Seller Subsidiaries Subsidiary nor any stockholder thereof has any obligation (whether legally binding or established by custom) to pay any pension or make any other ERISA Affiliate may incur payment after retirement or death or otherwise to provide "relevant benefits" or to make any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 payment for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary purpose of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (providing "relevant benefits" within the meaning of Section 3(37) 612 of ERISA)) the Taxes Act to or Part 3 in respect of Title any such persons and are not party to any scheme or arrangement having as its purpose or one of its purposes the making of such payments or the provision of such benefits. The Principal Stockholders have disclosed to Buyer details of all benefits payable or prospectively payable under the Pension Scheme to or in respect of all active members, pensioners and deferred pensioners, including any augmentations of benefits and have supplied to Buyer true and correct copies of all trust deeds, rules, resolutions, announcements, and booklets relating to the Pension Scheme. The Pension Scheme complies with and has at all times complied with the provisions of the Pensions Xxx 0000 and all other relevant legislation and the requirements of the Pension Schemes Office and the Contributions Agency affecting schemes approved under Chapter I of ERISA or Section 412 Part XIV of the Code, Taxes Act and neither Seller nor any ERISA Affiliate could be subject to any liability contracted-out under Title IV or Part 3 of Title I of ERISAthe Xxxxxxx Xxxxxxx Xxx 0000. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth disclosed in Section 5.13(e) Schedule 2.24 hereto, the Pension Scheme has been funded to the extent required by the terms thereof and in accordance with any applicable agreements between the Company and any of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (its employees. No employers other than as required by Part 6 of Subtitle B of Title I of ERISA the Company participate in the Pension Scheme. There are no current submissions or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of referrals to the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, Pensions Ombudsman or to the knowledge Occupational Pensions Advisory Service in respect of Seller, threatened with the Company or any Subsidiary or the Pension Scheme and neither the Company. the Trustees of the Pension Scheme nor the Pension Scheme is engaged in any litigation or arbitration proceedings in respect to of the Pension Scheme or the provision of any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except relevant benefits (as set forth defined in Section 5.13(f) 612 of the Seller Disclosure ScheduleTaxes Act). There are no outstanding. payments or penalties payable or awarded against the Company, there is no written correspondence between Seller, the Trustees of the Pension Scheme or the Pension Scheme in respect *of any determinations of the Occupational Pensions Regulatory Authority. No retirement benefits scheme (as defined in Section 611 of the Taxes Act) in which employees or former employees of the Company or any Subsidiary participate or have participated has been or is in the process of Seller being (or is proposed to be) wound up (in whole or in part) or closed to new entrants (in whole or in part). The Pension Scheme does not hold any other ERISA Affiliate and any Governmental Authority employer-related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” investments within the meaning of Section 409A 40 of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunderPensions > Xxx 0000. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal All amounts due to the fair market value of Pension Scheme or to any insurance company which are payable by the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments Company or any employee in connection with it have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementspromptly. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Stock Purchase Agreement (C Quential Inc)

Employee Benefit Programs. (a) Except SCHEDULE 2.19 sets forth all Employee Plans (as set forth in Section 5.13(adefined below) of to which the Seller Disclosure Schedule, none of Seller, Company or any of the Seller its Subsidiaries or any other ERISA Affiliate (as defined below) contributes to or maintains (or is obligated to contribute to contribute, under which the Company or maintain), and none of Seller, any of the Seller its Subsidiaries has or any other ERISA Affiliate may incur have any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance for premiums or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive planbenefits, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides which benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director ofdirector, consultant or consultants toindependent contractor of the Company or any of its Subsidiaries or any beneficiary thereof (each a "COMPANY PLAN"). For purposes of this Agreement, Sellerthe term "EMPLOYEE PLAN" means any plan, program, agreement, policy or arrangement (a "PLAN"), whether or not reduced to writing, that is: (i) a welfare benefit plan within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") (a "WELFARE PLAN"); (ii) a pension benefit plan within the meaning of Section 3(2) of ERISA; (iii) a stock bonus, stock purchase, stock option, restricted stock, stock appreciation right or similar equity-based plan; or (iv) any other deferred-compensation, retirement, welfare-benefit, bonus incentive or fringe-benefit plan whether for the benefit of a single individual or a group of individuals. With respect to each Company Plan, the Company has made available to Buyer accurate, current and complete copies of each of the following: (1) the plan document together with all amendments; (2) where applicable, copies of any trust agreements, custodial agreements, insurance policies, administration agreements and similar agreements and investment management or investment advisory agreements; (3) copies of any summary plan description, employee handbooks or similar employee communications and administrative forms; (4) in the case of any plan that is intended to be qualified under Section 401(a) of the Code, a copy of the most recent determination letter from the IRS; and (5) in the case of any plan for which Forms 5500 are required to be filed, a copy of the two most recently filed Forms 5500, with schedules attached. An "ERISA Affiliate" means any entity which is or at any time was a member of (i) a controlled group of corporations (as defined in Section 414(b) of the Code), (ii) result a group of trades or businesses under common control (as defined in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iiiSection 414(c) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. ), or (j3) No employee or other an affiliated service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan group (as defined in the event Section 414(m) of the imposition of any additional tax imposed on such service provider Code or the regulations issued under Section 280G or Section 409A 414(o) of the Code), any of which includes or included the Company. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Stock Purchase Agreement (Genzyme Transgenics Corp)

Employee Benefit Programs. i. Schedule 4.1(n) identifies each "employee benefit plan" as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (a"ERISA"), that is covered by ERISA and that is maintained, or otherwise contributed to by Sellers or any Affiliates of Sellers for the benefit of the current or former employees or directors of Sellers (a "Plan" and, collectively, the "Plans"), copies of which have been delivered to Buyer (together with (A) the most recent Annual Report on Form 5500 required to be filed by Sellers and (B) the most recent actuarial valuation reports, in connection with any Plan); ii. Schedule 4.1(n) identifies each plan or arrangement not subject to ERISA maintained or otherwise contributed to by Sellers for the benefit of employees of Sellers and providing for deferred compensation, bonuses, stock options, employee insurance coverage or any similar compensation arrangement (a "Benefit Arrangement"; such Benefit Arrangements, together with the Plans, are referred to herein collectively as the "Employee Benefit Programs"), true and correct copies of which have been delivered to Buyer. iii. Each Employee Benefit Program has been maintained and administered at all times substantially in compliance with its terms and with all applicable laws, rules and regulations, including, without limitation, ERISA and the Code; iv. No "prohibited transaction" (as such term is used in Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Plan which could have a Material Adverse Effect; v. Xxxxxxx xx not sponsor, contribute to, participate in or have any other obligations or liabilities (whether or not contingent) which remain unsatisfied or are pending with respect to any employee pension benefit plan (within the meaning of Section 3(2) of ERISA) that is subject to Title IV of ERISA or Section 302 of ERISA. vi. Sellers have not at any time contributed to or participated in any pension plan which is a "multiemployer plan," as defined in Section 3(37) of ERISA; vii. No material litigation or administrative or other proceedings involving the Employee Benefit Programs have occurred, are pending or, to the best knowledge of Sellers, are threatened; viii. Except as set forth in Schedule 4.1(n), there are no other employment agreements, contracts or understandings with any employee of Sellers; ix. There are no collective bargaining agreements which Sellers or their Affiliates have entered into on behalf of any employees of Sellers, nor, to the best knowledge of Sellers, are there any ongoing efforts to organize any union representation; and x. Except as set forth on Schedule 4.1(n), with respect to any Plan that is an employee welfare benefit plan (within the meaning of Section 5.13(a3(1) of ERISA), (1) no such Plan is funded through a "welfare benefits fund", as such term is defined in Section 419(e) of the Seller Disclosure ScheduleCode, none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or 2) each such Plan that is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” a group health plan (the “Seller Pension Plans”"Group Health Plan"), as such term is defined in Section 3(24980B(g)(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 complies with the applicable requirements of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e4980B(f) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated Code ("COBRA") and (3) no such Plan (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a selfCOBRA) provides any post-funded “employee employment welfare benefit plan.” benefits for former employees (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”retirees), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid either currently or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementstime hereafter. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Weight Watchers International Inc)

Employee Benefit Programs. (a) Other than the Employee Benefit Programs (as defined below) identified in Section 2.19(a) of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company maintains or contributes to, and for the past three years has not maintained or contributed to, any employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any fringe benefit, stock, equity-based compensation, phantom stock, bonus or incentive plan, severance pay policy or agreement, retirement, pension, profit sharing or deferred compensation plan or agreement, or any similar material plan or agreement or any plan or arrangement providing compensation to Employees, Workers or non-Employee directors (other than, in any case, plans or agreements to make current wage or salary payments terminable on notice of 30 days of less) (each, an “Employee Benefit Program”). As applicable with respect to each Employee Benefit Program, the Company has made available for review for Parent true and complete copies of (i) each Employee Benefit Program, including all amendments thereto, and in the case of an unwritten Employee Benefit Program, a written description thereof, (ii) all current trust documents relating thereto, (iii) the current summary plan description and each summary of material modifications thereto, (iv) the three most recently filed annual reports (Form 5500 and all schedules thereto), (v) the most recent IRS determination or opinion letter and each currently pending application to the IRS for a determination letter, and (vi) all records, notices and filings concerning IRS or Department of Labor audits or investigations, “prohibited transactions” within the meaning of Section 406 of ERISA or Section 4975 of the Code and “reportable events” within the meaning of Section 4043 of ERISA. The terms and operation of each such Employee Benefit Program comply and, during the five-year period prior to the date of this Agreement, have complied in all material respects with all applicable Laws relating to each such Employee Benefit Program. There are no unfunded obligations of the Company or any Subsidiary of the Company under any Employee Benefit Program that have not been accrued, except (A) where such accrual is not necessary under GAAP and (B) for those liabilities, costs and expenses associated with the termination of any Employee Benefit Program in the ordinary course of terminations at the Company or the Subsidiaries. Except as set forth in Section 5.13(a2.19(a) of the Seller Disclosure Schedule, none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Company Disclosure Schedule, neither Seller the Company nor any Subsidiary of Seller provides the Company is required to make any payments or has agreed contributions to provide healthcare any Employee Benefit Program pursuant to any collective bargaining agreement or, to the Knowledge of the Company, any applicable labor relations Law. All Employee Benefit Programs are terminable at the discretion of the Company or the applicable Subsidiary of the Company without liability to the Company or such Subsidiary upon or following such termination, except for benefits accrued under the terms of such Employee Benefit Programs and those liabilities, costs and expenses associated with the termination of any such Employee Benefit Program in the normal course of terminations. Except as described in Section 2.19(a) of the Company Disclosure Schedule, neither the Company nor any Subsidiary of the Company maintains or contributes to any Employee Benefit Program providing or promising any health or other non-pension nonpension benefits to any employees Employees or Workers after their employment is terminated (with the Company and the Subsidiaries terminates other than as required by Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code, or other similar state Law. With respect to any Employee Benefit Program, there has occurred no non-exempt “prohibited transaction,” as defined in Section 406 of ERISA or state health continuation Laws)Section 4975 of the Code, or breach of any duty under ERISA or other applicable Law that would reasonably be expected to result, directly or indirectly, in any material Taxes, penalties or other liability to the Company or any Subsidiary. No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” litigation, arbitration or governmental administrative proceeding (f) Except as set forth in Section 5.13(f) or, to the Knowledge of the Seller Disclosure ScheduleCompany, no lawsuits, governmental administrative proceedings, claims investigation) or other proceeding (other than those relating to routine claims for benefits) or complaints tois pending or, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge Knowledge of Sellerthe Company, threatened with respect to any Seller Pension Plansuch Employee Benefit Program. (b) Each Employee Benefit Program of the Company or any Subsidiary of the Company that is intended to qualify under Section 401(a) or 501(c)(9) of the Code has received a favorable determination letter from the IRS or is permitted to rely on an opinion letter issued by the IRS with respect to a “master and prototype” plan or “volume submitter” plan, Seller to the effect that such Employee Benefit Plan satisfies the requirements of Section 401(a) of the Code and that its related trust is exempt from taxation under Section 501(c) of the Code. To the Knowledge of the Company, no event or Seller Other Planomission has occurred which would cause any such Employee Benefit Program to lose its qualification under the applicable Code section. Except as set forth in Section 5.13(f2.19(b) of the Seller Company Disclosure ScheduleSchedule and other than those liabilities, there is no written correspondence between Seller, costs and expenses associated with the termination of any Subsidiary Employee Benefit Program in the normal course of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009terminations, each asset held under any such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A Employee Benefit Program may be liquidated or terminated without the imposition of the Code, and the regulations and guidance issued thereunderany redemption for surrender charge or comparable liability. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i2.19(b) of the Seller Company Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will Company does not (either alone maintain or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants contribute to, Sellerand has not maintained or contributed to (or been required to maintain or contribute to), (ii) result in the acceleration past six years any Employee Benefit Program which has been subject to Title IV of the time ERISA or Code Section 412, including, but not limited to, any “multiemployer plan” (as defined in Section 3(37) or Section 4001(a)(3) of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the CodeERISA). (jc) No employee or other service provider of Seller or any Seller Subsidiary Employee Benefit Program is entitled subject to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition Laws of any additional tax imposed on such service provider under Section 280G or Section 409A of jurisdiction other than the CodeUnited States. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Agreement and Plan of Merger (Icg Group, Inc.)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure ScheduleLetter, none of Seller, neither Seller nor any of the Seller its Subsidiaries or any other ERISA Affiliate maintains, contributes to or maintains (or is obligated to contribute to contribute) or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur have any liability under (contingent or otherwise) with respect to any "employee pension benefit plan" (the "Seller Pension Plans"), as such term is defined in Section 3(2) of ERISA, "employee welfare benefit plan" (the "Seller Benefit Plans"), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, any other stock option plan, restricted stock plan, stock purchase plan or other equity-based plan, deferred compensation plan, bonus or incentive plan, employment agreement, severance, change in control, supplemental retirement, or other employee benefit plan plan, contract or agreement (other than any contract or agreement on the Seller's standard forms providing for an annual base salary of less than $125,000) for any current or former employees of Seller Personnel or any of its Subsidiaries and/or their respective dependents or beneficiariesdependents, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate of its Subsidiaries (collectively, the "Seller Other Plans"). (b) Seller has made available to Parent Buyer and Merger Sub complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, the Seller Benefit Plans and the Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the most recent annual report on Form 5500 for required to be filed with the three most recent plan years; IRS (v) the financial and/or actuarial report, if any, for the three most recent plan yearsany such report was required); and (viv) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c4.13(c) of the Seller Disclosure ScheduleLetter, each of the Seller Pension Plans, each of the Seller Benefit Plans and each of the Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliateof its Subsidiaries or to which Seller or its Subsidiaries is obligated to contribute, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws, except as would not, individually or in the aggregate, have a Seller Material Adverse Effect. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS regarding its qualification thereunder, the trust, if any, forming a part thereof is exempt from taxation under Code Section 501(a), and to the Knowledge of Seller, no event has occurred that would adversely affect such letter remains in effect and has not been revokedqualification or tax exempt status. (e) Seller has made all contributions to the Seller Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e4.13(f) of the Seller Disclosure ScheduleLetter, neither Seller nor any Subsidiary of Seller its Subsidiaries provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation applicable Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (fg) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no No lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge Knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written correspondence between Seller, Seller or any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could would result in any material liability to Parent, the Surviving CorporationBuyer, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (gh) Except with respect to the agreements disclosed in Section 4.13(h) of the Seller Disclosure Letter, neither Seller nor any of its Subsidiaries is a party to any (i) agreement with any stockholder, director, or employee of Seller or any of its Subsidiaries (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Seller or any of its Subsidiaries of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee, or (C) providing severance benefits or other benefits after the termination of employment of such director or employee; (ii) agreement or plan binding Seller or any of its Subsidiaries, including, but not limited to, any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, other equity-based plan or severance benefit plan, any of the benefits of which shall be increased, or the vesting of the benefits of which shall be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which shall be calculated on the basis of any of the transactions contemplated by this Agreement; or (iii) any agreement, plan or other arrangement with any employee of Seller or its Subsidiaries that could reasonably be expected to give rise directly or indirectly to the payment of any amount that would be characterized as an "excess parachute payment" within the meaning of Section 280G(b)(1) of the Code. (i) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, Code and the regulations and guidance issued promulgated thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (hj) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any No Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in is subject to Title IV of ERISA. Neither Seller nor any payment (whether of severance pay ERISA Affiliate made, or otherwise) becoming due was required to make, contributions to any current or former employee, director of, or consultants to, Seller, plan subject to Title IV of ERISA during the five (ii5) result in year period ending on the acceleration last day of the time most recent plan year ended prior to the Effective Time. No liability under Title IV or Section 302 of paymentERISA has been incurred by Seller or any ERISA Affiliate that has not been satisfied in full, funding or vesting and no condition exists that presents a risk of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any such liability. No Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or is a "multiemployer plan" (vias such term is defined in Section 3(37) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the CodeERISA). (k) The treatment All amounts paid by Seller or any of its Subsidiaries to any of their respective "covered employees" (as such term is defined in Section 162(m) of the Code) have been deducted by Seller Stock Optionsor its Subsidiaries, as applicable, in accordance with the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to provisions of Section 3.4 of this Agreement is permitted by the terms 162(m) of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planCode.

Appears in 1 contract

Samples: Merger Agreement (Clayton Holdings Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure Schedule, none of Seller, neither the Seller nor any of the Seller its Subsidiaries has maintained or any other ERISA Affiliate currently maintains, or has contributed or currently contributes to (or maintains (has been or is obligated to contribute to or maintain)contribute) to, and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for employees of the Seller Personnel or their respective dependents or beneficiariesany of its Subsidiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any the Seller Subsidiary or any other ERISA Affiliate of its Subsidiaries, including the Seller Stock Option Plans and the Seller UK Sub-plan (collectively, the “Seller Other Plans”). (b) The Seller has made available to Parent the Buyer complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, the Seller Benefit Plans and the Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three ; (v) most recent plan yearsannual report on Form 5500; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c4.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, each of the Seller Benefit Plans and each of the Seller Other Plans, which are maintained or contributed to by the Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and that the trust associated with such letter remains in effect Seller Pension Plan is tax exempt under Code Section 501(a), and, to the knowledge of the Seller, each of such plans is so qualified and has the Seller is not been revokedaware of any fact or circumstance which would adversely affect the qualified status of any such plan. (e) The Seller has made or provided for all contributions to the Seller Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e4.13(f) of the Seller Disclosure Schedule, neither the Seller nor any Subsidiary of its Subsidiaries is a party to or maintains any existing contract or other arrangement with any employee or group of employees (i) that provides for any kind of severance payments, stock or stock-equivalent payments or post-employment benefits or (ii) providing that any otherwise disclosed plan, program or arrangement will irrevocably continue, with respect to any or all of its participants, for any period of time. (g) Except as set forth in Section 4.13(g) of the Seller provides Disclosure Schedule, neither the Seller nor any of its Subsidiaries (i) has ever maintained any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA, (ii) has ever maintained any plan subject to Title IV of ERISA, or has agreed to provide (iii) is providing healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a selflaws) or has promised to provide such post-funded “employee welfare benefit plantermination benefits in the future. (fh) Except as set forth in Section 5.13(f4.13(h) of the Seller Disclosure Schedule, no material lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of the Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) There is no material correspondence between the Seller or any Subsidiary of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any other Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could would result in any material liability to Parentthe Buyer, the Surviving Corporation, Seller, Seller or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (gi) Each With respect to any pension plan, scheme or arrangement maintained by the Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value covers employees of the Seller Common Stock or its Subsidiaries in the United Kingdom (the “Seller UK Pension Plans”): (i) The Seller UK Pension Plans are the only arrangements to which the Seller or any of its Subsidiaries has or could have any liability for the purpose of providing benefits on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidanceretirement or death. (hii) The parties acknowledge that certain payments have been Seller has made or are available to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans the Buyer documents containing material details of Seller, including the Seller Benefit PlansUK Pension Plans and of the Seller’s or any of its Subsidiaries’ and its employees’ obligations and liabilities under it. (iii) The Seller UK Pension Plans are approved in accordance with Chapter I or Chapter IV of Part XIV of the Income and Corporation Taxes Xxx 0000, and there is no reason why this approval could be withdrawn. (iv) So far as the Seller or any of its Subsidiaries are aware having made enquiries, the Seller or any of its Subsidiaries and Seller UK Pension Plans comply and have at all times complied with all legal and regulatory requirements (including equal treatment and data protection requirements) relevant to the Seller UK Pension Plans and the Seller Other Plans or any of its Subsidiaries’ participation in the Seller UK Pension Plans. (collectivelyv) So far as the Seller or any of its Subsidiaries are aware having made enquiries, the “Arrangements”)no claim, dispute, complaint or investigation has arisen which relates to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered UK Pension Plans or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board provision of retirement or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members death benefits in respect of the Seller Compensation Committee were presentor any of its Subsidiaries’ current and former employees, duly adopted resolutions approving as an “employment compensationand there is no reason why any such claim, severance dispute, complaint or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”)investigation could arise. (Avi) each Arrangement presented All amounts payable by the Seller or any of its Subsidiaries to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions UK Pension Plans have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementspaid. (ivii) Except as set forth All death in Section 5.13(i) of service benefits under the Seller Disclosure Schedule, UK Pension Plans are fully insured. (viii) All benefits under the execution Seller UK Pension Plans (other than those which are fully insured) are calculated on a money purchase basis only and delivery there is no obligation on the Seller or any of this Agreement and its Subsidiaries or under the performance of the transactions contemplated hereby, will not Seller UK Pension Plans (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result other than in the acceleration case of the time those benefits which are fully insured) to provide any specified level of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Codebenefits. (j) No employee or other service provider of With respect to the Seller UK Sub-plan: (i) All notices, returns, registrations and payments which should have been made by the Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition Seller’s Subsidiaries in relation to the Seller UK Sub-plan have been made during the requisite time periods, are up-to-date correct and on a proper basis and none of them is, or is likely to be, the subject of any additional tax imposed on such service provider under Section 280G or Section 409A of the Codedispute with any authority administering Tax. (kii) The treatment Seller UK Sub-plan is approved by the UK Inland Revenue under the provisions of ITEPA and there are no circumstances which are likely to result in such Inland Revenue approval being withdrawn. (iii) The Seller and the Seller’s Subsidiaries have properly operated the United Kingdom Pay As You Earn System by making deductions as required by applicable Tax Statutes, on the grant, exercise or other event in relation to share options granted under the Seller Stock Options, UK Sub-plan and has accounted for any such taxation the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planappropriate Taxation Authority.

Appears in 1 contract

Samples: Merger Agreement (Digitas Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a) None of the Seller Disclosure Schedule, none of SellerCompany, any of the Seller its Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Sellerthe Company, any of the Seller its Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Company Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Company Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance severance, change-in-control or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement providing benefits for or the remuneration of Company Personnel (including, but not limited to, benefit plans maintained outside the same or similar nature that provides benefits U.S. without regard to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate whether such plans are subject to ERISA) (collectively, the “Seller Company Other Plans”). (b) Seller The Company has made available provided to Parent complete and accurate copies of each of the following with respect to each of the Seller Company Pension Plans, Seller Company Benefit Plans and Seller Company Other Plans: (i) plan document and any amendments thereto and a description if such Seller Company Pension Plan, Seller Company Benefit Plan or Seller Company Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the most recent three (3) annual report reports on Form 5500 for the three most recent plan years5500; (v) the most recent three (3) financial and/or actuarial reportreports, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications; (vii) any other reporting and disclosure required under applicable Laws for benefit plans maintained outside the U.S. for the most recent three (3) years and (viii) evidence that any Company Pension Plan, Company Benefit Plan and Company Other Plans required to be registered under applicable Laws has been timely registered. (c) Except as set forth in Section 5.13(c) Each of the Seller Disclosure Schedule, each of the Seller Company Pension Plans, Seller Company Benefit Plans and Seller Company Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, Plans has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, No Company Pension Plan is or was at any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan time subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller the Company nor any ERISA Affiliate could be is subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Company Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revokedcovering all applicable Laws on which the IRS will currently rule. (e) Except as set forth in Section 5.13(e) of Neither the Seller Disclosure Schedule, neither Seller Company nor any Subsidiary of Seller its Subsidiaries provides or has agreed to provide healthcare or any other non-pension benefits (other than benefits under a Company Pension Plan) to any employees Company Personnel after their employment service with the Company and its Subsidiaries is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws or other applicable Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no No lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Sellerthe Company, threatened with respect to any Seller Company Pension Plan, Seller Company Benefit Plan or Seller Company Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written correspondence between Sellerthe Company, any Subsidiary of Seller its Subsidiaries or any other ERISA Affiliate and any Governmental Authority related to any Seller Company Pension Plan, Seller Company Benefit Plan or Seller Company Other Plan concerning any matter that could would result in any material liability to Parent, the Surviving CorporationCompany, Seller, any of the Company’s Subsidiaries or any Seller Company Pension Plan, Seller Company Benefit Plan or Seller Company Other Plan. (g) Neither the Company nor any of its Subsidiaries is a party to (i) any oral or written agreement with any stockholder of the Company or any of its Subsidiaries or any Company Personnel the benefits of which are contingent, or the terms of which are altered, upon the occurrence of the transactions contemplated by this Agreement or (ii) any agreement or plan binding the Company or any of its Subsidiaries, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan or severance benefit plan, any of the benefits of which shall be increased, or the vesting of the benefits of which shall be accelerated, by the occurrence of any of the transactions contemplated by this Agreement (either alone or in connection with any other Circumstance). Neither the Company nor any Subsidiary is obligated or may become obligated as a result of any of the transactions contemplated by this Agreement (either standing alone or in connection with a termination of employment or any other event) to make a payment that will not be fully deductible under Section 280G of the Code. (h) Each Seller Company Pension Plan, Seller Company Benefit Plan and Seller Company Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation the Company’s date of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementsincorporation. (i) Except No Company Pension Plan and no employee pension plan to which an ERISA Affiliate contributes or is obligated to contribute or maintains or is obligated to maintain is or was a “multiemployer pension plan” (as set forth defined in Section 5.13(i3(37) or 4001(a)(3) of ERISA) or a “multiple employer plan” (as described in Section 413(c) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Code). No Company Benefit Plan is or Seller Other Plan that will was a “multiple employer welfare arrangement” (ias defined in Section 3(40) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the CodeERISA). (j) No Each person on the payroll records of the Company or any of its Subsidiaries is properly classified as an employee or other service provider of Seller independent contractor. Further, the Company and its Subsidiaries have properly classified all individuals on their payroll records as exempt or nonexempt under the Fair Labor Standards Act or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan applicable state or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Codeforeign law equivalent. (k) The treatment All contributions or premiums required to be made by either the Company or any of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by its Subsidiaries under the terms of each Company Pension Plan, Company Benefit Plan or Company Other Plan or by ERISA, the Seller Stock PlansCode or applicable Laws have in all material respects been made in a timely fashion in accordance with ERISA, the Code or applicable Laws and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planplans.

Appears in 1 contract

Samples: Merger Agreement (Digital Cinema Destinations Corp.)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure Schedule, none Schedule sets forth a list of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any each material “employee pension benefit plan” (within the “Seller Pension Plans”), as such term is defined in meaning of Section 3(23(3) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined and all severance, change in Section 3(1) of ERISAcontrol or employment plan, employment, severance program or similar agreement, contract or policyand vacation, incentive, bonus, stock option planoption, stock purchase, and restricted stock plan, stock purchase plan, deferred compensation plan, bonus program or incentive plan, policy that is or other employee benefit plan for was at any time sponsored or maintained by Seller Personnel or their respective dependents or beneficiaries, or any other plan, program Affiliate of Seller in which the current or arrangement of the same former Business Employees participate or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate have a benefit (collectively, the “Seller Other Business Benefit Plans”). (b) Seller has made available to Parent Buyer complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Business Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the most recent annual report on Form 5500 for required to be filed with the three most recent plan years; IRS (v) the financial and/or actuarial report, if any, for the three most recent plan yearsany such report was required); and (viv) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c4.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Business Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been in all material respects and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof)ERISA, the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Business Benefit Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revokedregarding its qualification thereunder. (e) Except as set forth in Section 5.13(e4.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or does not provide and has not agreed to provide healthcare or any other non-pension benefits to any employees Business Employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Lawslaws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (f) Except as set forth with respect to the agreements disclosed in Section 5.13(f4.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect Seller is not a party to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number agreement with any Key Employee of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. Business (iA) Except as set forth in Section 5.13(i) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Seller of the Seller Disclosure Schedule, the execution and delivery nature of this Agreement and the performance any of the transactions contemplated herebyby this Agreement, will not (either alone B) providing any term of employment or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director ofcompensation guarantee, or consultants to, Seller, (C) providing severance benefits or other benefits after the termination of employment of such Key Employee; or (ii) result in the acceleration of the time of paymentany agreement, funding plan or vesting of other arrangement with any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right Key Employee of Seller that could reasonably be expected to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise directly or indirectly to the payment of any amount that would not be deductible by Seller or Buyer under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Princeton Review Inc)

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Employee Benefit Programs. (a) Except as set forth in Section 5.13(a3.13(a) of the Seller Buyer Disclosure Schedule, none of Seller, neither the Buyer nor any of the Seller its Subsidiaries has maintained or any other ERISA Affiliate currently maintains, or has contributed or currently contributes to (or maintains (has been or is obligated to contribute to or maintain), and none of Sellercontribute) to, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “"employee pension benefit plan" (the “Seller "Buyer Pension Plans"), as such term is defined in Section 3(2) of ERISA, "employee welfare benefit plan" (the “Seller "Buyer Benefit Plans"), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel employees of the Buyer or their respective dependents or beneficiariesany of its Subsidiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-non employee directors of Seller, any Seller Subsidiary the Buyer or any other ERISA Affiliate of its Subsidiaries, including the Buyer Stock Option Plans (collectively, the “Seller "Buyer Other Plans"). (b) Seller The Buyer has made available to Parent the Seller complete and accurate copies of each of the following with respect to each of the Seller Buyer Pension Plans, Seller the Buyer Benefit Plans and Seller the Buyer Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three ; (v) most recent plan yearsannual report on Form 5500; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c3.13(c) of the Seller Buyer Disclosure Schedule, each of the Seller Buyer Pension Plans, Seller each of the Buyer Benefit Plans and Seller each of the Buyer Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliatethe Buyer, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Buyer Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and that the trust associated with such letter remains in effect Buyer Pension Plan is tax exempt under Code Section 501(a), and, to the knowledge of the Buyer, each of such plans is so qualified and has the Buyer is not been revokedaware of any fact or circumstance which would adversely affect the qualified status of any such plan. (e) The Buyer has made or provided for all contributions to the Buyer Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e3.13(f) of the Seller Buyer Disclosure Schedule, neither Seller the Buyer nor any Subsidiary of Seller its Subsidiaries is a party to or maintains any existing contract or other arrangement with any employee or group of employees (i) that provides for any kind of severance payments, stock or stock-equivalent payments or post employment benefits or (ii) providing that any otherwise disclosed plan, program or arrangement will irrevocably continue, with respect to any or all of its participants, for any period of time. (g) Except as set forth in Section 3.13(g) of the Buyer Disclosure Schedule, neither the Buyer nor any of its Subsidiaries (i) has agreed ever maintained any "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA, (ii) has ever maintained any plan subject to provide Title IV of ERISA, or (iii) is providing healthcare or any other non-non pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit planlaws) or has promised to provide such post termination benefits in the future. (fh) Except as set forth in Section 5.13(f3.13(h) of the Seller Buyer Disclosure Schedule, no material lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Sellerthe Buyer, threatened with respect to any Seller Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written material correspondence between Seller, the Buyer or any Subsidiary of Seller or any other ERISA Affiliate the Buyer and any Governmental Authority related to any Seller other Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan concerning any matter that could would result in any material liability to Parentthe Seller, the Surviving Corporation, Seller, Buyer or any Seller Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan. (gi) Each Seller Pension PlanWith respect to any pension plan, Seller Benefit Plan and Seller Other Plan scheme or arrangement maintained by the Buyer that is a “nonqualified deferred compensation plan” within the meaning of Section 409A covers employees of the Code Buyer or its Subsidiaries in the United Kingdom (the "Buyer UK Pension Plans"): (i) The Buyer UK Pension Plans are the only arrangements to which the Buyer or any of its Subsidiaries has been operated in material compliance with Section 409A or could have any liability for the purpose of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock providing benefits on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidanceretirement or death. (hii) The parties acknowledge that certain payments have been Buyer has made or are available to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plansdocuments containing material details of the Buyer UK Pension Plans and of the Buyer's or any of its Subsidiaries' and its employees' obligations and liabilities under it. (iii) The Buyer UK Pension Plans are approved in accordance with Chapter I or Chapter IV of Part XIV of the Income and Corporation Taxes Xxx 0000, and there is no reason why this approval could be withdrawn. (iv) So far as the Buyer or any of its Subsidiaries are aware having made enquiries, the Seller Buyer or any of its Subsidiaries and Buyer UK Pension Plans comply and have at all times complied with all legal and regulatory requirements (including equal treatment and data protection requirements) relevant to the Buyer UK Pension Plans and the Seller Other Plans (collectively, Buyer or any of its Subsidiaries' participation in the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementsBuyer UK Pension Plans. (iv) Except So far as set forth the Buyer or any of its Subsidiaries are aware having made enquiries, no claim, dispute, complaint or investigation has arisen which relates to the Buyer UK Pension Plans or to the provision of retirement or death benefits in Section 5.13(i) respect of the Seller Disclosure ScheduleBuyer or any of its Subsidiaries' current and former employees, the execution and delivery of this Agreement and the performance of the transactions contemplated herebythere is no reason why any such claim, will not (either alone dispute, complaint or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or investigation could arise. (vi) give rise All amounts payable by the Buyer or any of its Subsidiaries to any amount that would not be deductible by Seller under Section 280G of the CodeBuyer UK Pension Plans have been paid. (jvii) No employee or other All death in service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller benefits under the Buyer UK Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the CodePlans are fully insured. (kviii) The treatment All benefits under the Buyer UK Pension Plans (other than those which are fully insured) are calculated on a money purchase basis only and there is no obligation on the Buyer or any of its Subsidiaries or under the Seller Stock Options, Buyer UK Pension Plans (other than in the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant case of those benefits which are fully insured) to Section 3.4 provide any specified level of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planbenefits.

Appears in 1 contract

Samples: Merger Agreement (Modem Media Inc)

Employee Benefit Programs. (a) Neither the Company nor the Acquired Business maintains or contributes to and for the past five (5) years has not maintained or contributed to, any employee benefit, fringe benefit, stock option, equity-based compensation, phantom stock, bonus or incentive plan, severance pay policy or agreement, retirement, pension, profit sharing or deferred compensation plan or agreement, or any similar plan or agreement (an "Employee Benefit Plan") other --------------------- than the Employee Benefit Plans identified and described in Section 2.18(a)(i) ------------------ of the Disclosure Schedule attached hereto, copies of which have been provided -------------------------- to the Investor. Following the Closing, the Company will implement only the Employee Benefit Plans identified and described in Section 2.18)a)(ii) of the -------------------------- Disclosure Schedule. The terms and operation of each such Employee Benefit Plan ------------------- comply and have heretofore complied in all material respects with all applicable laws and regulations relating to each such Employee Benefit Plan. Except as described in Section 2.18(a)(iii) of the Disclosure Schedule, there are no ----------------------------------------------- unfunded obligations of the Company or the Acquired Business under any retirement, pension, profit-sharing, deferred compensation plan or similar program. Except as described in Section 2.18(a)(iv) of the Disclosure Schedule, ---------------------------------------------- neither the Company nor the Acquired Business is required to make any payments or contributions to any Employee Benefit Plan pursuant to any collective bargaining agreement or, to the best knowledge of the Company and the Stockholders, any applicable labor relations law, and except as described in Section 2.18(a)(v) of the Disclosure Schedule, all Employee Benefit Plans are --------------------------------------------- terminable at the discretion of the Company or the Acquired Business without liability to the Company or the Acquired Business upon or following such termination. Except as described in Section 2.18(a)(vi) ------------------- of the Disclosure Schedule, neither the Company nor the Acquired Business has -------------------------- ever maintained or contributed to any Employee Benefit Plan providing or promising any health or other nonpension benefits to terminated employees other than as required by part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). With respect to any Employee ----- Benefit Plan, there has occurred no "prohibited transaction," as defined in Section 406 of ERISA or Section 4975 of the Code, or breach of any duty under ERISA or other applicable law which could result, directly or indirectly, in any Taxes, penalties or other liability to the Company or the Acquired Business. No litigation, arbitration or governmental administrative proceeding (or investigation) or other proceeding (other than those relating to routine claims for benefits) is pending or, to the best knowledge of the Company and the Stockholders, threatened with respect to any such Employee Benefit Plan. Except as described in Section 2.18(a)(vii) of the Disclosure Schedule, the Company ----------------------------------------------- will not have any obligations under any Employee Benefit Plan maintained or contributed to by the Acquired Business. (b) Each Employee Benefit Plan which has ever been maintained by the Company or the Acquired Business and which has been intended to qualify under Section 401(a) or 501(c)(9) of the Code has received a favorable determination or approval letter from the IRS regarding its qualification under such section and has, in fact, been qualified under the applicable section of the Code from the effective date of such Employee Benefit Plan through and including the Closing Date (or, if earlier, the date that all of such Employee Benefit Plan's assets were distributed). No event or omission has occurred which would cause any such Employee Benefit Plan to lose its qualification under the applicable Code section and each asset held under any such Employee Benefit Plan may be liquidated or terminated without the imposition of any redemption for surrender charge or comparable liability. Except as set forth in Section 5.13(a2.18(b) of the Seller ---------------------- Disclosure Schedule, none of Seller, neither the Company nor the Acquired Business has ever ------------------- maintained any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Employee Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions subject to title IV of ERISA (or Code Section 412, including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “"multiemployer plan" (within the meaning of as defined in Section 3(37) or Section 4001(a)(3) of ERISA). Each reference to "Company" and the "Acquired Business" in this Section 2.19 also refers to any other entity which would have ever been considered a single employer with the Company or the Acquired Business, as applicable, under ERISA Section 4001(b) or Part 3 part of Title I the same "controlled group" as the Company or the Acquired Business, as applicable, for purposes of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked302(d)(8)(C). (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Stock Purchase Agreement (Albany Molecular Research Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a3.13(a) of the Seller Buyer Disclosure Schedule, none of Seller, neither the Buyer nor any of the Seller its Subsidiaries has maintained or any other ERISA Affiliate currently maintains, or has contributed or currently contributes to (or maintains (has been or is obligated to contribute to or maintain)contribute) to, and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Buyer Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Buyer Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel employees of the Buyer or their respective dependents or beneficiariesany of its Subsidiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary the Buyer or any other ERISA Affiliate of its Subsidiaries, including the Buyer Stock Option Plans (collectively, the “Seller Buyer Other Plans”). (b) Seller The Buyer has made available to Parent the Seller complete and accurate copies of each of the following with respect to each of the Seller Buyer Pension Plans, Seller the Buyer Benefit Plans and Seller the Buyer Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three ; (v) most recent plan yearsannual report on Form 5500; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c3.13(c) of the Seller Buyer Disclosure Schedule, each of the Seller Buyer Pension Plans, Seller each of the Buyer Benefit Plans and Seller each of the Buyer Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliatethe Buyer, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Buyer Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and that the trust associated with such letter remains in effect Buyer Pension Plan is tax exempt under Code Section 501(a), and, to the knowledge of the Buyer, each of such plans is so qualified and has the Buyer is not been revokedaware of any fact or circumstance which would adversely affect the qualified status of any such plan. (e) The Buyer has made or provided for all contributions to the Buyer Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e3.13(f) of the Seller Buyer Disclosure Schedule, neither Seller the Buyer nor any Subsidiary of Seller its Subsidiaries is a party to or maintains any existing contract or other arrangement with any employee or group of employees (i) that provides for any kind of severance payments, stock or stock-equivalent payments or post-employment benefits or (ii) providing that any otherwise disclosed plan, program or arrangement will irrevocably continue, with respect to any or all of its participants, for any period of time. (g) Except as set forth in Section 3.13(g) of the Buyer Disclosure Schedule, neither the Buyer nor any of its Subsidiaries (i) has agreed ever maintained any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA, (ii) has ever maintained any plan subject to provide Title IV of ERISA, or (iii) is providing healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a selflaws) or has promised to provide such post-funded “employee welfare benefit plantermination benefits in the future. (fh) Except as set forth in Section 5.13(f3.13(h) of the Seller Buyer Disclosure Schedule, no material lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Sellerthe Buyer, threatened with respect to any Seller Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written material correspondence between Seller, the Buyer or any Subsidiary of Seller or any other ERISA Affiliate the Buyer and any Governmental Authority related to any Seller other Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan concerning any matter that could would result in any material liability to Parentthe Seller, the Surviving Corporation, Seller, Buyer or any Seller Buyer Pension Plan, Seller Buyer Benefit Plan or Seller Buyer Other Plan. (gi) Each Seller Pension PlanWith respect to any pension plan, Seller Benefit Plan and Seller Other Plan scheme or arrangement maintained by the Buyer that is a “nonqualified deferred compensation plan” within the meaning of Section 409A covers employees of the Code Buyer or its Subsidiaries in the United Kingdom (the “Buyer UK Pension Plans”): (i) The Buyer UK Pension Plans are the only arrangements to which the Buyer or any of its Subsidiaries has been operated in material compliance with Section 409A or could have any liability for the purpose of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock providing benefits on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidanceretirement or death. (hii) The parties acknowledge that certain payments have been Buyer has made or are available to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plansdocuments containing material details of the Buyer UK Pension Plans and of the Buyer’s or any of its Subsidiaries’ and its employees’ obligations and liabilities under it. (iii) The Buyer UK Pension Plans are approved in accordance with Chapter I or Chapter IV of Part XIV of the Income and Corporation Taxes Xxx 0000, and there is no reason why this approval could be withdrawn. (iv) So far as the Buyer or any of its Subsidiaries are aware having made enquiries, the Seller Buyer or any of its Subsidiaries and Buyer UK Pension Plans comply and have at all times complied with all legal and regulatory requirements (including equal treatment and data protection requirements) relevant to the Buyer UK Pension Plans and the Seller Other Plans (collectively, Buyer or any of its Subsidiaries’ participation in the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementsBuyer UK Pension Plans. (iv) Except So far as set forth the Buyer or any of its Subsidiaries are aware having made enquiries, no claim, dispute, complaint or investigation has arisen which relates to the Buyer UK Pension Plans or to the provision of retirement or death benefits in Section 5.13(i) respect of the Seller Disclosure ScheduleBuyer or any of its Subsidiaries’ current and former employees, the execution and delivery of this Agreement and the performance of the transactions contemplated herebythere is no reason why any such claim, will not (either alone dispute, complaint or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or investigation could arise. (vi) give rise All amounts payable by the Buyer or any of its Subsidiaries to any amount that would not be deductible by Seller under Section 280G of the CodeBuyer UK Pension Plans have been paid. (jvii) No employee or other All death in service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller benefits under the Buyer UK Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the CodePlans are fully insured. (kviii) The treatment All benefits under the Buyer UK Pension Plans (other than those which are fully insured) are calculated on a money purchase basis only and there is no obligation on the Buyer or any of its Subsidiaries or under the Seller Stock Options, Buyer UK Pension Plans (other than in the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant case of those benefits which are fully insured) to Section 3.4 provide any specified level of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planbenefits.

Appears in 1 contract

Samples: Merger Agreement (Digitas Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a5.13(a)(i) of the Seller Disclosure ScheduleLetter sets forth a complete and current list, none of Seller, any as of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain)date of this Agreement, and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any each “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, severance, change in control, retention or termination plan, program, policy or arrangement, and each other employee benefit plan for Seller Personnel plan, program, policy or their respective dependents or beneficiariesarrangement, in each case, sponsored, maintained, contributed to, or any other planrequired to be maintained or contributed to, program or arrangement of by the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary of its subsidiaries or any other of Seller’s ERISA Affiliate Affiliates for the benefit of any Seller Personnel, but not including any Seller Benefit Agreement (collectivelyeach such plan, program, policy or arrangement, together with any such plan, program, policy or arrangement that is entered into after the date of this Agreement, a “Seller Other PlansBenefit Plan”). Each employment, consulting, bonus, incentive or deferred compensation, equity or equity-based compensation, severance, change in control, retention, termination or other agreement or arrangement between the Seller or any of its subsidiaries, on the one hand, and any Seller Personnel, but not including any Seller Benefit Plan, is referred to herein as a “Seller Benefit Agreement”. Section 5.13(a)(ii) of the Seller Letter sets forth a complete and correct list, as of the date of this Agreement, of each material Seller Benefit Agreement. (b) The Seller has made available to the Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and the Seller Other PlansBenefit Agreements: (i) plan document a complete and current copy thereof, including any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingthereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the two most recent annual report reports on Form 5500 for the three most recent plan years5500; (v) the two most recent financial and/or actuarial reportreports, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each Each of the Seller Pension Plans, each of the Seller Benefit Plans and each of the Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA AffiliateBenefit Agreements, has been and is administered in material compliance with its terms and has been in all material respects and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, including the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and the Seller is not aware of any reason why any such opinion letter remains in effect and has would reasonably be expected to be revoked or not been revokedbe reissued. (e) Except as set forth in Section 5.13(e) of The Seller has made or provided for all contributions to the Seller Disclosure Schedule, neither Pension Plans required thereunder. (f) Neither the Seller nor any Subsidiary of its subsidiaries is a party to or maintains any contract or other arrangement with any employee or group of employees that provides for any kind of severance payments. (g) Neither the Seller nor any of its subsidiaries or ERISA Affiliates sponsors, maintains or contributes to, or in the six (6) years prior to the date hereof has sponsored, maintained or contributed to (i) any “multiemployer plan” within the meaning of Section 4001(a)(3) of ERISA, or (ii) any plan subject to Section 302 or Title IV of ERISA or Code Section 412 or which is otherwise a defined benefit pension plan. No circumstances exist which could reasonably be expected to result in any liability to the Seller or any of its subsidiaries under Section 302 or Title IV of ERISA or Code Section 412. (h) Neither the Seller nor any of its subsidiaries provides or has agreed to provide healthcare healthcare, welfare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Lawslaws). No , and no circumstances exist that could result in the Seller Benefit Plan is a self-funded “employee welfare benefit planor any of its subsidiaries becoming obligated to provide any such benefits. (fi) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no No lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of the Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other PlanBenefit Agreement. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there There is no written material correspondence between Seller, any Subsidiary of the Seller or any other ERISA Affiliate of its subsidiaries and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan Benefit Agreement concerning any matter that could would result in any material liability to the Parent, the Surviving Corporation, Seller, Seller or any Seller Pension Plan, Seller Benefit Plan or Seller Other PlanBenefit Agreement. Neither the Seller nor any of its subsidiaries has received notice of any, and, to the knowledge of the Seller, there are no, material investigations by any Governmental Authority with respect to any Seller Benefit Plan or Seller Benefit Agreement. None of the Seller and its Subsidiaries nor any other Person, including any fiduciary, has engaged in any “prohibited transaction” (as defined in Code Section 4975 or Section 406 of ERISA) which could subject any Seller Benefit Plan or Seller Benefit Agreement or their related trusts, the Seller, any of its subsidiaries or any Person that the Seller or any of its subsidiaries has an obligation to indemnify, to any material tax or penalty imposed under Code Section 4975 or Section 502 of ERISA. (gj) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan Benefit Agreement that is a “nonqualified deferred compensation plan” within the meaning of Code Section 409A of the Code has been operated in material compliance with Code Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Code Section 409A of 409A, the Code, proposed regulations issued thereunder and the regulations Internal Revenue Services Notices 2005-1 and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance2006-79. (hk) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of the Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans Benefit Agreements (collectively, the “Arrangements”), to the Covered Securityholders. The Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. The Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof of the Seller board of directors (the “Seller Compensation Committee”) (iA) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly and unanimously adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A1) each Arrangement Retention Letter Agreement presented to the Seller Compensation Committee on or prior to the date hereof, and (B2) the treatment of the Seller Stock Options, Seller Restricted Stock Awards Options and Seller Restricted Stock Units Shares in accordance with the terms set forth in this Agreement, and (C3) the terms of Section Sections 7.4 and Section 7.5 of this AgreementAgreement and (4) each Change in Control Arrangement that is set forth in Section 5.14(c)(i) of the Seller Letter, which resolutions have not been rescinded, modified or withdrawn in any way, way and (iiB) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. Immediately prior to the Acceptance Date, there will be no Change in Control Arrangements between the Seller or any of its subsidiaries, on the one hand, and any stockholder of the Seller that has tendered shares of Seller Common Stock into the Offer, on the other hand, other than those Change in Control Arrangements that have been approved by the Seller Compensation Committee as Employment Compensation Arrangements prior to the Acceptance Date and with respect to which the Seller Compensation Committee has taken all other actions, prior to the Acceptance Date, necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act. (il) Except as set forth in Section 5.13(i) All Seller Benefit Plans and Seller Benefit Agreements subject to the laws of any jurisdiction outside of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will United States (i) result have been maintained in any payment accordance with all applicable requirements in all material respects, (whether ii) if they are intended to qualify for special tax treatment meet all material requirements for such treatment, and (iii) if they are intended to be funded and/or book-reserved are fully funded and/or book-reserved, as appropriate, based upon reasonable actuarial assumptions. (m) With respect to each of severance pay the Key Personnel who has entered into a Retention Letter Agreement with the Parent on or otherwiseprior to the date of this Agreement, the Seller has made available to the Parent in the electronic data room complete and accurate information relating to all material terms and conditions of such Key Personnel’s employment with the Seller or its subsidiaries (including (i) becoming due all cash and non-cash compensation that each such Key Personnel is entitled to any current or former employee, director of, or consultants to, eligible to receive from the Seller, (ii) result any employment, change in control, retention or severance agreements between each such Key Personnel and the acceleration of the time of payment, funding or vesting Seller of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, of its subsidiaries and (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the all Seller Stock Options, the Options and Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted Shares held by the terms of the Seller Stock Plans, and any other agreements pursuant to which each such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planKey Personnel).

Appears in 1 contract

Samples: Merger Agreement (Global Imaging Systems Inc)

Employee Benefit Programs. (a) Other than the Employee Benefit Programs identified in Section 4.16 of the Disclosure Schedule, neither the Company nor any other entity under common control with the Company under Section 414(b), (c), (m) or (o) of the Code, or Section 4001 of ERISA (each such entity, an “ERISA Affiliate”), maintains, sponsors or contributes to, any employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any bonus, deferred compensation, incentive compensation, stock ownership, stock purchase, stock option, phantom stock, equity-based, vacation, paid time off, severance, consulting, incentive, commission, payroll, retention, change in control, fringe benefit, profit sharing, retirement, welfare, noncompetition, disability, death benefit, hospitalization or insurance plan, or other plan, Contract, or arrangement providing compensation or benefits to any present or former employee or contractor of the Company (an “Employee Benefit Program”). The terms and operation of each such Employee Benefit Program comply and have heretofore complied in all material respects with their terms and with all applicable Laws. There are no material unfunded obligations of the Company under any Employee Benefit Program that have not been accrued unless such accrual is not necessary under GAAP. Except as described in Section 4.16 of the Disclosure Schedule, the Company has not maintained, contributed to or promised any Employee Benefit Program providing or promising any health or other welfare benefits to employees after their employment terminates other than as required by part 6 of subtitle B of Title I of ERISA. With respect to any Employee Benefit Program, to the knowledge of the Company, there has occurred no “prohibited transaction,” as defined in Section 406 of ERISA or Section 4975 of the Code, or breach of any duty under ERISA or other applicable Law that could result, directly or indirectly, in any Taxes, penalties or other liability to the Company. No Action or other proceeding (other than those relating to routine claims for benefits) is pending or, to the knowledge of the Company, threatened with respect to any such Employee Benefit Program. (b) Each Employee Benefit Program that has ever been maintained by the Company and that has been intended to qualify under Section 401(a) or 501(c)(9) of the Code has been determined by the IRS or pursuant to regulations, notices, rulings or other IRS pronouncements to be so qualified, or is maintained pursuant to a valid volume submitter or prototype document. To the knowledge of the Company, each such Employee Benefit Program has, in fact, been qualified under the applicable section of the Code from the effective date of such Employee Benefit Program through and including the Closing Date (or, if earlier, the date that all of such Employee Benefit Program’s assets were distributed). To the knowledge of the Company, no event or omission has occurred which could cause any such Employee Benefit Program to lose its qualification under the applicable Code section. Except as set forth in Section 5.13(a) 4.16 of the Seller Disclosure Schedule, none of Seller, the Company has not maintained any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Employee Benefit Plans”), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for Seller Personnel or their respective dependents or beneficiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate (collectively, the “Seller Other Plans”). (b) Seller has made available to Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, Program which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions or could be subject to Title IV of ERISA (or Code Section 412, including, but not limited to, any “multiemployer plan” (as defined in Section 3(37) or Section 4001(a)(3) of ERISA). (c) The execution and delivery by the Company of this Agreement does not, and the consummation of the other Transactions and compliance with the terms hereof (whether alone or in combination with any other event) will not, (A) entitle any current or former employee or director or shareholder of the Company to severance pay, (B) except as expressly required by this Agreement, accelerate the time of payment or vesting or trigger any payment or funding and prohibited transactions provisions thereof)(through a grantor trust or otherwise) of compensation or benefits under, increase the Code and all amount payable or trigger any other applicable Lawsmaterial obligation pursuant to, any Employee Benefit Program or (C) result in any breach or violation of, or a default under, any Employee Benefit Program. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to The Company is not a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject party to any liability under Title IV Contract or Part 3 plan that has resulted or could result, separately or in the aggregate, in the payment of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan any “excess parachute payment” within the meaning of Code Section 401(a) has received a favorable determination 280G (or opinion letter from the IRS and such letter remains in effect and any corresponding provision of state, local or foreign Tax law). The Company has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” United States real property holding Company within the meaning of Code Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv897(c)(2) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by during the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”period specified in Code Section 897(c)(1)(A)(ii) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Azz Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a5.13(a)(i) of the Seller Disclosure ScheduleLetter sets forth a complete and current list, none of Seller, any as of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain)date of this Agreement, and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any each “employee pension benefit plan” (the “Seller Pension Plans”), as such term is defined in Section 3(2) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, severance, change in control, retention or termination plan, program, policy or arrangement, and each other employee benefit plan for Seller Personnel plan, program, policy or their respective dependents or beneficiariesarrangement, in each case, sponsored, maintained, contributed to, or any other planrequired to be maintained or contributed to, program or arrangement of by the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary of its subsidiaries or any other of Seller’s ERISA Affiliate Affiliates for the benefit of any Seller Personnel, but not including any Seller Benefit Agreement (collectivelyeach such plan, program, policy or arrangement, together with any such plan, program, policy or arrangement that is entered into after the date of this Agreement, a “Seller Other PlansBenefit Plan”). Each employment, consulting, bonus, incentive or deferred compensation, equity or equity-based compensation, severance, change in control, retention, termination or other agreement or arrangement between the Seller or any of its subsidiaries, on the one hand, and any Seller Personnel, but not including any Seller Benefit Plan, is referred to herein as a “Seller Benefit Agreement”. Section 5.13(a)(ii) of the Seller Letter sets forth a complete and correct list, as of the date of this Agreement, of each material Seller Benefit Agreement. (b) The Seller has made available to the Parent complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Benefit Plans and the Seller Other PlansBenefit Agreements: (i) plan document a complete and current copy thereof, including any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingthereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the two most recent annual report reports on Form 5500 for the three most recent plan years5500; (v) the two most recent financial and/or actuarial reportreports, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms and has been and is in material compliance with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Laws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS and such letter remains in effect and has not been revoked. (e) Except as set forth in Section 5.13(e) of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller provides or has agreed to provide healthcare or any other non-pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan.” (f) Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Merger Agreement (Xerox Corp)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure Schedule, none of Seller, neither the Seller nor any of the Seller its Subsidiaries has maintained or any other ERISA Affiliate currently maintains, or has contributed or currently contributes to (or maintains (has been or is obligated to contribute to or maintain), and none of Sellercontribute) to, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any “"employee pension benefit plan" (the "Seller Pension Plans"), as such term is defined in Section 3(2) of ERISA, "employee welfare benefit plan" (the "Seller Benefit Plans"), as such term is defined in Section 3(1) of ERISA, employment, severance or similar agreement, contract or policy, stock option plan, restricted stock plan, stock purchase plan, deferred compensation plan, bonus or incentive plan, or other employee benefit plan for employees of the Seller Personnel or their respective dependents or beneficiariesany of its Subsidiaries, or any other plan, program or arrangement of the same or similar nature that provides benefits to non-non employee directors of Seller, any the Seller Subsidiary or any other ERISA Affiliate of its Subsidiaries, including the Seller Stock Option Plans and the Seller UK Sub-plan (collectively, the "Seller Other Plans"). (b) The Seller has made available to Parent the Buyer complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, the Seller Benefit Plans and the Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three ; (v) most recent plan yearsannual report on Form 5500; and (vi) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c4.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, each of the Seller Benefit Plans and each of the Seller Other Plans, which are maintained or contributed to by the Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been and is administered in material compliance with its terms in all material respects and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof), the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Plans that which is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS that such plan meets the requirements of Code Section 401(a) and that the trust associated with such letter remains in effect Seller Pension Plan is tax exempt under Code Section 501(a), and, to the knowledge of the Seller, each of such plans is so qualified and has the Seller is not been revokedaware of any fact or circumstance which would adversely affect the qualified status of any such plan. (e) The Seller has made or provided for all contributions to the Seller Pension Plans required thereunder. (f) Except as set forth in Section 5.13(e4.13(f) of the Seller Disclosure Schedule, neither the Seller nor any Subsidiary of its Subsidiaries is a party to or maintains any existing contract or other arrangement with any employee or group of employees (i) that provides for any kind of severance payments, stock or stock equivalent payments or post employment benefits or (ii) providing that any otherwise disclosed plan, program or arrangement will irrevocably continue, with respect to any or all of its participants, for any period of time. (g) Except as set forth in Section 4.13(g) of the Seller provides Disclosure Schedule, neither the Seller nor any of its Subsidiaries (i) has ever maintained any "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA, (ii) has ever maintained any plan subject to Title IV of ERISA, or has agreed to provide (iii) is providing healthcare or any other non-non pension benefits to any employees after their employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Laws). No Seller Benefit Plan is a self-funded “employee welfare benefit planlaws) or has promised to provide such post termination benefits in the future. (fh) Except as set forth in Section 5.13(f4.13(h) of the Seller Disclosure Schedule, no material lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of the Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) There is no material correspondence between the Seller or any Subsidiary of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any other Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could would result in any material liability to Parentthe Buyer, the Surviving Corporation, Seller, Seller or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (gi) Each With respect to any pension plan, scheme or arrangement maintained by the Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value covers employees of the Seller Common Stock or its Subsidiaries in the United Kingdom (the "Seller UK Pension Plans"): (i) The Seller UK Pension Plans are the only arrangements to which the Seller or any of its Subsidiaries has or could have any liability for the purpose of providing benefits on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidanceretirement or death. (hii) The parties acknowledge that certain payments have been Seller has made or are available to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans the Buyer documents containing material details of Seller, including the Seller Benefit PlansUK Pension Plans and of the Seller's or any of its Subsidiaries' and its employees' obligations and liabilities under it. (iii) The Seller UK Pension Plans are approved in accordance with Chapter I or Chapter IV of Part XIV of the Income and Corporation Taxes Xxx 0000, and there is no reason why this approval could be withdrawn. (iv) So far as the Seller or any of its Subsidiaries are aware having made enquiries, the Seller or any of its Subsidiaries and Seller UK Pension Plans comply and have at all times complied with all legal and regulatory requirements (including equal treatment and data protection requirements) relevant to the Seller UK Pension Plans and the Seller Other Plans or any of its Subsidiaries' participation in the Seller UK Pension Plans. (collectivelyv) So far as the Seller or any of its Subsidiaries are aware having made enquiries, the “Arrangements”)no claim, dispute, complaint or investigation has arisen which relates to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered UK Pension Plans or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board provision of retirement or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members death benefits in respect of the Seller Compensation Committee were presentor any of its Subsidiaries' current and former employees, duly adopted resolutions approving as an “employment compensationand there is no reason why any such claim, severance dispute, complaint or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”)investigation could arise. (Avi) each Arrangement presented All amounts payable by the Seller or any of its Subsidiaries to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions UK Pension Plans have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementspaid. (ivii) Except as set forth All death in Section 5.13(i) of service benefits under the Seller Disclosure Schedule, UK Pension Plans are fully insured. (viii) All benefits under the execution Seller UK Pension Plans (other than those which are fully insured) are calculated on a money purchase basis only and delivery there is no obligation on the Seller or any of this Agreement and its Subsidiaries or under the performance of the transactions contemplated hereby, will not Seller UK Pension Plans (either alone or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result other than in the acceleration case of the time those benefits which are fully insured) to provide any specified level of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Codebenefits. (j) No employee or other service provider of With respect to the Seller UK Sub-plan: (i) All notices, returns, registrations and payments which should have been made by the Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition Seller's Subsidiaries in relation to the Seller UK Sub-plan have been made during the requisite time periods, are up-to-date correct and on a proper basis and none of them is, or is likely to be, the subject of any additional tax imposed on such service provider under Section 280G or Section 409A of the Codedispute with any authority administering Tax. (kii) The treatment Seller UK Sub-plan is approved by the UK Inland Revenue under the provisions of ITEPA and there are no circumstances which are likely to result in such Inland Revenue approval being withdrawn. (iii) The Seller and the Seller's Subsidiaries have properly operated the United Kingdom Pay As You Earn System by making deductions as required by applicable Tax Statutes, on the grant, exercise or other event in relation to share options granted under the Seller Stock Options, UK Sub-plan and has accounted for any such taxation the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such planappropriate Taxation Authority.

Appears in 1 contract

Samples: Merger Agreement (Modem Media Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure Schedule, none Letter sets forth a list of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any each “employee pension benefit plan” (within the “Seller Pension Plans”), as such term is defined in meaning of Section 3(23(3) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined and all severance, change in Section 3(1) of ERISAcontrol or employment plan, employment, severance program or similar agreement, contract or policyand vacation, incentive, bonus, stock option planoption, stock purchase, and restricted stock plan, stock purchase plan, deferred compensation plan, bonus program or incentive plan, policy that is sponsored or other employee benefit plan for maintained by Seller Personnel or their respective dependents or beneficiaries, or any other plan, program Affiliate of Seller in which the current or arrangement of the same former Business Employees participate or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate have a benefit (collectively, the “Seller Other Business Benefit Plans”). (b) Seller has made available to Parent Buyer complete and accurate copies of each of the following with respect to each of the Seller Pension Plans, Seller Business Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writingamendment thereto; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the most recent annual report on Form 5500 for required to be filed with the three most recent plan years; IRS (v) the financial and/or actuarial report, if any, for the three most recent plan yearsany such report was required); and (viv) summary plan description, any summary of material modifications thereto, and any material employee communications. (c) Except as set forth in Section 5.13(c4.13(c) of the Seller Disclosure ScheduleLetter, each of the Seller Pension Plans, Seller Business Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliateof its Subsidiaries, has been and is administered in material compliance with its terms and has been in all material respects and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof)ERISA, the Code and all other applicable Lawslaws. (d) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Business Benefit Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination and up-to-date determination, opinion or opinion advisory letter from the IRS on which Seller and its Subsidiaries are entitled to rely, stating that such letter remains in effect and has not been revokedBusiness Benefit Plan is so qualified. (e) Except as set forth in Section 5.13(e4.13(e) of the Seller Disclosure ScheduleLetter, neither Seller nor any Subsidiary none of Seller or any of its Subsidiaries provides or has agreed to provide healthcare or any other non-pension benefits to any employees Business Employees or their families or beneficiaries after their any such Business Employee’s employment is terminated (other than as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Lawslaws). No Seller Benefit Plan is a self-funded “employee welfare benefit plan. (f) Except as set forth with respect to the agreements disclosed in Section 5.13(f4.13(f) of the Seller Disclosure ScheduleLetter, no lawsuits, governmental administrative proceedings, claims (other than routine claims for benefits) or complaints to, or by, any Person or Governmental Authority have been filed, are pending, or to the knowledge of Seller, threatened with respect to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary none of Seller or any other ERISA Affiliate and any Governmental Authority related of its Subsidiaries is a party to any written agreement with any Key Employee of Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability with respect to Parent, the Surviving Corporation, SellerBusiness (A) the benefits of which are contingent, or the terms of which are materially altered, upon the occurrence of a transaction involving Seller and its Subsidiaries of the nature of any Seller Pension Planof the transactions contemplated by this Agreement, Seller Benefit Plan (B) providing any term of employment or Seller Other Plancompensation guarantee, or (C) providing severance benefits or other benefits after the termination of employment of such Key Employee. (g) Each None of Seller Pension Planor any of its Subsidiaries sponsors, Seller Benefit Plan and Seller Other Plan contributes to, or has any obligations or liability under any employee benefit plan that is a subject to Title IV of ERISA or Section 412 of the Code (including any nonqualified deferred compensation defined benefit plan” within the meaning of Section 409A 3(35) of ERISA), or to a “multiemployer plan” within the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation meaning of Section 409A 3(37) of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidanceERISA. (h) The parties acknowledge that certain Any current or former Business Employee who, as of Closing, is receiving benefit payments have been made or are becomes eligible to receive benefit payments under a current or former long-term disability policy or plan of Seller shall continue to receive benefit payments under such policy or plan until he or she ceases to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee eligible for benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable payments under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 such policy or plan, without payment of this Agreement, which resolutions have not been rescinded, modified any additional premiums or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangementscosts. (i) Except as set forth in Section 5.13(iSeller has timely made any and all contributions to the Business Benefit Plans and to any individual retirement arrangement (including any registered retirement savings plan for any Business Employee employed by The Princeton Review Canada Inc.) of the which Seller Disclosure Schedule, the execution and delivery of this Agreement and the performance of the transactions contemplated hereby, will not (either alone has promised or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller is required to contribute to such Business Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director of, or consultants to, Seller, (ii) result in the acceleration of the time of payment, funding or vesting of any benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Codeindividual retirement arrangement. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Princeton Review Inc)

Employee Benefit Programs. (a) Except as set forth in Section 5.13(a4.13(a) of the Seller Disclosure Schedule, none Schedule sets forth a list of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate contributes to or maintains (or is obligated to contribute to or maintain), and none of Seller, any of the Seller Subsidiaries or any other ERISA Affiliate may incur any liability under any each material “employee pension benefit plan” (within the “Seller Pension Plans”), as such term is defined in meaning of Section 3(23(3) of ERISA, “employee welfare benefit plan” (the “Seller Benefit Plans”), as such term is defined and each severance, change in Section 3(1) of ERISAcontrol or employment plan, employment, severance program or similar agreement, contract or policyand vacation, incentive, bonus, stock option planoption, stock purchase, and restricted stock plan, stock purchase plan, deferred compensation plan, bonus program or incentive planpolicy that is sponsored or maintained by Seller or any Affiliate of Seller in which the Business Employees participate or with respect to which Seller contributes to, or other employee has an obligation to contribute, for the benefit plan for Seller Personnel or their respective dependents or beneficiaries, or on behalf of any other plan, program or arrangement of the same or similar nature that provides benefits to non-employee directors of Seller, any Seller Subsidiary or any other ERISA Affiliate Business Employees (collectively, the “Seller Other Business Benefit Plans”). (b) Seller has made available to Parent complete and accurate copies of each Each of the following with respect to each of the Seller Pension Plans, Seller Business Benefit Plans and Seller Other Plans: (i) plan document and any amendments thereto and a description if such Seller Pension Plan, Seller Benefit Plan or Seller Other Plan is not in writing; (ii) trust agreement or insurance contract (including any fiduciary liability policy or fidelity bond), if any; (iii) most recent IRS determination or opinion letter, if any; (iv) the annual report on Form 5500 for the three most recent plan years; (v) the financial and/or actuarial report, if any, for the three most recent plan years; and (vi) summary plan description, any summary of material modifications theretois, and any material employee communications. (c) Except as set forth in Section 5.13(c) of the Seller Disclosure Schedule, each of the Seller Pension Plans, Seller Benefit Plans and Seller Other Plans, which are maintained or contributed to by Seller, any Subsidiary of Seller or any other ERISA Affiliate, has been maintained, operated and is administered in all material compliance respects in accordance with its terms and has been and is in compliance in all material compliance respects with the applicable provisions of ERISA (including, but not limited to, the funding and prohibited transactions provisions thereof)ERISA, the Code and all other applicable Lawslaws. (dc) None of Seller, any of the Seller Subsidiaries nor any other ERISA Affiliate sponsor, maintain or contribute to, has ever sponsored, maintained or contributed to a plan subject to Title IV (including, without limitation, a “multiemployer plan” (within the meaning of Section 3(37) of ERISA)) or Part 3 of Title I of ERISA or Section 412 of the Code, and neither Seller nor any ERISA Affiliate could be subject to any liability under Title IV or Part 3 of Title I of ERISA. Each of the Seller Pension Business Benefit Plans that is intended to be a qualified plan within the meaning of Code Section 401(a) has received a favorable determination or opinion letter from the IRS regarding its qualification thereunder or may rely on an opinion letter issued by the IRS with respect to a prototype plan adopted in accordance with the requirements for such reliance, and to Seller’s Knowledge, there are no facts or circumstances that would reasonably be expected to result in the loss of the qualification of such letter remains in effect and has not been revokedBusiness Benefit Plans. (ed) Except as set forth in Section 5.13(e) None of the Seller Disclosure Schedule, neither Seller nor any Subsidiary of Seller Business Benefit Plans provides or has agreed to provide healthcare or any other non-pension health and welfare benefits to any employees Business Employees after their employment is terminated (other than group health plan continuation coverage as required by Part 6 of Subtitle B of Title I of ERISA or state health continuation Lawslaws). No . (e) Neither Seller Benefit Plan nor any ERISA Affiliate sponsors, maintains or contributes to any plan that is subject to Title IV of ERISA, Section 412 of the Code, Section 302 of ERISA or is a self“multi-funded “employee welfare benefit employer plan” as defined in Section 3(37) of ERISA. There are no outstanding Liabilities of Seller or any ERISA Affiliate under or arising from Title IV of ERISA or Section 412 of the Code with respect to any Business Benefit Plans, and to Seller’s Knowledge, no facts or circumstances exist that would reasonably be expected to result in a lien imposed on any assets associated with the Business under Section 4068 of ERISA or Section 430(k) of the Code. (f) Except as set forth in Section 5.13(fWith respect to each Business Benefit Plan, Seller has made available to Buyer true and complete copies of each Business Benefit Plan (or, if not written, a written summary of its material terms), along with, to the extent applicable, copies of all trust agreements, insurance contracts or other funding vehicles, summary plan descriptions and summaries of material modifications, the three (3) most recently filed annual reports (Form 5500 series), and the most recent determination or opinion letter issued by the IRS. (g) There are no pending claims or, to the Knowledge of the Seller Disclosure Schedule, no lawsuits, governmental administrative proceedingsSeller, claims threatened in writing against any Business Benefit Plan, by any Business Employee or otherwise involving any such Business Benefit Plan or the assets of any Business Benefit Plan (other than routine claims for benefits) benefits made in the Ordinary Course of Business). There are no actions, audits or complaints to, or by, any Person or Governmental Authority have been filed, are investigations pending, or or, to the knowledge Knowledge of Seller, threatened in writing, by any Governmental Authority with respect to any Seller Pension Business Benefit Plan, Seller Benefit Plan or Seller Other Plan. Except as set forth in Section 5.13(f) of the Seller Disclosure Schedule, there is no written correspondence between Seller, any Subsidiary of Seller or any other ERISA Affiliate and any Governmental Authority related to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan concerning any matter that could result in any material liability to Parent, the Surviving Corporation, Seller, or any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan. (g) Each Seller Pension Plan, Seller Benefit Plan and Seller Other Plan that is a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code has been operated in material compliance with Section 409A of the Code since January 1, 2005, based upon a good faith, reasonable interpretation of Section 409A of the Code, and the regulations and guidance issued thereunder. Each such “nonqualified deferred compensation plan” was, as of January 1, 2009, in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. Since January 1, 2009, each such “nonqualified deferred compensation plan” has remained in documentary and operational compliance with Section 409A of the Code, and the regulations and guidance issued thereunder. The exercise price of all Seller Stock Options is at least equal to the fair market value of the Seller Common Stock on the date such options were granted based on Treasury Regulation Section 1.409A-1(b)(5)(iv) and applicable guidance. (h) The parties acknowledge that certain payments have been made or are to be made and certain benefits have been granted or are to be granted according to employment compensation, severance and other employee benefit plans of Seller, including the Seller Benefit Plans, the Seller Pension Plans and the Seller Other Plans (collectively, the “Arrangements”), to the Covered Securityholders. Seller hereby represents and warrants that all such amounts payable under the Arrangements (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by the Covered Securityholders (and matters incidental thereto) and (ii) are not calculated based on the number of shares tendered or to be tendered into the Offer by the applicable Covered Securityholder. Seller also hereby represents and warrants that the Seller Board or the Compensation Committee thereof (the “Seller Compensation Committee”) (i) at a meeting duly called and held at which all members of the Seller Compensation Committee were present, duly adopted resolutions approving as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1) under the Exchange Act (an “Employment Compensation Arrangement”) (A) each Arrangement presented to the Seller Compensation Committee on or prior to the date hereof, and (B) the treatment of the Seller Stock Options, Seller Restricted Stock Awards and Seller Restricted Stock Units in accordance with the terms set forth in this Agreement, and (C) the terms of Section 7.4 and Section 7.5 of this Agreement, which resolutions have not been rescinded, modified or withdrawn in any way, and (ii) has taken all other actions necessary to satisfy the requirements of the non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with respect to the foregoing arrangements. (i) Except as set forth in Section 5.13(i) of the Seller Disclosure Schedule, Neither the execution and delivery of this Agreement and (alone or together with any other event which, standing alone, would not by itself trigger such result) nor the performance consummation of the transactions contemplated herebyhereby will result in, will not (either alone cause the accelerated vesting, funding or upon the occurrence of any additional or subsequent events) constitute an event under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan that will (i) result in any payment (whether of severance pay or otherwise) becoming due to any current or former employee, director delivery of, or consultants toincrease the amount or value of, Seller, (ii) result in the acceleration of the time of payment, funding any payment or vesting of benefit to any benefits Business Employee due under any Seller Pension Business Benefit Plan, Seller Benefit Plan or Seller Other Plan, (iii) increase any amount of benefits under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (iv) require any contribution or payments to fund any obligations under any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan, (v) result in the triggering or imposition of any restrictions or limitations on the right of Seller to amend or terminate any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan or (vi) give rise to any amount that would not be deductible by Seller under Section 280G of the Code. (j) No employee or other service provider of Seller or any Seller Subsidiary is entitled to a tax gross-up payment pursuant to any Seller Pension Plan, Seller Benefit Plan or Seller Other Plan in the event of the imposition of any additional tax imposed on such service provider under Section 280G or Section 409A of the Code. (k) The treatment of the Seller Stock Options, the Seller Restricted Stock Awards and the Seller Restricted Stock Units pursuant to Section 3.4 of this Agreement is permitted by the terms of the Seller Stock Plans, and any other agreements pursuant to which such equity awards were granted, without the consent of the holder of such awards. The treatment of the ESPP pursuant to Section 3.4(d) of this Agreement is permitted by the terms of that plan without the consent of the participants in such plan.

Appears in 1 contract

Samples: Asset Purchase Agreement (Irobot Corp)

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