Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing. (b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent. (c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements. (d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits. (e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date. (f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)). (g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 4 contracts
Samples: Transaction Support Agreement (HighPoint Resources Corp), Transaction Support Agreement (Bonanza Creek Energy, Inc.), Merger Agreement (Bonanza Creek Energy, Inc.)
Employee Matters. (a) Between For a period of twelve (12) months following the date hereof Closing, Parent shall, and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with (including the Company and its Subsidiaries) to, including with respect provide to potential promotionseach Company Employee who is employed immediately prior to the Closing and who becomes an employee of Parent, transfersthe Company or any of its Subsidiaries upon the Closing (each such individual, or job eliminations following a “Continuing Employee”) employee benefits that are no less favorable in the Closingaggregate than the level of such employee benefits provided to such employees on the date hereof.
(b) The Parties agree that for For a period of 12 twelve (12) months following the Closing DateClosing, each Parent shall maintain the employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, severance protections set forth in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b7.05(b) of the Company Disclosure Letter, which shall consist be in lieu of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the any Parent severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentplans or benefits.
(c) Parent shall, or and shall cause its Subsidiaries (including the Surviving Corporation Company and its Subsidiaries) to, cause each Parent Employee Plan to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between (i) recognize the pre-Closing service of participating Continuing Employees with the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for all purposes of vesting, eligibility, severance eligibility and benefit accrual under the Parent Benefit Plans and the Company Benefit Plansentitlement (but not for purposes of pension benefit accrual), as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or except to the extent it such service credit would result in a duplication of benefits or compensation for the same period of serviceperiod, or (ii) with respect waive any pre-existing condition limitations for participating Continuing Employees and (iii) use commercially reasonable efforts to provide credit to each participating Continuing Employee under the Excluded Employees, any severance benefits or rights) in which applicable Parent Employee Plan for amounts paid by the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately Continuing Employee prior to the Closing Date, to during the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles under any analogous Company Employee Plan during the same period for purposes of applying deductibles, co-payments and annual out-of-pocket limits for medical expenses incurred prior to maximums as though such amounts had been paid in accordance with the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent terms of such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateParent Employee Plan.
(fd) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take continue to credit under any applicable Parent Employee Plans each Continuing Employee for all necessary vacation and appropriate actions personal holiday pay that such Continuing Employee is entitled to cause use but has not used as of the Closing.
(e) Parent and Merger Subsidiary hereby acknowledge that (i) the Merger will constitute a “Change in Control” (or concept of similar import) under the Company Employee Plans and (ii) as a result of the Merger, the individuals identified in Section 7.05(e) of the Company Disclosure Letter will be deemed to have experienced a “Good Reason” event (or concept of similar import), as applicable, for all purposes under the Company Employee Plans.
(f) The Company shall pay annual cash bonuses to executive officers and other key corporate office employees covered by the Carmike Annual Executive Bonus Program (the “Executive Plan”) for the period ending December 31, 2016 as follows: (i) if the Closing occurs prior to December 31, 2016, annual cash bonuses will be paid at the target performance level on a pro-rata basis, (ii) if the Closing occurs on or after December 31, 2016 and if the compensation committee of the Company’s Board of Directors (the “Compensation Committee”) has certified the performance results prior to Closing, annual cash bonuses will be paid based on actual achieved performance, and (iii) if the Closing occurs on or after December 31, 2016 and if the Compensation Committee has not certified the performance results prior to Closing, annual cash bonuses will be paid at the target performance level. The Company shall pay annual cash bonuses to individuals not covered by the Executive Plan in accordance with the terms of the applicable bonus plan. The Company shall pay the annual cash bonuses that are contemplated by this Section 7.05(f) on the earlier of (A) each Company Benefit Plan intended immediately prior to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated Closing and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30that is consistent with the Company’s past practices. For the avoidance of doubt, it is the intent of the Parties that the annual cash bonuses contemplated by this Section 7.05(f) days prior are in addition to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as severance arrangements set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under on Section 401(a4.19(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Disclosure Letter.
(g) Nothing in this Agreement shall constitute an establishment or termination ofSection 7.05, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed express or implied, is intended to or will be construed to shall confer upon or give to any Person (includingother Person, for the avoidance of doubtincluding any Continuing Employee, any Company Employee right, benefit or other current or former employee remedy of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) nature whatsoever under or by reason of any this Agreement, and no provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service7.05 shall constitute an amendment of, or (iii) prevent Parentan undertaking to amend, the Surviving Corporation any Company Employee Plan or any of their Affiliates from terminating, revising or amending any Parent Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesPlan.
Appears in 4 contracts
Samples: Agreement and Plan of Merger (Amc Entertainment Holdings, Inc.), Agreement and Plan of Merger (Carmike Cinemas Inc), Merger Agreement (Amc Entertainment Inc)
Employee Matters. (a) Between From and after the date hereof enrollment of Designated Employees in the employee benefit plans, programs and policies of Parent, Parent shall provide the Designated Employees with substantially similar types and levels of benefits as those provided to similarly situated employees of Parent. Effective Timeas of the day immediately preceding the Closing Date, each of the Company and any ERISA Affiliate shall terminate any and all Employee Plans intended to include a Code Section 401(k) arrangement (each, a “401(k) Plan”) (unless Parent provides written notice to the Company that such 401(k) Plans shall not be terminated). Unless Parent provides such written notice to the Company, no later than five (5) Business Days prior to the Closing Date, the Company shall provide Parent with evidence that such Employee Plan(s) have been terminated (effective as of the day immediately preceding the Closing Date) pursuant to resolutions of the Company Board or such Affiliate, as the case may be. The form and substance of such resolutions shall be subject to the reasonable review and approval of Parent. The Company also shall take such other actions reasonably necessary in furtherance of terminating such Employee Plan(s) as Parent may reasonably require. In the event that termination of a 401(k) Plan would reasonably be anticipated to trigger liquidation charges, surrender charges or other fees then the Company shall cause its Subsidiaries to) make available take such actions as are necessary to reasonably estimate the amount of such charges and/or fees and provide such estimate in writing to Parent no later than fifteen (15) calendar days prior to the employees Closing Date. If, in accordance with this Section 7.11, Parent requests in writing that the Company not terminate any 401(k) Plan, the Company shall take such actions as Parent may reasonably require in furtherance of the Company and its Subsidiaries so that assumption of any such 401(k) Plan by Parent, including by adopting such amendments as Parent may interview deem necessary or advisable in connection with such employees and evaluate their roles and responsibilities with assumption, provided, however, Parent provides written notice to the Company and its Subsidiaries, including with respect of such actions (identifying each action) no later than three (3) Business Days prior to potential promotions, transfers, or job eliminations following the ClosingClosing Date.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on From and after the Closing DateEffective Time, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) extent permitted by applicable Law, Parent shall, or shall cause the Surviving Corporation and its Subsidiariesto, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between recognize the prior service with the Company or its Subsidiaries of each Designated Employee in connection with all employee benefit plans, programs or policies of Parent or its Affiliates in which Designated Employees are eligible to participate following the Effective Time for purposes of eligibility and vesting and determination of level of benefits (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) for purposes of benefit accruals under any defined benefit pension plan or to the Company Disclosure Letter, it being understood extent that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms such recognition would result in duplication of the applicable agreements.
(d) benefits). From and after the Effective Time, as applicable, the Parties Parent shall, or shall cause the Surviving Corporation and its Subsidiariesto, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for cause any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or or limitations and eligibility waiting periods, active employment requirements periods under any group health plans of Parent or its Affiliates to be waived with respect to Designated Employees and requirements to show evidence of good health under the applicable Parent Benefit Plan their eligible dependents to the extent such Company Employee or covered, Designated Employees and their eligible dependents are covered were not subject to such preexisting conditions and limitations and eligibility waiting periods under an analogous Company Benefit Planthe comparable Employee Plans as of the time immediately preceding the Closing, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give provide each Company Designated Employee with credit for any deductibles paid under any Employee Plan that provides medical, dental or vision benefits in the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to in satisfying any applicable eligibility requirementsdeductible or out of pocket requirements under any medical, but giving effect dental or vision plans of Parent, the Surviving Corporation or its Subsidiaries that such employees are eligible to participate in after the Effective Time to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any same extent that such expenses were recognized under the comparable Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesPlan. The provisions of this Section 6.9 7.11(b) are for the sole benefit of the Parties and nothing herein, expressed or implied, is not intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), person other than the Parties and their respective permitted successors and assigns, parties hereto any third party beneficiary, legal or equitable or other rights or remedies (including with respect hereunder, and nothing herein shall be deemed to amend any Employee Plan to reflect the matters provided terms of this Section 7.11(b). Notwithstanding the foregoing, Parent shall continue to sponsor or maintain, as the case may be, the employee benefit plans programs or policies of the Company that provide health, dental, vision, accidental death or disability and life insurance coverage for the benefit of Designated Employees until such Designated Employees are enrolled in such employee benefit plans, programs or policies of Parent. Nothing contained in this Section 6.9) under or by reason 7.11 shall in any way alter the at-will employment of any provision U.S. employees of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries Subsidiaries.
(including following c) Prior to the Effective Time, the Surviving Corporation) or any particular term or condition Company ESPP shall be terminated. The Company shall take all actions necessary pursuant to the terms of employment or servicethe Company ESPP in order to shorten each currently ongoing offering period that extends beyond the Effective Time such that a new purchase date for such offering shall occur prior to the Effective Time. Prior to the Effective Time, or (iii) prevent and subject to the reasonable review and approval by Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed Company shall take all actions reasonably necessary give effect to the transactions contemplated by the Company, Parent or any of their respective Subsidiariesthis Section 7.11(c).
Appears in 4 contracts
Samples: Merger Agreement (Data Domain, Inc.), Merger Agreement (Emc Corp), Merger Agreement (Emc Corp)
Employee Matters. (a) Between Parent hereby acknowledges that a “change of control” (or similar phrase) within the date hereof meaning of the Employee Plans, as applicable, will occur as of the Appointment Time or Effective Time, as applicable.
(b) Except as provided in Section 7.2(b), from and after the Effective Time, the Company Surviving Corporation shall (and the Company Parent shall cause its Subsidiaries the Surviving Corporation to) make available to Parent the employees of the Company honor all Employee Plans and its Subsidiaries so that Parent may interview such employees and evaluate compensation arrangements in accordance with their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed terms as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; providedAppointment Time, howeverprovided that nothing in this sentence shall prohibit the Surviving Corporation from amending or terminating, that or from causing the covenants within this Surviving Corporation to amend or terminate, any such Benefit Plans, arrangements or agreements in accordance with their terms or if otherwise required by applicable Law. As of the Effective Time, Parent shall or shall cause the Surviving Corporation to assume the Employee Plans set forth in Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b7.2(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or The Company shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company take (or a Subsidiary thereofcause to be taken) and a Company Employeeall action necessary or appropriate to terminate, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of effective no later than the Company Disclosure Letter, it being understood that day immediately preceding the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Appointment Time, as applicable, the Parties shall, any Employee Plan that contains a cash or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan deferred arrangement intended to be qualified qualify under Section 401(a) of the Code (the “Company 401(k) PlanPlans”), unless Parent, in its sole and absolute discretion, agrees to sponsor and maintain any such 401(k) Plan by providing the Company with written notice of such election (an “Election Notice”) at least three days before the Appointment Time. Unless Parent timely provides an Election Notice to be terminated and (B) all participants to cease participating under the Company, the Company shall deliver to Parent, prior to the Appointment Time, evidence that the Company’s board of directors has validly adopted resolutions to terminate the 401(k) Plan, in each casePlans (the form and substance of which resolutions shall be subject to review and approval of Parent), effective no later than the Business Day date immediately preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and Appointment Time. Parent shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified qualify under Section 401(a401(k) of the Code designated by Parent (the “Parent 401(k) Plan”) to accept rollovers (Aincluding rollover loans) from any 401(k) plan of the Company.
(d) For a period of one year following the Effective Time, the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) provide (i) at least the same level of base salary or base wages to each Continuing Employee as the base salary or base wages provided to each such Continuing Employee immediately prior to the Effective Time, and (ii) benefits and severance payments (other than equity based benefits, change in control benefits and individual employment agreements) to each Continuing Employee employed in the United States that, taken as a whole, are substantially similar in the aggregate to the benefits and severance payments (other than equity based benefits, change in control benefits and individual employment agreements) provided to similarly situated employees of Parent 401(k) Plan and its Subsidiaries. Parent agrees that it shall cause the Surviving Corporation to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) pay an annual cash bonus to each participant in an annual cash bonus plan of the CodeCompany as of the Effective Time (excluding, for avoidance of doubt, sales and commission plans) in the form of cash in an amount equal to the full account balance distributed or distributable amount determined by (i) determining the annual cash bonus that would have been paid to such Company participant based on deemed performance for the fiscal year ending March 31, 2011 using the rate of accrual for purposes of the Company’s financial statements as of immediately prior to the date of this Agreement and (ii) multiplying the number determined pursuant to clause (i) by 0.8356 (i.e., 305/365), with the resulting amount reduced by any portion of such annual bonus previously paid to the participant. Such bonus will be paid in February 2011 subject to the participant’s continued employment through January 31, 2011.
(e) To the extent that an Employee from Plan or employee benefit plan of Parent is made available to any Continuing Employee on or following the Effective Time, the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) cause to be granted to such Continuing Employee credit for all service with the Company 401(kand its Subsidiaries (and their predecessors) prior to the Effective Time for purposes of eligibility to participate, vesting and entitlement to benefits where length of service is relevant (including, but not limited to, for purposes of vacation, sick and paid time off accrual and severance pay entitlement); provided, however, that such service need not be credited (i) to the extent that it would result in duplication of coverage or benefits or (ii) under any new plan or arrangement to the extent that such plan or arrangement does not provide prior service credit to employees generally. In addition, and without limiting the generality of the foregoing, at the Effective Time: (i) each Continuing Employee shall be immediately eligible to participate, without any waiting time, in any and all employee benefit plans sponsored by the Surviving Corporation and its Subsidiaries (other than the Employee Plans) (such plans, collectively, the “New Plans”) to the extent coverage under any such New Plan replaces coverage under a comparable Employee Plan in which such Continuing Employee participates immediately before the Appointment Time (such plans, collectively, the “Old Plans”); and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical, vision and/or disability benefits to any Continuing Employee, the Surviving Corporation shall cause all waiting periods, pre-existing condition exclusions, evidence of insurability requirements and actively-at-work or similar requirements of such New Plan to be waived for such Continuing Employee and his or her covered dependents, and the Parent 401(k) Surviving Corporation shall cause any eligible expenses incurred by such Continuing Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be given full credit under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan, including any outstanding loans and (Biii) cause each Company Employee to become the Surviving Corporation shall credit the accounts of such Continuing Employees under any New Plan which is a participant flexible spending plan with any unused balance in the Parent 401(k) Plan account of such Continuing Employee under the applicable Employee Plan. Any vacation or paid time off accrued but unused by a Continuing Employee as of immediately prior to the Closing Date (Effective Time shall be credited to such Continuing Employee following the Effective Time, and shall not be subject to any applicable eligibility requirements, but giving effect accrual limits or other forfeiture and shall not limit future accruals.
(f) Notwithstanding anything to the service crediting provisions contrary set forth in this Agreement, no provision of this Agreement shall be deemed to (i) guarantee employment for any period of time for, or preclude the ability of Parent or the Surviving Corporation to terminate, any Continuing Employee for any reason, or (ii) subject to the limitations and requirements specifically set forth in this Section 6.9(d))7.2, require Parent or the Surviving Corporation to continue any Employee Plan or prevent the amendment, modification or termination thereof after the Effective Time.
(g) Nothing This Section 7.2 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein7.2, expressed or implied, is intended or will be construed to confer upon or give to any other Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) of any nature whatsoever under or by reason of any this Section 7.2. Without limiting the foregoing, no provision of this Section 6.9. Nothing 7.2 will create any third party beneficiary rights in this Section 6.9 is intended to (i) prevent Parentany current or former employee, director or consultant of the Surviving Corporation Company or any of their Affiliates from terminating its Subsidiaries in respect of continued employment (or resumed employment) or any other matter.
(h) Effective as of immediately prior to, and contingent upon, the Appointment Time, the Company shall cause to be amended each outstanding Company RSU, Company Option and Company Restricted Stock Award to provide that, if upon or within twelve (12) months following the Appointment Time, the employment or service of the holder of any Personsuch Company RSU, including a Company Employee, at any time and for any reason, Option and/or Company Restricted Stock Award is terminated by the Company or the Parent (ii) provide any Person any right to employment or service or continued employment or service with Parent or any employing parent or subsidiary thereof) by reason of its Subsidiaries elimination of the holder’s position due to redundancy or integration of Parent and Company business units (including following but, for avoidance of doubt, excluding terminations for death, “Disability,” “Serious Misconduct,” or “Poor Performance,” (as such terms are defined in Section 7.2(h) of the Effective TimeCompany Disclosure Letter), then one hundred percent (100%) of the Surviving Corporation) or any particular term or condition of employment or servicethen unvested shares subject to such Company RSU, or (iii) prevent ParentCompany Option and/or Company Restricted Stock Award shall become immediately vested and, the Surviving Corporation or any of their Affiliates from terminatingif applicable, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesexercisable.
Appears in 4 contracts
Samples: Merger Agreement (3PAR Inc.), Merger Agreement (Hewlett Packard Co), Merger Agreement (Hewlett Packard Co)
Employee Matters. (a) Between For the date hereof and one-year period following the Exchange Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause its applicable Subsidiaries to, provide to those individuals actively employed by the Surviving Corporation Company or one of its Subsidiaries as of the Exchange Effective Time (collectively, the “Covered Employees”) with employee benefits, rates of base salary or hourly wage and annual bonus opportunities that are substantially similar, in the aggregate, to the rates of base salary or hourly wage provided to such Covered Employees and the employee benefits and annual bonus opportunities provided to such Covered Employees under the Company Benefit Plans as in effect immediately prior to the Exchange Effective Time (excluding for this purpose equity-based benefits); provided, that nothing herein shall limit the right of Parent or any of its Subsidiaries to terminate the employment of any Covered Employee at any time or require Parent or any of its Subsidiaries to provide any such employee benefits, rates of base salary or hourly wage or annual bonus opportunities for any period following any such termination.
(b) To the extent that a Covered Employee becomes eligible to participate in an employee benefit plan maintained by Parent or any of its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and than the Company Benefit Plans, as applicable, (other than Parent shall cause such employee benefit plan to (i) recognize the service of such Covered Employee with the Company or its Subsidiaries for purposes of eligibility and vesting and, except under defined benefit pension plans, benefit accrual under such employee benefit plan of Parent or any purposes of its Subsidiaries to the same extent such service was recognized immediately prior to the Exchange Effective Time under a comparable Company Benefit Plan in which such Covered Employee was a participant immediately prior to the Exchange Effective Time or, if there is no such comparable benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Exchange Effective Time, provided that such recognition of service shall not operate to duplicate any benefits payable to the Covered Employee with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or and (ii) with respect to any health, dental or vision plan of Parent or any of its Subsidiaries (other than the Excluded Employees, any severance benefits or rightsCompany Benefit Plans) in which any Covered Employee is eligible to participate in the Company Employees plan year that includes the year in which such Covered Employee is eligible to participate, for (x) cause any pre-existing condition limitations under such Company Employees’ service Parent or Subsidiary plan to be waived with the Company and its Subsidiaries, as applicable, respect to such Covered Employee to the same extent and for the same purposes that such service was taken into account limitation would have been waived or satisfied under a corresponding Company Benefit Plan in effect which such Covered Employee participated immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing DateExchange Effective Time, and (y) recognize any medical or other health expenses incurred by such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Covered Employee credit for in the plan year in which that includes the Closing Date occurs towards for purposes of any applicable deductibles deductible and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been madeexpense requirements under any such health, in each case, to the extent permitted by the applicable insurance dental or vision plan provider and only to the extent such deductibles of Parent or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Dateany of its Subsidiaries.
(fc) Prior to From and after the Closing DateExchange Effective Time, (i) if requested by Parent shall, or shall cause its Subsidiaries to, honor, in writing at least three (3) days before accordance with the Closingterms thereof as in effect as of the date hereof or as may be amended after the date hereof as permitted under Section 7.2, each employment agreement and change in control agreement listed on Section 5.11 of the Company shall cause Disclosure Schedule.
(d) No later than five Business Days prior to its distribution, the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance a copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan communication intended to be qualified under Section 401(a) made to any of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal their respective employees relating to the full account balance distributed or distributable transactions contemplated hereby, and will provide an opportunity for Parent to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))make reasonable revisions thereto.
(ge) Nothing in this Agreement Section 8.6 shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended interpreted to (i) prevent Parent, the Surviving Corporation or amend any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reasonBenefit Plan, (ii) provide prevent the amendment or termination of any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, Plan or (iii) prevent interfere with the Parent, the Surviving Corporation ’s right or obligation to make such changes to any of their Affiliates from terminating, revising or amending any Employee Company Benefit Plan sponsored, maintained or contributed as are necessary to by the Company, Parent or any of their respective Subsidiariesconform with applicable Law.
Appears in 4 contracts
Samples: Transaction Agreement (Banco Bilbao Vizcaya Argentaria, S.A.), Transaction Agreement (Compass Bancshares Inc), Transaction Agreement (Banco Bilbao Vizcaya Argentaria, S.A.)
Employee Matters. (a) Between the date hereof SBEEG shall be responsible for, and the Effective TimeParent Indemnified Persons shall be indemnified and held harmless by the Members from, against and in respect of any and all actual Losses (whether or not such Losses relate to a Third Party Claim), which all or any of such Parent Indemnified Persons may suffer or sustain as a result of, directly or indirectly relating to, or arising out of any notices, payments, benefits, fines, penalties, backpay, and damages required under WARN relating to any “plant closing” or “mass layoff” (as defined in WARN) (or similar triggering event) caused in part by the termination of employees of Spoonful working at the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following before the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on From and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit liable for any amendments otherwise permitted by claims and liabilities under any welfare plans, regardless of when such claims or liabilities arise or are asserted. To the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause extent the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, provides any substantially similar welfare plans as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) those maintained by Spoonful with respect to the Excluded Employees, any severance benefits or rights) in which the Company Business Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, providing services to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateCompany, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended cause credit to be qualified under Section 401(agiven (without duplication; and not to an extent greater than counted immediately before the Closing Date for comparable purposes) to all employees of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept Company and their eligible dependents and beneficiaries for any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal premiums, co-payments and deductibles paid on or prior to the full account balance distributed or distributable to such Company Employee from Closing Date in satisfying any deductible and out-of-pocket expense requirements under any new group medical plan for the Company 401(kcurrent plan year.
(c) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan Effective as of the Closing Date, the Parent will use commercially reasonable efforts to count (without duplication; and not to an extent greater than counted immediately before the Closing Date for comparable purposes) the service of all employees with the Company under the Surviving Company's vacation policy and welfare benefit plans to the extent applicable to such employees. In addition, the Surviving Company shall use commercially reasonable efforts to count (without duplication; and not to an extent greater than counted immediately before the Closing Date for comparable purposes) such service but only in determining each employee's eligibility to participate in, and each such employee's vested percentage in, each of the Surviving Company's employee benefit plans (as defined in Section 3(3) of ERISA) which are subject to any ERISA and are applicable eligibility requirementsto such employee, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (includingbut, for the avoidance of doubt, any Company Employee or other current or former employee of the Companynot for benefit accrual purposes.
(d) It is expressly acknowledged, Parent or any of their respective Affiliates), other than the Parties understood and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 agreed that nothing herein is intended to (i) prevent Parent, the Surviving Corporation or does or shall constitute an amendment to or requirement to establish any of their Affiliates from terminating the employment employee benefit or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide other plan or grant any Person any right to employment or service or continued employment or service with Parent or any rights as a third party beneficiary of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesthis Agreement.
Appears in 4 contracts
Samples: Merger Agreement (ONE Group Hospitality, Inc.), Merger Agreement (ONE Group Hospitality, Inc.), Merger Agreement (ONE Group Hospitality, Inc.)
Employee Matters. (a) Between For a period of no less than twelve (12) months following the date hereof and the Effective TimeClosing Date, the Company Parent shall (and the Company shall cause its Subsidiaries to) make available provide to Parent the employees each employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as an employee of the Closing Date by the Company or a Subsidiary thereof at the Closing Date (eacheach such employee, a “Company Employee”), (i) shall be provided with annual base salary or base wage rate, and employee benefits target annual cash incentive bonus opportunities and target long-term incentive opportunities that are, in each case, no less than the aggregate, substantially comparable to those in effect for similarly situated employees of Parent base salary and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date target annual cash incentive bonus opportunities and target long-term incentive opportunities (excluding any equity or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (equity-based compensation opportunities but subject to satisfying any Section 6.01) applicable release requirements) that are no less favorable than those in effect for to each such Company Employee immediately prior to the Closing Date; providedDate and (ii) employee benefits (excluding severance, howevernonqualified deferred compensation and qualified retirement plans) that are no less favorable, that in the covenants within this Section 6.9(baggregate, than those employee benefits (excluding severance, nonqualified deferred compensation and qualified retirement plans) shall not apply provided to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company immediately prior to the Closing Date.
(b) Parent shall provide each Company Employee who incurs a termination of employment other than for “cause” or resigns with “good reason” or is not offered “comparable employment” during the twelve (12) month period following the Closing Date with severance payments and severance benefits, subject to such Company Employee’s execution and non-revocation of a waiver and general release of claims in favor of Parent and its Affiliates (in the “Excluded Employees”form reasonably acceptable to Parent) that becomes effective no later than the sixtieth (60th) day following such termination, that are no less favorable than the severance payments and severance benefits to which Excluded Employees willsuch employees would have been entitled with respect to such termination or resignation under the Fidelity & Guaranty Life 2015 Severance Plan or, on and after if applicable, employment agreement, in each case, as in effect immediately prior to the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between Company or the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective TimeFinal Surviving Company, as applicable, the Parties shall, or shall cause Parent’s or the Surviving Corporation and its Company’s or the Final Surviving Company’s Subsidiaries, as applicable, to take use commercially reasonable efforts to credit the give Company Employees full credit for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its SubsidiariesSubsidiaries for purposes of eligibility, vesting and determination of the level of benefits (including, for purposes of vacation and severance), but not for purposes of benefit accruals under a defined benefit pension plan or for purposes of any benefit plan that provides retiree health or welfare benefits or any equity or equity-based compensation plan, program, agreement or arrangement, under any benefit plans made generally available to officers or employees or any class or level of officers or employees maintained by Parent, the Surviving Company or the Final Surviving Company, as applicable, or any of their respective Subsidiaries in which a Company Employee participates to the same extent and for recognized by the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateDate under a comparable Benefit Plan; provided, however, that such service shall not be recognized to the extent that such credit does not recognition would result in duplicate benefitsa duplication of benefits with respect to the same period of service.
(ed) The Parties Parent shall, or shall cause the Surviving Corporation and its Company or the Final Surviving Company, as applicable, or Parent’s or the Surviving Company’s or the Final Surviving Company’s Subsidiaries, as applicable, to take use commercially reasonable efforts to (i) waive any limitation on health coverage of any preexisting condition limitations otherwise applicable to Company Employees and their eligible dependents under any plan of Parent or any Subsidiary of Parent that provides health benefits in which Company Employees may be eligible to participate following the Closing Date, other than any limitations that were in effect with respect to such employees as of the Closing Date under the analogous Benefit Plan, (ii) honor any deductible, co-payment and out-of-pocket maximums incurred by the Company Employees and their eligible dependents under the health plans in which they participated immediately prior to the Closing Date during the portion of the calendar year prior to the Closing Date in satisfying any deductibles, co-payments or out-of-pocket maximums under health plans of Parent, the Surviving Company or the Final Surviving Company, as applicable, or any of their coveredrespective Subsidiaries in which they are eligible to participate after the Closing Date in the same plan year in which such deductibles, co-payments or out-of-pocket maximums were incurred and (iii) waive any waiting period limitation or evidence of insurability requirement that would otherwise be applicable to a Company Employee and his or her eligible dependents due to pre-existing conditions and/or waiting periodson or after the Closing Date, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan in each case to the extent such Company Employee or covered, eligible dependents are covered dependent had satisfied any similar limitation or requirement under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(fe) Prior to The Company shall take all actions, including through resolutions of the Closing Date, board of directors (ior a duly constituted and authorized committee thereof or other appropriate governing body) if requested by Parent in writing at least three (3) days before the Closing, of the Company shall cause the Company and its Subsidiaries to take all or it applicable Subsidiary, that may be necessary and or appropriate actions to cause (A) each Company any Benefit Plan that contains a cash or deferred arrangement intended to be qualified qualify under Section 401(a) of the Code (including any plan intended to qualify under 401(k) of the Code) (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, terminate effective no later than on the Business Day immediately preceding the Closing Date; provided, however, that with such actions may termination being contingent on the Closing. Such resolutions shall be contingent upon Closing subject to Parent’s reasonable prior review and (ii) no sooner than the date thirty (30) days prior to approval. As of the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective TimeDate, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a offer participation in Parent’s tax-qualified defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”), effective as of the Closing Date, to each person who was an active participant in the Company 401(k) to (A) Plan as of the date of its termination. If elected by a Company Employee in accordance with applicable Law, Parent shall cause the Parent 401(k) Plan to to, following the Closing Date, accept any a “eligible rollover distributionsdirect rollover” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date account balances (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions including promissory notes evidencing outstanding participant loans) of Section 6.9(d))such Company Employee.
(gf) Nothing This Section 6.09 shall be binding upon and shall inure solely to the benefit of each of the parties to this Agreement and nothing in this Section 6.09 or any other provision of this Agreement or any other related Contract, express or implied: (i) shall constitute an establishment or termination ofbe construed to establish, amend, or an amendment tomodify any Benefit Plan or any other benefit plan, program, agreement or arrangement; (ii) except as expressly provided by Section 6.09(b), shall alter or limit the ability of the Company or any of its Subsidiaries, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole its Subsidiaries to amend, modify or terminate any benefit of the Parties and nothing hereinplan, expressed program, agreement or implied, arrangement; or (iii) is intended to or will be construed to shall confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent Company or its Subsidiaries or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person person any right to employment or service or continued employment or service with Parent for any period of time by reason of this Agreement or any of its Subsidiaries (including following the Effective Timeother related agreement, the Surviving Corporation) or any right to a particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesemployment.
Appears in 4 contracts
Samples: Merger Agreement (FGL Holdings), Merger Agreement (Fidelity National Financial, Inc.), Merger Agreement (Fidelity National Financial, Inc.)
Employee Matters. (a) Between MCK and Echo Holdco shall agree to cooperate in good faith following the date hereof to identify the MTI Participating Employees that are not employed by a MCK Contributed Entity (including those providing shared services and working at a corporate level) in a manner intended to be consistent (along with the Effective TimeTransition Services Agreements) with the “stand-alone cost model” included in Section 5.16 of the MCK Disclosure Schedule and either (i) MCK shall use its commercially reasonable efforts to transfer the employment of such MTI Participating Employees to a MCK Contributed Entity prior to the Closing or (ii) the parties will take efforts to transfer the employment of such MTI Participating Employees to the Company or one of its Subsidiaries as of, or as soon as commercially practicable following, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingClosing Date.
(b) MCK and Echo Holdco agree to cooperate in good faith between the date hereof and such date (the “Plan Determination Date”) that allows MCK to reasonably set up Mirror Plans (as defined below) necessary to determine the appropriate employee benefits plans (the “New Company Benefit Plans”) for Company Employees with the intention that similarly situated Echo Participating Employees and MTI Participating Employees will receive substantially comparable benefits to the other by January 1, 2018, which may include establishment of plans at the applicable MCK Contributed Entity level effective January 1, 2017 (“New Subsidiary Plans”). If MCK and Echo Holdco fail to mutually agree upon the New Company Benefit Plans by the Plan Determination Date, MCK shall use its commercially reasonable efforts to cause the applicable MCK Contributed Entity to establish “mirror” benefit plans for each material health and welfare and nonqualified deferred compensation plan that covers the MTI Participating Employees as of the date hereof, effective starting no later than the Closing Date (such plans or the New Subsidiary Plans, as applicable, the “Mirror Plans”). Each Mirror Plan is intended to be substantially similar to the corresponding MCK plan. To the extent the Mirror Plans are “spin-offs” of MCK Plans that are funded through a rabbi trust, MCK shall provide sufficient assets (or access to such assets) to the Company to cover any existing liabilities as of Closing associated with such Mirror Plans. The Parties agree that for expenses incurred in connection with setting up such New Company Benefit Plans or Mirror Plans, as applicable, shall be considered a Shared Transaction Expense.
(c) For a period of 12 months at least one year following the Closing Date, the Company shall provide (x) each employee Echo Participating Employee and (y) each MTI Participating Employee, in each case who is employed as of the Closing Date by the Company or a Subsidiary thereof one of its Subsidiaries immediately after the Closing Date or the employment transfer date (eachthe “Employment Transfer Date”), a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following if after the Closing Date (collectively, the “Company Employees”), with base salary or such longer change in control coverage period as required under wage rate at least equal to the applicable Company Benefit Plan) shall be base salary or wage rate provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply . With respect to the Company Employees listed on Schedule 6.9(b) all benefit plans of the Company Disclosure Letter, or its Subsidiaries in which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to Employees participate after the Closing Date (the “Excluded EmployeesCompany Plans”) which Excluded Employees will(including any vacation, on paid time-off and after the Closing Dateseverance plans), only be entitled for all purposes (but not for benefit accrual under any defined benefit plan or vesting under any equity compensation plan), including determining eligibility to receive the severance benefits set forth in participate, level of benefits, vesting, benefit accruals and subject early retirement subsidies, each Company Employee’s service with Echo Holdco or MCK, as applicable (as well as service with any predecessor employer to the terms and conditions of extent service with the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, predecessor employer is recognized by Echo Holdco or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective TimeMCK, as applicable, the Parties ) shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider Law and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than be treated as service with the Business Day preceding the Closing DateCompany; provided, however, that such actions may service need not be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior recognized to the Closing Date (or extent that such earlier date approved by recognition would result in any duplication of benefits for the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A same period of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))service.
(gd) Nothing in The Company, Echo Holdco and MCK shall use reasonable best efforts between the date of this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed and Closing to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are determine appropriate management equity incentive plans for the sole benefit employees of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariespost-Closing.
Appears in 4 contracts
Samples: Agreement of Contribution and Sale (PF2 SpinCo, Inc.), Agreement of Contribution and Sale (Change Healthcare Inc.), Agreement of Contribution and Sale (Change Healthcare Inc.)
Employee Matters. (a) Between Until the date hereof and the Effective Time, the Company shall that is twelve (and the Company shall cause its Subsidiaries to12) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, Parent shall cause each employee individual who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall and who remains employed by Parent or any of its Subsidiaries (including the Surviving Company or any of its Subsidiaries) to be provided with annual (i) a total target cash compensation opportunity (consisting of base salary or base wage ratewages, as applicable, and employee benefits annual cash incentive opportunities) that are, in is no less favorable than either that provided to Company Employees immediately prior to the aggregate, substantially comparable Closing Date or to those in effect for similarly situated employees of Parent and or its Subsidiaries. In addition, provided that a Company Employee’s base compensation (salary or wages, as applicable) shall not be reduced below the level in effect for such Company Employee whose employment is involuntarily terminated other than as of immediately prior to the Closing Date; (ii) eligibility for cause within equity compensation to the period same extent as provided to similarly situated employees of 12 months Parent or its Subsidiaries, provided that the amount of such equity compensation may be adjusted to avoid duplication that otherwise may arise as a result of differences in timing of grants by the Company prior to the Closing Date and by Parent following the Closing Date Date; (or such longer change in control coverage period as required under the applicable Company Benefit Planiii) shall be provided with severance employee benefits (subject to satisfying any applicable release requirementsexcluding for the avoidance of doubt, incentives and equity compensation, which are covered above) at a level that are is no less favorable in the aggregate than those either the employee benefits in effect for such Company Employee immediately prior to the Closing DateDate or the employee benefits provided to similarly situated employees or Parent and its Subsidiaries; provided, however, that the covenants within this Section 6.9(band (iv) shall not apply eligibility for severance benefits on terms no less favorable than those provided pursuant to the Company Employees listed Company’s severance arrangements in place as of the date hereof and identified on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent4.10(a).
(cb) Parent shall, or shall cause the Surviving Corporation Company and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(dc) From and after the Effective Time, as applicable, the Parties Parent shall, or shall cause the Surviving Corporation Company and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance eligibility and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical medical, dental or life benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rightsbenefits) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties . Parent shall, or shall cause the Surviving Corporation Company and its Subsidiaries, to give service credit for long term disability coverage purposes for the Company Employees’ service with the Company and its Subsidiaries.
(d) From and after the Effective Time, as applicable, Parent shall, or shall cause the Surviving Company and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health and welfare coverage of any Company Employees Employee and his or any of their covered, her eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable health and welfare Parent Benefit Plan to the extent such Company Employee and his or covered, her eligible dependents are covered under an analogous a Company Benefit Plan, as applicable, Plan immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Company Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider provider.
(e) It is acknowledged and only to agreed that the extent such deductibles consummation of the transactions contemplated hereby will constitute a “change of control” (or limits “change in control” or transaction of similar import) for medical expenses were satisfied or did not apply under purposes of the analogous arrangements identified on Schedule 6.8(e) of the Company Benefit Plan in effect immediately prior to the Closing DateDisclosure Letter.
(f) Prior to the Closing DateEffective Time, (i) if requested by Parent in writing at least three (3) days before the Closingwriting, the Company and each of its Subsidiaries shall cause adopt resolutions and take all such corporate action as is necessary to terminate each 401(k) plan maintained, sponsored or contributed to by the Company and or any of its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (collectively, the “Company 401(k) PlanPlans”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan), in each case, effective no later than as of the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days day immediately prior to the Closing Date (or such earlier date approved by Date, and the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy evidence that such Company 401(k) Plans have been properly terminated, the form of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior such termination documents shall be subject to the adoption or execution thereofreasonable approval of Parent. In To the event extent the Company 401(k) Plan is Plans are terminated as set forth pursuant to Parent’s request, the Company Employees shall be eligible to participate in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement 401(k) plan intended to be qualified under Section 401(a) of the Code designated maintained by Parent or one of its Subsidiaries.
(g) For purposes of determining the “Parent 401(k) Plan”) number of vacation days and other paid time off to (A) cause which each Company Employee is entitled during the Parent 401(k) Plan to accept any “eligible rollover distributions” (within calendar year in which the meaning Closing occurs, Parent, the Surviving Company or one of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to their Subsidiaries will credit such Company Employee from for such Company Employee’s service with the Company 401(k) Plan and its Subsidiaries, to the Parent 401(k) Plansame extent and for the same purposes that such service was taken into account under the applicable Company Benefit Plans, including any outstanding loans and (B) cause Parent, the Surviving Company or one of their Subsidiaries will assume and honor all unused vacation and other paid time off days accrued or earned by each Company Employee through the Closing, pursuant to become a participant in the Parent 401(k) terms of the applicable Company Benefit Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving in effect immediately prior to the service crediting Closing, provided that the foregoing shall not prohibit Parent or the Surviving Company from amending or modifying its applicable vacation policies as in effect from time to time so long as Parent and Surviving Company comply with the provisions of this Section 6.9(d)6.8(g).
(gh) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 6.8 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent Company or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third third-party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.96.8) under or by reason of any provision of this Section 6.9Agreement. Nothing in this Section 6.9 Agreement is intended to (i) prevent Parent, the Surviving Corporation Company or any of their Affiliates (i) from amending or terminating any of their respective Employee Benefit Plans or, after the Closing, any Company Benefit Plan in accordance with their terms or (ii) after the Closing, from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 3 contracts
Samples: Merger Agreement (Vine Energy Inc.), Merger Agreement (Chesapeake Energy Corp), Merger Agreement (Chesapeake Energy Corp)
Employee Matters. (a) Between Following the date hereof and Closing Date, Parent shall maintain or cause to be maintained employee benefit plans for the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees benefit of each employee employed by the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of on the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and that provide employee benefits which are substantially comparable to the employee benefits that are, in the aggregate, substantially comparable are provided to those in effect for similarly situated employees of Parent and its Subsidiaries (other than the Company and its Subsidiaries. In addition) (collectively, the “Parent Plans”), as applicable; provided that (i) in no event shall any Company Employee be eligible to participate in any closed or frozen Parent Plan; and (ii) until such time as Parent shall cause Company Employees to participate in the Parent Plans, a Company Employee’s continued participation in employee benefit plans of the Company and its Subsidiaries shall be deemed to satisfy the foregoing provisions of this sentence (it being understood that participation in the Parent Plans may commence at different times with respect to each Parent Plan). Notwithstanding the foregoing, with respect to any Company Employee (other than a Company Employee who is party to an individual agreement that provides for severance) whose employment is involuntarily terminated by Parent for any reason other than for cause within on or before the period of 12 date that is six (6) months following after the Closing Date (Date, Parent shall pay or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall cause to be provided with severance benefits (subject paid to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior not less of an amount of cash severance as calculated pursuant to the Closing Date; provided, however, that the covenants within this methodology described in Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b5.15(a) of the Company Disclosure Letter, which shall consist determined taking into consideration the service crediting provisions set forth in Section 5.15(b) of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed Agreement.
(b) Parent shall, or shall cause the Surviving Corporation to, give each Company Employee full credit for such Company Employee’s service with the Company and its Subsidiaries for purposes of eligibility, vesting, determination of the level of benefits, and benefit accruals (other than benefit accruals under a defined benefit or post-retirement welfare plan), under any benefit plans maintained by Parent or the Surviving Corporation or their respective Subsidiaries in which a Company Employee participates to the same extent recognized by the Company or its Subsidiaries immediately prior to the Closing Date (the “Excluded Employees”) which Excluded Employees willEffective Time; provided, on and after the Closing Datehowever, only that such service shall not be entitled to receive the severance benefits set forth in and subject recognized to the terms and conditions extent that such recognition would result in a duplication of benefits with respect to the Retention and Sale Payment retention agreements provided to Parentsame period of service.
(c) Parent shall, or shall cause the Surviving Corporation to use commercially reasonable efforts to, (i) waive any preexisting condition limitations otherwise applicable to Company Employees and their eligible dependents under any plan of Parent or its SubsidiariesSubsidiaries that provides health benefits in which Company Employees may be eligible to participate following the Closing, other than any limitations that were in effect with respect to assume such employees as of the Effective Time under the analogous Company Plan, (ii) honor any deductible, co-payment and honor out-of-pocket maximums incurred by the Company Employees and their eligible dependents under the health plans in which they participated immediately prior to the Effective Time during the portion of the calendar year prior to the Effective Time in satisfying any deductibles, co-payments or out-of-pocket maximums under health plans of Parent, the Surviving Corporation or their respective obligations under all employmentSubsidiaries in which they are eligible to participate after the Effective Time in the same plan year in which such deductibles, severance, change in control, retention co-payments or out-of-pocket maximums were incurred and other agreements, if any, between the Company (iii) waive any waiting period limitation or a Subsidiary thereof) and evidence of insurability requirement that would otherwise be applicable to a Company Employee, including, but not limited to, those Company Benefit Plans set forth Employee and his or her eligible dependents on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and or after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan each case to the extent such Company Employee or covered, eligible dependents are covered dependent had satisfied any similar limitation or requirement under an analogous Company Benefit Plan, as applicable, immediately Plan prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Effective Time.
(d) If requested by Parent Benefit Plan and at least ten (ii10) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred Business Days prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the ClosingEffective Time, the Company shall cause terminate, contingent upon the Closing, any and all Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan Plans intended to be qualified qualify under Section 401(a) of the Code that include a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code (the “Company 401(k) PlanPlans”), effective not later than the day immediately preceding the Effective Time. In the event that Parent requests that any Company 401(k) Plan be terminated, the Company shall provide Parent with evidence that such Company 401(k) Plan(s) have been terminated pursuant to resolution of the Company Board (the form and substance of which shall be subject to review and approval by Parent) not later than the day immediately preceding the Effective Time.
(e) The ESOP shall be terminated, contingent upon the Closing, effective not later than the day immediately preceding the Effective Time. Prior to the Effective Time, the Company shall adopt, contingent upon the Closing, such resolutions and/or amendments (and take any other required action) to (i) amend the ESOP to provide that (A) any cash remaining in the ESOP suspense account upon repayment of the ESOP Loans in connection with the termination of the ESOP be terminated allocated to the accounts of the ESOP participants and their beneficiaries who have account balances in the ESOP in proportion to each participant’s relative amount of applicable compensation consistent with past practice and (B) all participants to cease participating under distributions of ESOP account balances made following the Company 401(k) Plantermination of the ESOP be in the form of cash only, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than terminate the date thirty ESOP, (30iii) days prior cause (A) the aggregate Per Share Merger Consideration received by the ESOP trustee in connection with the Merger with respect to the Closing Date (or such earlier date approved unallocated Shares held in the ESOP trust to first be applied by the Bankruptcy CourtESOP trustee to the full repayment of the ESOP Loans and (B) any cash remaining in the ESOP suspense account after the repayment of the ESOP Loans as described in clause (iii)(A) to be allocated to the accounts of the ESOP participants and their beneficiaries who have account balances in the ESOP in accordance with the applicable provisions of the ESOP, if applicable), as amended as described in clause (i)(A) and (iv) as soon as practicable following the receipt by the Company shall take and shall cause of a favorable determination letter from the IRS regarding the continued qualified status of the ESOP upon its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan termination (the “Excess PlanESOP Determination Letter”) distribute the account balances of all ESOP participants and distribute to each participant their beneficiaries in the Excess Plan, such participant’s account balance under the Excess Plan cash in accordance with Section 409A the terms of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B)ESOP, as applicableamended as described in clause (i)(B). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as As soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to shall file a request with the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in IRS for the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))ESOP Determination Letter.
(gf) Nothing in No provision of this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, (i) create any Employee Benefit Plan sponsored, maintained or contributed to by right in any employee of the Company, Parent Company or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed its Subsidiaries to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or continued employment by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation Corporation, the Company, or any respective Subsidiary or preclude the ability of their Affiliates from terminating Parent, the Surviving Corporation, the Company, or any respective Subsidiary to terminate the employment or service of any Person, including a Company Employee, at any time and employee for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent require Parent, the Surviving Corporation, the Company, or any respective Subsidiary to continue any Company Plans or prevent the amendment, modification or termination thereof after the Closing Date, (iii) confer upon any Company Employee any rights or remedies under or by reason of its Subsidiaries this Agreement or (including following iv) be treated as an amendment to any particular employee benefit plan of Parent, the Surviving Corporation, the Company or any respective Subsidiary.
(g) Subject to applicable Law, during the period between the date of this Agreement and the Effective Time, the Surviving Corporation) or any particular term or condition of employment or serviceCompany shall and shall cause its Subsidiaries to provide, or (iii) prevent after receiving reasonable advance notice from Parent, the Surviving Corporation or Parent and its representatives reasonable access during normal business hours to any of their Affiliates from terminatingthe employees of the Company and its Subsidiaries, revising including for the purpose of conducting job interviews or amending any Employee Benefit Plan sponsoredotherwise communicating transition plans and other matters to such employees. Without limiting the generality of the foregoing, maintained or contributed subject to by the Companyapplicable Law, Parent or shall be permitted to provide written materials to the employees of the Company and its Subsidiaries regarding employee retention and transition planning matters relating to the Merger; provided, however, that Parent shall provide any such materials to the Company prior to providing such materials to any employees of their respective the Company and its Subsidiaries.
Appears in 3 contracts
Samples: Merger Agreement (Green Bancorp, Inc.), Merger Agreement (Green Bancorp, Inc.), Merger Agreement (SP Bancorp, Inc.)
Employee Matters. (a) Between From the Closing Date through the date hereof and that is 12 months following the Effective TimeClosing Date (the “Benefits Continuation Period”), the Surviving Company shall (provide, and the Company Parent shall cause its Subsidiaries to) make available the Surviving Company to Parent the employees of provide, to each individual who is employed by the Company and its Subsidiaries so immediately prior to the First Effective Time, while such individual continues to be employed by the Surviving Company, Parent or any of Parent’s Subsidiaries (including Subsidiaries of the Surviving Company) during the Benefits Continuation Period (collectively, the “Affected Employees”) (i) a base salary or wage rate that Parent may interview is not less than the base salary or wage rate provided to such employees Affected Employee immediately prior to the First Effective Time, (ii) cash and evaluate their roles equity incentive compensation opportunities that are in the aggregate no less favorable than the aggregate cash and responsibilities with equity incentive compensation opportunities provided to such Affected Employee immediately prior to the First Effective Time, and (iii) employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such Affected Employee under the Company and its SubsidiariesEmployee Plans immediately prior to the First Effective Time; provided, including with respect however, that no retention, change-in control or other special or non-recurring compensation or benefits provided prior to potential promotions, transfers, or job eliminations following the ClosingFirst Effective Time shall be taken into account for purposes of this covenant.
(b) The Parties agree With respect to any employee benefit plan in which any Affected Employee first becomes eligible to participate on or after the First Effective Time (the “New Company Plans”), Parent shall: (i) use commercially reasonable efforts to waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such Affected Employee under any New Company Plan that is a health or welfare plan in which such Affected Employee may be eligible to participate after the First Effective Time to the extent satisfied or waived under a comparable Company Employee Plan, (ii) recognize service of Affected Employees (to the extent credited by the Company or its Subsidiaries in any comparable Company Employee Plan) accrued prior to the First Effective Time for a all purposes under (but not for the purposes of benefit accrual under any defined benefit pension plan) any New Company Plan in which such Affected Employees may be eligible to participate after the First Effective Time, provided, however, that in no event shall any credit be given to the extent it would result in the duplication of benefits for the same period of 12 months following service, and (iii) if applicable, use commercially reasonable efforts to cause to be credited, in any New Company Plan that is a health plan in which Affected Employees participate, any deductibles or out-of-pocket expenses incurred by such Affected Employee and such Affected Employee’s beneficiaries and dependents during the Closing Date, portion of the calendar year in which such Affected Employee first becomes eligible for the New Company Plan that occurs prior to such Affected Employee’s commencement of participation in such New Company Plan with the objective that there be no double counting during the first year of eligibility of such deductibles or out-of-pocket expenses.
(c) The Company may provide to each employee who who, immediately prior to the First Effective Time, is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with and is eligible to participate in an annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) bonus program of the Company Disclosure Letter, which shall consist or any of its Subsidiaries a pro-rated portion of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) annual bonus with respect to the Excluded Employees, any severance benefits or rights) in which portion of the Company Employees participate, for such Company Employees’ service with year of the Company and its Subsidiaries, as applicable, Closing that occurs prior to the same extent and for Closing, which bonus shall be determined based on actual performance through the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately latest practicable date prior to the Closing Date, as determined by the Company prior to the extent that such credit does not result in duplicate benefitsFirst Effective Time.
(ed) The Parties shallNothing contained in this Section 7.05 or elsewhere in this Agreement, express or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to implied (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, either Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will its Affiliates to be construed obligated to confer upon or give continue to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of employ any Person, including a Company Employeeany Affected Employees, at any time and for any reasonperiod of time following the First Effective Time, (ii) provide shall prevent Parent or its Affiliates from revising, amending or terminating any Person Company Employee Plan, Parent Employee Plan or any right other employee benefit plan, program or policy in effect from time to employment time, (iii) shall be construed as an amendment of any Company Employee Plan, Parent Employee Plan or service any other employee benefit plan, program or continued employment policy in effect from time to time, or service with Parent (iv) shall create any third-party beneficiary rights in any director, officer, employee or individual Person, including any present or former employee, officer, director or individual independent contractor of the Company or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) any beneficiary or any particular term or condition dependent of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariessuch individual).
Appears in 3 contracts
Samples: Merger Agreement (Astrazeneca PLC), Merger Agreement (Alexion Pharmaceuticals, Inc.), Merger Agreement (Alexion Pharmaceuticals, Inc.)
Employee Matters. (a) Between During the date hereof period commencing at the Effective Time and ending on December 31, 2019 (such period, the “Covered Period”), SJW shall, or shall cause its Subsidiaries (including the Surviving Corporation and its Subsidiaries) to, provide each individual who is actively employed by CTWS or any of its Subsidiaries immediately prior to the Effective Time and who continues employment during such period (the “CTWS Employees”) with (1) the same base compensation in effect immediately prior to the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to2) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with target annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) cash incentive opportunities that are no less favorable than those in effect for the target annual cash incentive opportunities provided by CTWS or any of its Subsidiaries to each such Company CTWS Employee immediately prior to the Closing Date; providedEffective Time, however(3) benefits, other than severance benefits and change of control benefits, that are substantially comparable in the covenants within this Section 6.9(baggregate to the benefits provided to CTWS Employees immediately prior to the Effective Time and (4) severance benefits that are no less favorable than the severance benefits provided by SJW or any SJW Subsidiary to similarly situated employees of SJW and the SJW Subsidiaries immediately prior to the Effective Time; provided that the immediately preceding clause (4) shall not apply to the Company Employees listed each CTWS Employee entitled to severance benefits under any agreement or plan set forth on Schedule 6.9(bSection 6.17(b) of the Company CTWS Disclosure Letter. Each CTWS Employee who received a long-term incentive award under the CTWS Stock Plan in 2018 shall be granted an equity incentive award under the SJW Stock Plan for each calendar year in the Covered Period (other than a calendar year in which the CTWS Employee received a long-term incentive award under the CTWS Stock Plan). Any such award granted under the SJW Stock Plan to a CTWS Employee shall be made at the same time and subject to the same terms and conditions as awards made to SJW’s executive officers, which shall consist provided that the target and maximum dollar values of the individuals that are a party award shall be equal to those certain Retention or greater than the target and Sale Payment retention agreements executed with maximum dollar values of the Company last award granted to such CTWS Employee under the CTWS Stock Plan prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only Effective Time; provided further that such awards shall be entitled to receive the severance benefits set forth in and subject to the accelerated vesting terms of any employment agreement between such employee and SJW or CTWS in effect at the time of the grant of such award.
(b) SJW agrees to honor the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentset forth on Section 6.17(b) of the CTWS Disclosure Letter.
(c) Parent shall, In the event any CTWS Employee becomes eligible to participate under any benefit plans maintained by SJW or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a any SJW Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after following the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance determining (i) eligibility to participate and vesting with respect to such benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, plans maintained by SJW or any SJW Subsidiary (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35pension plans and equity or equity-related plans maintained by SJW or any SJW Subsidiary) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or and (ii) with respect to the Excluded Employeeslevel of benefits under vacation and severance plans and arrangements (and not any other plans or arrangements) maintained by SJW or any SJW Subsidiary, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with CTWS or any of the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateCTWS Subsidiaries (or any predecessor employer of an employee of CTWS or any CTWS Subsidiary, to the extent that service with such credit does not result in duplicate benefits.
(e) The Parties shall, predecessor employer is recognized by CTWS or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to CTWS Subsidiary as of the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately date of this Agreement) prior to the Closing Date, and such conditions, periods Effective Time shall be treated as service with SJW or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing DateSJW Subsidiaries; provided, however, that such actions may service need not be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior recognized to the Closing Date extent (or A) that such earlier date approved by the Bankruptcy Courtrecognition would result in any duplication of benefits, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B)) not recognized by CTWS or a CTWS Subsidiary, as applicable). The Company shall provide Parent , for similar purposes, or (C) the benefit plan or arrangement of SJW or any SJW Subsidiary is grandfathered or frozen, either with an advance copy respect to eligibility to participate, vesting or level of all documentation necessary to effect this Section 6.9(fbenefits.
(d) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable any CTWS Employee becomes eligible to participate under any benefit plans maintained by SJW or any SJW Subsidiary following the Effective Time, Parent for purposes of each benefit plan of SJW or the SJW Subsidiaries, SJW and the SJW Subsidiaries shall use commercially reasonable best efforts to take any (i) cause all pre-existing condition exclusions and all action as may actively-at-work requirements of such plans to be reasonably requiredwaived for employees of CTWS and the CTWS Subsidiaries and their covered dependents (other than limitations, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) pre-existing conditions exclusions, or waiting periods that are already in the form of cash in an amount equal to the full account balance distributed or distributable effect with respect to such Company Employee from employees and dependents under the Company 401(k) Plan to benefit plans of CTWS and the Parent 401(k) Plan, including any outstanding loans CTWS Subsidiaries and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan that have not been satisfied as of the Closing Date date such employees and dependents commence participation in such benefit plans of SJW and the SJW Subsidiaries) and (subject to any applicable eligibility requirements, but giving effect ii) give full credit for all co-payments and deductibles to the service crediting provisions extent satisfied in the plan year in which the Effective Time occurs (or the year in which employees of Section 6.9(d)CTWS and the CTWS Subsidiaries and their dependents commence participation in the benefit plans of SJW and the SJW Subsidiaries, if later).
(ge) Nothing This Section 6.17 shall be binding upon and shall inure solely to the benefit of each of the parties to this Agreement, and nothing in this Agreement shall constitute an establishment or termination ofSection 6.17, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed express or implied, (i) is intended or will be construed to confer upon or give to any Person other person (including, for the avoidance of doubt, including any Company Employee or other current or former employee directors, officers, consultants or employees of the Company, Parent any of CTWS or any of their respective Affiliates)CTWS Subsidiary or, other than on or after the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentEffective Time, the Surviving Corporation or any of their Affiliates from terminating the employment its subsidiaries) any rights or service remedies of any Person, including a Company Employee, at any time and for any reasonnature whatsoever, (ii) provide is intended to be, shall constitute or be construed as an amendment to or modification of any Person any right to employment employee benefit plan, program, policy, agreement or service or continued employment or service with Parent or any arrangement of its Subsidiaries (including following the Effective TimeSJW, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent ParentCTWS, the Surviving Corporation or any of their Affiliates from terminating, revising respective Subsidiary thereof or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent (iii) obligates SJW or any of their respective Subsidiariesthe SJW Subsidiaries to retain the employment of any particular employee of CTWS or any CTWS Subsidiary following the Effective Time.
Appears in 3 contracts
Samples: Agreement and Plan of Merger (SJW Group), Agreement and Plan of Merger (Connecticut Water Service Inc / Ct), Merger Agreement (SJW Group)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) Buyer will make available to Parent the employees an offer of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three two (32) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days weeks prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take applicable Subsequent Closing Date or Distribution Center Closing Date) (it being acknowledged and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior agreed that to the adoption extent Buyer makes written offers of employment to any District Manager, Pharmacy District Manager, Human Resources District Manager, Asset Protection District Manager, Regional Vice President, Regional Pharmacy Vice President, Senior Human Resources Manager, or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentenceRegional Asset Protection Director or corporate Business Employees, as soon as administratively practicable following the Effective TimeSeller shall, Parent shall upon request, use commercially reasonable efforts to take any assist Buyer in preparing, printing and all action as may delivering the applicable written offer letters). Such offer of employment will be reasonably required, including amendments provided to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent each individual listed on an employee census (the “Parent 401(kEmployee Census”), who is employed by Seller or an Affiliate of Seller on the Closing Date (or the applicable Subsequent Closing Date or Distribution Closing Date) Planfor employment beginning on the first Business Day following such date (the “Employment Start Date”) to (Aand shall be for the same position held by such Business Employee, and at the same location(s) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal at which such Business Employee worked, immediately prior to the full account balance distributed Employment Start Date. The Employee Census shall first be delivered to Buyer prior to the date of this Agreement and shall state each Business Employee’s name, title, employment classification, salary or distributable pay rate and status with respect to whether he or she is currently on long-term disability or otherwise on a leave of absence. The Employee Census shall be updated by Seller no sooner than three (3) weeks prior to the Closing Date (or the applicable Subsequent Closing Date or Distribution Center Closing Date) for any Business Employee and with respect to any Business Employee added to the Employee Census pursuant to such Company an update, Buyer will make an offer of employment as soon as practicable thereafter but no later than the Closing Date (or the applicable Subsequent Closing Date or Distribution Center Closing Date). Each non-Union Business Employee from listed on the Company 401(kEmployee Census will receive an offer which will provide for compensation (including salary, wages, incentive compensation and bonus opportunities) Plan that is no less favorable than that provided immediately prior to the Parent 401(kEmployment Start Date and employee benefits (including retirement, welfare and fringe benefits) Plan, including any outstanding loans and (B) cause each Company that are equivalent to those provided to such non-Union Business Employee immediately prior to become a participant in the Parent 401(k) Plan as of the Closing Employment Start Date (subject to any eligibility requirements but taking into account prior service with Seller or Seller’s Affiliates). Each Union Business Employee listed on the Employee Census will receive an offer which will provide for compensation and employee benefits in accordance with the terms of the applicable eligibility requirementsCBA (taking into account prior service with Seller or Seller’s Affiliates). Each Business Employee that accepts an offer of employment from Buyer will be referred to as a “Transferred Employee”. Each offer of employment by Buyer to a Business Employee shall be on an employment “at-will” basis except as required by any CBA. Except as otherwise required by the terms of a CBA with respect to Union Business Employees and subject to Section 6.01(k) hereof, but giving effect for a period of at least one (1) year following the Employment Start Date, Buyer shall provide each Transferred Employee compensation (including salary, wages, incentive compensation and bonus opportunities) that is no less favorable than that provided immediately prior to the Employment Start Date and employee benefits (including retirement, welfare and fringe benefits) that are equivalent to those provided to such Transferred Employee immediately prior to the Employment Start Date (subject to any eligibility requirements but taking into account prior service crediting provisions of Section 6.9(dwith Seller or Seller’s Affiliates)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or . Transferred Employees will cease to be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit employees of the Parties Seller or Seller’s Affiliates, as applicable, and nothing herein, expressed become employees of Buyer or implied, is intended its Affiliates on the Employment Start Date and shall cease any further participation in (and shall cease to accrue benefits under) all Employee Plans as of the Employment Start Date. Seller (or its Affiliates) will be construed pay to confer upon or give to all Transferred Employees (A) any Person (including, for the avoidance of doubt, any Company Employee unpaid personal holidays or other current or former employee vacation leave accrued by such Transferred Employees as of the Company, Parent or date immediately preceding the Employment Start Date and (B) any of their respective Affiliates), other than accrued but unpaid bonus for any bonus periods that have commenced but not yet concluded before the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including Employment Start Date with respect to the matters provided for portion of the applicable bonus period occurring before the Employment Start Date, in this Section 6.9each case, in accordance with Seller’s (or its Affiliate’s) under programs and policies. Buyer agrees that it will (or by reason of will cause its Affiliates to) take any provision of this Section 6.9and all commercially reasonable actions necessary to allow any Business Employees on a work visa to become employed with Buyer or its Affiliates. Nothing in this Section 6.9 is intended For those Business Employees who become Transferred Employees and who are employed on a work visa, Buyer will serve as the successor-in-interest and thus accept all applicable rights and obligations related to (i) prevent Parent, the Surviving Corporation or work visa and any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariescorresponding permanent residence petition.
Appears in 3 contracts
Samples: Asset Purchase Agreement (Rite Aid Corp), Asset Purchase Agreement (Freds Inc), Asset Purchase Agreement (Walgreens Boots Alliance, Inc.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for For a period of 12 months at least two (2) years following the Closing DateEffective Time (the “Continuation Period”), Parent shall provide, or shall cause to be provided, to each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “current and former Company Employee”) shall be provided with annual base salary or base wage rate, other than such employees covered by collective bargaining agreements, compensation and employee benefits (exclusive of equity-based compensation or benefits) that areare no less favorable, in the aggregate, substantially comparable than the compensation and benefits provided to those current and former Company Employees (as the case may be) immediately before the Effective Time; provided, that Parent shall be entitled to make modifications thereto to the extent such modifications do not result in effect compensation and benefits for the Company Employees not covered by collective bargaining agreements that are less favorable in the aggregate than that which is then provided to similarly situated employees of Parent and its Subsidiaries. In additionnot covered by collective bargaining agreements; provided, a further, that nothing herein shall prohibit Parent or the Surviving Corporation from terminating the employment of any Company Employee whose employment is involuntarily terminated other than for cause within to the extent permitted by applicable Laws; and provided, further, that, to the extent permitted by applicable Law, notwithstanding the foregoing provisions of this Section 5.5(a), (i) during the period beginning at the Effective Time and ending December 31, 2013, Parent shall cause The Dayton Power and Light Retirement Income Plan to remain in effect in respect of 12 months following the Closing Date Company Employees (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (exclusive of those employed subject to satisfying any applicable release requirementsa collective bargaining agreement) that are hired before January 1, 2011 and participating therein immediately before the Effective Time on terms and conditions no less favorable than those in effect immediately before the Effective Time and (ii) if benefit accruals in respect of such Company Employees are reduced or eliminated under The Dayton Power and Light Retirement Income Plan after December 31, 2013, such Company Employees shall be fully vested in their benefit accrued under such plan as of the effective time of such reduction or elimination.
(b) For purposes of vesting, eligibility to participate and accrual and level of benefits under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time (the “New Plans”), each Company Employee shall be credited for his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company employee benefit plan in which such Company Employee participated or was eligible to participate immediately prior to the Closing Date; Effective Time, provided, however, that the covenants within this Section 6.9(b) foregoing shall not apply to the extent that its application would result in a duplication of benefits or to benefit accrual under a defined benefit pension plan. In addition, and without limiting the generality of the foregoing, (A) Parent shall cause each Company Employees listed Employee to be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan is comparable to a Company Benefit Plan set forth on Schedule 6.9(bSection 3.12(a) of the Company Disclosure LetterSchedule in which such Company Employee participated immediately before the Effective Time (such plans, which collectively, the “Old Plans”) and (B) for purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any Company Employee, Parent shall consist cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the individuals that Company or its Subsidiaries in which such employee participated immediately prior to the Effective Time, and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) With respect to any employee actively employed by the Company or its Subsidiaries at the Effective Time whose terms and conditions of employment are governed by the Compact by and between the Company and Local 175, Utility Workers Union of America, AFL-CIO (the “Compact”) (each, a party “Represented Employee”), Parent agrees to those certain Retention honor or cause to be honored the Compact in effect as of the Effective Time and Sale Payment to continue all terms and conditions of employment applicable to such Represented Employee under their respective collective bargaining agreements through the expiration, modification or termination of such agreements in conformity with applicable Law.
(d) The Company shall adopt a retention agreements executed program for key employees prior to the Closing in accordance with Section 5.5(d) of the Company Disclosure Schedule.
(e) If and to the extent not paid by the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees willClosing, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiariesto, pay, when such payments would have been due in the ordinary course, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Timeeach person who, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateClosing, was eligible to and participated in the extent that Company’s annual bonus plans with respect to fiscal year 2011 (each an “Eligible Company Employee”), the amount earned and payable to such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Eligible Company Employee or coveredfor the performance period ending December 31, eligible dependents are covered under an analogous Company Benefit Plan2011, as applicable, immediately prior to determined in accordance with the Closing Date, individual and such conditions, periods or requirements are satisfied or waived other performance targets established under such Parent Benefit Plan and (ii) give each Company Employee credit plans in respect of such period, adjusted for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses costs incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to Company in connection with the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateTransactions.
(f) Prior to During the Closing Dateperiod beginning at the Effective Time and ending December 31, (i) if requested by 2013, Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries not to take all necessary implement any involuntary workforce reductions that would result in the Company and appropriate actions to cause its Subsidiaries employing substantially fewer individuals in the aggregate than they employed (A) each Company Benefit Plan intended to be qualified under Section 401(a) exclusive of officers and management employees of the Code (Company who are covered by change in control agreements) immediately before the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing DateEffective Time; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)that, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions requirements of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, sentence shall not apply if a material adverse effect on the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent its Subsidiaries or any of its Subsidiaries (including following the Effective Timetheir respective material assets shall have occurred and is continuing; and, the Surviving Corporation) or any particular term or condition provided, further, that, for avoidance of employment or servicedoubt, or (iii) prevent nothing herein shall prohibit Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesSubsidiaries from terminating the employment of any Company Employee to the extent permitted by applicable Laws.
Appears in 3 contracts
Samples: Merger Agreement (DPL Inc), Merger Agreement (DPL Inc), Merger Agreement (Aes Corp)
Employee Matters. (a) Between the date hereof and For a period commencing at the Effective TimeTime and ending on the first anniversary thereof (or, such shorter period of employment, as the case may be), each Company Service Provider who continues to provide services to Parent, the Company shall (and the Company shall cause its Surviving Corporation or any of their respective Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Continuing Employee”) shall be provided with annual shall, for so long as the applicable Company Service Provider continues to provide services during such period, receive from Parent, the Surviving Corporation or such other Subsidiary (i) base salary or base wage ratesalary, and, if the Effective Date occurs after February 28, 2022, wages and employee benefits that arecommission rate and bonus opportunities, that, in the aggregate, substantially comparable are at least equal to those in effect for similarly situated employees of Parent that were provided to the Continuing Employee immediately prior to the Effective Time and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Planii) shall be provided with severance employee benefits (subject to satisfying any applicable release requirementsbut not incentive compensation) that are no less favorable favorable, in the aggregate, than those in effect for such Company the employee benefits (but not incentive compensation) that were provided to the Continuing Employee immediately prior before the Effective Time; provided that Parent may reduce employee benefits of a Continuing Employee to the Closing Date; provided, however, extent that the covenants within this Section 6.9(b) shall not apply such reduction applies on a uniform basis to the Company Continuing Employees listed on Schedule 6.9(b) and other similarly situated employees of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(cb) Parent shall, or shall cause the Surviving Corporation or any of their respective Subsidiaries to, provide to each Continuing Employee whose employment terminates during the one-year period following the Effective Time severance benefits that are no less favorable than the severance benefits required under the severance plan, policy or arrangement covering such Continuing Employee in effect immediately prior to the date of this Agreement. During such one-year period following the Effective Time, severance benefits offered to each Continuing Employee shall be determined without taking into account any reduction after the Effective Time in compensation paid to such Continuing Employee (other than any such reduction pursuant to the proviso to Section 8.03(a)).
(c) With respect to any health and welfare plan maintained by Parent or its Affiliates in which any Continuing Employee is eligible to participate at or after the Effective Time, Parent shall, or shall cause its Affiliates (including the Surviving Corporation) to, use its reasonable best efforts to (i) waive, or cause to be waived, preexisting conditions, limitations, exclusions, actively-at-work requirements and waiting periods with respect to participation by and coverage of the Continuing Employees to the same extent such preexisting conditions, limitations, exclusions, actively-at-work requirements and waiting periods were not applicable under any comparable Company Plan prior to the Effective Time and (ii) recognize, or cause to be recognized, the dollar amount of all co-payments, deductibles and similar expenses incurred by each Continuing Employee during the calendar year in which the Effective Time occurs for purposes of satisfying such year’s deductible and co-payment limitations to the same extent as such Continuing Employee was entitled, prior to the Effective Time, to recognition of such co-payments, deductibles and similar expenses under any Company Plan.
(d) With respect to any “employee benefit plan,” as defined in Section 3(3) of ERISA, and any other benefit plan, programs, agreements and arrangements maintained by Parent or its Affiliates in which any Continuing Employee is eligible to participate at or after the Effective Time, for all purposes, such Continuing Employee’s service with the Company or any of its Subsidiaries prior to the Effective Time shall be treated as service with Parent and its SubsidiariesAffiliates to the same extent as such Continuing Employee was entitled, before the Effective Time, to assume and honor their respective obligations credit for such service under all employment, severance, change in control, retention and other agreements, if any, between the any analogous Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood Plan; provided that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or apply to the extent that it would result in a any duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause Without limiting the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage generality of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the ClosingSection 12.14, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 8.03 are solely for the sole benefit of the Parties parties to this Agreement, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other no current or former employee Company Service Provider or any other individual associated therewith shall be regarded for any purpose as a third party beneficiary of this Section 8.03. Nothing herein shall be deemed to establish, amend or modify any Company Plan or any other benefit plan, program, agreement or arrangement maintained or sponsored by Parent, Merger Sub, the Company, Parent Company or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Neither Parent or nor any of its Subsidiaries (including Affiliates shall be obligated to continue to employ any Continuing Employee for any period of time following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 3 contracts
Samples: Merger Agreement (Santander Holdings USA, Inc.), Merger Agreement (Santander Holdings USA, Inc.), Merger Agreement (Santander Consumer USA Holdings Inc.)
Employee Matters. (a) Between Buyer and Merger Subsidiary agree that, effective as of the date hereof Effective Time and for the six-month period following the Effective Time, the Company Surviving Corporation and its Subsidiaries and successors shall (and continue for those persons who, immediately prior to the Effective Time, were employees of the Company shall cause or its Subsidiaries to("RETAINED EMPLOYEES") make available the Employee Plans and material Benefit Arrangements or provide benefits that are not less favorable in the aggregate to Parent the employees of such Employee Plans and Benefit Arrangements. Service accrued by such Retained Employees during employment with the Company and its Subsidiaries so that Parent may interview prior to the Effective Time shall be recognized to the extent and for the purposes such employees and evaluate their roles and responsibilities with service was recognized prior to the Company and its SubsidiariesEffective Time by the applicable Employee Plan or Benefit Arrangements or benefits plans established after the Effective Time. Except as provided in the Employee Agreements, including with respect nothing contained in the foregoing is intended to potential promotions, transfers, or job eliminations following preclude the ClosingSurviving Corporation from terminating the employment of any Retained Employee after the Effective Time.
(b) The Parties Buyer and Merger Subsidiary agree that for a period to honor, and cause the Surviving Corporation to honor, without modification, the Employee Agreements on the same terms as disclosed in Section 4.15 of 12 months following the Closing Date, each employee who is employed Company Disclosure Letter hereof (whether or not executed as of the Closing Date by date hereof) which Employee Agreements are listed on Section 4.15 of the Company or Disclosure Letter hereto. Buyer and Merger Subsidiary acknowledge that the consummation of the Offer shall constitute a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under for purposes of the applicable Employee Agreements.
(c) Buyer and Merger Subsidiaries agree to honor, and cause the Surviving Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are pay, without modification, no less favorable later than those in effect the earlier of July 31, 1999 or such employee's last day of work for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees to each employee listed on Schedule 6.9(bin Section 8.06(c) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits bonus amounts set forth opposite such employee's names listed in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) Section 8.06 of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.Disclosure
Appears in 3 contracts
Samples: Merger Agreement (Hilite Mergeco Inc), Merger Agreement (Hilite Industries Inc), Merger Agreement (Maher Donald M)
Employee Matters. (a) Between Following the date hereof Closing Date, Purchaser shall maintain or cause to be maintained employee benefit plans and compensation opportunities for the Effective Timebenefit of Employees who are actively employed by the Company or its Subsidiaries on the Closing Date (“Covered Employees”) that provide employee benefits and compensation opportunities that, in the aggregate, are no less favorable than the employee benefits (other than severance benefits, which, for the avoidance of doubt, are governed under Section 6.03(b)) and compensation opportunities that are generally made available to similarly situated employees of Purchaser or its Subsidiaries (other than the Surviving Corporation and its Subsidiaries) (collectively, the Company “Purchaser Plans”), as applicable; provided that (i) with respect to retirement benefits, satisfaction of the foregoing standard shall not require that any Covered Employee be eligible to participate in any specific retirement plan of Purchaser or a closed or frozen Purchaser Plan; and (and the Company ii) until such time as Purchaser shall cause its Subsidiaries to) make available Covered Employees to Parent participate in the employees Purchaser Plans, a Covered Employee’s continued participation in the employee benefit plans and compensation opportunities of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateDate shall be deemed to satisfy the foregoing provisions of this sentence (it being understood that participation in the Purchaser Plans may commence at different times with respect to each Purchaser Plan).
(b) Purchaser shall provide severance benefits in accordance with the terms and conditions of the special severance policy set forth on Section 6.03(b) of the Purchaser Disclosure Schedule (“Special Severance Policy”) to Covered Employees who experience a qualifying termination of employment with Purchaser, the Surviving Corporation or any of their respective Subsidiaries during the period beginning on the Closing Date and ending on the 60th day following the first anniversary of the Closing Date (the “Special Severance Period”). Each Covered Employee whose employment is terminated after the Special Severance Period shall be eligible to participate in Purchaser’s regular separation and severance pay programs on the same terms and conditions as other similarly-situated employees of Purchaser.
(c) To the extent that such credit does not result a Covered Employee becomes eligible to participate in duplicate benefits.
(e) The Parties shalla Purchaser Plan, or Purchaser shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts such plan to (i) waive recognize the service of such Covered Employee with the Company or its Subsidiaries for purposes of eligibility, vesting and benefit accrual (other than for purposes of eligibility, vesting and benefit accruals under any limitation on health coverage of any Company Employees Purchaser Plan that is a defined benefit pension plan or any of their covereda retiree medical plan )under such Purchaser Plan, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the same extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, service was recognized immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived Effective Time under such Parent a comparable Benefit Plan in which such Covered Employee was eligible to participate immediately prior to the Effective Time; provided that such recognition of service (A) shall not operate to duplicate any benefits of a Covered Employee with respect to the same period of service and (B) shall not apply for purposes of any Purchaser Plan under which similarly-situated employees of Purchaser and its Subsidiaries do not receive credit for prior service; and (ii) give each Company with respect to any Purchaser Plan that provides health plan or other welfare benefits in which any Covered Employee credit is eligible to participate for the plan year in which such Covered Employee is first eligible to participate, (A) cause any pre-existing condition limitations or eligibility waiting periods under such Purchaser Plan to be waived with respect to such Covered Employee to the extent such limitation would have been waived or satisfied under the Benefit Plan in which such Covered Employee participated immediately prior to the Effective Time, and (B) recognize any eligible expenses incurred by such Covered Employee in the year that includes the Closing Date occurs towards (or, if later, the year in which such Covered Employee is first eligible to participate) for purposes of any applicable deductibles deductible and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted expense requirements under any such Purchaser Plan.
(d) If requested by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately Purchaser by no later than ten (10) Business Days prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before effective as of immediately prior to, and contingent upon, the Closing, the Company shall cause adopt such resolutions and/or amendments to terminate the Company and Retirement Savings Plan or any 401(k) plan of the Company or any of its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (collectively, the “Company 401(k) Plan”) and the Covered Employees shall be permitted to be terminated and roll any eligible rollover distributions (Bincluding, to the extent applicable with respect to any Covered Employee, loans) all participants to cease participating under the Company into Purchaser’s 401(k) Plan, in each case, effective no later than plan. If the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participantCompany’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal immediately prior to the full account balance distributed Closing Date, each Covered Employee who participated or distributable was eligible to such Company Employee from participate in the Company 401(k) Plan as of immediately prior to the Parent Effective Time shall be eligible to participate in Purchaser’s 401(k) Planplan commencing on the Closing Date. If the Company 401(k) is not terminated as of immediately prior to the Closing Date, including any outstanding loans and (B) cause each Purchaser shall maintain the Company Employee to become a participant in the Parent 401(k) Plan as for the benefit of the Closing Date (subject Covered Employees until such time as they are eligible to any applicable eligibility requirements, but giving effect participate in Purchaser’s 401(k) Plan and Purchaser will make a discretionary matching contribution at a rate for each Covered Employee participating in the Company 401(k) Plan equal to the service crediting provisions of Section 6.9(d))Company’s 2011 discretionary matching contribution rate for the 2012 plan year.
(ge) Nothing in this Agreement Section 6.03 shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by limit the Company, Parent right of Purchaser or any of its Affiliates (including, following the Closing Date, the Surviving Corporation and its Subsidiaries) to amend or terminate any Benefit Plan or other employee benefit plan, to the extent such amendment or termination is permitted by the terms of the applicable plan, nor shall anything in this Section 6.03 be construed to require Purchaser or any of its Affiliates (including, following the Closing Date, the Surviving Corporation and its Subsidiaries) to maintain any Purchaser Plan or retain the employment of any particular Covered Employee for any fixed period of time following the Closing Date. This Agreement shall inure exclusively to the benefit of, and be binding upon the Parties hereto and their respective Subsidiariessuccessors, assigns, executors and legal representatives. The provisions of Nothing in this Section 6.9 are for the sole benefit of the Parties and nothing hereinAgreement, expressed express or implied, including without limitation this Section 6.03, is intended or will be construed to confer upon or give to on any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), person other than the Parties and hereto or their respective permitted successors and assignsassigns any rights, any third party beneficiaryremedies, legal obligations, or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) liabilities under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 3 contracts
Samples: Merger Agreement (Pacific Capital Bancorp /Ca/), Merger Agreement (Unionbancal Corp), Merger Agreement
Employee Matters. (a) Between During the date hereof period beginning on the Closing and ending on the Effective Time, the Company shall twelve (and the Company shall cause its Subsidiaries to12) make available to Parent the employees month anniversary of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as the Buyer (or any member of the Closing Date Buyer Group) shall provide employees of each member of the Company Group (other than the Sellers), who remain employed by the Company Buyer (or a Subsidiary thereof any member of the Buyer Group) following the Closing (each, a “Company Continuing Employee”) shall be provided (i) with base salaries or wages and annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) cash incentive opportunities that are no less favorable in the aggregate than those in effect for such Company Employee immediately prior to the Closing Date; providedbase salaries or wages and annual cash incentive opportunities, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company such Continuing Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, (ii) with employee benefits (including severance and excluding equity arrangements, phantom equity arrangements, retiree health and welfare benefits and defined benefit pension plans) that are substantially comparable in the aggregate to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, benefits provided to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company such Continuing Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, Group Plans immediately prior to the Closing Date, and (iii) with the positions, roles and responsibilities that are substantially comparable to such conditionspositions, periods or requirements are satisfied or waived under roles and responsibilities held by such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect Continuing Employees immediately prior to the Closing Date.
(f) Prior to the Closing Date, . For purposes of determining (i) if requested by Parent in writing at least three (3) days before the Closingeligibility to participate, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than level of benefits and vesting, and (iii) benefit accruals under any “employee benefit plan,” as defined in Section 3(3) of ERISA or any other benefit plan or arrangement maintained by the date thirty Buyer Group (30including any vacation, paid time off, sick pay or severance program), each Continuing Employee’s service with any member of the Company (as well as service with any predecessor employer) days prior to the Closing Date (or such earlier date approved by shall be treated as service with the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan Buyer Group as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the same extent that such service was recognized prior to the Closing Date under a comparable Company Group Plan in which such Continuing Employee participated; provided that the foregoing shall not apply to the extent that it would result in any duplication of analogous benefits for the same period of service or the crediting provisions of Section 6.9(d)).
service under a newly established plan of the Buyer Group for which prior service is not taken into account for similarly situated employees of the Buyer Group generally. From and after the Closing, the Buyer shall continue to honor, pay, perform and satisfy any and all liabilities, obligations and responsibilities to, or in respect of, each Continuing Employee, and each employee, officer, director, or consultant of each member of the Company Group (gwhether current, former or retired) Nothing in this Agreement shall constitute an establishment or termination their dependents, spouses, or beneficiaries, arising under the terms of, or an amendment to, or be construed as establishing, terminating or amendingin connection with, any Employee Benefit Plan sponsoredin accordance with the terms thereof. Following the Closing, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit no member of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person Buyer Group (including, for the avoidance of doubt, the Company Group) shall be responsible for any contributions required to be made by any Continuing Employee (but not, for the avoidance of doubt, any Seller Owner) to any Company Group GP Entity in existence on the Closing Date, to be funded in such a manner as determined by such member of the Buyer Group, including by way of any management fee offset permitted under the limited partnership agreement or limited liability company (or equivalent) of any TB Fund. With respect to any group health plan maintained by the Buyer Group in which any Continuing Employee is eligible to participate on or after the Closing Date, the Buyer shall (or shall cause the Buyer Group to) use commercially reasonable efforts to waive preexisting conditions, limitations, exclusions, evidence of insurability, required physical exams, actively-at-work requirements, waiting periods and similar limitations and requirements with respect to participation by and coverage of such Continuing Employee (and his or her eligible dependents). This Section 9.3(a) shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 9.3(a), express or implied, shall confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 9.3(a). Nothing contained herein, express or implied, is intended to confer upon any employee of any member of the Company Group any right to continued employment for any period or continued receipt of any specific employee benefit, shall constitute an amendment to or any other modification of any Plan, or create any right to compensation or benefits of any nature or kind whatsoever.
(b) To the fullest extent not prohibited by Applicable Law, from and after the Closing, all rights to indemnification, exculpation and advancement of expenses now existing in favor of any individual under the Company Formation Documents who, at the Closing, is entitled to exculpation, indemnification and advancement of expenses thereunder (collectively, the “D&O Indemnified Persons”) with respect to their activities as such prior to the Closing, as provided in the operating agreements, organizational documents, indemnification agreements or other current or former employee contracts of the Company as in effect on the date hereof (the “Indemnity Arrangements”), shall survive the Closing and continue in full force and effect for a period of not less than six (6) years from the Closing Date; provided that, in the event any claim or claims are asserted or made within such survival period, all such rights to indemnification in respect of any claim or claims shall continue until final disposition of such claim or claims. The Indemnity Arrangements shall not be terminated or modified in such a manner as to adversely affect any D&O Indemnified Person to whom this Section 9.3 applies without the consent of such affected D&O Indemnified Person.
(c) Prior to the Closing, the Buyer shall, or shall cause the Company as of the Closing to obtain and fully pay for a non-cancellable “tail” insurance policy with a claims period of at least six (6) years from and after the Closing from insurance carriers with the same or better claims-paying ability ratings as the Company’s current insurance carriers with respect to directors’ and officers’ liability insurance policies and fiduciary liability insurance policies (collectively, Parent “D&O Insurance”), for the persons who are covered by the Company’s existing D&O Insurance, with terms, conditions, retentions and levels of coverage (including as coverage relates to deductibles and exclusions) at least as favorable as the Company’s existing D&O Insurance with respect to matters arising out of or relating to acts or omissions existing or occurring (or alleged to have occurred or existed) at or prior to the Closing (including in connection with this Agreement, the Ancillary Agreements, or the transactions or actions contemplated hereby or thereby). The Buyer shall not, and shall cause its Affiliates not to, cancel or modify the D&O Insurance. In the event that, after the Closing Date, the Company or the Buyer or any of their respective Affiliates)successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or a substantial portion of its properties and assets to any Person, other than then, and in either such case, proper provisions shall be made so that the Parties and their respective permitted successors and assignsassigns of the Company or the Buyer, any third party beneficiaryas the case may be, legal or equitable or other rights or remedies (including with respect to shall assume the matters provided for obligations set forth in this Section 6.99.3. The provisions of Sections 9.3(b) under and 9.3(c) are intended to be for the benefit of, and shall be enforceable by, each D&O Indemnified Person, his or by reason of any provision her heirs, executors or administrators and his or her other representatives. The provisions of this Section 6.9. Nothing in 9.3(c) shall survive the consummation of the transactions contemplated by this Section 6.9 is intended to (i) prevent Parent, Agreement and the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAncillary Agreements.
Appears in 3 contracts
Samples: Sale and Purchase Agreement (P10, Inc.), Sale and Purchase Agreement (P10, Inc.), Sale and Purchase Agreement (P10, Inc.)
Employee Matters. (a) Between the date hereof and Following the Effective Time, Parent shall cause the Surviving Corporation to provide to employees of the Company shall and its Company Subsidiaries employed immediately prior to the Effective Time (and their dependents) (the “Company shall cause its Subsidiaries toEmployees”) make available to Parent the and former employees of the Company and its Subsidiaries so terminated prior to the Effective Time, the compensation and benefits required by applicable Law or pursuant to vested benefits under any Company Benefit Plan; provided, however, that nothing in this Agreement shall prohibit the Parent may interview such employees and evaluate their roles and responsibilities with or the Surviving Corporation from terminating the employment of any Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingEmployee.
(b) The Parties agree that for For a period of 12 at least twelve (12) months following the Closing DateEffective Time, unless the Company Employees have been enrolled in or entitled to benefits under a comparable Buyer Plan and entitled to the benefits thereunder provided to similarly situated employees of Parent and its Subsidiaries, Parent shall, and shall cause the Surviving Corporation to, honor, in accordance with their respective terms (as in effect on the date of this Agreement), each employee who is employed Company Benefit Plan including with respect to any payments, benefits or rights arising as a result of the Closing Date by Transactions, without any amendment or modification, other than any amendment or modification required to comply with applicable Law. After such twelve (12) month period, Parent shall, and shall cause the Surviving Corporation, to enroll the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, Employees in and employee receive benefits that are, in under the aggregate, substantially comparable Buyer Plans to those in effect for the same extent as similarly situated employees of Parent and its Subsidiaries. In additionParent acknowledges and agrees that the consummation of the Offer will constitute a “Change in Control”, a “Change of Control” or “Terminating Event” (as applicable) under the Company Employee whose employment is involuntarily terminated Benefit Plans.
(c) With respect to any “employee benefit plan”, as defined in Section 3(3) of ERISA, maintained by Parent or any of Parent’s Subsidiaries (including any vacation, paid time off and severance plans) in which Company Employees participate on or after the Effective Time (“Buyer Plans”), for all purposes, including determining eligibility to participate, level of benefits, benefit accruals (other than for cause within purposes of benefit accrual under any defined benefit plan) and vesting (other than for purposes of any equity-based compensation), each Company Employee’s service with the period Company or a Company Subsidiary (as well as service with any predecessor employer of 12 months following the Closing Date (Company or the Company Subsidiary to the extent service with such longer change in control coverage period as required under predecessor employer is recognized by the applicable Company Benefit Planor the Company Subsidiary) shall be treated as service with Parent or any of Parent’s Subsidiaries; provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) foregoing shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and extent its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it application would result in a duplication of benefits or compensation for with respect to the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event Parent, the Surviving Corporation, or any of Parent’s Subsidiaries terminates any or all of the Company 401(kBenefit Plans during the twelve (12) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following month period commencing on the Effective Time, each Company Employee shall participate in a Buyer Plan substantially comparable to the terminated Company Benefit Plan.
(d) Parent shall use commercially reasonable efforts to take any and all action as may be reasonably requiredwaive, including amendments to a defined contribution retirement plan intended or cause to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amendingwaived, any Employee Benefit Plan sponsoredpre-existing condition limitation, exclusions, actively-at-work requirements and waiting periods under any welfare benefit plan maintained or contributed to by the Company, Parent or any of its Subsidiaries (other than the Company Benefit Plans) in which the Company Employees (and their respective Subsidiarieseligible dependents) will be eligible to participate from and after the Effective Time. Parent shall use commercially reasonable efforts to recognize, or cause to be recognized, the dollar amount of all expenses incurred by each Company Employee (and his or her eligible dependents) during the calendar year in which the Effective Time occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare benefit plans in which they will be eligible to participate from and after the Effective Time.
(e) For the twelve (12) month period following the Effective Time, Company Employees shall be eligible to receive severance benefits pursuant to the Company Severance Plan from Parent, the Surviving Corporation, or the applicable Parent Subsidiary.
(f) The provisions of this Section 6.9 5.16 are for the sole benefit of the Parties parties to this Agreement and nothing herein, expressed or implied, is intended or will shall be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective AffiliatesEmployee), other than the Parties parties hereto and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9Agreement. Nothing No provision in this Section 6.9 Agreement shall modify or amend any Company Benefit Plan or Buyer Plan unless this Agreement explicitly states that the provision "amends" such Company Benefit Plan or Buyer Plan. This shall not prevent the parties entitled to enforce this Agreement from enforcing any provision in this Agreement, but no other party shall be entitled to enforce any provision in this Agreement on the grounds that it is intended an amendment to (i) prevent Parentsuch Company Benefit Plan or Buyer Plan. If a party not entitled to enforce this Agreement brings a lawsuit or other action to enforce any provision in this Agreement as an amendment to such Company Benefit Plan or Buyer Plan and that provision is construed to be such an amendment despite not being explicitly designated as one in this Agreement, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any that provision shall lapse retroactively as of its Subsidiaries (including following the Effective Timeinception, the Surviving Corporation) or thereby precluding it from having any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesamendatory effect.
Appears in 3 contracts
Samples: Merger Agreement (Perfumania Holdings, Inc.), Merger Agreement (Perfumania Holdings, Inc.), Merger Agreement (Parlux Fragrances Inc)
Employee Matters. (a) Between To the date hereof and the Effective Timeextent permitted by Applicable Law, the Company shall provide Parent with a true, complete and correct list of the following with respect to (i) each Company Employee: name, employer, title, hire date, location, whether full- or part-time, whether active or on leave (and, if on leave, the nature of the leave and the Company expected return date), whether exempt from the Fair Labor Standards Act, annual salary or wage rate, most recent annual bonus received and current annual bonus opportunity, which shall be provided not later than five (5) Business Days following the date of this Agreement, and (ii) each individual independent contractor whose engagement involves providing material services to the Company: name, entity for which services are provided, services provided, service commencement date, rate of compensation and scheduled termination date, which shall be provided not later than twenty (20) Business Days following the date of this Agreement.
(b) For the period commencing at the Closing and ending on the first anniversary thereof or shorter period of employment with Parent and its Affiliates (including the Surviving Corporation) following the Closing (the “Continuation Period”), Parent shall provide, or shall cause its Affiliates (including the Surviving Corporation) to provide, each Company Employee who is employed by the Company or any of its Subsidiaries toimmediately prior to the Effective Time (each, a “Continuing Employee”) make available to Parent the employees of and who continues employment during such time period, with (i) a base salary or base wages that are no less than those provided by the Company and its Subsidiaries so that Parent may interview to such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Continuing Employee immediately prior to the Closing Date; providedEffective Time and (ii) a base salary or base wages, howevertarget annual cash incentive compensation opportunities, target long-term incentive compensation opportunities and other employee benefits (excluding any change in control, transaction, stay, retention or similar bonuses or payments) that are substantially comparable in the covenants within this Section 6.9(b) shall not apply aggregate to those provided by the Company and its Subsidiaries to such Continuing Employee immediately prior to the Company Employees listed on Schedule 6.9(bEffective Time.
(c) Except as otherwise provided in Section 7.04(c) of the Company Disclosure LetterSchedule, with respect to any “employee benefit plan,” as defined in Section 3(3) of ERISA, or any other employee benefit plan, program or arrangement maintained by Parent or its Affiliates in which shall consist of the individuals that are a party any Continuing Employee is eligible to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, participate on and or after the Closing DateClosing, only be entitled to receive the severance benefits set forth in for all purposes (other than for benefit accrual purposes under any defined benefit pension plan, deferred compensation plan (including any savings or supplemental savings deferred compensation plan) or post-retirement medical and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) welfare plan), Parent shall, or shall cause its Affiliates (including the Surviving Corporation Corporation) to, use reasonable best efforts to treat such Continuing Employee’s service with the Company or any of its Subsidiaries prior to the Closing as service with Parent and its SubsidiariesAffiliates to the same extent as such Continuing Employee was entitled, before the Closing, to assume and honor their respective obligations credit for such service under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood any analogous Employee Plan; provided that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or apply to the extent that it would result in a any duplication of benefits or compensation for the same period of service, .
(d) The Company shall take all actions that may be necessary or (ii) with respect appropriate to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiariesterminate, as applicable, to of the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect day immediately prior to preceding the Closing Date, to the extent that such credit does not result in duplicate benefits.
(eCompany’s 401(k) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event evidence that the Company 401(k) Plan is has been terminated as set forth in (the form and substance of which shall be subject to review and reasonable comment by Parent) not later than two (2) Business Days immediately preceding sentence, as soon as administratively practicable following the Effective TimeClosing Date. In connection with the termination of the Company 401(k) Plan, Parent shall use commercially reasonable efforts permit each Continuing Employee who is a participant in the Company 401(k) Plan to take any and all action as may be reasonably required, including amendments to (A) become a defined contribution participant in a 401(k) plan of Parent or its Subsidiary that is an “eligible retirement plan intended to be qualified under plan” (within the meaning of Section 401(a401(a)(31) of the Code designated by Parent Code) (the “Parent 401(k) Plan”) immediately after the Closing Date, and (B) to (A) cause the Parent 401(k) Plan to accept any make rollover contributions of “eligible rollover distributions” (within the meaning of Section 402(c)(4401(a)(31) of the Code) in cash or a note (in the form case of cash a participant loan) in an amount equal to the full eligible rollover distribution portion of the account balance distributed or distributable to each such Company Continuing Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan effective as of the Closing Date (provided that the foregoing shall not require the Parent 401(k) Plan to accept a rollover of more than one loan note per participant). Notwithstanding the foregoing, the Company shall not terminate the Company 401(k) Plan if, not later than ten (10) Business Days prior to the Closing Date, Parent requests that the Company not terminate such plan.
(e) In the plan year in which the Effective Time occurs, Parent shall, or shall cause the Surviving Corporation or another Affiliate to, with respect to any welfare benefit plans of Parent or its Affiliates in which any Continuing Employee is eligible to participate on or after the Effective Time, (i) cause any preexisting conditions or limitations and eligibility waiting periods to be waived with respect to Continuing Employees and their eligible dependents to the same extent satisfied or waived under the corresponding Employee Plan as of the Effective Time, and (ii) give each Continuing Employee credit for the plan year in which the Effective Time occurs towards applicable copayments, deductibles and annual out-of-pocket limits for expenses incurred prior to the Effective Time under the corresponding Employee Plan to the same extent as such Continuing Employee was entitled, prior to the Effective Time, to recognition of such copayments, deductibles and annual out-of-pocket limits under the corresponding Employee Plan.
(f) From and after the Effective Time, Parent shall cause the Surviving Corporation to continue and honor its obligations under all employment, severance, change in control and other agreements between the Company (or a Subsidiary thereof) and each Continuing Employee as set forth in Section 7.04(f) of the Company Disclosure Schedule, in each case, for the term of such agreement as in effect at the Effective Time and subject to any applicable eligibility requirements, but giving effect to amendments that may be permitted by the service crediting amendment provisions of Section 6.9(d))such agreement.
(g) Prior to making any written communications to any Company Employee pertaining to the treatment of compensation or benefits in connection with the transactions contemplated by this Agreement or employment with Parent and its Affiliates (including the Surviving Corporation and its Subsidiaries) following the Effective Time, the Company shall provide Parent with a copy of the intended communication, and Parent shall have a reasonable period of time to review and comment on the communication, and the Company shall give reasonable and good faith consideration to any comments made by Parent with respect thereto.
(h) Nothing in this Agreement shall constitute an establishment or termination ofSection 7.04, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed express or implied, (i) is intended to or will be construed to shall confer upon or give to any Person (includingother than the parties hereto, for the avoidance of doubtincluding any current or former Service Provider, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assignsContinuing Employee, any third party beneficiaryright, legal benefit or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) remedy of any nature whatsoever under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reasonAgreement, (ii) provide shall establish, or constitute an amendment, termination or modification of, or an undertaking to amend, establish, terminate or modify, any Person any right to employment Employee Plan or service other benefit plan, program, agreement or continued employment arrangement, (iii) shall alter or service with limit the ability of Parent or any of its Subsidiaries (including or, following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation Company or any of their Affiliates from terminatingits Subsidiaries) to amend, revising modify or amending terminate any Employee Benefit Plan sponsoredor any other benefit plan, program, agreement or arrangement at any time assumed, established, sponsored or maintained by any of them or contributed to by (iv) shall create any obligation on the Companypart of Parent or its Subsidiaries (or, Parent following the Effective Time, the Company or any of their respective its Subsidiaries) to employ or engage any Service Provider for any period following the Effective Time.
Appears in 3 contracts
Samples: Merger Agreement (Exxon Mobil Corp), Merger Agreement (Pioneer Natural Resources Co), Merger Agreement (Pioneer Natural Resources Co)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for For a period commencing on the Closing Date and ending on the first (1st) anniversary of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof its Subsidiaries who remains employed by Parent, Buyer or any of their Affiliates (each, a “Company Continuing Employee”) shall be provided with annual receive from Parent or Buyer (or their applicable Affiliate) (i) at least the same base salary or base wage rate, and employee benefits the same target annual bonus opportunity that are, in the aggregate, substantially comparable was provided to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Continuing Employee immediately prior to the Closing Date; provided(ii) long-term incentive opportunities that are substantially as favorable in the aggregate as the long-term incentive opportunities provided to similarly situated employees of Parent, however, Buyer or their Affiliates and (iii) other compensation and employee benefits (excluding those contemplated by clauses (i) and (ii) and severance (which is covered in Section 6.02(b))) that are substantially as favorable in the covenants within this Section 6.9(b) shall not apply aggregate to the Company Employees listed compensation and benefits provided to similarly situated employees of Parent, Buyer or their Affiliates.
(b) Any Continuing Employee who incurs a termination of employment during the period commencing on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date and ending on the first (the “Excluded Employees”1st) which Excluded Employees will, on and after anniversary of the Closing Date, only Date shall be entitled to receive the severance payments and benefits set forth in and subject that such Continuing Employee would have been entitled to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with receive from the Company and its Subsidiaries, Affiliates under its applicable written severance plans and policies as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, and that have been made available to the extent that such credit does not result Parent and Buyer in duplicate benefitsaccordance with Section 3.18(b) of this Agreement.
(ec) The Parties Parent and Buyer shall, or and shall cause the Surviving Corporation and its Subsidiariesany of their applicable Affiliates to, to take use commercially reasonable efforts to (i) waive all limitations as to any limitation on health pre-existing condition or waiting periods in its applicable welfare plans with respect to participation and coverage requirements applicable to each Continuing Employee under any welfare plans that such Continuing Employee may be eligible to participate in after the Closing and (ii) credit each Continuing Employee for any copayments, deductibles, offsets or similar payments made under a Company Plan during the plan year that includes the Closing for purposes of satisfying any Company Employees applicable copayment, deductible, offset or similar requirements under the comparable plans of Parent, Buyer or any of their coveredAffiliates. As of the Closing, Parent and Buyer shall, or shall cause any of their applicable Affiliates to, credit to Continuing Employees the amount of vacation time that such employees had accrued under any applicable Company Plan as of the Closing, in each case, insofar as not prohibited by applicable Law. In addition, as of the Closing, Parent and Buyer shall, and shall cause their applicable Affiliates to give Continuing Employees full credit for purposes of eligibility, vesting and determination of level of benefits under any employee benefit and compensation plans or arrangements (including for purposes of vacation and severance but excluding for any purpose benefits under defined benefit plans, retiree medical plans, frozen or grandfathered benefit plans or benefit plans under which similarly-situated employees of Parent and its Affiliates do not receive any service credit) maintained by Parent, Buyer or their applicable Affiliates that such Continuing Employees may be eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence participate in after the Closing for such Continuing Employees’ service with the Company or any of good health under the applicable Parent Benefit Plan its Subsidiaries to the same extent that such service was credited for purposes of any comparable Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, Plan immediately prior to the Closing DateClosing, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been madeexcept, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan treatment would result in effect immediately prior to the Closing Dateduplicative benefits.
(fd) Prior Notwithstanding the generality of Section 9.10, the provisions of this Section 6.02 are solely for the benefit of the Parties, and no current or former Company Service Provider or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Section 6.02. In no event shall the terms of this Agreement be deemed to confer upon any Company Service Provider any right to continued employment with Buyer or any of its Affiliates (including, following the Acceptance Time, the Company and its Subsidiaries) or to limit the ability of Buyer, or any of its Affiliates to terminate the employment of any employee at any time and for any reason. Nothing herein shall be deemed to establish, amend, modify or cause to be adopted any Company Plan or any other benefit plan, program, agreement or arrangement maintained or sponsored by Buyer, the Company or any of their respective Affiliates.
(e) From and after the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company and Buyer shall cause the Company and its Subsidiaries to take honor the terms of all necessary and appropriate actions Labor Agreements to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under which the Company 401(k) Planor its Subsidiaries are bound. In addition, the terms of employment of all Continuing Employees represented by a labor union, works council or other labor organization in each caseconnection with their employment or any other Continuing Employees employed in any jurisdiction where it is not permitted to differentiate between union and non-union employees in terms of compensation and/or benefits shall be governed by any such obligations, effective no later rather than the Business Day preceding terms of this Agreement.
(f) Notwithstanding anything to the contrary contained herein, from and after the Closing Date; provided, howeverParent and Buyer shall cause the Company to honor, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior in accordance with their terms without giving effect to any amendments thereto after the Closing Date (or such earlier date approved by the Bankruptcy Court, except if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan adopted in accordance with Section 409A the terms of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B)applicable arrangement, as applicable). The Company shall provide Parent with an advance copy all benefits and obligations under the employment and severance agreements of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))its Affiliates.
(g) Nothing The occurrence of the Closing shall be deemed to be a change in this Agreement shall constitute an establishment control (or termination of, a similar term) under all Company Plans.
(h) Any written or an amendment to, oral communications to any Company Service Provider pertaining to compensation or be construed as establishing, terminating benefit matters that relate to or amending, any Employee Benefit Plan sponsored, maintained or contributed to are affected by the CompanyTransactions shall be provided to Parent for prior approval by Parent (such approval not to be unreasonably withheld, Parent conditioned or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliatesdelayed), other than it being agreed that Parent shall have a reasonable time to review any such communication and that Parent and the Parties and their respective permitted successors and assigns, Company shall cooperate in providing any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariessuch mutually agreeable communication.
Appears in 3 contracts
Samples: Purchase Agreement (Thermo Fisher Scientific Inc.), Purchase Agreement (Patheon N.V.), Purchase Agreement (Patheon N.V.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree agrees that for a period of 12 months following the Closing DateCompany Merger Effective Time (or, if an applicable employee’s employment earlier terminates, through such date of termination) (the “Continuation Period”), and subject to the last sentence of this Section 6.9(a), Parent shall, or shall cause the applicable Subsidiary of Parent to, provide each employee of the Company and its Subsidiaries who is employed as an employee of the Company and its Subsidiaries immediately prior to the Closing Date by and who continues in employment with Parent following the Company or a Subsidiary thereof Closing (each, a “Company Continuing Employee”): (i) shall be provided with annual base salary or base hourly wage rate, as applicable, and employee a target annual cash bonus opportunity, (ii) severance and termination benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for applicable to such Company Continuing Employee (if applicable) immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to before the Company Employees listed on Merger Effective Time, and which severance and termination benefits are set forth in Schedule 6.9(b6.9(a)(i) of the Company Disclosure LetterLetter and (iii) employee benefits (excluding severance and termination benefits, which shall consist defined benefit pension, post-employment health and welfare benefits, and change of the individuals control, retention or other one-off awards (collectively, “Excluded Benefits”)) that are a party (A) substantially the same in the aggregate to those certain Retention the compensation and Sale Payment retention agreements executed with the Company employee benefits to which such Continuing Employee was entitled immediately prior to the Closing Date Company Merger Effective Time, (B) substantially the same in the aggregate to the compensation and employee benefits provided to similarly-situated employees employed by Parent or any of its Subsidiaries, or (C) a combination of the foregoing. For the avoidance of doubt, nothing in this Section 6.9(a) shall prevent Parent or any of its Subsidiaries from converting the method of payment for any Continuing Employee from salaried to an hourly basis or vice versa. Parent hereby acknowledges that the transactions contemplated by this Agreement shall constitute a “Excluded Employees”) which Excluded Employees will, on change in control,” “change of control” or term or concept of similar import of the Company and its Subsidiaries under the terms of the Company Benefit Plans. From and after the Closing DateCompany Merger Effective Time, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation shall honor all obligations and its Subsidiaries, to assume rights under the Company Benefit Plans in accordance with their terms and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Continuing Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c6.9(a)(ii) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments or terminations otherwise permitted by the terms of the applicable agreementsarrangements.
(db) From and after the Company Merger Effective Time, as applicable, the Parties Parent shall, or shall cause the Surviving Corporation and its Subsidiariesrespective Subsidiaries to, to take commercially reasonable best efforts to credit the Company Continuing Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent any Employee Benefit Plans and the Company Benefit Plans, as applicable, Plan (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits benefits, equity or to equity based award granted after the extent it would result in a duplication of benefits Company Merger Effective Time or nonqualified deferred compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rightsplans) in which the Company Continuing Employees participate, for such Company Continuing Employees’ service with the Company and its Subsidiaries, as applicable, Subsidiaries to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsbenefits or compensation.
(ec) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially use reasonable best efforts to (i) waive any limitation on health coverage of any Company Continuing Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent any Employee Benefit Plan in which the Continuing Employees participate to the extent such Company Continuing Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, Plan immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Company Benefit Plan Plan, and (ii) give each Company Continuing Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(fd) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (Ai) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (Bii) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable)Closing. The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f6.9(d) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Company Merger Effective Time, Parent shall use commercially reasonable efforts to take any and all action reasonable actions as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Continuing Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Continuing Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d6.9(b)).
(ge) Nothing On the regularly-scheduled payment date for annual bonuses under the Company’s short-term cash incentive plan for the 2022 calendar year (the “2022 Bonus Plan”), the Company shall pay each employee participating in the 2022 Bonus Plan that remains employed with the Company and its Subsidiaries through such date, an amount equal to (i) 50% multiplied by (ii) 135% of such employee’s target annual bonus in respect of calendar year 2022 (the amount in this Agreement shall constitute an establishment or termination ofclause (ii), the “2022 Bonus”). Within five (5) Business Days following the Closing Date, Parent shall, or an amendment shall cause the Surviving Corporation and its respective Subsidiaries to, pay each Company Employee who participated in the 2022 Bonus Plan and who remains employed through the Closing Date and (x) who continues in employment with Parent following the Closing or be construed (y) who undergoes an Involuntary Termination (as establishingdefined below) on the Closing Date at the direction of Parent, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed an amount equal to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit 50% of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for 2022 Bonus. For the avoidance of doubt, the payments described in this Section 6.9(e) shall be in lieu of, and shall not be in addition to, any other payment under the 2022 Bonus Plan. Following the date of this Agreement, the Company Employee Board (or if appropriate, any committee thereof administering the 2022 Bonus Plan) shall pass any necessary resolutions or take any other required action in order to effect the foregoing provisions of this Section 6.9(e). The Company shall provide Parent with copies of any such resolutions or other current applicable documentation (including communications to employees) prior to approval by the Company Board (or former employee the appropriate committee thereof, as applicable), communication to employees, or other applicable action (as applicable), and shall consider in good faith any reasonable comments provided by Parent thereon.
(f) Continuing Employees who were eligible to participate in the Company’s short-term cash incentive plan for the 2023 calendar year (the “2023 Bonus Plan” and each such Continuing Employee, a “Participating Employee”) shall cease participation in the 2023 Bonus Plan and shall commence participation in Parent’s short-tern cash incentive program for the 2023 calendar year (the “Parent 2023 Bonus Program”), in each case, effective as of the CompanyCompany Merger Effective Time. In the event that a Participating Employee experiences an Involuntary Termination (a “Separated Participant”) (the date of such Separated Participant’s termination of employment, the “Participant’s Separation Date”) prior to the regularly scheduled payment date for annual bonuses under the Parent 2023 Bonus Program, solely to the extent that such Participating Employee is not already entitled to a prorated annual cash incentive payment pursuant to an existing Severance Arrangement (as defined in Schedule 6.9(a) of the Company Disclosure Letter), Parent shall pay, or any of their respective Affiliates)shall cause the Surviving Corporation to pay, other than to such Separated Participant, an amount in cash equal to the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including Separated Participant’s annual cash incentive payment with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to 2023 calendar year, (i) prevent based on Parent’s assessment of performance through the Participant’s Separation Date and (ii) prorated for the number of days that have elapsed in such calendar year through and including the Participant’s Separation Date, within thirty (30) days following such Participant’s Separation Date. “Involuntary Termination” means termination of such Participating Employee’s employment by the Company or its Affiliates without “Cause” (as defined in the Company Equity Plan). With respect to any Company Employee (i) who was eligible to participate in the 2023 Bonus Plan and (ii) whose employment is terminated in an Involuntary Termination on the Closing Date at the direction of Parent, solely to the extent that such Company Employee is not already entitled to a prorated annual cash incentive payment pursuant to an existing Severance Arrangement (as defined in Schedule 6.9(a) of the Company Disclosure Letter), Parent shall, or shall cause the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Personand its respective Subsidiaries to, including a pay each such Company Employee, at any time an amount in cash equal to such Company Employee’s target annual cash incentive payment with respect to the 2023 calendar year, prorated for the number of days that have elapsed in such calendar year through and for any reasonincluding the Closing Date, within thirty (ii30) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including days following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesClosing Date.
Appears in 3 contracts
Samples: Merger Agreement (Baytex Energy Corp.), Merger Agreement (Ranger Oil Corp), Merger Agreement (Ranger Oil Corp)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, Parent shall honor all Company Benefit Plans, Company Pension Plans and Company Other Plans in accordance with their terms as in effect immediately before the Effective Time, provided that nothing herein shall limit the right of the Surviving Entity or Parent to amend or terminate such plans, arrangements and agreements in accordance with their terms. For a period of one (1) year following the Effective Time, Parent shall provide, or shall cause to be provided, to each employee of the Company and its Subsidiaries who remains employed after the Effective Time (“Company Employees”)
(i) base salary or wages (as applicable), annual bonus opportunities, and employer matching contributions to a defined contribution retirement plan that are no less favorable than the Parties shallbase salary or wages (as applicable), annual bonus opportunities and employer matching contributions to a defined contribution retirement plan provided to such Company Employee immediately before the Effective Time, and (ii) equity award grants on a basis no less favorable to such Company Employee than the equity award grants made to similarly situated employees of Parent (other than Company Employees). For the period commencing at the Effective Time and ending on December 31, 2011, Parent agrees to cause the Surviving Entity to maintain health benefits and welfare benefits (other than severance benefits, which are addressed below) for each Company Employee at levels that are, in the aggregate, at least substantially comparable to such benefits provided to such Company Employee immediately before the Effective Time. Notwithstanding any other provision of this Agreement to the contrary, (A) Parent shall or shall cause the Surviving Entity to provide Company Employees whose employment terminates during the one-year period following the Effective Time with severance benefits in accordance with the Smurfit-Stone Container Corporation Severance Pay Plan for Salaried Employees (the “Company Severance Plan”) as in effect at the Effective Time and its Subsidiaries, (B) severance benefits provided to take commercially reasonable efforts to credit Company Employees under the Company Employees for Severance Plan during the one-year period following the Effective Time shall be determined without taking into account any reduction after the Effective Time in compensation paid to Company Employees.
(b) For all purposes (including purposes of vesting, eligibilityeligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time (the “New Plans”), severance each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, provided that the foregoing shall not apply with respect to benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits pension plan or to the extent it that its application would result in a duplication of benefits or compensation for with respect to the same period of service. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan is comparable to a Company Benefit Plan, Company Pension Plan or Company Other Plan in which such Company Employee participated immediately before the Effective Time (such plans, collectively, the “Old Plans”), and (ii) with respect for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the Excluded Employees, any severance benefits comparable Old Plans of the Company or rights) its Subsidiaries in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect employee participated immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or Effective Time and Parent shall cause the Surviving Corporation and its Subsidiaries, to take commercially use reasonable best efforts to (i) waive cause any limitation on health coverage of any deductibles, co-insurance and maximum out-of-pocket requirements paid by Company Employees or under any of their coveredthe Old Plans providing medical, eligible dependents due to pre-existing conditions dental, pharmaceutical and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for vision benefits in the plan year in which the Closing Date occurs to be credited towards applicable deductibles and annual out-of-pocket such limits for medical expenses incurred under the New Plans providing medical, dental, pharmaceutical and/or vision benefits.
(c) Immediately prior to the Effective Time, the Company shall pay to each Company Employee employed as of immediately prior to the Effective Time and then participating in any bonus plans established by the Company with respect to the Company’s fiscal year ending December 31, 2011 (the “2011 Bonus Plans”), a bonus under the 2011 Bonus Plans for the period from January 1, 2011 through the Closing Date (the “Bonus Period”) equal to the greater of (A) such Company Employee’s bonus entitlement for the Bonus Period under the 2011 Bonus Plans based on the level of achievement of the applicable performance goals for the period beginning on January 1, 2011 and ending as of the end of the month immediately preceding the month in which payment has been madethe Effective Time occurs (or as of the end of the month in which the Effective Time occurs if the Effective Time coincides with the end of the month) and assuming that the Company’s performance for the period from such month end through the Closing Date is equal to the level of achievement for the period through such month end, and (B) such Company Employee’s bonus entitlement for the Bonus Period under the 2011 Bonus Plans assuming target performance through the Closing Date. Any determinations with respect to bonus awards shall be made consistent with the Company’s past practice. The intent of this provision is to provide each Company Employee with a partial year bonus under the 2011 Bonus Plans with respect to the Bonus Period.
(d) Nothing in each casethis Section 6.20 shall be construed to limit the right of Parent or any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries) to amend or terminate any Company Benefit Plan, Company Pension Plan, Company Other Plan or other employee benefit plan, to the extent such amendment or termination is permitted by the terms of the applicable insurance plan provider and only plan, nor shall anything in this Section 6.20 be construed to the extent such deductibles require Parent or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries) to retain the employment of any particular Company Employee for any fixed period of time following the Closing Date.
(e) Without limiting the generality of Section 9.9, the provisions of this Section 6.20 are solely for the benefit of the parties to this Agreement, and no current or former employee, director or independent contractor or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of the Agreement, and nothing herein shall be construed as an amendment to any Company Benefit Plan, Company Pension Plan, Company Other Plan or other employee benefit plan for any purpose.
(f) Prior to making any equity awards permitted under Section 5.1(c) of the Closing Date, (i) if requested by Parent in writing at least three (3) days before the ClosingCompany Disclosure Letter, the Company shall cause amend Section 5.8 of the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Stock Plan to accept any “eligible rollover distributions” (within provide that the meaning of accelerated vesting provisions contained in such Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement 5.8 shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including not apply with respect to the matters provided for in this Section 6.9) under or by reason of Merger to any provision equity awards made after the date of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 3 contracts
Samples: Merger Agreement (Rock-Tenn CO), Merger Agreement (Rock-Tenn CO), Merger Agreement (SMURFIT-STONE CONTAINER Corp)
Employee Matters. (a) Between the date hereof and As of the Effective Time, all rights and obligations arising from any employment contract or employment relationship existing in the Company or in any of its subsidiaries, shall (and be transferred to the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingSurviving Corporation.
(b) The Parties agree that for a During the twelve (12) month period of 12 months following commencing on the Closing DateEffective Time, Buyer shall provide or shall cause the Surviving Corporation to provide to (after giving effect to the Spin-Off) each employee who is employed as current employee, officer, director or consultant of the Company and any of its subsidiaries at Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee” and collectively, the “Company Employees”) shall be (i) compensation no less favorable than the compensation being provided with annual base salary or base wage rateto Company Employees immediately prior to the Effective Time (including equity-based compensation, as valued by Buyer in good faith), and (ii) benefits under employee benefits benefit plans that areare the same or substantially comparable in the aggregate to, in the aggregatesole discretion of Buyer, substantially comparable either (A) those currently provided by the Company and its Subsidiaries to such employees under the Company Benefit Plans as of the Closing Date (excluding equity-based plans) or (B) those in effect for similarly provided by Buyer and its Subsidiaries to comparably situated employees from time to time during such twelve (12) month period.
(c) For purposes of Parent eligibility, vesting, determination of the level of benefits and its Subsidiariesbenefit accrual under the Employee Benefit Plans of Buyer, the Company, the Company’s subsidiaries and their respective affiliates providing benefits to any Company Employees after the Closing (the “New Plans”), and for purposes of accrual of vacation and other paid time off and severance benefits under New Plans, each Company Employee shall be credited with his or her years of service with the Company, the Company subsidiaries and their respective affiliates (and any additional service with any predecessor employer) before the Closing, to the same extent as such Company Employee was entitled, before the Closing, to credit for such service under any similar Company Benefit Plan. In addition, a and without limiting the generality of the foregoing: (i) each Company Employee whose employment is involuntarily terminated other than for cause within shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the period of 12 months following the Closing Date (or extent coverage under such longer change in control New Plan replaces coverage period as required under the applicable a comparable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those Plan in effect for which such Company Employee participated immediately before the replacement; and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Buyer shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, and Buyer shall cause any eligible expenses incurred by such employee and his or her covered dependents under any Company Benefit Plan during the portion of the plan year of the New Plan ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(d) Without limiting the generality of the foregoing, as of the Effective Time, Buyer shall cause the Surviving Corporation to honor in accordance with their terms all employment, change in control, severance and other compensation agreements and arrangements existing prior to the Closing Date; provided, however, that the covenants within execution of this Section 6.9(b) shall not apply to Agreement which are between the Company Employees listed on Schedule 6.9(band any subsidiary and any Company Employee and set forth in Section 6.10(d) of the Company Disclosure LetterSchedule (each, which a “Company Executive Agreement”); subject, in each case, to any amendment or termination thereof that may be permitted by the terms of such agreements or arrangements; provided, that no such amendment or termination shall consist be effected by Buyer or the Surviving Corporation if it would adversely affect an employee’s (or former employee’s) rights resulting from the or relating to the Merger, this Agreement or the other transactions contemplated hereby. The Company and Buyer hereby agree that the occurrence of the individuals that are Closing shall constitute a party to those certain Retention and Sale Payment retention agreements executed with the “Change in Control” for purposes of any Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits Executive Agreement set forth in and subject to the terms and conditions Section 6.10(d) of the Retention and Sale Payment retention agreements provided to ParentCompany Disclosure Schedule.
(ce) Parent shallFollowing the Effective Time, or Buyer shall cause the Surviving Corporation and its Subsidiaries, subsidiaries to assume and honor their respective obligations under all employment, severance, change in control, retention and other any Company collective bargaining agreements, if anyand to preserve the status and functions of any union representative of the current Company Employees, or any current Company Employee serving as a liaison between the Company (or a Subsidiary thereof) Employees and a Company Employeeapplicable unions, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that same terms and subject to the foregoing shall not be construed same conditions as existed prior to limit any amendments otherwise permitted by the terms of the applicable agreementsEffective Time.
(df) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, If requested by Buyer at least five (other than (i5) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately business days prior to the Closing Date, the Company shall take (or cause to be taken) all actions reasonably necessary or appropriate to terminate, effective no later than the extent that such credit does not result in duplicate benefits.
(e) The Parties shallEffective Time, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan that contains a cash or deferred arrangement intended to be qualified qualify under Section 401(a401(k) of the Code (the a “Company 401(k) Plan”) ). If the Company is required to be terminated and (B) all participants to cease participating under the terminate any Company 401(k) Plan, in each case, effective no later than then the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days Company shall provide to Buyer prior to the Closing Date (or such earlier date approved written evidence of the adoption by the Bankruptcy Court, if applicable), Board of Directors of the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate of resolutions authorizing the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, termination of such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning form and substance of Section 402(c)(4) of the Code) in the form of cash in an amount equal which resolutions shall be subject to the full account balance distributed prior review and approval of Buyer, which approval shall not be unreasonably withheld or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)delayed).
(g) Nothing This Section 6.10 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein6.10, expressed or implied, is intended or will be construed to confer upon any other person any rights or give remedies of any nature whatsoever under or by reason of this Section 6.10. Without limiting the foregoing, no provision of this Section 6.10 will create any third party beneficiary rights in any current or former employee, director or consultant of the Company or its subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 6.10 is intended to amend any Person Company Benefit Plan, or interfere with Buyer’s or the Surviving Corporation’s right from and after the Effective Time to amend or terminate any Company Benefit Plan or the employment or provision of services by any director, employee, independent contractor or consultant.
(including, for h) For the avoidance of doubt, this Section 6.10 shall not apply to any Company Employee or other current or former employee employees, officers, directors or consultants of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesCPEX.
Appears in 3 contracts
Samples: Merger Agreement (Teva Pharmaceutical Industries LTD), Merger Agreement (Bentley Pharmaceuticals Inc), Merger Agreement (Teva Pharmaceutical Industries LTD)
Employee Matters. (a) Between Except where an applicable collective bargaining agreement or similar labor agreement or arrangement requires otherwise, for the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following beginning on the Closing Date, each employee who is employed as Date and ending on the one year anniversary of the Closing Date by (the “Continuation Period” ), Parent shall provide, or cause to be provided, to each employee of the Company or a any of its Subsidiaries who continues to be employed immediately following the Merger Effective Time by Parent, the Surviving Corporation or any respective Subsidiary thereof (each, a “Company Continuing Employee”) shall and for as long as such employee continues to be provided employed during the Continuation Period by the Parent, Surviving Corporation or any Subsidiary thereof, with annual (i) the same base salary or base wage rate, rate and employee benefits that areshort-and-long-term incentive opportunities that, in each case, were provided to the aggregateContinuing Employee by the Company or its Subsidiaries immediately prior to the date hereof (provided that, in lieu of any equity-based incentive opportunities provided by the Company prior to the Offer Closing, Parent may substitute cash-based incentive opportunities of equal target value) and (ii) participation in employee benefit plans and programs that are substantially comparable in the aggregate to those benefits provided to the Continuing Employee under the employee benefit plans and programs of the Company and its Subsidiaries immediately prior to the date hereof; provided that nothing in this Section 7.10 or otherwise in this Agreement shall confer upon any Continuing Employee the right to continue in employment following the Merger Effective Time, or is intended to interfere with Parent’s, the Surviving Corporation’s or any of their respective Subsidiaries’ rights (subject to Applicable Law) to terminate the employment of any Continuing Employee for any reason or no reason following the Merger Effective Time. Without limiting the generality of the foregoing, for the one year period beginning on the Closing Date, Parent shall maintain, or cause to be maintained, in effect the existing terms of the severance and layoff plans provided to Parent prior to the Determination Date and set forth on Section 7.10(a) of the Company Disclosure Letter and applicable to Continuing Employees immediately before the Offer Closing; for the avoidance of doubt, any modifications to the severance and layoff plans following the Determination Date shall be disregarded for purposes of determining Parent’s compliance with the foregoing obligation.
(b) In furtherance and not in limitation of the provisions of this Section 7.10, the Parent and its Subsidiaries shall, as of the Merger Effective Time, recognize the Liabilities and obligations for earned or accrued but unused vacation time, paid time off, sick time and personal holidays in respect of each Continuing Employee (“Accrued Time Off”). Parent and its Subsidiaries shall allow Continuing Employees to utilize such Accrued Time Off subject to any maximums for vacation carryovers as in effect as of the Merger Effective Time under the Company’s applicable vacation, paid time off, sick time and personal holidays policies. During the Continuation Period, Continuing Employees shall receive vacation, paid time off, sick time and personal holidays benefits under the terms of the vacation, paid time off, sick time and personal holidays benefit policies of Parent and its Subsidiaries applicable to similarly situated employees of Parent and its Subsidiaries. In addition, in each case after giving credit for each Continuing Employee’s service with the Company and its Subsidiaries to the same extent such service would have been recognized by the Company and its Subsidiaries.
(c) The group health plan, disability plan and other plans established or made available by Parent, the Surviving Corporation and their respective Subsidiaries for the benefit of Continuing Employees and their dependents and other beneficiaries in accordance with this Section 7.10 shall not contain any exclusion or limitation with respect to any preexisting condition for a Continuing Employee or his or her dependents or other beneficiaries except to the extent such condition was taken into account under comparable plans of the Company Employee whose employment is involuntarily terminated other than and its Subsidiaries and shall credit all such individuals with any deductibles and out-of-pocket maximums incurred or paid by or on behalf of such individuals for cause within the period of 12 months following calendar year which includes the Closing Date (Date. Each Continuing Employee shall receive full credit under each plan, program, policy or other arrangement for his or her service as an employee of Parent, the Surviving Corporation and their respective Subsidiaries on the same basis that he or she would have received such longer change in control coverage period credit if such service had been completed as required under an employee of the applicable Company Benefit Plan) shall be provided with severance benefits (subject to or its Subsidiaries for purposes of satisfying any applicable release requirementsservice requirement to receive compensation or to participate in any such plan, program, policy or other arrangement and any service requirement to receive the benefit provided under each such plan, program, policy or other arrangement.
(d) that are no less favorable than those With respect to each bonus or other cash incentive, variable pay or sales incentive plan in effect for such Company which a Continuing Employee participates immediately prior to the Closing (excluding for the avoidance of doubt all Company Cash Awards), as set forth on Section 7.10(d) of the Company Disclosure Letter and in the form provided to Parent prior to the date hereof (collectively, the “Bonus Plans”), (i) if the Closing occurs prior to the completion of the 2018 fiscal year or prior to payment being made to such Continuing Employee under the applicable Bonus Plan with respect to the 2018 fiscal year, the Company or one of its Subsidiaries shall pay to such Continuing Employee, on the regularly scheduled payment date, the Bonus Amount (as defined below) through the payroll system of the Company or such Subsidiary and less all applicable deductions and withholdings and (ii) if the Closing occurs during the 2019 fiscal year, the Company or one of its Subsidiaries shall pay to such Continuing Employee, on the Closing Date; provided, howeverthe Bonus Amount, that pro-rated through the covenants within Closing Date, through the payroll system of the Company or such Subsidiary and less all applicable deductions and withholdings. For purposes of this Section 6.9(b7.10(d), the “Bonus Amount” for any Continuing Employee, means an amount equal to the greater of (i) the amount payable to such Continuing Employee under the applicable Bonus Plan for the applicable fiscal year based on actual performance and (ii) the amount payable to such Continuing Employee under the applicable Bonus Plan for the applicable fiscal year assuming target level performance; provided that in no event will any payment under this Section 7.10(d) be made if such payment would result in any duplicative amount being paid to any Continuing Employee under the severance and layoff plans set forth on Section 7.10(a) of the Company Disclosure Letter or otherwise; provided that any pro rata bonus payment provided under this Section 7.10(d) shall not apply be deemed to the Company Employees listed be duplicative of any target bonus payment provided under any severance or layoff plan set forth on Schedule 6.9(bSection 7.10(d) of the Company Disclosure Letter, which shall consist .
(e) Effective as of the individuals that are a party Merger Effective Time, Parent (i) shall cover (or cause to those certain Retention be covered) each Continuing Employee who is based primarily in the United States and Sale Payment retention agreements executed with who participated in the Company 401(k) Savings Plan (the “Company 401(k) Plan”) under one or more defined contribution plans and trusts intended to qualify under Section 401(a) of the Code (collectively, the “Parent DC Plan”) and (ii) shall cause the Parent DC Plan to accept, in accordance with Applicable Law, a “direct rollover” (within the meaning of Section 401(a)(31) of the Code) of each Continuing Employee’s account balances (including earnings thereon through the date of transfer and including promissory notes evidencing any outstanding loans) under the Company 401(k) Plan if such rollover to the Parent DC Plan is elected in accordance with Applicable Law and each applicable plan by such Continuing Employee. Parent shall or shall cause its Subsidiaries (including the Surviving Corporation) (i) to pay on behalf of each Continuing Employee all matching contributions that accrued on or prior to the Offer Closing Date under the terms of the Company 401(k) Plan without regard to whether any Continuing Employee is employed as of the last day of the plan year and (the “Excluded Employees”ii) which Excluded Employees will, on and after the Closing Date, only to take all actions necessary to provide that all participant accounts (including employer matching contributions) will be entitled to receive the severance benefits set forth in and subject 100% vested as of immediately prior to the terms and conditions of the Retention and Sale Payment retention agreements provided to ParentOffer Closing.
(cf) Without limiting the foregoing, Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those honor in accordance with their terms all Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to at the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Offer Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing No provision of this Section 7.10 shall create any third-party beneficiary or other rights in this Agreement shall constitute an establishment any employee or termination of, former employee (including any beneficiary or an amendment to, dependent thereof) of the Company or be construed as establishing, terminating any of its Subsidiaries in respect of continued employment (or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, resumption of employment) with Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties its Affiliates, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any no provision of this Section 6.9. Nothing Agreement shall create any such rights in this Section 6.9 is intended to (i) prevent any such individuals in respect of any benefits that may be provided, directly or indirectly, under any employee benefit plan or arrangement which has been or may be established by Parent, the Surviving Corporation or any of their Affiliates from terminating respective Affiliates. Subject to Applicable Law, unless otherwise provided in this Agreement, no provision of this Agreement shall constitute a limitation on rights to amend, modify or terminate, either before or after the employment Merger Effective Time, or service of shall constitute or be treated as an amendment, modification or termination of, any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment employee benefit plan or service arrangement which has been or continued employment or service with may be established by Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAffiliates.
Appears in 3 contracts
Samples: Merger Agreement, Merger Agreement (Essendant Inc), Merger Agreement (Staples Inc)
Employee Matters. (a) Between No later than 60 days following the date hereof and the Effective Timehereof, the Buyer shall provide a list in writing to Seller of Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities Employees whose employment with the Company and its Subsidiaries, including with respect is to potential promotions, transfers, or job eliminations following be terminated prior to the Closing (each such employee shall be referred to as a “Seller Transferred Employee”). Prior to the Closing, Seller shall take, and shall cause the Company to take, all necessary actions to (i) transfer the employment of the Seller Transferred Employees and any other Company Employee who is not actively at work as of the Closing Date from the Company to Seller (or an Affiliate of Seller other than the Transferred Companies) or to terminate the employment of the Seller Transferred Employees and (ii) to cause Seller to make all payments pursuant to the applicable agreement listed on Schedule 5.12(a) of the Buyer Disclosure Schedule to any such terminated Seller Transferred Employees both before and after the Closing Date. Buyer shall reimburse Seller for all payments to any Seller Transferred Employees terminated prior to the Closing pursuant to the terms of the applicable agreement listed on Schedule 5.12(a) of the Buyer Disclosure Schedule in effect for such Seller Transferred Employee in accordance with the foregoing provisions of this Section 5.12(a). Each Company Employee other than the Seller Transferred Employees who remains employed by the Company as of the Closing Date and who works for Buyer on or after the Closing Date is herein referred to as a “Buyer Transferred Employee.”
(b) The Parties agree that for For a period of 12 months not less than one year following the Closing Date, each employee who is employed as of Buyer shall, or shall cause its Affiliates to, provide to the Closing Date by the Company or Buyer Transferred Employees with (i) a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or at least equal to the base wage rate, salary provided to each such Buyer Transferred Employee as disclosed to Buyer; and (ii) employee benefits that are, in the aggregate, substantially comparable no less favorable than the employee benefits provided by Buyer or its Affiliates to those in effect for similarly situated employees of Parent Buyer and its SubsidiariesAffiliates; provided, however, that the Buyer Transferred Employees shall not be eligible for severance pursuant to the terms of any severance plan of Buyer during any period that such Buyer Transferred Employee remains entitled to severance payments pursuant to the terms of his or her retention or other employment agreement; provided, further, however, that that Buyer may terminate any Buyer Transferred Employee’s employment at any time, with or without notice, for any reason or no reason. In additionBuyer will recognize all service of the Buyer Transferred Employees with the Company to the extent such service is taken into account under the Seller Benefit Plans for purposes of eligibility, a Company Employee whose employment is involuntarily terminated participation, vesting and benefit accrual (other than accrual of benefits under any defined benefit plan and not to the extent that such service would result in a duplication of benefits for cause within the same period of 12 months following service) under Buyer’s employee benefit plans, programs and policies.
(c) Prior to the Closing Date (or Date, Seller shall take, and shall cause the Transferred Companies to take, all necessary actions to effect the cessation of, and withdrawal from, participation by the Transferred Companies as a participating employer in all Seller Benefit Plans, with such longer change in control coverage period actions to be effective as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to of the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply Buyer agrees to the Company Employees make all payments listed on Schedule 6.9(bSection 5.12(c) of the Company Buyer Disclosure Letter, which shall consist of Schedule for the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior Buyer Transferred Employees pursuant to the Closing Date (the “Excluded Employees”) which Excluded Employees willRadian Group, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans Inc. STI Incentive Plan and the Company Benefit PlansRadian Group Inc. 2008 Long Term Performance Cash Plan as amended and restated on December 11, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made2012, in each case, to the extent permitted by the applicable insurance plan provider and only not paid prior to the extent such deductibles Closing. Except as listed on Section 5.12(c) of the Buyer Disclosure Schedule, Seller or limits its Affiliates (other than the Transferred Companies), as applicable, shall be responsible for medical expenses were satisfied all liabilities arising under or did not apply under the analogous Company in relation to each Seller Benefit Plan. For any Seller Benefit Plan in effect immediately that is a nonqualified deferred compensation plan, Buyer agrees to notify Seller within ten (10) days of the date that any Buyer Transferred Employee incurs a separation from service within the meaning of Section 409A of the Code.
(d) Prior to the Closing Date, Seller shall take, and shall cause the Transferred Companies to take, all necessary actions to transfer the employment of the employee listed on Section 5.12(d) of the Buyer Disclosure Schedule to the Company and to transfer the employment agreement between Seller and such employee to the Company. On or prior to the Closing Date, Seller shall make all payments to all Buyer Transferred Employees pursuant to the FG Transaction Incentive Plan.
(e) Prior to the Closing Date, Seller shall take, and shall cause the Transferred Companies to take, all necessary actions to effect the termination of the Enhance Reinsurance Company Supplemental Pension Plan and distribution of all accrued benefits from such plan. Seller or its Affiliates (other than the Transferred Companies), as applicable, shall be responsible for all liabilities arising under or in relation to the Enhance Reinsurance Company Supplemental Pension Plan.
(f) Prior to the Closing Date, Seller shall take, and shall cause the Transferred Companies to take, all necessary action to transfer all obligations in relation to the Enhance Postretirement Medical Plan and any obligation to provide postretirement life insurance from the Company to Seller. Seller or its Affiliates (other than the Transferred Companies), as applicable, shall be responsible for all liabilities arising under or in relation to the Enhance Postretirement Medical Plan and any obligation to provide postretirement life insurance.
(g) Prior to the Closing Date, Seller and the Buyer agree to work in good faith: (i) to make any necessary adjustments of the applicable performance goals for the previously made grants to Buyer Transferred Employees pursuant to the Radian Group Inc. 2008 Long Term Performance Cash Plan as amended and restated on December 11, 2012 and (ii), if requested Seller intends to make grants to Buyer Transferred Employees for 2015 pursuant to the Radian Group, Inc. STI Incentive Plan prior to the Closing Date, to set performance goals for the grants to Buyer Transferred Employees for 2015.
(h) Seller shall be responsible for the provision of group health plan continuation coverage pursuant to COBRA with respect to each Person who is an “M&A qualified beneficiary,” as defined in Treasury Regulations Section 54.4980B-9, with respect to the transactions contemplated by Parent this Agreement, who experiences a “qualifying event” as defined in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a4980B(f)(3) of the Code (the other than any Buyer Transferred Employee or his or her dependents who experience a “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding qualifying event” after the Closing Date; provided, however, that such actions may ). Buyer shall be contingent upon Closing and (ii) no sooner than responsible for the date thirty (30) days prior provision of group health plan continuation coverage pursuant to COBRA with respect to any Buyer Transferred Employee or his or her dependents who experience a “qualifying event” after the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Date.
(gi) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any No provision of this Section 6.9. Nothing 5.12 shall create any third-party beneficiary rights in this Section 6.9 any Company Employee (including any beneficiary or dependent thereof) nor is it intended to (i) prevent Parent, the Surviving Corporation amend or alter any benefit plan of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent Seller or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) Affiliates or any particular term or condition benefit plan of employment or service, or (iii) prevent Parent, the Surviving Corporation Buyer or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesits Affiliates.
Appears in 2 contracts
Samples: Stock Purchase Agreement (Assured Guaranty LTD), Stock Purchase Agreement (Radian Group Inc)
Employee Matters. (a) Between Unless otherwise agreed between Berkshire and the date hereof Continuing Employee (as defined below), Berkshire, as the Surviving Corporation, shall provide the employees of Brookline and its Subsidiaries as of the Effective Time (the “Continuing Employees”), during the period commencing at the Effective Time and ending on the first anniversary thereof (the “Continuation Period”), for so long as such Continuing Employees are employed with the Surviving Corporation or its Subsidiaries following the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
following: (bi) The Parties agree that for a period of 12 months following the Closing Date, (x) each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company such Continuing Employee”) shall be provided with ’s annual base salary or base wage ratewages, and employee benefits as applicable, that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for that provided to such Company Continuing Employee as of immediately prior to the Closing Dateand (y) annual cash incentive opportunities that are no less than the cash incentive opportunities provided to such Continuing Employee as of immediately prior to the Closing; and (ii) (x) all employee statutory entitlements; and (y) all employee benefits (other than severance which will be provided as set forth in the last sentence of this Section 6.7(a)) and other compensation (including long-term incentive compensation opportunities) that are substantially comparable in the aggregate to those provided to similarly situated employees of Berkshire and its Subsidiaries; provided, howeverthat with respect to clause (ii), that until such time as Berkshire fully integrates the covenants within this Section 6.9(bContinuing Employees into its plans, participation in the Brookline Benefit Plans (other than severance) shall not apply be deemed to satisfy the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letterforegoing standards, it being understood that the Continuing Employees may commence participating in the plans of Berkshire and its Subsidiaries on different dates following the Effective Time with respect to different plans. During the Continuation Period, each Continuing Employee who is not party to an individual agreement providing for severance or termination benefits and is terminated under severance qualifying circumstances shall be provided severance benefits set forth in Section 6.7(a) of the Berkshire Disclosure Schedule, subject to such employee’s execution (and non-revocation) of a release of claims. Prior to the Effective Time, Berkshire and Brookline shall cooperate in reviewing, evaluating and analyzing the Berkshire Benefit Plans and Brookline Benefit Plans.
(b) With respect to any employee benefit plans of Berkshire or its Subsidiaries in which any Continuing Employees become eligible to participate on or after the Effective Time (the “Surviving Entity Plans”), Berkshire, as the Surviving Corporation, and its Subsidiaries shall use commercially reasonable efforts to (i) waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents under any Surviving Entity Plans, (ii) provide each such employee and their eligible dependents with credit for any co-payments or coinsurance and deductibles paid prior to the Effective Time under a Brookline Benefit Plan that provides health care benefits, to the same extent that such credit was given under the analogous Brookline Benefit Plan prior to the Effective Time, in satisfying any applicable deductible, co-payment, coinsurance or out-of-pocket requirements under any Surviving Entity Plans, and (iii) recognize all service of such employees with Brookline and its Subsidiaries for all purposes in any Surviving Entity Plan to the same extent that such service was taken into account under the analogous Brookline Benefit Plan prior to the Effective Time for purposes of eligibility, participation and vesting (but not for purposes of benefit accrual), vacation entitlement and severance benefits; provided, that the foregoing service recognition shall not be construed apply (A) to limit the extent it would result in duplication of benefits for the same period of service, (B) for purposes of any amendments otherwise permitted by the terms defined benefit pension plan, or (C) for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits. As of the Effective Time, the Surviving Corporation shall credit each Continuing Employee the amount of vacation time that such employee had accrued under any applicable agreementsBrookline Benefit Plan as of the Effective Time.
(c) Unless otherwise agreed between Berkshire and Brookline, no later than ten (10) business days prior to the Effective Time, Brookline shall cause any 401(k) plan sponsored or maintained by Brookline and its Subsidiaries, including, without limitation, the Brookline Bancorp, Inc. 401(k) Plan (each, a “Brookline 401(k) Plan”) to be terminated effective as of the day immediately prior to the Effective Time and contingent upon the occurrence of the Closing. Brookline shall provide Berkshire with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and comment by Berkshire) not later than two (2) business days immediately preceding the Effective Time, and (ii) the Continuing Employees of Brookline shall be eligible to participate, effective as of the Effective Time, in a 401(k) plan sponsored or maintained by Berkshire or one of its Subsidiaries (an “Berkshire 401(k) Plan”), it being agreed that there shall be no gap in participation in a tax-qualified defined contribution plan. Berkshire and Brookline shall take any and all actions as may be required, including amendments to any Brookline 401(k) Plan and/or Berkshire 401(k) Plan, to permit the Continuing Employees of Brookline who are then actively employed to make rollover contributions to the Berkshire 401(k) Plan of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code).
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, Berkshire agrees to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual honor all obligations under the Parent employment agreements, change in control agreements, supplemental executive retirement plans, and similar arrangements as set forth on Section 6.7(d) of the Brookline Disclosure Schedule. Berkshire shall assume and honor all Brookline Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in listed on Section 3(356.7(d) of ERISA, retiree medical benefits or disability benefits or to the extent it would result Brookline Disclosure Schedule in a duplication of benefits or compensation for the same period of service, or (ii) accordance with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitstheir terms.
(e) The Parties shallTo the extent necessary, or shall cause Berkshire and Brookline may provide a retention pool up to the Surviving Corporation amount set forth on Section 6.7(e) of the Berkshire Disclosure Schedule and its SubsidiariesSection 6.7(e) of the Brookline Disclosure Schedule, respectively, to take commercially reasonable efforts enable Berkshire and Brookline to (i) waive any limitation on health coverage provide pay for performance retention incentives to certain employees of any Company Employees Berkshire or any of their coveredBrookline who are not covered by a written employment agreement, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements change in control agreement or similar agreement. The recipients and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Dateamounts will be mutually determined by Berkshire and Brookline. Such pay for performance retention incentives will be in addition to, and such conditionsnot in lieu of, periods or requirements are satisfied or waived under such Parent Benefit Plan any severance payment, including the amount that may be paid pursuant to Section 6.7(a). Such designated employees will enter into retention agreements to be provided by Berkshire and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior reasonably acceptable to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateBrookline.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later No earlier than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy CourtDate, if applicable), the Company Berkshire shall take and shall all actions, including through resolutions of the boards of directors of Berkshire, that may be necessary or appropriate, to cause its Subsidiaries to take all necessary and appropriate actions the non-qualified deferred compensation plans set forth in Section 6.7(f) of the Berkshire Disclosure Schedule to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant be paid out, in the Excess Planamounts set forth in Section 6.7(f) of the Berkshire Disclosure Schedule, such participant’s account balance under no later than the Excess Plan first payroll cycle following the Closing Date in accordance with Section 409A of the Code Code.
(including Treasury Regulation Section 1.409A-3(j)(4)(ix)(Ag) or As of the date of this Agreement, (B), as applicable). The Company i) Berkshire and Berkshire Bank shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to enter into the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as agreements set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a6.7(g) of the Code designated by Parent (Berkshire Disclosure Schedule with the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of individuals listed in Section 402(c)(46.7(g) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to Berkshire Disclosure Schedule, and such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan agreements shall be effective as of the Closing Date Date, and (subject to any applicable eligibility requirementsii) Brookline, but giving effect to Brookline Bank, PCSB Bank and Bank Rhode Island, as applicable, shall enter into the service crediting provisions agreements set forth in Section 6.7(g) of the Brookline Disclosure Schedule with the individuals listed in Section 6.9(d))6.7(g) of the Brookline Disclosure Schedule, and such agreements shall be effective as of the Closing Date.
(gh) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination ofconsultant of Brookline, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Berkshire or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Subsidiaries or affiliates any right to continue in the sole benefit employ or service of the Parties and nothing hereinSurviving Corporation, expressed Brookline, Berkshire or impliedany Subsidiary or affiliate thereof, is intended or will be construed to confer upon shall interfere with or give to restrict in any Person (including, for way the avoidance of doubt, any Company Employee or other current or former employee rights of the CompanySurviving Corporation, Parent Brookline, Berkshire or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee (including any Continuing Employee), officer, director or consultant of the Surviving Corporation, Brookline, Berkshire or any of their respective Affiliates)Subsidiaries or affiliates at any time for any reason whatsoever, other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal with or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9without cause. Nothing in this Section 6.9 is intended Agreement shall be deemed to (i) prevent Parentestablish, amend, or modify any Brookline Benefit Plan, Berkshire Benefit Plan, Surviving Entity Plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Corporation or any of their Affiliates from terminating the employment its Subsidiaries or service of affiliates to amend, modify or terminate any Personparticular Brookline Benefit Plan, including a Company EmployeeBerkshire Benefit Plan, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent Surviving Entity Plan or any of its Subsidiaries (including following other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of Section 9.11, the Surviving Corporation) nothing in this Agreement, express or implied, is intended to or shall confer upon any particular term person, including, without limitation, any current or condition former employee, officer, director or consultant of employment or serviceBrookline, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Berkshire or any of their respective SubsidiariesSubsidiaries or affiliates, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Brookline Bancorp Inc), Merger Agreement (Berkshire Hills Bancorp Inc)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, unless otherwise mutually determined by SunTrust and BB&T, BB&T shall provide generally to employees of SunTrust and its Subsidiaries who at the Effective Time become employees of BB&T or its Subsidiaries (the “Continuing Employees”), employee compensation and benefits under the BB&T Benefit Plans on terms and conditions that are substantially the same as applicablethose that apply to similarly situated BB&T employees; provided that BB&T may satisfy its obligation under this Section 6.6(a) for a transitional period (which transitional period shall end by the later of (i) December 31, 2019 and (ii) the six (6) month anniversary of the Closing Date) by providing compensation and benefits that are substantially the same in the aggregate as the compensation and benefits provided by SunTrust and its Subsidiaries to Continuing Employees immediately prior to the Effective Time. Prior to the Closing, SunTrust and BB&T shall cooperate in reviewing, evaluating and analyzing the BB&T Benefit Plans and SunTrust Benefit Plans with a view towards developing appropriate new benefit plans with respect to employees of the Surviving Entity and its Subsidiaries (which shall in any event include the BB&T Corporation Pension Plan and the BB&T Non-Qualified Defined Benefit Plan) (collectively, the Parties shall“New Benefit Plans”) for the employees covered thereby, or shall cause the Surviving Corporation and its Subsidiarieswhich New Benefit Plans will, to take commercially reasonable efforts to credit the Company Employees extent permitted by applicable law, and among other things, (A) treat similarly situated employees on a substantially equivalent basis, taking into account all relevant factors, including duties, geographic location, tenure, qualifications and abilities, and (B) not discriminate between employees who were covered by BB&T Benefit Plans, on the one hand, and those covered by SunTrust Benefit Plans, on the other hand, at the Effective Time. Notwithstanding the foregoing, BB&T and SunTrust agree that, during the period commencing at the Effective Time and ending on the first anniversary thereof, any continuing employee of BB&T, SunTrust or any of their respective Subsidiaries who is involuntarily terminated during such one (1)-year period will be provided with severance as described in Section 6.6(a) of the BB&T Disclosure Schedule.
(b) For purposes of eligibility, participation, vesting and benefit accrual (except not for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits pension plan or to the extent it that such credit would result in a duplication of benefits or compensation for benefits) under the same period of serviceBB&T Benefit Plans, or (ii) with respect to SunTrust Benefit Plans and the Excluded EmployeesNew Benefit Plans, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and or credited by BB&T, SunTrust or any of their respective Subsidiaries or predecessors for Continuing Employees or continuing employees of BB&T or its Subsidiaries, Subsidiaries shall be treated as applicable, service with BB&T to the same extent and for the same purposes that such service was taken into account under a corresponding Company the analogous SunTrust Benefit Plan or BB&T Benefit Plan prior to the Effective Time. With respect to any SunTrust Benefit Plan, BB&T Benefit Plan or New Benefit Plan in which any employees of BB&T or SunTrust (or their Subsidiaries) prior to the Effective Time first become eligible to participate on or after the Effective Time, and in which such employees did not participate prior to the Effective Time, the Surviving Entity shall: (i) waive all preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents, except to the extent such pre-existing conditions, exclusions or waiting periods would apply under the analogous BB&T Benefit Plan or SunTrust Benefit Plan, as the case may be, and (ii) provide each such employee and his or her eligible dependents with credit for any co-payments and deductibles paid prior to the Effective Time (or, if later, prior to the time such employee commenced participation in the New Benefit Plan) under a BB&T Benefit Plan or SunTrust Benefit Plan (to the same extent that such credit was given under the analogous SunTrust or BB&T Benefit Plan) in satisfying any applicable deductible or out-of-pocket requirements under any SunTrust Benefit Plan, BB&T Benefit Plan or New Benefit Plan in which such employee first become eligible to participate after the Effective Time. Effective as of the later of January 1, 2020 and thirty (30) days after the Effective Time and subject to the immediately following sentence, the Continuing Employees shall become eligible to participate in the BB&T Corporation Pension Plan and the BB&T Non-Qualified Defined Benefit Plan on the same basis as similarly situated employees of BB&T and its Subsidiaries, except as otherwise mutually agreed by BB&T and SunTrust. For purposes of the foregoing, the Surviving Entity shall recognize (1) the service with SunTrust and its Subsidiaries of the Continuing Employees for purposes of eligibility to participate and vesting (but not benefit accrual) under the BB&T Corporation Pension Plan and (2) the service of the Continuing Employees who satisfy the eligibility requirements of the BB&T Non-Qualified Defined Benefit Plan as in effect immediately prior to the Closing Date, Effective Time and are designated by the compensation committee of the Board of Directors of the Surviving Entity as eligible to participate in such plan for purposes of eligibility to participate and vesting (but not benefit accrual) under the extent that such credit does not result in duplicate benefitsBB&T Non-Qualified Defined Benefit Plan.
(ec) The Parties shallSurviving Entity agrees to honor in accordance with their terms all BB&T Benefit Plans and SunTrust Benefit Plans. In addition, or shall cause prior to the Surviving Effective Time, BB&T may take such action as it deems necessary, including amending the BB&T Corporation and its SubsidiariesPension Plan and/or the BB&T Non-Qualified Defined Benefit Plan, to take commercially reasonable efforts to so that (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to preeach participant in the BB&T Corporation Pension Plan and BB&T Non-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Qualified Defined Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior Effective Time shall be entitled to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan continued benefit accrual on a basis no less favorable than in effect immediately prior to the Closing DateEffective Time (including as to any rights or features) for so long as such participant continues as an employee of the Surviving Entity or its Subsidiaries (or their respective successors or assigns) and (ii) following the Effective Time, the BB&T Corporation Pension Plan and BB&T Non-Qualified Defined Benefit Plan may not be terminated or amended so as to adversely impact any such participant or the benefit of any such participant, including any future benefit accruals or the vesting or entitlement to such future benefit accruals (including any rights or features of such accruals). Without limiting the foregoing and for purposes of clarity, any amendment to provide a lump sum cash out of a participant’s accrued pension benefit shall be deemed to adversely impact the participant for purposes of the foregoing clause (ii).
(fd) Prior If requested by BB&T in writing delivered to SunTrust not less than ten (10) business days before the Closing Date, the Board of Directors of SunTrust (ior the appropriate committee thereof) if requested by Parent in writing at least three (3shall adopt resolutions and take such corporate action as is necessary or appropriate to terminate the SunTrust Banks, Inc. 401(k) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company SunTrust 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case), effective no later than as of the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days day prior to the Closing Date (or such earlier date approved by and contingent upon the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A occurrence of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable)Effective Time. The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to If BB&T requests that the adoption or execution thereof. In the event the Company SunTrust 401(k) Plan is be terminated, (i) SunTrust shall provide BB&T with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and comment by BB&T) not later than two (2) days immediately preceding the Closing Date and (ii) the Continuing Employees shall be eligible to participate, effective as set forth in the preceding sentence, as soon as administratively practicable following of the Effective Time, Parent in a 401(k) plan sponsored or maintained by BB&T or one of its Subsidiaries (the “BB&T 401(k) Plan”), it being agreed that there shall use commercially reasonable efforts to be no gap in participation in a tax-qualified defined contribution plan. BB&T and SunTrust shall take any and all action actions as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(athe SunTrust 401(k) of Plan and/or the Code designated by Parent (the “Parent BB&T 401(k) Plan”) , to (A) cause permit the Parent Continuing Employees to make rollover contributions to the BB&T 401(k) Plan to accept any of “eligible rollover distributions” (within the meaning of Section 402(c)(4401(a)(31) of the Code) in the form of cash cash, notes (in the case of loans), BB&T Common Stock or a combination thereof in an amount equal to the full account balance distributed or distributable to such Company Employee employee from the Company 401(k) Plan to the Parent SunTrust 401(k) Plan, including any outstanding loans and .
(Be) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect Prior to the service crediting provisions Effective Time, the Board of Section 6.9(d)Directors of BB&T shall take such action as is necessary to provide that the transactions contemplated by this Agreement are deemed a “merger of equals” for purposes of each BB&T Benefit Plan that provides the Board of Directors of BB&T with the ability to declare that a particular transaction constitutes a “merger of equals” and thus does not constitute a “change in control”, “change of control” or similar concept under such BB&T Benefit Plans (which determination shall not be revoked during the 12-month period following the Effective Time).
(gf) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination of, consultant of BB&T or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent SunTrust or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Subsidiaries or affiliates any right to continue in the sole benefit employ or service of the Parties and Surviving Entity, SunTrust, BB&T or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Entity, SunTrust, BB&T or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of BB&T or SunTrust or any of their Subsidiaries or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any SunTrust Benefit Plan, BB&T Benefit Plan, New Benefit Plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Entity or any of its Subsidiaries or affiliates to amend, modify or terminate any particular SunTrust Benefit Plan, BB&T Benefit Plan, New Benefit Plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of Section 9.11, nothing hereinin this Agreement, expressed express or implied, is intended to or will be construed to shall confer upon or give to any Person (includingperson, for the avoidance of doubt, including any Company Employee or other current or former employee employee, officer, director or consultant of the Company, Parent BB&T or SunTrust or any of their respective Affiliates), other than the Parties and their respective permitted successors and assignsSubsidiaries or affiliates, any third party beneficiaryright, legal benefit or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) remedy of any nature whatsoever under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 2 contracts
Samples: Merger Agreement (Bb&t Corp), Merger Agreement (Suntrust Banks Inc)
Employee Matters. (a) Between Parent agrees that, during the date hereof and period commencing at the Effective TimeTime and ending on December 31, the Company 2016, Parent shall (and the Company provide, or shall cause its Subsidiaries to) make available to Parent be provided, with respect to the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee Subsidiaries who is are employed as of immediately prior to the Closing Date by the Company or a Subsidiary thereof Effective Time (each, a “Company Employee”), other than any Company Employee covered by a collective bargaining (or similar) shall be provided with annual agreement, (A) base salary or and annual cash bonus opportunities which are no less favorable than the base wage rate, salary and employee benefits that are, in annual cash bonus opportunities provided by the aggregate, substantially comparable to those in effect for similarly situated employees of Parent Company and its Subsidiaries. In additionSubsidiaries immediately prior to the Effective Time to each such Company Employee, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit PlanB) shall be provided with severance pension and welfare benefits (subject to satisfying excluding benefits under any applicable release requirementsdefined benefit pension plan) that are no less favorable than in the aggregate to those in effect for such provided by the Company Employee and the Company Subsidiaries immediately prior to the Closing DateEffective Time to the Company Employees and (C) severance benefits that are no less favorable than the severance benefits provided by the Company and the Company Subsidiaries immediately prior to the Effective Time; provided, however, that nothing in this Agreement shall prohibit the covenants within this Section 6.9(bSurviving Corporation from terminating the employment of any Company Employee.
(b) For purposes of vesting, level of benefits, vacation and sick time credit and eligibility to participate (but, for the avoidance of doubt, not for benefit accrual purposes) under the employee benefit plans, programs and policies of Parent and its Subsidiaries providing benefits to any Company Employee after the Effective Time (including the Company Benefit Plans) (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and the Company Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company Benefit Plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time; provided that the foregoing shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals extent that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it application would result in a duplication of benefits or compensation for with respect to the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date. In addition, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for without limiting the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) generality of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Timeforegoing, Parent shall use commercially reasonable efforts to take cause (i) each Company Employee to be immediately eligible to participate, without any waiting time, in any and all action as may be reasonably requiredNew Plans to the extent coverage under such New Plan is replacing comparable coverage under a Company Benefit Plan in which such Company Employee participated immediately before the Effective Time (such plans, including amendments collectively, the “Old Plans”), and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to a defined contribution retirement plan intended any Company Employee, any evidence of insurability requirements, all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be qualified waived for such Company Employee and his or her covered dependents, to the extent such conditions were inapplicable or waived under the comparable Old Plan. Parent shall use commercially reasonable efforts to cause any eligible expenses incurred by any Company Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such Company Employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Company Employee and his or her covered dependents for the applicable plan year. The provisions of this Section 401(a8.7(b) shall not apply to any Company Employee covered by a collective bargaining (or similar) agreement.
(c) Immediately following the Closing, Parent shall pay, or shall cause one of its Subsidiaries to pay, Company Employees a pro-rata bonus under the annual incentive plans listed in Section 5.16(a) of the Code designated by Company Disclosure Letter for the fiscal year in which the Effective Time occurs based on the accrual rate based on actual performance through the date of this Agreement (which is 125% of the target) with the bonus amounts to be the pro-rated portion of a full annual bonus based on the number of days that have elapsed in such fiscal year as of the Effective Time; provided that the amount of such pro rata bonus actually paid shall be offset against any other pro rata bonus to which the Company Employee may become entitled for the year in which the Closing occurs under any Company Benefit Plan.
(d) Parent (the hereby acknowledges that a “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any change in control” or “eligible rollover distributionschange of control” (within the meaning of the Company Benefit Plans will occur upon the Effective Time. From and after the Effective Time, Parent shall, and shall cause the Surviving Corporation to, honor and assume in accordance with their terms as in effect immediately before the Effective Time each Company Benefit Plan set forth on Section 402(c)(48.7(d) of the CodeCompany Disclosure Letter.
(e) in Parent and the form Company agree to take the actions set forth on Section 8.7(e) of cash in an amount equal the Company Disclosure Letter.
(f) No later than three (3) Business Days prior to its distribution, the Company shall provide Parent with a copy of any material written or broad based oral communication intended to be made to the full account balance distributed Company Employees regarding the compensation, benefits or distributable other treatment they will receive in connection with the transactions contemplated by this Agreement, and will provide Parent with a reasonable opportunity to review and comment on such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))communication.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, (i) is intended to create any Employee Benefit Plan sponsored, maintained or contributed to by third-party beneficiary rights in any employee of the Company, Parent Company or any of their respective the Company Subsidiaries. The , any beneficiary or dependent thereof, or any collective bargaining representative thereof, with respect to the compensation, terms and conditions of employment and/or benefits that may be provided to any Company Employee by Parent or the Company or under any benefit plan which Parent or the Company may maintain, (ii) shall be treated as an amendment to any Company Benefit Plan, (iii) shall, subject to compliance with the other provisions of this Section 6.9 are for the sole 8.7, obligate Parent to maintain any particular benefit of the Parties and nothing herein, expressed plan or implied, is intended arrangement or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, iv) shall prevent Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation from amending or terminating any of their Affiliates from terminating the employment benefit plan or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesarrangement.
Appears in 2 contracts
Samples: Merger Agreement (Omnicare Inc), Merger Agreement (CVS HEALTH Corp)
Employee Matters. (a) Between During the date hereof period beginning as of the Effective Time and ending no earlier than the first (1st) anniversary of the Effective Time (the “Benefit Period”), Parent shall cause the Company and the Company Subsidiaries to provide each Continuing Employee with (i) at least the same level of base wages or base salary, as applicable, that were provided to the Continuing Employee immediately prior to the Effective Time, the Company shall (and the Company shall cause its Subsidiaries toii) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
cash bonus opportunities (bexcluding any equity compensation) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that arethat, in the aggregate, are at least the same as were provided to the Continuing Employee immediately prior to the Effective Time, (iii) employee benefits that are substantially comparable similar in the aggregate to those in effect for similarly situated employees of Parent the employee benefits that were provided by the Company and its Subsidiaries. In addition, a the Company Subsidiaries to the Continuing Employee whose employment is involuntarily terminated other than for cause within immediately prior to the period of 12 months following the Closing Date Effective Time and (or such longer change in control coverage period as required under the applicable Company Benefit Planiv) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect set forth on Section 4.19(a) of the Company Disclosure Schedules.
(b) Parent shall, and shall cause its Subsidiaries to, grant all Continuing Employees credit for such any service to the Company Employee immediately and its Subsidiaries earned prior to the Closing Datefor purposes of eligibility, vesting and determination of the level of benefits, vacation or paid time off accrual and severance benefit determinations, under any benefit or compensation plan, program, agreement or arrangement in which a Continuing Employee participates that may be established or maintained by Parent or its Subsidiaries on or after the Closing (the “New Plans”); provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing such service credit shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or recognized to the extent that it would result in a duplication of benefits or compensation for the same period of servicetime. In addition, or Parent shall, and shall cause its Subsidiaries to, cause (iii) with respect to the Excluded Employeesbe waived all pre-existing condition exclusions and actively-at-work requirements and similar limitations, eligibility waiting periods and evidence of insurability requirements under any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, New Plans to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, waived or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of satisfied by a Continuing Employee under any Company Employees or any benefit plan as of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company any deductible, co-insurance and covered out-of-pocket expenses paid on or before the Closing by any Continuing Employee credit (or covered dependent thereof) to be taken into account for purposes of satisfying the corresponding deductible, coinsurance and maximum out-of-pocket provisions after the Closing under any applicable New Plan in the same plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Dateoccurs.
(fc) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for For the avoidance of doubt, any Company Employee or other current or former employee the Parties acknowledge and agree that the consummation of the Company, Parent Merger will constitute a “Change in Control” or any “Change of their respective AffiliatesControl” (or similar term), other than as applicable, within the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason meaning of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any Contacts with Company Service Providers set forth on Section 4.19(c) of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reasonDisclosure Schedules, (ii) provide the Stock Plans, and each agreement governing the awards granted under such plans, and (iii) such plans, programs, agreements or other arrangements set forth on Section 4.19(c) of the Company Disclosure Schedules, and shall have such other effects as specified in Section 4.19(c) of the Company Disclosure Schedules.
(d) Nothing contained herein, express or implied, (x) is intended to confer upon any Person Continuing Employee any right to continued employment or service for any period or continued employment receipt of any specific employee benefit, or service with Parent shall constitute an amendment to or any other modification of its Subsidiaries any benefit plan, (y) shall alter or limit Parent’s or the Company’s or their Subsidiaries’ ability to amend, modify or terminate any particular benefit plan, program, agreement or arrangement or (z) is intended to confer upon any individual (including following the Effective Timeemployees, the Surviving Corporationretirees or dependents or beneficiaries of employees or retirees) or any particular term or condition right as a third party beneficiary of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesthis Agreement.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (WEB.COM Group, Inc.), Merger Agreement (WEB.COM Group, Inc.)
Employee Matters. (a) Between Following the date hereof Effective Time, the employees of GETCO and its Subsidiaries who are employed by the Company or its Subsidiaries (including GETCO and its Subsidiaries) as of the Effective Time and the employees of Knight and its Subsidiaries (including Knight and its Subsidiaries) who are employed by the Company or its Subsidiaries at the Effective time (such employees, collectively, the “Covered Employees”) will be offered participation and coverage under Company employee benefit plans that are no less favorable, on an aggregate basis, to the Knight Benefit Plans generally in effect for similarly situated employees of Knight and its Subsidiaries in accordance with the terms thereof; it being understood that the Covered Employees may commence participation in the Knight Benefit Plans on different dates following the Effective Time with respect to different Knight Benefit Plans. Following the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the provide Covered Employees who were employees of Knight immediately prior to the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities Effective Time with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or that is substantially similar to the base wage rate, salary provided to such Covered Employees immediately prior to the Effective Time and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) incentive compensation opportunities that are no less favorable than those in effect for such Company Employee the incentive compensation opportunities provided to similarly situated Covered Employees who were employees of GETCO immediately prior to the Closing Date; providedEffective Time. For a period of one year following the Effective Time, however, that the covenants within this Section 6.9(b) Company shall not apply provide Covered Employees who were employees of Knight immediately prior to the Company Employees listed Effective Time with severance benefits at levels and pursuant to the terms of the Knight Severance Plan disclosed on Schedule 6.9(bSection 4.10(a) of the Company Knight Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date Schedule.
(the “Excluded Employees”b) which Excluded Employees will, on From and after the Closing Datetime that Covered Employees commence coverage under the Knight Benefit Plans pursuant to Section 7.7(a), only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent Company shall, or shall cause the Surviving Corporation its Subsidiaries to, (i) provide all Covered Employees with service credit for purposes of eligibility, participation, vesting and levels of benefit accruals under any Knight Benefit Plan in which Covered Employees are eligible to participate, for all periods of employment with GETCO or any of its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, or if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, Knight or shall cause the Surviving Corporation and any of its Subsidiaries, prior to take commercially reasonable efforts the Effective Time for which service was recognized by GETCO immediately prior to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, Effective Time as applicable, if such service had been performed with Knight or its applicable affiliate (other than (i) for any purposes with respect to any “newly adopted plan of the Company or any of its Subsidiaries for which past service credit is not granted to its employees generally); provided, that such service shall not be recognized (A) for purposes of any defined benefit plan” as defined in Section 3(35retirement plan or Knight Benefit Plan that provides retiree welfare benefits, (B) of ERISA, retiree medical benefits or disability benefits or to the extent it such recognition would result in a the duplication of benefits or compensation for the same period of service, or (C) any Knight Benefit Plan that is a frozen plan or provides grandfathered benefits, (ii) cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any healthcare benefit plans of the Company or any of its Subsidiaries to be waived with respect to the Excluded Employees, any severance benefits or rights) in which the Company Covered Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, their eligible dependents to the extent that such credit does not result in duplicate benefits.
(e) The Parties shallwaived under any similar plans of GETCO or, or shall cause the Surviving Corporation and its Subsidiariesif applicable, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicableKnight, immediately prior to the Closing DateEffective Time, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan (iii) recognize any healthcare expenses incurred by the Covered Employees and (ii) give each Company Employee credit their eligible dependents for the plan year in which the Closing Date Effective Time (or commencement of participation in a Knight Benefit Plan) occurs towards for applicable deductibles and deductibles, annual out-of-pocket limits and any lifetime maximums under any such Knight Benefit Plan for medical expenses incurred prior to the Closing Date for which payment has been made, Effective Time (or the date of commencement of participation in each case, to the extent permitted by the applicable insurance plan provider and only a Knight Benefit Plan) to the extent such deductibles or limits for medical expenses were satisfied or did not apply credited under the analogous Company Benefit Plan in effect any similar plans of GETCO, or, if applicable, Knight, immediately prior to the Closing DateEffective Time. To the extent that Covered Employees who were employed by Knight immediately prior to the Effective Time commence participation in benefit plans maintained by the Company, other than Knight Benefit Plans, such Covered Employees shall benefit from clauses (i), (ii) and (iii) in the same manner as Covered Employees who were employed by GETCO immediately prior to the Effective Time.
(fc) Prior The provisions of Sections 7.7(a) and 7.7(b) shall apply only with respect to Covered Employees who are covered under GETCO Benefit Plans or Knight Benefit Plans, that are maintained solely for the Closing Datebenefit of employees of GETCO or Knight, (i) if requested by Parent as applicable, employed in writing at least three (3) days before the ClosingUnited States. With respect to employees of GETCO or Knight who are regularly employed outside of the United States, from and after the Effective Time, the Company shall, or shall cause its Subsidiaries to, comply with all applicable Laws relating to employees and employee benefits matters applicable to such employees.
(d) Knight shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code adopt an equity incentive plan (the “Company 401(k) Equity Plan”) in a form that is proposed by GETCO, which shall be reasonably acceptable to Knight, which will include a 5% equity pool (the “Equity Pool”) and additional availability that is intended to permit equity-based awards to be terminated made in ordinary course over the two year period following the Effective Date covering Company Common Stock (the “Initial Equity Pool”). The Equity Pool shall be reserved for equity-based awards for Covered Employees (other than each of GETCO’s and (B) all participants Knight’s Chief Executive Officers as of the Original Execution Date, who will be eligible to cease participating receive equity-based awards outside of the Equity Pool). The Joint Proxy Statement will include a proposal for Company shareholders to approve the Company Equity Plan, unless approval by Knight would be sufficient to permit the Company Equity Plan to issue awards following the Effective Time under the NYSE listing standards. All grants made from the Equity Pool shall be allocated as directed by GETCO’s Chief Executive Officer in consultation with Knight’s Chief Executive Officer, subject to approval by the Board of Directors of the Company 401(k) Planas appropriate (or the Board of Directors of GETCO in the case of awards communicated before the Effective Time). If, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)Effective Time, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant Common Stock in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) Initial Equity Pool has not yet been registered on Form S-8 or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentenceanother appropriate form, as soon as administratively practicable following the Effective Time, Parent the Company shall file with the SEC a registration statement on Form S-8 or another appropriate form (in any case if available for use by the Company), registering the number of shares of Company Common Stock equal to the number of shares of Company Common Stock issuable from the Initial Equity Pool that are eligible to be registered on Form S-8 or such other appropriate form and shall use commercially reasonable efforts to take any maintain the effectiveness of such registration statement for so long as such awards remain outstanding.
(e) Each of Knight and all action as may be reasonably requiredGETCO agrees that, including amendments to for purposes of each Knight Stock Plan, the transactions contemplated by this Agreement constitute a defined contribution retirement plan intended to be qualified under Section 401(a“change in control,” “change of control” or term of similar meaning.
(f) From and following the date of the Code designated Original Merger Agreement, GETCO and Knight shall reasonably cooperate in implementing all appropriate communications with directors, officers, employees or consultants, regarding compensation or benefits that will be paid or provided in connection with the transaction contemplated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))this Agreement.
(g) Nothing If requested by Knight in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed writing delivered to by GETCO no less than ten (10) business days before the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentClosing Date, the Surviving Corporation Board of Directors of GETCO (or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time appropriate committee thereof) shall adopt resolutions and for any reason, take such corporate action as is necessary to terminate the GETCO 401(k) plan (iithe “GETCO 401(k) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including Plan”). As soon as practicable following the Effective Time, the Surviving Corporationassets thereof shall be distributed to the participants in the GETCO 401(k) Plan, and Knight shall take the action necessary (including the amendment of Knight’s 401(k) Plan (the “Knight 401(k) Plan”)) to permit the Covered Employees who are then actively employed to roll over any eligible distributions and loan balances into the Knight 401(k) Plan.
(h) Without limiting the generality of Section 10.11, the provisions of this Section 7.7 are solely for the benefit of the parties to this Agreement, and no current or former employee, director or independent contractor or any particular term other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement, and nothing herein shall be construed as an amendment to any GETCO Benefit Plan, Knight Benefit Plan or condition other employee benefit plan or agreement for any purpose or limit the right of employment or serviceKnight, or (iii) prevent Parent, the Surviving Corporation GETCO or any of their Affiliates from terminatingSubsidiaries (including, revising following the Closing Date, the Company and its Subsidiaries) to amend or amending terminate any Employee GETCO Benefit Plan, Knight Benefit Plan sponsored, maintained or contributed to by the Company, Parent other employee benefit plan or any of their respective Subsidiariesagreement.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (KCG Holdings, Inc.), Agreement and Plan of Merger (Knight Capital Group, Inc.)
Employee Matters. (a) Between Effective as of the date hereof and the Effective TimeTransfer Date, the Company Principals shall (resign from their respective positions with Seller and the Company shall cause its Subsidiaries to) make available hereby agree to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate forgo any additional future payments from Seller in connection with their roles and responsibilities employment with the Company and its SubsidiariesSeller, including with respect to potential promotionsincluding, transferswithout limitation, or job eliminations following the Closingany severance payments.
(b) The Parties agree that Seller shall reimburse the Principals for a period of 12 months following any expenses related to the Closing Date, each employee who is employed as of the Closing Date Business incurred by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately Principals prior to the Closing Date; provided, however, that Transfer Date upon submission and approval of expense reports as follows: (i) expenses submitted by the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention Principals and Sale Payment retention agreements executed with the Company approved by Seller prior to March 9, 2016 will be paid by Seller on or before March 11, 2016; and (ii) expenses submitted by the Closing Date (the “Excluded Employees”) which Excluded Employees willPrincipals and approved by Seller after March 9, on and after the Closing Date, only 2016 will be entitled to receive the severance benefits set forth paid by Seller in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentaccordance with its normal payment cycle.
(c) Parent shallFollowing the Closing, or the Principals shall cause be entitled to retain their restricted stock awards granted to them by Seller as part of their bonus for the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans 2015 fiscal year as set forth on Schedule 6.9(c) of 5.7(c), which shall vest on the Company Disclosure Letterawards’ current vesting schedules. With respect to any stock option awards, it being understood that the foregoing Principals agree to surrender all stock options granted pursuant to Seller’s 2010 Stock Incentive Plan with a strike price greater than $3.90. All remaining options will continue to vest until March 15, 2017 and, to the extent vested pursuant to their terms, shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreementsexercisable during such time period. All unexercised options will expire on March 16, 2017.
(d) From and after At or prior to the Effective TimeClosing, as applicable, each of the Parties shall, or Principals shall cause the Surviving Corporation and its Subsidiaries, have delivered to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than Seller (i) for any purposes with respect to any a fully-executed release of claims (a “defined benefit plan” as defined in Section 3(35Principal Release”) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or and (ii) a consulting agreement with respect Seller (a “Consulting Agreement”), each in a form reasonably satisfactory to the Excluded EmployeesSeller and Acquirer, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service connection with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsSeller’s ongoing patent litigation.
(e) The Parties shall, At or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Transfer Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which Acquirer shall offer employment effective as of the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to each of the Closing Date for which payment has been madeSeller’s employees listed on Schedule 5.7(e) (collectively, in the “Transferred Employees”), on substantially the same terms as each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateTransferred Employee currently receives.
(f) Prior to Seller shall pay the Closing Transferred Employees any accrued vacation directly and their last paycheck from Seller shall be paid through the Transfer Date. For the avoidance of doubt, (i) if requested by Parent in writing at least three (3) days before the ClosingSeller shall retain full responsibility for any severance payments, the Company shall cause the Company accrued vacation and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable related costs for any employees who are not Transferred Employees following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Transfer Date.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or Transferred Employees will be construed offered the continued vesting for one year of all stock options in exchange for entering into standard release agreements with Seller, provided any Transferred Employee who leaves his or her employment with Acquirer prior to confer upon or give such one year period will forfeit any unvested options and/or restricted shares. Acquirer agrees to promptly notify Seller if any Person (including, for the avoidance of doubt, any Company Transferred Employee or other current or former ceases to be an employee of Acquirer prior to March 15, 2017.
(h) Acquirer shall pay to Seller the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including Employee Reimbursement promptly following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesClosing.
Appears in 2 contracts
Samples: Purchase and Assignment Agreement (Crossroads Systems Inc), Purchase and Assignment Agreement
Employee Matters. (a) Between Prior to the date hereof Closing, the Board of Directors of the Company (or, if appropriate, any committee thereof administering the Company Share Plan) shall adopt such resolutions and take such other actions (including adopting any plan amendments), if any, as are required to provide that, effective at the Effective Time, : (i) each then outstanding Company Share Option granted under the Company Share Plan shall immediately vest in full and become exercisable for all of the Common Shares at the time subject to such option as fully-vested Common Shares; and (ii) each then-outstanding Company Share Option as so fully vested and exercisable shall be cancelled immediately and automatically in exchange for payment of an amount in cash equal to the product of (A) the number of Common Shares subject to such Company Share Option, and (B) the excess, if any, of $0.52 over the per share exercise price of such Company Share Option. All such cash payments to be paid pursuant to the immediately preceding clauses (ii) shall be referred to herein as the “Equity Incentive Amounts”. Any Equity Incentive Amounts shall be paid by the Company shall cause its Subsidiaries to) make available to Parent promptly following the employees Closing through the payroll of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with Company, but in no event later than twenty (20) Business Days after the Company and its SubsidiariesClosing. For purposes of clarity, including no payment shall be made with respect to potential promotions, transfers, any Company Share Option so cancelled with a per-share exercise price that equals or job eliminations following the Closingexceeds $0.52.
(b) The Parties agree that for Within twenty (20) Business Days after the Closing, the Company shall pay or cause to be paid to each holder of Company Share Options granted under the Company Share Plan any Equity Incentive Amounts to which such holder is entitled as determined in accordance with Section 5.6(a) through the Company’s payroll less any Taxes which the Company must withhold or is liable to pay to any Tax authority.
(c) Prior to the Closing, the Company shall grant, effective as of the Effective Time, a period of 12 months following the Closing Date, cash bonus to each employee who is employed as holds Common Shares or Company Share Options upon the execution of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall this Agreement and who continues to be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to on the Closing Date (the “Excluded Eligible Employees”) which Excluded Employees will), on and after the Closing Date, only be entitled to receive the severance benefits set forth in and an amount of $0.13 for each Common Share or each Common Share subject to the terms Company Share Option held by such employee. The foregoing cash bonus shall be declared upon the execution hereof and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect paid immediately prior to following the Closing Date, to through the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee payroll of the Company, Parent or any of their respective Affiliates), other but in no event later than twenty (20) Business Days after the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesClosing.
Appears in 2 contracts
Samples: Share Purchase Agreement (ALPHA & OMEGA SEMICONDUCTOR LTD), Share Purchase Agreement (ALPHA & OMEGA SEMICONDUCTOR LTD)
Employee Matters. (a) Between the date hereof Buyer may offer employment upon such terms and the Effective Timeconditions of employment as Buyer may establish, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent certain of the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including Employer who primarily perform services with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period operation of 12 months following the Closing Date, each employee who is employed Business as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, howeverthat if, that the covenants within this Section 6.9(b) shall not apply prior to the Company Employees date which is 180 days after the Closing Date, Buyer terminates the employment of any employee listed on Schedule 6.9(b5.13(d) employed by Buyer as of the Company Disclosure LetterClosing Date other than "for cause" as described in the Summary Plan Description of Telecommunications Inc. Severance Pay Plan effective July 1, 1996 (the "Severance Plan"), Buyer shall pay to such terminated employee the severance benefit payments which shall consist such employee would have been entitled to receive had it been terminated by Employer as of the individuals that are Closing Date in an amount and upon such terms as set forth in the Severance Plan (but in no event more than six months' severance benefits for any employee); provided, further, Buyer shall not be required to make any such severance payments with respect to any employee who is hired by TCI or any of its direct or indirect wholly-owned subsidiaries (including Employer) within 45 Business Days of his termination of employment by Buyer. Not later than March 24, 1997, Buyer shall deliver to Seller a party notice containing the names of employees of the Business to those certain Retention and Sale Payment retention agreements executed with the Company prior whom Buyer intends to offer employment on the Closing Date (the “Excluded Employees”"Employee List"); provided, that (i) if the Closing has not occurred, Buyer may deliver to Seller a notice updating the Employee List on the date which Excluded Employees willis 150 days after the date of this Agreement and (ii) if the Termination Date is extended by Seller, Buyer may deliver to Seller a notice no later than 60 Business Days prior to the extended Termination Date updating the Employee List; provided, however, that any notice delivered by Buyer updating the Employee List shall not be deemed effective if the Closing occurs fewer than 60 Business Days after delivery to Seller of such updated Employee List. TCI shall cause Employer to terminate the employment of all such employees hired by Buyer as of the Adjustment Time. Seller shall undertake to provide to all affected employees and any other necessary persons any notice that may be required under the WARN Act. Except as provided herein, Employer shall retain all liabilities arising prior to the Adjustment Time relating to employees, including severance obligations.
(b) For the period commencing on the date of this Agreement and expiring on the date which is 180 days after the Closing Date, only be entitled to receive the severance benefits TCI shall not, and shall cause its direct and indirect wholly-owned subsidiaries including Employer not to, solicit, or offer employment to, any employee of Employer set forth in and subject on Schedule 5.13(d) who primarily performs services with respect to the terms and conditions operation of the Retention Business as of the date of this Agreement; provided, however, that after the Closing Date, each of TCI and Sale Payment retention agreements provided to Parentits direct and indirect wholly-owned subsidiaries including Employer may hire any such employee that Buyer does not employ as of the Closing Date or whose employment Buyer terminates after the Closing Date.
(c) Parent shallNothing in this Section 7.3 or elsewhere in this Agreement is intended to confer upon any employee of Employer or his or her legal representative or heirs any rights as a third party beneficiary or otherwise or any remedies of any nature or kind whatsoever under or by reason of this Agreement, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employeetransactions contemplated hereby, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, continued employment. All rights and obligations created by this Agreement are solely between the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesparties hereto.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Mediacom LLC), Asset Purchase Agreement (Mediacom LLC)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees as of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following day immediately preceding the Closing Date, each employee who is employed as of the Closing Date by the Company or and any ERISA Affiliate shall terminate any and all Employee Plans intended to include a Subsidiary thereof Code Section 401(k) arrangement (each, a “Company Employee401(k) Plan”) (unless Parent provides written notice to the Company that such 401(k) Plans shall not be provided with annual base salary or base wage rateterminated). Unless Parent provides such written notice to the Company, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other no later than for cause within the period of 12 months following the Closing Date five (or such longer change in control coverage period as required under the applicable Company Benefit Plan5) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately Business Days prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(bshall provide Parent with evidence that such Employee Plan(s) have been terminated (effective as of the day immediately preceding the Closing Date) pursuant to resolutions of the Company Disclosure LetterBoard or such Affiliate, which as the case may be. The form and substance of such resolutions shall consist be subject to the reasonable review and approval of Parent. The Company also shall take such other actions in furtherance of terminating such Employee Plan(s) as Parent may reasonably require. In the individuals event that are termination of a party 401(k) Plan would reasonably be anticipated to those certain Retention and Sale Payment retention agreements executed with trigger liquidation charges, surrender charges or other fees then the Company shall take such actions as are necessary to reasonably estimate the amount of such charges and/or fees and provide such estimate in writing to Parent no later than fifteen (15) calendar days prior to the Closing Date (Date. If, in accordance with this Section 5.10(a), Parent requests in writing that the “Excluded Employees”Company not terminate any 401(k) which Excluded Employees willPlan, on and after the Closing Date, only be entitled to receive the severance benefits set forth Company shall take such actions as Parent may reasonably require in and subject to the terms and conditions furtherance of the Retention and Sale Payment retention agreements provided to assumption of any such 401(k) Plan by Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any adopting such amendments otherwise permitted by the terms of the applicable agreementsas Parent may deem necessary or advisable in connection with such assumption.
(db) From and after Effective as of the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect day immediately prior to preceding the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause terminate the Company and its Subsidiaries 2004 Plan (unless Parent provides written notice to take all necessary and appropriate actions the Company no later than five (5) Business Days prior to cause (A) each Closing that the Company Benefit 2004 Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to shall not be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)instead assumed).
(gc) Nothing The Company shall consult with Parent (and consider in good faith the advice of Parent) prior to sending any notices or other communication materials to Company employees and the Company shall not send any written notices or other written communication materials (including via electronic mail) to Company employees regarding this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies transactions contemplated hereby (including with respect to the matters provided for in this Section 6.9Merger) under or by reason without the prior written consent of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to Parent (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporationwhich consent will not be unreasonably withheld) or make any particular term or condition of employment or service, or (iii) prevent Parent, communications with the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesemployees that are inconsistent with this Agreement.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Market Leader, Inc.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the The employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by Effective Time who continue to remain employed with Parent or its Subsidiaries (including the Company or a Subsidiary thereof Surviving Corporation) in the United States and the United Kingdom (eachcollectively, a the “Company EmployeeContinuing Employees”) shall shall, during the period commencing at the Effective Time and ending on December 31, 2020 for so long as they are employed, be provided with annual (i) a base salary or base wage rate, and employee benefits annual cash incentive opportunity that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for the combined base salary or base wage and annual cash incentive opportunity provided to such Company Continuing Employee immediately prior to the Closing DateEffective Time; provided, however, that Parent shall have the covenants within right to adjust any Continuing Employee’s base salary or base wage and annual cash incentive opportunity so long as the aggregate base salary or base wage and annual cash incentive opportunity for any such Continuing Employee following any such adjustment is not less than the aggregate base salary or base wage and annual cash incentive opportunity for such Continuing Employee in effect immediately prior to the Effective Time and (ii) employee benefits that in the aggregate are substantially comparable to such employee benefits, excluding equity, change in control or retention arrangements, generally made available to similarly situated employees of Parent or its Subsidiaries (other than the Company and its Subsidiaries), as applicable; provided that until such time as Parent shall cause Continuing Employees to participate in the employee benefit plans that are made available to similarly situated employees of Parent or its Subsidiaries (other than the Company and its Subsidiaries), a Continuing Employee’s continued participation in employee benefit plans of the Company and its Subsidiaries as in effect immediately prior to the Effective Time shall be deemed to satisfy the foregoing provisions of this sentence (it being understood that participation in the Parent Benefit Plans may commence at different times with respect to each Parent Benefit Plan). Following the Effective Time, Parent shall evaluate if it is materially less favorable, in the aggregate, for the Continuing Employees to participate in the Parent Benefit Plans as compared to the Company Benefit Plans in effect immediately prior to the Effective Time and implement appropriate and reasonable solutions to minimize any such adverse impact on the Continuing Employees. Further, any Continuing Employee who is terminated by Parent or one its Subsidiaries without cause following the Effective Time and prior to December 31, 2020 will receive severance payments and benefits that are not less favorable than those provided under the applicable severance/redundancy plan of Parent or its Subsidiaries, subject to, and in accordance with, the terms of such plan as of the applicable date of termination. Notwithstanding the foregoing, the requirements of this Section 6.9(b6.5(a) shall not apply to the Continuing Employees who are covered by any Company Employees listed on Schedule 6.9(b) Labor Agreement. As of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties Parent shall, or and shall cause its Subsidiaries (including the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit PlansCorporation) to, as applicable, honor the terms of any Company Labor Agreement.
(other than b) With respect to any Parent Benefit Plan in which any Continuing Employees become eligible to participate on or after the Effective Time (the “New Plans”), Parent shall use its reasonable best efforts to: (i) for cause any purposes with respect pre-existing conditions or limitations and eligibility waiting periods under any of its group health plans to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) be waived with respect to the Excluded EmployeesContinuing Employees and their eligible dependents, any severance benefits except to the extent such pre-existing conditions, exclusions or rights) waiting periods would apply under the analogous Company Benefit Plan in which the Company Employees participateContinuing Employee participated immediately prior to the Effective Time, (ii) provide each Continuing Employee and their eligible dependents with credit for such Company Employees’ service with any co-payments or coinsurance and deductibles paid prior to the Company Effective Time under a benefit plan that provides health care benefits (including medical, dental and its Subsidiaries, as applicablevision), to the same extent and that such credit was given under the analogous Company Benefit Plan in which the Continuing Employee participated immediately prior to the Effective Time, in satisfying any applicable deductible, co-payment, coinsurance or maximum out-of-pocket requirements under any New Plans for the plan year in which participation in such Parent Benefit Plan commences, and (iii) give the Continuing Employees service credit for such Continuing Employee’s employment with the Company or its applicable Subsidiary for (x) eligibility and vesting purposes (other than for purposes of any new equity based compensation plan, program, agreement or arrangement) and (y) for purposes of vacation accrual and severance benefit determinations to the same purposes extent that such service was taken into account under a corresponding the analogous Company Benefit Plan in effect which the Continuing Employee participated immediately prior to the Closing DateEffective Time; provided that the foregoing service recognition shall not apply (A) to the extent it would result in duplication of benefits for the same period of service, (B) to the extent that such credit does is not result in duplicate recognized by Parent or its Subsidiaries with respect to similarly situated employees, (C) for purposes of any defined benefit pension plan or benefit plan that provides retiree health or welfare benefits, or (D) for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(gc) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination ofconsultant of the Company or any of its Subsidiaries or affiliates any right to continue in the employ or service of the Surviving Corporation, the Company, or an amendment toany Subsidiary or affiliate thereof, or be construed as establishingshall interfere with or restrict in any way the rights of the Surviving Corporation, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any Subsidiary or affiliate thereof to discharge or terminate the services of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit any employee, officer, director or consultant of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates)its Subsidiaries or affiliates at any time for any reason whatsoever, other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal with or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9without cause. Nothing in this Section 6.9 is intended Agreement shall be deemed to (i) prevent Parentestablish, amend, or modify any Company Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Corporation or any of their Affiliates from terminating its Subsidiaries or affiliates to amend, modify or terminate any particular Company Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement after the employment Effective Time. Nothing in this Agreement, express or service of implied, is intended to or shall confer upon any Personperson, including a any current or former employee, officer, director or consultant of the Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Timeor affiliates, the Surviving Corporation) any right, benefit or remedy of any particular term nature whatsoever under or condition by reason of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesthis Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Fidelity National Information Services, Inc.), Merger Agreement (Worldpay, Inc.)
Employee Matters. (a) Between Subject to the date hereof and provisions of Section 5.5(c), effective as of the Effective TimeTime and for a period of one year thereafter, the Company Parent shall (and the Company provide, or shall cause its Subsidiaries to) make available the Surviving Corporation to Parent the provide, to employees of the Company and or its Subsidiaries so that who continue to be employed by Parent may interview such employees and evaluate or the Surviving Corporation or any of their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations respective Subsidiaries following the Closing.
Effective Time (b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company EmployeeEmployees”) shall be provided with annual base salary for so long as the applicable Company Employee remains employed by Parent or base wage ratethe Surviving Corporation, compensation and employee benefits that are, are substantially comparable in the aggregate, substantially comparable aggregate to those in effect for the compensation and benefits paid and provided to similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated Subsidiaries (other than the Company and its Subsidiaries); provided, that for cause within purposes of the period foregoing sentence the compensation and employee benefit plans generally provided to employees of 12 months following the Closing Date (or such longer change in control coverage period Company as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee of immediately prior to the Closing Date; provided, however, that the covenants within this Effective Time (including without limitation continued payment of Annual Bonuses as provided in Section 6.9(b5.5(e) below) shall not apply be deemed to be substantially comparable, on an aggregate basis, to those provided to similarly situated employees of Parent and its Subsidiaries for purposes of this sentence, it being understood that the Company Employees listed may commence participation in Parent’s compensation and benefit plans on Schedule 6.9(bdifferent dates following the Effective Time with respect to different such plans.
(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after Following the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit cause any amendments otherwise permitted employee benefit plans sponsored or maintained by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, Parent or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) their Subsidiaries in which the Company Employees participatebecome eligible to participate following the Closing Date (collectively, for such the “Post-Closing Plans”) to recognize the service of each Company Employees’ service Employee with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been madepurposes of eligibility, vesting and benefit accrual rates or contribution rates under such Post-Closing Plans, in each case, to the same extent permitted by the applicable insurance plan provider and only such service was recognized immediately prior to the extent such deductibles or limits for medical expenses were satisfied or did not apply Effective Time under the analogous a comparable Company Benefit Plan in effect which such Company Employee was eligible to participate immediately prior to the Closing Date.
(f) Prior to the Closing Date, Effective Time; provided that such recognition of service shall not (i) if requested by apply for purposes of any defined benefit retirement plan or plan that provides retiree welfare benefits, (ii) operate to duplicate any benefits of a Company Employee with respect to the same period of service, (iii) apply for purposes of any plan, program or arrangement (x) under which similarly situated employees of Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries do not receive credit for prior service or (y) that is grandfathered or frozen, either with respect to take all necessary and appropriate actions level of benefits or participation. With respect to cause (A) each any Post-Closing Plan that provides medical, dental or vision insurance benefits, for the plan year in which such Company Benefit Plan intended to be qualified under Section 401(a) of the Code Employee first participates (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that first date of such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)participation, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess PlanParticipation Date”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to (A) cause any pre-existing condition limitations or eligibility waiting periods under such plan to be waived with respect to such Company Employee to the extent such limitation would have been waived or satisfied under the Company Benefit Plan in which such Company Employee participated immediately prior to the Participation Date, and (B) if the Participation Date does not occur on the first day of a calendar year, credit each Company Employee for an amount equal to any medical, dental or vision expenses incurred by such Company Employee in the year in which the Participation Date occurs for purposes of any applicable deductible and annual out-of-pocket expense requirements under any such Post-Closing Plan to the extent such expenses would have been credited under the Company Benefit Plan in which such Company Employee participated immediately prior to the Participation Date. Such credited expenses shall also count toward any annual or lifetime limits, treatment or visit limits or similar limitations that apply under the terms of the applicable plan.
(c) Notwithstanding anything contained in this Agreement to the contrary, following the Effective Time, while employed by Parent or the Surviving Corporation, the Company Employees whose employment is governed by a Collective Bargaining Agreement shall be provided compensation and benefits pursuant to the terms of the applicable Collective Bargaining Agreement as in effect from time to time.
(d) If requested by Parent in writing delivered to the Company not less than thirty (30) business days before the Closing Date, the Company Board of Directors (or the appropriate committee thereof) shall adopt resolutions and take any and all such corporate action as may be reasonably requiredis necessary to terminate the Company’s 401(k) plans (the “Company 401(k) Plans”), including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) effective as of the Code designated day prior to the Closing Date. Following the Effective Time and as soon as practicable following receipt of a favorable determination letter from the IRS on the termination of the Company 401(k) Plans, the assets thereof shall be distributed to the participants, and Parent shall, to the extent permitted by Parent Parent’s 401(k) plan (the “Parent 401(k) Plan”) ), permit the Company Employees who are then actively employed to (A) cause the Parent 401(k) Plan to accept any make rollover contributions of “eligible rollover distributions” (within the meaning of Section 402(c)(4401(a)(31) of the Code) , inclusive of loans), in the form of cash cash, in an amount equal to the full account balance (including any promissory notes) distributed or distributable to such Company Employee from the Company 401(k) Plan Plans to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in ; provided that this Agreement sentence shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including not apply with respect to those accounts designated as “Xxxx” accounts under the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.401(k)
Appears in 2 contracts
Samples: Merger Agreement (Rti International Metals Inc), Merger Agreement (Alcoa Inc.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties Company shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take to, honor all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan Employee Plans in accordance with Section 409A their terms as in effect immediately before the Effective Time. For a period of the Code twelve (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A12) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable months following the Effective Time, Parent shall use commercially reasonable efforts provide, or shall cause to take be provided, to each current and former employee of the Company and its Subsidiaries (“Company Employees”) (i) base compensation and annual cash incentive opportunities that, in each case, are no less favorable than were provided to the Company Employee immediately before the Effective Time and (ii) all other compensation and employee benefits (excluding transaction bonus payments, defined benefit pension, non-qualified deferred compensation and retiree medical coverage, but including annual long-term target equity incentive opportunity ) that are substantially similar in the aggregate to those provided to Company Employees immediately before the Effective Time. Without limiting the generality of the immediately preceding sentence, (A) Parent shall or shall cause the Surviving Corporation to provide to each Company Employee whose employment terminates during the one (1)-year period following the Effective Time severance benefits equal to the severance benefits that would have been provided to the Company Employee under the Company’s severance arrangements in effect immediately prior to the Effective Time, and (B) during such one (1)-year period following the Effective Time, severance benefits offered to each Company Employee shall be determined without taking into account any reduction after the Effective Time in compensation paid or benefits provided to such Company Employee. Notwithstanding the foregoing, compensation and employee benefits for Company Employees covered by a Collective Bargaining Agreement as of immediately prior to the Effective Time shall be provided in accordance with the applicable Collective Bargaining Agreement as in effect from time to time. For the avoidance of doubt, subject to the applicable terms of any Company Employee Plan, Parent shall not be prohibited by this Section 5.6(a) from terminating the employment of or changing or modifying the terms and conditions of employment for any Company Employee following the Closing Date.
(b) For all purposes (including for purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company Employee Plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time, provided that the foregoing shall not apply with respect to benefit accrual under any final average pay defined benefit pension plan or to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all action as may be reasonably required, including amendments New Plans to the extent coverage under such New Plan is comparable to a defined contribution retirement plan intended Company Employee Plan in which such Company Employee participated immediately before the Effective Time (such plans, collectively, the “Old Plans”), and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be qualified waived for such employee and his or her covered dependents, unless such conditions would not have been waived under Section 401(a) the comparable plans of the Code designated Company or its Subsidiaries in which such employee participated immediately prior to the Effective Time, and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Old Plans ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) Parent (the acknowledges that a “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributionschange in control” (or similar phrase) within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal Company Employee Plans will occur at or immediately prior to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) PlanEffective Time, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))applicable.
(gd) Nothing Without limiting the generality of Section 8.9, the provisions of this Section 5.6 are solely for the benefit of the parties to this Agreement, and no current or former director, employee or consultant or any other person shall be a third-party beneficiary of this Agreement, and nothing in this Agreement shall constitute an establishment or termination of, or be construed as an amendment to, or be construed as establishing, terminating or amendinglimiting the ability to amend, any Company Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent other compensation or benefit plan or arrangement for any of their respective Subsidiariespurpose. The provisions of this Section 6.9 are for 5.6 shall survive the sole benefit consummation of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesMerger.
Appears in 2 contracts
Samples: Merger Agreement (Aerojet Rocketdyne Holdings, Inc.), Merger Agreement (L3harris Technologies, Inc. /De/)
Employee Matters. (a) Between the date hereof and At the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview will continue the employment of all of the employees who are employed by the Company or any of its Subsidiaries as of the day immediately prior to the Effective Time (the “Affected Employees”) initially at the same salaries and wages of such employees immediately prior to the Effective Time. During the period from the Effective Time to and evaluate their roles and responsibilities with including the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period one year anniversary of 12 months following the Closing Date, Parent and its Subsidiaries (i) shall provide each employee Affected Employee with an annual salary rate or hourly wage rate, as applicable, that is no less favorable to such Affected Employee than the salary rate or wage rate provided to such Affected Employee immediately prior to the Effective Time, and (ii) shall provide Affected Employees who is are so employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that areits Subsidiaries as of the day immediately prior to the Effective Time, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent with employee compensation and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirementsexcluding equity compensation and long-term incentives) that are no less favorable in the aggregate than those in effect for such provided by the Company Employee or its Subsidiaries immediately prior to the Closing DateEffective Time; provided, however, that Parent may transition Affected Employees to Parent’s bonus and incentive compensation plans at any time in Parent’s discretion and, following the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) end of the Company Disclosure Letterfiscal year or benefit plan year, as applicable, in which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (occurs, Parent may transition Affected Employees to other compensation and benefit plans providing compensation and benefits that are substantially comparable in the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled aggregate to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements those provided to Parent.
(c) ’s other similarly situated employees. Nothing in this Agreement shall be considered a contract between Parent shalland its Subsidiaries and any Affected Employee or consideration for, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited inducement with respect to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letterany such employee’s continued employment and, it being understood that the foregoing shall not without limitation, all such employees are and will continue to be construed considered to limit any amendments otherwise permitted by the terms of be employees at will pursuant to the applicable agreements.
(d) employment at will laws or doctrines, subject to any express written agreement to the contrary with such employee. From and after the Effective Time, Parent shall honor, and shall cause its Subsidiaries to honor, each change in control or severance agreement between the Company and its Subsidiaries and any employee thereof and to perform the obligations of the Company thereunder, and Parent shall provide, or cause its Subsidiaries to provide, relocation benefits in accordance with Company policy as applicablein effect on the date of this Agreement to any Affected Employee who becomes entitled to severance benefits following the Effective Time pursuant to any Company Benefit Plan.
(b) With respect to each Affected Employee, Parent shall credit, or cause its Subsidiaries to credit, the Parties shall, or shall cause period of employment and service recognized by the Surviving Corporation and its Subsidiaries, applicable employer immediately prior to take commercially reasonable efforts to credit the Company Employees Effective Time (for purposes of vestingits corresponding plans, eligibilityprograms, policies or similar employment-related arrangements) to have been employment and service with Parent for purposes of determining the Affected Employee’s eligibility to join (subject to satisfaction of all non-service related eligibility criteria) and vesting (but not benefit accrual for any purpose other than vacation pay, severance and termination pay and sick leave) under all employee benefit accrual under plans, programs, policies or similar employment related arrangements of Parent and its Subsidiaries in which the Parent Benefit Plans and the Company Benefit PlansAffected Employee is eligible to participate; provided, as applicablehowever, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or that no such credit shall be provided to the extent that it would result in a duplication of benefits credit or compensation for the same period of servicebenefits. Parent shall waive, or (ii) with respect and to the Excluded Employeesextent necessary to effect the terms hereof, shall use commercially reasonable efforts to cause the relevant insurance carriers and other third parties to waive, any severance benefits or rights) in which restrictions and limitations for medical conditions existing as of the Company Effective Time of those Affected Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect their dependents who were covered immediately prior to the Closing DateEffective Time under a group health plan maintained by the Company, Parent or their Subsidiaries, but only to the extent that such credit does medical condition would be covered by Parent’s group health plan if it were not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to a pre-existing conditions and/or waiting periods, active employment requirements condition and requirements only to show evidence of good health the extent that such limitations would not have applied under the applicable Parent Benefit Plan to group health plan covering the extent such Company Affected Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing DateEffective Time. Further, Parent shall offer, or cause its Subsidiaries to offer, at the Effective Time to each Affected Employee coverage under a group health plan (as defined in Section 5000(b)(1) of the Code) which credits such Affected Employee towards the deductibles, coinsurance and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual maximum out-of-pocket limits provisions imposed under such group health plan, for medical the plan year during which the Effective Time (or such later date as the Affected Employees participate in such group health plan) occurs, with any applicable expenses already incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent during such deductibles or limits for medical expenses were satisfied or did not apply year under the analogous Company Benefit Plan in effect immediately prior to the Closing DateCompany’s or Parent’s group health plan.
(fc) Prior The Company and Parent agree to the Closing Date, (i) if requested by Parent cooperate in writing at least three (3) days before the Closing, good faith to establish a process to promptly integrate the Company shall cause Benefit Plans and the Company and its Subsidiaries to take all necessary and appropriate actions to cause Parent Benefit Plans following the Effective Time.
(Ad) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable Promptly following the Effective Time, Parent shall use commercially reasonable efforts pay, or shall cause its Subsidiaries to take any and all action as may be reasonably requiredpay, including amendments to a defined contribution retirement plan intended each Affected Employee who was employed by the Company or its Subsidiaries immediately prior to be qualified under Section 401(a) of the Code designated by Parent (Effective Time an amount, to the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount extent then unpaid, equal to the full account balance distributed or distributable unpaid portion of any annual incentive bonus to such which the Affected Employee were be entitled under the applicable Company Employee from annual bonus plan for the Company 401(k) Plan year prior to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant year in which the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Effective Time occurs.
(ge) Nothing Except with respect to offers of employment to prospective new employees in the ordinary course of business consistent with past practices, the Company and Parent agree that they shall not make, and shall cause their respective Subsidiaries not to make, any representations or promises, oral or written, to any of their employees concerning continued employment following the Effective Time, or the terms and conditions of that employment, except in writing with the prior written consent of the other party.
(f) Notwithstanding the foregoing, nothing in this Agreement Agreement, whether express or implied, shall constitute an establishment or termination of, or be treated as an amendment toor other modification of any Company Benefit Plan, or be construed as establishing, terminating or amending, any Employee Parent Benefit Plan sponsoredor other compensation or benefit plan, maintained program or contributed to by arrangement of the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for , or shall limit the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee right of the Company, Parent or any of their respective Affiliates)Subsidiaries, to amend, terminate or otherwise modify any such plan or arrangement or to terminate the employment of any Affected Employee at any time. No Affected Employee or other than the Parties and their respective permitted successors and assigns, any individual is an intended third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in of this Section 6.9) under or by reason of 5.18 and no such person shall have any right to enforce any provision of this Section 6.9. Nothing in this Section 6.9 is intended to 5.18.
(ig) prevent ParentFor the avoidance of doubt, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following upon the Effective Time, a “change in control” shall be deemed to have occurred for purposes of all Company Benefit Plans and other employee plans, programs and arrangements of the Surviving Corporation) Company that use “change in control” or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesa similar term.
Appears in 2 contracts
Samples: Merger Agreement (Ensco PLC), Merger Agreement (Atwood Oceanics Inc)
Employee Matters. (a) Between Purchaser Parent and US Purchaser shall cause the date hereof applicable Purchasers to adopt and assume at and as of the Closing each of the Employee Benefit Plan/Schemes, and each trust, insurance contract, annuity contract or other funding arrangement with respect thereto, of the Asset Selling Subsidiaries or the Acquired Subsidiaries set forth on Schedule 6.3(a) as such plans relate to Employees employed immediately prior to Closing (other than Liquid Finishing Transferred Employees) or retirees of the Liquid Finishing Business (the “Assumed Benefit Plans/Schemes”), and shall assume and exercise any and all rights, authorities, discretions and obligations as sponsor, named fiduciary and plan administrator of the Assumed Benefit Plans/Schemes. Such Purchasers shall cause the Assumed Benefit Plans/Schemes to be amended, as applicable, to treat employment with the Asset Selling Subsidiaries or the Acquired Subsidiaries prior to the Closing the same as employment with such Purchaser from and after the Closing Date for purposes of eligibility and vesting and the Effective Time, the Company respective Assumed Benefit Plans/Schemes shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees be responsible for group health plan continuation coverage required under Applicable Law for any qualified beneficiary under such Assumed Benefit Plans/Schemes as of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingClosing Date.
(b) The Parties agree No later than ten (10) Business Days prior to the Closing Date, Graco will deliver to Purchaser Parent an updated Employee List setting forth the information required by Section 4.12(n), as of ten (10) Business Days prior to the Closing Date, rather than as of the dates referenced in Section 4.12(n). At least five (5) Business Days before the Closing Date, Purchaser Parent and US Purchaser will, or will cause the applicable Purchaser to, offer employment to each Employee identified on the updated Employee List who is an Employee of Graco or an Affiliate of Graco (or than an Acquired Subsidiary) immediately prior to the Closing (other than any Liquid Finishing Transferred Employee), with such employment to be effective immediately following, and contingent upon the occurrence of, the Closing (or, in the case of any Employee of Graco or an Affiliate of Graco (other than an Acquired Subsidiary) on long-term disability or other leave of absence as disclosed on Schedule 4.12(n) (each, an “Inactive Employee”), effective upon the date such Inactive Employee is able to return to active employment as determined by Purchaser Parent or the applicable Purchaser provided that for a period of 12 months such return occurs within one (1) year following the Closing Date, except in the case of any Inactive Employee disclosed on Schedule 6.3(b) as of the date of this Agreement, effective immediately following, and contingent upon the occurrence of, the Closing). Purchaser Parent and US Purchaser acknowledge and agree that: (i) the Liquid Finishing Transferred Employees are employees (whether full-time, part-time or contract) of certain of the Acquired Subsidiaries and are engaged in the Liquid Finishing Business; and (ii) notwithstanding the foregoing, the Liquid Finishing Transferred Employees shall be transferred from such Acquired Subsidiaries to an Affiliate of Graco engaged in the Powder Finishing Business.
(c) With respect to each employee Employee of Graco or an Affiliate of Graco (other than an Acquired Subsidiary) who Purchaser Parent, US Purchaser or the applicable Purchaser offers employment to under Section 6.3(b), such offer shall include base salary compensation substantially comparable to such Employee’s base salary compensation immediately prior to Closing and medical benefits through the twelve-month anniversary of the Closing Date that are substantially comparable to such Employee’s medical benefits immediately prior to Closing. Nothing in this Section 6.3(c) or this Agreement shall be deemed to interfere with Purchaser Parent’s, US Purchaser’s or the applicable Purchaser’s ability to classify the Hired Employees as employees “at will.”
(d) Graco and Purchaser Parent shall, and shall cause Sellers and Purchasers (as applicable) to, as applicable, exercise commercially reasonable efforts to persuade all Employees of Graco and its Affiliates (other than the Acquired Subsidiaries) offered employment with Purchaser Parent, US Purchaser or any Purchaser under Section 6.3(b) to accept such offers of employment. Neither Graco nor any of its Affiliates will seek to induce any Employee of Graco or any Affiliate of Graco (other than an Acquired Subsidiary) to reject any offer of employment from Purchaser Parent, US Purchaser or any Purchaser. Employees who accept offers of employment from Purchaser Parent, US Purchaser or any Purchaser shall become employees of Purchaser Parent, US Purchaser or such Purchaser (as applicable) immediately following the Closing (or, in the case of any Inactive Employee not identified on Schedule 6.3(b), upon the date each such Inactive Employee is employed able to return to active employment as determined by Purchaser Parent, US Purchaser or the applicable Purchaser subject to such limitation as identified in Section 6.3(b)) and shall then cease to be employees of Graco or its applicable Affiliates (provided that, in the case of Inactive Employees, Graco or its applicable Affiliates retains discretion to terminate employment of Inactive Employees at any date it deems appropriate which is no later than the date of hire by Purchaser Parent, US Purchaser or any Purchaser). Such Employees of Graco and its Affiliates (other than the Acquired Subsidiaries) who accept offers of employment from Purchaser Parent, US Purchaser or any Purchaser and who complete all necessary documents in order to commence employment with Purchaser Parent, US Purchaser or such Purchaser (as applicable), and commence employment with Purchaser Parent, US Purchaser or any Purchaser immediately following the Closing (or, in the case of any Inactive Employee not identified on Schedule 6.3(b), immediately following the date each such Inactive Employee is able to return to active employment), together with all employees of any Acquired Subsidiary as of the Closing Date (other than the Liquid Finishing Transferred Employees), shall be the “Hired Employees.” Neither Graco nor any of its Affiliates shall state or represent to any Employees not identified on the Employee List (as updated in accordance with the first sentence of Section 6.3(b)) that Purchaser Parent, US Purchaser or any Purchaser is obligated to continue such Employees’ employment or will offer such Employees employment.
(e) Graco, Purchaser Parent and each of their applicable Affiliates acknowledge that certain employee transfer regulations may apply to the transfer of certain Non-U.S. Employees under Applicable Law, and Graco, Purchaser Parent and each of their applicable Affiliates agree to satisfy and comply with any employee transfer regulations that apply to the transfer of Non-U.S. Employees in accordance with and subject to Applicable Law.
(f) Purchaser Parent and US Purchaser agree to, and shall cause each applicable Purchaser to agree to, continue to be bound by and comply with the Company or terms of any written employment agreements between any Employee, on the one hand, and Graco and any Affiliate of Graco, on the other hand, for each Employee who becomes a Subsidiary thereof (eachHired Employee, a “Company Employee”subject to and only to the extent required under Applicable Law; provided that nothing in this Section 6.3(f) shall obligate Purchaser Parent, US Purchaser or any Purchaser to continue to be provided bound by or comply with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect terms of any such employment agreement for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other any period longer than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plansuch employment agreement or under Applicable Law.
(g) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to Purchaser Parent and US Purchaser hereby agree that, from and after the Closing Date; provided, howeverPurchaser Parent and US Purchaser shall, that and shall cause the covenants within this Section 6.9(b) shall not apply to applicable Purchaser and the Company Acquired Subsidiaries to, grant all Hired Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed credit for any service with the Company Graco or its Affiliates earned prior to the Closing Date (i) for eligibility and vesting purposes (but for no other purpose) under any employee benefit plan, program or arrangement established or maintained by Purchaser Parent, US Purchaser the “Excluded Employees”) applicable Purchaser or the applicable Acquired Subsidiary in which Excluded such Hired Employees will, participate on and or after the Closing Date, only be entitled to receive the whether or not such plan, program or arrangement is an Employee Benefit Plan/Scheme, (ii) for purposes of vacation and severance benefits set forth in benefits, and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent(iii) for any other purpose as required under Applicable Law.
(ch) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From On and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not legally applicable, Graco shall (or cause each of its applicable Affiliates to) have all responsibility and liability for meeting all requirements under “COBRA” with respect to each Person who is or becomes an “M & A qualified beneficiary,” within the meaning of Treas. Reg. Sec. 54.4980B-9, Q/A-4(b), with respect to the Liquid Finishing Business (including any individual who has a qualifying event as a result in duplicate benefitsof the transactions contemplated by this Agreement).
(ei) The Parties shall, Graco shall (or shall cause the Surviving Corporation and each of its Subsidiariesapplicable Affiliates to) pay all employment-related benefits, to take commercially reasonable efforts to excluding all amounts owed for accrued vacation or other paid leave (i) waive any limitation on health coverage of any Company Employees or any of their coveredwhich amounts shall be assumed by Purchasers, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and but only to the extent such deductibles amounts are included in the Final Closing Balance Sheet), earned or limits accrued through the Closing Date for medical expenses were satisfied all Employees not employed by an Acquired Subsidiary, including for all Hired Employees (other than Employees employed by an Acquired Subsidiary) in accordance with Applicable Law and Sellers’ past practices. Graco shall (or did not apply shall cause each of its applicable Affiliates to) pay all severance that may due and payable as a result loss or deemed on constructive termination of employment in connection with the transactions contemplated by this Agreement. Graco or its applicable Affiliates shall make any payments required to be made under this Section 6.3(i) either by making such payments directly to such Employees or, in the analogous Company Benefit Plan in effect immediately prior event Purchaser Parent, US Purchaser or any Purchaser pays any Employee any such amount, by reimbursing Purchaser Parent, US Purchaser or the applicable Purchaser for such payment to the degree such payment was not reflected on the Final Closing DateBalance Sheet.
(fj) Prior With respect to the Closing Dateany Hired Employees, as applicable:
(i) if requested by Parent in writing at least three (3Sellers and Purchaser Parent, US Purchaser or the applicable Purchaser shall treat the applicable Purchaser employer as a “successor employer” and Sellers as a “predecessor employer” within the meaning of Sections 3121(a)(1) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a3306(b)(1) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating for purposes of Taxes imposed under the Company 401(k) Plan, in each case, effective no later than United States Federal Unemployment Tax Act or the Business Day preceding the Closing DateUnited States Federal Insurance Contributions Act; provided, however, that such actions may be contingent upon Closing and and
(ii) no sooner than the date thirty (30) days prior Sellers will utilize, or will cause their respective Affiliates to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)utilize, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as standard procedure set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent Revenue Procedure 2004-53 with respect to wage reporting.
(k) Graco and its Affiliates shall use commercially reasonable efforts efforts, before and after the Closing, to take any and all action provide such information as may be reasonably requiredPurchaser Parent, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent US Purchaser or any Purchaser may reasonably request for purposes of fulfilling their respective Subsidiaries. The provisions of obligations under this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries6.3.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Graco Inc), Asset Purchase Agreement (Carlisle Companies Inc)
Employee Matters. (a) Between Commencing on the date hereof Effective Time and ending on December 31, 2022, unless otherwise mutually determined by Flagstar and NYCB prior to the Effective Time, the Company NYCB shall (provide to employees of Flagstar and the Company shall cause its Flagstar Subsidiaries to) make available to Parent who at the Effective Time become employees of NYCB or the Company and its NYCB Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with (the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company EmployeeContinuing Employees”) shall be provided with annual (i) a base salary or base wage raterate no less than that provided by Flagstar and the Flagstar Subsidiaries to each such Continuing Employee immediately prior to the Effective Time, (ii) target incentive opportunities (both cash and employee benefits equity) that areare no less favorable, in the aggregate, substantially comparable than the target incentive opportunities (both cash and equity) provided by Flagstar and the Flagstar Subsidiaries to those in effect for similarly situated employees of Parent each such Continuing Employee immediately prior to the Effective Time, and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated (iii) employee benefits (other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirementsseverance) that are no less favorable than those in effect for provided to other similarly situated employees of NYCB or by Flagstar and the Flagstar Subsidiaries to each such Company Continuing Employee immediately prior to the Closing Date; providedEffective Time. Notwithstanding the foregoing, howeverNYCB and Flagstar agree that, that during the covenants within this period commencing at the Effective Time and ending on the later of the first anniversary thereof or December 31, 2022, NYCB shall provide severance payments and benefits as described in Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b6.6(a) of the Company NYCB Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any Continuing Employee who is involuntarily terminated during such period.
(b) With respect to any employee benefit plans of NYCB or NYCB Subsidiaries in which any Continuing Employees become eligible to participate on or after the Effective Time (“defined benefit plan” as defined in Section 3(35) of ERISANew Plans”), retiree medical benefits or disability benefits or NYCB and the NYCB Subsidiaries shall, to the extent it would result in a duplication permitted by applicable law, (i) cause any pre-existing conditions or limitations and eligibility waiting periods under any group health plans of benefits NYCB or compensation for the same period of service, or (ii) its affiliates to be waived with respect to the Excluded EmployeesContinuing Employees and their eligible dependents, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Continuing Employee credit for the plan year in which the Closing Date Effective Time occurs towards applicable deductibles deductibles, co-payments or coinsurance and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date Effective Time for which payment has been mademade and (iii) give each Continuing Employee service credit for such Continuing Employee’s employment with Flagstar and its Subsidiaries for all purposes under each applicable New Plan (it being understood that, in each casefor the avoidance of doubt, such service credit shall not entitle any Continuing Employee to benefits under any frozen NYCB Benefit Plan), as if such service had been performed with NYCB, except for benefit accrual under defined benefit pension plans, for purposes of qualifying for subsidized early retirement benefits or to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan it would result in effect immediately prior to the Closing Datea duplication of benefits.
(fc) Prior If requested by NYCB in writing delivered to Flagstar not less than twenty (20) business days before the Closing Date, the Board of Directors of Flagstar (ior the appropriate committee thereof) if requested by Parent in writing at least three (3shall adopt resolutions and take such corporate action as is necessary or appropriate to terminate the Flagstar 401(k) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Employee Savings Plan intended to be qualified under Section 401(a) of the Code (the “Company Flagstar 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case), effective no later than as of the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days day prior to the Closing Date (or such earlier date approved by and contingent upon the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A occurrence of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable)Effective Time. The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company If NYCB requests that Flagstar 401(k) Plan is be terminated, (i) Flagstar shall provide NYCB with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and comment by NYCB) not later than two (2) days immediately preceding the Closing Date, and (ii) the Continuing Employees shall be eligible to participate, effective as set forth in the preceding sentence, as soon as administratively practicable following of the Effective Time, Parent in a 401(k) plan sponsored or maintained by NYCB or one of its Subsidiaries (the “NYCB 401(k) Plan”), it being agreed that there shall use commercially reasonable efforts to be no gap in participation in a tax-qualified defined contribution plan for Continuing Employees. NYCB and Flagstar shall take any and all action actions as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(aFlagstar 401(k) of Plan and/or the Code designated by Parent (the “Parent NYCB 401(k) Plan”) , to (A) cause permit the Parent Continuing Employees to make rollover contributions to the NYCB 401(k) Plan to accept any of “eligible rollover distributions” (within the meaning of Section 402(c)(4401(a)(31) of the Code) from Flagstar 401(k) Plan in the form of cash cash, notes (in the case of loans), NYCB Common Stock or a combination thereof in an amount equal to the full account balance distributed or distributable to such Company Employee employee from the Company 401(k) Plan to the Parent Flagstar 401(k) Plan, and NYCB shall endeavor through reasonably commercial efforts to ensure availability of in-kind and note rollover.
(d) On and after the date hereof, any written employee notices or communication materials for distribution to a group of employees (including any outstanding loans website posting) or broad-based oral communications (i) to be provided or communicated by Flagstar with respect to any material employment, compensation or benefits matters addressed in this Agreement or related, directly or indirectly, to the transactions contemplated by this Agreement shall be subject to the prior prompt review and comment of NYCB, and Flagstar shall consider in good faith revising such notice or communication to reflect any comments or advice that NYCB timely provides and (Bii) to be provided or communicated by NYCB to employees of Flagstar with respect to employment, compensation or benefits matters addressed in this Agreement or related, directly or indirectly, to the transactions contemplated by this Agreement shall be subject to the prior prompt review and comment of Flagstar, and NYCB shall consider in good faith revising such notice or communication to reflect any comments or advice that Flagstar timely provides.
(e) Except as otherwise expressly set forth in this Section 6.6, NYCB agrees to assume and honor, in accordance with their terms, all Flagstar Benefit Plans including with respect to any accrued paid time off, vacation or other approved leave, it being understood that this sentence shall not be construed to limit the ability of NYCB or any NYCB Subsidiary to amend or terminate any Flagstar Benefit Plan to the extent that such amendment or termination is permitted by the terms of the applicable Flagstar Benefit Plan. NYCB agrees that the transactions contemplated by this Agreement shall constitute a “change in control”, “change of control” or other similar concept under any Flagstar Benefit Plan, and prior to the Effective Time, Flagstar Board (or the compensation committee thereof) shall be empowered to take such action as necessary to declare such status under such Flagstar Benefit Plans.
(f) NYCB shall take all necessary action to cause each Company Employee the ESOP to become a participant be terminated as of not later than the business day prior to the Effective Time. Subject to the terms of the ESOP and applicable law, upon termination of the ESOP pursuant to the prior sentence, the accounts of all participants and beneficiaries in the Parent 401(k) Plan ESOP immediately prior to the Effective Time shall become fully vested effective as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to effective time of the service crediting provisions termination of Section 6.9(d))the ESOP.
(g) NYCB shall take all necessary action to cause the Supplemental Benefits Plan of NYCB Bank to be terminated at or immediately prior to the Effective Time in accordance with Section 409A of the Code and the terms of the plan document, and to pay to each participant a lump sum cash amount equal to the benefit to which such participant is entitled pursuant to the terms of such plan.
(h) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination of, consultant of NYCB or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Flagstar or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Subsidiaries or affiliates any right to continue in the sole benefit employ or service of the Parties and Surviving Entity, Flagstar, NYCB or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Entity, Flagstar, NYCB or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of NYCB or Flagstar or any of their Subsidiaries or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any Flagstar Benefit Plan or NYCB Benefit Plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Entity or any of its Subsidiaries or affiliates to amend, modify or terminate any particular Flagstar Benefit Plan or NYCB Benefit Plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of Section 9.12, nothing hereinin this Agreement, expressed express or implied, is intended to or will be construed to shall confer upon or give to any Person (includingperson, for the avoidance of doubt, including any Company Employee or other current or former employee employee, officer, director or consultant of the Company, Parent NYCB or Flagstar or any of their respective Affiliates), other than the Parties and their respective permitted successors and assignsSubsidiaries or affiliates, any third party beneficiaryright, legal benefit or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) remedy of any nature whatsoever under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 2 contracts
Samples: Merger Agreement (New York Community Bancorp Inc), Merger Agreement (Flagstar Bancorp Inc)
Employee Matters. (a) Between At least five (5) Business Days prior to the date hereof and the Effective TimeClosing Date, the Company shall (and the Company shall cause its Subsidiaries to) make available will deliver to Parent an updated list of the employees of the Company or any Company Subsidiary containing the information set forth in clauses (i) through (ix) of Section 6.7(j) as of a then-recent date. During the period beginning on the Closing Date and its Subsidiaries so that ending on the first (1st) anniversary of the Closing Date (the "Continuation Period"), Parent may interview such employees and evaluate their roles and responsibilities with shall provide each employee of the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable immediately prior to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (the "Company Employees"), in each case while the Company Employee is employed by the Company during the Continuation Period, (i) a base salary (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirementshourly base wage rate) that are no less favorable than those in effect for such is at least equal to the base salary (or hourly base wage rate) provided to the Company Employee immediately prior to the Closing Date; provided, however(ii) incentive compensation opportunities, through 2021, that are no less favorable in the covenants within this Section 6.9(b) shall not apply aggregate, on average, for the years 2018 through 2020, than such incentive compensation opportunities provided to the Company Employees listed on Schedule 6.9(bEmployee for such three years and (iii) of the Company Disclosure Letteremployee health, which shall consist of the individuals welfare, retirement and fringe benefits and perquisites that are a party no less favorable in the aggregate than the employee health, welfare, retirement and fringe benefits and perquisites provided by Parent to those certain Retention its similarly situated employees. The Company Employees shall be permitted to enroll in and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees willparticipate, on and after as of the Closing Date, only be entitled in the health and welfare, retirement, and fringe benefit plans of Parent (each, a "Parent Plan") according to receive the eligibility and coverage rules of each such Parent Plan, subject to Section 6.7(c) below.
(b) Parent shall provide severance payments and benefits to any Company Employee whose employment with Parent or the Company terminates during the Continuation Period consistent with the Scripps "Severance Practice" set forth in and subject to the terms and conditions Section 6.7(b) of the Retention and Sale Payment retention agreements provided to ParentDisclosure Schedule.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between provide each Company Employee with full credit for such Company Employee's service with the Company (or a Subsidiary thereofincluding any predecessors thereto to the extent that this information is provided to Parent by the Company before Closing) prior to the Closing Date for all purposes, including for purposes of eligibility, vesting, benefit accruals and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) determination of the level of benefits (including for purposes of paid time off, severance and retirement benefits) under any Parent Plan in which such Company Disclosure LetterEmployee is eligible to participate following the Closing Date; provided, it being understood that the foregoing such service shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or recognized to the extent it that such recognition would result in a duplication of benefits or compensation for the same period of service, or (ii) with benefits. With respect to the Excluded Employeeseach Parent Plan that is a health or welfare plan, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or Parent shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health and welfare coverage of any such Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or conditions, waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent and (ii) credit each such Company Employee or coveredwith all deductible payments, eligible dependents are covered co-payments and co- insurance paid by such Company Employee under an analogous Company Benefit Plan, as applicable, immediately any Plan prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for Date during the plan year in which the Closing Date occurs towards for the purpose of determining the extent to which any such Company Employee has satisfied any applicable deductibles deductible and annual whether such Company Employee has reached the out-of-pocket limits maximum for medical expenses incurred prior such year.
(d) The Company shall take all actions necessary to terminate the Company's tax-qualified defined contribution retirement plan (the "Company 401(k) Plan"), or cause such plan to be terminated, effective as of no later than the day immediately preceding the Closing Date, and contingent upon the occurrence of the Closing, and provide that participants in the Company 401(k) Plan shall become fully vested in any unvested portion of their Company 401(k) Plan accounts as of the date such plan is terminated. Parent shall designate a tax-qualified defined contribution retirement plan with a cash or deferred arrangement that is sponsored by the Parent or one of its Subsidiaries (the "Parent 401(k) Plan") that will cover Company Employees effective as of the Closing Date. In connection with the termination of the Company 401(k) Plan, Parent shall cause the Parent 401(k) Plan to accept from the Company 401(k) Plan the "direct rollover" of the account balance (including the in-kind rollover of promissory notes evidencing all outstanding loans) of each Company Employee who participated in the Company 401(k) Plan as of the date such plan is terminated and who elects such direct rollover in accordance with the terms of the Company 401(k) Plan and the Code.
(e) Parent shall permit the Company Employees to participate in the Parent's paid time off (PTO) plan and holiday policy according to the eligibility rules of each immediately as of the Closing Date for which payment has been madeDate. Parent shall recognize, as of the Closing Date, all accrued but unused PTO of each Company Employee and shall permit the Company Employees to use such carried over accrued, but unused PTO in each case, to accordance with the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately PTO policy of Parent. Three (3) Business Days prior to the Closing Date, the Company shall deliver Section 6.7(e) of the Disclosure Schedule to Parent, which shall set forth the accrued but unused PTO time projected to be carried over to Parent's PTO plan.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before and the ClosingCompany agree to cooperate as reasonably necessary to determine the appropriate method for transitioning payroll to Parent. Notwithstanding the foregoing, prior to the Closing Date, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions exercise commercially reasonable efforts to cause (A) each Company Benefit Plan intended its current payroll service provider to be qualified under Section 401(a) agree or acknowledge in writing that it will file all payroll Tax Returns, pay, and withhold all applicable income and employment Tax withholding, issue all IRS Form W-2's, and otherwise assume responsibility for all related federal, state, and local Tax filing issues for all periods of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days time prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Date.
(g) Prior to the Closing Date, the Company may establish and implement a retention bonus program for certain employees of the Company consistent with Section 6.7(g) of the Disclosure Schedule (such terms, the "Retention Bonus Program", and such retention bonuses in the aggregate, the "Retention Bonuses").
(h) Parent and the Company agree to cooperate as reasonably necessary to implement the provisions of this Section 6.7 and agree to provide each other with such records and information as may be necessary and appropriate to carry out their respective obligations under this Section 6.7, including, without limitation, to permit and implement, prior to the Closing Date, open enrollment for the Company Employees for participation in the Parent Plans as contemplated by Section 6.7(a) and to otherwise avoid gaps in coverage.
(i) With respect to each applicable Company Employee hired after the date hereof, prior to the Closing the Company will collect and maintain, in all material respects, Form I-9 (Employment Eligibility Verification Form) and all other records, documents or other papers which are required to be retained with the Form I-9 by the Company or any Company Subsidiary pursuant to the Immigration Laws.
(j) The Company will make available to Parent a true and complete list of all employees of the Company or any Company Subsidiary as of a date no later than ten (10) Business Days after the date hereof, including their (i) job titles; (ii) dates of hire; (iii) current rates of compensation; (iv) 2019 and 2020 bonus and commission opportunities and payments; (v) work locations; (vi) employment statuses (i.e., active, disabled or on authorized leave and the reason therefor); (vii) accrued but unused vacation and sick leave; (viii) services credited for purposes of vesting and eligibility to participate in the Plans; and (ix) whether full-time, part-time or per-diem.
(k) Nothing in this Agreement Section 6.7 shall constitute be treated as an amendment, establishment or termination of, or an amendment toundertaking to amend, establish or be construed as establishing, terminating or amendingterminate, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesother benefit or compensation plan, program, policy, contract, agreement or arrangement. The provisions of this Section 6.9 6.7 are solely for the sole benefit of the Parties respective parties to this Agreement, and nothing hereinin this Section 6.7, expressed express or implied, is intended or will be construed to shall confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at or legal representative or beneficiary thereof or any time and for other Person, any reasonrights or remedies, (ii) provide any Person including any right to employment or service or continued employment or service with Parent for any specified period, or compensation or benefits of any nature or kind whatsoever under this Agreement or a right of any employee or beneficiary of such Company Employee or other Person under a Plan that such Company Employee or beneficiary or other Person would not otherwise have under the terms of that Plan.
(l) Prior to the Closing Date, the Company shall determine whether Section 280G of the Code is or would become applicable to any payment(s) to be made to any Company Employee by reason of any plan, arrangement, grant or agreement between such Company Employee and the Company or any Company Subsidiary, or by reason of its Subsidiaries any plan, arrangement, grant, or arrangement with the Company or any Company Subsidiary (including following which is required to be aggregated with any such payments made by the Effective TimeCompany or any Company Subsidiary, for purposes of Section 280G of the Code) or pursuant to arrangements proposed by Parent in writing (which shall be disclosed to the Company at least ten (10) Business Days prior to Closing). In the event Section 280G of the Code is or becomes applicable to any such payment(s), then, prior to the Closing, the Surviving Corporation) or any particular term or condition of employment or serviceCompany shall seek, or (iii) prevent Parentand the Key Company Stockholder shall give, the Surviving Corporation or stockholder approval contemplated under Section 280G(b)(5)(B) of the Code and obtain the exemption from the application of Section 280G of the Code to any "excess parachute payments". The Company shall provide copies of their Affiliates from terminatingall solicitation, revising or amending any Employee Benefit Plan sponsoredproxy, maintained or contributed and communication materials to by the Company, Parent or any obtains such stockholder approval at least three (3) Business Days prior to such solicitation of their respective Subsidiariesstockholder approval.
Appears in 2 contracts
Samples: Merger Agreement (E.W. SCRIPPS Co), Merger Agreement (E.W. SCRIPPS Co)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties Parent shall, or and shall cause the Surviving Corporation Entity or any employing Subsidiary to, provide any person employed by the Company or any of its Subsidiaries as of the day immediately prior to the Effective Time (the “Affected Employees”) employee benefits that are no less favorable in the aggregate than those provided by the Company (with the exception of the Company ESPP and its supplemental executive retirement plans) immediately prior to the Effective Time or, in the sole discretion of Parent, those provided by Parent or its Subsidiaries to similarly situated employees of Parent or its applicable Subsidiary. From and after the Effective Time, with respect to the year ended December 31, 2011, Affected Employees shall be eligible to participate in such annual bonus plans as are sponsored by Parent or its Subsidiaries for similarly situated employees of Parent or the applicable Subsidiary and shall have a bonus opportunity under such plan that is no less than that of similarly situated employees of Parent or the applicable Subsidiary who are eligible to participate in such plan but only with respect to the portion of the calendar year in which such Affected Employees are employees of Parent or its Subsidiaries. From and after the Effective Time, to take commercially reasonable efforts to credit the Affected Employees who are working for the Company or any of its Subsidiaries in the United States will continue to be considered to be employees at will pursuant to the applicable employment at-will laws or doctrines, subject to any express written agreement to the contrary with such employee, and the Affected Employees who are working for the Company or any of its Subsidiaries outside the United States will remain on his or her terms of employment in place immediately prior to the Effective Time. For the sake of clarity, Parent or its Subsidiaries shall have no obligation to continue to employ or engage the Affected Employees following the Effective Time other than obligations in accordance with Applicable Law or collective bargaining contracts. From and after the Effective Time, Parent shall honor, and shall cause the Surviving Entity to honor, each compensation and benefit arrangement listed in Section 5.12(a) of the Company Disclosure Schedule and to perform the obligations of the Company thereunder. For the avoidance of doubt, nothing in this Agreement shall be considered a contract between Parent and its Subsidiaries and any of the Affected Employees or consideration for, or inducement with respect to, any such employee’s continued employment.
(b) With respect to each Affected Employee, Parent shall credit, or cause its Subsidiaries to credit, the period of employment and service recognized by the Company or any of its Subsidiaries immediately prior to the Effective Time (for purposes of vestingits corresponding plans, eligibilityprograms, policies or similar employment-related arrangements) to have been employment and service with Parent or any of its Subsidiaries for purposes of determining the Affected Employee’s eligibility to join (subject to satisfaction of all non-service related eligibility criteria) and vesting (but not benefit accrual for any purpose other than vacation pay, severance and termination pay, sick leave, post-retirement health coverage and satisfaction of early retirement criteria) under all employee benefit accrual plans, programs, policies or similar employment related arrangements of Parent and its Subsidiaries in which the Affected Employee is eligible to participate; provided, however, no such credit shall be provided to the extent that it would result in a duplication of credit or benefits, and nothing in this Section 5.12 shall be interpreted to provide any right to Affected Employees to participate in Parent’s equity incentive plans at the same level as Affected Employees may have participated in Company’s equity incentive plans. Parent shall waive, and to the extent necessary to effect the terms hereof, shall use its best efforts to cause the relevant insurance carriers and other third parties to waive, any restrictions and limitations for medical conditions existing as of the Effective Time of those Affected Employees and their dependents who were covered immediately prior to the Effective Time under a group health plan maintained by Parent or the Company, but only to the extent that such medical condition would be covered by Parent’s group health plan if it were not a pre-existing condition and only to the extent that such limitations would not have applied under Parent or the Company’s group health plan prior to the Effective Time. Further, Parent shall offer, or cause its Subsidiaries to offer, at the Effective Time to each Affected Employee coverage under a group health plan (as defined in Section 5000(b)(1) of the Code) which credits such Affected Employee towards the deductibles, coinsurance and maximum out-of-pocket provisions imposed under such group health plan, for the year during which the Effective Time (or such later date as the Affected Employees participate in such group health plan) occurs, with any applicable expenses already incurred during such year under Parent’s or the Company’s group health plan.
(c) Prior to the Effective Time, Parent and the Company will cooperate in good faith to establish a process to promptly integrate the Parent Benefit Plans and the Company Benefit PlansPlans following the Effective Time.
(d) The Company shall establish a date before the Effective Time as the final purchase date under the terms of the Company’s Employee Stock Purchase Plan (the “Company ESPP”), as applicableand shall cause all accumulated cash balances credited to the account of each participant in the Company ESPP on such final purchase date to be applied to purchase the number of shares of Company Common Stock that could be purchased with such amounts on such date pursuant to the Company ESPP. Each participant who would otherwise have been entitled to receive a fractional share of Company Common Stock, after giving effect to the purchase of Company Common Stock contemplated by this Section 5.12(d), shall receive, in lieu thereof, a cash disbursement (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35without interest) of ERISAsuch participant’s contributions credited to his or her account and not applied to such purchase. The Company shall take any and all actions necessary or appropriate, retiree medical benefits or disability benefits or including notification to the extent it would result in a duplication affected participants of benefits the new purchase date and termination of the Company ESPP, to cause the Company ESPP to terminate on such final purchase date, after giving effect to the purchases of Company Common Stock contemplated by this Section 5.12(d), and shall not thereafter offer any plan, program or compensation arrangement for the same period purchase of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the shares of Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsCommon Stock by means of payroll deductions.
(e) The Parties shallExcept with respect to offers of employment to prospective new employees in the ordinary course of business consistent with past practices, or the Company shall not make, and shall cause the Surviving Corporation and its SubsidiariesSubsidiaries not to make, any representations or promises, oral or written, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their coveredemployees concerning continued employment following the Effective Time, eligible dependents due to pre-existing or the terms and conditions and/or waiting periodsof that employment, active employment requirements and requirements to show evidence except in writing with the prior written consent of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateParent.
(f) Prior Notwithstanding the foregoing, nothing in this Agreement, whether express or implied, shall be treated as an amendment or other modification of any Parent Benefit Plan, Company Benefit Plan or compensation or benefit plan, program or arrangement of Parent or its Subsidiaries, or shall limit the right of Parent, the Company or any of their Subsidiaries, to amend, terminate or otherwise modify any such plan, program or arrangement. In the Closing Date, event that (i) if requested by Parent in writing at least three (3) days before the Closinga party other than Parent, the Company shall cause the Company and its or any of their Subsidiaries makes a claim or takes other action to take all necessary and appropriate actions enforce any provision in this Agreement as an amendment to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Planany such plan or arrangement, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior such provision is deemed to the Closing Date (be an amendment to such plan, program or arrangement even though not explicitly designated as such earlier date approved by the Bankruptcy Courtin this Agreement, if applicable), the Company then such provision shall take lapse retroactively and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))have no amendatory effect.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for For the avoidance of doubt, any Company Employee or other current or former employee Parent deems that the Merger and the transactions contemplated by this Agreement constitute a change of control of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including Company with respect to the matters provided for plans, agreements and arrangements specified in this Section 6.95.12(g) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesDisclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Pride International Inc), Merger Agreement (Ensco PLC)
Employee Matters. (a) Between Simultaneously with the Merger, the Surviving Corporation shall assume all employment agreements and termination benefit agreements and arrangements which are in effect at Company on the date hereof hereof. The Company and Parent agree to cooperate and take such reasonable actions as may be required to effect an orderly transition of benefits coverage under Company's 401(k) plan, including but not limited to, termination of such plan. As of the Effective Time, the Company Surviving Corporation shall (honor and satisfy all obligations and liabilities with respect to the Company Benefit Plans. Notwithstanding the foregoing, the Surviving Corporation shall cause not be required to continue any particular Company Benefit Plan after the Effective Time, and any Company Benefit Plan may be amended or terminated in accordance with its Subsidiaries to) make available terms and applicable law. To the extent that any Company Benefit Plan is terminated or amended after the Effective Time so as to reduce the benefits that are then being provided with respect to participants thereunder, Surviving Corporation shall arrange for each individual who is then a participant in such terminated or amended plan to participate in a comparable benefit plan maintained by Surviving Corporation in accordance with the eligibility criteria thereof. All welfare benefit plans of the Parent or the Surviving Corporation in which the Company's employees participate after the Effective Time shall provide coverage for preexisting health conditions to the same extent those conditions were covered under the applicable plans or programs of the Company as of the Effective Time, and its Subsidiaries so that Parent may interview such employees all limitations as to pre-existing conditions, exclusions and evaluate their roles and responsibilities with the Company and its Subsidiaries, including waiting periods shall accordingly be waived with respect to potential promotionsparticipation and coverage under those plans, transfers, other than limitations or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed waiting periods already in effect with respect to one or more Company employees which had not been satisfied as of the Closing Date by Effective Time under any welfare plan maintained for such Company employees immediately prior to the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its SubsidiariesEffective Time. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within under each such welfare benefit plan of the period of 12 months following Parent or the Closing Date (or such longer change in control coverage period as required Surviving Corporation, the outstanding claims and expenses incurred by the Company's employees under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) each corresponding welfare benefit plan of the Company Disclosure Letter, which shall consist for the portion of the individuals that are a party to those certain Retention plan year preceding the Effective Time shall be recognized, and Sale Payment retention agreements executed the Company's employees shall be given credit for amounts paid by them under each corresponding benefit plan of the Company, for the portion of the plan year preceding the Effective Time, for purposes of applying deductibles, co-payments and out-of-pocket maximums as though such amounts had been paid in accordance with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) successor welfare benefit plan of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Ariel Corp), Merger Agreement (Mayan Networks Corp/Ca)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for For a period of 12 months following the Closing Date, each employee who is employed as of beginning on the Closing Date by the Company or a Subsidiary thereof (eachand continuing until and through December 31, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date 2023 (the “Excluded EmployeesContinuation Period”) which Excluded Employees will), on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shallshall provide, or shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to provide, Continuing Employees with (i) wage or base salary levels that are not less than those provided to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between such Continuing Employees by the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed its Subsidiaries immediately prior to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicableand (ii) target annual cash bonus opportunities that are no less favorable than the target annual cash bonus opportunities provided to such Continuing Employees by the Company or its Subsidiaries immediately prior to the Effective Time (excluding, for the Parties shallavoidance of doubt, (x) the value of any equity or other long-term incentive opportunities or (y) any opportunity to elect to convert cash incentive opportunities into Company Awards). For the Continuation Period, Parent shall provide, or shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to provide, each Continuing Employee with employee benefits that are at least as favorable (excluding, for the avoidance of doubt, the value of any equity, equity-based or other long-term incentive opportunities and any transaction, retention, or change in control compensation granted or paid (A) in connection with the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby, or (B) relating to take commercially reasonable efforts transactions following the Closing) to credit those in effect for such Continuing Employee immediately prior to the Closing; provided that during the period beginning on the Closing Date and continuing for two years thereafter, Parent and the Surviving Corporation agree to keep in effect all severance plans, agreements, practices and policies that are applicable to Employees and set forth in Section 6.3(a) of the Company Employees for purposes Disclosure Letter or publicly filed with the SEC as of vestingthe date hereof, eligibilityand agree that each Continuing Employee shall, during the Continuation Period, be provided with severance benefits that are no less favorable than the severance benefits provided under such plans, agreements, practices and benefit accrual under policies (or such greater benefits as are required after giving effect to the Parent Benefit Plans and acknowledgment in Section 6.3(d)). Except as set forth in Section 6.3(a) of the Company Benefit PlansDisclosure Letter or a CBA, as applicablenothing herein shall be deemed to limit the right of Parent or its Subsidiaries (including the Surviving Corporation and its Subsidiaries) or any of their respective Affiliates to (I) terminate the employment of any Continuing Employee at any time, (II) change or modify the terms or conditions of employment for any Continuing Employee to the extent such change is not inconsistent with the provisions of this Section 6.3 or (III) change or modify any Company Plan or other employee benefit plan or arrangement in accordance with its terms; provided that such change or modification does not otherwise violate the requirements of this Section 6.3. For avoidance of doubt, nothing in this Section 6.3 shall be deemed to obligate Parent to provide non-qualified deferred compensation or defined benefit compensation (other than (ias required by Law or CBA) for any purposes with respect in the same form as provided prior to any “defined benefit plan” the Closing Date so long as defined the value thereof as in Section 3(35) of ERISA, retiree medical benefits or disability benefits or effect prior to the Effective Time is replaced during the Continuation Period in some other manner to the extent it provided herein. Notwithstanding the foregoing, the compensation and benefits treatment and terms and conditions of employment provided to all non-union Continuing Employees in Canada shall be at sufficient levels to avoid constructive dismissal.
(b) For all purposes (exclusive of purposes of defined benefit pension accrual or other plans providing for post-employment benefits, including, for the avoidance of doubt, supplemental retirement benefits, any retiree health or life insurance benefits or pursuant to any deferred compensation plan, for Employees who are not entitled to such benefit immediately prior to the Closing or pursuant to a CBA) under the employee benefit plans, programs and arrangements established or maintained by Parent and its respective Affiliates in which Continuing Employees may be eligible to participate after the Closing (the “New Benefit Plans”), each Continuing Employee shall be credited with the same amount of service as was credited by the Company immediately prior to the Effective Time under similar or comparable Company Plans in which such Continuing Employee participated immediately prior to the Effective Time (except (x) to the extent such credit would result in a duplication of benefits or compensation for the same period of service, funding thereof; or (iiy) with respect to new benefit or compensation arrangements that are not a replacement for a Company Plan and past service is not required to be credited). In addition, and without limiting the Excluded Employeesgenerality of the foregoing, (i) with respect to any severance benefits or rights) New Benefit Plans in which the Continuing Employees may be eligible to participate following the Closing, Parent or its respective Affiliates shall ensure (and shall use reasonable best efforts to cause any applicable third party insurance provider to provide) that each Continuing Employee will immediately be eligible to participate in such New Benefit Plans, without any waiting time, to the extent coverage under such New Benefit Plans replaces coverage under a similar or comparable Company Employees participatePlan in which such Continuing Employee was eligible to participate immediately before such commencement of participation and (ii) for purposes of each New Benefit Plan providing medical, dental, pharmaceutical or vision benefits to any Continuing Employee, Parent shall (or shall use reasonable best efforts to cause any applicable third party insurance provider to) cause all pre-existing condition exclusions and actively-at-work requirements of such New Benefit Plan to be waived for such Continuing Employee and his or her covered dependents, to the extent any such exclusions or requirements were waived or were inapplicable under any similar or comparable Company Employees’ service Plan in which such Continuing Employee participated immediately prior to the Closing. Parent shall (or shall use reasonable best efforts to cause any applicable third party insurance provider to) cause any eligible expenses incurred by such Continuing Employee and his or her covered dependents during the portion of the plan year of the Company Plan ending on the Closing Date to be taken into account under such New Benefit Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Benefit Plan (except to the extent such payment would result in a duplication of benefits or the funding thereof).
(c) In furtherance of Section 6.3(a)(ii), if the Effective Time occurs prior to the payment of any outstanding amounts under each Company Plan that is a fiscal 2022 cash-based short-term bonus plan, Parent shall, or shall cause its Affiliates (including the Surviving Corporation and its Subsidiaries) to (A) pay, at the time that the Company and its SubsidiariesSubsidiaries would have customarily made such bonus payments, a bonus to each eligible Continuing Employee who participates in a Company Plan that is a fiscal 2022 cash-based short-term bonus plan that is no less than the amount earned by (but not paid to) such Continuing Employee as of the Closing Date under each such plan, as applicabledetermined and paid in accordance with the terms of, and subject to the conditions of, the applicable Company Plan, and (B) to the extent the Effective Time occurs in calendar year 2022, maintain the short-term cash incentive plans in effect for the remainder of calendar year 2022 on the same terms and conditions, and with respect to the same extent targets and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan performance measures as were in effect immediately prior to the Closing Datefor such year. In furtherance of Section 6.3(a)(ii), to the extent the Company has adopted a Company Plan that is a fiscal 2023 cash-based short-term bonus plan, as permitted under Section 5.1(i) of the Company Disclosure Letter, Parent shall, or shall cause its Affiliates (including the Surviving Corporation and its Subsidiaries) to pay, at the time that the Company and its Subsidiaries would have customarily made such credit does bonus payments, a bonus to each eligible Continuing Employee who participates in each such Company Plan that is no less than the amount earned by (but not result paid to ) such Continuing Employee as of the Closing Date under each such plan, as determined and paid in duplicate benefitsaccordance with the terms of, and subject to the conditions of, the applicable Company Plan.
(ed) The Parties shallNotwithstanding anything to the contrary in Section 6.3(a), the compensation and benefits treatment and terms and conditions of employment afforded to all Continuing Employees who are covered by a CBA shall be provided in accordance with the applicable CBA. From and after the Effective Time, Parent shall assume, or shall cause the Surviving Corporation or one of its Subsidiaries to assume, the obligations of the CBAs until their respective expiration dates and treat the bargaining unit employees covered by such CBAs in accordance with the terms of the CBAs, as may be amended from time to time by the parties thereto. Each of the unions set forth on Section 6.3(d) of the Company Disclosure Letter shall be a third-party beneficiary of the obligations set forth in this Section 6.3(d) only, as required under the applicable CBA.
(e) Parent hereby acknowledges that the consummation of the Merger will constitute a “change in control” or “change of control” (or other similar phrase) for purposes of any Company Plan that contains a definition of “change in control” or “change of control” (or similar phrase), as applicable.
(f) From and after the Effective Time, Parent and its Subsidiaries (including the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any shall honor all Company Employees or any of Plans in accordance with their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, terms as applicable, in effect immediately prior to the Effective Time. Notwithstanding the foregoing, no provision of this Agreement shall limit the ability of Parent and its Subsidiaries (including the Surviving Corporation and its Subsidiaries) to provide compensation and benefits to Continuing Employees in accordance with this Agreement through plans of Parent or its Subsidiaries after the Effective Time.
(g) Following the Closing Date, and Parent in consultation with the Company’s Chief Executive Officer, shall adopt a long-term incentive program for key employees that provides for long-term incentives comparable to those offered to such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately key employees prior to the Closing Date.
(fh) Prior Notwithstanding anything to the Closing Datecontrary in this Agreement, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
clause (gd) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 6.3, the terms of this Section 6.3 are included for the sole benefit of the Parties and nothing herein, expressed shall not confer any rights or implied, is intended or will be construed to confer remedies upon or give to any Person (including, for the avoidance of doubt, any Company Continuing Employee or other current or former employee Employee of the Company, Parent Company or any of their respective Affiliates)its Subsidiaries, any participant or beneficiary in any Company Plan or any other Person or Governmental Authority (whether as a third-party beneficiary or otherwise) other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for Parties. Nothing contained in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 Agreement is intended to or shall: (i) prevent Parentconstitute or be deemed to constitute the establishment or adoption of or amendment to any Company Plan or other compensation or benefit plan, policy, program or arrangement for purposes of ERISA or otherwise or (ii) obligate the Surviving Corporation Company or any of their Affiliates from terminating the employment its Subsidiaries or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Surviving Corporation and its Subsidiaries) to (x) maintain any particular benefit plan or arrangement or prevent the amendment, modification or termination thereof after the Effective Time, or (y) retain the employment of any particular Employee. Nothing in this Agreement shall alter the employment relationship (including the at-will employment relationship, if applicable) of any Continuing Employee or confer upon any director, consultant or other similar service provider of the Company or any of its Subsidiaries any right to continue in the service of the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective its Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Domtar CORP), Merger Agreement (Resolute Forest Products Inc.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(di) From and after the Effective Time, Parent shall honor all Company Benefit Plans and Parent Benefit Plans and compensation arrangements and agreements in accordance with their terms as applicablein effect immediately before the Effective Time, provided that nothing herein shall prohibit Parent from amending or terminating any such Company Benefit Plans, Parent Benefit Plans, arrangements or agreements in accordance with their terms or from terminating the employment of any Company Employee or any Parent Employees to the extent permitted by applicable Law.
(ii) From and after the Effective Time, the Parties shall, or shall cause the Surviving Corporation Company Benefit Plans and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans in effect as of the date of this Agreement and at the Effective Time shall remain in effect with respect to employees and former employees of the Company or Parent and their Subsidiaries (the “Newco Employees”), respectively, covered by such plans at the Effective Time, until such time as Parent shall otherwise determine, subject to applicable Law and the terms of such plans. As soon as practicable following the Effective Time and consistent with any obligations arising under any collective bargaining agreement or similar contract, the Company and Parent shall take all actions necessary to transition the Company Employees’ participation in the Company Benefit Plans to the Parent Benefit Plans, and, at the effective time of such transition, such Company Employees shall cease to accrue any additional benefits under the applicable Company Benefit Plans. It is the intention of Parent and the Company, to the extent permitted by applicable Law, to (x) complete such transition to Parent Benefit Plans on a comparable basis in respect of Company Employees and Parent Employees as applicablesoon as administratively practicable after the Effective Time, and (y) provide to similarly situated Company Employees and Parent Employees following the Effective Time base salaries and wage rates and cash bonus opportunities on a comparable basis, in the case of both clauses (x) and (y) taking into account all relevant factors, including duties, geographic location, tenure, qualifications and abilities. Notwithstanding the foregoing provisions of this Section 6.7(b)(ii), except as otherwise provided under any collective bargaining agreement or similar contract, Parent shall provide each Company Employee during the 12-month period beginning on the Closing Date with cash severance benefits in an amount, and otherwise on terms, no less favorable than the amount and terms in effect immediately before the Effective Time under the Company severance plan in which the Company Employee participated immediately before the Effective Time.
(iii) With respect to any Parent Benefit Plans or new Benefit Plan in which any Company Employees first become eligible to participate at or after the Effective Time, (other than the “New Plans”), Parent shall: (iA) for any purposes waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Company Employees under any “New Plans that are health benefit plans in which such employees may be eligible to participate after the Effective Time, except to the extent such pre-existing conditions, exclusions or waiting periods would apply under the analogous Company Benefit Plan; (B) in the plan year in which the Effective Time occurs, provide each Company Employee and their eligible dependents with credit for any co-payments and deductibles paid prior to the Effective Time under a Company Benefit Plan (to the same extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket requirements under any New Plans in which such employees may be eligible to participate after the Effective Time; and (C) recognize all service of the Company Employees with the Company and its Affiliates, for purposes of eligibility to participate, vesting credit, entitlement to benefits, and, except with respect to defined benefit pension plans, benefit accrual in any New Plan in which such employees may be eligible to participate after the Effective Time, including any severance plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent such service is taken into account under the applicable New Plan and to the extent such service was granted under the analogous Company Benefit Plan; provided that the foregoing shall not apply to the extent it would result in a duplication of benefits or compensation for apply to equity-based plans unless such service credit is applicable to employees of Parent. On and after the same period of serviceEffective Time, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with shall continue in full force and effect pursuant to their terms all agreements set forth in Section 4.15(a)(i) of the Company Disclosure Schedule and its Subsidiariesany similar agreements entered into consistent with Section 6.1, as applicable, such agreements may be amended from time to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan time in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsaccordance with their terms.
(eiv) The Parties shall, Parent shall make payments to individuals who are participants in the Company’s 2012 annual cash incentive program in such amounts as are determined for such individual by the Company on or shall cause before the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to Effective Date (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has payments have not yet been made), in each case, to the extent permitted by the applicable insurance plan provider and only to the extent with such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended payments to be qualified under Section 401(a) of made as soon as practicable following the Code Effective Time (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, but in each case, effective no event later than the Business Day preceding the Closing DateMarch 15, 2013); provided, however, that any such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior participant who terminated employment before such payment is made shall instead receive payment pursuant to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, annual incentive-related provisions of such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))respective severance arrangements.
(gv) Nothing contained in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Section 6.7 or any of their respective Subsidiaries. The provisions other provision of this Section 6.9 are for the sole benefit of the Parties and nothing hereinAgreement, expressed express or implied, is intended or will be construed to confer upon any Newco Employee (or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former director, officer, employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9independent contractor) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to continued employment or service for any period or continued employment receipt of any specific benefit or service with compensation, or shall constitute the establishment of or amendment to or any other modification of any New Plan, Company Benefit Plan or Parent Benefit Plan or shall limit the right of Parent or any of its Subsidiaries to amend, modify or terminate any New Plan, Company Benefit Plan or Parent Benefit Plan. Further, this Section 6.7 shall be binding upon and shall inure solely to the benefit of the parties to this Agreement, and nothing in this Section 6.7, express or implied, is intended to confer upon any other Person (including following the Effective Time, the Surviving Corporationany Newco Employee) any rights or remedies of any particular term nature (including any third-party beneficiary rights under this Agreement) whatsoever under or condition by reason of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesthis Section 6.7.
Appears in 2 contracts
Samples: Merger Agreement (GenOn Energy, Inc.), Merger Agreement (NRG Energy, Inc.)
Employee Matters. (a) Between the date hereof and After the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent at Parent’s sole discretion, the employees of the Company and its Subsidiaries so that any Company Subsidiary (the “Company Employees”) will become employees of Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closinga Subsidiary of Parent.
(b) The Parties agree that Effective as of the Effective Time and for a period ending on the first anniversary of 12 the Closing Date, Parent shall provide, or cause the Surviving Corporation to provide, to Company Employees (provided such Company Employees remain employed by Parent or the Surviving Corporation), compensation and employee benefits that are substantially comparable, in the aggregate, to those provided to Company Employees, in the aggregate, immediately prior to the Effective Time, excluding for purposes of this comparison any equity-based compensation; provided that the base salary or regular hourly wages, whichever is applicable, and target variable cash opportunities for any Company Employee shall not be less than the base salary or regular hourly wage and target variable cash opportunity provided to such Company Employee by the Company immediately prior to the Effective Time. In the event a Company Employee’s employment with Parent or the Surviving Corporation is terminated within twelve (12) months following the Closing Date, each employee who is employed Parent shall provide, or cause the Surviving Corporation to provide, to such Company Employee severance and termination benefits pursuant to (i) the Company’s severance plan or arrangement in effect as of the Closing Date by date hereof for the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees resident country of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee (for U.S. Company Employees, specifically the Company Severance Benefit Plan, effective as of February 1, 2009), or (ii) Parent’s severance plan or arrangement in effect on the date of termination for the resident country of such Company Employee, whichever plan or arrangement provides the Company Employee with the highest amount of severance and termination benefits.
(c) Effective as of the Effective Time and thereafter, Parent shall provide, or shall cause the Surviving Corporation to provide, that, for purposes of eligibility for participation and vesting under the Parent Plans, but not, except as provided below, for purposes of determining the level of benefit entitlement, each Company Employee shall be credited with his or her years of service with the Company and the Company Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Plans in which such Company Employee participated or was eligible to participate immediately prior to the Closing DateEffective Time; provided, however, that the covenants within this Section 6.9(b) foregoing shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals extent that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it application would result in a duplication of benefits or compensation for with respect to the same period of service. The Company Employees shall be credited with prior service for purposes of determining the level of benefit entitlement under Parent’s severance and vacation plans, or as well as the retirement and other service related provisions under Parent’s equity compensation plans.
(iid) with respect Effective as of the Effective Time and thereafter, Parent shall, and shall cause the Surviving Corporation to, (i) waive all pre-existing condition exclusions, eligibility waiting periods, actively-at-work requirements and evidence of insurability requirements of such Parent Plan, to the Excluded Employees, any severance benefits or rights) in which extent permitted under the Company Employees participateParent Plans, for such Company Employees’ service with the Company Employee and its Subsidiarieshis or her covered dependents, as applicable, to the same extent and for the same purposes that unless such service was taken into account conditions would not have been waived under a corresponding Company Benefit similar Plan in effect which such Company Employee participated immediately prior to the Effective Time and (ii) credit each Company Employee with any and all deductible payments, out-of-pocket, co-payments and other eligible expenses paid or incurred by such employee and his or her covered dependents under the Plans prior to the Closing DateDate during the year in which the Closing occurs, to the extent that permitted under each Parent Plan, for purposes of determining the extent to which any such credit does not result Company Employee has satisfied all deductible and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in duplicate benefitsaccordance with such Parent Plan.
(e) The Parties shallAt Parent’s request, the Company shall take all actions reasonably necessary to amend or shall cause terminate the Surviving Corporation Company Retirement and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, Savings Program immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateEffective Time.
(f) Prior Immediately prior to the Closing DateEffective Time, (i) if requested by Parent the then-current Offering Period(s) and Purchase Period(s) (as defined in writing at least three (3the Employee Stock Purchase Plan) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) PlanEmployee Stock Purchase Plan shall terminate, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior shares shall be purchased pursuant to the Closing Date terms of the Employee Stock Purchase Plan, and (or such earlier date approved by the Bankruptcy Court, if applicable), iii) the Company shall take and shall cause its Subsidiaries to take all actions reasonably necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (Employee Stock Purchase Plan. Parent will not continue or assume the “Excess Employee Stock Purchase Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing Notwithstanding the foregoing, nothing contained in this Agreement Section 7.04 shall constitute an establishment or termination of, or (i) be treated as an amendment toof any particular Plan, or be construed as establishing, terminating or amending, (ii) give any Employee Benefit Plan sponsored, maintained or contributed third party any right to by enforce the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed 7.04 or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9iii) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with require Parent or any of its Subsidiaries Affiliates to (including following the Effective Time, the Surviving CorporationA) or maintain any particular term or condition of employment or service, Plan or (iiiB) prevent Parent, retain the Surviving Corporation or employment of any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesparticular employee.
Appears in 2 contracts
Samples: Merger Agreement (National Semiconductor Corp), Merger Agreement (Texas Instruments Inc)
Employee Matters. (a) Between the date hereof and For a period of not less than one year following the Effective TimeDate, the Company Parent shall (and the Company shall cause its Subsidiaries to) make available to Parent the provide all individuals who are employees of the Company and its Subsidiaries on the Effective Date so that Parent may interview such long as they remain employees and evaluate their roles and responsibilities with of the Company or its Subsidiaries (including employees who are not actively at work on account of illness, disability or leave of absence) on the Effective Date (taken as a whole, the “Affected Employees”), with base salary and its Subsidiaries, including with respect employee benefits which are not materially less favorable in the aggregate than the base salary and employee benefits provided generally to potential promotions, transferssimilarly situated employees of Parent (excluding incentive compensation). Nothing contained in this Section 8.11 shall be deemed to grant any Affected Employee (i) any right to continued employment after the Acceptance Date or the Effective Date or (ii) any right to any specific type or amount of, or job eliminations following eligibility for, incentive compensation or benefit, which shall be provided under Parent plans in which similarly situated employees of Parent participate. Certain benefits earned by employees of the ClosingCompany set forth on Schedule 8.11(a) of the Company Disclosure Letter shall be dealt with in the manner set forth thereon. For the avoidance of doubt, Parent hereby expressly assumes and agrees to perform the Company’s obligations under the employment agreements listed in Section 8.11(a) of the Company Disclosure Letter as amended to date in the same manner and to the same extent that the Company would be required to perform such obligations if the Offer and the Merger had not taken place.
(b) The Parties agree that for a period As of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, the Surviving Corporation shall give any Affected Employees full credit for all purposes (but not benefit accruals under any newly established defined benefit pension plans), under any new employee compensation and incentive plans, benefit (including vacation) plans, programs, policies and arrangements maintained for the benefit of Affected Employees as applicableof and after the Effective Time by the Surviving Corporation or any of its Subsidiaries for the Affected Employees’ service with the Company, its Subsidiaries and their predecessor entities (each, a “Surviving Corporation Plan”) to the Parties shallsame extent recognized by the Company immediately prior to the Effective Time under any similar Company Benefit Plan. With respect to each Surviving Corporation Plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than Subsidiaries shall (i) for cause there to be waived any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee condition or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan eligibility limitations and (ii) give each Company Employee credit effect, for the applicable plan year in which the Closing Date occurs towards applicable deductibles occurs, in determining any deductible and annual maximum out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each caselimitations, to the extent permitted claims incurred and amounts paid by, and amounts reimbursed to, Affected Employees under similar plans maintained by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days immediately prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(gc) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 8.11 are for the sole benefit of the Parties parties to this Agreement and nothing herein, expressed or implied, is intended or will shall be construed to (i) confer upon or give to any Person person (including, including for the avoidance of doubt, doubt any Company Employee Employees or other current or former employee of the Company, Parent or any of their respective AffiliatesAffected Employees), other than the Parties parties hereto and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.98.11) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentAgreement, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide constitute an amendment or modification of any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Company Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesPlan.
Appears in 2 contracts
Samples: Merger Agreement (Third Wave Technologies Inc /Wi), Merger Agreement (Hologic Inc)
Employee Matters. (a) Between Parent hereby agrees that individuals identified as continuing employees ("Continuing Employees") in Section 5.06(a)(1) of the date hereof Company Disclosure Schedule and who are employed by the Effective TimeCompany as of the Closing shall continue to be employed by the Surviving Corporation immediately following the Closing. Upon request of Parent, Company shall terminate the employment or services of all individuals not identified as a Continuing Employee as soon as practicable following the earlier to occur of (i) the consummation of the Offer or (ii) Parent's waiver of the conditions to the Offer set forth in Annex A upon an extension of the Offer. Each such terminated employee shall receive the severance pay as determined pursuant to Section 5.06(c) of the Company Disclosure Schedule with respect to such employee. Each Continuing Employee identified as a transition employee in Section 5.06(a)(1) of the Company Disclosure Schedule (a "Transition Employee") shall receive the severance pay as determined pursuant to Section 5.06(c) of the Company Disclosure Schedule with respect to such employee upon the earlier to occur of (i) termination of the Transition Employee's employment by Parent or the Surviving Corporation (other than a termination for cause as defined in Section 5.06(c) of the Company Disclosure Schedule), or (ii) the completion of the respective Transition Employee's transition period set forth in Section 5.06(a)(1) of the Company Disclosure Schedule. Prior to the consummation of the Offer, the Company shall (assist Parent in causing, and the Company Parent shall cause its Subsidiaries toreasonably endeavor to cause, each Continuing Employee who is identified in Section 5.06(a)(1) make available to Parent the employees of the Company Disclosure Schedule as key employee ("Key Employee") to enter an employment agreement substantially in the form as set forth 5.06(a)(2) of the Company Disclosure Schedule which shall provide for base salary equal to or exceeding the respective employee's salary on the date hereof (which base salary the Company represents has not been increased since April 15, 2002). Except as modified or amended with the consent of a Continuing Employee, or actions taken in furtherance thereof, Parent hereby agrees, and agrees to cause the Surviving Corporation, to comply with the terms and make required payments when due under (and not to attempt to invalidate), each of the contracts and agreements identified in Section 3.01(i) of the Company Disclosure Schedule. Neither this Section 5.06 nor any other provision of this Agreement shall limit the ability or right of the Company to terminate the employment of any of its Subsidiaries so that employees after the Closing (subject to any rights of any such employee pursuant to a written contract or agreement).
(b) From and after the Closing, for purposes of all employee benefit plans, programs and arrangements maintained by or contributed to by Parent, Parent may interview shall use commercially reasonable efforts, or shall cause the Surviving Corporation to use commercially reasonable efforts, to cause each such employees and evaluate their roles and responsibilities plan, program or arrangement, to the extent permitted by applicable law, to treat the prior service with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period affiliates of 12 months following the Closing Date, each employee person who is employed as an employee of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee subsidiaries immediately prior to the Closing Date(a "Company Employee") (to the same extent such service is recognized under analogous plans, programs or arrangements of the Company or its affiliates prior to the Closing) as service rendered to Parent or its subsidiaries, as the case may be, for purposes of eligibility to participate in and vesting thereunder (but not benefit accrual under defined benefit pension plans); provided, however, that the covenants within this Section 6.9(b) such crediting of service shall not apply operate to duplicate any benefit or the funding of such benefit. To the extent that following the Closing, a Continuing Employee participates in a Parent Benefit Plan, Parent shall use commercially reasonable efforts to cause each Parent Benefit Plan to waive any preexisting condition which was waived under the terms of any Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company Benefit Plan immediately prior to the Closing Date (the “Excluded Employees”) or waiting period limitation which Excluded Employees will, would otherwise be applicable to a Company Employee on and or after the Closing. Parent shall recognize any accrued but unused vacation time of the Company Employees as of the Closing Date, only be entitled to receive the severance benefits set forth in and subject Date to the terms extent accrued in Company's books and conditions of records, and Parent shall cause the Retention Company and Sale Payment retention agreements provided its subsidiaries to Parentprovide such paid vacation.
(c) For a period of eleven months following the Effective Time Parent shall provide, or shall cause the Surviving Corporation, the Company or their affiliates to provide to each Company Employee who is a Continuing Employee with each such entity with employee benefits that are no less favorable in the aggregate than those provided to comparable employees of the Parent. Parent shall, or shall cause the Surviving Corporation and its SubsidiariesCorporation, to assume and honor their respective obligations under all employment, severance, change provide severance pay to any Continuing Employee whose employment is terminated by Parent or the Surviving Corporation (other than a termination for cause as defined in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(cSection 5.06(c) of the Company Disclosure LetterSchedule), it being understood that or any of their respective subsidiaries, during the foregoing period beginning on the Closing Date and ending eleven months following the Effective Time. In connection with the preceding sentence, the amount of severance payable to any such terminated Company Employee shall not be construed as determined pursuant to limit any amendments otherwise permitted by the terms Section 5.06(c) of the applicable agreementsCompany Disclosure Schedule with respect to such employee.
(d) From Parent acknowledges that for purposes of all the applicable Company Benefit Plans identified on Schedule 3.01 of the Company Disclosure Schedule, the execution of this Agreement and after the consummation of the transactions contemplated by this Agreement will constitute a "Change in Control" of the Company (as that term is defined in such plans, agreements and arrangements). Parent and the Company further acknowledge that all plans set forth in the subsection entitled "Employee Benefit Plans" on Section 3.01(i) of the Company Disclosure Schedule will be terminated at the Effective Time, Time or as applicable, the Parties shall, or soon as practicable thereafter and shall cause the Surviving Corporation and its Subsidiaries, to take each use commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for cause such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitstermination.
(e) The Parties shallOther than filing the appropriate Tax returns with applicable Governmental Entities, or prior to consummation of the Offer the Company shall have taken all legally required steps to cause the Surviving Corporation termination of the U.S. Audiotex LLC Employee Pension Plan and its Subsidiaries, to take commercially reasonable efforts cause all account funds pursuant to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due such plan to pre-existing conditions and/or waiting periods, active employment requirements and requirements be distributed to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately participants prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) consummation of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Tier Technologies Inc), Merger Agreement (Official Payments Corp)
Employee Matters. (a) Between The Company shall, within fifteen (15) days following the Agreement Date, deliver to Parent an accurate and complete list as of the Agreement Date of all employees and independent contractors or consultants currently providing services to the Company or any of its Subsidiaries and indicate as of the Agreement Date for each: employing / engaging entity; classification (including notation of executive officer status with the Company); date hereof of hire / engagement or date of seniority if different; location where services are regularly performed; current salary, wage, actual bonus and/or target bonus opportunity, and/or commission rate, as applicable; accrued vacation/paid-time off; and any bonuses declared, but not paid.
(b) Unless a higher protection is given to the Effective Continuing Employees under applicable Law or any such Continuing Employee agrees otherwise, for a period of at least twelve (12) months following the Acceptance Time, the Company shall (Parent shall, and the Company shall cause its Subsidiaries to, provide to all Continuing Employees outside of the United States compensation and benefits (not including stock options or other equity compensation, retention or bonuses out of the ordinary not otherwise agreed to in Section 6.8(c)) make available that are in the aggregate, no less favorable than the compensation and benefits being provided to Continuing Employees outside of the United States by the Company immediately prior to the Acceptance Time.
(c) Parent shall cause its Subsidiaries to honor in accordance with their terms as in effect immediately prior to the employees Acceptance Time all existing employment, change of control, severance and retention arrangements between the Company or any of its Subsidiaries, on the one hand, and any current or former employee, director or consultant of the Company or any of its Subsidiaries, on the other hand, and its Subsidiaries so that Parent may interview shall recognize for such employees and evaluate their roles and responsibilities purposes continuous service with the Company and or its Subsidiaries, including with respect to potential promotionspredecessor employers, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or participating Continuing Employees under such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Dateplans; provided, however, that nothing in this Agreement shall prohibit Parent or its Subsidiaries from amending or terminating any such plans, programs, agreements or arrangements, so long as such amendment or termination complies with the covenants within terms of any such plans, programs, agreements or arrangements and applicable Law, including specifically obtaining any necessary or required consents
(d) Notwithstanding anything in this Section 6.9(b) shall not apply Agreement to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Lettercontrary, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and employment after the Effective TimeAcceptance Time for Continuing Employees whose employment is subject to a collective bargaining agreement, as applicableworks council agreement or similar Contract with any labor organization, the Parties shallworks council or employee association shall be governed by such agreement or Contract until its expiration, modification or shall cause the Surviving Corporation termination in accordance with its terms and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsapplicable Law.
(e) The Parties shallThis Section 6.8 shall be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 6.8, express or shall cause the Surviving Corporation and its Subsidiariesimplied, is intended to take commercially reasonable efforts to (i) waive confer upon any limitation on health coverage other Person any rights or remedies of any Company Employees nature whatsoever under or any by reason of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Datethis Section 6.8.
(f) Prior to the Closing Date, (i) if Unless otherwise requested by Parent in writing at least three (3) five days before prior to the ClosingAcceptance Time, the Company shall cause the Company and its Subsidiaries agrees to take (or cause to be taken) all actions necessary or appropriate to terminate, effective as of the day immediately prior to, and appropriate actions to cause (A) each Company conditioned upon the occurrence of, the Acceptance Time, any Employee Benefit Plan that is intended to be qualified under Section 401(a401(k) of the Code (the “Company 401(k) Plan”) and shall, prior to be terminated and (B) conditioned upon such termination, fully vest any and all unvested amounts of the accounts of all individuals who are participants to cease participating under the Company 401(k) Plan, in each case, effective no later than Plan at the Business Day preceding time of such termination. The form and substance of any resolutions providing for the Closing Date; provided, however, that such actions may termination of the 401(k) Plan shall be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior subject to the Closing Date (review and approval of Parent, which shall not be unreasonably withheld, conditioned or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable)delayed. The Company shall provide deliver to Parent with an advance executed copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, such resolutions as soon as administratively practicable following the Effective Time, Parent adoption of such resolutions and shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to fully comply with such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))resolutions.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Tender Offer Agreement, Tender Offer Agreement (Jazz Pharmaceuticals PLC)
Employee Matters. (a) Between Purchaser shall offer to each Business Employee employment with Purchaser, to be effective as of the date hereof and Closing (the Effective Time“Employment Offer”), which offers may be conditioned upon the Company occurrence of the Closing (for the avoidance of doubt, Employment Offers may be made orally). Each Employment Offer shall (and the Company shall cause its Subsidiaries tox) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that be for a period of 12 months following position substantially similar to the Closing Date, each employee who Business Employee’s current position and at the Business Employee’s current location and (y) include an offer to provide base pay that is employed equal to or higher than such Business Employee’s base salary as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, as described in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing DateSection 6.10(c); provided, however, that subject to the covenants within following provisions of this Section 6.9(b6.10, the foregoing shall not be construed to prevent Purchaser from changing the position, location, base pay or other terms and conditions of employment of any Continuing Employee following the Closing Date. The Business Employees who accept Employment Offers and actually (i) commence employment with Purchaser on the Closing Date, or (ii) on the Closing Date are on a leave previously approved by the Company or authorized by applicable Law (collectively, the “Continuing Employees”) shall become employees of Purchaser or one of its Affiliates effective as of immediately following the Closing and their employment with the Company shall cease as of immediately following the Closing. Any Business Employee who terminates employment with the Company as a result of the transactions contemplated by this Agreement and is subsequently hired by Purchaser within 180 days after the Closing Date shall be treated as a Continuing Employee. The Company agrees to cooperate in good faith with Purchaser to achieve the acceptance of all of the Employment Offers.
(b) At the Closing, without limiting Section 2.1, Purchaser shall assume the Change of Control Agreements and the Employment Agreements and, in each case, shall be solely responsible for any and all obligations thereunder following the Closing, except for the Change of Control Discretionary Bonuses (which are Excluded Liabilities for which the Company will claim deductions for income tax purposes) and except as otherwise set forth in this Section 6.10(b). For the avoidance of doubt, the Employment Agreements shall not apply include the SAR Agreements or the amounts payable thereunder (which are Excluded Liabilities). Notwithstanding the foregoing, in the event that Purchaser, during the eighteen-month period following the Closing Date, pays any Change of Control Retention Bonuses or severance due under the Change of Control Agreements or Employment Agreements (including accrued benefits and compensation obligations, salary and bonus payments, health benefits, life insurance, employee tax gross-ups and employment-related Taxes) (the “Retention and Severance Amounts”), then Purchaser shall deliver to the Company Employees listed on Schedule 6.9(bwritten evidence of each such payment and, at the option of Purchaser, (x) the Company shall pay to Purchaser an amount equal to 50% of the Company Disclosure LetterRetention and Severance Amounts within ten Business Days following such delivery, which shall consist (y) Purchaser may deduct an amount equal to 50% of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed Severance Amounts from amounts payable by Purchaser pursuant to Section 3.3(b) or (z) Purchaser may instruct the Escrow Agent in accordance with the Escrow Agreement to promptly pay to Purchaser an amount equal to 50% of such Retention and Severance Amounts; provided, that the Company’s obligation to reimburse Purchaser for 50% of the Retention and Severance Amounts pursuant to this Section 6.10(b) shall be capped at $2,500,000 in the aggregate. Purchaser shall notify the Company upon the satisfaction of the conditions necessary for an applicable Business Employee to earn a Change of Control Discretionary Bonus or the Retention and Severance Amounts, as set forth in such Business Employee’s Change of Control Agreement or Employment Agreement.
(c) Each Continuing Employee shall be eligible to continue to participate, at the option of Purchaser, in Company Benefit Plans (to the extent assumed by Purchaser) or in the employee benefit plans maintained by Purchaser (each, a “Purchaser Benefit Plan”) on substantially the same basis as similarly situated employees of Purchaser; provided, that the Continuing Employees shall be eligible to participate in Purchaser’s 401(k) plan as soon as practicable following the Closing Date. Following the Closing Date, each Continuing Employee shall receive credit for all service with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vestingeligibility to participate, eligibility, severance vesting and benefit accrual where length of service is relevant (excluding accruals under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISAplans); provided, retiree medical benefits or disability benefits or however, that such service need not be credited to the extent that it would result in a duplication of benefits coverage or compensation for benefits. In addition, and without limiting the same period generality of servicethe foregoing, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DatePurchaser shall, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shallpermitted by applicable Law, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially all reasonable efforts steps to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due all limitations as to pre-existing conditions and/or waiting periodsexclusions, active employment requirements and requirements to show evidence of good health under the insurability requirements, waiting periods and actively-at-work or similar requirements with respect to participation and coverage requirements applicable Parent Benefit Plan to the extent Continuing Employees under any medical, dental, pharmaceutical, vision and/or disability benefit plans that such Company Employee or covered, employees may be eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to participate in after the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan ; and (ii) give each provide Continuing Employees and their eligible dependents with credit for any co-payments, deductibles, out-of-pocket requirements and offsets (or similar payments) made under the Company Employee credit Benefit Plans for the plan year in which the Closing Date occurs towards under Purchaser Benefit Plans for the purposes of satisfying any applicable deductibles and annual deductible, out-of-pocket limits pocket, or similar requirements thereunder as if such amounts had been paid in accordance with such Purchaser Benefit Plan. Any vacation or paid time off accrued but unused by a Continuing Employee as of the Closing Date shall be credited to such Continuing Employee following the Closing Date in accordance with the policies set forth in Schedule 6.10. The Continuing Employees are not third-party beneficiaries of the provisions of this Section 6.10, and nothing herein expressed or implied will give or be construed to give any Continuing Employee any legal or equitable rights hereunder, including any right to employment or continued employment for medical expenses incurred any specified period, or level of compensation or benefits. Nothing contained in this Section 6.10 or elsewhere in this Agreement, express or implied, shall (A) limit the right of Purchaser or its Affiliates to terminate the employment or services of, or to reassign or otherwise alter the status of, any Continuing Employee or contractor or consultant of the Company and the Subsidiary after the Closing, or to change in any manner the terms and conditions of his or her employment or other service to or engagement by the Company and the Subsidiary, (B) be construed to prevent, and no action by the Company or the Subsidiary prior to the Closing Date for which payment has been madeshall limit the ability of, Purchaser or its Affiliates from terminating or modifying to any extent or in each caseany respect any employee benefit plan that Purchaser or its Affiliates may establish or maintain, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous (C) be construed as amending any Company Benefit Plan as in effect immediately prior to the Closing DateClosing.
(fd) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause pay to each applicable Business Employee a bonus award determined in accordance with the applicable bonus plan, which will not be inconsistent with the past practices of the Company and its Subsidiaries which will be prorated to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) reflect the portion of the Code year actually worked for the Company.
(the “Company 401(ke) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior Prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)Closing, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior contribute to the adoption or execution thereof. In the event the Company Company’s 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from Company’s employer matching and profit sharing contributions for the Company 401(k) Plan to fiscal year in which the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of Closing occurs through the Closing Date (subject which contributions shall be determined on a basis consistent with the Company’s past practices).
(f) The Company and Purchaser agree that, pursuant to the “Alternative Procedures” provided in Section 5 of Revenue Procedure 2004-53, with respect to the filing and furnishing of Internal Revenue Service Forms W-2, W-3 and 941 for the full calendar year in which the Closing occurs, (i) the Company and Purchaser shall report on a “predecessor-successor” basis, as set forth therein, (ii) the Company shall be relieved from furnishing Forms W-2 to any applicable eligibility requirementsContinuing Employees, but giving effect and (iii) Purchaser shall assume the obligations of the Company to furnish Forms W-2 to such Continuing Employees and Forms W-2 and W-3 with respect to Continuing Employees to the service crediting provisions of Section 6.9(d))Social Security Administration; provided that the Company shall transfer to Purchaser all Forms W-4 and W-5 with respect to the Continuing Employees, and such other data relating to Continuing Employees as shall be necessary for Purchaser to assume and satisfy such obligations accurately and in accordance with the law.
(g) Nothing After the Closing, the selling group (as defined in this Agreement Treasury Regulation Section 54.4980B-9, Q&A-3(a)) of which the Company is a part will cease to offer a group health plan to employees and, accordingly, Purchaser agrees that it shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by solely responsible for satisfying the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect continuation coverage requirements pursuant to the matters provided for in this Section 6.9Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the rules and regulations promulgated thereunder.
(h) On or before the 30th day after the Closing, the Company shall pay to each respective recipient all amounts owed under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parentthe Company’s Phantom Stock Plan, the Surviving Corporation or any effective as of their Affiliates from terminating the employment or service of any PersonApril 1, including a Company Employee2010, at any time and for any reason, as last amended; (ii) provide any Person any right to employment or service or continued employment or service with Parent or any those certain Salary Continuation Agreements between the Company and each of its Subsidiaries (including following the Effective TimeXxxxx Xxxxxxxxx, the Surviving Corporation) or any particular term or condition of employment or serviceXx Xxxxxxx, or Xxxxx Xxxxxxxxx and Xxx Xxxxxxx; and (iii) prevent Parentthe SAR Agreements, in each case in accordance with the Surviving Corporation or any terms of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the respective agreements.
(i) Purchaser shall maintain the Company, Parent or any ’s health care and dependent care flexible spending accounts established under Section 125 of their respective Subsidiariesthe Code (that are in effect at the Closing) for the remainder of the calendar year in which the Closing occurs.
Appears in 2 contracts
Samples: Purchase Agreement, Purchase Agreement (Perrigo Co)
Employee Matters. (a) Between As soon as practicable after the Closing Date (the "Benefits Date"), the Parent shall provide, or cause to be provided, employee benefit plans, programs and arrangements to employees of the Company that are substantially comparable to those made generally available to similarly situated non-represented employees of the Parent who are hired by the Parent after January 1, 2003. From the Effective Time to the Benefits Date (which the parties acknowledge may occur on different dates with respect to different plans, programs or arrangements of the Parent), the Parent shall provide, or cause to be provided, the employee benefit plans, programs and arrangements of the Company (other than equity-based plans, programs and arrangements) provided to employees of the Company as of the date hereof. The provisions of this Section 5.7(a) will not create in any current or former employee of the Company or any of its Subsidiaries any rights to employment or continued employment with the Parent, the Company or any of their respective Subsidiaries, or any right to specific terms or conditions of employment.
(b) With respect to each benefit plan, program, practice, policy or arrangement maintained by the Parent (the "Parent Plans") in which employees of the Company participate on the Benefits Date, (i) service with the Company and its Subsidiaries (or their respective predecessors) prior to the Effective Time shall be credited against all service and waiting period requirements under the Parent Plans, (ii) the Parent Plans shall not provide any pre-existing condition exclusions and (iii) the deductibles, co-payments and out-of-pocket maximums in effect under the Parent Plans shall be reduced by any deductibles, co-payments and out-of-pocket maximums paid by such individuals under the Company Benefit Plans for the plan year in which the Effective Time occurs. The Company shall take all action necessary to terminate, or cause to terminate, before the Effective Time, any Benefit Plan that is a 401(k) plan or other defined contribution retirement plan unless the Parent agrees to assume any such plan or to offer an opportunity to the participants in any such plans to rollover their accounts to a similar plan or plans of the Parent.
(c) Within a reasonable period of time after the last business day of each month after the date hereof and on the Closing Date, the Company shall, as and to the extent necessary, deliver to the Parent any additional information which Company reasonably believes would affect the determination of each person who the Company reasonably believes is a "disqualified individual" (within the meaning of Section 280G of the Code).
(d) Employees of the Company who transfer to the employment of the Parent or the Surviving Corporation after the Effective Time and meet the eligibility requirements for participation in the Parent Employee Stock Purchase Plan (the "Parent ESPP") shall be eligible to begin payroll deductions under that plan as soon as practicable after the Effective Time.
(e) Notwithstanding anything in this Agreement to the contrary and subject to the provisions of Section 5.7(a), from and after the Closing Date, the Company shall (Surviving Corporation will have sole discretion over the hiring, promotion, retention, termination and other terms and conditions of the Company shall cause its Subsidiaries to) make available to Parent employment of the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior Subject to the Closing Date; providedprovisions of Section 5.7(a), however, that nothing herein will prevent the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Subsidiaries from amending or terminating any Benefit Plan maintained by the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following or other employee benefit or fringe benefit plans of the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesin accordance with its terms.
Appears in 2 contracts
Samples: Merger Agreement (Horizon Organic Holding Corp), Merger Agreement (Dean Foods Co/)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees As of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and day after the Closing Date, only Purchaser shall offer to employ all of the Employees. Seller shall pay, discharge and be entitled to receive the severance benefits set forth in responsible for (i) all salary, wages and subject claims arising out of or relating to the terms and conditions employment of the Retention Employees on or before the Closing Date and Sale Payment retention agreements provided to Parent.
(cii) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company any employee benefits (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(caccrued vacation, annual or long-term incentive program, 401(k) of the Company Disclosure Letterplan, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From non-qualified deferred compensation plan and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or group health coverage continuation pursuant to the extent it would result in a duplication of benefits or compensation for the same period of service, or (iiCode) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company arising under Seller's employee benefit plans and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately employee programs prior to the Closing Date, including benefits with respect to claims incurred prior to or on the Closing Date but reported after the Closing Date. After the Closing Date, except as provided below, Purchaser shall pay, discharge and be responsible for all salary, wages, claims and benefits arising out of or relating to the extent that such credit does not result in duplicate benefitsemployment of the Employees by Purchaser after the Closing Date.
(eb) The Parties shallAfter the Closing Date, or Purchaser shall provide to the Employees employee benefits under employee benefit and welfare plans, including severance plans, on terms and conditions which when taken as a whole are substantially similar to those provided by Purchaser to its similarly situated officers and employees. For purposes of participation ,vesting, and (except in the case of defined benefit plans) benefit accrual under such employee benefit plans, the service of the Employees with Seller prior to the Closing Date shall be treated as service with Purchaser participating in such employee benefit plans. Purchaser shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts Purchaser welfare benefit plans that cover the Employees after the Closing Date to (i) waive any waiting period and restriction and limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to for pre-existing conditions and/or waiting periodsor insurability and (ii) cause any deductible, active co-insurance, or maximum out-of-pocket payments made by the Employees under Seller's welfare benefit plans to be credited to such Employees under Purchaser's welfare benefit plans, so as to reduce the amount of any deductible, co-insurance, or maximum out-of-pocket payments payable by the Employees under Purchaser's welfare benefits plans.
(c) With respect to any Employee whose employment requirements and requirements to show evidence is terminated by Purchaser other than for "cause" at any time during the 180 days following the Closing Date, such terminated Employee shall receive severance benefits calculated in accordance with the severance plan currently maintained by Seller as disclosed in Schedule 6.1(c) in lieu of good health receiving severance benefits under the applicable Parent Benefit Plan severance plan currently maintained by Purchaser. Seller and Purchaser agree that the severance benefits payable to all Employees terminated by Purchaser during the extent 180 days following the Closing Date will be payable (i) by Purchaser for the amount such Company aggregate severance benefits do not exceed $1.0 million; (ii) by Seller for the amount such aggregate severance benefits exceed $1.0 million but do not exceed $2.0 million; and (iii) by Purchaser for the amount such aggregate severance benefits exceed $2.0 million.
(d) Except with the prior written consent of Purchaser, Seller shall not for a period of one (1) year after the Closing Date solicit any Employee to again become an employee of Seller or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately any of its affiliates. Seller shall inform Purchaser of any Employee who resigns prior to the Closing Date, and within five (5) days of such conditionsresignation.
(e) If the transactions contemplated by this Agreement are not consummated for any reason, periods or requirements are satisfied or waived under such Parent Benefit Plan and Purchaser shall not solicit for hire any Employee for a period of one (ii1) give each Company Employee credit for year from the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Datedate hereof.
(f) Prior For each Employee, Seller shall use its reasonable efforts to deliver to Purchaser with copies of Seller's general employee benefit information, staff lists that include title and hire date, all records relating to withholding and payment of income and unemployment taxes (federal, state and local) and FICA taxes (including, without limitation, Forms W-4, Forms I-9, Employee's Withholding Allowance Certificate) with respect to wages paid by Seller during the Closing Date1995 calendar year, and other employee records (i) if requested by Parent in writing at least three (3) days before the Closingincluding, the Company without limitation, performance reviews, pre-employment investigation and background checks). Seller shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective provide Purchaser with such information no later than 30 days after the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A execution of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Agreement.
(g) Nothing As soon as practicable following the Closing Date, Purchaser and Seller shall cooperate to transfer from Seller's 401(k) plan, as applicable to Purchaser's 401(k) plan, the assets and liabilities in this Agreement Seller's 401(k) plan attributable to the Employees.
(h) Seller shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to promptly reimburse Purchaser for all costs incurred by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including Purchaser with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsoredon leave or disability on the Closing Date who does not return to work within 180 days after the Closing Date, maintained or contributed to which are paid by the Company, Parent or any of their respective SubsidiariesPurchaser within said 180-day period.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (First Nationwide Parent Holdings Inc), Purchase and Sale Agreement (First Nationwide Holdings Inc)
Employee Matters. (a) Between Parent will, or will cause the date hereof and the Effective TimeSurviving Corporation to, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of give individuals who are employed by the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing DateEffective Time who remain employed with the Surviving Corporation or any Subsidiary of the Surviving Corporation after the Effective Time (the “Affected Employees”) full credit for purposes of eligibility, vesting and determination of the level of benefits under any employee benefit plans or arrangements maintained by Parent or any Subsidiary of Parent for such Affected Employees’ service with the Company or any of its Subsidiaries to the same extent recognized immediately prior to the Effective Time and to the extent permitted under Parent’s employee benefit plans; provided, however, that the covenants within this Section 6.9(b) such crediting of service shall not apply operate to duplicate any benefit or the funding of any such benefit.
(b) To the extent permitted under Parent’s welfare benefit plans, Parent will, or will cause the Surviving Corporation to, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Company Affected Employees listed on Schedule 6.9(b) under any welfare benefit plans that such employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect with respect to such employees and that have not been satisfied as of the Company Disclosure Letter, which shall consist of Effective Time under any welfare benefit plan maintained for the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company Affected Employees immediately prior to the Closing Date Effective Time, and (ii) provide each Affected Employee with credit for any co-payments and deductibles paid in the “Excluded Employees”) calendar year in which Excluded the Effective Time occurs for purposes of satisfying any applicable deductible or out of pocket requirements for such year under any welfare benefit plans that Affected Employees will, on and are eligible to participate in after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to ParentEffective Time.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if If requested by Parent in writing at least three (3) days before the ClosingParent, the Company Board shall cause adopt resolutions terminating the Company and its Subsidiaries to take all necessary and appropriate actions to cause (ACompany’s 401(k) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) effective no later than the day immediately prior to be terminated the Closing Date and provide notice to the trustee of the Company 401(k) Plan pursuant to the terms of the Company 401(k) Plan. Parent shall notify the Company, in writing, at least ten (B10) all participants business days prior to cease participating under the Closing Date of any such request. If Parent makes such a request to terminate the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent and the trustee of the Company 401(k) Plan with an advance a copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon such Board resolutions. Neither the Company nor any of its Subsidiaries prior to Closing shall have any other responsibilities or obligations with respect to the adoption or execution thereoftermination of the Company 401(k) Plan. In the event If the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Timeterminated, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to cause the trustee of a defined contribution retirement plan intended to be qualified under Section 401(a) in which employees of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan or any of its Subsidiaries participate, to accept any “eligible rollover distributions” (within the meaning of as such term is defined under Section 402(c)(4) 402 of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Corel Corp), Merger Agreement (Intervideo Inc)
Employee Matters. (a) Between the date hereof From and after the Effective Time, the Company shall, and to the extent within its control, Parent shall (and cause the Company to, honor all Company Benefit Plans in accordance with their terms as in effect immediately before the Effective Time. For a period of one year following the Control Date, Parent shall provide, or shall cause its Subsidiaries to) make available to Parent the employees be provided, to each current employee of the Company and its Subsidiaries so (“Company Employees”) (i) base compensation and cash and equity target incentive opportunities that, in each case, are no less favorable than were provided to the Company Employee immediately before the Effective Time (it being understood that in lieu of equity compensation awards, Parent may interview provide Company Employees who, as of immediately prior to the Effective Time were eligible to receive Company equity compensation awards, long-term incentive awards that are settled in cash in an amount sufficient to replace the grant date value of the Company Employee’s equity compensation opportunity immediately prior to the Effective Time, provided, that, except as set forth in this Section 5.7(a), such employees long-term incentive awards shall have the same terms and evaluate their roles conditions as those applicable to the equity awards granted by Parent to its similarly situated employees), and responsibilities (ii) employee benefits that are no less favorable in the aggregate than the employee benefits provided to the Company Employee immediately before the Effective Time. Without limiting the generality of the foregoing, (A) Parent shall or shall cause the Surviving Corporation to provide to each Company Employee whose employment terminates during the one-year period following the Control Date under circumstances that would give rise to severance benefits under the Company Benefit Plans set forth on Section 5.7(a) of the Company Disclosure Schedules (the “Company Severance Plans”), severance benefits in accordance with the terms of the applicable Company Severance Plan in which such Company Employee is eligible to participate immediately prior to the Effective Time and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations (B) during such one-year period following the ClosingControl Date, severance benefits offered to each Company Employee shall be determined taking into account all service with the Company, its Subsidiaries (and including, on and after the Effective Time, the Surviving Corporation and any of its Affiliates) and without taking into account any reduction after the Effective Time in compensation paid or benefits provided to such Company Employee.
(b) The Parties agree that for a period of 12 months following If the Closing DateControl Date occurs before February 1, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each2022, a “Company Employee”) shall be provided with annual base salary or base wage ratethen no later than March 15, and employee benefits that are2022, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation to, pay to each Company Employee who participates in a Company annual bonus plan (or any successor plan of Parent and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change ) an annual bonus payment in control, retention and other agreements, if any, between respect of calendar year 2021 in an amount that is based on the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms achievement of the applicable agreements.
performance goals at the greater of (di) From target performance and (ii) 130% of actual performance, but in no event greater than 200% of target. If the Control Date occurs on or after the Effective TimeFebruary 1, as applicable2022 but before February 1, the Parties 2023, then no later than March 15, 2023, Parent shall, or shall cause the Surviving Corporation to, pay to each Company Employee who participates in a Company annual bonus plan (or any successor plan of Parent and its Subsidiaries) an annual bonus payment in respect of calendar year 2022 in an amount that is based on the achievement of the applicable performance goals at the greater of (A) target performance and (B) 130% of actual performance, to take commercially reasonable efforts to credit the Company Employees but in no event greater than 200% of target.
(c) For all purposes (including for purposes of vesting, eligibilityeligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Control Date (the “New Plans”), severance each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Control Date, to the same extent as such Company Employee was entitled, before the Control Date, to credit for such service under any similar Company Benefit Plan in which such Company Employee participated or was eligible to participate immediately prior to the Control Date; provided that the foregoing shall not apply (x) for benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicabledefined benefit pension plans, (other than (iy) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical qualifying for subsidized early retirement benefits or disability benefits or (z) to the extent it that its application would result in a duplication of benefits or compensation for benefits. In addition, and without limiting the same period generality of servicethe foregoing, or (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any New Plans to the extent coverage under such New Plan is comparable to a Company Benefit Plan in which such Company Employee participated immediately before the Control Date (such plans, collectively, the “Old Plans”), and (ii) with respect for purposes of each New Plan providing medical, dental, pharmaceutical, vision and any other insurance benefits to any Company Employee, Parent shall cause all preexisting condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its Subsidiaries in which such employee participated immediately prior to the Excluded EmployeesControl Date, and Parent shall cause any severance benefits eligible expenses incurred by such employee and his or rights) her covered dependents during the portion of the plan year of the Old Plans ending on the date such employee’s participation in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, corresponding New Plan begins to the same extent and for the same purposes that such service was be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(d) Parent hereby acknowledges that a corresponding “change in control” (or similar phrase) within the meaning of the Company Benefit Plan in effect immediately prior to Plans will occur at the Closing DateEffective Time, to the extent that such credit does not result in duplicate benefitsas applicable.
(e) The Parties shall, or shall cause Without limiting the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage generality of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the ClosingSection 8.10, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 5.7 are solely for the sole benefit of the Parties parties to this Agreement, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other no current or former director, employee of the Company, Parent or consultant or any other person shall be a third-party beneficiary of their respective Affiliates)this Agreement, other than the Parties and their respective permitted successors and assigns, nothing herein shall be construed as an amendment to any third party beneficiary, legal or equitable Company Benefit Plan or other rights compensation or remedies (including with respect to the matters provided benefit plan or arrangement for in this Section 6.9) under any purpose or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) otherwise shall prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Canadian National Railway Co), Merger Agreement (Kansas City Southern)
Employee Matters. (a) Between Except as provided in this Section 7.3, for a period beginning on the date hereof Closing Date and continuing thereafter until the end of calendar year 2018 (the “Continuation Period”), Parent shall provide, or shall cause the Surviving Corporation and its Subsidiaries to provide, Employees as of immediately prior to the Effective Time who continue employment with Parent or any of its Subsidiaries, including the Surviving Corporation, at or following the Closing (the “Continuing Employees”) with employee benefits (excluding compensation and equity-based compensation) that are (i) with respect to employee benefits that were elected for the Continuation Period during the Company’s annual enrollment period recently ended, the same as those in effect for such Continuing Employees immediately prior to the Closing, and (ii) with respect to employee benefits that were not elected for the Continuation Period during the Company’s annual enrollment period recently ended, comparable in the aggregate to those in effect for such Continuing Employees immediately prior to the Closing; provided that until the one year anniversary of the Closing Date, Parent and the Effective TimeSurviving Corporation shall keep in effect all severance plans, the Company shall (practices and the Company shall cause its Subsidiaries to) make available policies that are applicable to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, date hereof and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this set forth on Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b7.3(a) of the Company Disclosure Letter. During the Continuation Period, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited Subsidiaries to, those provide the Continuing Employees coverage under the same Company Benefit Plans set forth on Schedule 6.9(cin Section 7.3(a) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, Letter as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan were in effect immediately prior to the Closing Date. Except as set forth in Section 7.3(a) of the Company Disclosure Letter, nothing herein shall be deemed to limit the right of Parent or any of their respective Affiliates to (i) terminate the employment of any Continuing Employee at any time, (ii) change or modify the terms or conditions of employment for any Continuing Employee to the extent such change is not inconsistent with the provisions of this Section 7.3 or (iii) change or modify any Company Plan or other employee benefit plan or arrangement in accordance with its terms; provided that such credit change or modification does not result in duplicate benefitsotherwise violate the requirements of this Section 7.3.
(eb) The Parties shallIn the event that, during the 12 month period following the Closing Date, Parent shall or shall cause the Surviving Corporation to offer (a “Reduced Compensation Offer”) any Continuing Employee employment terms having (x) a rate of basic pay, (y) a target short-term incentive opportunity (including sales or management incentives) and its Subsidiaries(z) a target long-term incentive opportunity that, in the aggregate, is less than the rate of basic pay, target short-term incentive opportunity and the target long-term incentive opportunity in the aggregate that was made available to take commercially reasonable efforts such Continuing Employee immediately prior to the Closing (the “Pre-Closing Compensation”), such Reduced Compensation Offer shall be provided to the Continuing Employee in writing and such Continuing Employee shall have 7 days to consider whether to (i) waive accept employment on the terms provided in the Reduced Compensation Offer or (ii) reject the Reduced Compensation Offer and instead receive severance benefits. If a Continuing Employee shall accept the Reduced Compensation Offer, the rate of compensation described therein shall not take effect earlier than 28 days following the date the Reduced Compensation Offer is provided to the Continuing Employee (the “Reduced Compensation Effective Date”).
(c) Notwithstanding anything to the contrary in this Section 7.3, Parent shall or shall cause the Surviving Corporation to pay severance to (i) any limitation on health coverage Continuing Employee who rejects a Reduced Compensation Offer and who voluntarily terminates employment within 14 days following the rejection of such Reduced Compensation Offer, (ii) any Continuing Employee (including any Continuing Employee who accepts or rejects a Reduced Compensation Offer) who is terminated by the Company Employees without cause (as such term is defined in the Company Severance Plan or such Continuing Employee’s employment agreement) within 12 months following the Closing Date or, if applicable, the Reduced Compensation Effective Date and (iii) any of their coveredContinuing Employee who (x) is notified within the 12 month period following the Closing that his or her worksite is being relocated more than fifty (50) miles, eligible dependents (y) declines to relocate and (z) voluntarily terminates employment or is terminated without cause (as such term is defined in the Company Severance Plan or such Continuing Employee’s employment agreement) due to prehis or her decision not to relocate, in each such case, in accordance with the severance plans, practices and policies that are applicable to Employees as of the date hereof and set forth on Section 7.3(c) of the Company Disclosure Letter and any individual severance entitlements in an employment agreement, offer letter or severance letter set forth on Section 7.3(c) of the Company Disclosure Letter, except that, with respect to any Continuing Employee who has accepted a Reduced Compensation Offer, the amount of such severance benefits shall be determined assuming that such Continuing Employee was receiving, at termination, the Pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan Closing Compensation.
(d) Notwithstanding anything to the extent such Company Employee or coveredcontrary in this Section 7.3, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditionsthe pre-closing Compensation Committee of the Board (or other appropriate Company representatives) shall determine fiscal year 2017 annual bonuses under the Time Inc. 2017 Annual Incentive Plan, periods or requirements are satisfied or waived under such Parent Benefit the Time Inc. Advertising Sales Incentive Plan and (ii) give each any other annual incentive or short-term incentive bonus plan of the Company Employee credit or any of its Subsidiaries in effect for the plan 2017 fiscal year of the Company in which the Closing Date occurs towards applicable deductibles accordance with their terms and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately make bonus payments prior to the Closing Date.
(fe) Prior Notwithstanding anything to the contrary in this Section 7.3, prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall establish, or shall cause its Subsidiaries to establish, the Time Inc. 2018 Annual Incentive Plan (the “2018 AIP”), the Time Inc. 2018 Advertising Sales Incentive Plan (the “2018 ASIP”) and other annual incentive and short-term incentive bonus plans for fiscal year 2018 based on the budgetary goals established by the pre-Closing Company Board (the “FY 2018 Company Bonus Plans”). Notwithstanding the terms and conditions of any FY 2018 Company Bonus Plan to the contrary, (1) if a Continuing Employee participates in the 2018 AIP and such Continuing Employee either (a) participates in an annual incentive or short-term bonus plan sponsored or maintained by Parent and its Affiliates (the “FY 2018 Parent Bonus Plans”) following June 30, 2018 or (b) terminates employment with the Company and its Subsidiaries and is entitled to take all necessary receive severance, such Continuing Employee shall receive a Pro-Rated Incentive; (2) if a Continuing Employee participates in the 2018 ASIP or a sales incentive plan of the Company or its Subsidiaries and appropriate actions such Continuing Employee either (a) participates in a FY 2018 Parent Bonus Plan or (b) terminates employment with the Company and its Subsidiaries and is entitled to receive severance, such Continuing Employee shall receive a bonus based on actual performance through June 30, 2018 or the date of termination (whichever is earlier); and (3) Parent shall pay, or shall cause Surviving Corporation to pay, any bonus payment payable under clauses (A1) each and (2) above no later than 60 days after June 30, 2018. The Company Benefit Plan intended shall obtain Parent’s prior consent to be qualified under the terms and conditions of such 2018 bonus plans to the extent they contain material changes from the Company’s corresponding bonus plans for 2017 (except as modified by this Section 401(a7.3(e)); provided that the changes described in Section 7.3(e) of the Code Company Disclosure Letter shall not require Parent’s consent. An Employee’s “Pro-Rated Incentive” shall mean the product of (the “Company 401(ki) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.below:
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (Time Inc.)
Employee Matters. (a) Between On and after the date hereof Closing, Parent shall, and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries the Surviving Entity to) make available to Parent the employees , honor in accordance with their terms all severance obligations of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the or any Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, listed in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b2.23(a) of the Company Disclosure LetterSchedule, which except as may otherwise be agreed to by the parties thereto, and the Company or Parent shall consist pay on the Closing Date to the applicable officers and employees listed in said Section of the individuals Company Disclosure Schedule, any amounts with respect to such severance obligations that are a party to those certain Retention and Sale Payment retention agreements executed with payable by their terms upon consummation of the Company Merger, at the Effective Time or on the Closing Date (collectively, the “Severance Amounts”) unless prior to the Closing Date any of the Severance Amounts are funded into the SPS Benefits Protection Trust (the “Excluded Trust”), in which case such funded Severance Amounts shall be payable to such applicable officers and employees directly from the Trust. For the period through September 30, 2004, employees of the Surviving Entity and the Company Subsidiaries who remain employed after the Effective Time (the “Company Employees”) which Excluded Employees willwill continue to participate in the employee benefit plans (other than deferred compensation plans, supplemental retirement plans, management incentive plans (except as set forth in clause (b) below for the plans in effect on and after the Closing Date), only be entitled to receive the severance benefits long range incentive plans (except as set forth in clause (b) below for the plans in effect on the Closing Date), performance incentive plans, severance plans (excluding severance obligations that Parent has agreed to honor in accordance with the immediately preceding sentence), and subject stock option plans or other employer stock match or other employer stock related provisions) on substantially similar terms to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) those currently in effect. Thereafter, Parent shall, or and shall cause the Surviving Corporation and its SubsidiariesEntity to, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between provide the Company (Employees with the types and levels of employee benefits no less favorable in the aggregate than those maintained from time to time by Parent or a Subsidiary thereof) the Surviving Entity for similarly-situated employees of Parent or the Surviving Entity. Parent shall, and a shall cause the Surviving Entity to, treat, and cause the applicable benefit plans to treat, the service of Company EmployeeEmployees with the Company or the Company Subsidiaries attributable to any period before the Effective Time as service rendered to Parent of the Surviving Entity for purposes of eligibility to participate, vesting and for other appropriate benefits including, but not limited to, those applicability of minimum waiting periods for participation. Without limiting the foregoing, Parent shall not, and shall cause the Surviving Entity to not, treat any Company Benefit Plans set forth on Schedule 6.9(cEmployee as a “new” employee for purposes of any exclusions under any health or similar plan of Parent or the Surviving Entity for a pre-existing medical condition, and any deductibles and co-pays paid under any of the Company’s or any of the Company Subsidiaries’ health plans shall be credited towards deductibles and co-pays under the health plans of Parent or the Surviving Entity, if applicable. Parent shall, and shall cause the Surviving Entity to, make appropriate arrangements with its insurance carrier(s) to ensure such results. Notwithstanding the foregoing, Parent and the Company acknowledge that group health, prescription drug and dental benefit plans are subject to renewal effective January 1, 2004; that the Company will begin renewal negotiations and consideration of plan design changes prior to, but will not complete the renewal process by, the Effective Time; provided that the Effective Time has not occurred by January 1, 2004; and that market factors in recent years have created substantial volatility in group health, prescription drug and dental plan renewals. Therefore, Parent shall have the right to make plan design changes in any or all of the foregoing plans to the extent reasonably necessary to keep premium increases for individual plans below ten percent (10%) for the 2004 plan year.
(b) After the Closing, Parent shall cause the Surviving Entity to honor all obligations which existed prior to the Effective Time under the Company’s deferred compensation plans and supplemental retirement plans and, to the extent earned in accordance with the terms of the plan and accrued prior to the Effective Time, giving effect to pro-ration for partial years of service, all obligations which existed under the Company’s long range incentive plans and management incentive plans, including, without limitation, the SPS Technologies, Inc. Management Incentive Plan and SPS Technologies, Inc. Long Range Incentive Plan. Except as is otherwise required by the existing terms of the written employment and severance agreements to which the Company is presently a party and listed in Section 2.23(a) of the Company Disclosure LetterSchedule, it being understood that the foregoing shall future accruals may be (but are not be construed required to limit be) provided for under any amendments otherwise permitted by the terms such plan(s) or under any similar plan(s) of the applicable agreementsSurviving Entity or Parent.
(dc) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for Notwithstanding any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or provision to the extent it would result contrary in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under this Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)4.12, the Company shall take all actions necessary to ensure that the Company’s retirement arrangements in respect of current non-employee directors (involving payments of lifetime annual retainers to such directors and granting to such directors the right to elect to receive all or a portion of such annual retainers in discounted price options or otherwise) shall terminate as of the Effective Time and thereafter be of no further force or effect, and shall cause its Subsidiaries provide to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Time evidence reasonably satisfactory to Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning agreement of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable such directors to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))termination.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (SPS Technologies Inc), Merger Agreement (Precision Castparts Corp)
Employee Matters. (a) Between the date hereof Except as otherwise provided herein, from and after the Effective Time, Parent shall honor all Company Benefit Plans in accordance with their terms as in effect immediately before the date hereof or as modified after the date hereof through the Effective Time as permitted by this Agreement and the terms of such Company Benefit Plan; provided that nothing in this Agreement shall be deemed to limit or otherwise impair Parent’s ability to amend or terminate any Company Benefit Plan in accordance with its terms. Each of the Company and Parent agrees that, for purposes of each Company Benefit Plan, the transactions contemplated by this Agreement shall constitute a “change of control” or “change in control” or term of similar import, as applicable.
(b) From the Effective Time until the twelve (12) month anniversary of the Effective Time, subject to statutory and other legal requirements, Parent shall ensure that each employee of the Company shall cause or its Subsidiaries towho continues in employment with Parent or its Subsidiaries, including the Surviving Company, and who is not subject to a collective bargaining agreement (the “Company Employees”) make available to Parent the employees of shall receive a base salary or hourly wage rate no less than that provided by the Company and its Subsidiaries so immediately prior to the Effective Time. From the Effective Time until December 31, 2017, Parent shall provide or shall cause the Surviving Company and its Subsidiaries to provide to each Company Employee a cash commission opportunity and target cash bonus opportunity each no less than that Parent may interview such employees and evaluate their roles and responsibilities with provided by the Company and its SubsidiariesSubsidiaries immediately prior to the Effective Time. From the Effective Time, including Parent shall cause the Surviving Company and its Subsidiaries to provide welfare and employee benefit plans, programs and arrangements (other than with respect to potential promotions, transfers, non-cash incentive or job eliminations following the Closing.
(bseverance) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that areare substantially comparable, in the aggregate, substantially comparable to those in effect for provided to similarly situated employees of Parent and its Subsidiaries. In additionFrom and after the Effective Time, Parent shall provide to each Company Employee an equity or equity-based incentive opportunity that is substantially similar to the equity or equity-based incentive opportunity provided to similarly-situated employees of Parent and its Subsidiaries. For a period commencing at the Effective Time and ending not less than twelve (12) months after the Effective Time, Parent shall ensure that each Company Employee who is not party to either a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with Individual Agreement providing severance benefits (subject to satisfying any applicable release requirements) or the Company Change in Control Severance Plan shall receive severance benefits that are no less favorable than those in effect for such provided by the Company Employee and its Subsidiaries immediately prior to the Closing Date; providedEffective Time. Notwithstanding anything to the contrary herein, however, that the covenants within nothing in this Section 6.9(b5.7(b) shall not apply be deemed to the Company Employees listed on Schedule 6.9(b) be a guarantee of employment to any employee or officer of the Company Disclosure Letter, which shall consist or its Subsidiaries or to impose any obligation on Parent or its Subsidiaries to continue the employment of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentany person.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between affiliates shall recognize the service of employees with the Company and its Subsidiaries and their predecessors prior to Closing as service with Parent for all purposes in connection with any employee benefit plan, program or arrangement (including any vacation, paid time off and severance policies) maintained by Parent or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) one of its affiliates following the Effective Time to the extent credited for such purpose by the Company Disclosure Letter, it being understood that the foregoing shall not be construed or its Subsidiaries immediately prior to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than except (i) for benefit accrual purposes under any purposes with respect to any “defined benefit pension plan” , (ii) for purposes of any retiree welfare plan or (iii) as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(ed) The Parties shall, or shall cause the Surviving Corporation Parent and its Subsidiaries, to take affiliates shall use commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees waive, or any of their coveredcause its insurance carriers to waive, eligible dependents due all limitations as to pre-existing and at-work conditions, if any, with respect to participation and coverage requirements applicable to Company Employees under any group health plan (as defined in Section 4980B of the Code) that is made available to such employees following the Effective Time by Parent or one of its affiliates, unless such conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health would not have been waived under the applicable Parent Benefit Plan to comparable plans of the extent Company or its Subsidiaries in which such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, employees participated immediately prior to the Closing DateEffective Time, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each provide credit to Company Employee credit Employees for the plan year in which the Closing Date occurs towards applicable any co-payments, deductibles and annual out-of-pocket limits expenses paid by such employees under any group health plan of the Company or its Subsidiaries during the portion of the relevant plan year following the Effective Time in which Company Employees first participate therein for medical expenses incurred prior to the Closing Date for which payment has been madepurposes of any applicable co-payments, in each case, to the extent permitted by the applicable insurance deductibles and out-of-pocket expense requirements under any such group health plan provider of Parent and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Dateits affiliates.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(ge) Nothing in this Agreement Section 5.7 shall constitute be treated as an establishment or termination amendment of, or an amendment to, or be construed as establishing, terminating or amendingundertaking to amend, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesemployee benefit plan. The provisions of this Section 6.9 5.7 are solely for the sole benefit of the Parties respective parties to this Agreement and nothing hereinin this Section 5.7, expressed express or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to shall (i) be deemed or construed to establish any Company Benefit Plan or Parent Benefit Plan, (iii) prevent or limit Parent, the Surviving Corporation Company or any Affiliate of Parent from amending or terminating any Company Benefit Plan or Parent Benefit Plan in accordance with their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or serviceterms, or (iiiiv) prevent Parent, the Surviving Corporation create any third-party rights in any Company Employee (or any of their Affiliates from terminating, revising beneficiaries or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesdependents thereof).
Appears in 2 contracts
Samples: Merger Agreement (Windstream Holdings, Inc.), Merger Agreement (EarthLink Holdings Corp.)
Employee Matters. (a) Between Parent will cause the date hereof Surviving Corporation to honor the obligations of the Company or any of its subsidiaries under the provisions of all employment, consulting, termination, severance, change of control, and indemnification agreements set forth in Section 7.7 of the Effective TimeCompany Disclosure Schedule between and among the Company or any of its subsidiaries and any current or former officer, director, consultant, or employee of the Company or any of its subsidiaries. The Company shall terminate and shall cause each of its subsidiaries to terminate prior to the Closing Date any and all employees of the Company or any of its subsidiaries who do not have proper work authorization from any applicable Governmental Entity in respect of their employment with the Company or its subsidiaries. 44 52
(b) At the request of Parent, the Company shall, not less than ten days prior to the scheduled Closing Date, terminate its 401(k) retirement plan and complete the distribution of all participants' accounts thereunder (including, direct roll over of outstanding loans).
(c) The Company shall terminate its 1997 Employee Stock Purchase Plan (the "COMPANY STOCK PURCHASE PLAN"), including all employee salary deductions in connection therewith, on or before the Closing Date. On the Closing Date, all accumulated employee salary deductions shall be applied to the purchase of whole shares of Company Common Stock in accordance with the terms of the Company Stock Purchase Plan and any remaining employee salary deductions shall be returned to participants without interest. The shares of Company Common Stock to be delivered by the Company pursuant to the Company Stock Purchase Plan shall be converted into cash on the Closing Date in accordance with Article III, without further action by any participant. Further, the Company shall immediately amend, effective as of the date hereof, the Company Stock Purchase Plan to suspend any new offering periods or stock purchases after the date hereof (and any increases in employee salary deductions thereunder) except employees currently participating therein may continue to purchase stock in the current offering period in accordance with their current salary deduction election or may reduce the amount of their salary deduction election through the Closing Date. The Company shall promptly notify Parent of any changes in employee salary deductions and the number of shares of Company Common Stock hereafter acquired under the Company Stock Purchase Plan.
(d) Except as permitted in Section 3.2(a)(ii)(A), the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiariesnot, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that accelerate the covenants within this Section 6.9(b) shall not apply to vesting of any stock options granted under the Company Employees listed on Schedule 6.9(bOption Plans.
(e) United States employees of the Company Disclosure Letter, which shall consist who remain employees of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiariesfollowing the Effective Time ("CONTINUING U.S. EMPLOYEES") shall, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From from and after the Effective Time, as applicable, participate in Parent benefit plans identified in Section 7.7(e) of the Parties shall, or shall cause Parent Disclosure Schedule. Parent reserves the right to change such benefits from time to time. Parent and the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to will give Continuing U.S. Employees full credit the Company Employees for purposes of vesting, eligibility, severance eligibility and vesting under applicable Parent benefit accrual under the Parent Benefit Plans plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or employee arrangements to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) each such Continuing U.S. Employee has been credited with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and or any of its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account subsidiaries under a corresponding Company each comparable Benefit Plan in effect or Employee Arrangement maintained by the Company immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateEffective Time.
(f) Prior to Parent and the Closing Date, Surviving Corporation will use their respective reasonable efforts to: (i) if requested by Parent waive all limitations as to pre-existing condition exclusions and waiting periods in writing at least three (3) days before respect of participation and coverage requirements applicable to the ClosingContinuing U.S. Employees under any of Parent's benefit plans or employee arrangements that such Continuing U.S. Employees may be eligible to participate in after the Effective Time, other than limitations or waiting periods that are already in effect in respect of such Continuing U.S. Employees and that have not been satisfied as of the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Effective Time under any Benefit Plan intended or Employee Arrangement maintained for the Continuing U.S. Employee immediately prior to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) PlanEffective Time, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than provide each Continuing U.S. Employee with credit for the date thirty (30) days remaining short plan year for any co-payments and deductibles paid under each comparable Benefit Plan or Employee Arrangement maintained by the Company immediately prior to the Closing Date (Effective Time in satisfying any applicable deductible or co-payment requirements under any of Parent's benefit plans or employee arrangements that such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries Continuing U.S. Employees are eligible to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant participate in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following after the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Texas Instruments Inc), Merger Agreement (Texas Instruments Inc)
Employee Matters. (a) Between As soon as practicable after the date hereof and Closing Date (the Effective Time"Benefits Date"), the Company Parent shall (provide, or cause to be provided, employee benefit plans, programs and the Company shall cause its Subsidiaries to) make available arrangements to Parent the employees of the Company and its Subsidiaries so that are the same as those made generally available to similarly situated non-represented employees of the Parent who are hired by the Parent after January 1, 2003. From the Effective Time to the Benefits Date (which the parties acknowledge may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including occur on different dates with respect to potential promotionsdifferent plans, transfersprograms or arrangements of the Parent), the Parent shall provide, or job eliminations following cause to be provided, the Closingemployee benefit plans, programs and arrangements of the Company (other than equity-based plans, programs and arrangements) provided to employees of the Company as of the date hereof.
(b) The Parties agree that for a period of 12 months following the Closing DateWith respect to each benefit plan, each employee who is employed as of the Closing Date program, practice, policy or arrangement maintained by the Company or a Subsidiary thereof Parent (each, a “Company Employee”the "Parent Plans") shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated which employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of participate on the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Benefit Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately Subsidiaries (or their respective predecessors) prior to the Closing Date, to Effective Time shall be credited against all service and waiting period requirements under the extent Parent Plans (provided that such credit does recognition shall not result in duplicate benefits.
be for the purpose of determining (eA) The Parties shallretirement benefits under the Parent's defined contribution plans (unless otherwise required by law), or (B) any Parent subsidy under the Parent's retiree health plans) and (C) Parent's sabbatical benefit, (ii) the Parent Plans shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive not provide any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periodscondition exclusions and (iii) the deductibles, active employment requirements copayments and requirements to show evidence of good health out-of-pocket maximums in effect under the applicable Parent Benefit Plan to Plans shall be reduced by any deductibles, copayments and out-of-pocket maximums paid by such individuals under the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit Plans for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, Effective Time occurs. Unless Parent consents otherwise in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)writing, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation action necessary to effect this Section 6.9(f) and a reasonable opportunity terminate, or cause to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentenceterminate, as soon as administratively practicable following before the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to Benefit Plan that is a 401(k) plan or other defined contribution retirement plan intended plan.
(c) Within a reasonable period of time after the last business day of each month after the date hereof and on the Closing Date, the Company shall, as and to be qualified under Section 401(a) the extent necessary, deliver to Parent any additional information which Company reasonably believes would affect the determination of each person who the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” Company reasonably believes is a "disqualified individual" (within the meaning of Section 402(c)(4) 280G of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(gd) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed Employees of the Company who transfer to by the Company, employment of the Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any after the Effective Time and meet the eligibility requirements for participation in the Parent Employee Stock Purchase Plan (the "Parent ESPP") shall be eligible to begin payroll deductions under that plan as of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following next entry date thereunder beginning after the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Printcafe Software Inc), Merger Agreement (Electronics for Imaging Inc)
Employee Matters. (a) Between Huntington shall provide the date hereof employees of FirstMerit and its Subsidiaries as of the Effective Time (the “Continuing Employees”), for so long as they are employed following the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company following: (i) during the period commencing at the Effective Time and its Subsidiariesending on December 31, including with respect to potential promotions2016, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage ratewages, as applicable, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date target incentive opportunities (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirementsincluding equity-based awards) that are no less favorable than those the annual base salary or wages, as applicable, and target incentive opportunities in effect for each such Company Employee employee immediately prior to the Closing DateEffective Time, (ii) during the period commencing on January 1, 2017 and ending on the first anniversary of the Effective Time, annual base salary, wages and target incentive opportunities (including equity-based awards) that are substantially comparable in the aggregate to those provided to similarly situated employees of Huntington and its Subsidiaries, and (iii) during the period commencing at the Effective Time and ending on the first anniversary thereof, employee benefits that are substantially comparable in the aggregate to those provided to similarly situated employees of Huntington and its Subsidiaries (excluding any frozen benefit plans of Huntington and its Subsidiaries or benefit plans that exclusively provide benefits to grandfathered employees of Huntington and its Subsidiaries); provided, howeverthat until such time as Huntington fully integrates the Continuing Employees into its plans, participation in the FirstMerit Benefit Plans shall be deemed to satisfy the foregoing standards, it being understood that the covenants within this Section 6.9(b) Continuing Employees may commence participating in the plans of Huntington on different dates following the Effective Time with respect to different benefit plans. For a period beginning at the Effective Time and continuing through the first anniversary thereof, Huntington or its Subsidiaries shall not apply provide severance to the Company Employees listed on Schedule 6.9(b) each Continuing Employee of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention FirstMerit and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject its Subsidiaries pursuant to the terms and conditions of the Retention severance plan or policy of FirstMerit and Sale Payment retention agreements its Subsidiaries applicable to such Continuing Employees as of the date hereof (as set forth on Section 6.7(a) of the FirstMerit Disclosure Schedule); provided that (A) such severance shall be subject to Parentthe execution (and non-revocation) of a customary release of claims and (B) such severance may be paid in a lump sum.
(cb) Parent shall, With respect to any employee benefit plans of Huntington or shall cause the Surviving Corporation and its Subsidiaries, Subsidiaries in which any Continuing Employees become eligible to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (participate on or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective TimeTime (the “New Plans”), as applicable, the Parties shall, or shall cause the Surviving Corporation Huntington and its Subsidiaries, to take Subsidiaries shall use commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than to: (i) for any purposes waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents under any “defined benefit plan” as defined in Section 3(35) of ERISANew Plans, retiree medical benefits or disability benefits or except to the extent it such pre-existing conditions, exclusions or waiting periods would result in a duplication of benefits or compensation for apply under the same period of serviceanalogous FirstMerit Benefit Plan, or (ii) provide each such employee and their eligible dependents with respect credit for any co-payments or coinsurance and deductibles paid prior to the Excluded EmployeesEffective Time under a FirstMerit Benefit Plan that provides health care benefits (including medical, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company dental and its Subsidiaries, as applicablevision), to the same extent that such credit was given under the analogous FirstMerit Benefit Plan prior to the Effective Time, in satisfying any applicable deductible, co-payment, coinsurance or maximum out-of-pocket requirements under any New Plans, and (iii) recognize all service of such employees with FirstMerit and its Subsidiaries for all purposes in any New Plan to the same purposes extent that such service was taken into account under a corresponding Company the analogous FirstMerit Benefit Plan in effect immediately prior to the Closing DateEffective Time; provided, that the foregoing service recognition shall not apply (A) to the extent it would result in duplication of benefits for the same period of service, (B) for purposes of any defined benefit pension plan, or (C) for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits.
(c) Huntington agrees to assume and honor all FirstMerit Benefit Plans in accordance with their terms as of the date hereof, it being understood that this sentence shall not be construed to limit the ability of Huntington or any of its Subsidiaries or affiliates to amend or terminate any FirstMerit Benefit Plan to the extent that such credit does not result in duplicate benefitsamendment or termination is permitted by the terms of the applicable plan.
(ed) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if If requested by Parent Huntington in writing at least three twenty (320) business days before prior to the ClosingEffective Time, the Company FirstMerit shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (Aany 401(k) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code plan sponsored or maintained by FirstMerit (the “Company FirstMerit 401(k) Plan”) to be terminated and (B) all participants to cease participating under effective as of the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days day immediately prior to the Closing Date (or such earlier date approved by Effective Time and contingent upon the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A occurrence of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereofClosing. In the event the Company that Huntington requests that any FirstMerit 401(k) Plan is terminated be terminated, the Continuing Employees shall be eligible to participate, effective as set forth in the preceding sentence, as soon as administratively practicable following of the Effective Time, Parent in a 401(k) plan sponsored or maintained by Huntington or one of its Subsidiaries (a “Huntington 401(k) Plan”). FirstMerit and Huntington shall use commercially reasonable efforts to take any and all action actions as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent FirstMerit 401(k) Plan”) to (A) cause the Parent Plan and/or Huntington 401(k) Plan to accept any permit the Continuing Employees who are then actively employed to make rollover contributions to the Huntington 401(k) Plan of “eligible rollover distributions” (within with the meaning of Section 402(c)(4401(a)(31) of the Code) in the form of cash cash, notes (in an amount equal to the full account balance distributed case of loans) or distributable to such Company Employee from a combination thereof. FirstMerit shall provide Huntington with evidence that the Company FirstMerit 401(k) Plan has been terminated or amended, as applicable, in accordance with this Section 6.7(d); provided, that prior to amending or terminating the Parent FirstMerit 401(k) Plan, including any outstanding loans FirstMerit shall provide the form and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as substance of the Closing Date (subject to any applicable eligibility requirementsresolutions or amendments to Huntington for review and approval (which approval shall not be unreasonably withheld, but giving effect to the service crediting provisions of Section 6.9(d)conditioned or delayed).
(ge) On and after the date hereof, any broad-based employee notices or communication materials (including any website posting) with respect to employment, compensation or benefits matters addressed in this Agreement or related, directly or indirectly, to the transactions contemplated by this Agreement shall be subject to the prior prompt review and comment of the other party, and the party seeking to distribute any such notice or communication shall consider in good faith revising such notice or communication to reflect any comments or advice that the other party timely provides.
(f) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent consultant of FirstMerit or any of their respective Subsidiaries. The provisions of this Section 6.9 are for its Subsidiaries or affiliates any right to continue in the sole benefit employ or service of the Parties and Surviving Company, FirstMerit, Huntington, or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Company, FirstMerit, Huntington or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of FirstMerit or any of its Subsidiaries or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any FirstMerit Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Huntington or any of its Subsidiaries or affiliates to amend, modify or terminate any particular FirstMerit Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of the final sentence of Section 9.11, nothing hereinin this Agreement, expressed express or implied, is intended to or will be construed to shall confer upon or give to any Person (includingperson, for the avoidance of doubt, including any Company Employee or other current or former employee employee, officer, director or consultant of the Company, Parent FirstMerit or any of their respective Affiliates), other than the Parties and their respective permitted successors and assignsits Subsidiaries or affiliates, any third party beneficiaryright, legal benefit or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) remedy of any nature whatsoever under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 2 contracts
Samples: Merger Agreement (Huntington Bancshares Inc/Md), Merger Agreement (Firstmerit Corp /Oh/)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (Parent and the Company shall cause its Subsidiaries to) make available to Parent the agree that all employees of the Company and its Subsidiaries so immediately prior to the Effective Time shall be employed by the Surviving Company immediately after the Effective Time, it being understood that Parent may interview and the Surviving Company shall, except as required by law, have no obligations to continue employing such employees for any length of time thereafter except pursuant to any agreements which are specifically disclosed on Section 2.12 of the Company Schedule and evaluate their roles identified therein as providing such an exception. Parent shall deem, and responsibilities shall cause the Surviving Company to deem, the period of employment with the Company and its Subsidiaries, including the Subsidiaries (and with predecessor employers with respect to potential promotionswhich the Company and its Subsidiaries shall have granted service credit) to have been employment and service with Parent and the Surviving Company for benefit plan eligibility and vesting purposes (but not for purposes of benefit accruals or benefit computations) for all of Parent’s and the Surviving Company’s employee benefit plans, transfersprograms, policies or job eliminations following arrangements to the Closingextent service with Parent or the Surviving Company is recognized under any such plan, program, policy or arrangement.
(b) The Parties agree that for a period of 12 months following the Closing Date, each Under any medical and dental plans covering any employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, there shall be waived, and Parent or the Surviving Company shall cause the relevant insurance carriers and other third parties to waive, all restrictions and limitations for any medical condition existing as of the Effective Time of any of their respective Affiliates), other than the Parties such employees and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to eligible dependents for the matters provided for in this Section 6.9) under or by reason purpose of any provision of this Section 6.9. Nothing in this Section 6.9 is intended such plans, provided such persons had the requisite “creditable” service prior to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, but only to the Surviving Corporation) or any particular term or extent that such condition of employment or service, or (iii) prevent Parent, would be covered by the Surviving Corporation or any of their Affiliates from terminating, revising or amending any relevant Company Employee Benefit Plan sponsoredif it were not a pre-existing condition and only to the extent of comparable coverage in effect immediately prior to the Effective Time. Further, maintained Parent shall offer to each Company and Subsidiary employee coverage under a group health plan which credits such employee towards the deductibles imposed under the group medical and dental plan of Parent or contributed to by the Surviving Company, Parent or for the year during which the Effective Time occurs, with any of their respective Subsidiariesdeductibles already incurred during such year under the relevant Company Employee Benefit Plan.
Appears in 2 contracts
Samples: Merger Agreement (Plains Exploration & Production Co), Merger Agreement (Pogo Producing Co)
Employee Matters. (a) Between During the period beginning on the Closing Date and ending on the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of is 12 months following after the Closing Date, Parent shall, or shall cause one of its Subsidiaries or Affiliates (including, the Company, the Surviving Corporation and their respective Subsidiaries) to, provide each employee Employee who is employed as of the Closing Date by the Company or a any Company Subsidiary thereof on the Closing Date (each, a “Company Employee”) shall be provided to the extent that the Company Employee remains employed by the Surviving Corporation, Parent or any of their respective Subsidiaries or Affiliates with annual (i) a base salary or base hourly wage rate, and employee benefits as applicable, that are, in is at least equal to the aggregate, substantially comparable base salary or hourly wage rate provided to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a such Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following immediately prior to the Closing Date Date; (or such longer change in control coverage period as required under the applicable Company Benefit Planii) shall be provided with severance benefits incentive compensation opportunities (subject to satisfying any applicable release requirementsincluding bonus, commission and other incentive compensation opportunities) that are no less favorable than those at least equal to the incentive compensation opportunities in effect for such Company Employee immediately prior to the Closing DateDate (it being understood that Parent will make, or cause one of its Subsidiaries or Affiliates (including the Company, the Surviving Corporation and their respective Subsidiaries) to make, the applicable payment in respect of such incentive compensation opportunities that are earned or accrued in the 12-month period after the Closing Date at the time(s) they would be payable in the ordinary course even if such payment date is after the conclusion of such 12-month period); and (iii) employee benefits that are (x) not less favorable than the employee benefits provided to such Company Employee under the Company Benefit Plans immediately prior to the Closing Date (or, if a Company 401(k) Plan is terminated, then with respect to such plan, immediately prior to its termination) or (y) on the same terms and conditions as offered to similarly situated employees of Parent (or its Subsidiaries or Affiliates).
(b) Parent and its Affiliates (including the Company, the Surviving Corporation and their respective Subsidiaries) shall treat, and shall cause each plan, program, policy, practice and arrangement sponsored or maintained by Parent or any of its Affiliates (including the Company, the Surviving Corporation and any of their respective Subsidiaries) on or after the Closing Date and in which any Company Employee (or the spouse, domestic partner or dependent of any Company Employee) participates or is eligible to participate (each, a “Parent Plan”) to treat, for purposes of eligibility, vesting and, solely for the purposes of determining the amount of vacation, sick leave and other paid time off, benefit accrual and level of benefits, all service with the Company and the Company Subsidiaries (and any predecessor employers if the Company, any Company Subsidiary or any Company Benefit Plan provides past service credit) prior to the Closing Date as service with Parent and its Subsidiaries and Affiliates; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall such service need not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or counted to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for and such Company Employees’ service with the Company and its Subsidiaries, as applicable, need only be credited to the same extent and for the same purposes that purpose as such service was taken into account credited under a the corresponding Company Benefit Plan.
(c) Parent and its Affiliates (including the Company, the Surviving Corporation and their respective Subsidiaries and Affiliates) shall use commercially reasonable efforts to cause each Parent Plan in effect immediately that is a welfare benefit plan, within the meaning of Section 3(1) of ERISA, to waive any and all eligibility waiting periods, actively-at-work requirements, evidence of insurability requirements, pre-existing condition limitations and other exclusions and limitations regarding the Company Employees and their spouses, domestic partners and dependents to the extent waived, satisfied or not imposed under the corresponding Company Benefit Plan.
(d) If requested by Parent at least five days prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company adopt resolutions terminating any and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Plans described in Section 401(a401(k) of the Code (the each, a “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case), effective no later than the Business Day day immediately preceding the Closing Date; provided. If the Company is required to terminate any Company 401(k) Plan pursuant to this Section 6.11(d), however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to then as soon as practicable after the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicableand in any event not later than 45 days thereafter), Parent will establish or designate, or will cause the Company shall take and shall cause its Surviving Corporation or one of Parent’s other Subsidiaries or Affiliates to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Planestablish or designate, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section that includes a cash or deferred arrangement and that satisfies the requirement of Sections 401(a) and 401(k) of the Code designated by Parent (the “Parent 401(k) Plan”). Each Company Employee who was eligible to participate in such terminated Company 401(k) Plan immediately prior to the termination of such plan shall become eligible to participate in the Parent 401(k) Plan as soon as practicable after the Closing Date (A) and in any event not later than 45 days thereafter). Parent shall cause the Parent 401(k) Plan to accept any “direct rollovers” (within the meaning of Section 401(a)(31) of the Code) of “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to from such Company Employee from the Company 401(k) Plan to the Parent 401(k(or on behalf of) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to Employees who remain employed by the CompanySurviving Corporation, Parent or any of their respective Subsidiaries. The provisions Subsidiaries or Affiliates at the time of such rollover, including the amount of any unpaid balance of any participant loan made under such Company 401(k) Plan (and the related promissory note), to the extent such rollovers are elected by such Company Employees.
(e) Parent shall, or shall cause the Surviving Corporation to, comply with the Worker Adjustment and Retraining Notification Act of 1988, or any similar foreign, provincial, state or local Law, with respect to “employment losses” which would constitute a “mass layoff” or “plant closing” (each as defined in such Act) occurring at or after the Effective Time.
(f) No provision of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to Agreement shall (i) create any Person (including, for the avoidance of doubt, right in any Company Employee or any other current or former employee Employee of the Company, Parent Company or any of their respective Affiliates)Company Subsidiary to continued employment by or service with Parent, other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentCompany, the Surviving Corporation or any of their respective Subsidiaries or Affiliates, or prevent Parent, the Company, the Surviving Corporation or their respective Subsidiaries or Affiliates from terminating the employment or service of any Person, including a Company Employee, at Employee or any time and other Employee of the Company or any Company Subsidiary for any reason, ; (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Timerequire Parent, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent ParentCompany, the Surviving Corporation or any of their respective Subsidiaries or Affiliates from terminatingto continue any particular Company Benefit Plans or prevent the amendment, revising modification or amending termination thereof after the Closing Date (subject to the other provisions of this Section 6.11); or (iii) be treated as an amendment to any Employee Company Benefit Plan sponsoredor any other employee benefit plan, maintained policy, program, agreement or contributed to by arrangement of Parent, the Company, Parent the Surviving Corporation or any of their respective SubsidiariesSubsidiaries or Affiliates.
Appears in 2 contracts
Samples: Merger Agreement (Vail Resorts Inc), Merger Agreement (Peak Resorts Inc)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause employees of Sky and its Subsidiaries who are employed by the Surviving Corporation Company as of the Effective Time (the “Assumed Employees”) and who remain employed with the Surviving Company thereafter will be offered participation and coverage under Huntington Benefit Plans that are no less favorable than the plans generally in effect for similarly situated employees of Huntington and its Subsidiaries; provided, that continued participation and coverage following the Effective Time under the Sky Benefit Plans as in effect immediately prior to the Effective Time shall be deemed to satisfy the obligations under this sentence, it being understood that the Assumed Employees may commence participating in the comparable Huntington Benefit Plans on different dates following the Effective Time with respect to different comparable Huntington Benefit Plans. Notwithstanding any provision of this Section 6.7(a) to the contrary, each Assumed Employee (other than those with individual agreements providing for severance or “change of control” benefits) whose employment terminates during the 12-month period from and after the Effective Time shall receive the greater of the severance pay and benefits under (i) the Huntington Transition Pay Plan, in accordance with the terms thereof as in effect from time to time, or (ii) the Sky Severance Pay Plan, in accordance with the terms thereof as in effect immediately prior to the Effective Time, in either case to be calculated, on the basis of the Assumed Employee’s service at the time of termination of employment and the greater of the Assumed Employee’s compensation (A) at the time of termination of employment or (B) as in effect immediately prior to the Effective Time. Such severance benefits shall be provided in all cases under the terms and procedures set forth in the Huntington Transition Pay Plan, except with regard to the benefit formula as stated above.
(b) Huntington shall cause each Huntington Benefit Plan in which Assumed Employees are eligible to participate to take commercially reasonable efforts to credit the Company Employees into account for purposes of vesting, eligibility, severance vesting and benefit accrual accruals under the Parent Huntington Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for benefit accruals under any purposes with respect to any “of Huntington’s tax-qualified and non-qualified defined benefit plan” pension plans) the service of such employees with Sky and its Subsidiaries (and any predecessor entities) to the same extent as defined in Section 3(35) of ERISAsuch service was credited for such purpose by Sky and its Subsidiaries; provided, retiree medical benefits or disability benefits or however, that such service shall not be recognized to the extent it that such recognition would result in a duplication of benefits or compensation for with respect to the same period of service, service or (ii) with respect to newly implemented plans for which prior service is not taken into account. Nothing herein shall limit the Excluded Employeesability of Huntington, Merger Sub or the Surviving Company to amend or terminate any severance benefits of the Sky Benefit Plans or rightsHuntington Benefits Plans in accordance with their terms at any time.
(c) At and following the Effective Time, Huntington will cause the Surviving Company to honor the obligations of Sky or any of its Subsidiaries as of the Effective Time under the provisions of the Sky Benefit Plans and Sky Employment Agreements, provided that this provision shall not prevent the Surviving Company from amending, suspending or terminating any such plans or agreements to the extent permitted by the respective terms of such plans or agreement.
(d) If Assumed Employees become eligible to participate in which the Company Employees participatea medical, for such Company Employees’ service with the Company and dental or health plan of Huntington or its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or Huntington shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts each such plan to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan preexisting condition limitations to the extent such Company Employee or covered, eligible dependents conditions are covered under an analogous Company Benefit Planthe applicable medical, as applicablehealth or dental plans of Huntington, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles honor under such plans any deductible, co-payment and annual out-of-pocket limits for medical expenses incurred by such employees and their beneficiaries during the portion of the calendar year prior to such participation and (iii) waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to such employee on or after the Closing Date Effective Time for the year in which payment has been madethe Effective Time or participation in such medical, dental or health plan of Huntington, as applicable, occurs, in each case, to the extent permitted by the applicable insurance plan provider and only case to the extent such deductibles employee had satisfied any similar limitation or limits for medical expenses were satisfied requirement under an analogous medical, dental or did not apply under the analogous Company Benefit Plan in effect immediately health plan of Sky prior to the Closing DateEffective Time for the year in which the Effective Time or participation in such medical, dental or health plan of Huntington, as applicable, occurs.
(fe) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) As of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving CorporationCompany shall take all action necessary to effectuate the agreements set forth in Section 6.7(e) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesHuntington Disclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Huntington Bancshares Inc/Md), Merger Agreement (Sky Financial Group Inc)
Employee Matters. (a) Between During the date hereof period commencing at the Effective Time and ending on the 18-month anniversary of the Effective Time, M&T shall provide employee benefit and compensation plans for the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the benefit of employees of the Company who are actively employed by Xxxxxx and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following on the Closing Date (“Covered Employees”) while employed by M&T or such longer change in control coverage period as required under any of its Subsidiaries following the applicable Company Benefit Plan) shall be provided with severance Effective Time that provide employee benefits (subject to satisfying any applicable release requirements) that and compensation opportunities which are no less favorable in the aggregate than those in effect for such Company Employee the employee benefits and compensation opportunities that are provided by Xxxxxx and its Subsidiaries to Covered Employees immediately prior to the Closing Date; provided, however, that Effective Time (other than the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) value of the Company Disclosure Letter, which shall consist of benefits provided under the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company ESOP prior to the Closing Date (which shall not be considered in determining whether benefits are no less favorable in the “Excluded Employees”) which Excluded aggregate during the period noted above; it being understood that eligibility to participate in a tax-qualified savings plan with an employer matching contribution shall be available to the Covered Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject pursuant to the terms and conditions of the Retention and Sale Payment retention agreements provided applicable plan of M&T as in effect from time to Parent.
(c) Parent time). Notwithstanding any other provision of this Agreement to the contrary, M&T shall, or shall cause the Surviving Corporation and its SubsidiariesCompany to maintain the Severance Pay Plan of Xxxxxx City Savings Bank without amendment (except as required by applicable law, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between including tax law) following the Company Effective Time (or a Subsidiary thereofthe “Xxxxxx Severance Plan”) and provide each Covered Employee whose employment is terminated (other than a Company EmployeeCovered Employee who is terminated under circumstances that constitute a termination for “cause” or under other circumstances not entitling them to severance under the Xxxxxx Xxxxxxxxx Plan or who is otherwise party to an individual agreement that provides for severance pay) during the one-year period following the Effective Time with the severance payments and benefits to which the Covered Employee would have been entitled under the Xxxxxx Xxxxxxxxx Plan immediately prior to the Effective Time, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed subject to limit any amendments otherwise permitted by the terms of the Xxxxxx Severance Plan, including the requirement to sign a waiver and release. In addition, M&T shall, or shall cause the Surviving Company to, (i) provide eligible former employees of Xxxxxx and its Subsidiaries who retired prior to the Effective Time and who participate as of the Effective Time in the retiree medical and life insurance plans maintained by Xxxxxx and identified in Section 3.11(g) of the Xxxxxx Disclosure Schedule (the “Xxxxxx Retiree Welfare Plans”) with the ability to continue to participate in the Xxxxxx Retiree Welfare Plans in accordance with the terms of such plans as in effect from time to time during the period commencing at the Effective Time and ending on the fifth anniversary of the Effective Time, (ii) provide each Covered Employee who retires on or before December 31 of the calendar year in which the Effective Time occurs and who is eligible to participate in the Xxxxxx Retiree Welfare Plans on the date of his or her retirement from M&T with the ability to participate in the Xxxxxx Retiree Welfare Plans in accordance with the terms of such plans as in effect from time to time from his or her applicable agreementsretirement date until the fifth anniversary of the Effective Time, (iii) deem Covered Employees who as of immediately prior to the Effective Time satisfy the eligibility requirements of the Xxxxxx Retiree Welfare Plans (but who do not retire on or before December 31 of the calendar year in which the Effective Time occurs) (the “Eligible Xxxxxx Covered Employees”) to have satisfied the eligibility requirements of the M&T Bank Retiree Medical Plan and the M&T Bank Retiree Life Insurance Plan, in each case, as in effect from time to time, and (iv) recognize service credit with Xxxxxx or any of its Subsidiaries for Covered Employees who are not Eligible Xxxxxx Covered Employees and who are not eligible to participate in the Xxxxxx Retiree Welfare Plans in accordance with either of clauses (i) or (ii) of this sentence, for purposes of meeting the eligibility requirements of the M&T Bank Retiree Medical Plan and the M&T Bank Retiree Life Insurance Plan, in each case, as in effect from time to time, to the same extent such service credit was recognized for such purposes by Xxxxxx immediately prior to the Effective Time. After the fifth anniversary of the Effective Time, M&T shall, or shall cause the Surviving Company to provide the retirees of Xxxxxx and its Subsidiaries identified in clause (i) and the retired Covered Employees identified in clause (ii) of the immediately preceding sentence with access to enroll in the M&T Bank Retiree Medical Plan and the M&T Bank Retiree Life Insurance Plan as in effect on the fifth anniversary of the Effective Time (if any) in accordance with the terms of such plans as in effect from time to time, provided that such retirees shall be deemed to satisfy the eligibility requirements of such plans and shall receive credit for their service with Xxxxxx and its Subsidiaries (to the same extent such service was recognized by Xxxxxx prior to such retiree’s retirement from Xxxxxx) for purposes of any employer subsidy as in effect on the fifth anniversary of the Effective Time under the terms of the M&T plans (if any) in accordance with the terms of such plans as in effect from time to time.
(db) To the extent that a Covered Employee becomes eligible to participate in a M&T Benefit Plan, M&T shall cause such employee benefit plan to (i) recognize the service of such Covered Employee with Xxxxxx or its Subsidiaries (or their predecessor entities) for purposes of eligibility, vesting, level of benefits and benefit accrual (other than for purposes of benefit accruals or levels of credit under any M&T Benefit Plan that is a defined benefit pension plan), under such M&T Benefit Plan, to the same extent such service was recognized immediately prior to the Effective Time under a comparable Xxxxxx Benefit Plan in which such Covered Employee was eligible to participate immediately prior to the Effective Time; provided that such service credit shall not be recognized (A) for purposes of any plan or arrangement under which similarly-situated employees of M&T and its Subsidiaries do not receive credit for prior service or that is grandfathered or frozen, either with respect to level of benefits or participation, or (B) if such recognition of service would operate to duplicate any benefits of a Covered Employee with respect to the same period of service; and (ii) with respect to any M&T Benefit Plan that provides medical, dental or vision benefits in which any Covered Employee is eligible to participate, for the plan year in which such Covered Employee is first eligible to participate, (A) cause any pre-existing condition limitations or eligibility waiting periods under such M&T Benefit Plan to be waived with respect to such Covered Employee and his or her covered dependents to the extent such limitation would have been waived or satisfied under the Xxxxxx Benefit Plan in which such Covered Employee participated immediately prior to the Effective Time, and (B) recognize any health expenses incurred by such Covered Employee and his or her covered dependents in the year that includes the Closing Date (or, if later, the year in which such Covered Employee is first eligible to participate) for purposes of any applicable deductible and annual out-of-pocket expense requirements and any lifetime maximums under any such M&T Benefit Plan.
(c) From and after the Effective Time, as applicablesubject to the requirements of applicable law, the Parties shall, or M&T shall cause the Surviving Corporation honor all obligations to current and former employees of Xxxxxx and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual Subsidiaries under the Parent Benefit Plans and the Company Xxxxxx Benefit Plans, as applicableincluding all employment, (other than (i) for any purposes change of control or severance agreements entered into by Xxxxxx or its Subsidiaries or adopted by the Board of Directors of Xxxxxx, in each case consistent with the terms of the applicable Xxxxxx Benefit Plan; provided, that with respect to any “defined benefit plan” as defined in each employment agreement and change of control agreement entered into by Xxxxxx or its Subsidiaries and identified on Section 3(353.11(a) of ERISAthe Xxxxxx Disclosure Schedule (each, retiree medical benefits or disability benefits or an “Executive Agreement”), (1) the bonus component of any severance calculation performed pursuant to each such Executive Agreement for Executive Vice Presidents and above shall be no less than the bonus component that would have resulted in respect of a termination of employment on the date hereof as identified on Section 6.5(c) of the Xxxxxx Disclosure Schedule, and (2) the provisions in the Executive Agreements that allow Xxxxxx to elect to cancel a terminating employee’s outstanding stock options and shares of restricted stock in exchange for a cash payment equal to the extent it would result in a duplication spread value of benefits or compensation for the same period stock options and the value of service, or the restricted stock shall not be applicable.
(iid) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company Xxxxxx and each of its Subsidiaries, as applicable, shall, effective no later than immediately prior to, and contingent upon, the Closing, adopt such resolutions and/or amendments to the same extent ESOP, the ESOP trust or the ESOP Loan documents (if any) (and take any other required action) to (i) effectuate the mechanics relating to the repayment and/or forgiveness of the ESOP Loans contemplated by Section 2.1(a) of this Agreement and to provide for the same purposes that treatment of the Exception Shares held in the ESOP trust in accordance with Article II of this Agreement and (ii) terminate the ESOP (with distributions to occur upon receipt of a favorable determination letter from the IRS in respect of such service was taken into account under a corresponding Company Benefit Plan in effect immediately termination). No later than five (5) Business Days prior to the Closing Date, Xxxxxx shall provide M&T with (A) certified copies of the resolutions and/or amendments adopted by the Board of Directors (or the appropriate committee thereof) of Xxxxxx or its Subsidiaries, as applicable, authorizing that the ESOP has been terminated, and (B) executed amendments to the extent that ESOP, the ESOP trust and the ESOP Loan documents, as applicable, in form and substance reasonably satisfactory to M&T to effectuate such credit does not result in duplicate benefitstermination and any other amendments as set forth above.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended 6.5 shall be construed to (i) prevent Parent, limit the Surviving Corporation or any right of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent M&T or any of its Subsidiaries (including including, following the Effective TimeClosing Date, Xxxxxx and its Subsidiaries) to amend or terminate any Xxxxxx Benefit Plan or other employee benefit plan, to the Surviving Corporation) extent such amendment or any particular term or condition termination is permitted by the terms of employment or servicethe applicable plan, or (iii) prevent Parent, the Surviving Corporation nor shall anything in this Section 6.5 be construed to require M&T or any of its Subsidiaries (including, following the Closing Date, Xxxxxx and its Subsidiaries) to retain the employment of any particular employee of the Company or its Subsidiaries for any fixed period of time following the Closing Date. This Agreement shall inure exclusively to the benefit of, and be binding upon the parties hereto and their Affiliates from terminatingrespective successors and assigns, revising and no current or amending any former Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their respective Subsidiariessuccessors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement.
Appears in 2 contracts
Samples: Merger Agreement (Hudson City Bancorp Inc), Merger Agreement (M&t Bank Corp)
Employee Matters. (a) Between the date hereof Employees and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the former employees of the Company Hxxxxxxx Beach and its Subsidiaries so are currently provided benefits under employee benefit plans, programs, policies or arrangements that Parent may interview such are sponsored and maintained by Hxxxxxxx Beach or a Subsidiary of Hxxxxxxx Beach (collectively, the “Hxxxxxxx Beach Benefit Plans”). On and after the Spin-Off Date, employees and evaluate their roles former employees of Hxxxxxxx Beach and responsibilities its Subsidiaries will continue to receive benefits under the Hxxxxxxx Beach Benefit Plans. Immediately prior to the Spin-Off Date, Hxxxxxxx Beach will, and Parent will cause Hxxxxxxx Beach to, withdraw from and cease its participation in the Combined Defined Benefit Plan for Parent and its Subsidiaries (the “Parent 11 Pension Plan”) and, as a result thereof, employees of Hxxxxxxx Beach and its Subsidiaries will cease to participate in the Parent Pension Plan as active participants thereunder immediately prior to the Spin-Off Date but will continue to be entitled to receive any benefits that have previously accrued under the Parent Pension Plan, in accordance with the Company terms thereof, as in effect from time to time. The assets and Liabilities of the Parent Pension Plan (including the assets and Liabilities relating to the employees and former employees of Hxxxxxxx Beach and its Subsidiaries) will remain with Parent and its Subsidiaries (other than Hxxxxxxx Beach and its Subsidiaries) and no such assets or Liabilities will be transferred to Hxxxxxxx Beach and its Subsidiaries as a result of the Spin-Off. In furtherance of, including with respect but without limiting the foregoing, effective as of the Spin-Off Date, (1) Hxxxxxxx Beach and its Subsidiaries will have no Liability or obligations, and Parent agrees to potential promotionsassume and pay for any such Liabilities or obligations, transfers, or job eliminations following under the ClosingParent Pension Plan (the “Pension Plan Obligations”) and (2) Hxxxxxxx Beach and its Subsidiaries will have no further responsibility for the administration of the Parent Pension Plan except as specified in the Transition Services Agreement.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed Effective as of the Closing Spin-Off Date (1) Hxxxxxxx Beach and its Subsidiaries will have no Liability or obligations, and Parent agrees to assume and pay for any Liabilities or obligations under or relating to any nonqualified plans or other employee benefit plans or arrangements sponsored or maintained by Parent, including as required by, or imposed pursuant to, applicable Law (all of such plans or arrangements other than the Company Parent Pension Plan being referred to as the “Other Parent Plans” and all of such Liabilities or a Subsidiary thereof (each, a obligations described in this Section 4.1(b) being referred to as the “Company EmployeeOther Parent Plan Obligations”) shall be and (2) Hxxxxxxx Beach and its Subsidiaries will have no responsibility for the administration of the Other Parent Plans.
(c) Employees of Parent and its Subsidiaries (other than Hxxxxxxx Beach and its Subsidiaries) are currently provided with annual base salary benefits under employee benefit plans, programs, policies or base wage ratearrangements that are sponsored and maintained by Parent or its Subsidiaries (other than Hxxxxxxx Beach and its Subsidiaries) (collectively, the “Parent Benefit Plans”). On and employee benefits that areafter the Spin-Off Date, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period Subsidiaries (but not employees of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation Hxxxxxxx Beach and its Subsidiaries, ) will continue to assume and honor their respective obligations receive benefits under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Parent Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreementsPlans.
(d) From On or before the Spin-Off Date, Parent, Hxxxxxxx Beach and after the Effective Time, HB/PS will take such actions as applicable, the Parties shall, or shall cause the Surviving Corporation they determine are necessary and its Subsidiaries, advisable to take commercially reasonable efforts to credit the Company Employees establish separate administrative services agreements and funding vehicles for purposes of vesting, eligibility, severance Hxxxxxxx Beach Benefit Plans and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) and/or to provide for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitstransitional services related thereto.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Spin Off Agreement (Hamilton Beach, Inc.), Spin Off Agreement (Nacco Industries Inc)
Employee Matters. (a) Between the date hereof and At the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company Transocean and its Subsidiaries so that Parent may interview such will continue the employment of all of the employees and evaluate who are employed by Transocean, GlobalSantaFe or any of their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed Subsidiaries as of the Closing Date by day immediately prior to the Company or a Subsidiary thereof Effective Time (each, a the “Company EmployeeAffected Employees”) initially at the same salaries and wages of such employees immediately prior to the Effective Time. During the period from the Effective Time to and including December 31, 2008, Transocean and its Subsidiaries (i) shall be provided provide each Affected Employee with an annual base salary rate or base hourly wage rate, as applicable, that is no less favorable to such Affected Employee than the salary rate or wage rate provided to such Affected Employee immediately prior to the Effective Time, and employee benefits that are(ii) shall provide Affected Employees who are so employed by GlobalSantaFe or its Subsidiaries as of the day immediately prior to the Effective Time, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent with employee compensation and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable in the aggregate than those in effect for such Company Employee provided by GlobalSantaFe or its Subsidiaries immediately prior to the Closing Date; providedEffective Time. Nothing in this Agreement shall be considered a contract between Transocean and its Subsidiaries and any Affected Employee or consideration for, howeveror inducement with respect to, that the covenants within this Section 6.9(b) shall not apply any such employee’s continued employment and, without limitation, all such employees are and will continue to be considered to be employees at will pursuant to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letterapplicable employment at will laws or doctrines, which shall consist of the individuals that are a party subject to those certain Retention and Sale Payment retention agreements executed with the Company prior any express written agreement to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) contrary with such employee. From and after the Effective Time, as applicableTransocean shall honor, and shall cause Transocean Offshore Deepwater Drilling Inc. (“TODDI”) to honor each severance agreement listed in Section 7.14(a) of the GlobalSantaFe Disclosure Letter and to perform the obligations of GlobalSantaFe thereunder and, prior to the Effective Time, Transocean shall, and shall cause TODDI to, enter into a novation agreement in the form of Exhibit 7.14 with respect thereto, which novation agreement shall become effective immediately prior to the Effective Time.
(b) With respect to each Affected Employee, Transocean shall credit, or cause its Subsidiaries to credit, the Parties shall, or shall cause period of employment and service recognized by the Surviving Corporation and its Subsidiaries, applicable employer immediately prior to take commercially reasonable efforts to credit the Company Employees Effective Time (for purposes of vestingits corresponding plans, eligibilityprograms, policies or similar employment-related arrangements) to have been employment and service with Transocean for purposes of determining the Affected Employee’s eligibility to join (subject to satisfaction of all non-service related eligibility criteria) and vesting (but not benefit accrual for any purpose other than vacation pay, severance and termination pay, sick leave, post-retirement health coverage and satisfaction of early retirement criteria) under all employee benefit accrual under plans, programs, policies or similar employment related arrangements of Transocean and its Subsidiaries in which the Parent Benefit Plans and the Company Benefit PlansAffected Employee is eligible to participate; provided, as applicablehowever, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or no such credit shall be provided to the extent that it would result in a duplication of benefits credit or compensation benefits. Transocean shall waive, and to the extent necessary to effect the terms hereof, shall use its best efforts to cause the relevant insurance carriers and other third parties to waive, any restrictions and limitations for medical conditions existing as of the Effective Time of those Affected Employees and their dependents who were covered immediately prior to the Effective Time under a group health plan maintained by Transocean or GlobalSantaFe, but only to the extent that such medical condition would be covered by Transocean’s group health plan if it were not a pre-existing condition and only to the extent that such limitations would not have applied under Transocean or GlobalSantaFe’s group health plan prior to the Effective Time. Further, Transocean shall offer, or cause its Subsidiaries to offer, at the Effective Time to each Affected Employee coverage under a group health plan (as defined in Section 5000(b)(1) of the Code) which credits such Affected Employee towards the deductibles, coinsurance and maximum out-of-pocket provisions imposed under such group health plan, for the same year during which the Effective Time (or such later date as the Affected Employees participate in such group health plan) occurs, with any applicable expenses already incurred during such year under Transocean or GlobalSantaFe’s group health plan.
(c) Transocean and GlobalSantaFe agree that Transocean shall establish a severance plan, the general terms of which have been agreed upon and are set forth in Section 7.14 of the Transocean Disclosure Letter, effective for no less than the period from the Effective Time until the second anniversary of the Effective Time, for the benefit of Affected Employees on a U.S. dollar payroll who are eligible to participate pursuant to the terms as so set forth. Transocean and GlobalSantaFe agree to cooperate in good faith to take appropriate and substantially consistent actions to retain key employees and provide for a smooth transition, including such action as they deem appropriate to provide for retention payments under substantially consistent terms following the Closing Date.
(d) Transocean and GlobalSantaFe agree to cooperate in good faith to establish a process to promptly integrate the Transocean Benefit Plans and the GlobalSantaFe Benefit Plans following the Effective Time.
(e) Transocean shall pay, or shall cause its Subsidiaries to pay, to each Affected Employee who was employed by Transocean or its Subsidiaries immediately prior to the Effective Time an amount, to the extent then unpaid, equal to the annual incentive bonus to which the Affected Employee would be entitled under the terms of Transocean’s 2007 Performance Award and Cash Bonus Plan and applicable award letters. On March 14, 2008, Transocean shall pay, or shall cause its Subsidiaries to pay, to each Affected Employee who was employed by GlobalSantaFe or its Subsidiaries immediately prior to the Effective Time (or if the Effective Time shall have not yet occurred, GlobalSantaFe shall pay, or shall cause its Subsidiaries to pay, to each person who is an employee of GlobalSantaFe or its Subsidiaries on March 14, 2008) amounts equal to (i) any annual incentive bonus to which GlobalSantaFe determined (prior to the Effective Time) the Affected Employee (or employee, as the case may be) would be entitled under GlobalSantaFe’s 2007 non-equity annual incentive plan(s) and (ii) any amount to which GlobalSantaFe determined (prior to the Effective Time) that the Affected Employee (or employee, as the case may be) would be entitled with respect to GlobalSantaFe’s outstanding cash-based performance units. If the employment of an Affected Employee who would otherwise be entitled to a payment under clause (i) and/or clause (ii) of the immediately preceding sentence is involuntarily terminated, or such an Affected Employee voluntarily terminates employment after attaining age 55 and five years of service, prior to March 14, 2008, the payment or payments shall nevertheless be made to such Affected Employee on March 14, 2008. In the event the Effective Time occurs in 2008, immediately prior to the Effective Time, (i) Transocean shall have the right to pay each Affected Employee who was eligible to receive an annual incentive bonus under the Transocean Performance Award and Cash Bonus Plan in effect at such time (the “Transocean 2008 Annual Incentive Plan”), a cash bonus for the period from January 1, 2008 through the Effective Time equal to a pro rata portion of the total maximum bonus payable for 2008 under the Transocean 2008 Annual Incentive Plan, which shall not exceed the maximum target payout percentage established for 2007, provided that the CFROMC factor used for this purpose will not exceed 1.0, and (ii) GlobalSantaFe shall have the right to pay each Affected Employee who was eligible to receive an annual incentive bonus under GlobalSantaFe’s 2007 non-equity annual incentive plan(s) a cash bonus for the period from January 1, 2008 through the Effective Time which shall not exceed a pro rata portion of the total bonus paid or payable to the Affected Employee under the applicable 2007 plan, in each case determined on the basis of the number of days elapsed from January 1, 2008 through the Effective Time, with such payments to be in lieu of the portion of the annual bonus that would otherwise be paid with respect to such period. The Board of Directors of Transocean, or any committee designated by the Excluded EmployeesBoard of Directors, any severance benefits or rightsshall establish performance goals and cash bonus targets for the period following the Effective Time in its discretion.
(f) in All Transocean cash-settled stock appreciation rights (individually, a “Transocean Cash SAR” and collectively, the “Transocean Cash SARs”) outstanding at the Initial Effective Time under the Transocean Stock Plans shall remain outstanding following the Initial Effective Time, except that immediately following the Initial Effective Time (A) each Transocean Cash SAR shall be exercisable with respect to that whole number of Transocean Ordinary Shares equal to the product (rounded down to the nearest whole share) of the number of Transocean Ordinary Shares to which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, Transocean Cash SAR related immediately prior to the same extent Initial Effective Time multiplied by the Transocean Adjustment Fraction, and for (B) the same purposes that such service was taken into account under a corresponding Company Benefit Plan exercise price per Transocean Ordinary Share shall be an amount equal to the exercise price per Transocean Ordinary Share in effect immediately prior to the Closing DateInitial Effective Time divided by the Transocean Adjustment Fraction (the price per share, as so determined, being rounded up to the extent that such credit does not result nearest whole cent) and, as adjusted, each Transocean Cash SAR shall remain exercisable in duplicate benefitsaccordance with its terms.
(eg) The Parties shallExcept with respect to offers of employment to prospective new employees in the ordinary course of business consistent with past practices, or Transocean and GlobalSantaFe agree that they shall not make, and shall cause the Surviving Corporation and its Subsidiariestheir respective Subsidiaries not to make, any representations or promises, oral or written, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employees concerning continued employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any or the terms and all action as may be reasonably requiredconditions of that employment, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) except in writing with the prior written consent of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))other party.
(gh) Nothing Notwithstanding the foregoing, nothing in this Agreement Agreement, whether express or implied, shall constitute be treated as an establishment amendment or termination ofother modification of any Transocean Benefit Plan, GlobalSantaFe Benefit Plan or compensation or benefit plan, program or arrangement of Transocean or its Subsidiaries, or an amendment toshall limit the right of Transocean, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent GlobalSantaFe or any of their respective Subsidiaries, to amend, terminate or otherwise modify any such plan or arrangement. The provisions In the event that (i) a party other than Transocean, GlobalSantaFe or any of their Subsidiaries makes a claim or takes other action to enforce any provision in this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give Agreement as an amendment to any Person such plan or arrangement, and (includingii) such provision is deemed to be an amendment to such plan or arrangement even though not explicitly designated as such in this Agreement, for then such provision shall lapse retroactively and shall have no amendatory effect.
(i) For the avoidance of doubt, any Company Employee or other current or former employee Transocean deems that the Merger, the Reclassification and the transactions contemplated by this Agreement constitute a change of the Company, Parent or any control of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including Transocean with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any Transocean Executive Change of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reasonControl Severance Benefit, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any the Long-Term Incentive Plan of its Subsidiaries (including following the Effective TimeTransocean, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parentthe Deferred Compensation Plan of Transocean, (iv) the Surviving Corporation or Performance Award and Cash Bonus Plan of Transocean and (v) any awards under the Transocean Stock Plans, except for the awards specified on Section 7.14 of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesTransocean Disclosure Letter.
Appears in 2 contracts
Samples: Merger Agreement (Transocean Inc), Merger Agreement (Globalsantafe Corp)
Employee Matters. (a) Between Except as otherwise provided herein, commencing on the Closing Date and continuing through the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 is twelve months following the Closing Date, the Parent shall provide, or cause to be provided, to each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, Employee compensation and employee benefits that arethat, in the aggregate, are substantially comparable to those in effect for either (i) the material compensation and employee benefits provided to such Employee by the Company on the date of this Agreement, or (ii) the material compensation and employee benefits provided to similarly situated employees of the Parent and or its Subsidiaries. In addition, a Company Affiliate that then employs such Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or during such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Dateperiod; provided, however, that the covenants within this Section 6.9(b) Parent shall not apply have no obligation to provide equity grants to the Company Employees listed on Schedule 6.9(b) Employees. As of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (shall have made or a Subsidiary thereof) caused to be made any and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) all arrangements necessary to continue in full force and effect the payroll and health and welfare plans of the Company Disclosure Letter, it being understood that the foregoing shall not be construed and its Subsidiaries and to limit any amendments otherwise permitted by the terms allow continued participation of the applicable agreements.
(d) From Employees therein, until such time as the Employees commence participation in the health and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes welfare benefit plans of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and (the Company “Parent Benefit Plans, as applicable, (other than (i”) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or and are transferred to the extent it would result Parent’s payroll, in a duplication of benefits accordance with this Section 8.10(a). Notwithstanding the foregoing, in the event an industry downturn or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with other economic circumstances negatively impact the Company and its Subsidiaries, the compensation and employee benefits provided under clause (i) or (ii) above may be reduced as applicable, to part of a generally applicable reduction in salary or other compensation or benefits that applies in the same extent and for manner to other similarly situated employees of the same purposes Parent or its Subsidiaries or its Affiliate that then employs such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that Employee during such credit does not result in duplicate benefitsperiod.
(eb) The Parties With respect to any Parent Benefit Plans in which any Employee will participate following the Closing, Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions use commercially reasonable efforts to, or to cause any third party insurance carriers to, (Ai) waive all limitations as to pre-existing condition exclusions, active employment requirements, requirements to show evidence of good health and waiting periods with respect to Employees and their spouses and dependents, if applicable, to the same extent waived under a similar or comparable Benefit Program in which such Employee participated immediately before the Closing Date and (ii) cause each Company Parent Benefit Plan intended to provide each Employee with credit for any co-payments or deductibles paid prior to the Closing Date in satisfying any deductible requirements or out of pocket limits under the Parent Benefit Plans for the plan year in which participation in such Parent Benefit Plan occurs.
(c) The Parent shall cause to be qualified under Section 401(a) provided to each Employee credit for prior service with the Company or its Affiliates to the extent such service would be recognized if it had been performed as an employee of the Code (Parent or its Affiliates for purposes of eligibility to participate and vesting in each vacation, severance, retirement, welfare benefit and paid-time off plan or program of the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) PlanParent, if any, in each casewhich such Employees are eligible to participate after the Closing Date to the same extent as such Employee was entitled, effective no later than the Business Day preceding before the Closing Date, to credit for such service under the corresponding Benefit Program, if any; provided, however, that such actions may service need not be contingent upon Closing recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.
(d) The Company shall continue in full force and effect, until the Effective Time, (i) the fidelity bond, if any, issued to the Company as described in ERISA Section 412; and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy CourtERISA fiduciary liability insurance policy currently in effect, if applicable)any, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee covered fiduciaries of the Company, Parent or any of their respective AffiliatesO-Tex Pumping 401(k), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement (C&J Energy Services, Inc.)
Employee Matters. (a) Between During the date hereof and period commencing at the Effective TimeTime and ending on December 31, 2022 (the Company “Continuation Period”), Parent shall (and the Company or shall cause the Surviving Corporation or one of its Subsidiaries to) make available Subsidiaries, as applicable, to Parent the employees provide to each employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including for so long as such employee remains employed by Parent or its Subsidiaries during the Continuation Period (collectively, the “Company Continuing Employees”) with respect (i) at least the same annual base salary or wage rate provided to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each such employee who is employed as of the Closing Date by the Company or a Subsidiary thereof the Company Subsidiaries immediately prior to the Effective Time, (eachii) the opportunity to earn at least the same economic value for the short term incentives provided to such employee by the Company or the Company Subsidiaries in respect of calendar year 2021 (iii) continuing medical, a “Company Employee”) shall be provided with annual base salary or base wage ratedental, vision, disability and employee life insurance benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect provided under the Parent Benefit Plans for such similarly situated employees of the Parent or any of its Subsidiaries, and (iv) the same severance and post-termination benefits that a Company Continuing Employee would have received for a termination of employment immediately prior to the Closing Date; providedEffective Time. Each Company Continuing Employee shall retain all of such Company Continuing Employee’s accrued but unpaid vacation, howeversick time or other paid time off as of the Effective Time, that to be administered in accordance with the covenants within policies in effect when such vacation or other paid time off is used during 2022 by each such Company Continuing Employee. With respect to the continuing medical, dental, vision, disability and life insurance benefits under this Section 6.9(b5.8(a), Parent shall cause the applicable Parent Benefit Plan to: (x) shall not apply waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such Company Continuing Employees, to the extent such pre-existing conditions, exclusions or waiting periods were satisfied under the similar Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company Benefit Plan in effect immediately prior to the Closing Date Effective Time; and (the “Excluded Employees”y) which Excluded Employees will, on provide each such Company Continuing Employee with credit for any co-payments and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject deductibles paid (to the terms and conditions of same extent such credit was given for the Retention and Sale Payment retention agreements provided year under the similar Company Benefit Plan in effect immediately prior to Parentthe Effective Time) in satisfying any applicable deductible or out-of-pocket requirements.
(cb) With respect to any Parent Benefit Plan, excluding any retiree health plans or programs maintained by Parent or any of its Subsidiaries, if any, any defined benefit retirement plans or programs maintained by Parent or any of its Subsidiaries, if any, and any equity compensation arrangements maintained by Parent or any of its Subsidiaries, (collectively, the “Applicable Parent Benefit Plans”) Parent shall, or shall cause the Surviving Corporation and to, with respect to the Continuing Company Employees credit all years of service of such individuals with the Company or any of its SubsidiariesSubsidiaries as if such service were with Parent, for purposes of eligibility to assume and honor their respective obligations under all employmentparticipate (but not for purposes of vesting or benefit accrual, severance, change in control, retention and other agreementsexcept for vacation, if any, between the applicable) for full or partial years of service in any Applicable Parent Benefit Plan in which such Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not Continuing Employees may be construed eligible to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and participate after the Effective Time; provided, as applicable, that such service shall not be credited to the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than extent that: (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it such crediting would result in a duplication of benefits or compensation for benefits; (ii) such service was not credited under the same period of servicecorresponding Company employee plan, or (iiiii) with respect such crediting is not allowed by the terms of such Parent Benefit Plan.
(c) The Company shall terminate the Company Non-Qualified Deferred Compensation Plan effective no later than the day immediately prior to the Excluded EmployeesClosing Date. The Parent has its own 401(k) plan, any severance benefits or rights) in which therefore, effective as of no later than the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect day immediately prior to the Closing Date, the Company will, if requested by Parent in its sole discretion, freeze and terminate the Company’s 401(k) Plan with Fidelity Investments. Effective no later than the day immediately preceding the Closing Date, the Company shall terminate any Company employee plans maintained by the Company or its Subsidiaries that Parent has requested to be terminated by providing a written notice to the extent that such credit does not result in duplicate benefits.
Company at least five (e5) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately days prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may Company employee plans can be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan terminated in accordance with Section 409A their terms and applicable Law. For greater certainty, the provisions of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f5.8(c) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event do not affect the Company 401(k) Plan is terminated equity awards, which shall be affected as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))2.3.
(gd) Nothing in this Agreement shall constitute an establishment or termination ofWithout limiting the generality of Section 8.10, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 5.8 are solely for the sole benefit of the Parties to this Agreement, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other no current or former director, employee of the Company, Parent or consultant or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third person shall be a third-party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision beneficiary of this Section 6.9. Nothing in this Section 6.9 is intended to (i) Agreement, and nothing herein shall prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any PersonCompany Continuing Employee.
(e) Parent, including Merger Sub and Company acknowledge and agree that (i) the Merger will constitute a “Change in Control” (or concept of similar import) under the Company Employee, at any time Benefit Plans identified in Section 5.8(e) of the Company Disclosure Schedules and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any as a result of its Subsidiaries (including following the Effective TimeMerger, the Surviving Corporationindividuals identified in Section 5.8(e) of the Company Disclosure Schedules will be deemed to have experienced a “Good Reason” event (or any particular term or condition concept of employment or servicesimilar import), or as applicable, as defined under such Company Benefit Plans.
(iiif) prevent ParentWith respect to matters described in this Section 5.8, the Surviving Corporation Company will not send any written notices or other written communication materials to Company employees without the prior written consent of Parent. The Company will cooperate and collaborate with the Parent on any of their Affiliates from terminating, revising such notices or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariescommunications.
Appears in 2 contracts
Samples: Merger Agreement (Enerflex Ltd.), Merger Agreement (Exterran Corp)
Employee Matters. (a) Between From and after the date hereof Closing Date and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months one year following the Closing DateEffective Time (the “Continuation Period”), Parent shall provide or cause the Surviving Corporation to provide to each employee individual who is employed as of the Closing Date by the Company or a any Company Subsidiary thereof immediately prior to the Effective Time and who continues employment with Parent, the Surviving Corporation or any Company Subsidiary (each, a “Company Employee”) shall be provided with annual base (i) salary or base wage rate, and employee benefits that areincentive opportunities that, in each case, are no less favorable in the aggregate, substantially comparable aggregate (excluding any value attributable to equity-based compensation) than those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a provided to such Company Employee whose employment is involuntarily terminated other than for cause within by the period of 12 months following Company or the Company Subsidiaries immediately prior to the Closing Date and (or such longer change in control coverage period as required under the applicable Company Benefit Planii) shall be provided with severance employee benefits (subject to satisfying any applicable release requirementsexcluding defined benefit pension plan benefits) that are no less favorable in the aggregate than those in effect for provided to such Company Employee by the Company or the Company Subsidiaries immediately prior to the Closing Date. Without limiting the generality of the foregoing, during the Continuation Period, Parent shall, and shall cause the Surviving Corporation to, provide any Company Employee who experiences a termination of employment under circumstances that would have entitled such Company Employee to severance benefits under any Company Benefit Plan or Company Benefit Agreement applicable to such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply Date with severance benefits at a level at least equal to the severance benefits payable under such Company Employees listed on Schedule 6.9(bBenefit Plan or Company Benefit Agreement.
(b) Following the Continuation Period, to the extent that any of the existing Company Disclosure LetterBenefit Plans are discontinued, each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all plans maintained by Parent, the Surviving Corporation or their respective affiliates (the “Surviving Corporation Plans”) to the extent coverage under any such plan is necessary to replace coverage under the discontinued Company Benefit Plan in which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the such Company Employee participates immediately prior to the Closing Date Effective Time.
(c) Without limiting the “Excluded Employees”) which Excluded Employees willgenerality of Section 5.03(a), on from and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, shall or shall cause the Surviving Corporation to assume, honor and its Subsidiariescontinue during the Continuation Period or, to assume and honor their respective if later, until all obligations under thereunder have been satisfied, all of the Company’s employment, severance, retention, termination and change in controlcontrol plans, retention policies, programs, agreements and arrangements (including any change in control severance agreement or other agreements, if any, Company Benefit Agreement between the Company (or a Subsidiary thereof) and a any Company Employee) maintained by the Company or any Company Subsidiaries, includingin each case, but not limited toas in effect on the Closing Date, those Company Benefit Plans set forth on Schedule 6.9(c) including with respect to any payments, benefits or rights arising as a result of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit Transactions (either alone or in combination with any amendments otherwise permitted by the terms of the applicable agreementsother event) in accordance with their terms.
(d) From With respect to all Surviving Corporation Plans, including any “employee benefit plan,” as defined in Section 3(3) of ERISA, maintained by Parent or any of its respective subsidiaries (including any vacation, paid time-off and severance plans), for all purposes, including determining eligibility to participate, level of benefits, vesting, benefit accruals and early retirement subsidies, each Company Employee’s service with the Company or any Company Subsidiaries (as well as service with any predecessor employer of the Company or any such Company Subsidiary, to the extent service with the predecessor employer was recognized by the Company or such Company Subsidiary) shall be treated as service with Parent or any of their respective subsidiaries; provided that such service need not be recognized (i) to the extent that such recognition would result in any duplication of benefits for the same period of service or (ii) with respect to any benefit accrual under a defined benefit pension plan.
(e) With respect to any welfare plan maintained by Parent or any of its subsidiaries in which any Company Employee is eligible to participate after the Effective Time, as applicable, the Parties Parent shall, or and shall cause the Surviving Corporation and its Subsidiariesto, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes waive all limitations as to preexisting conditions and exclusions and waiting periods and actively-at-work requirements with respect to participation and coverage requirements applicable to such employees and their eligible dependents and beneficiaries, to the extent such limitations were waived, satisfied or did not apply to such employees or eligible dependents or beneficiaries under the corresponding welfare Company Benefit Plan in which such employees participated immediately prior to the Effective Time and (ii) provide Company Employees and their eligible dependents and beneficiaries with credit for any “defined benefit co-payments and deductibles paid prior to the Effective Time in satisfying any analogous deductible or out-of-pocket maximum requirements to the extent applicable under any such plan” as defined , in Section 3(35) of ERISAeach case, retiree medical benefits or disability benefits or except to the extent it would result in a any duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 5.03 are solely for the sole benefit of the Parties parties to this Agreement, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any no Company Employee or any other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies Person (including with respect to the matters provided for in any beneficiary or dependent thereof) shall be a third-party beneficiary of this Section 6.9) under or by reason of any 5.03, and no provision of this Section 6.9. Nothing 5.03 shall create such rights in this Section 6.9 is intended to (i) prevent Parentany such Persons in respect of any benefits that may be provided, the Surviving Corporation directly or indirectly, under any Company Benefit Plan or Company Benefit Agreement or any employee program or any plan or arrangement of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following subsidiaries shall be construed to modify, amend, or establish any benefit plan, program or arrangement or in any way affect the Effective Time, ability of the Surviving Corporation) parties hereto or any particular term other Person to modify, amend or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or terminate any of their Affiliates from terminatingits benefit plans, revising programs or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesarrangements.
Appears in 2 contracts
Samples: Merger Agreement (Avantor, Inc.), Merger Agreement (VWR Corp)
Employee Matters. (a) Between The Company shall terminate, effective no later than the day immediately preceding the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees becomes a member of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
same Controlled Group of Corporations (b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35414(b) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for Code) as Parent (the same period of service, or (ii) with respect to the Excluded Employees“Retirement Plan Termination Date”), any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be employee retirement plans qualified under Section 401(a) of the Code (the “Company 401(k) PlanRetirement Plans”) to be terminated and (B) all participants to cease participating under maintained by the Company 401(kor any of its Subsidiaries, unless Parent provides written notice to the Company at least three (3) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days Days prior to the Closing Date (or Effective Time that such earlier date approved by the Bankruptcy Court, if applicable), the Company Retirement Plans shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable)not be terminated. The Company shall provide Parent with an advance copy evidence that the Retirement Plans of the Company and its Subsidiaries have been terminated pursuant to resolutions of the Company Board or the board of directors of its Subsidiaries, as applicable. The form and substance of such resolutions shall be subject to the review and approval of Parent. The Company shall also take such other actions in furtherance of terminating any such Retirement Plans as Parent may reasonably request. As soon as practicable following the Retirement Plan Termination Date, Parent shall permit all documentation necessary Continuing Employees who were eligible to effect this Section 6.9(fparticipate in any 401(k) and a reasonable opportunity to comment thereon plan maintained by the Company or any of its Subsidiaries immediately prior to the adoption Retirement Plan Termination Date to participate in Parent’s 401(k) plan, and shall permit each such Continuing Employee to elect to transfer his or execution thereof. In the event her account balance when distributed from any terminated 401(k) plan maintained by the Company or any of its Subsidiaries, including any outstanding participant loans from such 401(k) Plan plans, to Parent’s 401(k) plan, except to the extent accepting such transfers would adversely affect the tax-qualified status of the Parent 401(k) plan, or as may be prohibited by Parent’s 401(k) plan.
(b) From and after the Effective Time through the date which is terminated five (5) months after the date on which the Effective Time occurs, or such longer period as set forth may be required by applicable Law, Parent will provide, or will cause to be provided, to all Continuing Employees who remain employed by Parent or any Subsidiary of Parent, compensation and benefits that are substantially comparable in the preceding sentenceaggregate to the compensation and benefits provided to such Continuing Employees immediately prior to the Effective Time (excluding benefits derived from awards under any equity incentive plan). Following the Effective Time and to the extent permitted by applicable Laws, as soon as administratively practicable Parent shall, or shall cause any Subsidiary of Parent, including the Surviving Corporation to, recognize the prior service with the Company or its Subsidiaries of Continuing Employees in connection with all employee benefit plans, programs or policies of Parent or its Subsidiaries in which Continuing Employees first become eligible to participate following the Effective Time for purposes of eligibility and vesting and determination of level of benefits (including vacation), including applicability of minimum waiting periods for participation, (but not to the extent that such recognition would result in duplication of benefits). In these regards, for purposes of determining the annual deductible, co-pay and out-of pocket expense limitation under its health plan for Continuing Employees who become eligible during the 2014 plan year, Parent will credit health plan expenses incurred by Continuing Employees during 2014 prior to the Effective Time as though they were incurred immediately after the Effective Time, . Parent shall use commercially reasonable efforts to take provide that no such Continuing Employee, or any of his or her eligible dependents, who are participating in the Company’s group health plan shall be excluded from Parent’s group health plan, or limited in coverage thereunder, by reason of any waiting period restriction or pre-existing condition limitation.
(c) The Company shall terminate any and all action as may be reasonably requiredgroup severance, including amendments separation, deferred compensation or salary continuation plans, programs or arrangements maintained by the Company or any of its Subsidiaries, effective in each case no later than the day immediately preceding the Effective Time. The Company shall provide Parent evidence that such plans have been terminated pursuant to a defined contribution retirement plan intended to be qualified under Section 401(a) resolutions of the Code designated by Parent Company Board or the board of directors of its Subsidiaries, as applicable (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning form and substance of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (which resolutions shall be subject to any applicable eligibility requirements, but giving effect to the service crediting provisions review and approval of Section 6.9(d)Parent).
(gd) Prior to the Effective Time, the Company ESPP shall be terminated. The rights of participants in the Company ESPP with respect to any offering period then underway under such Company ESPP shall be determined by treating the last business day prior to, or if preferable administratively, the last payroll date of the Company immediately prior to, the Effective Time, as the last day of such offering period and by making such other pro-rata adjustments as may be necessary to reflect the shortened offering period but otherwise treating such shortened offering period as a fully effective and completed offering period for all purposes under such Company ESPP. The Company shall provide that no additional offering period or purchase period shall commence under the Company ESPP after March 31, 2014. Prior to the Effective Time, and subject to the reasonable review and approval by Parent, the Company shall take all actions necessary give effect to the transactions contemplated by this Section 6.12(d).
(e) Nothing in this Agreement shall constitute an establishment (x) create any third-party beneficiary rights in any employee or termination offormer employee (including any beneficiary or dependent thereof) or service provider or former service provider (including any beneficiary or dependent thereof) of the Company in any respect, or an amendment to, (y) constitute or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or constitute an amendment to any of their respective Subsidiaries. The provisions of this Section 6.9 are the compensation or benefit plans maintained for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed provided to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee employees or other current persons prior to or former employee of following the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9Closing. Nothing in this Section 6.9 is intended Agreement shall constitute a limitation on the rights to (i) prevent Parentamend, the Surviving Corporation modify or terminate any such plans or arrangements of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariessubsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Microchip Technology Inc), Merger Agreement (Supertex Inc)
Employee Matters. (a) Between During the date hereof period commencing at the Effective Time and ending on the first (1st) anniversary of the Effective Time (the “Continuation Period”), Parent shall provide the employees of Company and its Subsidiaries as of the Effective Time (the “Continuing Employees”), for so long as they are employed following the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
following: (bi) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with an annual base salary or base wage ratewages and target annual cash incentive opportunities, and employee benefits as applicable, that are, in each case, no less than the aggregateannual base salary or wages and target annual cash incentive opportunities, substantially comparable to those as applicable, in effect for each such Continuing Employee immediately prior to the Effective Time and (ii) employee benefits that are substantially comparable in the aggregate to those provided to similarly situated employees of Parent and its Subsidiaries (excluding any severance benefits, frozen benefit plans of Parent and its Subsidiaries or benefit plans that exclusively provide benefits to grandfathered employees of Parent and its Subsidiaries). In additionWithout limiting the immediately preceding sentence, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and or one of its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited Subsidiaries to, those Company Benefit Plans provide to each Continuing Employee whose employment terminates during the Continuation Period with severance benefits no less than the severance benefits set forth on Schedule 6.9(cin Section 6.7(a) of the Company Disclosure LetterSchedule, it being understood that determined (A) by taking into account such Continuing Employee’s service with Company and its Subsidiaries (and their predecessor entities) prior to the foregoing shall not be construed Closing Date and with Parent and its Subsidiaries on and after the Closing Date, and (B) without taking into account any reduction after the Closing in the compensation paid to limit any amendments otherwise permitted by the terms of the applicable agreementssuch Continuing Employee.
(db) From and With respect to any employee benefit plans of Parent or its Subsidiaries in which any Continuing Employees become eligible to participate on or after the Effective TimeTime (the “New Plans”), as applicable, the Parties shall, or shall cause the Surviving Corporation Parent and its Subsidiaries, to take Subsidiaries shall use commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than to: (i) for any purposes waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents under any “defined benefit plan” as defined in Section 3(35) of ERISANew Plans, retiree medical benefits or disability benefits or except to the extent it such pre-existing conditions, exclusions or waiting periods would result in a duplication of benefits or compensation for apply under the same period of serviceanalogous Company Benefit Plan, or (ii) provide each such Continuing Employee and his or her eligible dependents with respect credit for any co-payments or coinsurance and deductibles paid prior to the Excluded EmployeesEffective Time under a Company Benefit Plan that provides health care benefits (including medical, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company dental and its Subsidiaries, as applicablevision), to the same extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time, in satisfying any applicable deductible, co-payment, coinsurance or maximum out-of-pocket requirements under any New Plans, and (iii) recognize all service of such Continuing Employees with Company and its Subsidiaries for all purposes in any New Plan to the same purposes extent that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateEffective Time; provided that the foregoing service recognition shall not apply (A) to the extent it would result in duplication of benefits for the same period of service, (B) for purposes of benefit accrual under any defined benefit pension plan, or (C) for purposes of any benefit plan that is a frozen plan or provides grandfathered benefits.
(fc) Prior to the Closing Date, (i) if If requested by Parent in writing at least three twenty (320) business days before prior to the ClosingEffective Time, the Company shall cause the any 401(k) plan sponsored or maintained by Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under effective as of the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days day immediately prior to the Closing Date (or such earlier date approved by Effective Time and contingent upon the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A occurrence of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereofClosing. In the event the that Parent requests that any Company 401(k) Plan is terminated be terminated, the Continuing Employees shall be eligible to participate, effective as set forth in the preceding sentence, as soon as administratively practicable following of the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to in a defined contribution retirement 401(k) plan intended to be qualified under Section 401(a) of the Code designated sponsored or maintained by Parent or one of its Subsidiaries (the a “Parent 401(k) Plan”). Company and Parent shall take any and all actions as may be required, including amendments to the Company 401(k) Plan and/or Parent 401(k) Plan to (A) cause permit the Continuing Employees who are then actively employed to make rollover contributions to the Parent 401(k) Plan to accept any of “eligible rollover distributions” (within with the meaning of Section 402(c)(4401(a)(31) of the Code) in the form of cash cash, notes (in the case of loans), Parent Common Stock or a combination thereof in an amount equal to the full account balance distributed or distributable to such Company Continuing Employee from a Company 401(k) Plan. Company shall provide Parent with evidence that the Company 401(k) Plan has been terminated or amended, as applicable, in accordance with this Section 6.7(c); provided that, prior to amending or terminating the Parent Company 401(k) Plan, including any outstanding loans Company shall provide the form and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as substance of the Closing Date (subject to any applicable eligibility requirements, but giving effect resolutions or amendments to the service crediting provisions of Section 6.9(d)Parent for review and comment (and shall consider in good faith any such comments).
(gd) On and after the date hereof, any broad-based employee notices or communication materials with respect to employment, compensation or benefits matters addressed in this Agreement or related, directly or indirectly, to the transactions contemplated by this Agreement shall be subject to the prior prompt review and comment of the other party, and the party seeking to distribute any such notice or communication shall consider in good faith revising such notice or communication to reflect any comments or advice that the other party timely provides.
(e) Nothing in this Agreement shall constitute an establishment confer upon any employee, officer, director or termination ofconsultant of Company or any of its Subsidiaries or affiliates any right to continue in the employ or service of the Surviving Company, Company, Parent, or an amendment toany Subsidiary or affiliate thereof, or be construed as establishingshall interfere with or restrict in any way the rights of the Surviving Company, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any Subsidiary or affiliate thereof to discharge or terminate the services of their respective Subsidiaries. The provisions any employee, officer, director or consultant of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates)its Subsidiaries or affiliates at any time for any reason whatsoever, other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal with or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9without cause. Nothing in this Section 6.9 is intended Agreement shall be deemed to (i) prevent Parentestablish, the Surviving Corporation amend, or modify any Company Benefit Plan, New Plan or any of their Affiliates from terminating the other benefit or employment plan, program, agreement or service of any Personarrangement, including a Company Employee, at any time and for any reason, or (ii) provide any Person any right to employment alter or service or continued employment or service with limit the ability of Parent or any of its Subsidiaries (including following or affiliates to amend, modify or terminate any particular Company Benefit Plan, New Plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of the final sentence of Section 9.11, the Surviving Corporation) nothing in this Agreement, express or implied, is intended to or shall confer upon any particular term person, including any current or condition former employee, officer, director or consultant of employment or service, or (iii) prevent Parent, the Surviving Corporation Company or any of their Affiliates from terminatingits Subsidiaries or affiliates, revising any right, benefit or amending remedy of any Employee Benefit Plan sponsored, maintained nature whatsoever under or contributed to by the Company, Parent or any reason of their respective Subsidiariesthis Agreement.
Appears in 2 contracts
Samples: Merger Agreement (First Horizon National Corp), Merger Agreement (Capital Bank Financial Corp.)
Employee Matters. (a) Between From and after the date hereof and the First Effective Time, the Company shall, and to the extent within its control, Parent shall (and cause the Company to, honor all Company Benefit Plans in accordance with their terms as in effect immediately before the First Effective Time. For a period of one year following the Control Date, Parent shall provide, or shall cause its Subsidiaries to) make available to Parent the employees be provided, to each current employee of the Company and its Subsidiaries so (“Company Employees”) (i) base compensation and cash and equity target incentive opportunities that, in each case, are no less favorable than were provided to the Company Employee immediately before the First Effective Time (it being understood that in lieu of equity compensation awards, Parent may interview provide Company Employees who, as of immediately prior to the First Effective Time were eligible to receive Company equity compensation awards, long-term incentive awards that are settled in cash in an amount sufficient to replace the grant date value of the Company Employee’s equity compensation opportunity immediately prior to the First Effective Time, provided, that, except as set forth in this Section 5.7(a), such employees long-term incentive awards shall have the same terms and evaluate their roles conditions as those applicable to the equity awards granted by Parent to its similarly situated employees), and responsibilities (ii) employee benefits that are no less favorable in the aggregate than the employee benefits provided to the Company Employee immediately before the First Effective Time. Without limiting the generality of the foregoing, (A) Parent shall or shall cause the Second Surviving Corporation to provide to each Company Employee whose employment terminates during the one-year period following the Control Date under circumstances that would give rise to severance benefits under the Company Benefit Plans set forth on Section 5.7(a) of the Company Disclosure Schedules (the “Company Severance Plans”), severance benefits in accordance with the terms of the applicable Company Severance Plan in which such Company Employee is eligible to participate immediately prior to the First Effective Time and (B) during such one-year period following the Control Date, severance benefits offered to each Company Employee shall be determined taking into account all service with the Company, its Subsidiaries (and including, on and after the First Effective Time, the Second Surviving Corporation and any of its Affiliates) and without taking into account any reduction after the First Effective Time in compensation paid or benefits provided to such Company Employee.
(b) For all purposes (including for purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Control Date (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following Subsidiaries and their respective predecessors before the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Control Date, each employee who is employed to the same extent as such Company Employee was entitled, before the Control Date, to credit for such service under any similar Company Benefit Plan in which such Company Employee participated or was eligible to participate immediately prior to the Control Date; provided that the foregoing shall not apply (x) for benefit accrual under defined benefit pension plans, (y) for purposes of qualifying for subsidized early retirement benefits or (z) to the Closing Date by the Company or extent that its application would result in a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees duplication of Parent and its Subsidiariesbenefits. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any New Plans to the extent coverage under such New Plan is comparable to a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change Benefit Plan in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for which such Company Employee participated immediately before the Control Date (such plans, collectively, the “Old Plans”), and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical, vision and any other insurance benefits to any Company Employee, Parent shall cause all preexisting condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its Subsidiaries in which such employee participated immediately prior to the Closing Control Date; provided, however, that and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) portion of the Company Disclosure Letter, which shall consist plan year of the individuals that are a party Old Plans ending on the date such employee’s participation in the corresponding New Plan begins to those certain Retention be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and Sale Payment retention agreements executed maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentsuch New Plan.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, hereby acknowledges that a “change in control, retention and other agreements, if any, between the Company ” (or a Subsidiary thereofsimilar phrase) and a Company Employee, including, but not limited to, those within the meaning of the Company Benefit Plans set forth on Schedule 6.9(c) of will occur at the Company Disclosure LetterFirst Effective Time, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreementsas applicable.
(d) From and after Without limiting the Effective Time, as applicablegenerality of Section 8.10, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 5.7(d) are solely for the sole benefit of the Parties parties to this Agreement, and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other no current or former director, employee of the Company, Parent or consultant or any other person shall be a third-party beneficiary of their respective Affiliates)this Agreement, other than the Parties and their respective permitted successors and assigns, nothing herein shall be construed as an amendment to any third party beneficiary, legal or equitable Company Benefit Plan or other rights compensation or remedies (including with respect to the matters provided benefit plan or arrangement for in this Section 6.9) under any purpose or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) otherwise shall prevent Parent, the Second Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Canadian Pacific Railway LTD/Cn), Merger Agreement (Kansas City Southern)
Employee Matters. (a) Between During the date hereof and period commencing on the Effective TimeTime and ending on the first anniversary of the Closing Date (the “Continuation Period”), the Company Parent shall (and the Company shall cause its Subsidiaries to) make available provide to Parent the employees each employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with at the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period Effective Time who remains an employee of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof any of its Subsidiaries (eacheach such employee, a “Company Employee”): (i) shall be provided with annual base salary or base wage rate, and employee benefits rate that areis, in the aggregateeach case, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for the base salary or wage rate to each such Company Employee immediately prior to the Closing DateEffective Time; provided, however, (ii) annual cash incentive bonus opportunities that are no less favorable in the covenants within this Section 6.9(b) shall not apply aggregate than those provided to each such Company Employee immediately prior to the Effective Time; and (iii) retirement, health and welfare benefits (excluding severance benefits, defined benefit pension plans, post-employment health and welfare benefit plans, nonqualified deferred compensation plans, and equity or equity-based and long-term compensation benefits) that are substantially comparable, in the aggregate, to those retirement, health and welfare benefits (excluding severance benefits, defined benefit pension plans, post-employment health and welfare benefit plans, nonqualified deferred compensation plans, and equity or equity-based and long-term compensation benefits) provided to such Company Employees listed Employee immediately prior to the Effective Time.
(b) Parent shall provide each Company Employee who incurs a termination of employment by Parent or its Affiliate (other than for cause or on Schedule 6.9(baccount of death or disability) during the Continuation Period, subject to such Company Employee’s timely executing and not revoking a waiver and general release agreement in the form customarily used by Parent or its Affiliate, with severance payments and benefits that are no less favorable than the severance payments and benefits to which such employee would have been entitled with respect to such termination under the severance policies of the Company set forth on Section 4.18(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to ParentSchedule.
(c) Parent shall, or shall cause the Surviving Corporation and its or Parent’s or the Surviving Corporation’s Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the give Company Employees full credit for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its SubsidiariesSubsidiaries for purposes of eligibility, as applicablevesting and determination of the level of benefits (including for purposes of vacation and severance) under any benefit plans made generally available to officers or employees or any class or level of officers or employees maintained by Parent, the Surviving Corporation or any of their respective Subsidiaries in which a Company Employee participates to the same extent and for recognized by the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing DateEffective Time; provided, however, that the foregoing shall not apply with respect to benefit accruals under any defined benefit pension plan, for purposes of any post-employment health or welfare benefit plan, or to the extent that such credit does not recognition would result in duplicate benefitsa duplication of benefits with respect to the same period of service.
(ed) The Parties Parent shall, or shall cause the Surviving Corporation and its or Parent’s or the Surviving Corporation’s Subsidiaries, as applicable, to take use commercially reasonable efforts to (i) waive any limitation on health coverage of any preexisting condition limitations otherwise applicable to Company Employees and their eligible dependents under any plan of Parent or any Subsidiary of their coveredParent that provides health benefits in which Company Employees may be eligible to participate following the Effective Time, eligible dependents due other than any limitations that were in effect with respect to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence such employees as of good health the Effective Time under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles honor any deductible, co-payment and annual out-of-pocket limits for medical expenses maximums incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider Company Employees and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply their eligible dependents under the analogous Company Benefit Plan health plans in effect which they participated immediately prior to the Closing Date.
(f) Prior to Effective Time during the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) portion of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days calendar year prior to the Closing Date (Effective Time in satisfying any deductibles, co-payments or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance out-of-pocket maximums under the Excess Plan in accordance with Section 409A health plans of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating respective Subsidiaries in which they are eligible to participate after the employment Effective Time in the same plan year in which such deductibles, co-payments or service out-of-pocket maximums were incurred and (iii) waive any waiting period limitation or evidence of any Person, including insurability requirement that would otherwise be applicable to a Company EmployeeEmployee and his or her eligible dependents on or after the Effective Time, at in each case to the extent such Company Employee or eligible dependent had satisfied any time similar limitation or requirement under an analogous Benefit Plan prior to the Effective Time.
(e) This Section 6.08 shall be binding upon and for shall inure solely to the benefit of each of the parties to this Agreement and nothing in this Section 6.08 or any reasonother provision of this Agreement or any other related Contract, express or implied (i) shall be construed to establish, amend, or modify any Benefit Plan or any other benefit or compensation plan, program, agreement or arrangement, (ii) provide shall alter or limit the ability of the Company or any Person of its Subsidiaries, or Parent or any of its Subsidiaries to amend, modify or terminate any benefit or compensation plan, program, agreement or arrangement or (iii) is intended to or shall confer upon any third-party beneficiary rights or obligations in any person (including any current or former employee of the Company or its Subsidiaries) or any right to employment or service or continued employment or service with Parent for any period of time by reason of this Agreement or any of its Subsidiaries (including following the Effective Timeother related agreement, the Surviving Corporation) or any right to a particular term or condition of employment or service, service with Parent or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Company or any of their respective SubsidiariesSubsidiaries or Affiliates or any other person.
Appears in 2 contracts
Samples: Merger Agreement (Vericity, Inc.), Merger Agreement (Vericity, Inc.)
Employee Matters. (a) Between Following the date hereof Effective Time and until December 31, 2017 (the “Continuation Period”), US Parent shall provide or shall cause the Surviving Corporation to provide the individuals who are employed by the Company or any of its Subsidiaries immediately before the Effective Time, other than any individual covered by a collective bargaining agreement (the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company EmployeeEmployees”) shall be provided and who continue employment during such time period with (i) annual base salary or compensation no less than the annual base wage rate, compensation provided to such Company Employees immediately prior to the Effective Time; (ii) annual target cash incentive amounts that are no less than the annual target cash incentive amounts provided to such Company Employees immediately prior to the Effective Time; and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Planiii) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for the severance benefits provided to such Company Employee Employees immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Effective Time. US Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those maintain during the Continuation Period, without any amendment or modification thereto that would affect Company Employees who are eligible for such Company Benefit Plans immediately prior to the Effective Time, a level of benefits for such Company Employees that are no less favorable in the aggregate than the level of benefits provided immediately prior to the Effective Time solely as it relates to benefits provided under the Company Benefit Plans set forth on Schedule 6.9(cin Section 5.06(a) of the Company Disclosure Letter; provided, it being understood however, that US Parent and the foregoing shall not be construed Surviving Corporation may amend such Company Benefit Plans as required to limit any amendments otherwise permitted by the terms of the comply with applicable agreementsLaw.
(db) From Without limiting the generality of Section 5.06(a), from and after the Effective Time, as applicable, the Parties US Parent shall, or shall cause the Surviving Corporation to, assume and its Subsidiaries, to take commercially reasonable efforts to credit honor each of the agreements as set forth in Section 5.06(b) of the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit PlansDisclosure Letter, as applicable, (other than (i) for any purposes in effect at the Effective Time with respect to any “defined benefit plan” as defined in Section 3(35) of ERISApayments, retiree medical benefits or disability benefits rights arising as a result of the transactions contemplated by this Agreement (either alone or in combination with any other event), without any amendment or modification, other than any amendment or modification required to comply with applicable Law in accordance with the extent it would result in a duplication terms of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing DatePlans; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent, US Parent or Surviving Corporation may exercise its discretion to provide written notice of termination of such agreements pursuant to their terms as they relate to any subsequent change in control. In addition, US Parent shall use commercially reasonable efforts assume and honor all collective bargaining agreements to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from which the Company 401(kor any of its Subsidiaries is a party as required by the terms thereof.
(c) Plan With respect to all plans maintained by Parent, US Parent, the Parent 401(k) Plan, including any outstanding loans and (B) cause each Surviving Corporation or their respective Subsidiaries in which the Company Employee Employees are eligible to become a participant in the Parent 401(k) Plan as of participate after the Closing Date (subject including any vacation, paid time-off and severance plans) for purposes of determining eligibility to participate, level of benefits and vesting (but not for benefit accrual under any applicable eligibility requirementsdefined benefit pension plan), but giving effect to each Company Employee’s service with the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Company or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit its Subsidiaries (as well as service with any predecessor employer of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates)such Subsidiary, other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9extent service with the predecessor employer is recognized by the Company or such Subsidiary) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent shall be treated as service with Parent, US Parent, the Surviving Corporation or any of their Affiliates from terminating respective Subsidiaries, in each case, to the employment extent such service would have been recognized by the Company or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following under analogous Company Benefit Plans prior to the Effective Time; provided, however, that such service need not be recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.
(d) Without limiting the generality of Section 5.06(a), US Parent shall, or shall cause the Surviving Corporation) or Corporation to, use all commercially reasonable efforts to waive any particular term or pre-existing condition of employment or servicelimitations, or (iii) prevent exclusions, actively-at-work requirements and waiting periods under any welfare benefit plan maintained by Parent, US Parent, the Surviving Corporation or any of their Affiliates respective Subsidiaries in which Company Employees (and their eligible dependents) will be eligible to participate from terminatingand after the Effective Time, revising except to the extent that such pre-existing condition limitations, exclusions, actively-at-work requirements and waiting periods would not have been satisfied or amending any Employee waived under the comparable Company Benefit Plan sponsoredimmediately prior to the Effective Time. US Parent shall, maintained or contributed shall cause the Surviving Corporation to, use all commercially reasonable efforts to recognize the dollar amount of all co-payments, deductibles and similar expenses incurred by each Company Employee (and his or her eligible dependents) during the Companycalendar year in which the Effective Time occurs for purposes of satisfying such year’s deductible and co-payment limitations under the relevant welfare benefit plans in which they will be eligible to participate from and after the Effective Time.
(e) Prior to the Closing, the Company shall adopt an amendment to the 401(k) Savings Plan contingent upon and effective as of the Closing, to terminate the Company stock fund and remove Company stock as an investment alternative under the 401(k) Savings Plan and to make such amendments as are necessary to accomplish the foregoing. The Company shall provide Parent a reasonable opportunity to review and comment on any amendment to be made pursuant to this Section 5.06(e) and, subject to plan fiduciary obligations, shall not adopt any amendment without the prior consent of Parent (such consent not to be unreasonably withheld, conditioned or delayed).
(f) The provisions of this Section 5.06 are solely for the benefit of the parties to this Agreement, and no other Person (including any Company Employee or any beneficiary or dependent thereof) shall be regarded for any purpose as a third-party beneficiary of this Section 5.06, and no provision of this Section 5.06 shall create such rights in any such Persons. No provision of this Agreement shall be construed (i) as a guarantee of continued employment of any Company Employee, (ii) to prohibit Parent, US Parent or the Surviving Corporation from having the right to terminate the employment of any Company Employee, (iii) to prevent the amendment, modification or termination of their respective Subsidiariesany Company Benefit Plan after the Closing (in each case in accordance with the terms of the applicable Company Benefit Plan) or (iv) as an amendment or modification of the terms of any Company Benefit Plan.
Appears in 2 contracts
Samples: Merger Agreement (Transcanada Corp), Merger Agreement (Columbia Pipeline Group, Inc.)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations As soon as practicable following the Closing.
parties’ execution of this Agreement (b) The Parties agree that for a period of 12 months following the Closing Datebut in no event later than fifteen (15)] Business Days thereafter), each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent Purchaser shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person Affiliate (including, for the avoidance of doubt, the Company) to, extend offers of employment effective as of the Closing to the active Business Employees set forth on Section 7.05(a) of the Seller Disclosure Schedule. Each such offer of employment shall be on terms determined by Purchaser in its sole discretion; provided, however, if any Company active Business Employee receives an offer of employment providing for (i) an initial base salary or wage rate that is not substantially comparable to the base salary or wage rate provided to such Business Employee immediately prior to the Closing and (ii) providing for an initial opportunity to earn a long-term incentive award with a target amount that is not substantially comparable to the target long-term incentive award provided by Seller immediately prior to the date hereof, such Business Employee shall be deemed not to have received an offer of employment pursuant to this Section 7.05(a) for purposes of determining satisfaction of the condition to closing set forth in Section 8.01(f). Each active Business Employee who accepts employment with Purchaser or its Affiliate as of the Closing shall be referred to herein as “Transferred Employees.”
(b) Effective as of the Closing, the Transferred Employees shall cease active participation in the Benefit Plans except as provided by the terms of any such Benefit Plan or applicable Law. Without limiting any other provision of this Agreement, Seller shall remain liable for all eligible claims for benefits and claims under the Benefit Plans that are incurred by the Transferred Employees (regardless of when such claims are reported or disclosed). Notwithstanding any other provision of this Agreement, any Business Employee (i) who as of the Closing Date is short-term disabled or receiving or entitled to receive short-term disability under a Benefit Plan and who subsequently becomes eligible to receive long-term disability benefits, or (ii) as of the Closing Date is receiving or entitled to receive long-term disability benefits, shall become eligible or continue to be eligible, as applicable, to receive short-term and/or long-term disability benefits as applicable under a short-term and/or long-term disability plan maintained by Seller. Seller shall be solely responsible for satisfying the continuation coverage requirements of Section 4980B of the Code for all individuals who are “M&A qualified beneficiaries” as such term is defined in Treasury Regulation Section 54.4980B-9.
(c) On or prior to the Closing, Seller shall pay to each Transferred Employee all amounts in respect of vacation and other paid time off earned but not taken by such Transferred Employee through the Closing; provided, however, Purchaser shall have no commitment, Liability or obligation for, and Seller and its Affiliates shall hold Purchaser harmless with respect to, all such amounts payable to any Transferred Employee; provided further, Purchaser shall have no obligation to honor after the Closing any vacation or other current or former employee paid time off earned by any Transferred Employee prior to the Closing. After the Closing, each Transferred Employee’s eligibility for vacation and other paid time off shall be determined under Purchaser’s policies.
(d) This Section 7.05 shall be binding upon and inure solely to the benefit of each of the Companyparties to this Agreement, Parent and nothing in this Section 7.05, express or implied, shall confer upon any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, person any third party beneficiary, legal or equitable or other rights or remedies of any nature whatsoever (including with respect to the matters provided for in this Section 6.9any third-party beneficiary rights) under or by reason of any provision of this Section 6.97.05. Nothing contained in this Section 6.9 is intended 7.05, express or implied, shall be construed to (i) prevent Parentestablish, amend or modify any benefit or compensation plan, program, policy, Contract, agreement or arrangement or to limit the Surviving Corporation ability of Purchaser or any of their its Affiliates from terminating to amend, modify or terminate any benefit or compensation plan, program, policy, Contract, agreement or arrangement. The parties hereto acknowledge and agree that the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person terms set forth in this Section 7.05 shall not create any right in any Transferred Employee or any other person to any employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation service with Purchaser or any of their its Affiliates from terminatingor compensation or benefits of any nature or kind whatsoever, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by limit the Company, Parent ability of Purchaser or any of their respective Subsidiariesits Affiliates to terminate the employment or service of any person at any time and for any or no reason.
Appears in 2 contracts
Samples: Unit Purchase Agreement (Yelp Inc), Unit Purchase Agreement (GrubHub Inc.)
Employee Matters. (a) Between Parent agrees that, during the period commencing at the Effective Time and ending on the date hereof and that is the Effective Time, the Company shall six (and the Company shall cause its Subsidiaries to6) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary month anniversary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded EmployeesContinuation Period”) which Excluded Employees will), on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shallshall provide, or shall cause the Surviving Corporation and and/or its Subsidiariesapplicable Subsidiaries to provide, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) each employee of the Company Disclosure Letterand its Subsidiaries at the Effective Time who continues to be employed by Parent or its Subsidiaries immediately after the Effective Time (the “Continuing Employees”), it being understood severance benefits pursuant to, and in accordance with the terms of the Escanaba Paper Company, Luke Paper Company, NewPage Wisconsin System Inc., Rumford Paper Company and Wickliffe Paper Company LLC Severance Pay Plan for Non-Union Employees, effective September 2, 2011, and the NewPage Corporation Severance Pay Plan for Non-Union Employees, effective September 2, 2011, as applicable, to the extent such Continuing Employees were covered by such plans immediately prior to the Effective Time.
(b) With respect to any benefit plans in which any Continuing Employees first become eligible to participate during the two (2) year period following the Effective Time and in which such Continuing Employees did not participate prior to the Effective Time (the “New Plans”), Parent shall, or shall cause its Subsidiaries to (i) for the plan year in which participation in the New Plans occurs, use commercially reasonable efforts to waive all pre-existing conditions (with respect to health coverage), exclusions and waiting periods with respect to participation and coverage requirements applicable to the Continuing Employees and their eligible dependents under any New Plans, except to the extent such pre-existing conditions, exclusions or waiting periods would apply under the analogous Company Benefit Plan in which the Continuing Employees participated immediately prior to the Effective Time; (ii) for the plan year in which participation in the New Plans occurs, use commercially reasonable efforts to provide each Continuing Employee credit for any co-payments and deductibles paid by each such Continuing Employee and his or her eligible dependents prior to the Effective Time under a Company Benefit Plan that is a group health plan (to the extent that such credit was given under the analogous Company Benefit Plan prior to the Effective Time) in satisfying any applicable deductible or out-of-pocket requirements under any New Plans in which such Continuing Employee participates after the Effective Time for the same plan year; and (iii) recognize all service of the Continuing Employees with the Company and its Subsidiaries for vesting and eligibility purposes (but not for purposes of benefit accrual or early retirement subsidies or with respect to any equity-based plan) in any New Plan in which such Continuing Employees may be eligible to participate after the Effective Time, to the extent such service is taken into account under the applicable New Plan (to the extent such service was recognized for the same purpose under the corresponding Company Benefit Plan); provided that the foregoing shall not be construed to limit apply under any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits pension plans or to the extent it would result in a duplication of benefits or compensation for the same period of service.
(c) Parent and the Company agree to implement the retention program described in Section 5.17(c) of the Company Disclosure Schedule.
(d) Parent agrees to cause the Surviving Corporation and/or its applicable Subsidiaries to recognize the unions that are parties to the collective bargaining agreements set forth in Section 3.14(a) of the Company Disclosure Schedule as the bargaining representatives for the employees covered by such collective bargaining agreements to the extent required by the terms of such agreements. Parent further agrees, to the extent required by the terms of such agreements, to cause the Surviving Corporation and/or its applicable Subsidiaries to either (i) assume and apply to the employees covered thereby (collectively, the “Union Employees”) the applicable collective bargaining agreements listed in Section 3.14(a) of the Company Disclosure Schedule; or (ii) negotiate new agreements with the unions that are parties to such collective bargaining agreements establishing the terms and conditions of employment to be effective with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to employees covered thereby. To the extent that such credit does not result required by any collective bargaining agreement listed in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a3.14(a) of the Code (the “Company 401(k) Plan”) Disclosure Schedule, Parent further agrees to be terminated and (B) all participants provide in writing to cease participating under the Company 401(k) Plan, in each case, effective no later than reasonable assurances that it has complied with the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as requirements set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(ge) Nothing in this Agreement Agreement, express or implied, is intended to or shall constitute an establishment or termination ofbe construed to (i) establish, modify, or an amendment to, or be construed as establishing, terminating or amending, amend any Employee particular Company Benefit Plan sponsoredor any other benefit or compensation plan, program, agreement or arrangement, (ii) alter, limit or prevent Parent from modifying, amending or terminating any benefit or compensation plan, program, agreement or arrangement at any time assumed, established, sponsored or maintained or contributed to by the CompanySurviving Corporation, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Affiliates or, after the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubtEffective Time, any Company Employee Benefit Plan, (iii) prevent Parent or other current any of its Affiliates (including the Surviving Corporation after the Effective Time) from terminating the employment of any Continuing Employee, or former (iv) create any third-party beneficiary rights in any employee of the CompanyCompany or any of its Subsidiaries, any beneficiary or dependent thereof, or any collective bargaining representative thereof or any other Person, with respect to any compensation, terms and conditions of employment and/or benefits of any nature or kind whatsoever. Notwithstanding anything in this Agreement to the contrary, neither Parent or nor Merger Sub, nor any of their respective Affiliates), shall be obligated, from and after the Closing, to provide any benefits, severance or compensation to the Company’s employees other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for as expressly set forth in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries5.17.
Appears in 2 contracts
Samples: Merger Agreement (Verso Paper Corp.), Merger Agreement (NewPage Holdings Inc.)
Employee Matters. (a) Between Effective immediately following the Closing Date and for a period of twelve (12) months thereafter, Buyer shall provide, or shall cause the Company or an Affiliate of the Company or the Buyer to provide, to each Company Employee (provided such Company Employee remains employed with the Company, the Buyer or an Affiliate of the Company or Buyer during such twelve (12) month period) (i) at least the same base salary or wage rate and target annual cash bonus opportunity to which the Company Employee was entitled immediately prior to the Closing Date so long as there has been no material deterioration in the Business between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each and (ii) employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits benefit plans that are, in the aggregate, using commercially reasonable efforts, substantially comparable to those in effect either (A) the employee benefit plans of Buyer for similarly situated employees of Parent and its Subsidiaries. In additionemployees, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date or (or such longer change in control coverage period as required B) those provided under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed Plans set forth on Schedule 6.9(b) 5.14(a). If the Company, the Buyer or an Affiliate of the Company Disclosure Letter, which shall consist or the Buyer terminates the employment of any Company Employee without Cause during the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date twelve (the “Excluded Employees”12) which Excluded Employees will, on and after month period immediately following the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shallBuyer shall provide, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) an Affiliate of the Company Disclosure Letteror the Buyer to provide, it being understood such Company Employee with severance commensurate with that previously provided by the Seller such that the foregoing shall not be construed Company Employee receives (two) 2 weeks’ severance plus one additional week of severance for each full year of service such Company Employee has provided to limit any amendments otherwise permitted by the terms of Seller and to the applicable agreementsBuyer.
(db) From and after the Effective TimeWith respect to all Company Employees, as applicable, the Parties shallBuyer shall provide, or shall cause the Surviving Corporation Company or an Affiliate of the Company or the Buyer to provide, full credit for all accrued and its Subsidiaries, unused paid vacation and personal/sick leave days which have accrued to take such Company Employees through the Closing
(c) Buyer shall use commercially reasonable efforts to give each Company Employee full credit for service with the Company Employees for purposes of vesting, eligibility, severance Seller and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or its Affiliates prior to the extent it would result in a duplication of benefits or compensation for the same period of serviceClosing, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ including service with the Company and its Subsidiariesany Affiliate thereof, as applicableand any predecessor employers, for purposes of eligibility and vesting, and with respect to paid leave and severance only, benefit accruals under each employee benefit plan or program of Buyer or any Affiliate of Buyer (including, after the Closing, the Company) under which such Company Employee may be eligible to participate in, to the same extent and for the same purposes purpose as credited under the corresponding Company Plan as set forth on Schedule 5.14(a) in which such Company Employee participated or was eligible to participate immediately prior to the Closing; provided that no such service was taken into account credit will be provided to the extent providing such past service credit would result in duplication of benefits.
(d) Buyer shall use commercially reasonable efforts to waive waiting period(s) with respect to participation requirements applicable to the Company Employees and their dependents under a group health plan(s) of the Buyer or any Affiliate of Buyer (including, after the Closing, the Company) provided to each Company Employee if the corresponding waiting period(s) had been satisfied under the corresponding Company Benefit Plan in effect which the Company Employee participated immediately prior to the Closing Date, (ii) waive limitations as to pre-existing conditions and exclusions with respect to participation and coverage requirements applicable to the Company Employees and their dependents under such group health plan(s) provided to each Company Employee to the extent that waived or otherwise satisfied under the corresponding Company Plan in which the Company Employee participated immediately prior to the Closing Date, and (iii) during the plan year in which the Closing Date occurs, cause any eligible expenses paid by such credit does not result Company Employee and his or her covered dependents during the portion of the plan year prior to the Closing Date to be taken into account under such group health plan(s) for purposes of satisfying all deductible, coinsurance, maximum out of pocket requirements and similar amounts applicable to such Company Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in duplicate benefitsaccordance with such group health plan(s).
(e) The Parties shall, or shall cause the Surviving Corporation Buyer and its Subsidiaries, to take Affiliates shall use commercially reasonable efforts to continue heath care coverage in accordance with the requirements of Section 4980B of the Code and Sections 602 through 608 of ERISA (i) waive “COBRA Coverage”), and any limitation on similar state health care continuation coverage of Law, for any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are other “M&A qualified beneficiary” (as such term is defined under Treasury Regulation 54.4980B-9) covered under an analogous a Company Benefit Plan, as applicablePlan that is a “group health plan,” within the meaning of Section 4980B(g)(2) of the Code (a) who is receiving COBRA Coverage or similar state health care continuation coverage, immediately prior to the Closing Date, and regardless of the circumstances entitling them to such conditions, periods coverage or requirements are satisfied or waived (b) who loses health care coverage under such Parent Benefit a Company Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been madebefore, in each caseat, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Dateafter Closing.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement Agreement, whether express or implied shall constitute an establishment create any right or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed entitlement to by continued employment with the Company, Parent Buyer or any of their respective Subsidiaries. The provisions of this Section 6.9 are for its Affiliates or the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person Company (including, for after the avoidance Closing), (ii) the employment of doubt, any Company Employee or other current or former each employee of the CompanyCompany after the Closing Date will be “at will” employment, Parent or and (iii) except as otherwise set forth in any of their respective Affiliates), agreement (other than this Agreement) with any employee of the Parties and their respective permitted successors and assignsCompany or applicable Law, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to nothing herein shall preclude the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentBuyer, the Surviving Corporation or any of their Affiliates Company from terminating the employment or service of any Person, including a Company Employee, employee at any time and for any reason, (ii) provide any Person any right to employment on or service or continued employment or service with Parent or any of its Subsidiaries (including following after the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesClosing.
Appears in 2 contracts
Samples: Membership Interest Purchase Agreement (R F Industries LTD), Membership Interest Purchase Agreement (Wireless Telecom Group Inc)
Employee Matters. (a) Between Beginning on the date hereof of the execution of this Agreement, Artemis Corporation shall, or shall cause its applicable Affiliate to, make available to Contributor or its Affiliate each of the employees of Artemis Corporation or its Affiliate who is set forth on Schedule 5.13(a)(i) of the Company Disclosure Letter (such employees, the “Executive Employees”) to discuss potential employment with the Company or its post-Closing Affiliate following the Closing. No later than fourteen (14) days prior to the Closing, Contributor shall inform Artemis Corporation which of the Executive Employees have received and accepted offers of employment with the Company or its post-Closing Affiliate (such Executive Employees are referred to herein as the “Identified Executive Employees”). Immediately prior to the Closing, Artemis Corporation shall, or shall cause its applicable Affiliate to, transfer and the Effective TimeCompany shall, or shall cause its applicable Affiliate to, accept transfer of the employment of each Identified Executive Employee and each employee of Artemis Corporation or its Affiliates who is set forth on Schedule 5.13(a)(ii) of the Company Disclosure Letter (such employees, the “Company-Related Employees”). Each Company-Related Employee and Identified Executive Employee whose employment is transferred to the Company or its applicable Affiliate pursuant to this Section 5.13 shall be referred to herein as a “Transferred Employee”. No Company Support Employee shall transfer employment to the Company pursuant to this Agreement.
(b) For a period of at least one year immediately following the Closing Date, or until employment termination of the relevant Transferred Employee if sooner, the Company shall or shall cause one of its Subsidiaries to provide each Transferred Employee with (i) an annual base salary or hourly wage rate, as applicable, and target bonus opportunity substantially similar to the annual base salary or hourly wage rate, as applicable, and target bonus opportunity provided to similarly situated employees of Contributor and (ii) employee benefits that are no less valuable, in the aggregate, than the employee benefits provided by Contributor to similarly situated employees of Contributor.
(c) The Company shall cause each Transferred Employee to be immediately eligible to participate in each Contributor Plan after Closing, subject to applicable third-party insurer and administrator consent, which consent Contributor shall take reasonable best efforts to secure. From and after the Closing Date, the Company or its applicable Subsidiaries shall credit each Transferred Employee’s service with Artemis Corporation and its Affiliates for purposes of eligibility to participate, vesting, and benefit accrual (but not for purposes of defined benefit pension accrual or post-employment retiree welfare benefits) with respect to the Contributor Plans in which any Transferred Employee is eligible to participate after the Closing; provided, however, that such service need not be recognized to the extent that such recognition would result in any duplication of benefits for the same period of service.
(d) For purposes of each Contributor Plan in which any Transferred Employee is eligible to participate after the Closing, the Company shall (i) cause all pre-existing condition exclusions, waiting periods, evidence of insurability, and actively-at-work requirements to be waived for each Transferred Employee and their covered dependents, to the extent such conditions were inapplicable or waived under the comparable Company Plan or Artemis Sponsor Plan in which such Transferred Employee participated immediately prior to the Closing Date and (ii) give full credit for all co-payments, coinsurance, maximum out-of-pocket requirements, and deductibles under applicable Company Plans and Artemis Sponsor Plans to the extent incurred or satisfied, as applicable, in the plan year in which the Closing occurs as if there had been a single continuous employer, subject, in each case, to applicable third-party insurer and administrator consent, which consent Contributor shall take reasonable best efforts to secure.
(e) As soon as practicable after the Closing, the Company shall cause its Subsidiaries totake all action necessary to provide that each Transferred Employee may elect to rollover his or her full account balance (including participant loans) make available in the Artemis Corporation 401(k) Savings Plan to Parent the employees EagleClaw Midstream 401(k) Plan, which shall be amended as soon as reasonably practicable after the Closing to the extent such plan does not otherwise permit all of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closingforegoing.
(bf) The Parties agree that In the event the Company or an applicable Company Subsidiary terminates the employment of a Transferred Employee for a reasons other than cause, death, or disability prior to the end of the one year period of 12 months immediately following the Closing Date, each employee who is employed as of the Closing Date by the Company shall, or a shall cause its applicable Subsidiary thereof (eachto, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company provide such terminated Transferred Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than the greater of (i) those in effect for that would have been provided to such Company Transferred Employee under the severance plan or program applicable to such Transferred Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed as set forth on Schedule 6.9(b5.13(f) of the Company Disclosure Letter, which or (ii) those that may be provided to such Transferred Employee under the terms of a Company Plan or Contributor Plan applicable to similarly situated employees, whichever is more favorable to such Transferred Employee; provided, that, in no event shall consist the Company be required to provide severance payments and benefits to a terminated Transferred Employee who was a Company-Related Employee in excess of one hundred percent (100%) of such Transferred Employee’s annual base salary. Such severance benefits may be contingent upon the employee’s execution, and non-revocation of, a standard general release and waiver agreement in favor of the individuals that are a party to those certain Retention Contributor, the Company, and Sale Payment retention agreements executed with the Company Subsidiaries, and compliance with confidentiality and other restrictive covenants agreed to prior to the Transferred Employee’s termination from employment.
(g) The Company shall promptly reimburse Artemis Corporation for all out-of-pocket costs Artemis Corporation or its Affiliates incur with respect to the termination of employment of any Company-Related Employee who does not become a Transferred Employee. For the avoidance of doubt, the Company-Related Employees do not include any Executive Employees.
(h) With respect to each Artemis Sponsor Plan equity, equity-based, or incentive award held immediately prior to the Closing Date by a Transferred Employee that will be forfeited pursuant to the terms of such Artemis Sponsor Plan or award thereunder as a result of the transfer of employment of such Transferred Employee to the Company (the each, a “Excluded EmployeesForfeited Award”) which Excluded Employees will), on and after as soon as practicable following the Closing Date, only be entitled the Company shall grant such Transferred Employee an equity, equity-based or incentive award that has an equivalent monetary value and substantially similar terms (including the same vesting dates and triggers and settlement terms) to receive the severance benefits set forth in and subject to the terms and conditions that of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shallForfeited Award, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans as set forth on Schedule 6.9(c5.13(h) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” Effective as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result each Transferred Employee shall cease active participation in duplicate benefitseach Artemis Sponsor Plan, except as otherwise required by Law.
(ej) The Parties shallCompany shall not, or and shall cause the Surviving Corporation and its SubsidiariesSubsidiaries not to, to take commercially reasonable efforts to at any time within ninety (i90) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to calendar days after the Closing Date, (i) effectuate a “plant closing” or “mass layoff” (in each case, as defined in the Worker Adjustment and Retraining Notification Act of 1988 or similar applicable Law governing employment losses (the “WARN Act”)) affecting any of the Transferred Employees, or (ii) terminate the employment of any Transferred Employee, in either case if requested by Parent in writing at least three (3) days before such employment terminations cause Losses to Artemis Corporation under the ClosingWARN Act. For the avoidance of doubt, the Company shall cause be responsible for notices or payments due to any Transferred Employees, and all applications, notices, payments, fines, or assessments due to any Governmental Entity, pursuant to any applicable Law, with respect to the employment, discharge, or layoff of any Transferred Employees on or after the Closing. The Company will indemnify Artemis Corporation from and against any Losses that may be incurred by it as a result of any obligation owed by it to any Transferred Employees under the WARN Act arising on or after the Closing as a result of any action or omission of the Company or any of its Subsidiaries with respect to the Transferred Employees occurring on or after the Closing.
(k) The Company agrees to indemnify, defend, and hold harmless Artemis Sponsor, its Affiliates, and its Subsidiaries and their respective Representatives for any and all Losses incurred by Artemis Sponsor, its Affiliates, or its or their respective Representatives arising as a result of any breach of this Section 5.13 by the Company, the Company Subsidiaries, or any of their respective Representatives, including any Proceedings resulting from or in connection with any breach of this Section 5.13 by the Company, the Company Subsidiaries, the Company Subsidiaries, or any of their respective Representatives.
(l) This Section 5.13 shall be binding upon and shall inure solely to take all necessary the benefit of each of the Parties and appropriate actions to cause their intended third party beneficiaries, as provided in Section 10.12, and nothing in this Section 5.13, express or implied, (Ai) each Company Benefit Plan is intended to be qualified under Section 401(a) confer upon any other Person any rights or remedies of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Planany nature whatsoever, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Planbe, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment toconstitute, or be construed as establishing, terminating an amendment to or amending, modification of any Employee Benefit Artemis Sponsor Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for Company Plan, or (iii) obligates the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following to retain the Effective Time, employment of any Transferred Employee or a service relationship with any other service provider of the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation Company or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by its Subsidiaries following the Company, Parent or any of their respective SubsidiariesClosing.
Appears in 2 contracts
Samples: Contribution Agreement (Blackstone Holdings III L.P.), Contribution Agreement (Altus Midstream Co)
Employee Matters. (a) Between Parent agrees to honor, or cause the date hereof Surviving Entity to honor, from and after the Effective Time any bonus payments for the Company's 2005 fiscal year (or any portion thereof) and, if the Closing occurs in 2006, the Company's 2006 fiscal year (or any portion thereof) under the bonus plans set forth in Section 6.11(a) of the Company Disclosure Letter in accordance with their terms as in effect immediately before the Effective Time and as set forth in Section 6.11(a) of the Company Disclosure Letter.
(b) Following the Effective Time, the Company shall (and the Company Parent shall cause its Subsidiaries to) make available to Parent the employees of be provided to individuals who are employed by the Company and its Subsidiaries so that Parent may interview such employees immediately prior to the Effective Time and evaluate their roles and responsibilities who remain employed with the Company Surviving Entity or any of Parent's Subsidiaries (the "Affected Employees"), compensation and employee benefits no less favorable in the aggregate than, at Parent's election from time to time, those provided (i) pursuant to the Company's and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, ' compensation and employee benefits that arebenefit policies, in plans and programs immediately prior to the aggregate, substantially comparable Effective Time or (ii) to those in effect for similarly situated employees of Parent and its Subsidiaries. In additionNotwithstanding the generality of the foregoing, a Company Employee whose employment is involuntarily terminated other than for cause within (x) during the 12 month period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) Effective Time, Affected Employees shall be provided with the severance benefits provided under the Company's Severance Plan without adverse amendment as set forth in Section 6.11(b) of the Company Disclosure Letter and (subject y) Parent shall provide the severance arrangements set forth in Section 6.11(b) of the Company Disclosure Letter.
(c) For all purposes, with respect to satisfying any applicable release requirementsbenefit plan, program, arrangement (including any "employee benefit plan" (as defined in Section 3(3) that are no less favorable of ERISA) Parent's retiree medical benefit plan and any vacation program), other than those in effect for such under Parent's 2002 Stock Incentive Plan (or any successor plan thereto), Parent shall, and shall cause the Surviving Entity to, recognize the service with the Company Employee immediately and its Subsidiaries (including service recognized by the Company and its Subsidiaries) prior to the Closing DateEffective Time of the Affected Employees for purposes of such plan, program or arrangement; provided, however, that the covenants within this Section 6.9(b) such recognition shall not apply result in a duplication of benefits. Parent agrees to honor, or cause the Company Surviving Entity to honor, all vacation, sick leave and other paid time off accrued by Affected Employees listed on Schedule 6.9(bas of the Effective Time.
(d) With respect to any welfare plan in which employees of the Company Disclosure Letterand its Subsidiaries are eligible to participate after the Effective Time, which Parent shall, and shall consist cause the Surviving Entity to, (i) waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees to the extent such conditions were satisfied under the welfare plans of the individuals that are a party to those certain Retention Company and Sale Payment retention agreements executed with the Company its Subsidiaries prior to the Closing Date Effective Time, and (the “Excluded Employees”ii) which Excluded Employees will, on provide each such employee with credit for any co-payments and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject deductibles paid prior to the terms and conditions of Effective Time in satisfying any analogous deductible or out-of-pocket requirements to the Retention and Sale Payment retention agreements provided to Parentextent applicable under any such plan.
(ce) Effective as of the Effective Time, the Company shall, if requested to do so by Parent, terminate its defined contribution 401(k) plan. Parent shall provide, or cause the Surviving Entity to provide, that the Affected Employees are eligible to participate in a defined contribution 401(k) plan immediately following the Effective Time and that such defined contribution plan shall accept "eligible rollover distributions" for Affected Employees from a terminated Company defined contribution 401(k) plan.
(f) Parent agrees that it shall, or shall cause the Surviving Corporation to, continue the Company Supplemental Executive Retirement Plan without adverse amendment or termination during the 12 month period following the Effective Time.
(g) At least 30 days prior to the Effective Time, Parent shall provide each of the Affected Employees listed on Section 6.11(g)(1) of the Company Disclosure Letter with a written notice specifying that either (i) the Affected Employee's employment shall be terminated immediately following the Effective Time and that Parent and its Subsidiaries, to assume and affiliates shall honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, the senior executive employment agreement between the Company and the Affected Employee in accordance with its terms as in effect on the date hereof on the basis of the Company having terminated the Affected Employee without cause as such term is defined in such agreement, or (ii) the Affected Employee shall be offered a new employment agreement with Parent or a Subsidiary thereof) an affiliate of Parent which contains terms and a Company Employee, including, but not limited to, conditions that are substantially similar to those Company Benefit Plans set forth on Schedule 6.9(ccontained in the employment agreements provided to the category of Affected Employees identified in Section 6.11(g)(2) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Unitedhealth Group Inc), Merger Agreement (Pacificare Health Systems Inc /De/)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(di) From and after the Effective Time, as applicable, the Parties shall, or Parent shall cause the Surviving Corporation honor all Company Benefit Plans and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Effective Time and shall assume as of the Effective Time the agreements identified in Section 5.8(b)(i) of the Company Disclosure Schedule, provided that nothing herein shall prohibit Parent from amending or terminating any such Company Benefit Plans, Parent Benefit Plans, arrangements or agreements in accordance with their terms as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, Effective Time or from terminating the employment of any Company Employee or Parent Employee to the extent that such credit does not result in duplicate benefitspermitted by applicable Law.
(eii) The Parties shallFrom and after the Effective Time, or shall cause the Surviving Corporation Company Benefit Plans and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan Plans in effect as of the date of this Agreement and at the Effective Time shall remain in effect with respect to employees and former employees of the Company or Parent and their Subsidiaries (the “Newco Employees”), respectively, covered by such plans at the Effective Time, until such time as Parent shall otherwise determine, subject to applicable Laws and the terms of such plans. Prior to the extent such Effective Time, the Company Employee or coveredand Parent shall cooperate in reviewing, eligible dependents are covered under an analogous evaluating and analyzing the Company Benefit Plan, as applicable, immediately prior to Plans and the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan Plans with a view towards developing appropriate new Benefit Plans for Newco Employees. It is the intention of Parent and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each caseCompany, to the extent permitted by applicable Laws, to (x) develop new Benefit Plans, as soon as reasonably practicable after the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing DateEffective Time, (i) if requested by Parent in writing at least three (3) days before the Closingwhich, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause among other things, (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated treat similarly situated employees on a substantially equivalent basis, taking into account all relevant factors, including duties, geographic location, tenure, qualifications and abilities and (B) all participants to cease participating under do not discriminate between Newco Employees who were covered by Company Benefit Plans, on the Company 401(k) Planone hand, in each caseand those covered by Parent Benefit Plans on the other, effective no later than at the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing Effective Time and (iiy) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries provide to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable similarly situated Newco Employees following the Effective Time base salaries and wage rates and cash bonus opportunities on a substantially equivalent basis and in a manner that does not discriminate between Newco Employees who were Parent employees, on the one hand, and those who were Company employees on the other, at the Effective Time. For purposes of this Agreement, Parent shall use commercially reasonable efforts “Benefit Plans” means, with respect to take any and all action as may be reasonably requiredentity, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the any compensation or employee benefit plans, programs, policies, agreements or other arrangements, whether or not “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributionsemployee benefit plans” (within the meaning of Section 402(c)(43(3) of the Code) in the form Employee Retirement Income Security Act of cash in an amount equal to the full account balance distributed 1974, as amended (“ERISA”), whether or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (not subject to any applicable eligibility requirementsERISA), but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment including, without limitation, bonus, cash- or termination ofequity-based incentive, deferred compensation, stock purchase, health, medical, dental, disability, accident, life insurance, or an amendment tovacation, paid time off, perquisite, fringe benefit, severance, change of control, retention, employment, separation, retirement, pension, or be construed as establishingsavings, terminating plans, programs, policies, agreements or amendingarrangements, any Employee Benefit Plan that are sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent such entity or any of its Subsidiaries (including following for the Effective Timebenefit of current or former directors, the Surviving Corporation) officers or any particular term or condition employees of employment or service, or (iii) prevent Parent, the Surviving Corporation such entity or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent its Subsidiaries or any of their respective Subsidiariesdependant or beneficiary thereof.
Appears in 2 contracts
Samples: Merger Agreement (Rri Energy Inc), Merger Agreement (Mirant Corp)
Employee Matters. (a) Between During the date hereof period from and after the Effective TimeAcceptance Date through December 31, 2008 (such period the “Continuation Period”), Parent shall and shall cause the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent , and from and after the employees Effective Time shall cause the Surviving Corporation and its Subsidiaries to, provide each employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with who remains in the employment of the Company and its Subsidiaries (and after the Effective Time, the Surviving Corporation and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following ) (the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company EmployeeContinuing Employees”) shall be provided with annual (i) base salary or and wages that are at least equal to the base wage rate, salary and wages payable to such Continuing Employee prior to the Acceptance Date and (ii) incentive compensation and employee benefits that are, are substantially comparable in the aggregateaggregate to the incentive compensation and employee benefits provided to the Continuing Employees immediately prior to the Acceptance Date; provided, substantially comparable however, that neither Parent nor the Surviving Corporation nor any of their Subsidiaries shall have any obligation to those issue, or adopt any plans or arrangements providing for the issuance of, shares of capital stock, warrants, options, stock appreciation rights or other rights in respect of any shares of capital stock of any entity or any securities convertible or exchangeable into such shares pursuant to any such plans or arrangements and for purposes of the standard in clause (ii) above the equity-based compensation programs in effect at the Company prior to the Acceptance Date and the retention program set forth on Section 6.09(e) of the Company Disclosure Schedule shall not be taken into account in determining whether such standard is satisfied. Notwithstanding the foregoing or anything else contained herein to the contrary, following the Effective Time the Continuing Employees shall be considered and be eligible for equity-based compensation awards denominated in the equity of Parent on a basis that is no less favorable than applies to similarly situated employees of Parent and its Subsidiaries, as determined by Parent in its sole discretion. In addition, a Company Employee whose employment is involuntarily terminated Notwithstanding any other than for cause within the period provision of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior this Agreement to the Closing Date; providedcontrary, however, that the covenants within this Section 6.9(b) Parent shall not apply to and shall cause the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letterand its Subsidiaries to, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on from and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or Effective Time shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited Subsidiaries to, those Company Benefit Plans provide Continuing Employees whose employment terminates following the Acceptance Date and at any time during the Continuation Period with severance benefits in an amount that is no less than the severance benefits that such Continuing Employee would have been entitled to pursuant to and under circumstances consistent with the Parent’s severance plan as set forth in the Parent’s employee handbook as in effect on Schedule 6.9(cthe date hereof as previously disclosed to the Company; provided that such severance benefits shall be determined without taking into account any reduction after the Acceptance Date in base salary or base wages paid to Continuing Employees and shall take into account the service crediting provisions set forth in Section 6.09(b) below. The foregoing provisions of the Company Disclosure Letter, it being understood that the foregoing this Section 6.09(a) shall not apply to employees whose terms and conditions of employment are governed by a collective bargaining agreement and the employee benefits for such employee shall be construed subject to limit any amendments otherwise permitted by the terms of the applicable agreementscollective bargaining agreement.
(db) From Parent shall and shall cause the Company and its Subsidiaries to, and from and after the Effective Time, as applicable, the Parties shall, or Time shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to, recognize the service of each Continuing Employee as if such service had been performed with Parent with respect to take commercially reasonable efforts any plans or programs in which Continuing Employees are eligible to credit participate after the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than Acceptance Date (i) for purposes of eligibility, participation, vesting and levels of benefits (including the calculation of vacation, sick days, severance, layoff and similar benefits (but not for purposes of defined benefit pension accruals) under any compensation, retirement, welfare or other employee benefit plan, program or arrangement adopted, maintained or contributed to by Parent, the Company or the Surviving Corporation or any of their respective Affiliates in which the Continuing Employees are eligible to participate on or after the Acceptance Date and (ii) for such additional purposes with as may be required by applicable Law; provided, however, that Continuing Employees shall not receive service credit to the extent such treatment would result in duplicative benefits.
(c) With respect to any “defined benefit plan” as defined in Section 3(35) welfare plan maintained by Parent, the Company, the Surviving Corporation or any of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) their respective Affiliates in which Continuing Employees are eligible to participate on or after the Company Employees participateAcceptance Date, for such Company Employees’ service with Parent shall, and shall cause the Company and its SubsidiariesSubsidiaries to, as applicable, to and from and after the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or Effective Time shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to, to take commercially reasonable efforts to (i) waive any limitation on health all limitations as to preexisting conditions and exclusions with respect to participation and coverage of any Company Employees or any of their covered, eligible dependents due requirements applicable to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan such employees to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, conditions and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses exclusions were satisfied or did not apply to such employees under the analogous welfare plans maintained by the Company Benefit Plan in effect immediately prior to the Closing DateAcceptance Date and (ii) provide each Continuing Employee with credit for any out-of-pocket and deductible expenses incurred prior to the date on which the Continuing Employee’s participation commences in satisfying any analogous deductible or out-of-pocket requirements to the extent applicable under any such plan, to the extent credited under the welfare plans maintained by the Company prior to the date on which the Continuing Employee’s participation commences.
(fd) Prior Notwithstanding the foregoing provisions of this Section 6.09, the provisions of Sections 6.09(a), (b) and (c) shall apply only with respect to Continuing Employees who are covered under Company Benefit Plans that are maintained primarily for the benefit of employees employed in the United States (including Continuing Employees regularly employed outside the United States to the Closing Dateextent they participate in such Company Benefit Plans). With respect to Continuing Employees not described in the preceding sentence, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall and shall cause the Company and its Subsidiaries to, and from and after the Acceptance Time shall cause the Surviving Corporation and its Subsidiaries to, comply with all applicable Laws relating to employees and employee benefits matters applicable to such employees.
(e) As of the Acceptance Time, Parent shall and shall cause the Company and its Subsidiaries to, and from and after the Effective Time shall cause the Surviving Corporation and its Subsidiaries to, take all action necessary to effectuate the agreements and appropriate actions arrangements with respect to cause (A) each Company Benefit the 2008 Incentive Payments, the Minimum 2008 Discretionary Contribution to the UAP Retirement Income Savings Plan intended to be qualified under and the Retention Program set forth in Section 401(a6.09(e) of the Code (Company Disclosure Schedule; provided that, notwithstanding the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Planforegoing provisions of this Section 6.09 or any other provision of this Agreement, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (event shall any of Parent or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause any of its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code Affiliates (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable Surviving Corporation following the Effective Time) have any Liability for any bonus or incentive compensation for the Company’s fiscal year ended February 24, 2008 in excess of the limitation relating to the 2008 Incentive Payments as set forth on Section 6.09(e) of the Company Disclosure Schedule. From and after the Acceptance Date, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably requiredshall cause the Company and its Subsidiaries to, including amendments to a defined contribution retirement plan intended to be qualified and from and after the Effective Time shall cause the Surviving Corporation and its Subsidiaries to, honor and perform the Company’s obligations under the Change of Control Employment Agreements set forth on Section 401(a3.13(a) of the Code designated by Parent (Company Disclosure Schedule in accordance with their terms as in effect immediately before the “Parent 401(k) Plan”) to (A) cause Acceptance Date and the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) PlanEffective Time, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))respectively.
(gf) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 6.09 are for the sole benefit of the Parties parties to this Agreement and nothing herein, expressed or implied, is intended or will shall be construed to confer upon or give to any Person (including, including for the avoidance of doubt, doubt any Company Employee or other current or former employee employees, directors, or independent contractors of any of the CompanyCompany or any of its Subsidiaries, Parent or any of their respective Affiliatesits Subsidiaries, or on or after the Effective Time, the Surviving Corporation or any of its Subsidiaries), other than the Parties parties hereto and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.96.09) under or by reason of any provision of this Section 6.9Agreement. Without limiting the generality of the foregoing, no provision of this Agreement shall create any third party beneficiary rights in any employee or former employee of the Company or any of its Subsidiaries (including any beneficiary or dependent thereof) in respect of continued employment by the Company or any of its Subsidiaries or otherwise. Nothing in this Section 6.9 is intended to herein shall (i) prevent Parentguarantee employment for any period of time or preclude the ability of Parent or the Surviving Corporation and its Subsidiaries to terminate any employee of the Company or any of its Subsidiaries for any reason, (ii) require Parent or the Surviving Corporation or any of their Affiliates from terminating respective Subsidiaries to continue any Company Benefit Plans, employee benefits plans or arrangements or prevent the employment amendment, modification or service of any Persontermination thereof after the Acceptance Date, including a Company Employee, at any time in accordance with the terms thereof and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or serviceapplicable Law, or (iii) prevent Parentamend any Company Benefit Plans, the Surviving Corporation employee benefit plans or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesarrangements.
Appears in 2 contracts
Samples: Merger Agreement (Agrium Inc), Merger Agreement (Uap Holding Corp)
Employee Matters. (a) Between Prior to the date hereof Closing, US Airways shall use best efforts to cause each employee of US Airways that is party to an Executive Change in Control Agreement to waive his or her rights under such agreement to accelerated vesting of US Airways Options, US Airways Equity Awards, US Airways Cash-Settled RSUs and/or US Airways Cash-Settled SARs, in each case, solely as a result of the consummation of the Merger.
(b) Prior to the Closing, American and/or its Subsidiaries shall make all minimum required contributions (within the meaning of Section 303 of ERISA) to each American Compensation and Benefit Plan that are required to have been made and were not made prior to the effective time of the Plan.
(c) Prior to the Closing, American shall adopt and approve, to be effective as of the Effective Time, a Newco 2013 Incentive Award Plan, which shall be substantially in the Company form of the US Airways Group, Inc. 2011 Incentive Award Plan except that references to US Airways Group, Inc. shall (be revised to reflect Newco and the Company aggregate number of shares of Newco Common Stock reserved for issuance pursuant to the Newco 2013 Incentive Award Plan shall be equal to 40,000,000 shares of Newco Common Stock (the “Newco 2013 Incentive Award Plan”).
(d) American shall, or shall cause its Subsidiaries to, adopt or otherwise put into effect (i) make available prior to Parent the employees Closing, the Ordinary Course Changes as defined in and set forth in Section 4.1(o) of the Company American Disclosure Letter and its Subsidiaries so that Parent may interview such employees (ii) promptly after the Merger Support Order is entered by the Bankruptcy Court, the Employee Protection Arrangements as defined in and evaluate their roles set forth in Section 4.1(o) of the American Disclosure Letter (including but not limited to granting under the Newco 2013 Incentive Award Plan, the alignment equity and responsibilities with long term incentive awards in the Company amounts and its Subsidiariesupon the terms and conditions set forth in Section 4.1(o) of the American Disclosure Letter, including with respect to potential promotions, transfers, or job eliminations following which awards shall be effective as of the ClosingEffective Time).
(be) The Parties agree that for a period Each employee of 12 months following the Closing DateUS Airways, each employee who is employed American or any of their respective Subsidiaries as of the Closing (including any employee who is full-time, part-time, temporary, on vacation or on a medical or disability or any other paid or unpaid approved leave of absence) who continues employment with Newco or the Surviving Corporation following the Closing Date by the Company or a Subsidiary thereof (each, a “Company Continuing Employee”) who is not represented by a labor union and/or whose employment is not covered by a collective bargaining agreement (collectively, the “Non-Union Continuing Employees”) shall be provided with annual continue to receive, during the one (1)-year period beginning on the Closing Date, base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) wages that are no less favorable than those in effect for the base salary or wages received by such Company Non-Union Continuing Employee immediately prior to the Closing Date; provided. During the two (2)-year period beginning on the Closing Date, however, each Non-Union Continuing Employee shall be entitled to receive severance pay and benefits that are not less favorable than the covenants within this Section 6.9(b) shall not apply severance pay and benefits such Non-Union Continuing Employee would have received under the applicable American Compensation and Benefit Plans in effect immediately prior to the Company Employees listed on Schedule 6.9(bClosing Date, including as amended or supplemented in accordance with Section 4.1(o) of the Company American Disclosure Letter, which shall consist or any US Airways Compensation and Benefit Plans in effect immediately prior to the Closing Date, including as amended or supplemented in accordance with Section 4.2(o) of the individuals that are US Airways Disclosure Letter. The employment terms and conditions of each Continuing Employee who is not a party Non- Union Continuing Employee shall be governed by the applicable labor union agreement and/or collective bargaining agreement.
(f) To the extent permitted by applicable Laws, Newco shall credit, or shall cause the Surviving Corporation and its Subsidiaries to those certain Retention credit, each Non-Union Continuing Employee with his or her years of service with US Airways, American, or any of their respective Subsidiaries and Sale Payment retention agreements executed with predecessor entities, under any employee benefit plans, programs and arrangements in which such Non-Union Continuing Employee participates following the Company Closing (the “Post-Closing Plans”), to the same extent as such Non-Union Continuing Employee was entitled immediately prior to the Closing to credit for such service under any similar US Airways Compensation and Benefit Plan or American Compensation and Benefit Plan, for purposes of eligibility, vesting and, to the extent applicable, calculation of the amount of vacation, travel and/or severance benefits. Notwithstanding the foregoing, no service prior to the Closing Date (shall be credited for the “Excluded Employees”) which Excluded Employees willpurpose of benefit accrual or eligibility for any defined benefit pension plan, on and after the Closing Dateearly retirement benefits or subsidies under any defined benefit pension plan, only be entitled to receive the severance benefits set forth in and subject nor for purposes of eligibility under any retiree medical plan, except to the terms extent required by applicable Laws (and conditions then only to the extent crediting such service would not result in the duplication of the Retention and Sale Payment retention agreements provided to Parentbenefits).
(cg) Parent In addition, and without limiting the generality of Section 4.10(f), this Section 4.10(g) or any other provisions herein, (i) for purposes of each Post-Closing Plan providing medical, dental, pharmaceutical, vision and/or other health benefits to any Non-Union Continuing Employee and his or her dependents, Newco shall, or shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to, cause all pre-existing condition exclusions and actively-at-work requirements of such Post-Closing Plan to be waived for such Non-Union Continuing Employee and his or her covered dependents, to assume the extent any such pre-existing condition exclusions or actively-at-work requirements were waived or were inapplicable under the comparable US Airways Compensation and honor their respective obligations under all employment, severance, change in control, retention Benefit Plan or American Compensation and other agreements, if any, between Benefit Plan and (ii) the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Post-Closing Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit deny Non-Union Continuing Employees coverage on the basis of pre-existing conditions and shall credit such Non-Union Continuing Employees for any amendments otherwise permitted by deductibles and out-of-pocket expenses paid in the terms year of initial participation in the applicable agreementsPost-Closing Plans.
(dh) From On the date the employment of any Non-Union Continuing Employee is transferred to Newco or a different Subsidiary of Newco, the accrued and unused vacation and any positive account balance under any medical or dependent care expense reimbursement account of such Non-Union Continuing Employee shall be transferred to such new employer, and such new employer shall be responsible for such obligations at or after the Effective Timedate of such transfer, except in the case of a transfer of such expense reimbursement account balances to a new employer that does not maintain any dependent care or medical expense reimbursement account plan. Each Non-Union Continuing Employee also shall be permitted to continue to have payroll deductions made as applicablemost recently elected by him or her under the applicable FSA Plan.
(i) Notwithstanding anything in Section 4.10(e) to the contrary, the Parties Newco shall, or shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to, explicitly assume and hereby agree to take commercially reasonable efforts perform, or to credit cause to be performed, the Company Employees for purposes obligations of vesting, eligibility, severance US Airways or its Subsidiaries under those plans and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in agreements set forth on Section 3(354.10(i) of ERISAthe US Airways Disclosure Letter (which provide severance payments and/or benefits applicable to Non-Union Continuing Employees).
(j) Without limiting the generality of the foregoing, retiree medical benefits each Non-Union Continuing Employee who satisfies the eligibility requirements of a US Airways Compensation and Benefit Plan or disability benefits an American Compensation and Benefit Plan that is a 401(k) plan shall be eligible to participate in a 401(k) plan maintained by Newco or the Surviving Corporation following the Closing (each, a “Post-Closing 401(k) Plan”) and shall be credited with eligibility service and vesting service for all periods of service with US Airways and American, and their respective Subsidiaries to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) so credited with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under the applicable 401(k) plan as of the Closing Date. Additionally, in the event Newco or any of its Subsidiaries terminates a corresponding Company Benefit Plan in effect immediately prior to 401(k) plan after the Closing Date, each Non-Union Continuing Employee who participates in such plan shall, following such termination, become eligible to participate in a Post-Closing 401(k) Plan for purposes of making rollover contributions and, at his or her election, be entitled to roll over his or her outstanding participant loan and related promissory note under the extent that terminated 401(k) plan. During the period commencing on the date of such credit does not result in duplicate benefits.
(etermination and ending at the time of the rollover of such loan and related promissory notes and related account balances, such loans shall continue to be maintained under the applicable 401(k) The Parties plan, and Newco shall, or shall cause the Surviving Corporation to, make payroll deductions in respect of required payments under any such loan and its Subsidiaries, timely remit such amounts to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan 401(k) plan as payments on such loan. During such period, provided that the participant continues to make all required installment payments with respect to such loan, such loan shall not be placed in default, and Newco (or the Surviving Corporation) and the US Airways or one of its Subsidiaries shall take all necessary action to cause such loan not to be placed in default.
(k) Except as otherwise required under applicable Laws or to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as expressly set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including binding written agreement with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentNewco, the Surviving Corporation or any of their Affiliates from terminating respective Subsidiaries, Non-Union Continuing Employees shall be considered to be employed “at will” and nothing shall be construed to limit the employment or service ability of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent ParentNewco, the Surviving Corporation or any of their Affiliates from terminatingrespective Subsidiaries to terminate the employment of any such employee at any time, revising subject to any applicable severance and related benefits (including any governmental or amending statutory severance).
(l) Notwithstanding the foregoing, with respect to any Continuing Employee Benefit Plan sponsoredwho is located in a jurisdiction where local employment Laws provide for an automatic transfer of employees upon transfer of a business as a going concern and such transfer occurs by operation of Law (the “Automatic Transferred Employees”), maintained or contributed to by in the Companyevent that the applicable Laws of any country require Newco, Parent the Surviving Corporation or any of their respective Subsidiaries.its Subsidiaries (i) to maintain Terms and Conditions of Employment with respect to any Automatic Transferred Employee following the Closing or (ii) to continue or cause to be continued any employment contract of any Automatic Transferred Employee, Newco shall cause the entity that employs such Automatic Transferred Employee following the Closing to comply with such requirements to the extent required
Appears in 2 contracts
Samples: Merger Agreement (Us Airways Group Inc), Merger Agreement (Amr Corp)
Employee Matters. (a) Between Parent agrees to, and to cause the date hereof Company to, honor all Benefit Plans and Company Benefit Agreements in accordance with their terms as in effect immediately before the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) amendment or termination thereof that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only may be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the such plans and applicable agreements.
(d) From law and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in this Agreement. For a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable two years following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably requiredprovide, including amendments to a defined contribution retirement plan intended or shall cause to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) provided, to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans each current and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the CompanyCompany and its Subsidiaries (the “Company Employees”) compensation and benefits no less favorable, in the aggregate, to those provided to Company Employees immediately prior to the Effective Time (it being understood that any grant of equity based compensation awards to Company Employees shall remain discretionary), provided that after December 31, 2006, Parent may satisfy its obligations under this sentence by providing Company Employees with compensation and benefits that are no less favorable, in the aggregate, than those provided to employees of Parent and its pre-Merger Subsidiaries who perform comparable duties and services as such Company Employee will perform at Parent and its Subsidiaries.
(b) For all purposes under the employee benefit plans of Parent and its affiliates providing benefits to any Company Employees after the Effective Time (the “New Plans”), each Company Employee shall be receive credit for his or her years of service with the Company and its affiliates before the Effective Time (including predecessor or acquired entities), to the same extent that such Company Employee received credit for such service before the Effective Time (except (i) for credit for benefit accrual under any defined benefit pension plan and (ii) to the extent such credit would result in a duplication of accrual of benefits). In addition, and without limiting the generality of the foregoing: (i) each Company Employee shall not be subject to any waiting time in any New Plan in which such Company Employee is eligible to become a participant; and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year ending on the date such employee’s participation in the New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.
(c) Nothing contained herein shall be construed as requiring, and the Company shall take no action that would have the effect of requiring, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation to continue any specific employee benefit plans or any of their Affiliates from terminating to continue the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesspecific person.
Appears in 2 contracts
Samples: Merger Agreement (Advo Inc), Merger Agreement (Valassis Communications Inc)
Employee Matters. (a) Between the date hereof and the Effective TimeUntil December 31, the Company shall (and the Company 2014, Parent shall, or shall cause its Subsidiaries to) make available to Parent the employees , provide each employee of the Company and or any of its Subsidiaries so that who remains in the employment of Parent may interview such employees and evaluate their roles and responsibilities with the Company and or any of its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations Subsidiaries following the Closing.
Effective Time (b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Continuing Employee”) shall be provided with annual with: (i) at least the same base salary or base wage rate, wages and employee benefits that are, in the aggregate, substantially comparable annual cash bonus opportunities as were provided to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following such individual immediately prior to the Closing Date and (or such longer change ii) employee benefits (other than equity compensation) that are no less favorable in control coverage period as required the aggregate than those provided under the applicable Company Benefit Plan) Plans in which such Continuing Employee participated immediately prior to the Closing Date. From January 1, 2015 through at least the one-year anniversary of the Closing, Parent shall, or shall be provided cause its Subsidiaries to, provide each Continuing Employee with severance base salary or base wages, annual cash bonus opportunities and employee benefits (subject to satisfying any applicable release requirementsother than equity compensation) that are no less favorable than those the base salary or base wages and annual cash bonus opportunities and that are no less favorable in effect the aggregate than the employee benefits (other than equity compensation) provided to similarly situated employees of Parent or its Subsidiaries.
(b) Notwithstanding anything to the contrary in this Agreement, with respect to any Continuing Employee who is laid off, made redundant or whose employment is otherwise terminated without cause or for such Company Employee immediately prior to good reason (if applicable) (in each case, as defined in the severance applicable plan or program) during the one-year period following the Closing Date; provided, howeverParent shall, that or shall cause its Subsidiaries to honor the covenants within this terms of the Company’s severance plans and programs as disclosed on Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b6.07(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party Letter with respect to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parentsuch Continuing Employee.
(c) Parent shall, or shall cause its Subsidiaries to, credit Continuing Employees for service earned on and prior to the Surviving Corporation Effective Time with the Company and its SubsidiariesAffiliates, or any of their respective predecessors, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the extent such service was credited by the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those its Subsidiaries under the corresponding Company Benefit Plans set forth Plan prior to Closing, in addition to service earned with Parent and its Subsidiaries on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and or after the Effective TimeClosing Date, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “of eligibility, vesting or the calculation of vacation, sick days, severance, layoff and/or similar benefits (but not for purposes of defined benefit pension benefit accruals) under any retirement or other employee benefit plan” , program or arrangement of Parent or any of its Subsidiaries for the benefit of the Continuing Employees on or after the Closing Date and (ii) for such additional purposes as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would may be required by Applicable Law; provided that nothing herein shall result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Continuing Employees.
(d) Parent shall, and shall cause each of its Subsidiaries to, use its reasonable best efforts to waive limitations on benefits relating to any severance benefits or rights) in which the Company pre-existing conditions of Continuing Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, their eligible spouses and dependents (to the same extent and for the same purposes that such service was taken into account limitations were waived under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties Closing). Parent shall, or and shall cause the Surviving Corporation and its SubsidiariesSubsidiaries to, to take commercially use reasonable best efforts to (i) waive any limitation on health coverage recognize for purposes of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements annual deductible and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical under their health plans applicable to Continuing Employees, deductible and out-of-pocket expenses incurred paid by Continuing Employees and their respective spouses and dependents the Company’s or any of its Affiliates’ health plans in the calendar year in which the applicable Effective Time occurs.
(e) If requested by Parent at least ten (10) days prior to the Effective Time, the Company shall terminate any and all Company Benefit Plans intended to qualify under Section 401(a) of the Code that include a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code, effective not later than the day immediately preceding the Closing Date for which payment has Date. In the event that Parent requests that such 401(k) plan(s) be terminated, the Company shall provide Parent with evidence reasonably satisfactory to Parent that such 401(k) plan(s) have been made, in each case, terminated pursuant to the extent permitted by methodology set forth in the applicable insurance plan provider and only to not later than the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect day immediately prior to preceding the Closing Date.
(f) Prior to Without otherwise limiting the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closinggenerality of Section 9.07, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 6.07 are for the sole benefit of the Parties parties to this Agreement and nothing herein, expressed or implied, is intended or will shall be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Continuing Employee or other current or former employee of the Company, Parent Company or any of their respective its Affiliates), other than the Parties parties hereto and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.96.07) under or by reason of any provision of this Section 6.9Agreement. Nothing in this Section 6.9 is intended 6.07 shall amend, or be deemed to amend (ior, except as otherwise provided in this Section 6.07, prevent the amendment or termination of) prevent Parent, the Surviving Corporation any Company Benefit Plan or any other employee benefit plan, agreement or other arrangement. Notwithstanding anything to the contrary in Section 6.07(a), Parent shall honor the plans and agreements set forth on Section 6.07(f) of the Company Disclosure Letter in accordance with their Affiliates from terminating terms. Parent shall have no obligation to continue to employ or retain the employment or service services of any Person, including a Company Employee, at any time and Continuing Employee for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any period of its Subsidiaries (including time following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesClosing.
Appears in 2 contracts
Samples: Merger Agreement (Entegris Inc), Merger Agreement (Atmi Inc)
Employee Matters. (a) Between On and after the date hereof and the Effective TimeClosing, the Company Buyer shall, and shall (and cause the Company shall cause and its Subsidiaries toto honor in accordance with their terms all existing employment, severance, consulting and salary continuation agreements between the Company or any of its Subsidiaries and any current or former officer, director, employee or consultant of the Company or any of its Subsidiaries, including the Sachs Agreement; provided, however, that nothing herein shall preclude the Buyer from having the right to terminate the employment of any employee, with or without cause.
(b) make available On and after the Closing until the first anniversary thereof, the Buyer shall either continue the Benefit Plans (including any severance plan or arrangement but excluding any equity-based plan or arrangement) and compensation practices of the Company and its Subsidiaries or shall provide, or cause the Company or its Subsidiaries to Parent provide, benefits and compensation practices to employees of the Company and its Subsidiaries that are substantially similar in the aggregate to the benefits provided under the Benefit Plans and compensation practices applicable to such employees of the Company or any of its Subsidiaries, as applicable immediately prior to the Closing.
(c) The Buyer shall assume the obligation to pay to the employees of the Company and its Subsidiaries so any bonuses, to the extent such bonuses are accrued, that Parent may interview such would have been payable to the employees and evaluate their roles and responsibilities with of the Company and its Subsidiaries, including Subsidiaries with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of calendar year in which the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that areoccurs, in accordance with the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) provisions of the Company Disclosure Letterpolicy, plan, arrangement, program, practice or agreement under which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed any such bonuses would have been paid in accordance with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreementspast practices.
(d) From and after the Effective Time, as applicableClosing Date, the Parties shallBuyer shall be responsible for complying with the continuation coverage requirements of Section 4980B of the Code with respect to all “qualifying events” (as such term is defined in Section 4980B of the Code) occurring prior to, or shall cause on or after, the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes Closing Date with respect to any current or former “defined benefit plancovered employee” (as such term is defined in Section 3(354980B of the Code) of ERISAthe Company and its Subsidiaries or any related “qualified beneficiary” (as such term is defined in Section 4980B of the Code), retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation including, for the same period avoidance of servicedoubt, or those former covered employees (iiand their qualified beneficiaries) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service who terminate their employment with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately Subsidiaries prior to the Closing Date.
(fe) Prior to From and after the Closing Date, (i) if requested by Parent and to the extent not otherwise addressed in writing at least three (3) days before the Closingforegoing Section 6.12(d), the Company Buyer shall cause be responsible with respect to current and former employees of the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person beneficiaries (including, for the avoidance of doubt, those former employees (and their beneficiaries) who terminate their employment with the Company and its Subsidiaries prior to the Closing Date) for compliance with the Worker Adjustment and Retraining Notification Act of 1988, and any Company Employee or other current or former employee applicable Law, including any requirement to provide for and discharge any and all notifications, benefits and liabilities to employees of the Company, Parent or any of their respective Affiliates), other than the Parties Company and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following and Governmental Authorities that might be imposed as a result of the Effective Time, consummation of the Surviving Corporation) transactions contemplated by this Agreement or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesotherwise.
Appears in 2 contracts
Samples: Agreement and Plan of Merger (Deerfield Triarc Capital Corp), Merger Agreement (Triarc Companies Inc)
Employee Matters. (a) Between Each Property Employee, other than the date hereof and the Effective TimeReserved Employees, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees who is an employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, shall hereinafter be referred to as a “Company Transferred Employee”) shall . Each of the Property Employees is an at-will employee, except that certain Property Employees may be provided with annual base salary or base wage rate, and employee benefits eligible for severance compensation upon certain termination events under an employment agreement that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company covers any such Property Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this set forth on Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b7.13(a) of the Company Disclosure Letter, which shall consist .
(b) Effective as of the individuals that are a party to those certain Retention and Sale Payment retention Closing, Buyer shall assume all employment agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(cSection 9.4(b) of the Company Disclosure LetterLetter to the extent in effect as of the Closing, it being understood provided that the foregoing shall not be construed applicable Property Employee consents to limit any amendments otherwise permitted such assignment to the extent required by the terms of the applicable agreementsemployment agreement.
(c) For a period of at least one (1) year immediately following the Closing Date, (x) Buyer shall provide the Transferred Employees who remain employed by the Company with base compensation, bonus opportunity and annual and long-term incentive compensation opportunity that are in the aggregate, on an employee by employee basis, no less favorable than those which the Transferred Employees were provided by the Company or its Affiliates immediately prior to the Closing and (y) Buyer shall honor the severance policies of the Company and its Affiliates with respect to Transferred Employees.
(d) From and after For a period of at least one (1) year immediately following the Effective TimeClosing Date, as applicable, the Parties Buyer shall, pursuant to plans and arrangements established or shall cause maintained by Buyer (the Surviving Corporation and its Subsidiaries“Buyer Benefit Plans”), to take commercially reasonable efforts to credit provide the Transferred Employees who remain employed by the Company employee benefits (including medical benefits) which are no less favorable in the aggregate on an employee by employee basis than those which the Transferred Employees for purposes of vesting, eligibility, severance and benefit accrual were provided under the Parent Benefit Plans and the Company Benefit Plans immediately prior to Closing. To the extent permitted under the terms of the Buyer Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ Buyer shall cause service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately Affiliates prior to the Closing Dateto be treated the same as service with any of Buyer and its Affiliates from and after the Closing Date for purposes of eligibility, vesting, and benefit accrual under the Buyer Benefit Plans (except (i) to the extent that giving such credit does not would result in duplicate duplication of benefits, (ii) for benefit accrual purposes under any defined benefit pension plan, (iii) for purposes of any retiree medical plan or (iv) for any newly established plan of Buyer for which similarly situated employees of Buyer do not receive past service credit).
(e) The Parties shallEffective immediately after the Closing, or Buyer shall cause the Surviving Corporation Transferred Employees to be covered by one or more medical benefit plans (“Buyer’s Medical Plans”), which shall provide benefits to the Transferred Employees and its Subsidiariestheir dependents which in the aggregate are substantially comparable to the benefits that were provided to the Transferred Employees and their dependents by the Company Benefit Plans immediately prior to Closing. To the extent permitted under the terms of Buyer’s Medical Plans, to take commercially reasonable efforts to (i) waive Buyer shall cause any limitation on health coverage of any Company Transferred Employees or their dependents to not be subject to any of their covered, eligible dependents due to “pre-existing conditions and/or waiting periods, active employment conditions” exclusions or limitations or “actively at work” requirements and requirements which would cause any of the Transferred Employees or their dependents otherwise to show evidence of good health be excluded from Buyer’s Medical Plans immediately after the Closing. To the extent permitted under the applicable Parent Benefit Plan terms of Buyer’s Medical Plans, Buyer shall give effect, in determining any deductible and maximum out-of-pocket limitations, to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Dateclaims incurred and amounts paid by, and amounts reimbursed to, such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit employees for the plan calendar year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior under any welfare benefit plans maintained or contributed to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits Company for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect its benefit immediately prior to the Closing Date.
(f) Prior to Effective as of the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company Buyer shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be establish or designate a defined contribution retirement plan which is qualified or eligible for qualification under Section 401(a) of the Code (the “Buyer’s 401(k) Plan”). Each Transferred Employee who participates in the Xxxxxx’x Entertainment, Inc. Savings and Retirement Plan (the “Company 401(k) Plan”) who satisfies the eligibility requirements of Buyer’s 401(k) Plan shall become eligible to participate in Buyer’s 401(k) Plan on the date he or she becomes an employee of Buyer and, to the extent permitted under the terms of Buyer’s 401(k) Plan, Buyer shall cause such Transferred Employee to be terminated credited with eligibility service and (B) vesting service for all participants to cease participating periods of service with the Company or any other Person if so credited with such service under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Equity Interest Purchase Agreement (CAESARS ENTERTAINMENT Corp), Equity Interest Purchase Agreement (Penn National Gaming Inc)
Employee Matters. (a) Between For a period of one year following the date hereof and Closing Date, Parent shall provide to each current (and, to the Effective Timeextent applicable, the Company shall (and the Company shall cause its Subsidiaries toformer) make available to Parent the employees employee of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded (other than Company Employees willwhose terms and conditions of employment are governed by a collective bargaining or other labor contract, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) which Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted respected by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its applicable Subsidiaries, as applicable, to )
(i) no less than the same extent level of annual base salary and wage rates (unless an affected Company Employee agrees to a change of position or to assume a new role for Parent), (ii) (x) for the performance year ending December 31, 2014, no less than the same purposes that such service was taken into account under a corresponding Company Benefit Plan level of annual cash bonus target opportunities, and (y) thereafter, annual cash bonus opportunities consistent with the plans and programs offered by Parent to similarly situated employees, and (iii) substantially the same level of benefits, measured in the aggregate, in each case as those in effect immediately prior to the Closing Date, . Notwithstanding any other provision of this Agreement to the extent that such credit does contrary, Parent shall or shall cause the Company to provide Company Employees whose employment terminates during the one-year period following the Closing Date with severance benefits at not result in duplicate benefitsless than the levels and pursuant to the terms of any written employment agreements or offer letters with the Company or its Subsidiaries; Company Employees without a written employment agreement or offer letter providing severance shall be subject to the respective severance plans, agreements and guidelines of the Parent.
(eb) The Parties From and after the Closing Date, Parent shall, or shall cause an affiliate to, assume and honor in accordance with their terms all of the Surviving Corporation Company’s retention, termination and change in control plans, policies, programs, agreements and arrangements (including any written change in control severance agreement, but excluding all other severance policies or plans other than those applicable in Section 5.15(a)) maintained by the Company or any of its Subsidiaries, in each case, as in effect on the Closing Date, including with respect to take commercially reasonable efforts any payments, benefits or rights arising as a result of the transactions contemplated by this Agreement (either alone or in combination with any other event).
(c) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans sponsored by Parent or its Subsidiaries providing benefits to any Company Employees after the Closing Date (including vacation, paid time-off policies and severance plans), (i) waive each Company Employee shall be entitled to carryover any limitation on health coverage of any Company Employees or any of their coveredunused vacation days, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan (ii) to the extent a Company Employee terminates his or her employment for any reason at any time on or prior to the first anniversary of the Closing Date such Company Employee shall be paid a cash lump sum for all unused vacation days upon such employment termination to the same extent as would have applied to such a termination of the Company Employee under Company Plans in effect prior to the Closing Date (and to the extent not otherwise required by applicable law) and (iii) each Company Employee shall be credited with his or covered, her years of service with the Company and its Subsidiaries and their respective predecessors before the Closing Date to the same extent as such Company Employee was entitled before the Closing Date to credit for such service under any similar Company employee benefit plan in which such Company Employee participated or was eligible dependents are covered under an analogous Company Benefit Plan, as applicable, to participate immediately prior to the Closing Date. In addition, and such conditionswithout limiting the generality of the foregoing, periods (x) to the extent that any Company Plan, or requirements are satisfied any Company Employee’s participation or waived coverage thereunder, is terminated at any time on or after the Closing Date, each affected Company Employee shall be immediately eligible to participate, without any waiting time, in any and all Parent employee benefit plans providing, in the aggregate, substantially similar participation or coverage as was provided under such Parent Benefit Company Plan and (ii) give each in which such Company Employee credit participated immediately before the Closing Date (determined without regard for any amendment or termination of such Company Plan pursuant to this Agreement). Parent shall use its commercially reasonable efforts to continue all plans of the Company, until the end of the plan year in which the Closing Date occurs towards applicable deductibles Effective Time occurs, providing for flexible spending contributions, deductibles, maximum out of pocket requirements and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance coinsurance requirements that are measured on a plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Dateyear basis.
(fd) Prior With respect to any Company Employees based outside of the United States, Parent’s obligations under this Section 15.15 shall be modified to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries minimum extent necessary to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) comply with applicable Laws of the Code (the “Company 401(k) Plan”) to be terminated foreign countries and (B) all participants to cease participating under the Company 401(k) Plan, political subdivisions thereof in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to which such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Employees are based.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Schawk Inc), Merger Agreement (Matthews International Corp)
Employee Matters. (a) Between the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available On or prior to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed the Sellers shall use their commercially reasonable efforts to transfer, or cause to be transferred, effective as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company employment of any Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist Business (other than Employees of the individuals that are a party Subject Companies) to those certain Retention and Sale Payment retention agreements executed with any of the Company Subject Companies designated in writing by Buyer at least ten (10) business days prior to the Closing Date Date; provided that the Sellers shall be solely responsible for any severance pay or benefits that becomes due to any such Employees solely as a result of such transfer of employment and any other obligations to such Employee (including any liabilities under any Seller Benefit Plan) for any period of service prior to the “date of such transfer. On or prior to the Closing Date, the Sellers shall transfer, or cause to be transferred to Sellers or their Affiliates (other than the Subject Companies) the employment of any Employees any of the Subject Companies primarily engaged in the Excluded Employees”RCS Business and any other Employees that Sellers and Apollo mutually agree in writing to allow to be transferred to Sellers effective as of the Closing Date; provided that the Sellers shall be solely responsible for any severance pay or benefits that becomes due to any such Employees solely as a result of such transfer of employment and any other obligations to such Employee (including any liabilities under any Seller Benefit Plan) which Excluded Employees willfor any period of service prior to, or after, the date of such transfer.
(b) As of the Closing, the Acquired Companies shall terminate their participation in each Seller Benefit Plan and in no event shall any Employee be entitled to accrue any benefits under such Seller Benefit Plans with respect to services rendered or compensation paid on and or after the Closing Date, only be entitled except for rights that have vested prior to receive or at the severance benefits set forth in Closing. Without limiting the foregoing, the Sellers shall retain responsibility for all claims incurred by Employees (and subject their covered dependents) prior to the terms and conditions Closing under all Seller Benefit Plans. To the extent any of the Retention Acquired Benefit Plans cover employees of Seller and Sale Payment retention agreements provided to Parentits Affiliates, other than the Employees, the Sellers shall, as of the Closing, assume all liability in respect of such Persons under the applicable Acquired Benefit Plans.
(c) Parent shallApollo shall assume, or and Subject Companies shall cause the Surviving Corporation and its Subsidiariesretain, to assume and honor their respective obligations under all employment, severance, change liability in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) respect of vacation accrued by any such individuals in respect of the Company Disclosure Letterperiod ending on the Closing Date, it being understood that except to the foregoing shall not be construed to limit extent any amendments otherwise permitted payment in respect of accrued vacation is required by the terms Applicable Law as a result of the applicable agreementstransactions contemplated by this Agreement.
(d) From Effective no later than the Closing (but conditioned upon the Closing having occurred), RCAP shall award the Employees the restricted stock awards that Sellers and after the Effective TimeSubject Companies have accrued, as applicableof that date, in respect of bonuses for the Parties shallfull 2015 fiscal year. In addition, or prior to the Closing Date, RCAP shall cause take all action necessary to provide that continued service as an employee of the Surviving Corporation Sellers and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, their Affiliates (other than the Subject Companies) after the Closing shall not be a vesting condition of these awards; provided that the transferability of any such RCAP shares (or the RCAP shares that would be delivered upon vesting of any such restricted stock units) shall be restricted until the originally scheduled vesting dates (or the vesting dates that would have been scheduled for such awards absent this Agreement and the transactions contemplated hereby).
(e) Without limiting the generality of Section 9.7, the provisions of this Section 4.12 are solely for the benefit of the Sellers and Buyer, and no current or former Employee, director or service provider of the Subject Companies or the Business or any other Person shall be regarded for any purpose as a third-party beneficiary of this Section 4.12. In no event shall the terms of this Section 4.12 be deemed to (i) for establish, amend, or modify any purposes with respect to Employee Benefit Plan (including any Acquired Benefit Plan) or any “defined employee benefit plan” as defined in Section 3(353(3) of ERISAERISA or any other benefit plan, retiree medical benefits program, agreement or disability benefits arrangement maintained or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees sponsored by Buyer or any of their coveredits Affiliates (including, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before following the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing DateSubject Companies); provided, however, that such actions may be contingent upon Closing and (ii) no sooner than alter or limit the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A ability of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent Buyer or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person its Affiliates (including, for following the avoidance of doubtClosing, the Subject Companies) to amend, modify or terminate any Company Employee Acquired Benefit Plan, or any other benefit plan, program, agreement or arrangement after the Closing; or (iii) confer upon any current or former employee of the CompanyEmployee, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable director or other rights service provider or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any other Person any right to employment or service or continued employment or continued service with Parent Buyer or any of its Subsidiaries Affiliates (including including, following the Effective TimeClosing, the Surviving Corporation) or any particular term or condition Subject Companies), preclude the ability of employment or service, or (iii) prevent Parent, the Surviving Corporation Buyer or any of their its Affiliates (including, following the Closing, the Subject Companies) to terminate the employment or services of or demote the position of any employee for any reason, or constitute or create an employment agreement with any such Person.
(f) If, in respect of calendar year ended December 31, 2015, the aggregate cash bonus compensation paid to Existing Employees of the Business (the “Aggregate Cash Bonuses”) is less than $7,026,000, Apollo will pay, or cause to be paid to, RCAP in cash an amount equal to (A) a fraction the numerator of which is the number of days from terminatingand after January 1, revising or amending any Employee Benefit Plan sponsored2015 through and excluding the Closing Date and the denominator of which is 365, maintained or contributed multiplied by (B) the difference between (i) $7,026,000 and the (ii) the Aggregate Cash Bonuses (such amount being hereinafter referred to as the “Bonus True-Up Payment”). No later than February 15, 2016, Apollo will deliver to RCAP a certificate, duly executed by an authorized officer of Apollo, setting forth a true, complete and accurate list of the cash bonuses paid by the CompanySubject Companies to each Existing Employee of the Business in respect of the calendar year ended December 31, Parent or any 2015. If the Aggregate Cash Bonuses set forth on such certificate are less than $7,026,000, Apollo shall, within five (5) days after the delivery of their respective Subsidiariessuch certificate, pay to RCAP, by wire transfer in immediately available funds, the Bonus True-Up Payment. For purposes of this Agreement, the “Existing Employee of the Business” means an employee of the Business in respect of which an accrued bonus was taken into account in the calculation of Closing Regulatory Capital and Closing Net Working Capital.
Appears in 2 contracts
Samples: Membership Interest Purchase Agreement (Apollo Global Management LLC), Membership Interest Purchase Agreement (RCS Capital Corp)
Employee Matters. (a) Between From the date hereof and Changeover Time through the first anniversary of the Effective Time, the Company shall (and the Company Parent shall cause its Subsidiaries to) make available the Company, the Surviving Corporation and their respective Affiliates to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, provide each employee individual who is employed as of the Closing Date by the Company or a any Company Subsidiary thereof immediately before the Changeover Time who continues employment with Parent or the Surviving Corporation (or any Affiliate thereof) following the Effective Time (each, a “Company Employee”) shall be provided with annual (i) base salary or base wage ratecompensation, bonus and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) incentive opportunities that are no less favorable in the aggregate than those in the base compensation, bonus and incentive opportunities (including value attributable to equity based compensation generally, without giving effect for to the Transactions) provided to such Company Employee immediately prior to the Closing Date; providedAcceptance Time, however, that the covenants within this Section 6.9(band (ii) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals employee benefits that are a party substantially comparable in the aggregate to those certain Retention and Sale Payment retention agreements executed with the provided to such Company Employee immediately prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject Changeover Time. Except to the terms and conditions extent necessary to avoid the duplication of the Retention and Sale Payment retention agreements provided to Parent.
(c) benefits, Parent shall, or shall cause the Company, the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between Affiliates to recognize the service of each Company Employee with the Company or a Subsidiary (or a Subsidiary thereofpredecessor) and a Company Employee, including, but not limited to, those prior to the Changeover Time as if such service had been performed with Parent or its Affiliates for all purposes under the Company Benefit Plans set forth on Schedule 6.9(c) of maintained by the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation or their respective Affiliates after the Changeover Time and its Subsidiaries, to take commercially reasonable efforts to credit any employee benefit plans and programs of Parent or the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under Surviving Corporation or their respective Affiliates (the “Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights”) in which the Company Employees participate, for such Company Employees’ service with Employee participates after the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
Changeover Time (e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (includingexcluding, for the avoidance of doubt, benefit accrual under any defined benefit pension plans), in each case to the same extent such Company Employee’s service was recognized by the Company or a Subsidiary under the corresponding Company Benefit Plan in which such Company Employee participated immediately before the Changeover Time. In addition, and without limiting the generality of the foregoing, each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all Parent Plans to the extent coverage under any such plan replaces coverage under a comparable benefit plan in which such Company Employee participates immediately before the Changeover Time.
(b) With respect to any welfare plan maintained by the Company or the Surviving Corporation or their respective Affiliates in which Company Employees are eligible to participate after the Changeover Time, the Company, the Surviving Corporation and their respective Affiliates shall (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods and actively-at-work requirements with respect to participation and coverage requirements applicable to such employees and their eligible dependents and beneficiaries, to the extent such limitations were waived, satisfied or did not apply to the applicable employee or eligible dependent or beneficiary under the corresponding welfare Company Benefit Plan in which he or she participated immediately prior to the Changeover Time, and (ii) provide each Company Employee and his or her eligible dependents and beneficiaries with credit for any co-payments and deductibles paid prior to the Effective Time in satisfying any analogous deductible or out-of-pocket requirements to the extent applicable under any such plan and to the same extent such credit was provided to him or her under the corresponding welfare Company Benefit Plan in which he or she participated immediately prior to the Changeover Time, in each case without duplication of benefits.
(c) From and after the Changeover Time, Parent shall cause the Company, the Surviving Corporation and their respective Affiliates to honor all of the Company Benefit Plans that are employment, severance, retention and termination plans, policies, programs, agreements and arrangements (including any change in control severance agreement between the Company and any Company Employee Employee) maintained by the Company or any Subsidiary of the Company that have either been filed as exhibits to the Company SEC Reports or have otherwise been disclosed in Section 6.5(c) of the Company Disclosure Letter or are otherwise not material in the aggregate, in each case in accordance with their terms and shall honor all administrative interpretations previously made under any such plan or agreement. Each of the Company and Parent hereby acknowledge and agree that the consummation of the Offer will constitute a “Change in Control” or “Change of Control” (as such term is defined under each of the Company Benefit Plans) for all purposes under such Company Benefit Plans.
(d) With respect to the annual performance period in which the Acceptance Time occurs, the Company shall and, after the Changeover Time, Parent shall cause the Company or the Surviving Corporation, as the case may be, and their respective Affiliates to pay to each individual who is employed by the Company or any Company Subsidiary at the Acceptance Time, and who is a participant in such plan, as soon as practicable following the Acceptance Time (but in any event within the period required by Section 409A of the Code, such that it qualifies as a “short-term deferral” pursuant to Section 1.409A-1(b)(4) of the Department of Treasury Regulations), a bonus payment equal to such Company Employee’s target bonus under such plan, pro-rated for the portion of the annual performance period occurring prior to the Acceptance Time.
(e) Notwithstanding anything herein to the contrary, Parent, Merger Sub and the Company acknowledge and agree that none of the provisions contained in this Agreement (i) shall be treated as an amendment or other current modification of any Company Benefit Plan or former other employee benefit plan, agreement or other arrangement, (ii) shall (except as set forth in Section 6.5(c)) limit the right of Parent, the Company or their respective Affiliates to amend, terminate or otherwise modify any Company Benefit Plan or Parent Plan following the Changeover Time or (iii) shall be construed to create a right with any employee of the Company, Parent Company or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including its Affiliates to employment with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating respective Affiliates.
(f) The Company agrees that as soon as reasonably practical following the employment or service date of any Personthis Agreement, including it will issue a Company Employee, at any time notification and for any reason, (ii) provide any Person any right to employment or service or continued employment or service notice of cancellation of options in the form agreed with Parent or any to all holders of its Subsidiaries (including following options under the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesUK Savings Related Share Option Scheme.
Appears in 2 contracts
Samples: Merger Agreement (Osi Pharmaceuticals Inc), Merger Agreement (Astellas Pharma Inc.)
Employee Matters. (a) Between On or before the date hereof and Closing, but effective as of the Effective TimeClosing Date (or January 1, 2011 in the event the Closing Date occurs prior to December 31, 2010), the Company shall (and the Company take, or shall use reasonable efforts to cause its Subsidiaries to) make available Affiliates, as applicable, to Parent the employees of take, all actions necessary, if any, to cause the Company and its Subsidiaries so to cease to be adopting or participating employers under all Benefit Plans that Parent may interview such employees are not Company Benefit Plans and evaluate their roles and responsibilities with each Company Employee shall cease to accrue benefits under the Benefit Plans that are not Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingBenefit Plans.
(b) The Parties agree employment of each person employed by the Company and its Subsidiaries as of the Closing Date (for the avoidance of doubt, after giving effect to the Related Transactions and Section 6.1) (the “Company Employees”) shall automatically be continued on the Closing Date.
(c) Except as otherwise provided in the Separation Agreement with respect to severance benefits and transition services with respect to human resources and employee benefit plans and programs, for the period commencing on the Closing Date and ending on the first anniversary of the Closing Date, Buyer shall, or shall cause one of its Affiliates to, provide Company Employees with compensation and employee benefit plans, programs, policies and arrangements that are no less favorable, in the aggregate, than the compensation and employee benefit plans, programs, policies and arrangements provided to similarly situated employees of Buyer and its Affiliates. In addition, for a the period commencing on the Closing Date and ending on the first anniversary of 12 the Closing Date, unless agreed upon by such Company Employee, Buyer shall not, and shall cause each of its Affiliates not to, increase any Company Employee’s commute as of immediately prior to the Closing Date by thirty (30) or more miles one way.
(d) For the period commencing on the Closing Date and ending six (6) months following the Closing Date, Buyer shall, or shall cause its Affiliates to, provide to each employee who is employed Company Employee base wages or salaries, as of applicable, that are no less favorable than the Closing Date base wages or salaries provided to each such Company Employee by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its SubsidiariesSubsidiaries immediately prior to the Closing Date. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months on and following the Closing Date (or such longer change January 1, 2011 in control coverage period as required under the applicable event the Closing Date occurs prior to December 31, 2010), Buyer shall, or shall cause its Affiliates to, cause each compensation or employee benefit plan, program, or arrangement maintained or contributed to by Buyer or any of its Affiliates and in which any Company Benefit Plan) shall be provided with severance benefits (subject Employee becomes eligible to satisfying any applicable release requirements) that are no less favorable than those in effect for participate, to treat the prior service of such Company Employee immediately prior with the Company or any of its Affiliates, as the case may be, as service rendered to Buyer or its Affiliates, as the Closing Datecase may be, for all purposes (including vesting, eligibility, level of benefit (including for purposes of severance and vacation/paid time off benefits) and benefit accrual purposes); provided, however, that the covenants within this Section 6.9(b) foregoing shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to benefit accruals under any “defined benefit plan” as defined in Section 3(35) of ERISA; and provided, retiree medical benefits or disability benefits or to further, that the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ years of service with the Company and its Subsidiaries, as applicable, to the same extent Affiliates and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to their respective predecessors before the Closing Date, to the extent that such credit does Date shall be not result in duplicate included for purposes of determining whether a Company Employee is eligible for subsidized retiree medical benefits.
(e) The Parties Buyer shall, or shall cause the Surviving Corporation and its SubsidiariesAffiliates to, to take commercially reasonable efforts to (i) waive any limitation on health and welfare coverage of any Company Employees or any of their covered, eligible dependents Employee due to pre-existing conditions and/or waiting periods, active employment requirements requirements, and requirements to show evidence of good health under the applicable Parent Benefit Plan health and welfare plan of Buyer or any Affiliate of Buyer to the extent such Company Employee or covered, eligible dependents are is currently covered under an analogous a health and welfare benefit plan of the Company or any of its Affiliates (as the case may be) and (ii) in the event the Closing Date occurs after January 1, 2011, credit each Company Employee with all deductible payments, co-payments and co-insurance paid by such employee and covered dependents under the group health plan of the Company or any of its Affiliates (as the case may be) prior to the Closing Date during the year in which the Closing Date occurs for the purpose of determining the extent to which any such employee and his or her dependents have satisfied their deductible and whether they have reached the out-of-pocket maximum under any medical plan of Buyer or any Affiliate of Buyer for such year.
(f) Effective as of the Closing Date (if the Closing Date occurs after December 31, 2010), Buyer shall (i) permit, or shall cause its Affiliates to permit, Company Employees to participate in flexible spending reimbursement accounts under a cafeteria plan qualifying under Section 125 of the Code (the “Buyer FSA”) to the extent coverage under such Buyer FSA replaces coverage under a comparable Benefit PlanPlan in which such Company Employee participated immediately prior to the Closing Date (the “CBNA FSA”), (ii) credit Company Employees under the Buyer FSA immediately following the Closing Date with amounts available for reimbursement equal to such amounts as applicable, were credited under the CBNA FSA with respect to such person immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (iiiii) give each effect under the Buyer FSA to any elections made by such Company Employee credit Employees with respect to the CBNA FSA for the plan year in which the Closing Date falls.
(g) In the event that a Company Employee makes a voluntary election pursuant to Section 401(a)(31) of the Code to roll over his or her account balance in the Citigroup 401(k) Plan to a tax-qualified defined contribution plan sponsored by Buyer, Buyer agrees to cause such tax-qualified defined contribution plan to accept such rollover, subject to the terms of the Buyer’s tax-qualified defined contribution plan.
(h) Effective as of January 1, 2011 (if the Closing Date occurs towards applicable deductibles prior to December 31, 2010) or effective as of the Closing Date (if the Closing Date occurs on or after January 1, 2011), Buyer shall credit each Company Employee with the number of unused planned time off days earned by and annual out-of-pocket limits for medical expenses incurred credited to such Company Employee as of immediately prior to the Closing Date for which payment has been made, in each case, to accordance with the extent permitted by policy of the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to . For the period commencing on the Closing Date and ending on the first anniversary of the Closing Date, (i) if requested by Parent in writing at least three (3) days before Buyer shall provide Company Employees with planned and unplanned time-off policies that are no less favorable than the Closing, the Company shall cause the Company planned and unplanned time-off policies provided to similarly situated employees of Buyer and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing DateAffiliates; provided, however, that such actions the number of unused planned time-off days that may be contingent upon Closing and (ii) no sooner than carried over from 2010 to 2011 shall be limited by the date thirty (30) days time-off policies as in effect with respect to the Company Employees immediately prior to the Closing Date (or such earlier date approved Date; provided further that any unused planned time-off days that are carried over from 2010 to 2011 must be used before any planned time-off days earned in 2011 may be used. For the avoidance of doubt, the number of unused planned time-off days and unplanned time-off days that may be carried over from 2011 to 2012 shall be limited by the Bankruptcy Court, if applicable), the Company shall take planned and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A unplanned time-off policies of similarly situated employees of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) Buyer and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))its Affiliates.
(gi) Nothing in this Agreement shall constitute an establishment or termination ofWithout limiting the generality of Section 9.5, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties parties to this Agreement and nothing herein, expressed or implied, is intended or will shall be construed to confer upon or give to any Person person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent Company or any of their respective Affiliatesits Subsidiaries), other than the Parties parties hereto and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9Agreement. Nothing in this Section 6.9 is intended shall amend, or be deemed to amend (ior prevent the amendment or termination of) prevent Parent, the Surviving Corporation any Benefit Plan or any compensation or benefit plan of their Affiliates from terminating the Company or its Affiliates. Nothing in this Section 6.9 shall create any obligation on the part of Buyer (or the Company, as applicable) to continue the employment or service of any Person, including a Company Employee, at Employee or any time and employee of the Company or its Subsidiaries for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any definite period of its Subsidiaries (including time following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Merger Agreement (Discover Financial Services), Merger Agreement (Student Loan Corp)
Employee Matters. (a) Between Following the date hereof Closing Date, Purchaser shall maintain or cause to be maintained employee benefit plans and compensation opportunities for the Effective Time, the Company shall benefit of employees (and the Company shall cause its Subsidiaries toas a group) make available to Parent the employees of the who are actively employed by Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of on the Closing Date by the Company or a Subsidiary thereof (each, a “Company EmployeeCovered Employees”) shall be provided with annual base salary or base wage rate, and that provide employee benefits that areand compensation opportunities which, in the aggregate, are substantially comparable to those in effect for the employee benefits and compensation opportunities that are generally made available to similarly situated employees of Parent Purchaser or its Subsidiaries (other than Company and its Subsidiaries. In addition) (collectively, the “Purchaser Plans”), as applicable; provided that (i) in no event shall any Covered Employee be eligible to participate in any closed or frozen Purchaser Plan; and (ii) until such time as Purchaser shall cause Covered Employees to participate in the Purchaser Plans, a Covered Employee’s continued participation in employee benefit plans and compensation opportunities of Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) and its Subsidiaries shall be provided deemed to satisfy the foregoing provisions of this sentence (it being understood that participation in the Purchaser Plans may commence at different times with severance benefits (subject respect to satisfying each Purchaser Plan). Notwithstanding any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior other provision of this Agreement to the Closing Date; providedcontrary, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent Purchaser shall, or shall cause the Surviving Corporation Company to maintain the Company’s Reduction in Force Severance Policy (as amended) without amendment following the Effective Time (the “Company Severance Plan”) and its Subsidiaries, provide each Covered Employee whose employment is terminated (other than under circumstances that constitute a termination for “cause” or who are not otherwise party to assume and honor their respective obligations an individual agreement that provides for severance pay) during the one-year period following the Effective Time with severance under all employment, severance, change in control, retention and other agreements, if any, between the Company (or Severance Plan. ; provided that, the severance benefits provided to a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing terminated Covered Employee shall not be construed to limit determined without taking into account any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and reduction after the Effective TimeTime in compensation paid to such Covered Employee and may be conditioned on the Covered Employee signing a separation and general release agreement in the form reasonably acceptable to Purchaser. In addition, as applicable, the Parties Purchaser shall, or shall cause the Surviving Corporation and its SubsidiariesCompany to, honor the obligations with respect to take commercially reasonable efforts to credit Company’s retiree medical program as set forth in Section 6.5(a) of the Company Employees Disclosure Schedule.
(b) To the extent that a Covered Employee becomes eligible to participate in a Purchaser Plan, Purchaser shall cause such employee benefit plan to (i) recognize the service of such Covered Employee with Company or its Subsidiaries (or their predecessor entities) for purposes of vesting, eligibility, severance vesting and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than for purposes of benefit accruals under any Purchaser Plan that is a defined benefit pension plan), under such Purchaser Plan, to the same extent such service was recognized immediately prior to the Effective Time under a comparable Company Benefit Plan in which such Covered Employee was eligible to participate immediately prior to the Effective Time; provided that such recognition of service (iA) for shall not operate to duplicate any purposes benefits of a Covered Employee with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service and (B) shall not apply for purposes of any Purchaser Plan under which similarly-situated employees of Purchaser and its Subsidiaries do not receive credit for prior service, or ; and (ii) with respect to the Excluded Employees, any severance Purchaser Plan that provides health plan or other welfare benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, any Covered Employee is eligible to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit participate for the plan year in which such Covered Employee is first eligible to participate, use its reasonable best efforts to (A) cause any pre-existing condition limitations or eligibility waiting periods under such Purchaser Plan to be waived with respect to such Covered Employee to the extent such limitation would have been waived or satisfied under the Company Benefit Plan in which such Covered Employee participated immediately prior to the Effective Time, and (B) recognize any health expenses incurred by such Covered Employee in the year that includes the Closing Date occurs towards (or, if later, the year in which such Covered Employee is first eligible to participate) for purposes of any applicable deductibles deductible and annual out-of-pocket limits expense requirements under any such Purchaser Plan. For purposes of any cash balance pension plan maintained or contributed to by Purchaser or any of its Subsidiaries in which Covered Employees become eligible to participate following the Effective Time, the Covered Employees’ level of benefit accruals under any such plans (for medical expenses incurred periods of service following the Effective Time) shall be determined based on the Covered Employees’ credited service prior to the Closing Date Effective Time (as recognized for which payment has been made, in each case, to the extent permitted same purpose by Company for purposes of the applicable insurance plan provider and only to the extent such deductibles tax-qualified retirement plans maintained or limits for medical expenses were satisfied or did not apply under the analogous sponsored by Company Benefit Plan in effect immediately prior to the Closing DateEffective Time) and with the Surviving Company following the Effective Time.
(fc) Prior to Effective as of immediately prior to, and contingent upon, the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, Company shall adopt such resolutions and/or amendments to terminate the Company shall cause the Company and Retirement Savings Plan or any 401(k) plan of any of its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the collectively, “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent Purchaser with an advance a copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event resolutions and/or plan amendments evidencing that the Company 401(k) Plan is has been terminated as set forth in the preceding sentence, as soon as administratively practicable following accordance with its terms. Prior to the Effective TimeTime and thereafter (as applicable), Parent Company and Purchaser shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a the Company 401(k) Plan and/or the tax-qualified defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent Purchaser (the “Parent Purchaser 401(k) Plan”) to (Ai) cause the Parent 401(k) Plan permit each Covered Employee to accept any make rollover contributions of “eligible rollover distributions” (within the meaning of Section 402(c)(4401(a)(31) of the Code, including of loans) in the form of cash cash, shares of Parent Common Stock, notes (in the case of loans) or a combination thereof, in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (Bii) cause each obtain from the IRS a favorable determination letter on termination for the Company 401(k) Plan. Each Covered Employee to shall become a participant in the Parent Purchaser 401(k) Plan as of on the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d6.5(b)); it being agreed that there shall be no gap in participation in a tax-qualified defined contribution plan.
(d) If requested by Purchaser in writing within thirty (30) business days prior to the Effective Time, effective as of, and contingent upon, the Closing Date, Company shall adopt such resolutions and/or amendments terminate each Company Benefit Plan listed in Section 6.5(d) of the Company Disclosure Schedule (each, a “Terminated Benefit Plan”). Company shall provide Purchaser with a copy of the resolutions and/or plan amendments evidencing that each Terminated Benefit Plan has been terminated. Each Covered Employee or other eligible participant shall become a participant in the Purchaser benefit plan that is comparable to the Terminated Benefit Plan on the Closing Date (giving effect to the service crediting provisions of Section 6.5(b)), it being agreed that there shall be no gap in coverage under, or participation in, any benefit plan or program of the type that Purchaser requests Company to terminate. Notwithstanding the foregoing, in no event shall Company be required to terminate the Company’s Flex Benefit Plan until December 31, 2011, unless Purchaser makes arrangements, including amendments to the Purchaser flex benefit plans, to ensure that the participants in the Company’s Flex Benefit Plan for the calendar year in which the Effective Time occurs are able to have the full plan year in which to use the amounts elected under such plan and are not otherwise adversely impacted.
(e) From and after the Effective Time, subject to the requirements of applicable law, Purchaser shall honor all obligations to current and former employees of Company and its Subsidiaries under the Company Benefit Plans, including all employment or severance agreements entered into by Company or its Subsidiaries or adopted by the Board of Directors of Company. From and after the Effective Time, Purchaser shall, or shall cause the Surviving Company to, take all action necessary to effectuate the agreements set forth in Section 6.5(e) of the Company Disclosure Schedule.
(f) Nothing in this Section 6.5 shall be construed to limit the right of Purchaser or any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries) to amend or terminate any Company Benefit Plan or other employee benefit plan, to the extent such amendment or termination is permitted by the terms of the applicable plan, nor shall anything in this Section 6.5 be construed to require the Purchaser or any of its Subsidiaries (including, following the Closing Date, Company and its Subsidiaries) to retain the employment of any particular Covered Employee for any fixed period of time following the Closing Date. This Agreement shall inure exclusively to the benefit of, and be binding upon the parties hereto and their respective successors, assigns, executors and legal representatives. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement
(g) Nothing For purposes of this Agreement, “Company Benefit Plans” means each “employee benefit plan” as defined in this Agreement shall constitute an establishment Section 3(3) of ERISA, whether or termination ofnot subject to ERISA, and each employment, consulting, bonus, incentive or an amendment todeferred compensation, retirement or be construed as establishingpost-retirement, terminating vacation, stock option, stock purchase, stock appreciation rights, stock based or amendingother equity-based, severance, termination, retention, change of control, profit-sharing, fringe benefit or other similar plan, program, agreement or commitment, whether written or unwritten, for the benefit of any Employee Benefit Plan sponsoredemployee, former employee, director or former director of Company or any of its Subsidiaries entered into, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation to which Company or any of their Affiliates from terminatingits Subsidiaries is obligated to contribute, revising or amending any Employee Benefit Plan sponsored, maintained or contributed with respect to by the Company, Parent which Company or any of their respective Subsidiariesits Subsidiaries has any liability, direct or indirect, contingent or otherwise (including any liability arising out of an indemnification, guarantee, hold harmless or similar agreement) or otherwise providing benefits to any current, former or future employee, officer or director of Company or any of its Subsidiaries or to any beneficiary or dependant thereof.
Appears in 2 contracts
Samples: Merger Agreement (Marshall & Ilsley Corp), Merger Agreement (Bank of Montreal /Can/)
Employee Matters. (a) Between Following the date hereof Effective Time, the employees of GETCO and its Subsidiaries who are employed by the Company or its Subsidiaries (including GETCO and its Subsidiaries) as of the Effective Time and the employees of Knight and its Subsidiaries (including Knight and its Subsidiaries) who are employed by the Company or its Subsidiaries at the Effective time (such employees, collectively, the “Covered Employees”) will be offered participation and coverage under Company employee benefit plans that are no less favorable, on an aggregate basis, to the Knight Benefit Plans generally in effect for similarly situated employees of Knight and its Subsidiaries in accordance with the terms thereof; it being understood that the Covered Employees may commence participation in the Knight Benefit Plans on different dates following the Effective Time with respect to different Knight Benefit Plans. Following the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the provide Covered Employees who were employees of Knight immediately prior to the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities Effective Time with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or that is substantially similar to the base wage rate, salary provided to such Covered Employees immediately prior to the Effective Time and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) incentive compensation opportunities that are no less favorable than those in effect for such Company Employee the incentive compensation opportunities provided to similarly situated Covered Employees who were employees of GETCO immediately prior to the Closing Date; providedEffective Time. For a period of one year following the Effective Time, however, that the covenants within this Section 6.9(b) Company shall not apply provide Covered Employees who were employees of Knight immediately prior to the Company Employees listed Effective Time with severance benefits at levels and pursuant to the terms of the Knight Severance Plan disclosed on Schedule 6.9(bSection 4.10(a) of the Company Knight Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date Schedule.
(the “Excluded Employees”b) which Excluded Employees will, on From and after the Closing Datetime that Covered Employees commence coverage under the Knight Benefit Plans pursuant to Section 7.7(a), only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent Company shall, or shall cause the Surviving Corporation its Subsidiaries to, (i) provide all Covered Employees with service credit for purposes of eligibility, participation, vesting and levels of benefit accruals under any Knight Benefit Plan in which Covered Employees are eligible to participate, for all periods of employment with GETCO or any of its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, or if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, Knight or shall cause the Surviving Corporation and any of its Subsidiaries, prior to take commercially reasonable efforts the Effective Time for which service was recognized by GETCO immediately prior to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, Effective Time as applicable, if such service had been performed with Knight or its applicable affiliate (other than (i) for any purposes with respect to any “newly adopted plan of the Company or any of its Subsidiaries for which past service credit is not granted to its employees generally); provided, that such service shall not be recognized (A) for purposes of any defined benefit plan” as defined in Section 3(35retirement plan or Knight Benefit Plan that provides retiree welfare benefits, (B) of ERISA, retiree medical benefits or disability benefits or to the extent it such recognition would result in a the duplication of benefits or compensation for the same period of service, or (C) any Knight Benefit Plan that is a frozen plan or provides grandfathered benefits, (ii) cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any healthcare benefit plans of the Company or any of its Subsidiaries to be waived with respect to the Excluded Employees, any severance benefits or rights) in which the Company Covered Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, their eligible dependents to the extent that such credit does not result in duplicate benefits.
(e) The Parties shallwaived under any similar plans of GETCO or, or shall cause the Surviving Corporation and its Subsidiariesif applicable, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicableKnight, immediately prior to the Closing DateEffective Time, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan (iii) recognize any healthcare expenses incurred by the Covered Employees and (ii) give each Company Employee credit their eligible dependents for the plan year in which the Closing Date Effective Time (or commencement of participation in a Knight Benefit Plan) occurs towards for applicable deductibles and deductibles, annual out-of-pocket limits and any lifetime maximums under any such Knight Benefit Plan for medical expenses incurred prior to the Closing Date for which payment has been made, Effective Time (or the date of commencement of participation in each case, to the extent permitted by the applicable insurance plan provider and only a Knight Benefit Plan) to the extent such deductibles or limits for medical expenses were satisfied or did not apply credited under the analogous Company Benefit Plan in effect any similar plans of GETCO, or, if applicable, Knight, immediately prior to the Closing DateEffective Time. To the extent that Covered Employees who were employed by Knight immediately prior to the Effective Time commence participation in benefit plans maintained by the Company, other than Knight Benefit Plans, such Covered Employees shall benefit from clauses (i), (ii) and (iii) in the same manner as Covered Employees who were employed by GETCO immediately prior to the Effective Time.
(fc) Prior The provisions of Sections 7.7(a) and 7.7(b) shall apply only with respect to Covered Employees who are covered under GETCO Benefit Plans or Knight Benefit Plans, that are maintained solely for the Closing Datebenefit of employees of GETCO or Knight, (i) if requested by Parent as applicable, employed in writing at least three (3) days before the ClosingUnited States. With respect to employees of GETCO or Knight who are regularly employed outside of the United States, from and after the Effective Time, the Company shall, or shall cause its Subsidiaries to, comply with all applicable Laws relating to employees and employee benefits matters applicable to such employees.
(d) Knight shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code adopt an equity incentive plan (the “Company 401(k) Equity Plan”) in a form that is proposed by GETCO, which shall be reasonably acceptable to Knight, which will include a 5% equity pool (the “Equity Pool”) and additional availability that is intended to permit equity-based awards to be terminated made in ordinary course over the two year period following the Effective Date covering Company Common Stock (the “Initial Equity Pool”). The Equity Pool shall be reserved for equity-based awards for Covered Employees (other than each of GETCO’s and (B) all participants Knight’s Chief Executive Officers as of the date hereof, who will be eligible to cease participating receive equity-based awards outside of the Equity Pool). The Joint Proxy Statement will include a proposal for Company shareholders to approve the Company Equity Plan, unless approval by Knight would be sufficient to permit the Company Equity Plan to issue awards following the Effective Time under the NYSE listing standards. All grants made from the Equity Pool shall be allocated as directed by GETCO’s Chief Executive Officer in consultation with Knight’s Chief Executive Officer, subject to approval by the Board of Directors of the Company 401(k) Planas appropriate (or the Board of Directors of GETCO in the case of awards communicated before the Effective Time). If, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable)Effective Time, the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant Common Stock in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) Initial Equity Pool has not yet been registered on Form S-8 or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentenceanother appropriate form, as soon as administratively practicable following the Effective Time, Parent the Company shall file with the SEC a registration statement on Form S-8 or another appropriate form (in any case if available for use by the Company), registering the number of shares of Company Common Stock equal to the number of shares of Company Common Stock issuable from the Initial Equity Pool that are eligible to be registered on Form S-8 or such other appropriate form and shall use commercially reasonable efforts to take any maintain the effectiveness of such registration statement for so long as such awards remain outstanding.
(e) Each of Knight and all action as may be reasonably requiredGETCO agrees that, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) for purposes of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) each Knight Stock Plan, including any outstanding loans the transactions contemplated by this Agreement constitute a “change in control,” “change of control” or term of similar meaning.
(f) From and (B) cause each Company Employee to become a participant following the date hereof, GETCO and Knight shall reasonably cooperate in implementing all appropriate communications with directors, officers, employees or consultants, regarding compensation or benefits that will be paid or provided in connection with the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))transaction contemplated by this Agreement.
(g) Nothing If requested by Knight in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed writing delivered to by GETCO no less than ten (10) business days before the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent ParentClosing Date, the Surviving Corporation Board of Directors of GETCO (or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time appropriate committee thereof) shall adopt resolutions and for any reason, take such corporate action as is necessary to terminate the GETCO 401(k) plan (iithe “GETCO 401(k) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including Plan”). As soon as practicable following the Effective Time, the Surviving Corporationassets thereof shall be distributed to the participants in the GETCO 401(k) Plan, and Knight shall take the action necessary (including the amendment of Knight’s 401(k) Plan (the “Knight 401(k) Plan”)) to permit the Covered Employees who are then actively employed to roll over any eligible distributions and loan balances into the Knight 401(k) Plan.
(h) Without limiting the generality of Section 10.11, the provisions of this Section 7.7 are solely for the benefit of the parties to this Agreement, and no current or former employee, director or independent contractor or any particular term other individual associated therewith shall be regarded for any purpose as a third-party beneficiary of this Agreement, and nothing herein shall be construed as an amendment to any GETCO Benefit Plan, Knight Benefit Plan or condition other employee benefit plan or agreement for any purpose or limit the right of employment or serviceKnight, or (iii) prevent Parent, the Surviving Corporation GETCO or any of their Affiliates from terminatingSubsidiaries (including, revising following the Closing Date, the Company and its Subsidiaries) to amend or amending terminate any Employee GETCO Benefit Plan, Knight Benefit Plan sponsored, maintained or contributed to by the Company, Parent other employee benefit plan or any of their respective Subsidiariesagreement.
Appears in 2 contracts
Samples: Merger Agreement (Knight Capital Group, Inc.), Merger Agreement (GETCO Holding Company, LLC)
Employee Matters. (a) Between The Elan Companies have provided to the Acquirors a list setting forth (i) the names, addresses, titles and dates of hire of each of the Employees, (ii) the then current annual base salary (or hourly rate) and bonus for the four (4) immediately preceding fiscal quarters for which bonuses have been paid and the estimated bonus for the immediately preceding fiscal quarters, in each case for each Employee and (iii) to the extent any Employee is on leave of absence, the type of leave, the date hereof it commenced and the Effective Timeexpected duration of leave (based on information provided to the Elan Companies by the Employees or their physicians). All Employees are employed on an at-will basis. Except as set forth on Schedule 6.07(a) of the Elan Disclosure Schedule, no Employee has a right to take more than four weeks of vacation per year. Except as set forth on Schedule 6.07(a) of the Elan Disclosure Schedule, no Employee is, or will become, other than as required by Law, entitled to any payment, benefit or right, or any increased and/or accelerated payment, benefit or right, as a result of such Employee's termination of employment with the Elan Companies or any of their Affiliates, or the execution of this Agreement or the consummation of the transactions contemplated hereby and by the Related Agreements, the Company shall (Wyeth/Elan Agreements and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the ClosingWyeth/King Agreements.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b6.07(b) of the Company Elan Disclosure Letter, which shall consist Schedule contains a true and complete list of all Employee Benefit Plans (other than stock option plans and plans providing benefits of immaterial value to Employees) currently maintained or contributed to by the Elan Companies and providing benefits to the Employees. The Elan Companies have delivered or made available to the Acquirors a true and complete copy of each Employee Benefit Plan set forth on Schedule 6.07(b) of the individuals that are Elan Disclosure Schedule. No Employee Benefit Plan (i) provides for defined benefit pension benefits or (ii) is a party to those certain Retention "multiemployer plan" (as defined in Section 3(37) of ERISA). Except as would not have a Material Adverse Effect, each Employee Benefit Plan complies with and Sale Payment retention agreements executed has at all times been administered in accordance with all applicable Laws, including ERISA and the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to ParentCode.
(c) Parent shall, or shall cause No fewer than 80% of the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans management personnel set forth on Schedule 6.9(c6.07(c) of the Company Elan Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents Schedule are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” actively employed (within the meaning of Section 402(c)(48.10(a)) in such capacities as set forth on Schedule 6.07(c) of the Code) in Elan Disclosure Schedule by the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan Elan Companies as of the Closing Date date which is two (subject to any applicable eligibility requirements, but giving effect 2) Business Days prior to the service crediting provisions of Section 6.9(d))Original Agreement Date.
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries.
Appears in 2 contracts
Samples: Asset Purchase Agreement (King Pharmaceuticals Inc), Asset Purchase Agreement (Elan Corp PLC)
Employee Matters. (a) Between the date hereof and Following the Effective Time, the Company Newco at its election shall either (i) provide generally to officers and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company Mellon and its Subsidiaries, including who at or after the Effective Time become employees of Newco or its Subsidiaries (“Mellon Continuing Employees”), employee benefits under Compensation and Benefit Plans maintained by Newco, on terms and conditions which are the same as for similarly situated officers and employees of BNY and its Subsidiaries, who at or after the Effective Time become employees of Newco or its Subsidiaries (“BNY Continuing Employees”), and/or (ii) maintain for the benefit of the Mellon Continuing Employees, the Compensation and Benefit Plans maintained by Mellon immediately prior to the First Effective Time (“Mellon Plans”); provided that Newco may amend any Mellon Plan to comply with respect any Law or as necessary and appropriate for other business reasons. Following the First Effective Time, Newco at its election shall either (x) provide generally to potential promotionsBNY Continuing Employees, transfersemployee benefits under Compensation and Benefit Plans maintained by Newco, on terms and conditions which are the same as for similarly situated Mellon Continuing Employees, and/or (y) maintain for the benefit of the BNY Continuing Employees, the Compensation and Benefits Plans maintained by BNY immediately prior to the Effective Time (“BNY Plans”); provided that Newco may amend any BNY Plan to comply with any Law or as necessary and appropriate for other business reasons. For purposes of this Section 5.17, Compensation and Benefit Plans maintained by BNY or Mellon are deemed to include Compensation and Benefit Plans maintained by their respective Subsidiaries. As soon as practicable following the Effective Time, Newco shall review, evaluate and analyze the Mellon Plans and the BNY Plans with a view towards developing appropriate and effective Compensation and Benefit Plans for the benefit of employees of Newco and its Subsidiaries on a going forward basis that does not discriminate between the Mellon Continuing Employees and the BNY Continuing Employees (together, the “Continuing Employees”). Newco will honor, or job eliminations following cause to be honored, in accordance with their terms, all vested or accrued benefit obligations to, and contractual rights of, the ClosingContinuing Employees, including, without limitation, any benefits or rights arising as a result of the Merger (either alone or in combination with any other event).
(b) The Parties agree For purposes of eligibility, participation, vesting and benefit accrual (except not for purposes of benefit accrual to the extent that such credit would result in a duplication of benefits) under Newco’s Compensation and Benefit Plans, service with or credited by Mellon or any of its Subsidiaries or any of their predecessors or BNY or any of its Subsidiaries or any of their predecessors shall be treated as service with Newco. To the extent permitted under applicable Law, Newco shall cause welfare Compensation and Benefit Plans maintained by Newco that cover the Continuing Employees and their dependents after the Effective Time to (i) waive any waiting period and restrictions and limitations for a period of 12 months following the Closing Datepreexisting conditions or insurability (except for pre-existing conditions that were excluded, each employee who is employed as of the Closing Date or restrictions or limitations that were applicable, under welfare Compensation and Benefit Plans maintained by Mellon or BNY), and (ii) cause any deductible, co-insurance, or maximum out-of-pocket payments made by the Company Mellon Continuing Employees or a Subsidiary thereof (eachBNY Continuing Employees and their dependents under welfare Compensation and Benefit Plans maintained by Mellon or BNY, a “Company Employee”) shall respectively, to be provided with annual base salary credited to such Continuing Employees under welfare Compensation and Benefit Plans maintained by Newco, so as to reduce the amount of any deductible, co-insurance, or base wage rate, maximum out-of-pocket payments payable by such Continuing Employees under welfare Compensation and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to ParentPlans maintained by Newco.
(c) Parent shallFrom the First Effective Time or the Effective Time, or as the case may be, Newco shall cause the Surviving Corporation each medical Compensation and its SubsidiariesBenefit Plan maintained by Mellon or BNY, respectively, to assume continue in effect for the benefit of the Mellon Continuing Employees or BNY Continuing Employees, respectively, and honor their respective obligations under all employmentdependents so long as such Continuing Employees and their dependents remain eligible to participate and until they shall become eligible to become participants in the corresponding medical Compensation and Benefit Plans maintained by Newco (and, severancewith respect to any such plan or program, change in control, retention subject to complying with the eligibility requirements after taking into account the crediting of service and benefits accruals and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans provisions set forth on Schedule 6.9(c) above and subject to the right of the Company Disclosure Letter, it being understood that the foregoing shall not be construed Newco to limit any amendments otherwise permitted by the terms of the applicable agreementsterminate such plan or program).
(d) From the First Effective Time or the Effective Time, as the case may be, until the expiration of the transitional period described in section 410(b)(6)(c) of the Internal Revenue Code, Newco shall cause each qualified and related non-qualified pension Compensation and Benefit Plan maintained by Mellon or BNY, respectively, to continue in effect for the benefit of the Mellon Continuing Employees or BNY Continuing Employees, respectively, so long as such Continuing Employees remain eligible to participate and until they shall become eligible to become participants in the corresponding qualified and related non-qualified pension Compensation and Benefit Plans maintained by Newco (and, with respect to any such plan or program, subject to complying with the eligibility requirements after taking into account the crediting of service and benefits accruals and other provisions set forth above and subject to the right of Newco to terminate such plan or program).
(e) Effective as of the Effective Time, Newco hereby assumes all Compensation and Benefit Plans maintained by Mellon or BNY, as applicable, that require express assumption by any successor to Mellon or BNY, as applicable.
(f) The Board of Directors of BNY will have the ability to create severance and other compensation and benefit arrangements for the BNY members of the Newco executive management that it determines in good faith are reasonable, appropriate and provide termination protection in connection with the Merger that is comparable, as of the Effective Time (taking into account the following sentence), to that of Mellon members. The Board of Directors of Mellon will have the ability to change severance and other compensation and benefit arrangements of the Mellon members of the Newco executive management in a manner that it determines in good faith is reasonable, appropriate and necessary to retain such Mellon members through and after the Effective Time, in light of any other changes to such arrangements that Mellon may implement as applicable, part of or in connection with the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable Parties’ efforts to credit create, as of the Company Employees for purposes of vestingEffective Time, eligibility, comparable and appropriate severance and other compensation and benefit accrual under arrangements for all members of the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes Newco executive management. The Parties agree to consult with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) one another with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))foregoing.
(g) The Parties agree that their Boards of Directors will work together in good faith to create appropriate retention bonus arrangements for the members of Newco executive management.
(h) Nothing in this Agreement Section 5.17 shall constitute an establishment or termination ofbe interpreted as preventing Newco, or an amendment tofrom and after the Effective Time, or be construed as establishing, terminating or from amending, modifying or terminating any Employee Benefit Plan sponsoredBNY Plans, Mellon Plans or other Contracts, arrangements, commitments or understandings, in accordance with their terms and applicable Law.
(i) To the extent applicable, each of Mellon and BNY will satisfy any service of notice and other obligations under the Worker Adjustment and Retraining Act of 1988 or similar local Laws with respect to its officers and employees.
(j) Notwithstanding anything to the contrary set forth herein, this Agreement is not intended, and it shall not be construed, to create third party beneficiary rights in any current or former employee, including the Continuing Employees (including any beneficiaries or dependents thereof), under or with respect to any plan, program or arrangement described in or contemplated by this Agreement and shall not confer upon any such current or former employee, including each Continuing Employee, the right to continued employment for any period of time following Closing.
(k) With respect to any Compensation and Benefits Plans of Mellon or BNY that are and will continue to be maintained or contributed to by outside of the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are U.S. primarily for the sole benefit of Continuing Employees employed outside of the Parties U.S., the principles set forth in Section 5.17(a) through (d) will apply to the extent the application of such principles does not violate applicable local Law and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties modified as and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended extent necessary to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service comply with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesapplicable local Law.
Appears in 2 contracts
Samples: Merger Agreement (Bank of New York Co Inc), Merger Agreement (Mellon Financial Corp)
Employee Matters. (a) Between the date hereof From and after the Effective Time, the Company shall (and the Company its Subsidiaries shall, and Parent shall cause its Subsidiaries to) make available to Parent the employees of the Surviving Company and its Subsidiaries so to, honor all Company Benefit Plans, and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Effective Time, provided that nothing herein shall be construed as prohibiting the amendment or termination of any of the foregoing in accordance with its terms. From the Effective Time until the one year anniversary of the Effective Time, Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfersshall provide, or job eliminations following the Closing.
shall cause to be provided, to each current (b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of immediately prior to the Closing Date by Effective Time) employee of the Company or a Subsidiary thereof its Subsidiaries (eachcollectively, a the “Company EmployeeEmployees”) shall be provided with annual (i) base salary or base wage rate, compensation and employee benefits that arebonus opportunities that, in the aggregate, substantially comparable are at least equal to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a that were provided to the Company Employee whose employment is involuntarily terminated immediately before the Effective Time (provided that Parent shall make no modifications to bonus opportunities with respect to the Company’s fiscal year ended June 30, 2015) and (ii) accrual based-vacation policies that are at least equal to those that were provided to the Company Employee immediately before the Effective Time. From the Effective time until December 31, 2015, Parent shall provide, or shall cause to be provided, to each current Company Employee, all other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance employee health, retirement and welfare benefits (subject to satisfying any applicable release requirements) and commission opportunities that are no less favorable than those in effect for such the compensation and benefits or commissions that were provided to the Company Employee immediately prior before the Effective Time. Notwithstanding any other provision of this Agreement to the Closing Date; providedcontrary, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and Company or its SubsidiariesSubsidiaries to, provide to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, each Company Employee whose employment terminates during the period between the Company (or a Subsidiary thereof) Effective Time and a Company Employeethe one year anniversary of the Effective Time, includingseverance benefits that are no less favorable than the severance benefits provided for under the Company’s severance arrangements in effect immediately prior to the Effective Time, but not limited to, those Company Benefit Plans as set forth on Schedule 6.9(cSection 5.5(a) of the Company Disclosure Letter.
(b) For all purposes (including purposes of vesting, it being understood eligibility to participate, severance, paid time off and level of benefits) under the employee benefit plans of Parent and its Affiliates providing benefits to any Company Employee after the Effective Time (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors, provided that the foregoing shall not be construed apply to limit any amendments otherwise permitted by the terms extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be immediately eligible to participate, without any waiting time, in any and all New Plans to the extent coverage under such New Plan replaces coverage under a similar Company Benefit Plan in which such Company Employee participated (such plans, collectively, the “Old Plans”), and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical, vision, disability and/or life benefits to any Company Employee (or his or her covered dependents) (collectively, the “Parent Welfare Plans”), Parent shall cause all pre-existing condition exclusions and limitations and actively-at-work requirements of such Parent Welfare Plan to be waived for such Company Employee and his or her covered dependents, and, to the extent permissible under Parent Welfare Plans, Parent shall cause any eligible expenses incurred by such Company Employee and his or her covered dependents under the corresponding Old Plan during the portion of the plan year of such Old Plans ending on the date such Company Employee’s participation in the corresponding Parent Welfare Plan begins (such initial plan year of participation, the “Initial Year of Participation”) to be taken into account under such Parent Welfare Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable agreementsto such Company Employee and his or her covered dependents for the Initial Year of Participation as if such amounts had been paid in accordance with such Parent Welfare Plan. Between the Effective Time and January 1, 2016, Parent shall continue to maintain all Old Plans with respect to Company Employees.
(dc) From and after Parent hereby acknowledges that a “change of control,” “change in control” or similar phrase within the meaning of the Company Benefit Plans, will occur at or prior to the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the .
(d) Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes agree that prior to the Closing the Parent shall engage in discussion with Company Employees with respect to any “defined benefit plan” as defined in Section 3(35) adoption of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication retention program for employees of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries. The Company shall reasonably cooperate with Parent with respect to such discussions, as applicable, and grant Parent reasonable access to the same extent and Company Employees for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefitsdiscussions.
(e) The Parties shallIt is expressly acknowledged, understood and agreed that nothing in this Section 5.5 or otherwise contained in this Agreement is intended to or does or shall cause constitute an amendment to or establishment of any employee benefit or other plan or, subject to the Surviving Corporation and its Subsidiariesexpress provisions of Sections 5.5(a)-(d), shall prevent the amendment or termination of any such plan. Nothing herein shall be deemed to take commercially reasonable efforts be a guarantee to any Company Employee of (i) waive any limitation on health coverage of any Company Employees employment or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for without limiting the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) express provisions of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicableSections 5.5(a)-(d), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular specific term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiariesemployment.
Appears in 2 contracts
Samples: Merger Agreement (Lexmark International Inc /Ky/), Merger Agreement (Kofax LTD)
Employee Matters. (a) Between Parent hereby acknowledges that a “change of control,” or “change in control” or “fundamental change” within the date hereof and meaning of the Employee Plans, as applicable, will occur as of the Acceptance Time or Effective Time, as applicable.
(b) As of the Effective Time, the Company Surviving Corporation and its Subsidiaries shall (and the Company Parent shall cause the Surviving Corporation and its Subsidiaries to) make available honor all Employee Plans and compensation arrangements in accordance with their terms as in effect immediately prior to the Acceptance Time, provided that nothing in this sentence shall prohibit the Surviving Corporation from amending or terminating, or from causing the Surviving Corporation to amend or terminate, any such Employee Plans, arrangements or agreements in accordance with their terms or if otherwise required by applicable Law. The Company will take such action as it determines to be necessary or appropriate prior to the Effective Time to cause all participants in the Company’s 401(k) plan to become fully vested in all of their account balances thereunder upon the Effective Time.
(c) For a period of one year following the Effective Time, the Surviving Corporation or its Subsidiary shall (and Parent shall cause the Surviving Corporation or its Subsidiary to) provide (i) at least the same level of base salary or base wages to each Continuing Employee as the base salary or base wages provided to each Continuing Employee immediately prior to the Effective Time, and (ii) benefits and severance payments (other than equity based benefits, change in control benefits and individual employment agreements) to each Continuing Employee that, taken as a whole, are substantially similar in the aggregate to the benefits and severance payments (other than equity based benefits, change in control benefits and individual employment agreements) provided to either similarly situated employees of Parent and its Subsidiaries or similarly situated employees of the Company and its Subsidiaries so immediately prior to the Effective Time.
(d) The Company 2011 Performance Bonus Plan and the Company 2011 401(k) Matching Plan shall be continued on behalf of eligible Continuing Employees for the remainder of the 2011 calendar year based upon Company performance during 2011, with the resulting payments and contributions for 2011 to be made in the first quarter of 2012 similar to the timing of such payments and contributions in prior years.
(e) To the extent that an Employee Plan or employee benefit plan of Parent may interview is made available to any Continuing Employee on or following the Effective Time, the Surviving Corporation shall (and Parent shall cause the Surviving Corporation to) cause to be granted to such employees and evaluate their roles and responsibilities Continuing Employee credit for all service with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations following the Closing.
Subsidiaries (band their predecessors) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing DateEffective Time for purposes of eligibility to participate, vesting and entitlement to benefits where length of service is relevant (including, but not limited to, for purposes of vacation, sick and paid time off accrual and severance pay entitlement); provided, however, that such service need not be credited (i) to the covenants within extent that it would result in duplication of coverage or benefits, (ii) to the extent service during a period is not recognized under any such plan, or (iii) under any new plan or arrangement to the extent that such plan or arrangement does not provide prior service credit to employees generally. In addition, and without limiting the generality of the foregoing, at the Effective Time: (i) each Continuing Employee shall be immediately eligible to participate, without any waiting time, in any and all employee benefit plans sponsored by the Surviving Corporation and its Subsidiaries (other than the Employee Plans) (such plans, collectively, the “New Plans”) to the extent coverage under any such New Plan replaces coverage under a comparable Employee Plan in which such Continuing Employee participates immediately before the Acceptance Time (such plans, collectively, the “Old Plans”); and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical, vision and/or disability benefits to any Continuing Employee, the Surviving Corporation shall cause all waiting periods, pre-existing condition exclusions, evidence of insurability requirements and actively-at-work or similar requirements of such New Plan to be waived for such Continuing Employee and his or her covered dependents to the extent such requirements had been met under the Old Plan which such New Plan replaced, and the Surviving Corporation shall cause any eligible expenses incurred by such Continuing Employee and his or her covered dependents during the portion of the plan year of the Old Plan ending on the date such employee’s participation in the corresponding New Plan begins to be given full credit under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan, and (iii) the Surviving Corporation shall credit the accounts of such Continuing Employees under any New Plan which is a flexible spending plan with any unused balance in the account of such Continuing Employee under the applicable Employee Plan. Any vacation or paid time off accrued but unused by a Continuing Employee as of immediately prior to the Effective Time shall be credited to such Continuing Employee following the Effective Time.
(f) Notwithstanding anything to the contrary set forth in this Agreement, no provision of this Agreement shall be deemed to (i) guarantee employment for any Continuing Employee for any period of time, or preclude the ability of Parent or the Surviving Corporation to terminate the employment of any Continuing Employee for any reason, or (ii) subject to the limitations and requirements specifically set forth in this Section 6.9(b7.2, require Parent or the Surviving Corporation to continue any Employee Plan or prevent the amendment, modification or termination thereof after the Effective Time provided that such action does not violate the terms and conditions of such Employee Plans or applicable Law.
(g) This Section 7.2 shall not apply be binding upon and inure solely to the benefit of each of the parties to this Agreement, and nothing in this Section 7.2, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 7.2. Without limiting the foregoing, no provision of this Section 7.2 will create any third party beneficiary rights in any current or former employee, director or consultant (including any beneficiary or dependent thereof) of the Company or any of its Subsidiaries in respect of continued employment (or resumed employment) or any other matter, provided that nothing in this Agreement shall relieve the Parent or the Surviving Corporation or its Subsidiaries of their obligations to the Continuing Employees (or any former employee) (who, together with their heirs and legal representatives, shall be third party beneficiaries of this Agreement) as the successor to the Company Employees listed or its Subsidiaries under any agreements disclosed on Schedule 6.9(bSection 7.2(g) of the Company Disclosure Letter, which shall consist as disclosed in the Company SEC Reports, or pursuant to the Company Change in Control Plan, the Company Key Employee Change in Control Plan or the Company Key Employee Change in Control Retention Plan adopted by the Company on September 13, 2011 or any other plan, program, policy, agreement or arrangement of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments except as otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing specifically provided in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) or any particular term or condition of employment or service, or (iii) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective SubsidiariesAgreement.
Appears in 2 contracts
Samples: Merger Agreement (Brigham Exploration Co), Merger Agreement (Statoil Asa)
Employee Matters. (a) Between Acquiror shall provide, or cause its Subsidiaries or Company or its Subsidiaries to provide, to employees of the date hereof and Company or any of its Subsidiaries as of the Effective Time who continue employment with Acquiror, its Subsidiaries or any of its Affiliates (“Continuing Employees”) for one year following the Effective Time, base salary at a rate not less than the Company rate of base salary received by the Continuing Employees immediately prior to the Effective Time.
(b) If the transactions contemplated by this Agreement are consummated prior to December 31, 2014, Acquiror shall (and the Company shall provide, or cause its Subsidiaries toor Company or its Subsidiaries to provide, for payment to Continuing Employees (other than executive officers) make available the bonus established by the Company prior to Parent the employees Effective Date pursuant to Section 4.2(b)(ix)(C) for the second half of 2014, which shall be paid on or before December 31, 2014. For 2015, Acquiror shall provide, or cause its Subsidiaries or Company or its Subsidiaries to provide, to the Continuing Employees a bonus opportunity that is substantially comparable in the aggregate to the bonus opportunity provided to similarly-situated Acquiror employees.
(c) From the Effective Time until the end of the calendar year in which the transaction contemplated hereby is consummated, Acquiror shall cause Company or its Subsidiaries to provide to the Continuing Employees benefits (other than base salary, bonus or equity-based compensation) at a level that is substantially comparable in the aggregate to the level of such benefits provided to the Continuing Employees immediately prior to the Effective Time. During the calendar year after the calendar year in which the transaction contemplated hereby is consummated, Acquiror shall provide, or cause its Subsidiaries or Company or its Subsidiaries to provide, to the Continuing Employees such benefits at a level that is substantially comparable in the aggregate to the level of such benefits provided to similarly-situated Acquiror employees.
(d) With respect to any “employee benefit plan,” as defined in Section 3(3) of ERISA, maintained by Acquiror or any of its Subsidiaries in which any Continuing Employee becomes a participant, such Continuing Employee shall receive full credit for service with the Company or any of its Subsidiaries for purposes of eligibility to participate and vesting, to the same extent such service was recognized as of the Effective Time under a comparable plan of the Company and its Subsidiaries so in which the Continuing Employee participated (but not for purposes of benefit accrual under any defined benefit pension plans, special or early retirement programs, window separation programs, or similar plans which may be in effect from time to time); provided that Parent may interview in no event shall such employees service recognition result in any duplication of benefits; and evaluate their roles and responsibilities with the Company and its Subsidiaries, including provided further that with respect to potential promotionsany such plan maintained by Acquiror or any of its subsidiaries that is insured, transfersthe insurance carrier consents to the recognition of such prior service credit, if required. Company shall provide to Acquiror a list of each Continuing Employee and his or job eliminations following her service credit under each Company Employee Benefit Plan as of the ClosingEffective Time, and Acquiror shall be entitled to rely on such information.
(be) The Parties agree that for a period of 12 months following To the Closing Date, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise extent permitted by applicable Law and the terms of any insurance policy, Acquiror shall waive, or cause to be waived, any pre-existing condition limitations, exclusions and waiting periods with respect to participation and coverage requirements under any welfare benefit plan maintained by Acquiror or any of its Subsidiaries in which the applicable agreements.
Continuing Employees (dand their eligible dependents) From will be eligible to participate from and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, except to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or condition limitations, exclusions and waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are would not have been satisfied or waived under such Parent Benefit Plan the comparable plan of the Company and (ii) give each Company Employee credit for the plan year its Subsidiaries in which the Closing Date occurs towards applicable deductibles and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been made, in each case, to the extent permitted by the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateContinuing Employee participated.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to 4.21 shall (i) prevent Parentbe treated as an amendment of, the Surviving Corporation or undertaking to amend, any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reasonbenefit plan, (ii) provide any Person any right to employment or service or continued employment or service with Parent prohibit Acquiror or any of its Subsidiaries (including following the Effective Time, the Surviving Corporation) from amending or terminating any particular term or condition of employment or service, employee benefit plan or (iii) prevent Parentconfer any rights or benefits on any person other than the parties to this Agreement. Notwithstanding the foregoing, nothing in this Agreement shall prohibit Acquiror from terminating or causing the Surviving Corporation Company to terminate (i) any Acquiror employee benefit plan following the Effective Time or (ii) the employment (for any reason or for no reason) of their Affiliates from terminatingany Continuing Employee following the Effective Time without the provision of further salary, revising bonus or amending any Employee Benefit Plan sponsored, maintained or contributed benefits following such termination except to the extent required by the Company, Parent or any of their respective Subsidiariesapplicable Law.
Appears in 2 contracts
Samples: Arrangement Agreement (Whiting Petroleum Corp), Arrangement Agreement (Kodiak Oil & Gas Corp)
Employee Matters. (a) Between The Company shall continue to maintain, effective as of the day immediately preceding the date hereof the Company becomes a member of the same Controlled Group of Corporations (as defined in Section 414(b) of the Code) as Parent, any and all 401(k) plans maintained by the Company or any of its Subsidiaries as of the Effective Time, unless Parent provides written notice to the Company that such 401(k) plan(s) shall be terminated prior to the date that the Company becomes a member of Parent’s control group of corporations (as defined in Section 414(b) of the Code). The Company shall take any and all other actions in furtherance of maintaining any such 401(k) Plans as Parent may reasonably request.
(b) Prior to the Appointment Time, the Company shall (terminate any and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiariesall group severance or group separation plans, including with respect to potential promotions, transfers, programs or job eliminations following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing Date, each employee who is employed as of the Closing Date arrangements maintained by the Company or a Subsidiary thereof any of its Subsidiaries, except for (eachi) the existing compensation agreements listed in Section 6.13(d) of the Company Disclosure Schedule, a “and (ii) any plans, programs or arrangements required by Legal Requirements, effective in each case as of the day immediately preceding the last day of the initial period of the Offer (not including any subsequent offer period provided by Parent pursuant to Rule 14d-11 of the Exchange Act). Prior to the Appointment Time, the Company Employee”) shall provide Parent evidence that such plans have been terminated pursuant to resolutions of the Company Board or the board of directors of its Subsidiaries, as applicable (the form and substance of which resolutions shall be provided with annual base salary subject to review and approval of Parent).
(c) For the twelve (12) month period commencing on the Appointment Time, Parent shall permit and shall cause the Surviving Corporation to permit all Continuing Employees who become employees of Parent or base wage rateany Subsidiary of Parent to participate in the benefit programs of Parent or the Subsidiary. Parent shall, and employee benefits agrees to cause, the Surviving Corporation to maintain compensation levels, including base salary, cash-based incentive opportunities, retirement, health and welfare benefits, but not any stock based benefits, for the Continuing Employees at the same levels that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent or the Subsidiary. Without limiting the foregoing, for U.S. Continuing Employees Only, Parent shall cause any pre-existing conditions or limitations, eligibility waiting periods or required physical examinations under any health or similar plan of Parent to be waived with respect to Continuing Employees and its Subsidiaries. In additiontheir eligible dependents, a Company Employee whose employment is involuntarily terminated other than for cause within to the period of 12 months following the Closing Date (or such longer change in control coverage period as required extent waived under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those corresponding plan in effect for such Company Employee which Continuing Employees participated immediately prior to the Closing Date; providedAppointment Time, however, that the covenants within this Section 6.9(b) shall not apply to the Company and any deductibles paid by Continuing Employees listed on Schedule 6.9(b) under any of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, Company’s or shall cause the Surviving Corporation and its Subsidiaries, to assume and honor their respective obligations under all employment, severance, change ’ health plans in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that the foregoing shall not be construed to limit any amendments otherwise permitted by the terms of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (other than (i) for any purposes with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or (ii) with respect to the Excluded Employees, any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the Company and its Subsidiaries, as applicable, to the same extent and for the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Employee credit for the plan year in which the Closing Date Appointment Time occurs shall be credited towards deductibles under the health plans of Parent or any Subsidiary of Parent. Parent shall, and shall cause the Surviving Corporation to, use commercially reasonable efforts to make appropriate arrangements with its insurance carrier(s) to ensure such result. Except with respect to Continuing Employees who have entered into employment agreements with the Company or its Subsidiaries and as required by applicable deductibles Legal Requirements, Continuing Employees shall be considered to be employed by Parent “at will” and annual out-of-pocket limits nothing shall be construed to limit the ability of Parent or the Surviving Corporation to terminate the employment of any such Continuing Employee at any time. In the U.S., Continuing Employees who become employees of Parent shall be given credit for medical expenses incurred prior all service with the Company or its U.S. Subsidiaries solely for purposes of determining their rate of vacation accrual under Parent’s standard procedure, and for eligibility to participate in, and vesting of benefits under, Parent’s 401(k) plan. Outside the U.S., Continuing Employees who become employees of a Subsidiary of Parent shall be given credit for service with the Company or its Subsidiaries solely as required by applicable Legal Requirements.
(d) Except as otherwise expressly provided in this Agreement, Parent shall, and shall cause the Surviving Corporation to, continue to be obligated to perform, in accordance with their terms, all contractual rights of current and former employees of the Company existing as of the date of this Agreement and disclosed in Section 6.13(d) of the Company Disclosure Schedule, as well as any retention and severance agreements entered into pursuant to Section 6.13(h), that are “change in control” agreements of the Company (collectively, the “Change in Control Agreements”).
(e) For purposes of the Change in Control Agreements disclosed in Section 6.13(d) of the Company Disclosure Schedule, Parent acknowledges that the Offer will constitute a “change in control” and a “change of control” of the Company. Without limiting the foregoing, Parent acknowledges and agrees that the executive officers and directors and, as applicable, employees of the Company shall be entitled to the Closing Date for which payment has been madeapplicable payments and benefits as set forth in such Change in Control Agreements, in each case, to accordance with the extent permitted by terms thereof as disclosed in Section 6.13(d) of the applicable insurance plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing DateDisclosure Schedule.
(f) Prior The Company acknowledges and agrees to cause the accrual of all severance payments under all of the Change in Control Agreements to occur prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Appointment Time. The Company shall cause appropriately reflect such accruals in the consolidated financial statements of the Company and its Subsidiaries in accordance with GAAP and will pay such amounts immediately prior to take all necessary the Appointment Time and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under as disclosed in Section 401(a6.13(d) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d))Disclosure Schedule.
(g) Nothing in this Agreement shall constitute an establishment or termination ofParent acknowledges and agrees that all bonus payments due to executives of the Company and its Subsidiaries for the fiscal year ended June 30, or an amendment to2008, or will be construed payable pursuant to the terms of the cash bonus plan (as establishingamended, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any “Cash Bonus Plan”) and the bonus amounts disclosed on Section 6.13(g) of their respective Subsidiariesthe Company Disclosure Schedule. The provisions Company acknowledges and agrees that the consolidated financial statements of this Section 6.9 are the Company and its Subsidiaries will reflect appropriate accruals for the sole benefit Cash Bonus Plan and any other employee incentive plans providing employees of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following with any bonus or awards determined based on the Effective TimeCompany’s performance during the fiscal year ended June 30, 2008, all of which such amounts are reflected in Section 6.13(g) of the Company Disclosure Schedule. Notwithstanding the foregoing, the Surviving Corporation) Company acknowledges and agrees that the Company shall not enter into, implement, adopt, amend, modify or approve any cash bonus plan for the fiscal year ended June 30, 2009 or any particular term or condition other employee incentive plans providing employees of employment or service, or (iii) prevent Parent, the Surviving Corporation Company or any of their Affiliates from terminating, revising its Subsidiaries with any bonus or amending any Employee Benefit Plan sponsored, maintained or contributed to by awards determined based on the Company’s performance during the fiscal year ended June 30, 2009, without the written approval of Parent’s designee.
(h) Notwithstanding the provisions of Section 5.2(g), Parent or any acknowledges that the Company may enter into retention and severance agreements by and between the Company and certain employees after the date of their respective Subsidiariesthe this Agreement and pursuant to the terms set forth in Section 6.13(h) of the Company Disclosure Schedule.
Appears in 2 contracts
Samples: Merger Agreement (Moldflow Corp), Merger Agreement (Autodesk Inc)
Employee Matters. (a) Between For the date hereof and the Effective Time, the Company shall (and the Company shall cause its Subsidiaries to) make available to Parent the employees of the Company and its Subsidiaries so that Parent may interview such employees and evaluate their roles and responsibilities with the Company and its Subsidiaries, including with respect to potential promotions, transfers, or job eliminations period immediately following the Closing.
(b) The Parties agree that for a period of 12 months following the Closing DateAcceptance Time through December 31, each employee who is employed as of the Closing Date by the Company or a Subsidiary thereof (each2013, a “Company Employee”) shall be provided with annual base salary or base wage rate, and employee benefits that are, in the aggregate, substantially comparable to those in effect for similarly situated employees of Parent and its Subsidiaries. In addition, a Company Employee whose employment is involuntarily terminated other than for cause within the period of 12 months following the Closing Date (or such longer change in control coverage period as required under the applicable Company Benefit Plan) shall be provided with severance benefits (subject to satisfying any applicable release requirements) that are no less favorable than those in effect for such Company Employee immediately prior to the Closing Date; provided, however, that the covenants within this Section 6.9(b) shall not apply to the Company Employees listed on Schedule 6.9(b) of the Company Disclosure Letter, which shall consist of the individuals that are a party to those certain Retention and Sale Payment retention agreements executed with the Company prior to the Closing Date (the “Excluded Employees”) which Excluded Employees will, on and after the Closing Date, only be entitled to receive the severance benefits set forth in and subject to the terms and conditions of the Retention and Sale Payment retention agreements provided to Parent.
(c) Parent shall, or shall cause the Surviving Corporation Entity to, (i) provide to each individual actively employed by the Company or one of its Subsidiaries as of the Acceptance Time who continues as an employee of the Surviving Entity (excluding any employee covered under the terms of a collective bargaining agreement) (collectively, the “Covered Employees ”) with at least the same level of base salary or base wages and its Subsidiarieson substantially the same terms and conditions as provided to such Covered Employee immediately prior to the Acceptance Time and (ii) except as set forth in Section 6.08(a) of Company Disclosure Schedule, provide each Covered Employee with employee benefits and annual bonus opportunities that in the aggregate are substantially similar to assume and honor their respective obligations under all employment, the employee benefits (excluding any equity-based plans or change in control severance, change in control, retention and or other agreements, if any, between benefits with respect to a transaction occurring after the Company Closing Date (or a Subsidiary thereof) and a Company Employee, including, but not limited to, those Company Benefit Plans set forth on Schedule 6.9(c) of the Company Disclosure Letter, it being understood that nothing in this Section 6.08(a) is intended to address or affect whether any such change in control severance, retention or other benefits may be payable pursuant to any existing commitment or obligation that continues in effect after the foregoing Closing)) and annual target bonus opportunities provided to such Covered Employee under the Company Benefit Plans as in effect immediately prior to the Acceptance Time. Notwithstanding the foregoing, nothing contained in this Section 6.08(a) shall (i) prevent the amendment or termination of any Company Benefit Plan in accordance with its terms, or interfere with the right or obligation of Parent or the Surviving Entity to make such changes as are necessary to conform with applicable Law or (ii) limit the right of Parent or the Surviving Entity to terminate the employment of any employee at any time.
(b) For purposes of determining eligibility to participate, and to the extent that a Covered Employee becomes eligible to participate or commences to participate in an employee benefit plan maintained by Parent or the Surviving Entity, Parent shall cause such employee benefit plan to (i) recognize the service of such Covered Employee with the Company or its Subsidiaries for purposes of eligibility, vesting, level of benefits and benefit accrual (other than benefit accrual under a defined benefit pension plan) under such employee benefit plan to the same extent such service was recognized immediately prior to the Acceptance Time under a comparable Company Benefit Plan in which such Covered Employee was a participant immediately prior to the Acceptance Time or, if there is no such comparable benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Acceptance Time, provided that (A) recognition of such service shall not be construed required to limit any amendments otherwise permitted by the terms extent that the service of the applicable agreements.
(d) From and after the Effective Time, as applicable, the Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to credit the Company Employees for purposes of vesting, eligibility, severance and benefit accrual under the Parent Benefit Plans and the Company Benefit Plans, as applicable, (employees other than Covered Employees is not so recognized under such employee benefit plans and (iB) for such recognition of service shall not operate to duplicate any purposes benefits payable to the Covered Employee with respect to any “defined benefit plan” as defined in Section 3(35) of ERISA, retiree medical benefits or disability benefits or to the extent it would result in a duplication of benefits or compensation for the same period of service, or and (ii) with respect to the Excluded Employeesany health, dental or vision plan of Parent or any severance benefits or rights) in which the Company Employees participate, for such Company Employees’ service with the of its Subsidiaries (other than Company and its Subsidiaries) in which any Covered Employee commences to participate, as applicablein the plan year that includes the year in which such Covered Employee commences to participate, (x) cause any pre-existing condition limitations under such Parent or Subsidiary plan to be waived with respect to such Covered Employee to the same extent and for such limitation would have been waived or satisfied under the same purposes that such service was taken into account under a corresponding Company Benefit Plan in effect which such Covered Employee participated immediately prior to the Closing Date, to the extent that such credit does not result in duplicate benefits.
(e) The Parties shall, or shall cause the Surviving Corporation and its Subsidiaries, to take commercially reasonable efforts to (i) waive any limitation on health coverage commencement of any Company Employees or any of their covered, eligible dependents due to pre-existing conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable Parent Benefit Plan to the extent such Company Employee or covered, eligible dependents are covered under an analogous Company Benefit Plan, as applicable, immediately prior to the Closing Dateparticipation, and (y) recognize any medical or other health expenses incurred by such conditions, periods or requirements are satisfied or waived under such Parent Benefit Plan and (ii) give each Company Covered Employee credit for in the plan year that includes the year in which the Closing Date occurs towards such Covered Employee commences to participate for purposes of any applicable deductibles deductible and annual out-of-pocket limits for medical expenses incurred prior to the Closing Date for which payment has been madeexpense requirements under any such health, in each case, to the extent permitted by the applicable insurance dental or vision plan provider and only to the extent such deductibles or limits for medical expenses were satisfied or did not apply under the analogous Company Benefit Plan in effect immediately prior to the Closing Date.
(f) Prior to the Closing Date, (i) if requested by Parent in writing at least three (3) days before the Closing, the Company shall cause the Company and its Subsidiaries to take all necessary and appropriate actions to cause (A) each Company Benefit Plan intended to be qualified under Section 401(a) of the Code (the “Company 401(k) Plan”) to be terminated and (B) all participants to cease participating under the Company 401(k) Plan, in each case, effective no later than the Business Day preceding the Closing Date; provided, however, that such actions may be contingent upon Closing and (ii) no sooner than the date thirty (30) days prior to the Closing Date (or such earlier date approved by the Bankruptcy Court, if applicable), the Company shall take and shall cause its Subsidiaries to take all necessary and appropriate actions to terminate the Executive Nonqualified Excess Plan (the “Excess Plan”) and distribute to each participant in the Excess Plan, such participant’s account balance under the Excess Plan in accordance with Section 409A of the Code (including Treasury Regulation Section 1.409A-3(j)(4)(ix)(A) or (B), as applicable). The Company shall provide Parent with an advance copy of all documentation necessary to effect this Section 6.9(f) and a reasonable opportunity to comment thereon prior to the adoption or execution thereof. In the event the Company 401(k) Plan is terminated as set forth in the preceding sentence, as soon as administratively practicable following the Effective Time, Parent shall use commercially reasonable efforts to take any and all action as may be reasonably required, including amendments to a defined contribution retirement plan intended to be qualified under Section 401(a) of the Code designated by Parent (the “Parent 401(k) Plan”) to (A) cause the Parent 401(k) Plan to accept any “eligible rollover distributions” (within the meaning of Section 402(c)(4) of the Code) in the form of cash in an amount equal to the full account balance distributed or distributable to such Company Employee from the Company 401(k) Plan to the Parent 401(k) Plan, including any outstanding loans and (B) cause each Company Employee to become a participant in the Parent 401(k) Plan as of the Closing Date (subject to any applicable eligibility requirements, but giving effect to the service crediting provisions of Section 6.9(d)).
(g) Nothing in this Agreement shall constitute an establishment or termination of, or an amendment to, or be construed as establishing, terminating or amending, any Employee Benefit Plan sponsored, maintained or contributed to by the Company, Parent or any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other than the Parties and their respective permitted successors and assigns, any third party beneficiary, legal or equitable or other rights or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision of this Section 6.9. Nothing in this Section 6.9 is intended to (i) prevent Parent, the Surviving Corporation or any of their Affiliates from terminating the employment or service of any Person, including a Company Employee, at any time and for any reason, (ii) provide any Person any right to employment or service or continued employment or service with Parent or any of its Subsidiaries (including following the Effective Surviving Entity).
(c) From and after the Acceptance Time, Parent shall, or shall cause the Surviving CorporationEntity to, honor, in accordance with the terms thereof as in effect as of the date hereof each employment agreement and change in control agreement listed on Section 6.08(c) or any particular term or condition of employment or servicethe Company Disclosure Schedule (the “ Executive Agreements”), the 2012 DTG Retention Plan and the Adjusted Options. Following the Acceptance Time, Parent shall, or shall cause the Surviving Entity to, pay and provide to any Covered Employee not covered by an Executive Agreement whose employment is terminated without cause or due to a reduction in force (iiiincluding due to the closing or reduction in operations at the Tulsa Facilities, as defined below) prevent Parentduring the period from the Acceptance Time through December 31, 2013, severance payments and benefits in an amount equal to the severance payments and benefits that would be provided under the Company’s general severance guidelines as customarily interpreted and applied by the Company prior to the Acceptance Time and outlined on Section 6.08(c) of the Company Disclosure Schedule.
(d) Prior to the scheduled expiration of the Offer, the Surviving Corporation Company (acting through the Board of Directors of the Company and the Human Resources and Compensation Committee of such Board) shall take all such steps as may be required to cause to be exempt under Rule 14d-10(d) promulgated under the Exchange Act any Arrangements that have been, or after the date of this Agreement will be, entered into by the Company or any of their Affiliates from terminating, revising or amending any Employee Benefit Plan sponsored, maintained or contributed to by the Company’s Subsidiaries with any Company Securityholders and to ensure that any such Arrangements fall within the safe harbor provisions of such rule.
(e) This Section 6.08 shall be binding upon and inure solely to the benefit of the parties to this Agreement, Parent and nothing in this Article VI, express or implied, is intended to confer upon any other person any rights or remedies of their respective Subsidiariesany nature whatsoever under or by reason of this Section 6.08.
Appears in 2 contracts
Samples: Merger Agreement, Merger Agreement
