Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows: (i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws. (ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law. (iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws. (iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date. (v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter. (vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date. (b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted). (c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date. (d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service). (e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan. (f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. (g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent. (h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter. (i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto. (j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein. (k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Marvell Technology Group LTD), Purchase and Sale Agreement (Avago Technologies LTD)
Employee Relations and Benefits. (a) The Parties intend that there Immediately prior to the Closing, the Company shall pay to Management in immediately available U.S. federal funds the Management Incentive Payment. Seller shall be continuity of employment responsible for all Tax, withholding, reporting, accounting and other obligations associated with respect to all Business Employees the Management Incentive Payment and except as follows:provided in Section 3.5, the Buying Parties shall have no responsibility therefor.
(i) Automatic Transferred Employees shall not be terminated upon Closing As soon as practicable after the Closing, Seller and the rights, powers, duties, liabilities and obligations of Seller (or Company shall take appropriate corporate action to distribute the relevant Subsidiary of Seller) to the employees in respect balances of the material terms incentive compensation accounts of employment with all participants in the employees Executive Incentive Plan in force immediately before Closing shall be transferred to Purchaser the form of a lump sum in accordance with local employment Lawsthe terms of the Executive Incentive Plan. Upon completion of such distribution, the Buying Parties shall be under no obligation to continue to maintain the Executive Incentive Plan.
(ii) For non-Automatic Transferred EmployeesBuying Parties acknowledge and agree that the Company shall pay to the employees all accrued benefits under the Annual SCT Bonus Plan including any appropriate accruals related to the period beginning on January 1, Purchaser shall offer employment to each Business Employee effective 2008 and ending on the Closing Date, each such offer to be at in accordance with the same general location and substantially terms of the same terms and conditions of employmentAnnual SCT Bonus Plan, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the extent that such accrued benefits and 2008 accruals are reserved against on the Preliminary Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofBalance Sheet; provided, however, that Seller Parent in no event shall the Company pay to the employees pursuant to the Annual SCT Bonus Plan any amounts that are less than the amount of such benefits that have been reserved against on the Preliminary Closing Balance Sheet. After the Closing Date, employees may become eligible to participate in Buyer bonus and its Subsidiaries shall be permitted to take any action they are legally required to take incentive plans in order to comply with local employment LawsBuyer’s discretion.
(iviii) Those employees who are transferred Buying Parties acknowledge and agree that the accruals for the Company’s existing 401(k) profit sharing plans (as described in Section 4.15(a) of the Disclosure Letter) related to Purchaser and/or the period beginning on January 1, 2008 and ending on the Closing Date shall be credited and funded to eligible Employees’ profit sharing accounts as soon as practicable following the Closing Date. All amounts described in this Section 7.5(b) shall be paid or credited, as applicable, no later than the last day of the calendar month following the calendar month in which the Closing Date occurs.
(c) The Buying Parties or one of its Affiliates shall recognize all service of the employees with the Company and the SCT Subsidiaries prior to the Closing Date as service with the Buying Parties and its Affiliates in connection with any tax-qualified pension plan, 401(k) savings plan, welfare benefit plans and employment policies (including vacations and holiday policies) maintained by the Buying Parties or one of their Affiliates that are made available following the Closing Date by the Buying Parties or one of their Affiliates for purposes of any waiting period, vesting, eligibility and benefit entitlement (but excluding pension plan accruals); provided, however, that with respect to any defined benefit pension plan maintained by the Buying Parties or one of their Affiliates in which such employee participates following the Closing Date, such service credit shall be measured from the earliest date that such employee commenced participation in a tax-qualified pension or savings plan maintained by the Company and the SCT Subsidiaries.
(d) The Buying Parties shall (i) waive, or use commercially reasonable efforts to cause their insurance carriers to waive, all limitations as to pre-existing and at-work conditions, if any, with respect to participation and coverage requirements applicable to the employees of the Company and the SCT Subsidiaries under any welfare benefit plan (as defined in Section 3(l) of ERISA) that is made available to such employees following the Closing Date by the Buying Parties or one of their Affiliates, and (ii) provide credit to such employees for any co-payments, deductibles and out-of-pocket expenses paid by such employees under the employee benefit plans, programs and arrangements of the Company and the SCT Subsidiaries during the portion of the relevant plan year including the Closing Date. The Buying Parties shall assume responsibility for all liabilities arising under the Benefit Plans in accordance with clause (i) above and those who accept Section 4980B of the offer Code regardless of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be whether such liability accrued before or after the Closing Date.
(ve) Except as set forth in Section 6.6(a)(v) Nothing herein, expressed or implied, shall confer upon any employee or former employee of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date Company or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything SCT Subsidiaries, or the Buying Parties or any of their respective Affiliates, any right to the contrary in employment or continued employment for any specified period, under or by reason of this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller The Buying Parties shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Restraining Notification Act of 1988, as amended (amended, and be solely responsible for furnishing any required notice of any “WARN Actplant closing” or “mass layoff”) , as applicable, which arise as a result of any facility closings, reductions in work force or any comparable provision of state termination or local law other action, that are binding upon Seller under any such law the Company and the SCT Subsidiaries may cause or initiate on or after the Closing Date and shall jointly and severally indemnify Purchaser Seller and its Affiliates for any Liabilities and Losses liability related thereto, including reasonable attorneys’ fees related thereto.
(jg) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to If the terms of any liability under COBRA or similar applicable Laws Benefit Plan named in the United States arising from the actions (or inactionsSection 4.15(b) of Purchaser the Disclosure Letter, provide any eligible current or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result former employee of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention Company or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with PurchaserSCT Subsidiaries, as a result of the transactions contemplated by this AgreementTransactions, with (i) an increased or modified benefit or payment; (ii) an increased amount of compensation due to any such employee, consultant, officer or director; or (iii) accelerated vesting, payment or funding of any compensation, stock-based benefit, incentive or other benefit, then Buyer shall provide such benefit or compensation as soon as reasonably practicable following the Closing Date. Seller Parent’s This Section 7.5(g) includes the full and Seller’s liability with regard to Designated Employees is subject to the rules immediate vesting and payment of the retention balances in the incentive compensation accounts of each individual who is a participant in the Standard Car Truck Company and severance plans of Seller as in force prior to or Affiliates Executive Incentive Compensation Plan on the Closing Date, which payment shall be in the form of a lump sum and shall be made as soon as practicable following the Closing Date.
Appears in 2 contracts
Samples: Stock Purchase Agreement, Stock Purchase Agreement (Westinghouse Air Brake Technologies Corp)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be mean the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits accounts described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to fully vest the Transferred Employees in their account balances under the Seller 401(k) plan or Seller Retirement Plan and allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan and the Seller Retirement Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan and the Seller Retirement Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, is entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, elects not to transfer such accrued but unused vacation time from Angel Seller Parent or Seller Parentin connection with such Transferred Employee’s termination of employment with Angel; provided that such vacation time is included in the accrual for FTO which should be recorded on a balance sheet of the Business as of the Closing Date calculated in accordance with past accounting practices.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Avago Technologies LTD), Purchase and Sale Agreement (PMC Sierra Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall use its Commercially Reasonable Efforts to offer employment to each Business Employee other than an Identified Business Employee (the “Offer Employees”) as soon as reasonably practicable and in any event within one hundred and twenty (120) calendar days following the Closing Date. Prior to the Closing, Purchaser will offer employment to Identified Business Employees to be effective on as of the Closing Date. With respect to each Offer Employee, Purchaser shall provide, for at least twelve (12) months after the Closing Date, each (i) employment at a location that is no more than 30 (thirty) miles from the principal work location at which such offer Offer Employee was employed immediately prior to be at the same general location and substantially the same terms and conditions of employmentClosing, including (Aii) the same or superior base salary salaries or base wage rate, (B) substantially wages that are no less favorable than the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those base salaries or base wages provided to such employees the Offer Employees by Seller or the Company and its Subsidiaries as of immediately prior to the Closing Date Date, (iii) bonus and other incentive compensation opportunities (excluding retention or transaction bonuses) that are no less favorable in the aggregate to those in effect for such Offer Employee immediately prior to the Closing (unless otherwise required by local Law, in which case such offer shall comply with local lawLaw) and (the “Current Employment Terms”). Notwithstanding anything iv) severance entitlements that are no less favorable to the contrary, all offers pursuant severance entitlements provided by Purchaser to this Section 6.6(a)(ii) to its employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and immediately prior to the Closing Date Date. The Parties agree that the foregoing does not require Purchaser to provide equity-settled or equity-linked compensation to any Transferred Employee (other than such that Purchaser may meet the obligations set forth in this Section 6.08(a) in the absence of any equity-based or equity-linked compensation, so long as the comparability standard is otherwise met). Offer Employees and Identified Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those Employee who accept the offer of employment from Purchaser and/or or one of its Subsidiaries in accordance with clause (ii) above and, in each case, and who commence employment with Purchaser and/or or one of its Subsidiaries on the Employment Commencement Date (or, for those on vacation or other approved leave of absence with a legal right to return to employment, immediately upon their return to active work) shall be referred to herein as “Transferred Employees.” For purposes hereof, Nothing herein shall limit Purchaser’s ability to terminate the date on which employment of any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than after the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate Closing. If any Offer Employee requires a work visa or permit or an employment pass or other approval for his or her employment to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date continue with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) Affiliates as of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on or after the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser or shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect Affiliates to, use Commercially Reasonable Efforts to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately secure prior to the Closing Date the necessary visa, permit, pass or other approval in a timely manner consistent with the terms of this Section 6.08, if and only if the Company provides in advance of Closing and in a timely manner (the “Vacation Policy”)and no less than fifteen (15) calendar days before Closing) all information as is necessary to secure such necessary visa, to the extent permitted by lawpermit, Purchaser shall assume the liability for such accrued but unused vacation time pass or other approval in a timely manner, and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates solely responsible for any reason subsequent to the Closing Date and expenses related thereto. Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to ensure that the terms of any Transferred Employee who is, or was, entitled offer of employment to an accrued but unused vacation time payout on termination from Angel Identified Business Employee or Seller under local Law and who elects, Offer Employee state that such terms supersede any prior oral or elected, not to transfer such accrued but unused vacation time from Angel written agreements or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for with the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller Company and its Subsidiaries and Affiliates regarding the terms and conditions of employment or service with respect to any liability under COBRA such Identified Business Employee or similar applicable Laws Offer Employee as in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or effect prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Employment Commencement Date.
Appears in 2 contracts
Samples: Asset Purchase Agreement (TTEC Holdings, Inc.), Asset Purchase Agreement (Alj Regional Holdings Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity Effective as of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon the Closing and for a period of twelve (12) months thereafter, the rights, powers, duties, liabilities and obligations of Seller (or Buyer shall cause the relevant Subsidiary of Seller) Acquired Business to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to provide each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms base compensation amount and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same positionincentive compensation program, and (C) cash bonus and other non-equity based incentive compensation opportunities with a benefits package substantially similar in value in the aggregate as those aggregate, to the compensation and benefits provided to such employees by Seller or its Subsidiaries immediately prior to such Business Employee at the Closing Date (unless otherwise required by local Law, in which case such offer time of Closing; provided that nothing herein shall comply with local law) (prevent Buyer from terminating the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities employment of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer with or without cause. For a period of employment from Purchaser and/or one of its Subsidiariestwelve (12) months after Closing, and Seller Parent the Business Employees not terminated for cause shall not, be entitled to participate in Buyer’s severance plan and shall cause receive credit thereunder for service to Seller or its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than Affiliates. For the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting period beginning on the Closing Date and ending on December 31, 2006 or as extended by mutual agreement of the parties to a date one no later than December 31, 2007 (the “Transition Period”), Buyer may elect, and Seller shall agree to provide: (1) year after continuation of benefits for Business Employees under the Benefit Plans set forth in Section 6.7(a) of the Disclosure Schedule (the “Continued Benefit Plans”) to the extent provided to such Business Employees immediately prior to the Closing Date or any longer period as required under local employment Lawsalong with employee benefits administration services; provided, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries however, that nothing in this Section 6.7(a) shall be employed by Purchaser and/or one of construed to amend the Continued Benefit Plans or to otherwise limit Seller’s or its Subsidiaries on terms no less favorable than Subsidiaries’ right to amend or modify its Benefit Plans; and (2) payroll services (not including payments under any employment, consulting, retention, severance, change-of-control, bonus, or similar agreements) for the Current Employment Terms Transition Period. If Buyer elects such services and participate in employee benefit plansbenefits, agreements, programs, policies Buyer agrees to pay or reimburse Seller for costs and arrangements of Purchaser and/or one of its Subsidiaries expenses associated with providing such services and benefits attributable to the Business Employees (and their covered dependents) pursuant to the “Purchaser Plans”) that are substantially similar Transition Services Agreement. If Buyer elects for the Business Employees to continue participation in the aggregate to Continued Benefit Plans during the employee benefit plansTransition Period, programs, policies and arrangements in effect immediately prior to Seller shall not be liable for payment for any claim for welfare or fringe benefits incurred on or after the Closing Date with respect to such Transferred Business Employees. For purposes of this Section 6.7(a), a claim is deemed incurred for medical, dental, and vision benefits, when the services or products generating such expenses are performed or provided to the Business Employee (or his or her covered dependent); for life insurance, accidental death and not inconsistent dismemberment insurance, and travel accident insurance, when the death or dismemberment of the Business Employee (or his or her covered dependent) occurred; for short-term disability and long-term disability, upon the occurrence of the accident, injury, illness, or disabling effect; for pre-tax dependent care benefits or pre-tax health care benefits under Seller’s flexible spending account plan, when the services or products generating such expenses are performed or provided to the Business Employee (or his or her covered dependent, as applicable); and for tuition assistance benefits, when the Business Employee begins an approved course in accordance with Seller’s tuition assistance plan. Seller shall make matching contributions to the accounts of Business Employees participating in the ProQuest 401(k) Plan based on Seller’s earnings through the Closing Date; such matching contributions shall be made by Seller at the same time and in the same manner as applicable for other participants in the plan. If Buyer elects for the Business Employees to continue participation in the ProQuest 401(k) Plan during the Transition Period, then Buyer may elect to make an additional matching contribution to the accounts of Business Employees attributable to the Transition Period. Seller shall be required to perform benefits and payroll administration services only in a manner that is substantially similar to the manner in which such services were performed for the Acquired Business prior to the Closing Date. Notwithstanding any provision to the contrary, and in addition to any other remedies provided under this Agreement and the Transition Services Agreement, Buyer shall indemnify, defend, and hold Seller and its Subsidiaries harmless from any and all claims, liabilities, damages, losses, or expenses (including reasonable attorneys fees) incurred by Seller in connection with, arising from, or relating to the provision of benefits and payroll services pursuant to this Section 6.7(a), including liabilities relating to the Business Employees’ participation in the Continued Benefit Plans following the Closing, other than liability arising out of Seller’s gross negligence or willful misconduct.
(b) Buyer and its Affiliates shall recognize all service (consistent with Buyer’s service recognition policies) of the Business Employees with the Current Employment TermsAcquired Business prior to the Closing Date as service with Buyer and its Affiliates in connection with any designated 401(k) savings plans, welfare benefit plans and shall be offered employment policies (including any other additional terms vacation and conditions holiday policies) maintained by Buyer or its Affiliates that are made available following the Closing Date (or after the end of employment the Transition Period described in Section 6.7(a)) by Purchaser and/or one any of its Subsidiaries required by local employment Lawsthe Buying Parties or their Affiliates for purposes of any waiting period, vesting, eligibility and benefit entitlement (but excluding pension plan accruals); provided, however, that nothing herein shall obligate Purchaser with respect to any defined benefit pension plan maintained by Buyer or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described Affiliates in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on which such Business Employee participates following the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date service credit shall be measured from the responsibility of Purchaser. For purposes of this paragraph, earliest date that such employee commenced participation in a claim is deemed incurred: in the case of medical tax-qualified pension or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted)savings plan maintained by Buyer.
(c) With Following the Closing Date (or after the end of any Transition Period described in Section 6.7(a)), Buyer shall (i) waive, or cause their insurance carriers to waive, all limitations as to pre-existing and at-work conditions, if any, with respect to participation and coverage requirements applicable to Business Employees under any plan that is a “welfare benefit plan” plan (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(13(l) of ERISA) if it were subject that is made available to ERISABusiness Employees following the Closing Date by Buyer or one of its Affiliates, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effectprovide credit to Business Employees for any co-payments, in determining any deductible deductibles and maximum out-of-pocket limitations, to claims incurred and amounts expenses paid by, and amounts reimbursed to, by such employees under the employee benefit plans, programs and arrangements of the Seller or the Acquired Business during the portion of the relevant plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to including the Closing Date.
(d) Transferred Employees Effective as of the Closing, the Buying Parties shall be given credit for retain or assume all service with Seller, any liabilities under the Benefit Plans listed on Section 6.7(d) of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual Disclosure Schedule (other than under any equity or quasithe “Stand-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of serviceAlone Benefit Plans”).
(e) Except as required by applicable Law Nothing herein, expressed or as may be agreed to by implied, shall confer upon any employee or former employee of Seller and Purchaseror any Acquired Entity, as or the Buying Parties or any of their respective Affiliates (including the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover Business Employees), any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, rights or remedies including any associated loans, as part right to employment or continued employment for any specified period of any lump sum distribution to the extent permitted nature or kind whatsoever, under or by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer reason of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Planthis Agreement.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller The Buying Parties shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Restraining Notification Act of 1988, as amended (amended, and be solely responsible for furnishing any required notice of any “WARN Actplant closing” or “mass layoff”) , as applicable, which arise as a result of any facility closings, reductions in work force, terminations or any comparable provision of state other actions, that the Acquired Business or local law that are binding upon Seller under any such law their Affiliates may cause or initiate on or after the Closing Date with respect to the Acquired Business and shall jointly and severally indemnify Purchaser Seller and its Affiliates for any Liabilities and Losses liability related thereto, including reasonable attorneys’ fees related thereto.
(jg) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with In respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser European Employees, Section 6.7 shall have no liabilities associated with any retention or severance plans entered into apply except as otherwise required by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing DateLaw; provided, however, that Designated Employees shall not include Section 6.8 will take precedence over this Section 6.7, and where there is any employee chosen by Sellerinconsistency between this Section 6.7 and Section 6.8, after consultation with Purchaser, as a result Section 6.8 will apply in respect of the transactions contemplated by European Employees.
(h) The Business Employees are expressly made third party beneficiaries to this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject Agreement to the rules of the retention extent provided in this Section 6.7 and severance plans of Seller as in force prior to or on the Closing DateSection 6.8.
Appears in 2 contracts
Samples: Stock and Asset Purchase Agreement (Snap on Inc), Stock and Asset Purchase Agreement (Proquest Co)
Employee Relations and Benefits. (a) The Between thirty (30) and fifteen (15) Business Days prior to the Closing Date, Seller shall provide Buyer with an updated Business Employee List to reflect new hires, terminations or other personnel changes occurring between the date hereof and the Closing Date made in accordance with and subject to Section 6.1(a) and the amount of accrued PTO and accrued bonus and other incentive compensation (including amounts accrued under any Seller Annual Bonus Plan or any Seller sales and commission plans in effect as of the Closing) as of the date thereof.
(b) Where applicable, the Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
who are Automatic Transferred Employees or who accept employment with an Employing Entity and that the transactions contemplated by this Agreement do not constitute a separation, termination or severance of employment of any Continuing Employee (or any Business Employee) prior to or upon the occurrence of the Closing, to the extent permitted by applicable Law and the terms of any applicable benefit plan or other Contract. Within a reasonable period of time (but not less than required under applicable Law) prior to the Closing Date, Buyer shall, or shall cause the appropriate Employing Entity to, make a Compliant Offer to the Business Employees, other than (i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred EmployeesBusiness Employees already then employed by a Purchased Entity, Purchaser shall offer employment to each in compliance with the terms of Section 6.6(d). Each such Business Employee effective on who accepts (and commences) employment with an Employing Entity pursuant to such offer of employment and continues to be employed by such Employing Entity at the Closing Dateand each Purchased Entity Employee, each such offer is referred to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity herein as a “Continuing Employee.” Each Continuing Employee who is based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary is referred to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result “U.S. Continuing Employee,” and each Continuing Employee who is based outside of any requirements the United States is referred to as a “Foreign Continuing Employee.” Each Affiliate of applicable local LawBuyer (including, following the Closing, a Purchased Entity) that employs a Continuing Employee is referred to herein as an “Employing Entity.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any ” Each Business Employee from accepting who receives an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to an Employing Entity that complies with this Section 6.6 (and shall not encourage or assist its Affiliates toa “Compliant Offer”), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates excluding (other than the BusinessA) after the date hereof each Automatic Transferred Employee and prior (B) each Business Employee who would have otherwise been an Automatic Transferred Employee but who objects to the Closing Date (other than Business Employees who have applied for a position with Seller Parent automatic transfer of his or one her employment to an Employing Entity by operation of its Subsidiaries or Affiliates outside the Business prior to the date hereof; providedLaw, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be is referred to herein as an “Transferred EmployeesOffer Recipient Employee.” For purposes hereofWith respect to Foreign Continuing Employees, the date on which any Transferred Employee is deemed to “commence employment” Seller shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as take all actions required under local employment LawsLaw to implement an effective transfer of employment, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees including complying with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letternotice or consultation requirements.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 2 contracts
Samples: Purchase Agreement (Welbilt, Inc.), Purchase Agreement (PENTAIR PLC)
Employee Relations and Benefits. (a) The Parties intend that there Purchaser shall be continuity make offers of employment (including continued employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective employed by a Conveyed Entity on the Closing Date) in accordance with this Section 6.8, at least thirty (30) days prior to the Closing Date, with such employment to commence as of the Closing, to each such offer to be at the same general location and substantially the same Business Employee, except for those Business Employees whose terms and conditions of employmentemployment are covered by the Collective Bargaining Agreements set forth on Exhibit O, including (A) for the same or superior base salary or base wage ratea Comparable Position (as defined herein), (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided at a rate of pay at least equal to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, Business Employee’s pay in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting effect on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms benefits which are no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements those provided to similarly-situated employees of Purchaser and/or one and its Affiliates. For purposes of its Subsidiaries this Section 6.8, references to “pay” shall be limited to base pay. Purchaser shall provide Affected Employees with commission, bonus, incentive pay, overtime, premium pay and shift differentials (the collectively, “Purchaser PlansAdditional Pay”) that which are substantially similar no less favorable than those provided to similarly-situated employees of Purchaser and its Affiliates. A “Comparable Position” is a position with Purchaser or its Affiliates in which (i) the aggregate Business Employee’s level of responsibilities would not be significantly reduced and (ii) the Business Employee is not required to relocate more than 25 miles from the employee benefit plans, programs, policies and arrangements in effect Business Employee’s principal business location immediately prior to such relocation. Purchaser shall have no obligation with regard to former employees who are retired, or who are not or shall have ceased to be Business Employees as of the Closing Date. Purchaser shall be responsible for all salaries and wages (including commissions, bonuses, incentive pay, overtime, premium pay, shift differentials and severance pay) accruing after the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment TermsAffected Employees, and Seller shall be offered responsible for all such salaries and wages accruing on or prior to the Closing Date. Seller shall be responsible for any other additional terms and severance pay or benefits that accrue under any severance pay plan or policy of Seller on or prior to the Closing with respect to each Business Employee, whether or not such Business Employee is also an Affected Employee. Purchaser agrees that the following conditions of employment by Purchaser and/or one shall remain unchanged until the date immediately following the first (1st) anniversary of its Subsidiaries required by local employment Lawsthe Closing Date: (x) the Comparable Position requirement described in this Section 6.8(a) and (y) the pay, Additional Pay and benefits comparability requirements described in this Section 6.8(a); provided, however, that nothing herein shall obligate be deemed to be a covenant on the part of Purchaser not to terminate the employment of any employee. Notwithstanding the foregoing, Purchaser shall not be obligated to make an offer of employment to the individuals set forth on Section 1.1(b) of the Seller Disclosure Letter until Purchaser shall have interviewed such individuals and shall have determined, based on such interviews, whether or one not Purchaser will make such an offer to such individuals; provided, that Purchaser shall undertake such interviews and make such determination within 30 days following the date of this Agreement and shall promptly notify Seller of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plansdeterminations; and provided, further, that to the extent Purchaser shall provide U.S. Transferred Employees determines, in compliance with the retiree medical benefits described in this sentence, not to make an offer of employment to any such individual set forth on Section 6.6(a)(v1.1(b) of the Seller Disclosure Letter.
(vi) Notwithstanding anything to the contrary in , such individual shall not be considered a Business Employee for any purposes of this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Affected Employees shall be given provided credit by Purchaser for all service with SellerSeller and its Affiliates, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, based on the hire dates provided to the same extent as such service was credited for such purpose Purchaser by Seller, under each all employee benefit plans, programs, policies and benefits of Purchaser Plan in which such Transferred Employees are eligible to participate or its Affiliates for purposes of eligibility, vesting and benefits benefit accrual (under such plans, other than benefit accrual under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which extent that such credit would result in the a duplication of benefits accrual for the same period of service)benefits.
(ec) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees Purchaser shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation permit each Affected Employee who participates in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to Xxxx Corporation Employees’ Savings Plan (the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the “Seller 401(k) Plan, if any, ”) to roll elect to make a direct rollover of such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an Affected Employee’s account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees balance under the Seller 401(k) Plan to an account under a defined contribution plan maintained by Purchaser that is qualified under Section 401(a) of the Purchaser’s Code and that includes an arrangement described in Section 401(k) of the Code (the “Purchaser Savings Plan”), including the direct rollover of any outstanding loan balances such that the Affected Employee will continue to make payments under the terms of such loans under the Purchaser Savings Plan, subject to compliance with applicable Law , including, but not limited to, Section 414(l) of the Code. Notwithstanding the foregoing, Purchaser shall only permit rollover of outstanding loan balances for an Affected Employee who rolls over his or her entire account balance under the Seller 401(k) Plan.
(fd) Promptly after the Closing, Seller shall transfer and Purchaser shall accept be responsible for paying the flexible spending account elections and accounts Affected Employees (maintained pursuant to Code Sections 105 and 129) other than Affected Employees who are employees of any Conveyed Entity as of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the ClosingClosing Date) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) due as of the Closing Date to which any Transferred Employee is entitled pursuant to under the applicable vacation policy of Seller or its Affiliates (the “Seller Vacation Policy”). Between the Closing Date and the end of the year in which the Closing Date occurs, Purchaser covenants that Purchaser, or Purchaser’s Affiliates, shall permit all such Affected Employees to take the same number of days of vacation on an unpaid basis as they would have been eligible to take as of the day immediately prior to the Closing Date (under the “Seller Vacation Policy”), to Policy based upon the extent permitted by law, recognized credited service amounts of such Affected Employees with Seller or its Affiliates. Seller shall provide Purchaser shall assume with a report setting forth the liability for such amount of accrued but unused vacation time and allow for each such Transferred Affected Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each as of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or day immediately prior to the Closing Date or arising as a result of the transactions described herein.
within ten (k10) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on Days following the Closing Date.
Appears in 2 contracts
Samples: Purchase and Sale Agreement (Buckeye Partners, L.P.), Purchase and Sale Agreement
Employee Relations and Benefits. (a) The Parties intend that there Prior to the Closing, Purchaser or one of its Designees shall be continuity offer employment to the employees of the Business set forth in Section 6.6(a) of the Disclosure Letter (the “Transferred Employees”) effective on the Closing Date on the terms and conditions of employment with respect to salary, bonus opportunity and position as determined by Purchaser in its sole discretion, subject to Purchaser’s obligation to assume all Business liabilities and obligations to provide severance to Transferred Employees as follows:disclosed in Section 6.6(a) of the Disclosure Letter.
(b) Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance to (i) Automatic any Transferred Employees shall Employee who is not be terminated upon Closing and the rights, powers, duties, liabilities and obligations offered employment by Purchaser or one of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii6.6(a), (ii) any Transferred Employees who are entitled to employees severance due to Purchaser’s noncompliance with any provisions of this Section 6.6, and (iii) except as otherwise provided in jurisdictions outside this Section 6.6, any Transferred Employee whose employment is terminated by Purchaser or its Designee within 12 months following the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Closing Date.
(c) Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Transferred Employee from accepting an offer of employment from Purchaser and/or one of or its Subsidiaries, and Seller Parent shall not, Designees and shall cause its Subsidiaries use commercially reasonable efforts to provide that Transferred Employees will not to (and shall not encourage or assist its Affiliates to), offer be offered employment with any business by businesses of Seller Parent or any of its Subsidiaries or Affiliates Subsidiary (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofDate; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(bd) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses Seller shall retain no responsibility, and Purchaser shall assume sole responsibility, for expenses and benefits with respect to claims incurred by Transferred Employees who accept its offer of employment with Purchaser or their covered dependents on or after the Closing Date shall be the responsibility of PurchaserDate. For purposes of this paragraph, a claim is deemed incurred: , in the case of medical or dental benefits, when the services or supplies or medications that are the subject of the claim are performedperformed or provided, as applicable; in the case of life insurance, when the death occurs; and in the case of short-term and long-term disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain have full responsibility for compliance with those provisions of the Worker’s Worker Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller the Purchaser under any such law Law with respect to the Transferred Employees, and shall indemnify Purchaser Seller for any Liabilities and Losses related thereto. Seller and the Other Sellers shall not terminate any Transferred Employee, other than for cause. Prior to and following the Closing, Seller and the Other Sellers and Purchaser will reasonably and in good faith consult with each other with respect to (i) any termination by Seller or any Other Seller of any employee of Seller and the Other Sellers other than Transferred Employees and (ii) any termination of Transferred Employees by Purchaser, in each case the termination of whom would reasonably be expected to result in state or federal WARN Act liability to Purchaser, in the case of (i), or Seller, in the case of (ii).
(jf) Purchaser shall indemnify and hold harmless not assume any equity compensation awards granted by Seller and its Subsidiaries with respect to Transferred Employees pursuant to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described hereinPlans.
(kg) Purchaser shall have no liabilities associated The provisions of this Section 6.6 are exclusively for the benefit of Seller and Purchaser, in order to help ensure a smooth transition of business operations via continuity of service by Transferred Employees familiar with any retention or severance plans entered into by Seller or its Subsidiaries with regard the Business, and to any Designated Employee. “Designated Employees” are Business clarify Seller’s and Purchaser’s related rights and responsibilities regarding the Transferred Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan accept offers of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation employment with Purchaser, as a result of . Nothing in this Section 6.6 confers or is intended to confer any rights or remedies upon any Person other than the transactions contemplated by parties to this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 2 contracts
Samples: Asset Purchase Agreement (Infospace Inc), Asset Purchase Agreement (Idearc Inc.)
Employee Relations and Benefits. (a) The Parties parties hereto intend that there shall be continuity of employment with respect to all Business Transferred Employees as follows:;
(i) Automatic where the Transferred Employees are employed by a Transferred Subsidiary, the employment of such Transferred Employees shall not be terminated upon the Closing and the rights, powers, duties, liabilities and obligations of Seller to or in respect of such Transferred Employees in respect of any contract of employment with such Transferred Employees in force immediately before the Closing shall be transferred to Purchaser and/or one of its Affiliates in accordance with those local employment laws and together with the transfer of the Transferred Shares, (ii) where local employment laws provide for an automatic transfer of employees upon the transfer of a business as a going concern, the employment of the employees shall not be terminated upon the Closing and the rights, powers, duties, liabilities and obligations of Seller to or the relevant Subsidiary in respect of Seller) to the employees in respect of the material terms any contract of employment with the employees in force immediately before the Closing shall be transferred to Purchaser and/or one of its Affiliates in accordance with those local employment Laws.
laws, and (iiiii) For non-Automatic Transferred Employeeswhere the local employment laws do not provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern (or in any jurisdiction where the local employment laws do provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern but for any reason any employee does not transfer by operation of law), Purchaser and/or one of its Affiliates shall offer employment to each Business the Transferred Employees commencing on the Closing Date or upon the return of any such Transferred Employee effective to active employment.
(b) Starting on the Closing Date and ending on the date 1 year after the Closing Date, each such offer Transferred Employee that is a U.S. Employee shall be eligible to be at participate in employee benefit and severance plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Affiliates (the same general location and substantially the same terms and conditions of employment, including (A"Purchaser Plans") the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar that are not less favorable in the aggregate than the employee benefit plans, programs and arrangements in effect with respect to similarly situated employees of Purchaser. Each Transferred Employee that is not a U.S. Employee shall be employed by Purchaser on terms as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Lawemployment laws or in accordance to local custom in the United Kingdom, the Netherlands, and France. Nothing in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii5.9(b) shall be construed to employees in jurisdictions outside the United States will be on such terms as are necessary entitle any Transferred Employee to avoid giving rise to any severance continue his or similar Liabilities her employment with Purchaser or an Affiliate of Seller and its Subsidiaries as a result of any requirements of applicable local LawPurchaser.
(iiic) Seller Parent (i) shall notuse commercially reasonable efforts to cooperate with Purchaser to effect the transfer of employment of the Transferred Employees to Purchaser and/or one of its Affiliates, and shall cause its Subsidiaries not to (and ii) shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Transferred Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, Affiliates and Seller Parent (iii) shall not, and shall cause its Subsidiaries use commercially reasonable efforts to provide that Transferred Employees (other than Transferred Employees who have applied for a position outside the Business prior to the date hereof) will not to (and shall not encourage be employed or assist its Affiliates to), offer offered employment with any business by businesses of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofDate; provided, however, that Seller Parent and its Subsidiaries Affiliates shall be permitted to take any action they are legally required to take in order to comply with local employment Lawslaws.
(ivd) Those employees who are transferred Subject to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above andSection 5.15, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries the Local Sellers against all liabilities and obligations to provide any severance or similar payments to (Ai) any Automatic Transferred EmployeesU.S. Employee who is not offered employment by Purchaser and/or one of its Affiliates pursuant to Section 5.9(a), (Bii) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws Purchaser's severance policy due to Purchaser’s 's noncompliance with Sections 6.6 or 6.7, Section 5.9(a) and (Ciii) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred U.S. Employee whose employment is terminated by Purchaser or its Subsidiaries Affiliates following the Closing Date; provided, however, Purchaser shall not assume or indemnify Seller or its Local Sellers for any severance due under a Plan.
(be) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing DateClosing. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or health, dental and/or prescription drug benefits, when upon the services that are provision of services, materials or supplies with respect to the subject of the claim are performedclaim; in the case of life insurancelife, when accidental death and dismemberment and business travel accident insurance benefits, upon the death occursor accident giving rise to such benefits; in the case of short-term disability and long-term disability benefits, when upon the date on which an individual has been absent from active employment for the requisite period of time and has been diagnosed with an injury or illness that reasonably qualifies the individual for short-term disability occursor long-term disability benefits under the applicable plan; and in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(ef) Except as required by applicable Law law or as may be agreed to by Seller and Purchaser, or as reflected otherwise in the Actuarial Memorandum, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries Affiliates and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such fully vest the Transferred Employees to rollover any associated loan notes to the extent permitted in their account balances under the Seller Philips Electronics North America Corporation Employee Savings Plan ("Seller's 401(k) planPlan") or any other qualified profit-sharing plan maintained by Seller. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller Seller's 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, distribution as part of any lump sum distribution to the extent permitted by the Seller Seller's 401(k) Plan into an account under a 401(k) plan maintained by Purchaser Purchaser's Employee Savings Plan (the “"Purchaser’s 's 401(k) Plan”"). Notwithstanding With regard to Transferred Employees who are not U.S. Employees, in the foregoingevent of any conflict between the terms of the Actuarial Memorandum and the terms of this Section 5.9, the terms of the Actuarial Memorandum shall prevail.
(g) With respect to any plan that is a "welfare benefit plan" (as defined in Section 3(1) of ERISA) maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) if the Closing Date occurs after February 15, 2003, give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, U.S. Employees with respect to similar plans maintained by Seller and Purchaser may mutually agree following the date hereof, but its Affiliates immediately prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(fh) Promptly after U.S. Employees shall be given credit for all service with Seller or any of its Affiliates, to the Closingsame extent as such service was credited for such purpose by Seller, Seller shall transfer under each Purchaser Plan in which such U.S. Employees are eligible to participate for purposes of eligibility, vesting and Purchaser shall accept the flexible spending account elections and accounts benefit accrual (maintained other than under a defined benefit pension plan in which no assets are transferred pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementthis Agreement).
(gi) With respect to any accrued but unused vacation time (including flexible time time-off and sick paypay accrued under the applicable vacation policy) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy applicable to such Transferred Employee immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by lawDate, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and vacation or pay in cash an amount equal to such accrued but unused vacation time to any the Transferred Employee whose employment terminates for any reason subsequent to immediately following the Closing Date and Purchaser shall indemnify Seller for an amount equal (to such accrued but unused vacation time paid the extent required by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parentapplicable law).
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(ij) Seller shall retain full responsibility for compliance with those provisions of agrees to provide any required notice under the Worker’s Worker Adjustment and Retraining Notification Act of 1988, ("WARN") and any other applicable U.S. Law and to otherwise comply with any such statute with respect to any "plant closing" or "mass layoff" (as amended (“WARN Act”defined in WARN) or any comparable provision similar event affecting U.S. Employees and occurring on or prior to the Closing (other than employment terminations and other events resulting from the affirmative action of state Purchaser or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) its Affiliates). Purchaser shall indemnify and hold harmless Seller and its Subsidiaries the Local Sellers with respect to any liability under COBRA WARN or similar other applicable Laws in the United States law arising from the actions (or inactions) of Purchaser or its Subsidiaries Affiliates after the Closing Date.
(k) (i) Purchaser shall indemnify and hold harmless Seller and the Local Sellers with respect to any liability under COBRA or other applicable U.S. law arising from the actions (or inactions) of Purchaser or its Affiliates after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” Qualifying Event (as defined in Treasury Regulation section 54.4980B-4, Q&A-1), under COBRA) and liabilities under similar applicable Laws COBRA incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) contemplated hereby. Notwithstanding the immediately preceding sentence, to the extent required by Treasury Regulation section 54.4980B-9, Q&A-8(c), Purchaser shall have no liabilities associated perform all obligations under COBRA and the foregoing provisions of the Code and ERISA with any retention or severance plans entered into by Seller or its Subsidiaries with regard respect to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan each employee of Seller prior who is an "M&A qualified beneficiary" with respect to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees , as such term is subject to defined by Treasury Regulation section 54.4980B-9, Q&A-4.
(l) To the rules extent Legally Required, as of the retention and severance plans of Seller as in force prior to or on the Closing Date, the liabilities of the Versorgungswerk der Deutschen Philips Unternehmen (the "Versorgungswerk Plan") in respect of the Transferred Employees who are not U.S. Employees (the "Retirement Plan Liabilities") shall be assumed by Purchaser or an Affiliate of Purchaser. To the extent such Retirement Plan Liabilities are so assumed then, at the option of the Purchaser (i) to the extent permitted by applicable Law, assets from the Versorgungswerk Plan equal to the value of the Retirement Plan Liabilities with respect to services performed through the Closing Date by the Transferred Employees who are not U.S. Employees and are members of the Versorgungswerk Plan (such value to be referred to as "Asset Transfer Value") shall be transferred by Seller within one month after the Closing Date (unless an alternative time is agreed to by Seller and Purchaser) to a trust, insurance arrangement or similar vehicle (whichever is allowed by Law), in form and substance and with such terms and conditions as are acceptable to Purchaser or (ii) Purchaser may become a participating employer, as of the Closing Date, in the Versorgungswerk Plan. The actuarial assumptions to calculate the Asset Transfer Value shall be reasonably determined by Seller and Purchaser prior to the Closing Date pursuant to applicable Laws and applicable actuarial standards. To the extent Seller and Purchaser cannot agree on the actuarial assumptions to calculate the Asset Transfer Value then the parties shall engage a third party actuary to make such a determination prior to the Closing Date. Seller shall take all actions necessary to accomplish the foregoing, including but not limited to taking any appropriate board action.
Appears in 2 contracts
Samples: Purchase Agreement (Scansoft Inc), Purchase Agreement (Scansoft Inc)
Employee Relations and Benefits. (a) The Parties intend that there Except as otherwise set forth in this Section 6.10, Seller Parent and its Affiliates shall be continuity of employment retain sponsorship of, and shall retain and indemnify and hold harmless Buyer and its Affiliates against, all Liabilities under, the Benefit Plans, whether arising before, on or after the Closing, and Buyer and its Affiliates shall not assume sponsorship of, contribute to or maintain, or have any Liability with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and to, the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment LawsBenefit Plans.
(iib) For non-Automatic Transferred EmployeesBuyer shall, Purchaser or shall cause its Affiliates to, offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar Company Employees currently employed in the aggregate as those provided positions set forth in Section 6.10(b) of the Buyer Disclosure Schedule. Such offers of employment to such employees by Seller or its Subsidiaries immediately the Company Employees shall be made no later than twenty (20) days prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not provide for such employment to (be effective as of 12:01 a.m. on the Closing Date. Each Company Employee who receives and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting accepts an offer of employment from Purchaser and/or Buyer or one of its SubsidiariesAffiliates and actually commences employment with Buyer or an Affiliate on or after the Closing Date is referred to herein as a “Continuing Employee.” Seller Parent hereby authorizes Buyer and its Affiliates to enter into discussions with the Company Employees regarding employment with Buyer or its Affiliates as contemplated by this Section 6.10(b). Buyer and its Affiliates shall comply with all applicable Laws relating to the foregoing offers of employment to, and continuation of employment of, the Company Employees on and after the Closing. Buyer shall assume liability for, and fully indemnify and hold harmless Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates with respect to), offer employment with any business of Liability incurred by Seller Parent or any of its Subsidiaries Affiliates pursuant to applicable Laws or otherwise, including without limitation, the WARN Act, in connection with any Company Employee, to the extent such liability arises from actions of Buyer or any of its Affiliates (other than the Business) on or after the date hereof and prior Closing or with respect to the Closing Date actions described in the immediately preceding sentences (other than Business Employees who have applied for including the selection and hiring of Company Employees). Nothing herein shall be construed as a position with representation or guarantee by Seller Parent or one any of its Subsidiaries Affiliates that any particular Company Employee shall accept Buyer’s offer of employment or shall continue in employment with Buyer or its Affiliates outside following the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment LawsClosing.
(ivc) Those employees who are transferred to Purchaser and/or one For a period of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date not less than one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on following the Closing Date, Purchaser Buyer shall, for a period ending on the date one (1) year after the Closing Dateor shall cause its Affiliates to, maintain a severance pay practice for the benefit of provide each Transferred Continuing Employee that is no less favorable than with the severance pay practice provided in benefits set forth on Section 6.6(a)(vi6.10(c) of the Seller Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of PurchaserSchedule. For purposes of this paragraph, a claim is deemed incurred: in covenant and the case severance plans of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; Buyer and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed toits Affiliates, such employees during the plan year of the applicable plan sponsored by Continuing Employee shall be credited for service with Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller Parent and its Affiliates immediately prior to as described in Section 6.10(d) and for service with Buyer and its Affiliates following the Closing Date.
(d) Transferred Employees From and after the Closing, Buyer shall be given give each Continuing Employee full credit for all service with Sellerpurposes, including eligibility to participate, level of benefits, vesting and benefit accrual, under any employee benefit plans, programs and arrangements (including severance and vacation/paid time off policies (and any accruals thereunder)) provided, sponsored, maintained or contributed to by Buyer or any of its SubsidiariesAffiliates (“Buyer Plans”) for such Continuing Employee’s service with Seller Parent or its Affiliates prior to the Closing, and with any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiariesemployer, to the same extent as recognized by Seller Parent or such service was credited for such purpose by SellerAffiliates, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment except to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which extent such credit would result in the duplication of benefits accrual for the same period of service). Notwithstanding the foregoing, to the extent permitted under applicable Law, Buyer shall not be required to provide credit for such service for benefit accrual purposes under any Buyer Plan that is a defined benefit pension plan.
(e) Except Buyer shall (i) waive or cause to be waived for each Continuing Employee and his or her dependents, any waiting period provision, payment requirement to avoid a waiting period, pre-existing condition limitation, actively-at-work requirement, evidence of insurability requirement and any other restriction that would prevent immediate or full participation under the welfare plans of Buyer or any of its Affiliates applicable to such Continuing Employee to the extent such waiting period, pre-existing condition limitation, actively-at-work requirement or other restriction would not have been applicable (or was previously satisfied by) to such Continuing Employee under the terms of the comparable Benefit Plan, and (ii) give or cause to be given full credit under the Buyer Plans applicable to each Continuing Employee and his or her dependents for all out-of-pocket or other co-payments and deductibles under any Benefit Plan satisfied prior to the Closing in the same plan year as required by applicable Law the Closing for purposes of any annual and lifetime maximums, as if there had been a single continuous employer.
(f) Buyer shall, or as may be agreed to by Seller and Purchasershall cause its Affiliates to, have in effect as of the Closing Date flexible spending reimbursement accounts for medical and dependent care expenses under a cafeteria plan qualifying under Section 125 of the Transferred Code (the “Buyer’s Cafeteria Plan”) that provide benefits to Continuing Employees shall cease no less favorable than the benefits provided to accrue further benefits Buyer’s other employees. Buyer agrees to cause the Buyer’s Cafeteria Plan to accept a spin-off of the flexible spending reimbursement accounts of the Continuing Employees from the cafeteria plan qualifying under Section 125 of the employee benefit plans and arrangements Code maintained by Seller and its Subsidiaries and shall commence participation Parent in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow which such Transferred Employees to rollover any associated loan notes employees participated immediately prior to the extent permitted Closing (“Seller Parent’s Cafeteria Plan”) and to honor and continue through the end of the calendar year in which the Closing Date occurs the elections made by each Continuing Employee under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined Parent’s Cafeteria Plan in Section 402(c)(4) respect of the Code) from flexible spending accounts that are in effect immediately prior to the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loansClosing. Buyer shall credit or debit, as part applicable, effective as of any lump sum distribution the Closing Date, the applicable account of each Continuing Employee under Buyer’s Cafeteria Plan with an amount equal to the extent permitted by the Seller 401(k) Plan into an balance of such Continuing Employee’s account under a 401(k) plan maintained by Purchaser (the “PurchaserSeller Parent’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but Cafeteria Plan as of immediately prior to the Closing Date. As soon as practicable following the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred from the Seller Parent’s Cafeteria Plan to Purchaser the Buyer’s Cafeteria Plan the excess, if any, of the aggregate net cash amount (determined immediately accumulated contributions to the flexible spending reimbursement accounts made prior to the Closing during the year in which the Closing Date occurs by Continuing Employees over the aggregate reimbursement payouts made prior to the Closing for such year from such accounts to the Continuing Employees. If the aggregate reimbursement payouts from the flexible spending reimbursement accounts made prior to the Closing during the year in which the Closing Date occurs made to Continuing Employees exceed the aggregate accumulated contributions to such accounts prior to the Closing for such year by the Continuing Employees, Buyer shall cause such excess to be transferred to Seller Parent as soon as practicable following the Closing Date. From and after the Closing) , Buyer shall assume and be solely responsible for contributions all claims by Continuing Employees under the Seller Parent’s Cafeteria Plan whether incurred prior to, on or after the Closing Date, that have not been paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf in full as of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementClosing.
(g) With respect Buyer shall cause each Continuing Employee who is a participant in a Benefit Plan intended to any accrued but unused vacation time qualify under Section 401(a) of the Code that includes a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code (including flexible time off and sick paythe “Seller 401(k) Plans”) to be allowed to participate, effective as of the Closing Date date of his or her commencement of employment with Buyer or one of its Affiliates, in a tax qualified plan which includes a cash or deferred arrangement intended to which any Transferred Employee satisfy the provisions of Section 401(k) of the Code that is entitled pursuant to the vacation policy immediately prior to the Closing Date sponsored and maintained by Buyer or an Affiliate thereof (the “Vacation PolicyBuyer 401(k) Plan”), ) and such Continuing Employee shall be credited with eligibility service and vesting service for all periods of service with Seller Parent or its Affiliates to the extent permitted by law, Purchaser shall assume so credited with such service under the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify applicable Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.401(k)
Appears in 1 contract
Samples: Purchase and Sale Agreement (Consolidated Edison Co of New York Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof, who are listed in Section 6.6(a)(iii) of the Disclosure Letter to the extent permitted by local Law); provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be mean the date that such employees become employed by Purchaser, which for Automatic Transferred Employees is the Closing Date, and for non-Automatic Transferred Employees is the effective date of the offer of employment.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting Starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with retiree medical benefits unless required to do so by local Laws or any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits accounts described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k6.6(j) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett limitation the Hewlett-Packard Company or their its Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to fully vest the Transferred Employees in their account balances under the Seller 401(k) plan or Seller Retirement Plan and allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan and the Seller Retirement Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan and the Seller Retirement Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, is entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, elects not to transfer such accrued but unused vacation time, provided that such vacation time from Angel or Seller Parentis included in the accrual for FTO recorded in the Final Working Capital.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(ji) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(kj) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Samples: Asset Purchase Agreement (Agilent Technologies Inc)
Employee Relations and Benefits. (a) The Parties intend Employees of the Company immediately before the Effective Time shall become employees of the Surviving Corporation at the Effective Time ("Transferred Employees"). Buyer shall ensure that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing Buyer, the Surviving Corporation, or both adopt the Company's defined contribution plan at the Effective Time. Buyer or the Surviving Corporation may adopt the Company's other Benefit Plans, and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) Company shall facilitate such adoption to the extent necessary. Each plan, program, policy, and arrangement covering employees in respect of the material terms Surviving Corporation shall credit each Transferred Employee's length of employment service with the employees in force immediately before Closing shall be transferred Company for purposes of determining eligibility to Purchaser in accordance with local employment Laws.
participate and vesting (ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”but not for benefit accrual). Notwithstanding anything to To the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which extent any Transferred Employee is deemed to “commence employment” has satisfied any deductible or co-payments under a Benefit Plan for the current plan year, such Transferred Employee shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required credited for such payment under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plansplan, programsprogram, policies and arrangements in effect immediately prior to policy, or arrangement of Buyer or the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment TermsSurviving Corporation, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, howeverif any, that nothing herein shall obligate Purchaser most closely resembles the Benefit Plan under which the deductible or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Nonco-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Datepayment was paid.
(b) Seller Buyer shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each ensure that any Transferred Employee with respect who is terminated by the Surviving Corporation other than for cause within one year following the Effective Time shall receive an amount equal to claims incurred by at least two weeks' base salary for such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, Employee at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted)termination.
(c) With respect to any plan Buyer shall ensure that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA)the Surviving Corporation shall recognize vested but unused paid vacation, or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid byearned time off, and amounts reimbursed to, such employees during the plan year sick leave accrued by a Transferred Employee as of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior Effective Time. Prior to the Closing DateEffective Time, the Company shall confirm in writing to Buyer the amount of accrued and unpaid days of vacation, earned time off, and sick leave applicable to such Transferred Employee.
(d) Transferred Employees Buyer, Merger Sub, and the Company do not intend this Agreement to create any rights or interests, except as among Buyer, Merger Sub, and the Company, and no present, former or future employee of Buyer, Merger Sub, or the Company shall be given credit for all service with Sellertreated as a third party beneficiary by, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service)any related document.
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of Buyer shall ensure that the Closing Date the Surviving Corporation provides Transferred Employees shall cease to accrue further benefits with bonuses under the employee benefit plans Company's Service Recognition Program for 2002 that are consistent with the Company's established bonus policies and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Planpractices.
(f) Promptly Except as provided in this Section 5.8, neither Buyer nor the Surviving Corporation shall be restricted or otherwise prevented from amending, revising or terminating any of its Benefit Plans (including the Company's defined contribution plan) or Welfare Plans at any time after the Closing, Seller shall transfer Effective Time in accordance with the terms of such plans and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementapplicable law.
(g) With respect to any accrued but unused vacation time The Company shall terminate the Company's Nonqualified Deferred Compensation Plan (including flexible time off and sick paythe "DCP") as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (Effective Time and shall distribute amounts credited in the “Vacation Policy”), DCP to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws participants in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or DCP prior to the Closing Date or arising as a result of the transactions described hereinEffective Time.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees:
(i) Prior to the Closing, Purchaser and/or one of its Designees shall offer employment to each Business Employee the Transferred Employees effective on the Closing Date, each such offer to be Date initially at the same general location and substantially the same on terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities employment that are substantially similar in the aggregate as (with respect to cash compensation and benefits, but excluding equity incentive compensation) to those provided to such employees by Seller or its Subsidiaries immediately prior Other Sellers as of the date hereof (as modified by any changes thereto made since the date hereof as permitted pursuant to Section 6.1(e)), subject, for the avoidance of doubt, to the Closing Date provisions regarding severance for Transferred Employees as set forth in Section 6.6(a)(v);
(unless otherwise required by local Law, in which case such offer shall comply with local lawii) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Transferred Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (Designees and shall not encourage or assist its Affiliates to), offer employment with respect to any business businesses of Seller Parent or any of its Subsidiaries or Affiliates Subsidiary (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofDate; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local labor and employment Laws.;
(iii) Section 6.6(a)(iii) of the Disclosure Letter sets forth a list of all employees of Seller or any of its Subsidiaries as of the date hereof that are deemed “Transferred Employees,” which schedule sets forth the name, position and salary of such Transferred Employee. From time to time and in no event later than the Closing, Seller shall provide notices of changes to such list to reflect departures of such employees and new hires of employees with responsibilities primarily related to the Business, who shall become Transferred Employees;
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause For no less than six (i6) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be months after the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in on terms no less favorable than those provided to similarly situated employees of the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.Subsidiaries;
(viv) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one six (16) year months after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and provide (or cause its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (Aprovide) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any each Transferred Employee whose employment is terminated by Purchaser or during this six-month period with severance pay and benefits at least comparable to the levels of severance pay and benefits offered to similarly-situated employees under Seller’s severance plan, or, if applicable, its Subsidiaries following Affiliates’ severance plan, as of the Closing Datedate hereof.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses Seller shall retain no responsibility, and Purchaser shall assume sole responsibility, for expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of PurchaserDate. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services or supplies or medications that are the subject of the claim are performedperformed or provided, as applicable; in the case of life insurance, when the death occurs; and in the case of short-term and long-term disability benefits, when the disability occurs; in .
(c) Seller shall remain responsible and retain liability for workers’ compensation claims and all other claims relating to occupational illnesses and injuries that are incurred before the case Closing Date and reported within a reasonably period after the Closing Date. For purposes of workers this Section 6.6(c), a workers’ compensation benefits, claim will be deemed incurred when the event giving rise to the benefits benefit occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(cd) With respect to Seller hereby agrees that any plan that is a “welfare benefit plan” (as defined in Section 3(1) employee of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall the Business who (i) cause there as of the Closing Date is short-term disabled or receiving or entitled to be waived any prereceive short-existing condition term disability benefits and waiting periods and who subsequently becomes eligible to receive long-term disability benefits, or (ii) give effectas 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 long-term disability benefits under the Seller’s long-term disability plan unless and until such individual is no longer disabled.
(e) Purchaser shall be responsible for any WARN Act (and similar state and local Laws) Liabilities or Losses incurred by Seller arising as a result, in determining any deductible and maximum out-of-pocket limitationswhole or in part, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored actions taken by Seller Purchaser on or one of its Subsidiaries during which after the Closing occurs Date. Upon request from Purchaser, Seller shall provide Purchaser with respect such information regarding any layoffs, terminations or other similar workforce reduction matters as Purchaser reasonably requests for the purpose of assessing potential WARN Act (and similar state and local Laws) Liabilities or Losses of Purchaser (it being understood Seller need not provide any information which would not be reasonably expected to be relevant to the WARN Act (and similar plans maintained state and local laws) Liability or Losses of Purchaser). Seller shall otherwise retain full responsibility for any WARN Act (and similar state and local Laws) Liabilities or Losses incurred by Seller and its Affiliates immediately the Business arising prior to the Closing Date.
(df) Purchaser shall not assume any equity compensation awards granted by Seller to Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by any Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”)Nothing contained in this Agreement, to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, express or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
implied: (i) Seller shall retain full responsibility for compliance with those provisions be construed to establish, amend, or modify any benefit plan, program, agreement, or arrangement; (ii) shall limit the ability of the Worker’s Adjustment and Retraining Notification Act Purchaser or any of 1988its Affiliates to amend, as amended modify or terminate any benefit plan, program, agreement or arrangement at any time assumed, established, sponsored or maintained by any of them; (“WARN Act”iii) is intended to confer upon any current or former employee (including any Transferred Employee) or any comparable provision of state other Person any right to employment or local law that are binding upon Seller under any such law and shall indemnify Purchaser continued employment for any Liabilities and Losses related thereto.
period of time by reason of this Agreement, or any right to a particular term or condition of employment; or (jiv) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect is intended to confer upon any liability under COBRA Person who is not a party hereto (including Transferred Employees, employees, retirees, or similar applicable Laws in the United States arising from the actions (dependents or inactionsbeneficiaries of employees or retirees) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising rights as a result third party beneficiary of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and Closing, but rather the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the such employees in respect of the material terms of employment with the employees in force immediately before Closing (other than eligibility to participate in, coverage or benefits under any Seller Plan) shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For nonNon-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee such employee effective on the Closing Date, or as otherwise agreed between Seller and Purchaser, each such offer to be at the employee’s same general location and same base salary as is in effect immediately prior to the Closing and otherwise on substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar employment in the aggregate as those are provided by Purchaser to such similarly situated employees by Seller of Purchaser or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.Subsidiaries..
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be mean the Closing Datedate that such employees become employed by Purchaser.
(v) Except Neither Seller and its Subsidiaries nor Purchaser and its Subsidiaries shall (or encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries. Modification of the terms of employment (or the offer of employment) as set forth described in Section 6.6(a)(i), (ii) and (vi), shall not be regarded as a discouragement of employment. Seller and its Subsidiaries shall not (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof and who are listed in Section 6.6(a)(v) of the Disclosure LetterLetter to the extent permitted by local Law); provided, starting on the Closing Date however, that Seller and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by permitted to take any action they are legally required to take in order to comply with local employment Laws.
(vi) Starting on the Closing Date, Purchaser and/or one of its Subsidiaries on terms no less favorable than shall cause to be provided to each Transferred Employee only the Current Employment Terms and participate in benefits provided to similarly situated employees under the employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar unless otherwise required under local Law, in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date which case such benefits shall comply with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure LetterLaw.
(vivii) Notwithstanding anything Any and all liabilities and obligations, whether arising under contract, Seller’s Plans, local Laws or otherwise, to provide any termination, notice, severance or similar payments to any Business Employees arising out of the contrary in this Agreement, starting termination of their employment with Seller or its Subsidiaries at the Closing or Seller’s or its Subsidiaries’ automatic transfer of their employment at the Closing shall be borne equally by Seller and Purchaser. Purchaser agrees that during the six month period commencing on the Closing Date, Purchaser shallit will not, for a period ending on without the date one (1) year after the Closing Datewritten consent of Seller, maintain a employ any Business Employee who receives such severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice payments. Except as otherwise provided in Section 6.6(a)(vi) of the Disclosure Letter. 6.6 or with respect to any payments under a Seller Plan , Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived recognize all service of Transferred Employees with Seller for purposes of any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, Seller and any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (but not for purposes of benefit accruals other than benefit accruals under any equity vacation and leave plans) or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received as otherwise required by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service)local Law.
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such fully vest the Transferred Employees to rollover any associated loan notes to the extent permitted in their account balances under the Seller 401(k) planplan and Seller Retirement Plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan and the Seller Retirement Plan, if any, to roll such eligible cash rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan and the Seller Retirement Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller Seller’s 401(k) Plan plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any On Closing, Seller shall pay out all accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy (and flexible time off and sick pay policy) immediately prior to the Closing Date (the “Vacation Policy”), ) to the extent permitted by lawLocal Law. Within forty-five (45) days after the Closing Date, Seller will deliver to Purchaser shall assume (i) an accounting of the liability for such accrued but unused vacation time (including flexible time off and allow such sick pay) as of the Closing Date for any Transferred Employee to use such accrued vacation; providedwhose vacation was not otherwise paid out by Seller, however, that Purchaser shall be liable for and pay in (ii) a cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser such bank account as shall indemnify Seller for an amount equal to such accrued but unused vacation time paid be designated in advance in writing by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller ParentPurchaser.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability Liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilitiessuch Liabilities, including all Liabilities with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws ), incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(ki) Purchaser The Parties acknowledge and agree that all provisions contained in this Section 6.6 with respect to employees are included for the sole benefit of the respective Parties and shall have no liabilities associated not create any right (i) in any other Person, including, without limitation, any employees, former employees, any participant in any Seller Plan or any beneficiary thereof or (ii) to continued employment with any retention or severance plans entered into by Seller or its Subsidiaries Purchaser.
(j) Seller shall indemnify Purchaser and each of Purchaser’s Affiliates and defend and hold Purchaser and each of Purchaser’s Affiliates harmless from and against any and all Liabilities and losses (including but not limited to reasonable attorneys’ fees and other costs of defense incurred in any action) arising out of or with regard respect to any Designated EmployeeU.S. Benefit Plan. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees Such indemnification shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is be subject to the rules limitations set forth in Section 9.2 herein.
(k) The Parties recognize that certain of the retention Transferred Employees are in nonimmigrant visa status or have applications for lawful permanent residence pending with the relevant governmental authorities (the “Affected Non-United States National Employees”). The Parties further recognize that new or amended petitions with respect to such Affected Non-United States National Employees may be required in certain of these cases, unless Purchaser (or its Affiliates, as the case may be), are deemed the “successor-in-interest” to Seller (as such term is used in pronouncements by the United States Citizenship and severance plans Immigration Service (“USCIS”)) with respect to such Affected Non-United States National Employees. Accordingly, Purchaser hereby expressly agrees to assume, and Seller hereby assigns, all of the immigration-related Liabilities of the Affected Non-United States National Employees (including, without limitation, any obligations, Liabilities and undertakings arising from or under attestations made in each certified and still effective Labor Condition Application (“LCA”) filed by Seller with respect to any such Affected Non-United States National Employees). The Parties each agree to take such actions as in force prior to or on may reasonably be requested at and following the Closing Dateto document to the USCIS or such other governmental agency, as the case may be, as may be necessary, the “successor-in-interest” relationship with respect to any Affected Non-United States National Employees.
Appears in 1 contract
Samples: Asset Purchase Agreement (Ixia)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:Employment - United States. ---------------------------
(i) Automatic Transferred Subject to Section 6.6(a)(iv), all U.S. Business Employees employed by the U.S. FHS Companies as of the Closing Date will continue to be employed by the U.S. FHS Companies on and immediately after the Effective Benefits Time. Commencing effective as of the Effective Benefits Time, the terms of employment of U.S. Business Employees shall not be terminated upon Closing include compensation and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Selleremployee benefits as provided in Section 6.6(a)(ii) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Lawsextent provided therein.
(ii) For nonPurchaser shall, or shall cause the U.S. FHS Companies to, for the period commencing at the Effective Benefits Time and ending on December 31, 2006, (x) provide employee benefits under plans, programs and arrangements which, in the aggregate, will provide benefits to the U.S. Salaried Transitioned Employees and the U.S. Non-Automatic Transferred EmployeesBargaining Hourly Transitioned Employees which are, taking into account and not in limitation of the obligations of Purchaser shall offer employment under Sections 6.6(b)(v), 6.6(d) and 6.6(e), no less favorable in the aggregate to each those benefits provided to the U.S. Salaried Business Employee effective Employees and the U.S. Non-Bargaining Hourly Business Employees pursuant to the plans, programs and arrangements of ITT and/or the FHS Companies in effect on the Closing DateDate or, each at Purchaser's option such offer to be at benefits that are the same general location as those benefits provided to similarly situated employees of Purchaser and, (y) provide the U.S. Salaried Transitioned Employees and substantially the same terms U.S. Non-Bargaining Hourly Transitioned Employees, with base salaries and working conditions (which constitute principal places of employment, including and hour requirements (Aflex time, etc.) as of the same or superior base salary or base wage rate, (BClosing Date) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior that are at least equivalent to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (base salaries and working conditions of the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than U.S. Salaried Business Employees who have applied for a position with Seller Parent or one and the U.S. Non-Bargaining Hourly Business Employees as of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(viii) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for or shall cause a period ending on U.S. FHS Company to assume and to comply in all respects with the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) terms of the Disclosure Letter. Purchaser shall assume collective bargaining agreements identified on Schedule 4.15 ("U.S. Bargaining Agreements") in accordance with their terms and shall indemnify Seller applicable law, commencing on and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following after the Closing Date.
(biv) Seller Nothing in this Agreement shall require Purchaser or the U.S. FHS Companies to retain responsibility any U.S. Transitioned Employee for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or any period of time after the Closing Date shall be Effective Benefits Time and, subject to requirements of applicable law, Purchaser reserves the responsibility of Purchaser. For purposes of this paragraphright, a claim is deemed incurred: at any time after the Effective Benefits Time, to terminate such employment for any reason at its expense and, except as expressly stated in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitationsAgreement, to claims incurred amend, modify or terminate any term and amounts paid bycondition of employment including, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angelany employee benefit plan, Hewlett Packard program, policy, practice or their Subsidiaries, to arrangement or the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity compensation or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as working conditions of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) PlanU.S. Transitioned Employees.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Samples: Stock and Asset Purchase Agreement (Cooper-Standard Holdings Inc.)
Employee Relations and Benefits. (a) The Parties parties hereto intend that there shall be continuity of employment with respect to all Business Employees as follows:;
(i) Automatic Transferred Employees where local employment laws provide for an automatic transfer of employees upon the transfer of a business as a going concern, the employment of the employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to or in respect of the employees in respect of the material terms any contract of employment with the employees in force immediately before Closing shall be transferred to Purchaser and/or one of its Subsidiaries in accordance with those local employment Laws.
laws, and (ii) For non-Automatic Transferred Employeeswhere the local employment laws do not provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern (or in any jurisdiction where the local employment laws do provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern but for any reason any employee does not transfer by operation of law), Purchaser and/or one of its Subsidiaries shall offer employment to each the Business Employee effective Employees commencing on the Closing Date, each Date or upon the return of any such offer Business Employee to be at active employment with the same general aggregate salary and bonus opportunity and location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate position as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “"Current Employment Terms”"). Notwithstanding anything Seller shall provide within five Business Days of Purchaser's request an electronic roster of all Business Employees categorized as reasonably requested by Purchaser to the contraryextent permitted by local law; provided, all offers pursuant that Purchaser may not request such information prior to the tenth Business Day following the date of this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Agreement. Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, Subsidiaries and shall cause its Subsidiaries use commercially reasonable efforts to provide that Business Employees (other than Business Employees who have applied for a position outside the Business prior to the date hereof) will not to (and shall not encourage or assist its Affiliates to), offer be offered employment with any business by businesses of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofDate; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) laws. Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence active employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “"Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting " Starting on the Closing Date and ending on the date one (1) year two years after the Closing Date or any longer period as required under local employment Lawslaws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms (other than with respect to location) and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “"Purchaser Plans”") that are substantially similar no less favorable in the aggregate to than the employee benefit plans, programs, policies programs and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment TermsEmployee, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Lawslaws; provided, however, that nothing herein 41 37 shall obligate Purchaser or and/or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) unless required to do so by local laws. Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year two years after the Closing Date, maintain (or cause its Subsidiaries to maintain) a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure LetterSchedule 6.6(a). Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (Ai) any Automatic Transferred EmployeesBusiness Employee who is not offered employment by Purchaser and/or one of its Subsidiaries pursuant to this Section 6.6(a), (Bii) any Non-U.S. Business Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s 's noncompliance with Sections 6.6 or 6.7, and (Ciii) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan6.6(h)(ii), any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; and in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “"welfare benefit plan” " (as defined in Section 3(1) of ERISA), or any plan that would be a “"welfare benefit plan” " (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, Seller or any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, eligibility vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of serviceAgreement).
(e) Except as required by applicable Law law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to fully vest the Transferred Employees in their account balances under the Seller 401(k) plan or any other qualified profit-sharing plan maintained by 42 38 Seller and allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the applicable Seller 401(k) planPlan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser the Philips Electronics North America Corporation Employee Savings Plan (the “"Purchaser’s 's 401(k) Plan”"). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 's 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time time-off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy applicable to such Transferred Employee immediately prior to the Closing Date (the “"Vacation Policy”"), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacationvacation to the extent reflected on the Final Closing Statement of Purchased Net Assets; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller ParentDate.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(ig) Seller shall retain full responsibility for compliance with those provisions of agrees to provide any required notice under the Worker’s Worker Adjustment and Retraining Notification Act of 1988, ("WARN") and any other applicable U.S. law and to otherwise comply with any such statute with respect to any "plant closing" or "mass layoff" (as amended (“WARN Act”defined in WARN) or any comparable provision similar event affecting Business Employees and occurring on or prior to Closing (other than employment terminations and other events resulting from the affirmative action of state Purchaser or local law that are binding upon Seller under any such law and its Subsidiaries). Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under WARN or other applicable law arising from the actions (or inactions) of Purchaser for any Liabilities and Losses related theretoor its Affiliates after the Closing Date.
(ji) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar other applicable Laws in the United States U.S. law arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined Qualifying Event, under COBRA) and liabilities under similar applicable Laws COBRA incurred on or prior to the Closing Date or arising as a result of the transactions described hereincontemplated hereby.
(kii) Except for employees listed in Schedule 6.6(h)(ii), Purchaser shall have no liabilities associated with any current retention or severance plans entered into by Seller or its Subsidiaries Subsidiaries, including Aurora, Global and Dragon plans, with regard to any Designated Employee. “Designated Employees” Employees are Business Employees employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by 43 39 Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s 's liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date. Seller has provided to Purchaser true and correct copies of all letters received by participants in the Aurora retention program.
(iii) Prior to the Closing Date, Seller shall take all necessary actions to fully vest the Transferred Employees in their accrued benefits or account balances under any Seller Plan maintained in the U.S. which is a non-qualified pension plan or nonqualified deferred compensation plan.
(iv) Prior to the Closing Date, Seller shall pay any and all accruals owed under the terms of any Seller Plan maintained in the U.S. (including any such Seller Plan with a "last day of the quarter" requirement) for any plan year that commenced prior to the Closing Date. Prior to the Closing Date, Seller shall pay to the Transferred Employees a pro-rata portion of any [target] annual cash bonuses or cash profit-sharing awards owed to such Transferred Employees under the terms of any such nonqualified Seller Plan for any plan year that commenced prior to the Closing Date.
(i) Prior to the Closing Date, Seller shall take all necessary actions to fully vest the Transferred Employees in their accrued benefits under the Seller Retirement Plan and, to the extent permitted by the Seller Retirement Plan, allow such Transferred Employees, if they choose, to rollover any such accrued benefits to the Purchaser's 401(k) Plan. From and after the Closing Date, Purchaser shall allow the Transferred Employees to participate in its Philips Electronics North America Corporation Pension Plan for Salaried Employees (the "Purchaser Retirement Plan"), and shall grant the Transferred Employees credit for service with Hewlett-Packard Company, Seller or any of their affiliates for purposes of eligibility to participate, eligibility for any early-retirement subsidy and vesting (but not for purposes of benefit accrual) under such Purchaser Retirement Plan.
(j) Seller shall provide that each share of restricted stock including restricted stock held by a Transferred Employee pursuant to any of the Seller Plans (including Seller's employee stock purchase plan) immediately prior to the Closing Date shall, as of the Closing Date, vest and become free of restrictions.
(k) Seller shall take all action necessary to provide that, immediately prior to the Closing Date, each option to purchase shares of common stock of Seller (a "Seller Option") held by each Transferred Employee shall become exercisable with respect to all shares subject to such Seller Option and that each Seller Option shall be exercisable for a period ending on the earlier of (i) the date that is three months following the Closing Date or (ii) the date of expiration of the Seller Option in accordance with the terms of such Seller Option. 44 40
Appears in 1 contract
Samples: Asset Purchase Agreement (Agilent Technologies Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all the Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing Closing, and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the such employees in respect of the material terms of employment with the such employees in force immediately before Closing shall be transferred to Purchaser or one of its Affiliates in accordance with local employment Laws.;
(ii) For non-Automatic Transferred EmployeesExcept as set forth on Section 6.6(a) of the Disclosure Letter, Purchaser or one of its Affiliates shall offer employment to each Business Employee who is not an Automatic Transferred Employee effective on the Closing Date, each . Each such offer to be at the same general location and substantially the same shall include terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar no less favorable in the aggregate as those than the terms provided to such employees employee by Seller or its Subsidiaries immediately prior to Affiliates as of the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Lawdate hereof.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries Affiliates in accordance with clause (i) above above, and those who accept the an offer of employment from Purchaser and/or or one of its Subsidiaries Affiliates in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or or one of its Subsidiaries Affiliates shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.”
(vb) Except Effective as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to those Transferred Employees who are not Automatic Transferred Employees, Purchaser shall, or shall cause one of its Affiliates to, provide employee benefits to such Transferred Employee Employees on terms and not inconsistent with conditions that are no less favorable in the Current Employment Terms, and shall be offered any other additional aggregate to such employees as the terms and conditions of employment such benefits offered to such employees by Purchaser and/or one of Seller or its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) Affiliates as of the Disclosure Letterdate hereof.
(vic) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller Parent and its Subsidiaries against all liabilities and obligations to provide any payments, including, without limitation, severance or similar payments and payment-in-lieu of notice, to (Ai) any Automatic Transferred Employees, (B) any Non-U.S. Business Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.76.6(a)(i), (a)(ii) and (a)(iii), and (Cii) except as otherwise provided in this Section 6.6(k) 6.6 or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries Affiliates following the Closing Date. The Purchaser’s liability under this Section 6.6(c) shall be limited to the greater of (X) the amount payable pursuant to the provisions of the severance plans, policies and programs of Seller Parent and its Subsidiaries, including any payment-in-lieu of notice policies, as in effect as of the date hereof, and (Y) the amount required to be paid pursuant to local Laws, including any payment-in-lieu of notice. Section 6.6(c) of the Disclosure Letter describes in summary form the amounts payable under such plans, policies or programs.
(bd) Seller and its Affiliates shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Business Employee with respect to claims incurred by such Transferred Business Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted)under any Seller Plan.
(ce) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by PurchaserPurchaser and provided to Transferred Employees, Purchaser shall shall, with respect to such Transferred Employees, (i) cause there to be waived any pre-pre existing condition and waiting periods periods, except to the extent such provisions were applicable under the similar Seller Plan as of the Closing Date, and (ii) give effect, in determining any deductible and maximum out-of-out of pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees Transferred Employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries Affiliates during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(df) For purposes of eligibility and vesting and for purposes of determining the amount of any benefits under any applicable sick leave, vacation or severance plan, Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited such service, including without limitation, AngelAgilent, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, Subsidiaries under each plan of Purchaser Plan or its Affiliates in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementparticipate.
(g) With respect to any accrued but unused vacation leave time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation Seller Parent or its Subsidiaries’ leave time policy immediately prior to the Closing Date (the “Vacation Policy”)Date, to the extent permitted by lawLaw, Purchaser shall assume the liability for such accrued but unused vacation leave time and allow such Transferred Employee to use such accrued vacation; providedleave time in accordance with the terms of the applicable Purchaser leave plan or program, however, that Purchaser shall be liable for and pay in cash an amount equal including without limitation the required approval of management to such accrued but unused vacation take time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parentoff.
(h) The Seller Parties and Purchaser or its and their respective Affiliates shall pay comply with all of their respective obligations under applicable Laws to notify and/or consult with Business Employees or otherwise make arrangements for employee representatives, unions, works councils or other employee representative bodies, if any, and shall provide such information to the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letterother Party as is required by that Party to comply with its notification and/or consultation obligations.
(i) Seller shall retain full responsibility for compliance with those The Parties acknowledge and agree that all provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries contained in this Section 6.6 with respect to employees are included for the sole benefit of the respective Parties and shall not create any liability under COBRA right in any other Person, including, without limitation, any employees, former employees, any participant in any Seller Plan or similar applicable Laws in the United States arising from the actions (any beneficiary thereof or inactions) any right to continued employment with Seller or Purchaser, nor shall require Purchaser or any Affiliate of Purchaser to continue or its Subsidiaries amend any particular benefit plan after the Closing Date. Seller shall retain all liabilitiesDate for Transferred Employees, including and any such plan may be amended or terminated in accordance with respect to any “qualifying event,” (as defined under COBRA) its terms and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described hereinlaw.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent Holdco shall not, and shall cause each of its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in make any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiariesmaterial modifications, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than effective during the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting period beginning on the Closing Date and ending on the date one first anniversary thereof, to (1i) year after the Closing Date or any longer period base compensation and incentive compensation program as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date Effective Time with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered Vowel Employees who are active employees of Vowel or any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Lawsas of the Effective Time (the “Vowel Active Employees”) or (ii) the employee benefit plans, programs and arrangements provided to Vowel Employees as in effect immediately prior to the Effective Time, unless, in case of clauses (i) or (ii) (other than with respect to 2009 incentive compensation payable in 2009 or 2010 pursuant to the plans or arrangements described in Section 5.9(a) of the Vowel Disclosure Schedules (the “2009 Incentive Plans”)), any such modification is applicable to similarly situated employees of Consonant Learning; provided, however, nothing in this Section 5.9 shall prevent Holdco or any Subsidiary from making any modification (other than with respect to 2009 Incentive Plans) (x) to the extent required to comply with applicable Law, or (y) that nothing herein shall obligate Purchaser or one is approved by the Special Majority of the Holdco Board. Neither Vowel nor any of its Subsidiaries shall amend or otherwise modify the 2009 Incentive Plans prior to provide the Transferred Employees with Effective Time without the prior written consent of Holdco, and after the Effective Time, none of Holdco, Vowel or any defined benefit pension plans; and provided, further, that Purchaser of their respective Subsidiaries shall provide U.S. Transferred Employees with amend or otherwise modify or terminate the retiree medical benefits described in Section 6.6(a)(v) 2009 Incentive Plans without the consent of the Disclosure Letter.
(vi) Notwithstanding anything to Stockholders’ Representative. During the contrary in this Agreement, starting period beginning on the Closing Date, Purchaser shall, for a period Date and ending on the date one (1) year after the Closing Datefirst anniversary thereof, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Vowel Active Employees who are terminated without cause (as reasonably determined by the applicable employer) shall be entitled to a severance or similar payments amount no less than they would have received as severance under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided the Vowel Benefits Plans in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following effective immediately before the Closing DateEffective Time.
(b) Seller Holdco and Consonant shall, and shall retain responsibility for cause Vowel and continue to pay the Subsidiaries of Holdco to, recognize all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee service of the Vowel Active Employees (consistent with respect to claims incurred by such Transferred Employees or their covered dependents Vowel’s service recognition policies) prior to the Closing Date. Expenses Date as service in connection with any 401(k) savings plans, welfare benefit plans and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after employment policies (including any vacation and holiday policies) that are made available following the Closing Date shall be the responsibility by any of Purchaser. For Holdco, Consonant or their respective Subsidiaries or Affiliates for purposes of this paragraphany waiting period, a claim is deemed incurred: in the case of medical or dental benefitsvesting, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; eligibility and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit entitlement (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submittedbut excluding pension plan accruals).
(c) With Following the Closing Date, Holdco and Consonant shall, and shall cause the Subsidiaries of Holdco to, waive, or cause their insurance carriers to waive, all limitations as to pre-existing and at-work conditions, if any, with respect to participation and coverage requirements applicable to Vowel Active Employees under any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject that is made available to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to Vowel Active Employees following the Closing Date.
(d) Transferred Employees Nothing herein, express or implied, shall be given credit confer upon any Vowel Employee or Consonant Employee any right to employment or continued employment for all service with Seller, any specified period of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard nature or their Subsidiaries, to the same extent as such service was credited for such purpose by Sellerkind whatsoever, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes or by reason of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity For a period of employment with respect to all Business Employees as follows:
not less than twelve (i12) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on months following the Closing Date, Buyer shall, or shall cause the Company or another Affiliate to, provide each such offer to be at Company Employee who continues in the same general location and substantially employ of Buyer, the same terms and conditions Company or any of employmenttheir respective Affiliates following the Closing Date (each, including a “Continuing Employee”) with: (Ai) the same or superior an annual base salary or base an hourly wage rate, (B) substantially as applicable, and annual cash incentive target opportunity that is no less than the same positionannual base salary or an hourly wage rate, as applicable, and annual cash incentive target opportunity, respectively, provided to such Continuing Employee immediately prior to the Closing Date, and (Cii) cash bonus and other nonemployee benefits (excluding any change of control or equity-equity or transaction-based incentive compensation opportunities benefits) that are substantially similar comparable in the aggregate as to the better of those benefits provided to such employees by Seller or its Subsidiaries Continuing Employee immediately prior to the Closing Date (unless and those benefits that Buyer or its Affiliates provide to their similarly-situated employees during such period, except as otherwise required contemplated by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local LawTransition Services Agreement.
(iiib) Seller Parent From and after the Closing, Buyer (i) shall notgive or cause to be given to each Continuing Employee full credit for all purposes, including for purposes of eligibility to participate, level of benefits and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in vesting under any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent employee benefit plans maintained by Buyer or any of its Subsidiaries or Affiliates for which the Continuing Employee is eligible to participate (other than “Buyer Plans”) for such Continuing Employee’s service with the Business) after Company, and with any predecessor employer, to the date hereof and same extent recognized by the Company under any similar Benefit Plan prior to the Closing Date (Closing, except to the extent such credit would result in the duplication of benefits for the same period of service, provided, that credit for such prior service shall not be provided for benefit accrual purposes under the Buyer Plans other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; providedvacation/paid time off accruals and severance benefits, howeveras applicable, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) service of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Continuing Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits shall not be recognized for the purpose of any entitlement to participate in, or benefit accruals with respect to claims incurred to, any equity-based or long-term incentive compensation, retiree medical programs or other retiree welfare benefit programs or any defined benefit plan maintained by Transferred Employees Buyer or their covered dependents on or its Affiliates in which any Continuing Employee may participate after the Closing Date Closing, and (ii) shall be credit to each Continuing Employee under the responsibility applicable vacation or paid time off program of Purchaser. For purposes Buyer or its Affiliates for all unused vacation or other paid time off days of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services such Continuing Employee that are the subject accrued as of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted)Closing Date.
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA)each Buyer Plan, or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISAapplicable Law, maintained by Purchaser, Purchaser Buyer shall use commercially reasonable efforts to (i) waive or cause there to be waived for each Continuing Employee and each Continuing Employee’s dependents, any waiting period provision, pre-existing condition limitation or actively-at-work requirement with respect to participation and coverage requirements under the welfare plans of Buyer or any of its Affiliates in which such Continuing Employee may be eligible to participate after the Closing to the extent such waiting periods period, pre-existing condition limitation or actively-at-work requirement would not have been applicable (or was previously satisfied by) to such Continuing Employee under the terms of the comparable Benefit Plan immediately prior to the Closing, and (ii) solely with respect to any medical plan, give effector cause to be given full credit under the Buyer Plans applicable to each Continuing Employee and each Continuing Employee’s dependents for all co-payments, in determining any deductible deductibles, and maximum out-of-pocket limitations, to claims incurred and amounts expenses under any Benefit Plan paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Datein the same plan year as the Closing for purposes of any annual and lifetime maximums, as if there had been a single continuous employer.
(d) Transferred Employees shall be given credit The Parties acknowledge and agree that all provisions contained in this Section 6.8 are included for all service with Seller, any the sole benefit of its Subsidiariesthe Parties. This Agreement is not intended by the Parties to, and nothing in this Section 6.8 or otherwise in this Agreement, whether express or implied, shall, (i) constitute an adoption, amendment to, or termination of any predecessor employer for which Seller credited serviceBenefit Plan or any Buyer Plan, including without limitation(ii) limit the ability of the Company or Buyer or its Affiliates to adopt, Angelamend, Hewlett Packard or their Subsidiariesterminate any Benefit Plan, to the same extent Buyer Plan or any other particular employee benefit plan, program, policy, Contract or arrangement, as such service was credited for such purpose by Sellerapplicable, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibilityor (iii) confer on any Company Employee, vesting and benefits accrual Service Provider or Continuing Employee, or any dependent or beneficiary thereof, or any other Person (other than under the Parties) any equity rights or quasiremedies (including any right to continued employment or other service relationship for any period or any third-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of serviceparty beneficiary rights).
(e) Except as required by applicable Law or as may be agreed to by Seller and PurchaserThe Company shall terminate participation in, effective as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes immediately prior to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) PlanClosing, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Benefit Plan into an account under that constitutes a 401(k) plan maintained or a group health plan, if requested by Purchaser (Xxxxx in writing at least five Business Days prior to the “Purchaser’s 401(k) Plan”)Closing. Notwithstanding If any such termination requires approval of Seller, in its capacity as the foregoingsole member of the Company, Seller and Purchaser may mutually agree following so as to effect such termination, the date hereofCompany shall deliver to Buyer, but prior to the Closing Date, to provide for a trust to trust transfer evidence that Seller, in its capacity as sole member of the account balances Company, has validly adopted resolutions to terminate participation in, and make any necessary amendments to, such Benefit Plan pursuant to this Section 6.8(e) (the form and substance of Transferred Employees under the Seller 401(k) Plan which resolutions and any necessary amendments shall be subject to the Purchaser’s 401(k) Planadvance review and approval of Buyer (not to be unreasonably withheld, conditioned or delayed)).
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement[***].
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Coherus BioSciences, Inc.)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(iindividuals set forth on Section 6.11(a) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms Seller Disclosure Schedule (the “Resigning Employees”) have each entered into a Separation and Release Agreement as of employment with the employees in force immediately before Closing date hereof (collectively, the “Executive Separation Agreements”), pursuant to which they shall be transferred to Purchaser in accordance with local employment Lawsresign from the Company Group effective as of the Closing.
(iib) For non-Automatic Transferred Employees, Purchaser shall offer employment At least ten (10) days prior to each Business Employee effective on the Closing Date, each such offer Buyer shall identify to Seller in writing which of the employees of the Company Group identified on Section 6.11(b)(i) of the Seller Disclosure Schedule (the “Identified Employees”) are to be at retained by Buyer following Closing (the same general location “Specified Continuing Employees”), and substantially Seller shall terminate, effective as of not later than the same terms Closing Date, all Identified Employees who are not Specified Continuing Employees (the “Terminated Employees”). The Company Group shall pay severance to each Terminated Employee in amounts as set forth on Section 6.11(b)(ii) of the Seller Disclosure Schedule (the “Specified Severance Payments”), in each case, subject to the Terminated Employee signing and conditions not revoking a release of employmentclaims in favor of Seller, the Company, Buyer and their Affiliates in a form to be mutually agreed between Seller and Buyer, and any obligations of the Company Group that exist as of the Closing for, any compensation or other amounts payable to any Resigning or Terminated Employee, including salary, wages, hourly pay, commission, bonus, accrued vacation, severance, termination, retention or other payments and the employer portion of all associated employment or payroll taxes will, as applicable, be treated as Outstanding Seller Transaction Expenses, as included in Company Group Indebtedness Amount or as a current liability in the Adjusted Working Capital. Buyer shall comply with all applicable Laws with respect to its determinations as to which Identified Employees will be Specified Continuing Employees.
(Ac) For a period of not less than one (1) year following the same Closing Date, Buyer shall, or superior shall cause the Company Group to, provide each employee of a Company who is employed by a Company immediately prior to the Closing and continues in the employ of Buyer, a Company or any of their respective Affiliates following the Closing Date (“Continuing Employees”) with: (i) annual base salary or wages, that are no less than the annual base wage ratesalary or wages, (B) substantially respectively, provided to such Continuing Employee immediately prior to the same position, Closing Date and (Cii) cash bonus and other non-equity based incentive compensation opportunities substantially similar employee benefits, including severance entitlements, that are not in the aggregate as less favorable to such Continuing Employee than those benefits provided to such employees by Seller or its Subsidiaries Continuing Employee immediately prior to the Closing Date (unless otherwise required by local Lawprovided, for the avoidance of doubt, the determination of whether any benefits are in which case the aggregate less favorable to such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything Continuing Employee than those benefits provided to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Continuing Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and immediately prior to the Closing Date (other shall not take into account the treatment or payment by or on behalf of an employee of any premiums under any benefit plans). Until December 31, 2024, Buyer shall, or shall cause the Company Group to, provide each Continuing Employee with bonuses that are no less than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business annual bonuses provided to such Continuing Employee immediately prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of , prorated for the Disclosure Letter, starting calendar year for the period beginning on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment LawsDecember 31, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date2024.
(d) Transferred Employees From and after the Closing, Buyer (i) shall be given give each Continuing Employee full credit for all service purposes, including eligibility to participate, vesting (but not level of benefits (other than with Sellerrespect to severance and vacation or paid time off entitlements) and benefit accruals), under any employee benefit plans, programs and arrangements (excluding any defined benefit plans and equity incentive plans) provided, sponsored, maintained or contributed to by Buyer or any of its SubsidiariesAffiliates in which such Continuing Employees are eligible to participate (“Buyer Plans”) for such Continuing Employee’s service with such Company, and with any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiariesemployer, to the same extent as recognized by such service was credited for such purpose by SellerCompany, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment except to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which extent such credit would result in the duplication of benefits accrual for the same period of service).
, and (eii) Except as required by applicable Law or as may be agreed shall credit to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits each Continuing Employee under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions applicable vacation or paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as program of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser Buyer or its Affiliates shall pay for all unused vacation or otherwise make arrangements for the payment other paid time off days of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law such Continuing Employee that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred accrued on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention vacation or severance plan paid time off program of Seller such Company in place immediately prior to the Closing Date, but either whose and shall not take any actions that adversely affect any such Continuing Employees (or their future accrual of vacation or paid time off) as a result of such credit.
(e) Buyer shall make commercially reasonable efforts to (i) waive or cause to be waived for each Continuing Employee and his or her dependents, any waiting period provision, payment requirement to avoid a waiting period, pre-existing condition limitation, actively-at-work requirement and any other restriction that would prevent immediate or full participation under the welfare plans of retention has Buyer or any of its Affiliates applicable to such Continuing Employee to the extent such waiting period, pre-existing condition limitation, actively-at-work requirement or other restriction would not have been completed applicable (or was previously satisfied by) to such Continuing Employee under the terms of the comparable Benefit Plan, and (ii) give or cause to be given full credit under the Buyer Plans applicable to each Continuing Employee and his or her dependents for all co-payments and deductibles under any Benefit Plan satisfied prior to the Closing Date or whose dismissal has not been carried out prior to in the same plan year as the Closing Date; provided, however, that Designated Employees shall not include for purposes of any employee chosen by Seller, after consultation with Purchaserannual and lifetime maximums, as if there had been a result single continuous employer.
(f) The Parties acknowledge and agree that all provisions contained in this Section 6.11 are included for the sole benefit of the transactions contemplated Parties. This Agreement is not intended by the Parties to, and nothing in this Section 6.11 or otherwise in this Agreement. Seller Parent’s and Seller’s liability with regard , whether express or implied, shall, (i) constitute an amendment to Designated Employees is subject any Benefit Plan or any Buyer Plan or (ii) confer on any Participant or any other Person (other than the Parties) any rights or remedies (including any right to the rules of the retention and severance plans of Seller as in force prior to employment or on the Closing Dateother service relationship or any third party beneficiary rights).
Appears in 1 contract
Samples: Purchase and Sale Agreement (Delek Logistics Partners, LP)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and Closing, but rather the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the such employees in respect of the material terms of employment with the employees in force immediately before Closing (other than eligibility to participate in, coverage or benefits under any equity or pension plan to the extent permitted by local employment Laws) shall be transferred to Purchaser or its applicable Subsidiary, but only to the extent required by, and only then in accordance with with, local employment Laws. So long as Purchaser complies with this Section 6.6(a)(i), if an Automatic Transferred Employee objects to the transfer of employment to Purchaser or its Subsidiaries, any and all Liabilities arising in connection with such termination, notice, severance and similar payments shall constitute an Excluded Liability for the purpose of Section 9.1(a)(iv).
(ii) For nonNon-Automatic Transferred Employees, Purchaser or its applicable Subsidiary shall offer employment to each Business Employee such employee effective on the Closing Date, or as otherwise agreed between Seller and Purchaser, each such offer to be at the employee’s same general location and same base salary as is in effect immediately prior to the Closing and otherwise on substantially the same terms and conditions of employment, employment (including (Acash and equity incentive opportunities) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those are provided by Purchaser to such similarly situated employees by Seller of Purchaser or its Subsidiaries immediately prior to Subsidiaries. For the Closing Date (unless otherwise required by local Lawsake of clarity, if a Non-Automatic Transferred Employee rejects the offer of employment with Purchaser or its Subsidiaries, any and all Liabilities arising in which case connection with such offer termination, notice, severance and similar payments shall comply with local law) (constitute an Excluded Liability for the “Current Employment Terms”purpose of Section 9.1(a)(iv). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be mean the Closing Datedate that such employees become employed by Purchaser.
(v) Except Seller shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries. Modification of the terms of employment (or the offer of employment) as set forth described in Section 6.6(a)(i), (ii) and (vi) shall not be regarded as a discouragement of employment. Seller shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof and who are listed in Section 6.6(a)(v) of the Disclosure LetterLetter to the extent permitted by local Law); provided, starting on the Closing Date however, that Seller and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by permitted to take any action they are legally required to take in order to comply with local employment Laws.
(vi) Starting on the Closing Date, Purchaser and/or one of its Subsidiaries on terms no less favorable than shall cause to be provided to each Transferred Employee only the Current Employment Terms and participate in benefits provided to similarly situated employees under the employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar unless otherwise required under local Law, in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date which case such benefits shall comply with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure LetterLaw.
(vivii) Notwithstanding anything to In the contrary in this Agreementevent that Purchaser breaches its obligations under Section 6.6(a)(i), starting on the Closing Dateany and all Liabilities, Purchaser shallwhether arising under contract, for a period ending on the date one (1) year after the Closing DateSeller Plans, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations local Laws or otherwise, to provide any termination, notice, severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance arising out of the termination of their employment with Seller or similar payments under applicable local Laws due to Purchaserits Subsidiaries at the Closing or Seller’s noncompliance with Sections 6.6 or 6.7, its Subsidiaries’ automatic transfer of their employment at the Closing shall be borne by Purchaser and (C) except shall constitute Assumed Liabilities for the purposes of Section 9.1(b)(iv). Except as otherwise provided in Section 6.6(k) 6.6 or with respect to any payments under a Seller Plan, any and all Liabilities to provide any severance or similar payments to any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing DateDate (other than Restructuring Liabilities) shall constitute Assumed Liabilities for the purposes of Section 9.1(b)(iv).
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents on or prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived recognize all service of Transferred Employees with Seller and its Subsidiaries for purposes of any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Dateperiods.
(d) Transferred Employees shall be given credit for all service with Seller, Seller and any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service)all purposes.
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries Plans and shall commence participation in as soon as practicable under the terms of Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such fully vest the Transferred Employees to rollover any associated loan notes to the extent permitted in their account balances under the Seller 401(k) planplan and Seller Retirement Plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) plan and the Seller Retirement Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) plan and the Seller Retirement Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller Seller’s 401(k) Plan plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the On Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any pay out all accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy (and flexible time off and sick pay policy) immediately prior to the Closing Date (the “Vacation Policy”), ) to the extent permitted by lawlocal Law. Within 45 days after the Closing Date, Seller will deliver to Purchaser shall assume (i) an accounting of the liability for such accrued but unused vacation time (including flexible time off and allow such sick pay) as of the Closing Date for any Transferred Employee to use such accrued vacation; providedwhose vacation was not otherwise paid out by Seller, however, that Purchaser shall be liable for and pay in (ii) a cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent that was unpaid by Seller according to the Closing Date and Purchaser shall indemnify Seller for an amount equal accounting in the previous clause to such accrued but unused vacation time paid bank account as shall be designated in advance in writing by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller ParentPurchaser.
(hg) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment Any and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any all Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability arising under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing DateDate shall constitute Assumed Liabilities for the purposes of Section 9.1(b)(iv). Seller shall retain all liabilitiessuch Liabilities, including all Liabilities with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws ), incurred on or prior to the Closing Date or arising as a result of the transactions described herein, which shall constitute Excluded Liabilities for the purposes of Section 9.1(a)(iv).
(kh) The Parties acknowledge and agree that all provisions contained in this Section 6.6 with respect to employees are included for the sole benefit of the respective Parties and shall not create any right (i) in any other Person, including, without limitation, any employees, former employees, any participant in any Seller Plan or any beneficiary thereof or (ii) to continued employment with Seller or Purchaser.
(i) Except to the limited extent set forth in this Section 6.6 or 6.7, any and all Liabilities arising out of or with respect to any Seller Plan shall constitute Excluded Liabilities for the purposes of Section 9.1(a)(iv).
(j) The Parties recognize that certain of the Transferred Employees are in nonimmigrant visa status or have applications for lawful permanent residence pending with the relevant governmental authorities (the “Affected Non-United States National Employees”). The Parties further recognize that new or amended petitions with respect to such Affected Non-United States National Employees may be required in certain of these cases, unless Purchaser shall have no liabilities associated (or its Affiliates, as the case may be), are deemed the “successor-in-interest” to Seller (as such term is used in pronouncements by the United States Citizenship and Immigration Service (“USCIS”)) with respect to such Affected Non-United States National Employees. Accordingly, Purchaser hereby expressly agrees to assume, and Seller hereby assigns, all of the immigration-related Liabilities of the Affected Non-United States National Employees (including, without limitation, any retention obligations, Liabilities and undertakings arising from or severance plans entered into under attestations made in each certified and still effective Labor Condition Application (“LCA”) filed by Seller or its Subsidiaries with regard respect to any Designated Employeesuch Affected Non-United States National Employees). “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior The Parties each agree to take such actions as may reasonably be requested at and following the Closing to document to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date USCIS or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchasersuch other governmental agency, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability case may be, as may be necessary, the “successor-in-interest” relationship with regard respect to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Dateany Affected Non-United States National Employees.
Appears in 1 contract
Samples: Asset Purchase Agreement (Agilent Technologies Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
No later than ten (i10) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) days prior to the employees in respect Closing, Seller shall provide to Buyer an updated correct and complete copy of the material terms of employment with the employees in force immediately before Closing shall be transferred Company Employee Census. Prior to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective on the Closing Date, Seller and its Affiliates shall take all steps as are reasonably required to (i) transfer the employment of each employee who is primarily dedicated to servicing the Business and employed by Seller or one of its Affiliates (other than a Company Entity) to a Company Entity (each such offer employee, a “Transferred Employee”, who shall be deemed a Company Employee for purposes of Article III and Section 6.1), and (ii) transfer the employment of each individual who is employed by any of the Company Entities and is not primarily dedicated to servicing the Business to Seller or one of its Subsidiaries (other than a Company Entity).
(b) From and after the Closing Date, Buyer shall, or shall cause the Company Entities to, honor all employment, severance, termination, retention, change in control, consulting, and similar Contracts and plans to which any Company Entity is a party or which are sponsored by any Company Entity in accordance with its terms as of the date hereof, in each case, to the extent disclosed on Section 3.15(a) of the Seller Disclosure Schedule and denoted as a Company Entity Plan. On or prior to the Closing Date, Seller shall cause all Benefit Plans set forth on Section 6.11(b)(i) of the Seller Disclosure Schedule (and all rights and obligations thereunder) to be at assumed by the same general location Company Entities (the “Assumed Benefit Plans”). From and substantially after the same Closing Date, Buyer shall, or shall cause its Affiliates (including the Company Entities) to, honor, comply with the terms of, and conditions fulfill all obligations (whether in respect of employmentservice prior to, including on or after the Closing Date) under, the Assumed Benefit Plans, and, except as set forth on Section 6.11(b)(ii) of the Seller Disclosure Schedule or as set forth in Section 6.11(e) of this Agreement, Seller and its Affiliates (Aother than the Company Entities) shall not retain any Liability with respect to the same Assumed Benefit Plans on or superior after the Closing.
(c) For a period of one (1) year following the Closing Date, Buyer shall, or shall cause the Company Entities to, provide each Transferred Employee and Company Employee who, in each case, continues in the employ of Buyer, the Company Entities or any of their respective Affiliates following the Closing Date (“Continuing Employees”) with: (i) annual base salary or base wage rate that is no less than the annual base salary or base wage rate, respectively, provided to such Continuing Employee immediately prior to the Closing Date, (Bii) substantially the same position, and (C) cash bonus and other nonshort-equity based term incentive compensation opportunities substantially similar in (including bonuses (annual or more frequent) and commissions) that are no less than the aggregate as those short-term incentive compensation opportunities (including bonuses (annual or more frequent) and commissions) provided to such employees by Seller or its Subsidiaries Continuing Employee immediately prior to the Closing Date (unless otherwise required by local Lawexcluding any special, in which case such offer shall comply with local law) (the “Current Employment Terms”one-time or other non-recurring incentives). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage compensation that is substantially equivalent in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior value to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements long-term incentive compensation opportunities in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment TermsDate, and shall be offered any (iv) other additional terms employee benefits (including retirement, health and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; providedwelfare benefits, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any but excluding defined benefit pension plans; and providedbenefits, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Nonlong-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7term incentive compensation opportunities, and (Cequity or equity-based benefits) except as otherwise provided that are substantially equivalent in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: value in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise aggregate to the benefits occurs; and otherwise, at the time the Transferred those provided to such Continuing Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees 401(k) Plan.
(i) Effective not later than the Closing Date, Buyer shall be given credit for all service with Seller, any have in effect one or more defined contribution plans that include a qualified cash or deferred arrangement within the meaning of its Subsidiaries, Section 401(a) of the Code (the “Buyer 401(k) Plan”) and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, a related trust exempt from tax under Section 501(a) of the Code. Each Continuing Employee who immediately prior to the same extent Closing Date is participating in a Benefit Plan that is a defined contribution plan that includes a qualified cash or deferred arrangement within the meaning of Section 401(a) of the Code (a “Seller 401(k) Plan”) shall become a participant in the corresponding Buyer 401(k) Plan as of the Closing Date in accordance with the terms of the Buyer 401(k) Plan.
(ii) Buyer agrees to cause the Buyer 401(k) Plan to allow each Continuing Employee to make a “direct rollover” to the Buyer 401(k) Plan of the account balances of such service was credited for such purpose by Seller, Continuing Employee (including promissory notes evidencing any outstanding loans) under each Purchaser the Seller 401(k) Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment Continuing Employee participated prior to the Purchase PriceClosing if such Seller 401(k) Plan permits such a direct rollover and if such direct rollover is elected in accordance with applicable law by such Continuing Employee. The rollovers described herein shall comply with applicable Law, is received by Purchaser pursuant to this Agreement or (B) which would result and each party shall make all filings and take any actions required of such party under applicable Law in the duplication of benefits accrual for the same period of service)connection therewith.
(e) Except as required by applicable Law or as may be agreed With respect to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation each Continuing Employee who is a participant in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) PlanCon Edison Clean Energy Businesses, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Inc. Retention Bonus Plan into an account under a 401(k) plan maintained by Purchaser for Key Executives (the “Purchaser’s 401(k) Executive Retention Plan”). Notwithstanding the foregoing) and who also was, Seller and Purchaser may mutually agree following the date hereof, but immediately prior to the Closing Date, a participant in the Con Edison Clean Energy Businesses, Inc. Annual Incentive Plan (“CEB AIP”) or the Consolidated Edison Clean Energy Businesses, Inc. Long Term Incentive Plan (the “CEB LTIP”), Xxxxx agrees to provide for a trust to trust transfer of (or cause its Affiliates, including the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly Company after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129provide) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and its Affiliates with such information as is reasonably necessary to allow Seller Parent shall to timely satisfy any of its obligations to pay, or cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred paid, such Continuing Employees certain payments and benefits under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements plans for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller period prior to the Closing Date, but either whose period including to determine the amounts to be paid under Sections 3.6(a) and 3.6(b) of retention has not been completed prior the Executive Retention Plan. Seller and Buyer agree that Seller’s obligations under such Sections shall be satisfied by Seller instructing Buyer or the Company or an applicable Affiliate thereof as to the Closing Date or whose dismissal has not been carried out prior amounts to pay to the Closing Date; providedapplicable Continuing Employees thereunder and that Buyer or the Company or an applicable Affiliate thereof shall timely make such payments. No later than ten (10) Business Days following such payments, howeverSeller shall reimburse Buyer, that Designated Employees shall not include the Company or the applicable Affiliate for any employee chosen by Sellersuch payments made, after consultation with Purchaserincluding the applicable employer portion of payroll taxes therefor, in each case other than to the extent already deducted from the Base Purchase Price as a result part of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.Adjustment
Appears in 1 contract
Samples: Purchase and Sale Agreement (Consolidated Edison Inc)
Employee Relations and Benefits. (a) The Parties intend that there Except as otherwise set forth in this Section 6.10, Seller Parent and its Affiliates shall be continuity of employment retain sponsorship of, and shall retain and indemnify and hold harmless Buyer and its Affiliates against, all Liabilities under, the Benefit Plans, whether arising before, on or after the Closing, and Buyer and its Affiliates shall not assume sponsorship of, contribute to or maintain, or have any Liability with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and to, the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment LawsBenefit Plans.
(iib) For non-Automatic Transferred EmployeesBuyer shall, Purchaser or shall cause its Affiliates to, offer employment to each Business Employee effective on the Closing Date, each such offer to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar Company Employees currently employed in the aggregate as those provided positions set forth in Section 6.10(b) of the Buyer Disclosure Schedule. Such offers of employment to such employees by Seller or its Subsidiaries immediately the Company Employees shall be made no later than twenty (20) days prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not provide for such employment to (be effective as of 12:01 a.m. on the Closing Date. Each Company Employee who receives and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting accepts an offer of employment from Purchaser and/or Buyer or one of its SubsidiariesAffiliates and actually commences employment with Buyer or an Affiliate on or after the Closing Date is referred to herein as a “Continuing Employee.” Seller Parent hereby authorizes Buyer and its Affiliates to enter into discussions with the Company Employees regarding employment with Buyer or its Affiliates as contemplated by this Section 6.10(b). Buyer and its Affiliates shall comply with all applicable Laws relating to the foregoing offers of employment to, and continuation of employment of, the Company Employees on and after the Closing. Buyer shall assume liability for, and fully indemnify and hold harmless Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates with respect to), offer employment with any business of Liability incurred by Seller Parent or any of its Subsidiaries Affiliates pursuant to applicable Laws or otherwise, including without limitation, the WARN Act, in connection with any Company Employee, to the extent such liability arises from actions of Buyer or any of its Affiliates (other than the Business) on or after the date hereof and prior Closing or with respect to the Closing Date actions described in the immediately preceding sentences (other than Business Employees who have applied for including the selection and hiring of Company Employees). Nothing herein shall be construed as a position with representation or guarantee by Seller Parent or one any of its Subsidiaries Affiliates that any particular Company Employee shall accept Buyer’s offer of employment or shall continue in employment with Buyer or its Affiliates outside following the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment LawsClosing.
(ivc) Those employees who are transferred to Purchaser and/or one For a period of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date not less than one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on following the Closing Date, Purchaser Buyer shall, for a period ending on the date one (1) year after the Closing Dateor shall cause its Affiliates to, maintain a severance pay practice for the benefit of provide each Transferred Continuing Employee that is no less favorable than with the severance pay practice provided in benefits set forth on Section 6.6(a)(vi6.10(c) of the Seller Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of PurchaserSchedule. For purposes of this paragraph, a claim is deemed incurred: in covenant and the case severance plans of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; Buyer and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed toits Affiliates, such employees during the plan year of the applicable plan sponsored by Continuing Employee shall be credited for service with Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller Parent and its Affiliates immediately prior to as described in Section 6.10(d) and for service with Buyer and its Affiliates following the Closing Date.
(d) Transferred Employees From and after the Closing, Buyer shall be given give each Continuing Employee full credit for all service with Sellerpurposes, including eligibility to participate, level of benefits, vesting and benefit accrual, under any employee benefit plans, programs and arrangements (including severance and vacation/paid time off policies (and any accruals thereunder)) provided, sponsored, maintained or contributed to by Buyer or any of its SubsidiariesAffiliates (“Buyer Plans”) for such Continuing Employee’s service with Seller Parent or its Affiliates prior to the Closing, and with any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiariesemployer, to the same extent as recognized by Seller Parent or such service was credited for such purpose by SellerAffiliates, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment except to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which extent such credit would result in the duplication of benefits accrual for the same period of service). Notwithstanding the foregoing, to the extent permitted under applicable Law, Buyer shall not be required to provide credit for such service for benefit accrual purposes under any Buyer Plan that is a defined benefit pension plan.
(e) Except Buyer shall (i) waive or cause to be waived for each Continuing Employee and his or her dependents, any waiting period provision, payment requirement to avoid a waiting period, pre-existing condition limitation, actively-at-work requirement, evidence of insurability requirement and any other restriction that would prevent immediate or full participation under the welfare plans of Buyer or any of its Affiliates applicable to such Continuing Employee to the extent such waiting period, pre-existing condition limitation, actively-at-work requirement or other restriction would not have been applicable (or was previously satisfied by) to such Continuing Employee under the terms of the comparable Benefit Plan, and (ii) give or cause to be given full credit under the Buyer Plans applicable to each Continuing Employee and his or her dependents for all out-of-pocket or other co-payments and deductibles under any Benefit Plan satisfied prior to the Closing in the same plan year as required by applicable Law the Closing for purposes of any annual and lifetime maximums, as if there had been a single continuous employer.
(f) Buyer shall, or as may be agreed to by Seller and Purchasershall cause its Affiliates to, have in effect as of the Closing Date flexible spending reimbursement accounts for medical and dependent care expenses under a cafeteria plan qualifying under Section 125 of the Transferred Code (the “Buyer’s Cafeteria Plan”) that provide benefits to Continuing Employees shall cease no less favorable than the benefits provided to accrue further benefits Buyer’s other employees. Buyer agrees to cause the Buyer’s Cafeteria Plan to accept a spin-off of the flexible spending reimbursement accounts of the Continuing Employees from the cafeteria plan qualifying under Section 125 of the employee benefit plans and arrangements Code maintained by Seller and its Subsidiaries and shall commence participation Parent in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow which such Transferred Employees to rollover any associated loan notes employees participated immediately prior to the extent permitted Closing (“Seller Parent’s Cafeteria Plan”) and to honor and continue through the end of the calendar year in which the Closing Date occurs the elections made by each Continuing Employee under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined Parent’s Cafeteria Plan in Section 402(c)(4) respect of the Code) from flexible spending accounts that are in effect immediately prior to the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loansClosing. Buyer shall credit or debit, as part applicable, effective as of any lump sum distribution the Closing Date, the applicable account of each Continuing Employee under Buyer’s Cafeteria Plan with an amount equal to the extent permitted by the Seller 401(k) Plan into an balance of such Continuing Employee’s account under a 401(k) plan maintained by Purchaser (the “PurchaserSeller Parent’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but Cafeteria Plan as of immediately prior to the Closing Date. As soon as practicable following the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred from the Seller Parent's Cafeteria Plan to Purchaser the Buyer’s Cafeteria Plan the excess, if any, of the aggregate net cash amount (determined immediately accumulated contributions to the flexible spending reimbursement accounts made prior to the Closing during the year in which the Closing Date occurs by Continuing Employees over the aggregate reimbursement payouts made prior to the Closing for such year from such accounts to the Continuing Employees. If the aggregate reimbursement payouts from the flexible spending reimbursement accounts made prior to the Closing during the year in which the Closing Date occurs made to Continuing Employees exceed the aggregate accumulated contributions to such accounts prior to the Closing for such year by the Continuing Employees, Buyer shall cause such excess to be transferred to Seller Parent as soon as practicable following the Closing Date. From and after the Closing) , Buyer shall assume and be solely responsible for contributions all claims by Continuing Employees under the Seller Parent’s Cafeteria Plan whether incurred prior to, on or after the Closing Date, that have not been paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf in full as of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementClosing.
(g) With respect Buyer shall cause each Continuing Employee who is a participant in a Benefit Plan intended to any accrued but unused vacation time qualify under Section 401(a) of the Code that includes a cash or deferred arrangement intended to satisfy the provisions of Section 401(k) of the Code (including flexible time off and sick paythe “Seller 401(k) Plans”) to be allowed to participate, effective as of the Closing Date date of his or her commencement of employment with Buyer or one of its Affiliates, in a tax qualified plan which includes a cash or deferred arrangement intended to which any Transferred Employee satisfy the provisions of Section 401(k) of the Code that is entitled pursuant to the vacation policy immediately prior to the Closing Date sponsored and maintained by Buyer or an Affiliate thereof (the “Vacation PolicyBuyer 401(k) Plan”), ) and such Continuing Employee shall be credited with eligibility service and vesting service for all periods of service with Seller Parent or its Affiliates to the extent permitted by law, Purchaser shall assume so credited with such service under the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify applicable Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.401(k)
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser Clarant shall offer employment to each Business Employee effective on as of the Closing Date, each such offer Date to be at all of the same general location and substantially employees of the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar Contributor exclusively engaged in the aggregate as those provided to such employees by Seller Business (whether salaried or its Subsidiaries immediately prior to hourly, whether full-time or part-time), whether or not actively employed on the Closing Date (unless otherwise required by local LawE.G., in which case such offer shall comply with local lawincluding employees on vacation and leave of absence, including maternity, family, sick or short-term disability leave) (on at least the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms same wage rates or cash salary levels as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date Date. With respect to each such employee who accepts Clarant's offer of employment (a "TRANSFERRED EMPLOYEE"), Clarant shall (i) maintain such equivalent or higher cash salary levels, and (ii) to the extent permitted by applicable plans, credit periods of service prior to the Closing for purposes of determining eligibility and benefit accruals and vesting under its Plans after the Closing and (iii) provide substantially similar benefits (other than with respect to such Transferred Employee the Contributor's cash balance pension plan and not inconsistent with the Current Employment Terms, and shall be offered any post-retirement benefits for life or health coverage other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries than as required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide law) in the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, aggregate for a period ending on the date one (1) year 12 months after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing DateClosing.
(b) Seller Without limiting the scope of Section 10.7(a), Clarant shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for cause each Transferred Employee with respect (and his or her eligible dependents) to claims incurred by such Transferred Employees or their be covered dependents prior to following the Closing Date. Expenses and by a group health plan that provides health benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after (within the Closing Date shall be the responsibility meaning of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject Section 5000(b)(1) of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming Code) that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived does not limit or exclude coverage on the basis of any pre-existing condition and waiting periods of such Transferred Employee or dependent who was not so limited by the Contributor's plans and (ii) give effectprovides each Transferred Employee full credit, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during for the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs occurs, with respect to similar plans maintained any deductible already incurred by Seller and its Affiliates immediately prior to the Closing DateTransferred Employee under the Contributor's group health plan.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(gc) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to for which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to eligible as of the Closing Date (the “Vacation Policy”)Date, to the extent permitted by law, Purchaser Clarant shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, howeverprovided that Clarant shall not be required to allow use of vacation if and to the extent that it accrued at a higher rate after December 31, that Purchaser 1998.
(d) The Contributor shall be liable retain responsibility for and pay making long-term disability payments for employees who are receiving long-term disability payments as of the Closing or who were on short-term disability but become eligible for long-term disability.
(e) Without limiting the scope of Section 10.7(a), as soon as practicable after the Closing, Clarant shall make available a tax-qualified defined contribution plan or plans with a cash or deferred feature (a "CLARANT 401(k) PLAN") for the benefit of each Transferred Employee who was eligible to participate in a tax-qualified defined contribution plan maintained by the Contributor with a cash an amount equal to such accrued but unused vacation time or deferred feature (a "CONTRIBUTOR 401(k) PLAN").
(f) Any severance payable on or after the consummation of the transactions contemplated hereby to any Transferred Employee whose employment terminates for any reason subsequent to shall be the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parentsole responsibility of Clarant.
(hg) Purchaser Nothing herein, expressed or its Affiliates implied, shall pay confer upon any employee or otherwise make arrangements for the payment of each former employee of the obligations described in Section 6.6(hContributor or Clarant or any of their affiliates (including, without limitation, the Transferred Employees), any rights or remedies (including, without limitation, any right to employment or continued employment for any specified period or benefits of any nature) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions any nature or kind whatsoever, under or by reason of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity Seller has made available to Purchaser a summary of employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) employees related to the employees in respect Water Business, including data on salaries and years of the material terms of employment with the employees in force immediately before Closing shall be transferred service, organized according to Purchaser in accordance with local employment LawsMPAT and bargaining unit.
(iib) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective make a Qualifying Offer of Employment (as defined herein) commencing on the Closing Date to all Assigned MPAT Employees, including those on personal time off, or leave of absence who were employed by Seller on the day immediately preceding such Closing Date, each . Purchaser shall make a Qualifying Offer of Employment (as defined herein) commencing on the date of recovery from disability to any Assigned MPAT Employee on disability on the Closing Date provided such Employee recovers from disability and is medically determined to be fit to return to work within 18 months after the Closing Date. Those Assigned MPAT Employees who accept such offer of employment from Purchaser and who commence working with Purchaser on such Closing Date shall be referred to herein as "Transferred Management Employees." An offer of employment shall be at the same general location and substantially the same terms and conditions -------------------------------- deemed a "Qualifying Offer of employment, including Employment" if (A) the same or superior proposed salary ------------------------------ compensation is at least 90% of the employee's base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based plus incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller or its Subsidiaries immediately prior to the Closing Date and (unless otherwise required by local Law, in which case such offer shall comply with local lawB) (the “Current Employment Terms”). Notwithstanding anything to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer proposed principal place of employment from Purchaser and/or is within one hundred (100) miles of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer the employee's principal place of employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and immediately prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(vc) Except as set forth in Section 6.6(a)(v) Purchaser shall maintain for a period of the Disclosure Letter, starting on the Closing Date and ending on the date at least one (1) year after the Closing Date or any longer period as required under local employment LawsDate, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms without interruption, such employee compensation, welfare and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements fringe benefits covering Transferred Management Employees that will be of substantially similar value, in the aggregate, as those provided pursuant to those employee compensation, welfare and benefit plans, programs, policies and fringe benefits of the Seller for employees related to the Water Business as in effect immediately prior to the Closing Date Date. To the extent permissible under the terms of the Benefit Plans of Purchaser and as required by applicable law, the Purchaser shall waive all limitations as to preexisting conditions, exclusions and waiting periods with respect to such Transferred Employee participation and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries coverage requirements applicable to provide the Transferred Management Employees with under any defined Benefit Plans of Purchaser that are welfare benefit pension plans; and provided, further, plans that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described such employees may be eligible to participate in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee other than limitations or waiting periods that is no less favorable than the severance pay practice provided are already in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or effect with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for such employees and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after that have not been satisfied as of the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time under any welfare benefit plan maintained for the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates Management Employees immediately prior to the Closing Date.
(d) Purchaser and Seller agree to negotiate benefits plans for Transferred Management Employees shall be that, to the extent permitted under Nevada law given credit Purchaser's status as a public employer and its participation in the Public Employees Retirement System in Nevada, provide in the aggregate for all benefits, vesting, service credits, and eligibility that recognizes those Transferred Management Employees' past service with Seller; provided, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as however that such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate with Seller shall not be recognized for purposes of eligibility, vesting and benefits benefit accrual (other than under in any equity or quasi-equity compensation plan or under a Purchaser defined benefit pension plan either or of any retiree medical plan. Purchaser shall maintain for a period of at least eighteen (A18) in which no assets are transferred or for which no other compensationmonths following the Closing Date, including an adjustment the Program Benefits of the Guide to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual Water Business Divestiture Severance Program for the same period of service)MPAT Employees.
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary offer employment to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) begin as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to Seller's employees ("IBEW 1245 Employees") who are covered by Seller's ------------------- new collective bargaining agreement with Local Union 1245 of the Closing Date International Brotherhood of Electrical Workers (the “Vacation Policy”"New IBEW Contract"), . Purchaser shall ----------------- assume (as co-signator) Seller's obligations under the New IBEW Contract to the extent permitted under Nevada law given Purchaser's status as a public employer and its participation in the Public Employees Retirement System in Nevada, and in any event shall provide IBEW 1245 employees with compensation, welfare and benefit plans, programs, policies and fringe benefits that will be of substantially similar value in the aggregate to those provided by law, Purchaser shall assume Seller under the liability for New IBEW Contract. Benefits accrued under such accrued but unused vacation time Benefits Plans of Seller and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to all benefits currently payable as of the Closing Date shall be and Purchaser shall indemnify remain the obligation of the Seller. Any individual covered under any such Benefit Plan of Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law that is a Group Health Plan (as defined in Section 49080B(g)(2) of the Code and Section 607(1) of ERISA) and who electsis eligible for continued coverage under such Group health Plan as of the Closing Date, or elected, not shall continue to transfer such accrued but unused vacation time from Angel or Seller Parentbe covered under Seller's Group Health Plan after Closing pursuant to the provisions of COBRA.
(hf) Purchaser shall not, at any time prior to 60 days after the Closing Date, effectuate a "Plant Closing" or its Affiliates shall pay or otherwise make arrangements for "mass layoff", as those terms are defined in the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Worker Adjustment and Retraining Notification Act of 19881988 ("WARN"), as amended affecting in whole or in part any site of employment, facility, ---- operating unit or employee of Seller, without notifying Seller in advance and without complying with the notice requirements and other provisions of WARN. In addition, Purchaser shall provide a full defense to, and indemnify Seller for any loss, liability, claim, damage or expense (“WARN Act”including attorney's fees and other costs of defense) which Seller may incur in connection with, any suit or any comparable provision claim of state or local law that are binding upon violation brought against Seller under any such law and shall indemnify Purchaser WARN for any Liabilities and Losses related thereto.
(j) actions taken by Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parentsite of employment, Seller and/or its Subsidiaries for retention facility, operating unit or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated affected by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Employee Relations and Benefits. (a) The Parties intend It is understood by the parties hereto that there the employment of the employees of the Companies and their Subsidiaries shall continue immediately following the Closing uninterrupted by the transactions contemplated by this Agreement on substantially similar terms and conditions in the aggregate as prior to the Closing except as otherwise provided in this Section 6.13(a), except for such employees of FCR and their Subsidiaries listed in Section 6.13(a)(i) of the Seller Disclosure Letter who are operating in the Franchise Territory and who shall be continuity transferred by Casella to become employees of Casella or any of its other Affiliates prior to the Closing (the “Retained Employees”). Prior to the Closing, Purchaser shall, or shall cause its controlled Affiliates to, offer at-will employment with respect to all Business Employees as follows:
(i) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect listed on Section 6.13(a)(ii) of the material terms Seller Disclosure Letter (the “Business Employees”), and the employment by Casella or its Subsidiaries of any such Business Employee who shall have accepted such offer of employment shall terminate effective as of the Closing Date and commence with Purchaser as of the Closing Date (any such Business Employee who are offered and commence employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred Employees, Purchaser shall offer employment to each Business Employee effective or its controlled Affiliates on the Closing Date, each a “Transferred Employee,” and all such employees, collectively, the “Transferred Employees”). Effective on the Closing Date, Casella and any applicable Subsidiary of Casella hereby waives and releases any non-compete or other restrictions which would prevent any Business Employee from accepting such employment offer from, and/or performing duties with any Person; provided however that any restrictions contained in any employment agreement with such Business Employee shall survive other than any non-competition provision therein, which shall be terminated and replaced by the noncompete provisions in the form of Exhibit X. Xxxxxxx shall also provide such waiver in a separate form satisfactory to Purchaser to be at the same general location and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided to such employees by Seller Business Employee, which shall expressly release such Business Employee from any obligations they may have to Casella in order allow them to accept an employment offer from and/or perform duties with, Purchaser (or a controlled Affiliate of Purchaser, as applicable), or to a successor to Purchaser or controlled Affiliate of Purchaser. Except as otherwise expressly provided herein, Casella shall retain responsibility for the payment of any employee benefits or entitlements pursuant to any Employee Benefit Plan or Law, including severance pay that may be due to any employee of the Companies or any of their Subsidiaries or to any Transferred Employee as a result of or in connection with the consummation of the transactions contemplated hereby or in connection with their employment prior to the Closing Date except to the extent any such payments are payable under Law or under an employee benefit plan of Purchaser as a result of the termination of any employee of FCR or one of its Subsidiaries or any Transferred Employee by Purchaser after the Closing; provided, however, that with respect to any accrued but unused vacation, sick, personal or similar paid time off (“PTO”) to which any such employee is entitled immediately prior to the Closing Date (unless otherwise required by local Lawto the extent included as an FCR Transaction Expense, Purchaser shall assume the liability for such PTO and allow such employees of the Companies to use, in which case accordance with procedures established by Purchaser, such offer PTO and, if such employee’s employment with Purchaser terminates for any reason, Purchaser shall comply with local lawpay such employees the balance of any such unused PTO.
(b) (the “Current Employment Terms”). Notwithstanding anything Except to the contrary, all offers pursuant to extent otherwise expressly set forth in this Section 6.6(a)(ii6.13 or in the Transition Services Agreement, (i) Purchaser shall not be obligated to employees in jurisdictions outside assume, continue or maintain any of the United States will Employee Benefit Plans; (ii) no assets or liabilities of the Employee Benefit Plans shall be on such terms as are necessary to avoid giving rise to any severance transferred to, or similar Liabilities of Seller assumed by, Purchaser or Purchaser’s benefit plans; and (iii) Casella and its Subsidiaries as a result (other than the Companies) shall be solely responsible for funding or paying any benefits under any of the Employee Benefit Plans, including any requirements termination benefits and other employee entitlements accrued under such plans by or attributable to employees of applicable local LawCasella and its Subsidiaries.
(c) Except to the extent otherwise expressly set forth in this Section 6.13 or in the Transition Services Agreement, (i) Casella shall take such action as is necessary such that, as of the Closing Date, the Companies and their Subsidiaries and the Transferred Employees cease participation in each Employee Benefit Plan, (ii) Casella and its Affiliates (other than the Companies and their Subsidiaries) shall retain all Liabilities for claims under the Employee Benefit Plans, whether such claims are made before, on or after the Closing Date, and (iii) Seller Parent Casella shall notbe solely responsible for paying and providing long-term disability and any applicable life insurance benefits due with respect to any employee of the Companies and their Subsidiaries (and any individual formerly employed by the Companies and their Subsidiaries) who is currently receiving long-term disability benefits as of the Closing Date; provided that if and when such disabled employee is no longer eligible to receive long-term disability benefits, and is ready, willing and able to return to full-time employment within one (1) year following the Closing Date, Purchaser shall offer at-will employment to such individual.
(d) Nothing in this Agreement, express or implied, shall: (i) confer upon any employee of Casella or its Subsidiaries, or any Representative of any such employee, any rights or remedies, including any right to employment or continued employment for any period or terms of employment, for any nature whatsoever, or (ii) be interpreted to prevent or restrict Purchaser or its Affiliates from modifying or terminating the employment or terms of employment of any Transferred Employee or any employees of a Company or its Subsidiaries including the amendment or termination of any employee benefit or compensation plan, program or arrangement, after the Closing Date, except to the extent otherwise expressly set forth in this Section 6.13. For the avoidance of doubt, Casella and its Affiliates shall not be obligated to amend or terminate any Employee Benefit Plan pursuant to which such Transferred Employees or any employees of a Company or its Subsidiaries continue to participate in after the Closing pursuant to the Transition Services Agreement.
(e) Casella shall permit, and cause its Subsidiaries to permit, Purchaser to contact and make arrangements with the Business Employees and/or the employees of the Companies and their Subsidiaries regarding employment or prospective employment by Purchaser on and after the Closing and for the purpose of ensuring the continuity of the business of the Companies and their Subsidiaries, and Casella shall not discourage, and shall cause its Subsidiaries not to (discourage, any such employees from consulting with Purchaser; provided, however, that any such contact and/or consultation shall occur only at such times and shall in such manner as has been mutually agreed upon, with such mutual agreement not encourage to be unreasonably withheld, by Purchaser and Casella so as not to interfere with Xxxxxxx’x or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not’ normal business operations. Casella shall, and shall cause its Subsidiaries not to, make available to Purchaser such personnel information and similar information as Purchaser may request with respect to any Transferred Employee, including compensation and employment records, to the extent permitted by applicable Law.
(f) Casella shall be solely responsible for compliance with the requirements of Section 4980B of the Code and shall not encourage or assist its Affiliates topart 6 of subtitle B of Title I of ERISA (“COBRA”), offer employment including the provision of continuation coverage (within the meaning of COBRA), with respect to all employees and former employees of the Companies and their Subsidiaries and/or the Business Employees, and their respective spouses and dependents, for whom a qualifying event (within the meaning of COBRA) occurs at any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and time prior to or on the Closing Date under any group health plan of Casella or its Affiliates.
(g) Casella shall take such action as is necessary to provide that all Transferred Employees and any employees of the Companies and their Subsidiaries who are participants in the Xxxxxxx Waste Systems 401(k) Plan (the “Seller 401(k) Plan”) have a fully vested and nonforfeitable interest in their entire respective account balances under such plan as of the Closing Date (other than Business Employees who have applied for a position with regardless of their years of vesting credit under the Seller Parent 401(k) Plan). On or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits , with respect to claims incurred by all Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject and any employees of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard Companies or their Subsidiaries, Casella shall contribute all contributions to the same extent as such service was credited for such purpose by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service).
(e) Except as required by applicable Law or as may be agreed to by Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan. Purchaser shall take all steps necessary Plan which are required to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of be made on or before the Code) from Closing Date under the Seller 401(k) Plan, if anyand within five (5) Business Days following the Closing Date, Casella shall make all contributions to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but which relate to service or employee salary deferral contributions on or prior to the Closing Date, provided that any employer contribution to provide for a trust such Seller 401(k) Plan will be made only with respect to trust transfer employees of the account balances Companies who have satisfied the requirements for such contributions under the terms of the Seller 401(k) Plan other any “last day” or similar service obligation otherwise applicable. Effective as of the Closing Date, Purchaser shall establish a retirement plan intended to qualify under Section 401(a) of the Code (the “Purchaser 401 Plan”). Purchaser shall permit rollover contributions of any amounts maintained by a Transferred Employees Employee or an employee of Companies or their Subsidiaries under the Seller 401(k) Plan to the Purchaser’s Purchaser 401 Plan, including the rollover of participant loans under the Seller 401(k) Plan.
. In addition, as of the Closing Date, the Purchaser shall establish a medical spending account and dependent care plan under Section 125 Plan of the Code (fthe “Purchaser Cafeteria Plan”) Promptly after and shall, upon Casella providing Purchaser with specific details relating thereto, credit to accounts established for employees of the Companies all amounts credited under accounts of a similar Employee Benefit Plan, net of any amounts for which such employees have received reimbursement. Once the administrators of the Purchaser Cafeteria Plan and Xxxxxxx’x similar Employee Benefit Plan have determined how to address the claims made by employees of the Companies and Transferred Employees following the Closing (but which arose prior to the Closing) so that the net account balances under Purchaser Cafeteria Plan can be established, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent Casella shall cause to be transferred to Purchaser an amount in cash equal to the excess of the aggregate net cash amount (determined immediately prior accumulated contributions to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf flexible spending reimbursement accounts under the medical spending account and dependent care plan under Section 125 Plan of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangementCode made during the year in which the Closing Date occurs by the employees of the Companies over the aggregate reimbursement payouts made for such year from such accounts to such employees as of the agreed upon transfer date.
(gh) With Each Transferred Employee and each employee of the Companies or their Subsidiaries shall be credited under employee benefit plans established and maintained by Purchaser or any Affiliate with all service which was credited to such employee while employed by Casella or any Subsidiaries for purposes of vesting and eligibility and for purposes of determining the level of benefits (other than under any defined benefit plan, severance plan or retiree medical plan). In addition, Purchaser shall waive any pre-existing condition, actively at work, evidence of insurability, waiting period requirement or similar provisions, under any employee benefit plan with respect to any accrued but unused vacation time (including flexible time off Transferred Employee and sick pay) as each employee of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), Companies or their Subsidiaries to the extent permitted by lawsatisfied under any Employee Benefit Plan. Provided the Seller provides Purchaser with the necessary records within a reasonable period of time after the Closing, Purchaser shall assume the liability for such accrued but unused vacation time and allow such also credit, under each comparable employee benefit plan of Purchaser, each Transferred Employee to use such accrued vacationor employee of the Companies or their Subsidiaries with any deductibles paid under any Employee Benefit Plan for the plan year in which the Closing occurs; provided, however, that Purchaser following the period under the Transition Service Agreement applicable to health insurance, credit of payments towards out-of-pocket maximums shall only be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to provided upon the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each consent of the obligations described in Section 6.6(h) of carrier selected as the Disclosure Letterinsurance provider for Purchaser’s group medical plan.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(j) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after controlled Affiliates, as the Closing Date. Seller case may be (each of such Purchaser and Affiliates employing any Transferred Employee being a “Successor Employer”) shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to of the Closing Date or arising as a result succeed to and assume the immigration-related interests, liabilities, and obligations of the transactions described herein.
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller Casella or its Subsidiaries with regard related to any Designated Transferred Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Casella Waste Systems Inc)
Employee Relations and Benefits. (a) The Parties intend that there shall be continuity of employment with respect to all Business Employees Except as follows:
(iset forth on Section 6.6(a) Automatic Transferred Employees shall not be terminated upon Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of Seller) to the employees in respect of the material terms of employment with the employees in force immediately before Closing shall be transferred to Purchaser in accordance with local employment Laws.
(ii) For non-Automatic Transferred EmployeesDisclosure Letter, Purchaser or one of its Affiliates shall offer employment to each Business U.S. Employee effective on the Closing Date and to each Malaysia Employee effective on the Malaysia Closing Date, each . Each such offer to be at the same general location and shall include substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those rate provided to such employees employee by Seller or its Subsidiaries immediately prior Affiliates as of the date hereof and a position within the Purchaser or an Affiliate of Purchaser that is consistent with Purchaser’s job classification system for employees with duties similar to those duties it is expected that the Closing Date (unless otherwise required Business Employee will undertake for Purchaser or its Affiliates. With respect to each U.S. Employee employed in Corvallis, Oregon or San Jose, California and each Malaysia Employee, such offers shall be at the same general location as such employee is currently employed by local LawSeller and its Affiliates as of the date hereof, and with respect to each U.S. Employee employed in which case Fort Xxxxxxx, Colorado, such offer shall comply include an offer to relocate to an employment location of Purchaser and its Affiliates. Purchaser or one of its Affiliates may offer employment to each Germany Employee or may enter into an arrangement with local law) Seller Parent or its Affiliates whereby any such Germany Employee would remain employed by Seller Parent or its Subsidiaries for a period of up to 18 months and would during such period provide services for the benefit of Purchaser or its Affiliates (the a “Current Employment TermsLeased Employee”). Notwithstanding anything Those employees who accept an offer of employment from Purchaser or one of its Affiliates and who commence employment with Purchaser or one of its Affiliates shall be referred to the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will herein as “Transferred Employees.” Any Germany Employee who becomes a Leased Employee shall not be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local LawTransferred Employee.
(iiib) Seller Parent shall not, and shall cause its Subsidiaries Affiliates not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its SubsidiariesAffiliates, and Seller Parent shall not, and shall cause its Subsidiaries Affiliates not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date or, with respect to the Malaysia Employees, prior to the Malaysia Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof); provided, however, that Seller Parent and its Subsidiaries Affiliates shall be permitted to take any action they are legally required to take in order to comply with local employment Laws.
(ivc) Those employees Effective as of the Closing Date with respect to those Transferred Employees who are transferred to U.S. Employees or Germany Employees, Purchaser and/or shall, or shall cause one of its Subsidiaries Affiliates to, provide employee benefits to such Transferred Employees on terms and conditions that are at least as favorable to such employees as the terms and conditions of such benefits offered to similarly situated (after reflecting such Transferred Employees’ positions within Purchaser’s job classification system) employees of Purchaser and its Affiliates employed in accordance the United States and Germany, respectively. Effective as of the Malaysia Closing Date with clause (i) above and respect to those Transferred Employees who accept the offer of employment from are Malaysia Employees, Purchaser and/or shall, or shall cause one of its Subsidiaries in accordance with clause (ii) above andAffiliates to, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred provide employee benefits to herein as “such Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries Employees on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) conditions that are substantially similar in the aggregate to the employee benefit plans, programs, policies terms and arrangements in effect conditions of the benefits provided to such employees by the Seller or its Affiliates as of immediately prior to the Malaysia Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment LawsDate; provided, however, that nothing herein shall obligate require Purchaser or one its Affiliates to offer to Malaysia Employees (i) anything inconsistent with the provisions of its Subsidiaries Section 6.6(a), including any guaranteed program to provide determine or increase base pay or any form of commission, bonus or other extraordinary compensation (except for the retention bonus program described in Exhibit E), (ii) any form of stock option, restricted stock, employee stock purchase or other equity compensation program or (iii) any form of benefit for which the approval of any Malaysian governmental agency is required. Notwithstanding anything herein to the contrary, the employee benefits to be provided to Transferred Employees effective as of the Applicable Closing Date pursuant to this Section 6.6(c) shall be consistent with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical those benefits described in Section 6.6(a)(v) Exhibit F of the Disclosure Letterthis Agreement. In no event will Purchaser and/or its Affiliates be obligated to provide post-retirement benefits to Transferred Employees.
(vid) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller Parent and its Subsidiaries against all liabilities and obligations to provide any payments, including, without limitation, severance or similar payments and payment-in-lieu of notice, to (Ai) any Automatic Transferred Employees, (B) any Non-Non U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (Cii) except as otherwise provided in this Section 6.6(k) 6.6 or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries Affiliates following the Closing Date or, with respect to Malaysia Employees, following the Malaysia Closing Date. Purchaser shall reimburse Seller Parent or its Subsidiaries for severance or similar payments under applicable local Laws, including any payment-in-lieu of notice, made by Seller Parent and its Subsidiaries, to (i) any Business Employee described on Section 6.6(a) of the Disclosure Letter whose employment with Seller Parent and its Subsidiaries is terminated on the Closing Date (or with respect to a Business Employee on a leave of absence under which reemployment rights are protected by applicable Laws, the date such protection ends), (ii) any Business Employee (A) whose offer of employment from Purchaser and its Affiliates pursuant to Section 6.6(a) includes an offer of relocation, (B) who refuses such offer of employment and relocation and (c) whose employment with Seller Parent and its Subsidiaries is terminated on the Closing Date (or with respect to a Business Employee on a leave of absence under which reemployment rights are protected by applicable Laws, the date such protection ends), and (iii) any Germany Employee who becomes neither a Transferred Employee nor a Leased Employee. The Purchaser’s liability under this Section 6.6(d) shall be limited to the greater of (X) the amount payable pursuant to the provisions of the severance plans, policies and programs of Seller Parent and its Subsidiaries, including any payment-in-lieu of notice policies, as in effect as of the date hereof, and (Y) in the case of any German Employee, the amount required to be paid pursuant to local Laws, including any payment-in-lieu of notice. Section 6.6(d) of the Disclosure Letter describes in summary form the amounts payable under such plans, policies or programs.
(be) Seller and its Affiliates shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Business Employee with respect to claims incurred by such Transferred Business Employees or their covered dependents prior under any Seller Plan.
(f) Section 6.6(f) of the Disclosure Letter lists each Business Employee who is eligible for a bonus pursuant to this Section 6.6(f). On the first anniversary of the Closing Date. Expenses and benefits with respect , Seller shall pay or shall cause one of its Affiliates to claims incurred pay to each such Business Employee who remains employed by Transferred Employees Purchaser or their covered dependents one of its Affiliates on or after such date the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: amount specified for such Business Employee in the case of medical or dental benefits, when the services that are the subject Section 6.6(f) of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted)Disclosure Letter.
(cg) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by PurchaserPurchaser and provided to Transferred Employees, Purchaser shall shall, with respect to such Transferred Employees, (i) cause there to be waived any pre-pre existing condition and waiting periods periods, except to the extent such provisions were applicable under the similar Seller Plan as of the Applicable Closing Date, and (ii) give effect, in determining any deductible and maximum out-of-out of pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees Transferred Employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries Affiliates during which the Applicable Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Applicable Closing Date.
(dh) For purposes of eligibility and vesting and for purposes of determining the amount of any benefits under any applicable sick leave, vacation or severance plan, Transferred Employees shall be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited such service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose by Seller, Subsidiaries under each plan of Purchaser Plan or its Affiliates in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service)participate.
(ei) Except as required by applicable Law or as may be agreed to by The Seller and Purchaser, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent Parties shall take all necessary actions to (i) allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the 401(k) plan maintained by Seller Parent or a Subsidiary of Seller Parent (the “Seller 401(k) planPlan”) and (ii) permit Transferred Employees to continue to make loan repayments to the Seller 401(k) Plan following the Closing Date. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any, Plan to roll such eligible rollover distribution, distribution (including within a reasonable period of time following the Closing Date an opportunity to roll over any associated loans, as part of any lump sum distribution to the extent permitted by the Seller 401(k) Plan if applicable), into an account under a 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Planor its Affiliates.
(fj) Promptly after If the ClosingMalaysia Closing shall not have occurred prior to January 1, 2007, then Seller Parent or its Subsidiaries shall transfer and Purchaser shall accept pay the flexible spending account elections and accounts (maintained pursuant Malaysia Employees the bonuses due to Code Sections 105 and 129such employees on such date under the “Angel 3-2-1 Retention Arrangement” described in Section 4.11(a) of the Transferred Disclosure Letter. If the Malaysia Closing shall have occurred prior to January 1, 2007, then Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment to Malaysia Employees of the bonuses due to such employees on such date under Seller’s the “Angel 3-2-1 Retention Arrangement” described in Section 125 plan flexible spending arrangement. Promptly after 4.11(a) of the ClosingDisclosure Letter, Seller and Seller Parent or its Subsidiaries shall cause reimburse Purchaser or its Affiliates an amount equal to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject of such bonuses paid, along with any employment taxes payable to a pending claim Governmental Authority that are related thereto, in cash within thirty (30) days of Seller Parent’s receipt of Purchaser’s written request for reimbursement) by reimbursement thereof. Purchaser or on behalf its Affiliates shall pay or otherwise make arrangements for the payment to Malaysia Employees of the Transferred Employees bonuses due to such employees on January 1, 2008 under Seller’s the “Angel 3-2-1 Retention Arrangement” described in Section 125 plan flexible spending arrangement4.11(a) of the Disclosure Letter.
(gk) (i) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the Seller Parent or its Subsidiaries’ vacation time policy immediately prior to the Closing Date (the “Vacation Policy”)Date, to the extent permitted by lawLaw, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; providedvacation time in accordance with the terms of the applicable Purchaser vacation plan, however, that including without limitation the required approval of management to take time off. Purchaser shall be liable for and pay in cash an amount equal to convert such accrued but unused vacation time to any Transferred Employee whose employment terminates hours under Purchaser’s Time Off Plan (for any reason subsequent U.S. Employees), to days in accordance with Purchaser’s holiday practices for employees of Purchaser and its Affiliates employed in Germany (for Germany Employees) and to a vacation program comparable to the applicable vacation program of Seller Parent or its Subsidiaries as of the date immediately prior to the Malaysia Closing Date and (for Malaysia Employees).
(ii) Notwithstanding anything in Section 6.6(k)(i) to the contrary, Purchaser shall indemnify reimburse Seller for or its Subsidiaries an amount equal to such the accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer in lieu of the assumption of such accrued but unused vacation time from Angel or Seller Parentby Purchaser, along with any employment taxes payable to a Governmental Authority that are related thereto, in cash within thirty (30) days of Purchaser’s receipt of Seller’s written request for reimbursement thereof.
(hiii) Purchaser or For the purposes of this Section 6.6(k), “vacation time” shall include vacation time, sick time, Seller Parent and its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure LetterSubsidiaries’ Flexible Time Off program, floating holidays and similar arrangements.
(il) The Seller Parties shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are is binding upon the Seller Parties under any such law and shall indemnify Purchaser for any Liabilities and Losses related thereto.
(jm) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries with respect to any liability under COBRA or similar applicable Laws in the United States arising from the actions (or inactions) of Purchaser or its Subsidiaries after the Closing Date. The Seller Parties shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) ), and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described herein.
(kn) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries Affiliates with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by any Seller Parent, Seller and/or its Subsidiaries Party for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Section 6.6(n) of the Disclosure Letter lists each Designated Employee. The Seller Parent’s and Seller’s Parties’ liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date (or the Malaysia Closing Date, with respect to any Designated Employee who is a Malaysia Employee).
Appears in 1 contract
Samples: Purchase and Sale Agreement (Avago Technologies LTD)
Employee Relations and Benefits. (a) The Parties intend that there Prior to the Closing, in each case in form and substance reasonably satisfactory to Buyer, Seller shall, and shall be continuity of employment with respect cause the Seller Group to, take all actions necessary or appropriate to all Business Employees as follows:
(i) Automatic Transferred Employees shall not transfer the employment or engagement of all Participants who are current officers, employees or independent contractors of any member of the Seller Group (the “Current Participants”) to the Company prior to the Closing Date, including the Current Participants whose employment is anticipated to be terminated on the Closing Date. Prior to the Closing, in each case in form and substance reasonably satisfactory to Buyer, Seller shall take all actions necessary or appropriate to cause the Company to assume all liabilities to or in respect of (including paid time off) the Current Participants upon Closing the transfer of their employment or engagement, with the exclusion of any employment or similar contracts and all associated liabilities (including any severance liabilities) with those arrangements (the rights“Employment Contracts”), powers, duties, and to assume all remaining liabilities and obligations to or in respect of any former officer, employee or independent contractor of the Seller or any member of the Seller Group (the “Former Participants”) other than liabilities and obligations to or the relevant Subsidiary of Seller) to the employees in respect of the material terms Employment Contracts. The liabilities and obligations described in the foregoing sentence are referred to herein as “Employment Liabilities.” For the avoidance of employment doubt, any severance payable to the employees who are parties to the Employment Contracts shall not be an Employment Liability; provided, however, Buyer agrees, if requested by Seller, from and after the Closing to assist Seller with the employees payment of any severance payments or other obligations under the Employment Contracts at Seller’s sole cost and expense (without duplication of the severance amounts under the Employment Contracts included in force immediately before Closing shall be transferred clause (b) of the definition of “Outstanding Seller Transaction Expenses”) and without any Liability to Purchaser the Company or Buyer. From and after the Closing, Buyer and the Company will promptly reimburse, indemnify and hold Seller and its Affiliates harmless with respect to any and all Employment Liabilities whether contingent or otherwise and whether known or unknown as of the date of this Agreement, regardless of when any such liability or obligation is incurred, arises or is disclosed, provided, however, that the Buyer and the Company will not indemnify the Seller and its Affiliates for any reduction to the Base Purchase Price on account of the inclusion of any accrued Employment Liabilities in accordance with local employment LawsAdjusted Working Capital.
(iib) For nonPrior to the Closing, in each case in form and substance reasonably satisfactory to Buyer, Seller shall take all actions necessary or desirable to cause the Company to assume sponsorship of all Benefit Plans listed on Section 3.20(a) of the Seller Disclosure Schedule (which, for purposes of clarity, shall not include the Employment Contracts), effective as of no later than immediately prior to the Closing, along with all assets of and obligations and liabilities under or with respect to such Benefit Plans (the “Assumed Benefit Plans”). From and after the Closing, Buyer and the Company will promptly reimburse, indemnify and hold Seller and its Affiliates harmless with respect to any and all liabilities and obligations under or in respect of the Assumed Benefit Plans (“Benefit Plan Liabilities”), provided, however, that the Buyer and the Company will not indemnify the Seller and its Affiliates for any reduction to the Base Purchase Price on account of the inclusion of any Benefit Liabilities in Adjusted Working Capital. Prior to the Closing, Seller shall cause the Company to enter into arrangements to effect the Post-Automatic Transferred EmployeesClosing Bonus, Purchaser in each case in form and substance reasonably satisfactory to Buyer. Any Continuing Employee that resigns his or her employment prior to the end of such ninety (90) day employment period shall be allowed to retain the first fifty percent (50%) paid to that individual in connection with the Closing, but shall forfeit the remaining fifty percent (50%) for no consideration.
(c) From and after the date of this Agreement, Seller shall reasonably cooperate with Buyer to provide Buyer with reasonable access, during regular working hours, to the Current Participants to allow Buyer to evaluate the Current Participants and make determinations with respect to Buyer’s decision to offer the Current Participants continued employment with Company (or with Buyer or its Affiliates) for a period beyond the Closing Date. Buyer shall have no obligation to each Business Employee effective continue the employment of any Current Participant for any period after the Closing Date and may terminate employment of any such Current Participant on the Closing Date, each such offer to be at the same general location provided that Buyer’s decisions and substantially the same terms and conditions of employment, including (A) the same or superior base salary or base wage rate, (B) substantially the same position, and (C) cash bonus and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those provided determination with respect to such employees by Seller terminations are conducted in accordance with Law. Buyer will provide any notifications that may be required under WARN with respect to any employment terminations that are anticipated to occur on or its Subsidiaries immediately prior to after the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “Current Employment Terms”). Notwithstanding anything to the contraryextent reasonably practicable, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result of any requirements of applicable local Law.
(iii) Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), offer employment with any business of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereof; provided, however, that Seller Parent and its Subsidiaries shall be permitted to take bear the ultimate responsibility for providing any action they are legally required to take in order to comply with local employment Lawssuch notifications for any terminations occurring on or after the Closing. For the avoidance of doubt, the Employment Liabilities include all liabilities arising under WARN.
(ivd) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept For the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting period beginning on the Closing Date and ending on the date one (1) year after anniversary of the Closing Date (the “Continuation Period”), Buyer shall, or shall cause the Company to, provide each employee of the Company who is employed by the Company immediately prior to the Closing and continues in the employ of Buyer, the Company or any of their respective Affiliates following the Closing Date (“Continuing Employees”) with: (i) annual base salary or wages that are no less than the annual base salary or wages provided to such Continuing Employee immediately prior to the Closing Date, and (ii) incentive compensation opportunities and employee benefits that are (A) no less than the incentive compensation opportunities and employee benefits provided to such Continuing Employee immediately prior to the Closing Date or any longer period as required under local employment Laws(B) available to similarly situated employees of Buyer and its Affiliates, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries provided that with respect to the retirement and health benefits, such retirement and health benefits shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies retirement and arrangements in effect immediately prior to the Closing Date with respect health benefits provided to such Transferred Continuing Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing herein shall obligate Purchaser or one of its Subsidiaries to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, Purchaser shall, for a period ending on the date one (1) year after the Closing Date, maintain a severance pay practice for the benefit of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) of the Disclosure Letter. Purchaser shall assume and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any Non-U.S. Employees who are entitled to severance or similar payments under applicable local Laws due to Purchaser’s noncompliance with Sections 6.6 or 6.7, and (C) except as otherwise provided in Section 6.6(k) or with respect to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee with respect to claims incurred by such Transferred Employees or their covered dependents prior to the Closing Date. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of disability benefits, when the disability occurs; in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(de) Transferred Employees Without limiting the obligations set forth in Section 6.10(d), with respect to annual bonuses for each Continuing Employee for the calendar year in which the Closing occurs, Buyer will or will cause the Company to pay annual bonuses that consist of the following two amounts: (i) with respect to any portion of the calendar year that occurred prior to the Closing, the Continuing Employee will be eligible to receive a payment equal to the amount that was deemed accrued for that Continuing Employee at the time of Closing as a current liability in the calculation of Adjusted Working Capital (notwithstanding any results of the Business), and (ii) with respect to the portion of the calendar year that begins with the Closing Date, the Continuing Employee will be eligible to receive a payment equal to the amount that was earned, if any, pursuant to the applicable annual incentive bonus plan maintained by Buyer or its Affiliates for that Continuing Employee for the applicable portion of the calendar year. All annual bonus payments with respect to the calendar year in which the Closing occurs will be paid in accordance with terms and conditions of the applicable annual incentive plan of Buyer or its Affiliates in effect for that calendar year. In the event Buyer or the Company terminates the employment of any Current Participant without cause on the Closing Date or after the Closing Date and prior to the payment date for annual bonuses for the year in which the Closing occurs, Buyer will pay or cause to be paid to such individual a pro-rated annual bonus for the year of termination (each a “Pro Rata Bonus”), subject to such individual executing and not revoking a customary release of claims. Any Current Participant that resigns their employment or that Buyer or the Company terminates for cause shall not be eligible for any annual bonus, including the Pro Rata Bonus.
(f) With respect to any Continuing Employee whose employment is terminated during the Continuation Period by Buyer without Cause (as such term is defined in Buyer’s applicable severance plan or policy in effect at the time of such Continuing Employee’s termination of employment), Buyer shall provide, or shall cause the Company to provide, severance benefits to such Continuing Employee, which shall be given determined and payable in accordance with the terms and conditions of the severance plan maintained for similarly situated employees of Buyer and its Affiliates in effect at the time of such Continuing Employee’s termination of employment, provided, however, that severance payments for any Continuing Employee who is terminated within ninety (90) days after Closing will be as set forth on Section 1.1(e)(ii) of the Seller Disclosure Schedule, subject to such individual executing and not revoking a customary release of claims. Such severance payments, if any, shall be in addition to a Pro Rata Bonus, if applicable. For the avoidance of doubt, (i) if any Continuing Employee resigns for any reason or is terminated by the Company, Buyer or any of their Affiliates for cause, such Continuing Employee will not be entitled to any severance payment, benefit or other entitlement pursuant to Buyer’s severance policies or otherwise, including a Pro Rata Bonus, and (ii) nothing in this Agreement shall limit Buyer’s right or authority to terminate the employment or services of any Continuing Employee at any time and for any reason.
(g) From and after the Closing, Buyer shall take all commercially reasonable efforts to (i) give each Continuing Employee full credit for all service with Sellerpurposes, including eligibility to participate, level of benefits, vesting and benefit accrual, under any employee benefit plans, programs and arrangements (including severance and paid time off policies (and any accruals thereunder)) provided, sponsored, maintained or contributed to by Buyer or any of its SubsidiariesAffiliates (“Buyer Plans”) for such Continuing Employee’s service with the Company, and with any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiariesemployer, to the same extent as such service was credited for such purpose recognized by Sellerthe Company, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibility, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment except to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which extent such credit would result in the duplication of benefits accrual for the same period of service), and (ii) credit to each Continuing Employee under the applicable paid time off program of Buyer or its Affiliates for all unused paid time off days of such Continuing Employee that accrued on or prior to the Closing Date under any paid time off program of the Company in place immediately prior to the Closing Date, and shall not take any actions that adversely affect any such Continuing Employees (or their future accrual of paid time off) as a result of such credit. Notwithstanding the foregoing, to the extent permitted under Law, Buyer shall not be required to provide credit for such service for benefit accrual purposes under any Buyer Plan that is a defined benefit pension plan or post-retirement medical plan, to the extent that the credit would result in duplicative benefits to the Continuing Employee, or to the extent that such credit was not recognized with a similar Benefit Plan to which that individual participated immediately prior to the Closing.
(eh) Except Buyer shall take all commercially reasonable efforts to (i) waive or cause to be waived for each Continuing Employee and his or her dependents, any waiting period provision, payment requirement to avoid a waiting period, pre-existing condition limitation, actively-at-work requirement and any other restriction that would prevent immediate or full participation under the welfare plans of Buyer or any of its Affiliates applicable to such Continuing Employee to the extent such waiting period, pre-existing condition limitation, actively-at-work requirement or other restriction would not have been applicable (or was previously satisfied by) to such Continuing Employee under the terms of the comparable Benefit Plan, and (ii) give or cause to be given full credit under the Buyer Plans applicable to each Continuing Employee and his or her dependents for all co-payments and deductibles under any Benefit Plan satisfied prior to the Closing in the same plan year as required the Closing for purposes of any annual and lifetime maximums, as if there had been a single continuous employer.
(i) Without limiting the provisions of Section 6.10(b), sponsorship of the Benefit Plan of Seller that is a qualified plan with a cash or deferred arrangement described in Section 401(k) of the Code (the “Seller 401(k) Plan”) shall be transferred to the Company prior to the Closing. If so directed by applicable Law or the Buyer prior to the Closing Date, Seller shall cause the Company to adopt resolutions terminating the Seller 401(k) Plan, effective as may of the day prior to the Closing Date, but subject to the Closing. Buyer shall cause each Continuing Employee who is a participant in the Seller 401(k) Plan at the time of its termination to be agreed allowed to by Seller and Purchaser, participate effective as of the Closing Date in a 401(k) plan sponsored by Buyer (or a member of the Transferred Employees same controlled group as Buyer) and such employee shall cease be eligible immediately after the Closing Date to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries and shall commence participation in the Purchaser Plans. Seller and Seller Parent shall take all necessary actions to allow make elective deferrals into such Transferred Employees to rollover any associated loan notes to the extent permitted under the Seller 401(k) plan, and to be eligible to receive employer contributions. Purchaser In addition, if applicable, Buyer shall take all steps necessary cause such 401(k) plan to permit each such Transferred Employee who has received an accept rollover contributions of “eligible rollover distribution distributions” (as defined in within the meaning of Section 402(c)(4401(a)(31) of the Code) from the Seller 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated participant loans, as part of any lump sum distribution . All rollovers shall be accomplished pursuant to the extent permitted by terms of the Seller 401(k) Plan into an account under a Buyer’s 401(k) plan maintained by Purchaser (the “Purchaser’s 401(k) Plan”). Notwithstanding the foregoing, Seller and Purchaser may mutually agree following the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer of the account balances of Transferred Employees under the Seller 401(k) Plan to the Purchaser’s 401(k) Plan.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy immediately prior to the Closing Date (the “Vacation Policy”), to the extent permitted by law, Purchaser shall assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parent.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(i) Seller shall retain full responsibility for compliance with those provisions of the Worker’s Adjustment and Retraining Notification Act of 1988, as amended (“WARN Act”) or any comparable provision of state or local law that are binding upon Seller under any such law and shall indemnify Purchaser for any Liabilities and Losses related theretoadministrative policies.
(j) Purchaser shall indemnify The Parties acknowledge and hold harmless Seller agree that all provisions contained in this Section 6.10 are included for the sole benefit of the Parties. This Agreement is not intended by the Parties to, and its Subsidiaries with respect nothing in this Section 6.10 or otherwise in this Agreement, whether express or implied, shall, (i) constitute an amendment to any liability under COBRA Benefit Plan or similar applicable Laws in any Buyer Plan or (ii) confer on any Participant or any other Person (other than the United States arising from the actions Parties) any rights or remedies (including any right to employment or inactions) of Purchaser other service relationship or its Subsidiaries after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” (as defined under COBRA) and liabilities under similar applicable Laws incurred on or prior to the Closing Date or arising as a result of the transactions described hereinthird-party beneficiary rights).
(k) Purchaser shall have no liabilities associated with any retention or severance plans entered into by Seller or its Subsidiaries with regard to any Designated Employee. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or on the Closing Date.
Appears in 1 contract
Samples: Purchase and Sale Agreement (Targa Resources Corp.)
Employee Relations and Benefits. (a) The Parties parties hereto intend that there shall be continuity of employment with respect to all Business Transferred Employees as follows:;
(i) Automatic Transferred Employees where local employment laws provide for an automatic transfer of employees upon the transfer of a business as a going concern, the employment of the employees shall not be terminated upon the Closing and the rights, powers, duties, liabilities and obligations of Seller (or the relevant Subsidiary of a Local Seller) to or in respect of the employees in respect of the material terms any contract of employment with the employees in force immediately before the Closing shall be transferred to Purchaser and/or one of its Affiliates in accordance with those local employment Laws.
laws, and (ii) For non-Automatic Transferred Employeeswhere the local employment laws do not provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern (or in any jurisdiction where the local employment laws do provide for the automatic transfer of employees upon the transfer of a business or part of a business as a going concern but for any reason any employee does not transfer by operation of law), Purchaser and/or one of its Affiliates shall offer employment to each Business Employee effective the Transferred Employees commencing on the Closing Date, each Date or upon the return of any such offer Transferred Employee to be at the same general location and substantially the same terms and conditions of active employment, including (A) provided that the same or superior terms of such employment may differ from base salary or base wage ratesalary, (B) substantially the same positionbenefits, and (C) cash bonus location, position and other non-equity based incentive compensation opportunities substantially similar in the aggregate as those terms provided to such employees by Seller or its Subsidiaries a Local Seller immediately prior to the Closing Date (unless otherwise required by local Law, in which case such offer shall comply with local law) (the “"Current Employment Terms”"). Notwithstanding anything Purchaser shall cause such ------------------------ Transferred Employees who are U.S. Employees to be eligible to participate in such employee benefit plans of Purchaser in which similarly situated employees of Purchaser are generally eligible to participate, provided that nothing herein shall prevent Purchaser from terminating the contrary, all offers pursuant to this Section 6.6(a)(ii) to employees in jurisdictions outside the United States will be on such terms as are necessary to avoid giving rise to any severance or similar Liabilities of Seller and its Subsidiaries as a result employment of any requirements of applicable local Law.
(iii) such Transferred Employee or modifying or terminating such plans from time to time. Seller Parent shall not, and shall cause its Subsidiaries not to (and shall not encourage or assist its Affiliates to), engage in any activity intended to discourage any Business Transferred Employee from accepting an offer of employment from Purchaser and/or one of its Subsidiaries, and Seller Parent shall not, Affiliates and shall cause its Subsidiaries use commercially reasonable efforts to provide that Transferred Employees (other than Transferred Employees who have applied for a position outside the Business prior to the date hereof) will not to (and shall not encourage or assist its Affiliates to), offer be offered employment with any business by businesses of Seller Parent or any of its Subsidiaries or Affiliates (other than the Business) after the date hereof and prior to the Closing Date (other than Business Employees who have applied for a position with Seller Parent or one of its Subsidiaries or Affiliates outside the Business prior to the date hereofDate; provided, however, that Seller Parent and its Subsidiaries Affiliates shall be -------- ------- permitted to take any action they are legally required to take in order to comply with local employment Laws.
(iv) Those employees who are transferred to Purchaser and/or one of its Subsidiaries in accordance with clause (i) above and those who accept the offer of employment from Purchaser and/or one of its Subsidiaries in accordance with clause (ii) above and, in each case, who commence employment with Purchaser and/or one of its Subsidiaries shall be referred to herein as “Transferred Employees.” For purposes hereof, the date on which any Transferred Employee is deemed to “commence employment” shall be the Closing Date.
(v) Except as set forth in Section 6.6(a)(v) of the Disclosure Letter, starting on the Closing Date and ending on the date one (1) year after the Closing Date or any longer period as required under local employment Laws, each Transferred Employee who remains employed by Purchaser and/or one of its Subsidiaries shall be employed by Purchaser and/or one of its Subsidiaries on terms no less favorable than the Current Employment Terms and participate in employee benefit plans, agreements, programs, policies and arrangements of Purchaser and/or one of its Subsidiaries (the “Purchaser Plans”) that are substantially similar in the aggregate to the employee benefit plans, programs, policies and arrangements in effect immediately prior to the Closing Date with respect to such Transferred Employee and not inconsistent with the Current Employment Terms, and shall be offered any other additional terms and conditions of employment by Purchaser and/or one of its Subsidiaries required by local employment Laws; provided, however, that nothing laws. Nothing herein shall obligate Purchaser or one of its Subsidiaries Affiliates to provide the Transferred Employees with any defined benefit pension plans; and provided, further, that Purchaser shall provide U.S. Transferred Employees with the Current Employment Terms or retiree medical benefits described in Section 6.6(a)(v) of the Disclosure Letter.
(vi) unless required to do so by local laws. Notwithstanding anything to the contrary in this Agreement, starting on the Closing Date, for purposes of determining severance pay, Purchaser shallshall give each Transferred Employee credit for service with Seller and severance pay equal to that of similarly situated persons within Purchaser. Purchaser shall comply with Applicable Employee Benefits Laws or other applicable local laws and regulations, for a period ending with respect to the terms and conditions of employment, including employee benefits, it offers to Non-U.S. Employees on the date one (1) year and after the Closing Date. Purchaser agrees, maintain a severance pay practice for in jurisdictions where applicable, to negotiate or consult in good faith with works counsel organizations or agencies with respect to the benefit initial terms and conditions of each Transferred Employee that is no less favorable than the severance pay practice provided in Section 6.6(a)(vi) employment of the Disclosure LetterNon-U.S. Employees. Purchaser shall assume contemplates offering initial compensation and shall indemnify Seller and its Subsidiaries against all liabilities and obligations to provide any severance or similar payments to (A) any Automatic Transferred Employees, (B) any benefit packages for Non-U.S. Employees who which are entitled comparable in the aggregate to severance or similar payments under the compensation and benefit packages provided by Seller prior to the Closing, provided however, that Purchaser reserves the right to vary the type and amount of particular benefits, to offer certain benefits and not to offer others, within the overall framework of providing a comparable initial compensation and benefit package consistent with the requirements of applicable local Laws due law. Purchaser and Seller agree that the foregoing shall not prevent Purchaser from terminating the employment of any such Non-U.S. Employees or modifying and/or terminating the compensation and benefit packages for such Non-U.S. Employees from time to Purchaser’s noncompliance with Sections 6.6 or 6.7time, and (C) except as otherwise provided in Section 6.6(k) or with respect subject to any payments under a Seller Plan, any Transferred Employee whose employment is terminated by Purchaser or its Subsidiaries following the Closing Daterequirements of applicable local Law.
(b) Seller shall retain responsibility and liability for and continue to pay all medical, life insurance, disability and other welfare plan expenses and benefits for each Transferred Employee Employee, or former employees of the Business, with respect to claims incurred by such Transferred Employees Employees, or former employees of the Business or their respective covered dependents prior to the Closing DateDate except to the extent such liabilities are reflected in the Final Statement of Net Operating Capital. Seller and Purchaser agree that Purchaser shall assume none of said responsibilities or liabilities and Seller shall indemnify and hold harmless Purchaser with respect to any such liabilities. Expenses and benefits with respect to claims incurred by Transferred Employees or their covered dependents on or after the Closing Date shall be the responsibility of Purchaser. For purposes of this paragraph, a claim is deemed incurred: in the case of medical or dental benefits, when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term disability benefits, when the disability occurs; and in the case of workers compensation benefits, when the event giving rise to the benefits occurs; and otherwise, at the time the Transferred Employee or covered dependent becomes entitled to payment of a benefit (assuming that all procedural requirements are satisfied and claims applications properly and timely completed and submitted).
(c) With respect to any plan that is a “"welfare benefit plan” (as defined in Section 3(1) of ERISA), or any plan that would be a “welfare benefit plan” " (as defined in Section 3(1) of ERISA) if it were subject to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be waived any pre-existing condition and waiting periods and (ii) give effect, in determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts paid by, and amounts reimbursed to, such employees during the plan year of the applicable plan sponsored by Seller or one of its Subsidiaries during which the Closing occurs Transferred Employees with respect to similar plans maintained by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall For purposes of any eligibility and vesting requirements under the employee benefit plans and arrangements maintained or to be given credit for all service with Seller, any of its Subsidiaries, and any predecessor employer for which Seller credited service, including without limitation, Angel, Hewlett Packard or their Subsidiaries, to the same extent as such service was credited for such purpose established by Seller, under each Purchaser Plan in which such Transferred Employees are eligible to participate for purposes of eligibilityparticipate, vesting and benefits accrual (other than under any equity or quasi-equity compensation plan or under a defined benefit pension plan either (A) in which no assets are transferred or for which no other compensation, including an adjustment Purchaser shall ensure that service by such Transferred Employees with Seller shall be deemed to the Purchase Price, is received by Purchaser pursuant to this Agreement or (B) which would result in the duplication of benefits accrual for the same period of service)have been service with Purchaser.
(e) Except as required by applicable Law law or as may be agreed to by Seller and Purchaser, or as reflected otherwise in the Actuarial Memorandum, as of the Closing Date the Transferred Employees shall cease to accrue further benefits under the employee benefit plans and arrangements maintained by Seller and its Subsidiaries Affiliates and shall commence participation in the Purchaser Plansemployee benefit plans and arrangements maintained or to be established by Purchaser. Seller and Seller Parent shall take all necessary actions to fully vest the Transferred Employees in their account balances under the Philips Electronics North America Corporation Employee Savings Plan ("Seller's 401(k) Plan") or any other -------------------- qualified profit-sharing plan maintained by Seller and allow such Transferred Employees to rollover any associated loan notes to the extent permitted under the applicable Seller 401(k) planPlan. Purchaser shall take all steps necessary to permit each such Transferred Employee who has received an eligible rollover distribution (as defined in Section 402(c)(4) of the Code) from the Seller Seller's 401(k) Plan, if any, to roll such eligible rollover distribution, including any associated loans, as part of any lump sum distribution to the extent permitted by the Seller Seller's 401(k) Plan into an account under a 401(k) plan maintained by Purchaser Purchaser's Employee Savings Plan (the “"Purchaser’s 's 401(k) Plan”"). Notwithstanding With regard to Non-U.S. Employees, in the foregoing, Seller and Purchaser may mutually agree following event of ----------------------- any conflict between the date hereof, but prior to the Closing Date, to provide for a trust to trust transfer terms of the account balances Actuarial Memorandum and the terms of Transferred Employees under this Section 5.4 and Section 5.5, the Seller 401(k) Plan to terms of the Purchaser’s 401(k) PlanActuarial Memorandum shall prevail.
(f) Promptly after the Closing, Seller shall transfer and Purchaser shall accept the flexible spending account elections and accounts (maintained pursuant to Code Sections 105 and 129) of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement. Promptly after the Closing, Seller and Seller Parent shall cause to be transferred to Purchaser the aggregate net cash amount (determined immediately prior to the Closing) for contributions paid (but not yet reimbursed or subject to a pending claim for reimbursement) by or on behalf of the Transferred Employees under Seller’s Section 125 plan flexible spending arrangement.
(g) With respect to any accrued but unused vacation time (including flexible time time-off and sick pay) as of the Closing Date to which any Transferred Employee is entitled pursuant to the vacation policy applicable to such Transferred Employee immediately prior to the Closing Date (the “"Vacation Policy”"), to the extent permitted by law, Purchaser shall --------------- assume the liability for such accrued but unused vacation time and allow such Transferred Employee to use such accrued vacation; provided, however, that Purchaser shall be liable for and pay in cash an amount equal to such accrued but unused vacation time to any Transferred Employee whose employment terminates for any reason subsequent to the Closing Date and Purchaser shall indemnify Seller extent such liability is provided for an amount equal to such accrued but unused vacation time paid by Seller to any Transferred Employee who is, or was, entitled to an accrued but unused vacation time payout on termination from Angel or Seller under local Law and who elects, or elected, not to transfer such accrued but unused vacation time from Angel or Seller Parentin the Final Statement of Net Operating Capital.
(h) Purchaser or its Affiliates shall pay or otherwise make arrangements for the payment of each of the obligations described in Section 6.6(h) of the Disclosure Letter.
(ig) Seller shall retain full responsibility for compliance with those provisions of agrees to provide any required notice filings and payments under the Worker’s Worker Adjustment and Retraining Notification Act of 1988, ("WARN") ---- and any other applicable U.S. Law and to otherwise comply with any such statute with respect to any "plant closing" or "mass layoff" (as amended (“WARN Act”defined in WARN) or similar event affecting Transferred Employees and occurring on or prior to the Closing (other than employment terminations and other events resulting from the affirmative action of Purchaser or its Affiliates). Purchaser agrees to provide any comparable provision of state or local law that are binding upon Seller required notice filings and payments under WARN and any other applicable U.S. Law and to otherwise comply with any such law statute with respect to any "plant closing" or "mass layoff" (as defined in WARN) or similar event affecting Transferred Employees and shall indemnify occurring on or after the Closing. To the extent that Purchaser for any Liabilities or Seller incurs obligations under WARN due to the combined actions of Seller and Losses related theretoPurchaser (or their Affiliates), Seller and Purchaser agree to evenly split the costs incurred in complying with the obligations imposed by WARN.
(ji) Purchaser shall indemnify and hold harmless Seller and its Subsidiaries the Local Sellers with respect to any liability under COBRA or similar other applicable Laws in U.S. law, or pursuant to the United States requirements of Section 701 et seq. of ERISA or the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") arising ----- from the actions (or inactions) of Purchaser or its Subsidiaries Affiliates after the Closing Date. Seller shall retain all liabilities, including with respect to any “qualifying event,” Qualifying Event (as defined in Treasury Regulation section 54.4980B-4, Q&A-1), under COBRA) and liabilities under similar applicable Laws , or pursuant to the requirements of Section 701 et seq. of ERISA or HIPAA, incurred on or prior to the Closing Date or arising as a result of the transactions described hereincontemplated hereby, whether with respect to the Transferred Employees, former employees of the Company, or any of their dependents, and Seller shall indemnify and hold harmless Purchaser with respect to any such liabilities.
(ii) Prior to the Closing Date, Seller shall pay any and all accruals owed with respect to Transferred Employees under the terms of any Seller Plan maintained in the U.S. (including any such Seller Plan with a "last day of the quarter" requirement) for any plan year that commenced prior to the Closing Date.
(i) Prior to the Closing Date, Seller and PENAC shall take all necessary steps to vest the Transferred Employees in their accrued benefit with respect to service up to the Closing Date under each of the Philips Electronics North America Corporation Pension Plan and the Philips Electronics North America Corporation Pension Plan for Hourly Employees (each, a "Seller Domestic Defined ----------------------- Benefit Plan"). Seller, PENAC and Purchaser agree that Purchaser shall succeed ------------ to no obligations or liabilities of Seller, PENAC or the Company with respect to Transferred Employees, or any other former employees of the Business or their beneficiaries, under any Seller Domestic Defined Benefit Plan, and Seller and PENAC shall indemnify and hold harmless Purchaser with respect to such liabilities.
(j) For a period of 24 months following the Closing Date, Seller, the Local Sellers, Purchaser and their Affiliates will reasonably cooperate in promoting the voluntary transfer of expatriate Transferred Employees in whose favor there exists return guarantees by Seller or any Local Seller, to the Purchaser's organization.
(k) Following the execution of this Agreement, Seller will reasonably cooperate to provide to Purchaser shall have no liabilities associated with any retention or (i) true and complete information regarding the name, current annual compensation rate (including bonuses and commissions), title, current base salary rate, accrued bonus, accrued sick leave, accrued severance plans entered into pay and accrued vacation pay of each Transferred Employee and (ii) descriptive materials regarding each Benefit Plan sufficient to permit Purchaser to ascertain the level of benefits and other material terms and conditions of such Benefit Plans as they pertain to the Transferred Employees.
(l) Schedule 5.4(l) sets forth the preliminary identities of the Transferred Employees, as identified by Seller or its Subsidiaries with regard to any Designated Employeebased on information as of the date of this Agreement. “Designated Employees” are Business Employees who have been chosen by Seller Parent, Seller and/or its Subsidiaries for retention or dismissal under any current retention or severance plan of Seller prior Prior to the Closing Date, but either whose period of retention has not been completed prior to the Closing Date or whose dismissal has not been carried out prior to the Closing Date; provided, however, that Designated Employees Seller and Purchaser shall not include any employee chosen by Seller, after consultation with Purchaser, as a result of the transactions contemplated by this Agreement. Seller Parent’s and Seller’s liability with regard to Designated Employees is subject to the rules of the retention and severance plans of Seller as in force prior to or agree on the Closing Dateemployees to be listed on Schedule 5.4(l) as Transferred Employees.
Appears in 1 contract
Samples: Purchase Agreement (C Cor Net Corp)
