Common use of Employee Matters; Benefit Plans Clause in Contracts

Employee Matters; Benefit Plans. (a) Subsequent to the Effective Time, Parent shall perform or cause a Subsidiary of Parent to perform the obligations of Target under the Target Severance Policy and the employment agreements and letter agreements set forth in Section 4.11(e) of the Target Disclosure Letter. (b) To the extent service is relevant for purposes of eligibility, participation or vesting or receipt of benefits under a welfare benefit plan (but not the accrual of benefits under a retirement plan) under any employee benefit plan, program or arrangement established or maintained by Parent or a Subsidiary of Parent in which Business Employees may participate, such Business Employees shall be credited for service accrued as of the Effective Time with Target and its Subsidiaries to the extent such service was credited under a similar plan, program or arrangement of Target. (c) To the extent Business Employees and their dependents enroll in any health plan sponsored by Parent or a Subsidiary of Parent, Parent shall waive any preexisting condition limitation applicable to such Business Employees to the extent that the employee’s or dependent’s condition would not have operated as a preexisting condition under the group health plan maintained by Target. In addition, Parent shall cause such health plans (i) to waive all preexisting condition exclusions and waiting periods otherwise applicable to Business Employees and their dependents, other than exclusions or waiting periods that are in effect with respect to such individuals as of the Effective Time to the extent not satisfied, under the corresponding benefit plans of Target, and (ii) to provide each Business Employee and his or her dependents with corresponding credit for any co-payments and deductibles paid by them under the corresponding benefit plans of Target during the portion of the respective plan year prior to the Effective Time. (d) With respect to the 401(k) accounts of those Business Employees who become eligible to participate in Parent’s 401(k) Plan after the Effective Time, Parent agrees to take one or more of the following actions: (i) to establish an arrangement under which such Business Employees are provided with payroll withholding for purposes of repaying any loan that is outstanding under Target’s 401(k) Plan as of the Effective Time; (ii) to permit such Business Employees to voluntarily transfer or rollover their accounts (including loans) from Target’s 401(k) Plan to Parent’s 401(k) Plan; or (iii) to cause Parent’s 401(k) Plan to accept a direct trustee-to-trustee transfer of assets from Target’s 401(k) Plan into Parent’s 401(k) Plan, including any outstanding loans, on behalf of such Business Employees. Parent and Target agree that they shall take all actions necessary, including the amendment of their respective plans, to effect the actions selected by Parent under the preceding sentence. (e) With respect to any Business Employees who become employed by Parent or a Subsidiary of Parent after the Effective Time, Parent will permit or cause such Subsidiary to permit such Business Employees to schedule and take vacation days that have accrued prior to the Effective Time with pay through December 31, 2006, and Parent shall give service credit for purposes of determining post Effective Time vacation, sick leave and any other paid time off entitlements that Parent provides to its employees generally. (f) At the Effective Time, Target will freeze the accrual of benefits under Target’s Deferred Compensation Plan. (g) Target and Parent shall cooperate with each other in all reasonable respects relating to any actions to be taken pursuant to this Section 7.11.

Employee Matters; Benefit Plans. (a) Subsequent to the Effective Time, Parent shall perform or cause a Subsidiary of Parent to perform the obligations of Target under the Target Severance Policy and the employment agreements and letter agreements set forth in Section 4.11(e) of the Target Disclosure Letter. (b) To the extent service is relevant for purposes of eligibility, participation or vesting or receipt of benefits under a welfare benefit plan (but not the accrual of benefits under a retirement plan) under any employee benefit plan, program or arrangement established or maintained by Parent in or a Subsidiary of Parent in which Business Employees may participate, such Business Employees shall be credited for service accrued as of the Effective Time with Target and its Subsidiaries to the extent such service was credited under a similar plan, program or arrangement of Target. (c) To the extent Business Employees and their dependents enroll in any health plan sponsored by Parent or a Subsidiary of Parent, Parent shall waive any preexisting condition limitation applicable to such Business Employees to the extent that the employee’s or dependent’s condition would not have operated as a preexisting condition under the group health plan maintained by Target. In addition, Parent shall cause such health plans (i) to waive all preexisting condition exclusions and waiting periods otherwise applicable to Business Employees and their dependents, other than exclusions or waiting periods that are in effect with respect to such individuals as of the Effective Time to the extent not satisfied, under the corresponding benefit plans of Target, and (ii) to provide each Business Employee and his or her dependents with corresponding credit for any co-payments and deductibles paid by them under the corresponding benefit plans of Target during the portion of the respective plan year prior to the Effective Time. (d) With respect to the 401(k) accounts of those Business Employees who become eligible to participate in Parent’s 401(k) Plan after the Effective Time, Parent agrees to take one or more of the following actions: (i) to establish an arrangement under which such Business Employees are provided with payroll withholding for purposes of repaying any loan that is outstanding under Target’s 401(k) Plan as of the Effective Time; , (ii) to permit such Business Employees to voluntarily transfer or rollover their accounts (including loans) from Target’s 401(k) Plan to Parent’s 401(k) Plan; or (iii) to cause Parent’s 401(k) Plan to accept a direct trustee-to-trustee transfer of assets from Target’s 401(k) Plan into Parent’s 401(k) Plan, including any outstanding loans, on behalf of such Business Employees. Parent and Target agree that they shall take all actions necessary, including the amendment of their respective plans, to effect the actions selected by Parent under the preceding sentence. (e) With respect to any Business Employees who become employed by Parent or a Subsidiary of Parent after the Effective Time, Parent will permit or cause such Subsidiary to permit such Business Employees to schedule and take vacation days that have accrued prior to the Effective Time with pay through December 31, 2006, and Parent shall give service credit for purposes of determining post Effective Time vacation, sick leave and any other paid time off entitlements that Parent provides to its employees generally. (f) At the Effective Time, Target will freeze the accrual of benefits under Target’s Deferred Compensation Plan. (g) Target and Parent shall cooperate with each other in all reasonable respects relating to any actions to be taken pursuant to this Section 7.11.

Employee Matters; Benefit Plans. (a) Subsequent Illinova and Dynegy will evaluate their personnel needs and consider continuing the employment of certain employees of Illinova, Dynegy and their respective Subsidiaries on a case-by-case basis. At the Effective Time, the Dynegy Stock Options and Illinova Stock Options shall be modified to the extent provided in Section 4.6(c). In addition, Illinova and Dynegy shall take the other employment related actions specified in Section 8.11(a) of the Dynegy Disclosure Schedule and Section 8.11(a) of the Illinova Disclosure Schedule, respectively. Otherwise, neither Illinova nor Dynegy shall, with respect to the officers having an executive function of either party or their respective material subsidiaries and with an expected aggregate annual salary and bonus of $200,000 or more, amend any existing employment 64 66 agreements, make any grants of options, restricted stock or similar benefits, pay any bonuses or otherwise materially modify the financial aspects of employment arrangements except to the extent contractually obligated to as of the date hereof under agreements listed in Section 5.11(a) of the Dynegy Disclosure Schedule or Section 6.11(a) of the Illinova Disclosure Schedule, respectively; (b) After the Effective Time, Newco will initially provide to any employees of Illinova, Dynegy and their respective Subsidiaries who are employed by Newco as of the Effective Time (the "RETAINED EMPLOYEES") the same base salary or wages provided to such employees prior to the Effective Time, Parent shall perform subject to such changes in base salary or cause a Subsidiary of Parent to perform the obligations of Target under the Target Severance Policy and the employment agreements and letter agreements set forth in Section 4.11(e) of the Target Disclosure Letter. (b) To the extent service is relevant for purposes of eligibility, participation or vesting or receipt of benefits under a welfare benefit plan (but not the accrual of benefits under a retirement plan) under any employee benefit plan, program or arrangement established or maintained by Parent or a Subsidiary of Parent in which Business Employees may participate, such Business Employees wages as shall be credited for service accrued as of determined by Newco after the Effective Time. Newco will take all actions necessary or appropriate to permit the Retained Employees to continue to participate from and after the Effective Time with Target and its Subsidiaries to in the extent such service was credited under a similar plan, program or arrangement of Target. (c) To the extent Business Employees and their dependents enroll in any health plan sponsored by Parent or a Subsidiary of Parent, Parent shall waive any preexisting condition limitation applicable to such Business Employees to the extent that the employee’s or dependent’s condition would not have operated as a preexisting condition under the group health plan maintained by Target. In addition, Parent shall cause such health plans (i) to waive all preexisting condition exclusions and waiting periods otherwise applicable to Business Employees and their dependents, other than exclusions or waiting periods that are in effect with respect to such individuals as of the Effective Time to the extent not satisfied, under the corresponding employee benefit plans of Target, and (ii) to provide each Business Employee and his or her dependents with corresponding credit for any co-payments and deductibles paid by them under the corresponding benefit plans of Target during the portion of the respective plan year arrangements in which such Retained Employees were participating immediately prior to the Effective Time. (d1) With respect cause each Replacement Plan that is an employee pension benefit plan (as such term is defined in Section 3(2) of ERISA) intended to be qualified under Section 401 of the Code to be amended to provide that the Retained Employees shall receive credit for participation and vesting purposes under such plan for their period of employment with Illinova, Dynegy, their Subsidiaries and predecessors to the 401(kextent such predecessor employment was recognized by Illinova, Dynegy and their respective Subsidiaries and (2) accounts of those Business credit the Retained Employees who become eligible to participate in Parent’s 401(k) under each other Replacement Plan after the Effective Time, Parent agrees to take one or more of the following actions: (i) to establish an arrangement under which such Business Employees are provided with payroll withholding for purposes of repaying any loan that is outstanding under Target’s 401(k) Plan as not described in the preceding clause for their period of the Effective Time; (ii) to permit such Business Employees to voluntarily transfer or rollover their accounts (including loans) from Target’s 401(k) Plan to Parent’s 401(k) Plan; or (iii) to cause Parent’s 401(k) Plan to accept a direct trustee-to-trustee transfer of assets from Target’s 401(k) Plan into Parent’s 401(k) Planemployment with Illinova, including any outstanding loansDynegy, on behalf of such Business Employees. Parent and Target agree that they shall take all actions necessary, including the amendment of their respective plans, to effect the actions selected by Parent under the preceding sentence. (e) With respect to any Business Employees who become employed by Parent or a Subsidiary of Parent after the Effective Time, Parent will permit or cause such Subsidiary to permit such Business Employees to schedule Subsidiaries and take vacation days that have accrued prior predecessors to the Effective Time with pay through December 31extent such predecessor employment was recognized by Illinova, 2006, and Parent shall give service credit for purposes of determining post Effective Time vacation, sick leave and any other paid time off entitlements that Parent provides to its employees generally. (f) Dynegy or their respective Subsidiaries. At the Effective Time, Target will freeze Newco shall assume the accrual obligations of benefits (i) Dynegy under Target’s Deferred Compensation Planthe Dynegy Benefit Plans and (ii) Illinova under the Illinova Benefit Plans. The terms of each such Dynegy Benefit Plan and Illinova Benefit Plan shall continue to apply in accordance with their terms. (g) Target and Parent shall cooperate with each other in all reasonable respects relating to any actions to be taken pursuant to this Section 7.11.

Employee Matters; Benefit Plans. Parent, Xxxxx and Reading will evaluate their personnel needs and consider continuing the employment of certain employees of Parent, Xxxxx and Reading and their Subsidiaries on a case-by-case basis. After the Effective Time, Parent will initially provide to any employees of Parent, Xxxxx and Reading and their Subsidiaries who are to be employed by Parent, Xxxxx or Reading immediately after the Effective Time (athe "Retained Employees") Subsequent substantially the same base salary or wages provided to such employees prior to the Effective Time, subject to such changes in base salary or wages as shall be determined by Parent after the Effective Time. Parent shall perform take all reasonable actions necessary or cause a Subsidiary of appropriate to permit the Retained Employees to continue to participate from and after the Effective Time in the employee benefit plans or arrangements in which such Retained Employees were participating immediately prior to the Effective Time. Notwithstanding the foregoing, Parent may permit any such employee benefit plan or arrangement to perform be terminated or discontinued on or after the obligations of Target under Effective Time, provided that Parent shall (a) take all reasonable actions necessary or appropriate to permit the Target Severance Policy and Retained Employees participating in such employee benefit plan or arrangement to immediately thereafter participate in employee benefit plans or arrangements comparable to those maintained with respect to the employment agreements and letter agreements set forth in Section 4.11(e) remainder of the Target Disclosure Letter. Retained Employees (the "Replacement Plans"), (b) To the extent service with respect to a Replacement Plan that is relevant for purposes of eligibility, participation or vesting or receipt of benefits under a welfare benefit group health plan (but not i) credit such Retained Employees, for the accrual of benefits year during which participation in the Replacement Plan begins, with any deductibles and co-payments already incurred during such year under a retirement plan) under any employee benefit plan, program the terminated or arrangement established or maintained by Parent or a Subsidiary of Parent in which Business Employees may participate, such Business Employees shall be credited for service accrued as of the Effective Time with Target and its Subsidiaries to the extent such service was credited under a similar plan, program or arrangement of Target. (c) To the extent Business Employees and their dependents enroll in any discontinued group health plan sponsored by Parent or a Subsidiary of Parent, Parent shall and (ii) waive any preexisting condition limitation limitations applicable to such Business the Retained Employees (and their eligible dependents) under the Replacement Plan to the extent that the employee’s a Retained Employee's (or dependent’s 's) condition would not have operated as a preexisting condition under the terminated or discontinued group health plan, and (c)(i) cause each Replacement Plan that is an employee pension benefit plan maintained by Target. In addition(as such term is defined in Section 3(2) of ERISA) intended to be qualified under Section 401 of the Code to be amended to provide that the Retained Employees shall receive credit for participation and vesting purposes under such plan for their period of employment with the respective Company, Parent shall cause such health plans (i) to waive all preexisting condition exclusions and waiting periods otherwise applicable to Business Employees its Subsidiaries and their dependents, other than exclusions or waiting periods that are in effect with respect to such individuals as of the Effective Time predecessors to the extent not satisfied, under such predecessor employment was recognized by the corresponding benefit plans of Target, respective Company and its Subsidiaries and (ii) to provide credit the Retained Employees under each Business Employee and his or her dependents other Replacement Plan that is not described in the preceding clause for their period of employment with corresponding credit for any co-payments and deductibles paid by them under the corresponding benefit plans of Target during the portion of the respective plan year prior Company, its Subsidiaries and their predecessors to the Effective Time. (d) With respect to extent such predecessor employment was recognized by the 401(k) accounts of those Business Employees who become eligible to participate in Parent’s 401(k) Plan after respective Company or its Subsidiaries. At the Effective Time, Parent agrees to take one or more shall assume the obligations of the following actions: (i) to establish an arrangement respective Companies and their Subsidiaries under which such Business Employees are provided with payroll withholding for purposes of repaying any loan that is outstanding under Target’s 401(k) Plan as of the Effective Time; (ii) to permit such Business Employees to voluntarily transfer or rollover their accounts (including loans) from Target’s 401(k) Plan to Parent’s 401(k) Plan; or (iii) to cause Parent’s 401(k) Plan to accept a direct trustee-to-trustee transfer of assets from Target’s 401(k) Plan into Parent’s 401(k) Xxxxx Benefit Plan, including any outstanding loans, on behalf of such Business Employees. Parent and Target agree that they shall take all actions necessary, including the amendment of their respective plans, to effect the actions selected by Parent under the preceding sentence. (e) With respect to any Business Employees who become employed by Parent or a Subsidiary of Parent after the Effective Time, Parent will permit or cause such Subsidiary to permit such Business Employees to schedule and take vacation days that have accrued prior to the Effective Time with pay through December 31, 2006, and Parent shall give service credit for purposes of determining post Effective Time vacation, sick leave Reading Benefit Plan and any other paid time off entitlements that Parent provides employment contracts or severance agreements. The terms of each such Xxxxx Benefit Plan and Reading Benefit Plan shall continue to its employees generallyapply in accordance with their terms. (f) At the Effective Time, Target will freeze the accrual of benefits under Target’s Deferred Compensation Plan. (g) Target and Parent shall cooperate with each other in all reasonable respects relating to any actions to be taken pursuant to this Section 7.11.