Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees shall be coordinated by Company. (b) Company Employees (other than those who are parties to an employment, change of control, or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), receive severance pay in a lump sum equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or (ii) eight weeks of base compensation. (c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits. (d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs. (e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans. (f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act. (g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval). (h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant. (i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
Appears in 2 contracts
Samples: Merger Agreement (Independent Bank Corp), Merger Agreement (Independent Bank Corp)
Employees; Benefit Plans. (a) All Company Employees who remain employed by Company to whom Buyer in its sole discretion offers employment at or any of its Subsidiaries as of prior to the Effective Time shall be retained after the Effective Time as employees of Buyer Bank so long as such Company Employees accept the terms and conditions of employment specified by Buyer; provided, that continued retention by Buyer Bank of such employees subsequent to the Merger shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, consulting or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees Company’s employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank shall (if Buyer, in its discretion, requests that a release be signed), i) receive severance pay in a lump sum equal to the greater two weeks of the amount determined under (i) the East Boston Savings Bank Amended base weekly pay for each completed year of employment service encompassing all periods of employment with Company or any of its Subsidiaries and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b)ending with such employee’s termination date with Buyer, or with a maximum payment equal to 26 weeks of base pay, and (ii) eight weeks be offered outplacement assistance. Such severance pay will be made at Buyer Bank’s regular payroll intervals. Such severance payments will be in lieu of base compensationany severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time.
(c) Buyer and Company have made the agreement regarding Company Employees set forth on Schedule 5.11(c).
(d) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next last sentence of this Section 5.11(c5.11(d). For However, for any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(de) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan Plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, agreements and arrangements of Company. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(fg) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
Appears in 2 contracts
Samples: Merger Agreement (Mayflower Bancorp Inc), Merger Agreement (Independent Bank Corp)
Employees; Benefit Plans. (a) All Company Employees who remain employed by Company to whom Buyer in its sole discretion offers employment at or any of its Subsidiaries as of prior to the Effective Time shall be retained after the Effective Time as employees of Buyer Bank so long as such Company Employees accept the terms and conditions of employment specified by Buyer; provided, that continued retention by Buyer Bank of such employees subsequent to the Merger shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, consulting or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees Company’s employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in a lump sum equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or (ii) eight two weeks of base compensationweekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries and ending with such employee’s termination date with Buyer, with a maximum payment equal to 26 weeks of base pay. Such severance pay will be made at regular payroll intervals. Such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next last sentence of this Section 5.11(c) and to Section 5(d). For However, for any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan Plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of the Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of the Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on in the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of the Company for purposes of any benefit plans, agreements, agreements and arrangements of the Company. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In Subject to the event that Buyer or Buyer Bank terminates or lays off a sufficient number occurrence of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and the tax-qualified employee stock ownership plan of the Company (iithe “ESOP”) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide terminated immediately prior to and effective as of the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration). Following Any outstanding ESOP indebtedness shall be repaid from unallocated ESOP assets and the Effective Time, balance of the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other assets remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after (subject to the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)as provided for below), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under provided for in the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as unless otherwise required by applicable Lawlaw. If requested by Buyer, prior Prior to the Effective Time, Company and Company BankCompany, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP and the proposed allocations as may be required requested by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall will adopt such amendments to the ESOP and related trusts and resolutions as may be reasonably required by the IRS as a condition to effect granting such favorable determination letter on termination. Neither Company, nor following the provisions Effective Time, Buyer shall make any distribution from the ESOP to any Company Employees who continue employment with Buyer, except as may be required by applicable law, until receipt of such favorable determination letter. In the case of a conflict between the terms of this Section 5.11(g5.11(f) (which amendments or resolutions and the terms of the ESOP, the terms of the ESOP shall control; however, in the event of any such conflict, Company before the Merger, and Buyer after the Merger, shall use their commercially reasonable efforts to cause the ESOP to be provided amended to Buyer at least five (5) Business Days prior conform to adoption for Buyer’s review and approvalthe requirements of this Section 5.11(f).
(hg) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
Appears in 2 contracts
Samples: Merger Agreement (Central Bancorp Inc /Ma/), Merger Agreement (Independent Bank Corp)
Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon BuyerXxxxx’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, retention or other similar type of agreement or arrangement which provides for severanceseverance or other payments or benefits upon termination) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer Xxxxx and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), (i) receive severance pay in a lump sum equal to the greater two weeks’ base compensation for every year of the amount determined under service, up to a maximum of twenty-six (i26) the East Boston Savings Bank Amended weeks and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or (ii) eight weeks of base compensationbe offered outplacement assistance.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c5.12(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan (excluding any severance, defined benefit pension, deferred compensation, equity- based, change-in-control, retention and/or transaction-based plans, programs or arrangements) to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.times
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.Benefit
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Employees; Benefit Plans. (a) All Employees of Company Employees who remain employed by and Company Bank shall be retained as “at will” employees of the Surviving Entity or any of its Subsidiaries as of Buyer Bank after the Effective Time shall be subject to as employees of Buyer or Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those who are parties to an employment, change of controlExcept as otherwise provided in this Agreement, or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as otherwise determined in writing by the employerBuyer no less than ten (10) within one year after days preceding the Effective Time shallClosing Date, subject not later than the day immediately preceding the Closing Date, Company shall take all action required to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), receive severance pay in a lump sum equal to the greater of the amount determined under (i) cause any Company Benefit Plan that has liabilities in respect of its participants, to be fully funded to the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or reasonable satisfaction of Buyer; (ii) eight weeks of base compensationterminate via duly adopted resolution all such Company Benefit Plans, including any nonqualified deferred compensation plans or arrangements Company 401(k) Plan and the ESOP, effective immediately prior to Closing and fully vest each participant in any unvested account balances thereunder; and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company employees in such form or forms as Company or Company Bank reasonably determined under the applicable Company Benefit Plans and as permitted or required under applicable Law.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the The ESOP shall be terminated via duly adopted resolution the day immediately preceding the Closing Date (the “ESOP Termination Date”). No new participants shall be admitted on On or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On prior to the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of unallocated shares of the Company Common Stock Shares held in by the ESOP Loan ESOP’s suspense account (the “Suspense Shares”) back to Company Bank or any other lender (as applicable) to repay the full outstanding balance of the ESOP Loan loan(s). None of the unallocated shares used to repay the ESOP loan(s) will be entitled to receive any Merger Consideration. On or prior to the ESOP Termination Date, the Company shall make a contribution to the ESOP and/or take such other actions as requested by Buyer for prior years’ hires in fullconnection with the ESOP, as amended and restated effective January 1, 2016, in either case as may be directed by Buyer. All remaining shares of unallocated Company Common Stock Shares and other unallocated plan assets, if any, held by the ESOP shall be allocated among the participant accounts on the ESOP Termination Date in accordance with the terms of the ESOP, and, as of immediately prior to the Effective TimeClosing, including any unallocated shares all Company Common Shares held in by the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following As soon as administratively feasible following the Effective TimeClosing Date, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts balances of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and shall be distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request in accordance with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOPESOP and the requirements of the Code and ERISA. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP necessary amendment(s) and related trusts and resolutions board resolution(s) to effect the provisions of this Section 5.11(g) 5.12(b), upon prior written notice and consent of Buyer. From the date of this Agreement until the ESOP Termination Date, contributions by Company to the ESOP shall continue to be accrued and made in accordance with the terms of the ESOP except as otherwise directed by Buyer in accordance with this clause (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approvalc).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
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Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, consulting or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees Company’s employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each such Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), i) receive severance pay in a lump sum equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended of two weeks pay for every year of service, up to a maximum of twenty-six weeks severance, and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or (ii) eight weeks be offered outplacement assistance. Such severance pay will be made at Buyer Bank’s regular payroll intervals. Such severance payments will be in lieu of base compensationany severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a such comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, benefits and vacation entitlement (but not for accrual of benefits under any Buyer Benefit PlansPlan, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a an Employee with the Company Employee or any Subsidiary shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan Plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan Plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of Company, Company but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, agreements and arrangements of Company. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the Worker Adjustment and Retraining Notification Act of 1988 (the “WARN Act”).
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
(ih) If Buyer terminates Company’s 401(k) plan prior to and Company have made the Closing Date, Buyer shall use its commercially reasonable efforts to permit agreement regarding Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planEmployees set forth on Schedule 5.11(h).
Appears in 1 contract
Employees; Benefit Plans. (a) All Employees of Company Employees who remain employed by and Company or any of its Subsidiaries Bank shall be retained as of “at will” employees after the Effective Time shall be subject to as employees of Buyer or Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees Except as otherwise provided in this Agreement, not later than ten (other than those who are parties to an employment, change of control, or other type of agreement which provides for severance10) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject Business Days prior to the execution by each Closing Date, Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), receive severance pay in a lump sum equal shall take all action required to the greater of the amount determined under (i) cause any Company Benefit Plan that has liabilities in respect of its participants, to be fully funded to the East Boston Savings extent required under applicable Law; (ii) terminate all such plans effective immediately prior to Closing (unless directed otherwise by Buyer or Buyer Bank); and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank Amended elects and Restated Employee Severance Compensation Plan as set forth permitted or required under applicable Law. Distributions of benefits under any profit sharing plan of Company or Company Bank shall occur in Company Disclosure Schedule 5.11(b)accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (iiz) eight weeks a rollover to a tax qualified retirement plan of base compensationBuyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent allowable under any of such plans, Company Employees shall be given credit for prior service or employment with Company or Company Bank (as well as service with any predecessor employer) for all purposes, including for purposes of determining eligibility to participate, vesting, entitlement to level of benefits, vesting and vacation entitlement benefit plan accruals (but other than benefit accrual under a defined benefit pension plan or for service time requirements under the Buyer’s Employee Stock Ownership Plan); provided that the foregoing shall not for accrual apply to the extent that it would result in any duplication of benefits under for the same period of service. Notwithstanding the foregoing, Buyer may amend or terminate any Buyer Benefit Plans, including Plan at any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefitsits sole discretion.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, if required, provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses deductible incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Except to the extent otherwise expressly provided in this Section 5.12, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the in Company Disclosure ScheduleSchedule 5.12(e). Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In Each full-time employee of Company or Company Bank, other than an employee who is a party to an employment agreement, change in control agreement or other separation agreement that provides a benefit on a termination of employment, who incurs an involuntary termination (other than for cause) within six (6) months following the event that Effective Time shall receive a lump sum severance payment from Buyer or Buyer Bank terminates equal to two (2) weeks of pay at the rate then in effect, for each full year of employment with Company or lays off Company Bank, up to a sufficient number maximum of employees following the Effective Date to trigger twenty six (26) weeks, provided that such employee enters into a notice requirement under the Worker Adjustment and Retraining Notification Act release of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. claims against Company and Company Bank shall cooperate Buyer, their Subsidiaries and Affiliates in providing information reasonably requested by Buyer that is necessary for Buyer a form satisfactory to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN ActBuyer.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.115.12, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.115.12. Without limiting the foregoing, no provision of this Section 5.11 shall 5.12 will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries or Controlled Group Members, any beneficiary or dependent thereof, or any collective bargaining representative thereof, in respect of continued employment (or resumed employment) ), compensation, terms and conditions of employment and/or benefits or any other matter. Nothing in this Section 5.11 5.12 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.11.
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Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), (i) receive severance pay in a lump sum equal to in the greater of the amount amounts determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or and (ii) eight weeks of base compensationbe offered outplacement assistance.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, benefits and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, Buyer but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan Plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, Company but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the The ESOP shall be terminated as of or as soon as practicable following the Effective Time (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration). Following Any outstanding ESOP indebtedness shall be repaid from unallocated ESOP assets and the Effective Time, balance of the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other assets remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after (subject to the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)as provided for below), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under provided for in the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as unless otherwise required by applicable Lawlaw. If requested by Buyer, prior Prior to the Effective Time, Company and Company BankCompany, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP and the proposed allocations as may be required requested by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall will adopt such amendments to the ESOP and related trusts and resolutions as may be reasonably required by the IRS as a condition to effect granting such favorable determination letter on termination. Neither Company nor, following the provisions Effective Time, Buyer shall make any distribution from the ESOP to any Company Employees who continue employment with Buyer, except as may be required by applicable law or the terms of the ESOP, until receipt of such favorable determination letter. In the case of a conflict between the terms of this Section 5.11(g) (which amendments or resolutions and the terms of the ESOP, the terms of the ESOP shall control; however, in the event of any such conflict, Company before the Merger, and Buyer after the Merger, shall use their commercially reasonable efforts to cause the ESOP to be provided amended to Buyer at least five (5) Business Days prior conform to adoption for Buyer’s review and approvalthe requirements of this Section 5.11(g).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
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Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, retention or other similar type of agreement or arrangement which provides for severanceseverance or other payments or benefits upon termination) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), (i) receive severance pay in a lump sum equal to the greater two weeks’ base compensation for every year of the amount determined under service, up to a maximum of twenty-six (i26) the East Boston Savings Bank Amended weeks and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), or (ii) eight weeks of base compensationbe offered outplacement assistance.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c5.12(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan (excluding any severance, defined benefit pension, deferred compensation, equity-based, change-in-control, retention and/or transaction-based plans, programs or arrangements) to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a any such comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Company Benefit Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; applicable; provided, however, that such service shall not be recognized (i) to the extent such recognition would result in a duplication of benefits, (ii) for benefit accruals under any defined benefit pension plan or for purposes of qualifying for subsidized early retirement benefits, (iii) for newly-established employee benefit plans sponsored or maintained by Buyer or any of its affiliates for which similarly-situated employees of Buyer and its affiliates do not receive past service credit, (iv) for any benefit plan that is a frozen plan or provides grandfathered benefits, or (v) for any equity-based or long-term incentive compensation plans.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably If requested by Buyer that is necessary for Buyer in a written notice delivered to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
Company not less than five (g5) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, Company shall cause the board of directors (or the appropriate committee thereof) of Company or its applicable Subsidiary to adopt resolutions and no more than seven Business Days take such corporate actions that are necessary to terminate each Company Benefit Plan that includes a cash or deferred arrangement intended to qualify under Section 401(k) of the Code (each, a “Company 401(k) Plan”), effective as of the calendar day before the Closing Date. If Buyer terminates Company’s 401(k) plan prior to the Closing Date, the ESOP Buyer shall be terminated (the “ESOP Termination Date”). No new use its commercially reasonable efforts to permit Company 401(k) participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively who are employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP or any of its Subsidiaries as of the ESOP Termination Date and distributed such date to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that roll over any eligible rollover distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g’s 401(k) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for plan into Buyer’s review and approval)401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
(hg) Nothing in this Section 5.115.12, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.115.12. Without limiting the foregoing, no provision of this Section 5.11 5.12 shall create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 5.12 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
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Employees; Benefit Plans. (a) All Employees of Company Employees who remain employed by and Company or any of its Subsidiaries Bank shall be retained as of “at will” employees after the Effective Time shall be subject to as employees of Buyer or Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed in Company Disclosure Schedule 5.11 who are parties to an employment, change of control, change-of-control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries or Controlled Group Members as of the Effective Time, who become employees of Buyer Bank at the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard practices (which may include a lump sum severance agreement and general release of claims to be provided by the terminated employee) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries or Controlled Group Members and ending with such employee’s termination date with Buyer, with a minimum payment equal to four (4) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay (unless otherwise agreed in a separate written agreement between such employee and Buyer Bank). Subject to the greater terms and execution of the amount determined severance agreement and general release of claims by such employee, such severance payment will be made in accordance with the terms stated in the severance document and such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries or Controlled Group Members prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries or Controlled Group Members is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks of base compensationa severance or change-of-control plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Except as otherwise provided in this Agreement, not later than ten (10) Business Days prior to the Closing Date, Buyer may choose Company shall take all action required to maintain (i) cause any or all of the other Company Benefit Plans Plan that has liabilities in respect of its sole discretionparticipants, subject to be fully funded to the next sentence extent required under applicable Law; (ii) terminate all such plans effective immediately prior to Closing (unless directed otherwise by Buyer or Buyer Bank); and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank elects and as permitted or required under applicable Law. Distributions of this Section 5.11(c). benefits under any profit sharing plan of Company or Company Bank shall occur in accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (z) a rollover to a tax qualified retirement plan of Buyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(d) For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent allowable under any of such plans, Company Employees shall be given credit for prior service or employment with Company or Company Bank (as well as service with any predecessor employer) for all purposes, including for purposes of determining eligibility to participate, vesting, entitlement to level of benefits, vesting and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time accruals (other than benefit accrual under a comparable Plan in which such Company Employee was a participant immediately before defined benefit pension plan); provided that the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time foregoing shall not apply to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition it would result in a any duplication of benefits.
(d) benefits for the same period of service. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, sole discretion.
(e) Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, if required, provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses deductible incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the in Company Disclosure ScheduleSchedule 5.11(f). Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section Section 5.11. Without limiting the foregoing, no provision of this Section Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries or Controlled Group Members, any beneficiary or dependent thereof, or any collective bargaining representative thereof, in respect of continued employment (or resumed employment) ), compensation, terms and conditions of employment and/or benefits or any other matter. Nothing in this Section Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.10.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Employees who remain employed to whom Buyer in its sole discretion offers employment at or prior to the Effective Time shall be retained as “at will” employees after the Effective Time as employees of Buyer Bank so long as such Company Employees accept the terms and conditions of employment specified by Company or any Buyer; provided, that continued retention by Buyer Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed on Disclosure Schedule Section 5.11 who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard practices (which may include a lump sum severance agreement and general release of claims to be provided by the terminated employee) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries and ending with such employee’s termination date with Buyer, with a minimum payment equal to two (2) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay. Subject to the greater terms and execution of the amount determined severance agreement and general release of claims by such employee, such severance payment will be made in accordance with the terms stated in the severance document and such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks a severance or change of base compensationcontrol plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Except as otherwise provided in this Agreement, not later than ten (10) Business Days prior to the Closing Date, Buyer may choose Company shall take all action required to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For (i) cause any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan that has liabilities in respect of general applicabilityits participants, to be fully funded to the extent necessary to pay out all required benefits, (ii) terminate all such plans effective as of Closing and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank elects and as permitted or required under applicable Law. Distributions of benefits under any profit sharing plan of the Company or Company Bank shall occur in accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (z) a rollover to a tax qualified retirement plan of Buyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(d) Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent feasible under any of such plans, Company Employees shall be given credit for purposes of determining eligibility to participate, vesting, entitlement to benefits, prior service or employment with Company or Company Bank and vacation entitlement (but not eligible for accrual of any increased benefits under any such plans that would apply to such employees as if they had been eligible for such benefits as of the Effective Time, based on the length of service or employment with Company or Company Bank. With regard to insured Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) applicable waiting periods may apply. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. sole discretion.
(e) If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable best efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses deductible incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company in Disclosure ScheduleSchedule Section 5.11. Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractorcontractor or consultant or (iv) interfere with Buyer’s indemnification obligations set forth in Section 5.10.
(h) Prior to the Effective Time, all unvested Company Restricted Shares granted under the Company Stock Plans shall vest in full so as to no longer be subject to any forfeiture or consultantvesting requirements pursuant to the terms of the Company Stock Plans, and all such Company Restricted Shares shall be considered outstanding shares of Company Common Stock for all purposes of this Agreement, including, without limitation, for purposes of the right to receive the Merger Consideration with respect thereto and the Company Board (or, if appropriate, any committee thereof) shall adopt such resolutions or take such other actions as may be required to effect the foregoing prior to the Effective Time.
(i) If Buyer terminates Company’s 401(k) plan prior to On the Business Day immediately preceding the Closing Date, Buyer the Company shall use its commercially reasonable efforts (i) terminate and cancel each issued and outstanding Company Stock Option and Company SAR and (ii) pay each holder thereof a cash payment equal to permit the difference between the per share exercise price, as set forth in such holder’s award agreement with respect to such Company 401(k) participants who are employed Stock Option or Company SAR, and the Company Stock Price. Except as otherwise provided in this Agreement with respect to Company Restricted Shares, Company shall take all requisite action so that, prior to the Effective Time, each Company Stock Option, Company SAR or other Right, contingent or accrued, to acquire or receive Company Common Stock or benefits measured by Company or any of its Subsidiaries as the value of such date shares, and each award of any kind consisting of Company Common Stock that may be held, awarded, outstanding, payable or reserved for issuance under the Company Stock Plans, or otherwise, will be terminated and cancelled. Prior to roll over the Effective Time, the Company Board (or, if appropriate, any eligible rollover distributions in Company’s 401(kcommittee thereof) plan into Buyer’s 401(kshall adopt any resolutions and take any actions (including obtaining any consents) plan, excluding those related that may be necessary to plan loans under Company’s 401(k) planeffectuate the foregoing prior to the Effective Time.
Appears in 1 contract
Employees; Benefit Plans. (a) All Employees of Company Employees who remain employed by and Company or any of its Subsidiaries Bank shall be retained as of “at will” employees after the Effective Time shall be subject to as employees of Buyer or Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed in Company Disclosure Schedule 5.11 who are parties to an employment, change of control, change-of-control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries or Controlled Group Members as of the Effective Time, who become employees of Buyer Bank at the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard practices (which may include a lump sum severance agreement and general release of claims to be provided by the terminated employee) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries or Controlled Group Members and ending with such employee’s termination date with Buyer, with a minimum payment equal to four (4) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay (unless otherwise agreed in a separate written agreement between such employee and Buyer Bank). Subject to the greater terms and execution of the amount determined severance agreement and general release of claims by such employee, such severance payment will be made in accordance with the terms stated in the severance document and such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries or Controlled Group Members prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries or Controlled Group Members is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks of base compensationa severance or change-of-control plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Except as otherwise provided in this Agreement, not later than ten (10) Business Days prior to the Closing Date, Buyer may choose Company shall take all action required to maintain (i) cause any or all of the other Company Benefit Plans Plan that has liabilities in respect of its sole discretionparticipants, subject to be fully funded to the next sentence extent required under applicable Law; (ii) terminate all such plans effective immediately prior to Closing (unless directed otherwise by Buyer or Buyer Bank); and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank elects and as permitted or required under applicable Law. Distributions of this Section 5.11(c). benefits under any profit sharing plan of Company or Company Bank shall occur in accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (z) a rollover to a tax qualified retirement plan of Buyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(d) For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent allowable under any of such plans, Company Employees shall be given credit for prior service or employment with Company or Company Bank (as well as service with any predecessor employer) for all purposes, including for purposes of determining eligibility to participate, vesting, entitlement to level of benefits, vesting and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time accruals (other than benefit accrual under a comparable Plan in which such Company Employee was a participant immediately before defined benefit pension plan); provided that the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time foregoing shall not apply to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition it would result in a any duplication of benefits.
(d) benefits for the same period of service. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, sole discretion.
(e) Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, if required, provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses deductible incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the in Company Disclosure ScheduleSchedule 5.11(f). Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries or Controlled Group Members, any beneficiary or dependent thereof, or any collective bargaining representative thereof, in respect of continued employment (or resumed employment) ), compensation, terms and conditions of employment and/or benefits or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.10.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees Company’s employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each such Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), receive severance pay in a lump sum equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan receive payments as set forth in Company Buyer Disclosure Schedule 5.11(b), 5.11(h) in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time and (ii) eight weeks of base compensationbe offered outplacement assistance.
(c) Following the Closing Date, Buyer will assume responsibility for administration of the Company’s frozen noncontributory defined benefit plan and may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a such comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, benefits and vacation entitlement (but not for accrual of benefits under any Buyer Benefit PlansPlan, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a an Employee with the Company Employee or any Subsidiary shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan Plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, Company but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of Company. Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall create any third party beneficiary rights in any current or former employee, director, or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
Appears in 1 contract
Employees; Benefit Plans. (a) All Employees of Company Employees who remain employed and Company Bank shall be retained as “at will” employees after the Effective Time as employees of Buyer or Buyer Bank; provided, that continued retention by Company or any Buyer Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed in Company Disclosure Schedule 5.11(b) who are parties to an employment, change of control, change-of-control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time, who become employees of Buyer Bank at the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard practices (which may include a lump sum severance agreement and general release of claims to be provided by the terminated employee) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries (including service with any predecessor companies or banks as set forth in Company’s records) and ending with such employee’s termination date with Buyer, with a minimum payment equal to two (2) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay (unless otherwise agreed in a separate written agreement between such employee and Buyer Bank). Subject to the greater terms and execution of the amount determined severance agreement and general release of claims by such employee, such severance payment will be made in accordance with the terms stated in the severance document and such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks of base compensationa severance or change-of-control plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Effective as of no later than the Closing Dateday immediately preceding the Effective Time, Company shall provide Buyer may choose to maintain any or all with a copy of the other appropriate board resolutions and plan amendments, if applicable, evidencing that all Company Benefit Plans intended to qualify under Section 401(a) and 401(k) of the Code are in its sole discretion, the process of being terminated effective as of no later than the day immediately preceding the Effective Time. The form and substance of such resolutions or plan amendment shall be subject to the next sentence review and reasonable and timely approval of this Section 5.11(c)Buyer. For Company shall take such additional actions that may be necessary or appropriate, including but not limited to any necessary amendments and notices, to terminate the Company Stock Plans, the Community & Southern Bank Annual Incentive Compensation Plan and the Community & Southern Bank Severance Plan as of the Effective Time and shall take any additional actions necessary to terminate the remaining Company Benefit Plan terminated for which there is a comparable Plans as Buyer Benefit Plan of general applicability, may reasonably request.
(d) Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect plans due to a comparable Buyer Benefit Plan, for purposes of determining eligibility reasonable administrative requirements to participate, vesting, entitlement to benefits, and vacation entitlement (but not for accrual of benefits under any enroll such Company Employees in such Buyer Benefit Plans). To the extent allowable under any of such plans, Company Employees shall be given credit for prior service or employment with Company or Company Bank, including service with any post-retirement welfare benefit plan predecessor companies or banks, and eligible for any increased benefits under such plans that would apply to such employees as if they had been eligible for such benefits as of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, based on the length of service or if there is no such comparable employee benefit planemployment with Company or Company Bank, to the same extent such including service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) with any predecessor companies or banks. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. sole discretion.
(e) If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, provide full credit under such plans for any deductible, co-payment, and deductible or out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall assume and honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the in Company Disclosure ScheduleSchedule 5.11(f). Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, Immediately prior to the Effective Time, Company and and/or Company Bank, and following as applicable, will terminate the Effective Time, Buyer shall use their commercially reasonable efforts employment agreements set forth in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section Disclosure Schedule 5.11(g) (which amendments or resolutions shall be provided and pay to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approvaleach of the parties thereto the amounts set forth in Company Disclosure Schedule 5.11(g).
(h) Buyer will establish a stay bonus pool in an amount to be developed in consultation with Company, the precise amount to be determined in the sole discretion of Buyer, in order to encourage and reward Company Employees to remain with Buyer after the consummation of the transactions contemplated by this Agreement. Participants in such pool shall be determined in Buyer’s sole discretion after consultation with Company.
(i) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries Subsidiaries, any beneficiary or dependent thereof, or any collective bargaining representative thereof, in respect of continued employment (or resumed employment) ), compensation, terms and conditions of employment and/or benefits or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.10.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Employees who remain employed by the Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, the Company and Company Bank agreeagrees, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees shall be coordinated by the Company.
(bi) Company Employees (other than those who are parties to an employment, change of control, or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by the Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), receive severance pay in a lump sum an amount equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as amount set forth in on Company Disclosure Schedule 5.11(b), or (ii) eight four weeks of base compensation, in each case to be paid in accordance with the normal and regular payroll practice and the policy of the Company.
(ii) During the period commencing at the Effective Time and ending on the date which is twelve (12) months from the Effective Time (or if earlier, the date of the employee’s termination of employment with Buyer and its Subsidiaries), Buyer shall cause the Surviving Entity and each of its Subsidiaries, as applicable, to provide the Company Employees who remain employed immediately after the Effective Time with annual base salary or wage level, annual target bonus opportunities (excluding equity-based compensation), and employee benefits (excluding any retiree health or defined benefit retirement benefits) that are, in the aggregate, no less favorable than the annual base salary or wage level, annual target bonus opportunities (excluding equity-based compensation), and employee benefits (excluding any retiree health or defined benefit retirement benefits) provided by Buyer for similarly situated employees of Buyer or Buyer Bank.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the Buyer Benefit Plan to the same extent as similarly-similarly situated employees of Buyer or Buyer Bank (it being understood that inclusion of the Company Employees in Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, benefits and vacation entitlement (but not for accrual of benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan Plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by the Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and or Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of the Company or any of its Subsidiaries become eligible to participate in a medical, dental, or health plan of Buyer or Buyer Bank upon termination of a similar plan of the Company or any of its Subsidiaries, Buyer shall cause each plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the employee on or after the Effective Time, in each case to the extent the employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of the Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, or policies of Company, the Company but only if such obligations, rights, agreements, plans or policies, that which are individually or in the aggregate are material, are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-controlChange in Control” of the Company for purposes of any benefit plans, agreements, and arrangements of Companythe Company that provide for a Change in Control. Without limiting the generality of the foregoing:
(i) Buyer acknowledges and agrees that (A) the Company is party to the employment agreements and change in control agreements set forth on Company Disclosure Schedule 5.11(e)(i) (the “Change in Control Agreements”); (B) each of the Change in Control Agreements provides for the severance payments and benefits set forth in such agreements and summarized on Company Disclosure Schedule 5.11(e)(i); (C) the consummation of the Merger and the other transactions contemplated hereby shall constitute a “Change in Control” under each of the Change in Control Agreements; and (D) following the Effective Time, Buyer shall honor the obligations of the Company or any successor under the Change in Control Agreements;
(ii) Company shall use commercially reasonable efforts to pay, or cause to be paid, on the Closing Date the lump sum severance payments set forth on Company Disclosure Schedule 5.11(e)(ii) to the Company Employees listed on such schedule, which are due and payable under each such Company Employee’s Change in Control Agreement upon a termination by such Company Employee for any reason in connection with, or within 12 months after, a Change in Control; and
(iii) Buyer and the Company agree that the Company will terminate the 1st Constitution Bancorp 2005 Supplemental Executive Retirement Plan, effective as of January 1, 2005 and the 1st Constitution Bancorp Supplemental Executive Retirement Plan, dated as of October 1, 2002, as amended, pursuant to Treasury Regulation Section 1.409A-3(j)(4)(ix)(B) (collectively, the “SERPs”), effective as of the Closing Date, and to distribute the value of the SERP Benefit amounts as set forth on Company Disclosure Schedule 5.11(e)(iii), less any applicable withholding, to the participants at Closing.
(f) Nothing in this Agreement shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer Benefit Plans.
(fg) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date Time to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. The Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, or consultant of the Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, or consultant.
(i) If requested by Buyer terminates in writing reasonably prior to the Effective Time, the Company shall cause the Company’s 401(k) plan to be terminated effective as of the day immediately prior to the Closing DateEffective Time and contingent upon the occurrence of the Closing. If Buyer requests that the Company’s 401(k) plan be terminated, the Company and Buyer shall use its commercially reasonable efforts to take any and all actions as may be required, including adopting amendments to Company’s 401(k) plan and/or Buyer’s 401(k) plan, to permit Company 401(k) participants Employees who are employed by Company Buyer or any of its Subsidiaries as of such date Buyer Bank following the Effective Time to roll over any eligible rollover distributions in the Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under the Company’s 401(k) plan. Further, if Buyer requests that the Company’s 401(k) plan be terminated and to the extent permissible under applicable law, Buyer shall use commercially reasonable efforts, including adopting any amendments and coordinating with the third-party administrator of Buyer’s 401(k) plan, to establish an employer stock fund as part of Buyer’s 401(k) plan for the sole purpose of permitting Company Employees who are employed by Buyer or Buyer Bank following the Effective Time to make a one-time direct transfer of Buyer Common Stock which has been allocated to their respective Company 401(k) accounts as of the Effective Time to the Buyer’s 401(k) plan as soon practicable after the Effective Time; provided, however, that except as otherwise contemplated by this Section 5.11(i), no participant in Buyer’s 401(k) plan will be permitted to purchase additional shares of Buyer Common Stock through Buyer’s 401(k) plan or transfer additional assets into the employer stock fund of Buyer’s 401(k) plan.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Employees who remain employed to whom Buyer in its sole discretion offers employment at or prior to the Effective Time shall be retained as “at will” employees after the Effective Time as employees of Buyer Bank so long as such Company Employees accept the terms and conditions of employment specified by Company or any Buyer; provided, that continued retention by Buyer Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed on Disclosure Schedule Section 5.11 who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard policies (which may include a lump sum general release and waiver of all claims) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries and ending with such employee’s termination date with Buyer, with a minimum payment equal to two (2) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay. Subject to the greater terms of the amount determined severance agreement and general release, such severance payment will be made within thirty (30) days after such employee’s termination date, subject to execution by such employee of any required general release and waiver of all claims. Such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks a severance or change of base compensationcontrol plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Except as otherwise provided in this Agreement, not later than ten (10) Business Days prior to the Closing Date, Buyer may choose Company shall take all action required to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For (i) cause any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan that has liabilities in respect of general applicabilityits participants, to be fully funded to the extent necessary to pay out all required benefits, (ii) terminate all such plans effective as of Closing and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank elects and as permitted or required under applicable Law. Distributions of benefits under any profit sharing plan of the Company or Company Bank shall occur in accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (z) a rollover to a tax qualified retirement plan of Buyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(d) Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent feasible under any of such plans, Company Employees shall be given credit for purposes of determining eligibility to participate, vesting, entitlement to benefits, prior service or employment with Company or Company Bank and vacation entitlement (but not eligible for accrual of any increased benefits under any such plans that would apply to such employees as if they had been eligible for such benefits as of the Effective Time, based on the length of service or employment with Company or Company Bank. With regard to insured Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) applicable waiting periods may apply. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. sole discretion.
(e) If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company in Disclosure ScheduleSchedule Section 5.11. Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.10.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Sound Bank Employees who remain employed at the Effective Time will become employees of Interim Bank as the Surviving Bank. The continued retention by Company or any Surviving Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer BankWest Town’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Sound Bank agreeagrees, upon BuyerWest Town’s reasonable request, to facilitate discussions between Buyer West Town and Company Sound Bank Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer Sound Bank’s employees and Company Employees West Town shall be coordinated by CompanySound Bank.
(b) Company Sound Bank Employees as of the date of the Agreement (other than those listed on Sound Bank Disclosure Schedule Section 5.11 who are parties to an employment, change of control, in control or other type of agreement which that provides for severanceseverance or other compensation upon a change in control) as of the date of this Agreement who remain employed by Company Sound Bank or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer the Surviving Bank (absent termination for cause as determined by the employeremployer in its sole discretion) within one year 180 days after the Effective Time shallshall receive severance pay equal to two weeks of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Sound Bank or any of its Subsidiaries and ending with such employee’s termination date with the Surviving Bank, subject with a maximum payment equal to 26 weeks of base pay and a minimum equal to 4 weeks of base pay. Any such severance payment paid hereunder (or bonus in lieu thereof) is conditioned upon the employee’s execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), general release of claims in favor of Buyer West Town, Surviving Bank and Buyer Bank (if Buyertheir respective management employees in a form reasonably acceptable to West Town and its counsel that is executed within any consideration period required by applicable Law and that is not revoked within any legally-prescribed revocation period. The severance payment will be made on the later of the day following the expiration of any revocation period or 30 days after such employee’s termination date; provided, however, that no employee will have the authority or discretion to directly or indirectly designate the date on which the payment will be made. Such severance payments will be in its discretion, requests that a release be signed), receive lieu of any severance pay plans that may be in a lump sum equal effect at Sound Bank or any of its Subsidiaries prior to the greater Effective Time. No officer or employee of the amount determined Sound Bank or any Subsidiary is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks of base compensationa severance or change in control plan; (iii) this section; or (iv) any other plan, program or arrangement.
(c) Following Not later than fifteen (15) Business Days prior to the Closing Date, Buyer Sound Bank shall, to the extent directed by West Town and to the extent permitted by Law, (i) take all action required to cause any Sound Bank Benefit Plan that has liabilities in respect of its participants, to be fully funded to the extent necessary to pay out all required benefits, (ii) terminate every Sound Bank Benefit Plan that, under the terms thereof may choose to maintain any or all be terminated by Sound Bank without the consent of the other Company Benefit Plans in its sole discretionone or more Sound Bank Employees covered thereby, subject no later than immediately prior to the next sentence of this Section 5.11(c). For Closing Date and (iii) pay out or commence the process to pay out any Company vested benefits under every such terminated Sound Bank Benefit Plan terminated for which there is a comparable Buyer Benefit Plan to participating and eligible Sound Bank Employees in such form or forms as required or permitted by the terms of general applicability, Company such Plans (as they may be permissibly amended by Sound Bank) and as permitted or required under applicable Law. Sound Bank Employees shall be entitled to participate in the Buyer West Town Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer West Town’s Subsidiaries, including Surviving Bank (it being understood that inclusion of Company Sound Bank Employees in Buyer the West Town Benefit Plans may occur, if at all, occur at different times with respect to different plans)) or as required by applicable Law. With respect to a comparable Buyer Benefit Plan, Sound Bank Employees shall be given credit for prior service or employment with Sound Bank for purposes of determining eligibility to participatewaiting periods, vestingeligibility, entitlement to benefits, vesting and vacation entitlement years of service (but not for accrual of benefits benefit accrual) purposes under any Buyer West Town Benefit Plans. Notwithstanding the foregoing, West Town or its Subsidiaries, as applicable, may amend or terminate any West Town Benefit Plan at any time in its sole discretion (provided that no such amendment or termination shall treat former employees of Sound Bank any differently than other employees of West Town’s Subsidiaries, including any post-retirement welfare benefit plan of BuyerSurviving Bank, but excluding any severance, vacation and/or paid time off plansexcept as may be imposed by law), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries Sound Bank become eligible to participate in a medical, dental, dental or health plan of Buyer West Town or Buyer Surviving Bank upon termination of a similar such plan of Company or any of its SubsidiariesSound Bank, Buyer West Town shall cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer BankWest Town, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer Surviving Bank shall honor, and the Surviving Entity Bank or West Town shall continue to assume and be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of Company, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, are Sound Bank set forth on the Company in Sound Bank Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, and arrangements of CompanySchedule Section 5.11. Nothing in this Agreement herein shall limit the ability of Buyer West Town or Buyer Surviving Bank to amend or terminate any of the Company Sound Bank Benefit Plans or Buyer West Town Benefit Plans in accordance with and to the extent permitted under their terms at any time after the Effective Timetime, subject to any required consents and the vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer such Sound Bank Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company Sound Bank or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Sound Bank Benefit Plan or any Buyer West Town Benefit Plan, (ii) interfere with BuyerWest Town’s or the Surviving EntityBank’s right from and after the Closing Date to amend or terminate any Company Sound Bank Benefit Plan that is not terminated prior to the Effective Time or Buyer West Town Benefit Plan or Plan, (iii) interfere with BuyerWest Town’s or the Surviving Entity’s any of its Subsidiaries’ right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultantconsultant or (iv) interfere with West Town’s indemnification obligations set forth in Section 5.10.
(i) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) plan.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company FNB Employees who remain employed to whom Buyer in its sole discretion offers employment at or prior to the Effective Time shall be retained as “at will” employees after the Effective Time as employees of Buyer Bank so long as such FNB Employees accept the terms and conditions of employment specified by Company or any Buyer; provided, that continued retention by Buyer Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agreeFNB agrees, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company FNB Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees FNB’s employees shall be coordinated by CompanyFNB.
(b) Company FNB Employees (other than those listed on Disclosure Schedule Section 5.11 who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company FNB or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in a lump sum equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with FNB or any of its Subsidiaries and ending with such employee’s termination date with Buyer, with a maximum payment equal to twelve (12) weeks of base pay. Such severance payment will be made within thirty (30) days after such employee’s termination date. Such severance payments will be in lieu of any severance pay plans that may be in effect at FNB or any of its Subsidiaries prior to the greater Effective Time. No officer or employee of the amount determined FNB or any Subsidiary is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks a severance or change of base compensationcontrol plan; (iii) this section; or (iv) any other program or arrangement.
(c) Following Not later than fifteen (15) Business Days prior to the Closing Date, Buyer may choose FNB shall (i) take all action required to maintain cause any or all FNB Benefit Plan that has liabilities in respect of the other Company Benefit Plans in its sole discretionparticipants, subject to be fully funded to the next sentence of this Section 5.11(c)extent necessary to pay out all required benefits, (ii) terminate all such plans and (iii) pay out or commence the process to pay out any vested benefits thereunder to participating and eligible FNB Employees in such form or forms as FNB elects and as permitted or required under applicable Law. For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company FNB Employees shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company FNB Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent feasible under any of such plans, FNB Employees shall be given credit for purposes of determining eligibility to participate, vesting, entitlement to benefits, prior service or employment with FNB and vacation entitlement (but not eligible for accrual of any increased benefits under any Buyer Benefit Plans, including any post-retirement welfare benefit plan such plans that would apply to such employees as if they had been eligible for such benefits as of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, based on the length of service or if there is no such comparable employee benefit planemployment with FNB or FNB Bank. Notwithstanding the foregoing, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result Buyer may amend or terminate any Buyer Benefit Plan at any time in a duplication of benefitsits sole discretion.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company FNB or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company FNB or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity or Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyFNB, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company in Disclosure ScheduleSchedule Section 5.11. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company FNB for purposes of any benefit plans, agreements, agreements and arrangements of CompanyFNB. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company FNB Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the Company Benefit Plans or Buyer such FNB Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company FNB or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company FNB Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company FNB Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
consultant or (iiv) If Buyer terminates Company’s 401(k) plan prior to the Closing Date, Buyer shall use its commercially reasonable efforts to permit Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into interfere with Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planindemnification obligations set forth in Section 5.10.
Appears in 1 contract
Employees; Benefit Plans. (a) All Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees regarding employment, consulting, consulting or other arrangements to be effective prior to or following the Merger. Any interaction between Buyer and Company Employees Company’s employees shall be coordinated by Company.
(b) Company Employees (other than those who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer (absent termination for cause as determined by the employer) within one year after the Effective Time shall, subject to the execution by each such Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), release in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), i) receive severance pay in a lump sum equal to the greater of the amount determined under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as accordance with Company’s existing severance policy set forth in Company Disclosure on Schedule 5.11(b), or and (ii) eight weeks be offered outplacement assistance. Such severance pay will be made at Buyer Bank’s regular payroll intervals. Such severance payments will be in lieu of base compensationany severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time.
(c) Following the Closing Date, Buyer may choose to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan of general applicability, Company Employees shall be entitled to participate in the such Buyer Benefit Plan to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, at different times with respect to different plans). With respect to a such comparable Buyer Benefit Plan, for purposes of determining eligibility to participate, vesting, entitlement to benefits, benefits and vacation entitlement (but not for accrual of benefits under any Buyer Benefit PlansPlan, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a an Employee with the Company Employee or any Subsidiary shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan Plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) Notwithstanding the foregoing, no coverage of any Company Employees who remain employed by Company or any of its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting condition limitations to the extent such conditions are covered under the applicable medical, health, health or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts to provide full credit under such plans for any deductible, co-payment, payment and out-of-pocket 68 expenses incurred by the employees and their beneficiaries during the portion of the plan year prior to participation, such participation and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan Plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(e) Buyer shall honor, and the Surviving Entity shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of Company, Company but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company Disclosure Schedule. Buyer acknowledges that the consummation of the Merger shall will constitute a “change-in-control” of Company for purposes of any benefit plans, agreements, agreements and arrangements of Company. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Time, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act).
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating Subject to the ESOP and ESOP Loan. At least five Business Days prior to occurrence of the Closing Date, and no more than seven Business Days prior to the Closing DateEffective Time, the ESOP shall be terminated immediately prior to and effective as of the Effective Time (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration). Following Any outstanding ESOP indebtedness shall be repaid from unallocated ESOP assets and the Effective Time, balance of the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other assets remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after (subject to the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)as provided for below), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under provided for in the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as unless otherwise required by applicable Lawlaw. If requested by Buyer, prior Prior to the Effective Time, Company and Company BankCompany, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP and the proposed allocations as may be required requested by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall will adopt such amendments to the ESOP and related trusts and resolutions as may be reasonably required by the IRS as a condition to effect granting such favorable determination letter on termination. Neither Company, nor following the provisions Effective Time, Buyer shall make any distribution from the ESOP to any Company Employees who continue employment with Buyer, except as may be required by applicable law, until receipt of such favorable determination letter. In the case of a conflict between the terms of this Section 5.11(g5.11(h) (which amendments or resolutions and the terms of the ESOP, the terms of the ESOP shall control; however, in the event of any such conflict, Company before the Merger, and Buyer after the Merger, shall use their commercially reasonable efforts to cause the ESOP to be provided amended to Buyer at least five (5) Business Days prior conform to adoption for Buyer’s review and approvalthe requirements of this Section 5.11(h).
(h) Nothing in this Section 5.11, expressed or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan or Buyer Benefit Plan or (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractor, contractor or consultant.
(i) If Buyer terminates Company’s 401(k) plan prior to and Company have made the Closing Date, Buyer shall use its commercially reasonable efforts to permit agreement regarding Company 401(k) participants who are employed by Company or any of its Subsidiaries as of such date to roll over any eligible rollover distributions in Company’s 401(k) plan into Buyer’s 401(k) plan, excluding those related to plan loans under Company’s 401(k) planEmployees set forth on Schedule 5.11(i).
Appears in 1 contract
Samples: Merger Agreement (Peoples Federal Bancshares, Inc.)
Employees; Benefit Plans. (a) All Company Employees who remain employed to whom Buyer in its sole discretion offers employment at or prior to the Effective Time shall be retained as “at will” employees after the Effective Time as employees of Buyer Bank so long as such Company Employees accept the terms and conditions of employment specified by Company or any Buyer; provided, that continued retention by Buyer Bank of its Subsidiaries as of such employees subsequent to the Effective Time shall be subject to Buyer Bank’s normal and customary employment procedures and practices, including customary background screening and evaluation procedures, and satisfactory employment performance. In addition, Company and Company Bank agree, upon Buyer’s reasonable request, to facilitate discussions between Buyer and Company Employees a reasonable time in advance of the Closing Date regarding employment, consulting, consulting or other arrangements to be effective prior to or following the MergerEffective Time. Any Prior to the Effective Time, any interaction between Buyer and Company Employees shall be coordinated by CompanyCompany or Company Bank.
(b) Company Employees (other than those listed on Disclosure Schedule Section 5.11(b) who are parties to an employment, change of control, control or other type of agreement which provides for severance) as of the date of this the Agreement who remain employed by Company or any of its Subsidiaries as of the Effective Time and whose employment is terminated by Buyer or Buyer Bank (absent termination for cause as determined by the employer) within one year hundred eighty (180) days after the Effective Time shall, subject to the execution by each Company Employee of a standard release, substantially in the form set forth in Buyer Disclosure Schedule 5.11(b), in favor of Buyer and Buyer Bank (if Buyer, in its discretion, requests that a release be signed), shall receive severance pay in accordance with Buyer’s standard practices (which may include a lump sum severance agreement and general release of claims to be provided by the terminated employee) equal to one (1) week of base weekly pay for each completed year of employment service commencing with any such employee’s most recent hire date with Company or any of its Subsidiaries and ending with such employee’s termination date with Buyer, with a minimum payment equal to two (2) weeks of base pay and a maximum payment equal to twelve (12) weeks of base pay. Subject to the greater terms and execution of the amount determined severance agreement and general release of claims by such employee, such severance payment will be made in accordance with the terms stated in the severance document and such severance payments will be in lieu of any severance pay plans that may be in effect at Company or any of its Subsidiaries prior to the Effective Time. No officer or employee of Company or any of its Subsidiaries is, or shall be, entitled to receive duplicative severance payments and benefits under (i) the East Boston Savings Bank Amended and Restated Employee Severance Compensation Plan as set forth in Company Disclosure Schedule 5.11(b), an employment or severance agreement; (ii) eight weeks a severance or change of base compensationcontrol plan; (iii) this Section 5.11; or (iv) any other program or arrangement.
(c) Following Except as otherwise provided in this Agreement, not later than ten (10) Business Days prior to the Closing Date, Buyer may choose Company shall take all action required to maintain any or all of the other Company Benefit Plans in its sole discretion, subject to the next sentence of this Section 5.11(c). For (i) cause any Company Benefit Plan terminated for which there is a comparable Buyer Benefit Plan that has liabilities in respect of general applicabilityits participants, to be fully funded to the extent necessary to pay out all required benefits, (ii) terminate all such plans effective immediately prior to Closing and (iii) commence the process to pay out any vested benefits thereunder to participating and eligible Company Employees in such form or forms as Company or Company Bank elects and as permitted or required under applicable Law. Distributions of benefits under any profit sharing plan of the Company or Company Bank shall occur in accordance with such plan’s terms, and a participant in such plan will be allowed to take, at the participant’s option: (x) a direct distribution from such plan, (y) a rollover to an Individual Retirement Account, or (z) a rollover to a tax qualified retirement plan of Buyer or Buyer Bank to the extent the plan sponsored by Buyer or Buyer Bank accepts rollover contributions, if such participant is employed by Buyer or Buyer Bank.
(d) Company Employees who are retained by Buyer or Buyer Bank shall be entitled to participate in the Buyer Benefit Plan Plans to the same extent as similarly-situated employees of Buyer or Buyer Bank (it being understood that inclusion of Company Employees in the Buyer Benefit Plans may occur, if at all, occur at different times with respect to different plans). With respect to a comparable Buyer Benefit PlanTo the extent allowable under any of such plans, Company Employees shall be given credit for purposes of determining eligibility to participate, vesting, entitlement to benefits, prior service or employment with Company or Company Bank and vacation entitlement (but not eligible for accrual of any increased benefits under any such plans that would apply to such employees as if they had been eligible for such benefits as of the Effective Time, based on the length of service or employment with Company or Company Bank. With regard to insured Buyer Benefit Plans, including any post-retirement welfare benefit plan of Buyer, but excluding any severance, vacation and/or paid time off plans), service by a Company Employee shall be recognized to the same extent such service was recognized immediately prior to the Effective Time under a comparable Plan in which such Company Employee was a participant immediately before the Effective Time, or if there is no such comparable employee benefit plan, to the same extent such service was recognized under the Company 401(k) plan immediately prior to the Effective Time to the extent applicable; provided, however, that such service shall not be recognized to the extent such recognition would result in a duplication of benefits.
(d) applicable waiting periods may apply. Notwithstanding the foregoing, no coverage of Buyer may amend or terminate any Company Employees who remain employed by Company or Buyer Benefit Plan at any of time in its Subsidiaries as of the Effective Time or their dependents shall terminate under any of the Company’s health care plans prior to the time such employees or their dependents, as applicable, become eligible to participate in the health plans, programs and benefits common to similarly situated employees of Buyer and Buyer Bank and their dependents and, consequently, no such employees shall experience a gap in health care benefit coverage. sole discretion.
(e) If employees of Company or any of its Subsidiaries become eligible to participate in a medical, dental, dental or health plan of Buyer or Buyer Bank upon termination of a similar such plan of Company or any of its Subsidiaries, Buyer shall use commercially reasonable efforts to cause each such plan to (i) waive any preexisting pre-existing condition limitations to the extent such conditions are covered under the applicable medical, health, or dental plans of Buyer or Buyer Bank, (ii) use commercially reasonable efforts subject to approval from Buyer’s insurance carrier, provide full credit under such plans for any deductible, co-payment, and out-of-pocket 68 expenses deductible incurred by the employees and their beneficiaries during the portion of the plan calendar year prior to such participation, and (iii) use commercially reasonable efforts to waive any waiting period limitation or evidence of insurability requirement which would otherwise be applicable to the such employee on or after the Effective Time, in each case to the extent the such employee had satisfied any similar limitation or requirement under an analogous plan prior to the Effective Time for the plan year in which the Effective Time occurs.
(ef) Except to the extent otherwise expressly provided in this Section 5.11, Buyer shall honor, and the Surviving Entity Buyer shall continue to be obligated to perform, in accordance with their terms, all vested benefit obligations to, and contractual rights of, current and former employees and directors of Company existing as of the Effective Time, as well as all employment, severance, deferred compensation, retirement or “change-in-control” agreements, plans, plans or policies of CompanyCompany or Company Bank, but only if such obligations, rights, agreements, plans or policies, that individually or in the aggregate are material, policies are set forth on the Company in Disclosure ScheduleSchedule Section 5.11(f). Buyer acknowledges that the consummation of the Merger shall and Bank Merger will constitute a “change-in-control” of Company and Company Bank for purposes of any benefit plans, agreements, agreements and arrangements of CompanyCompany and Company Bank. Nothing in this Agreement herein shall limit the ability of Buyer or Buyer Bank to amend or terminate any of the Company Benefit Plans or Buyer Benefit Plans in accordance with their terms at any time after the Effective Timetime, subject to vested rights of employees and directors that may not be terminated pursuant to the terms of the such Company Benefit Plans or Buyer Benefit Plans.
(f) In the event that Buyer or Buyer Bank terminates or lays off a sufficient number of employees following the Effective Date to trigger a notice requirement under the Worker Adjustment and Retraining Notification Act of 1988 or any similar applicable Law (“WARN Act”) with respect to (i) Company Employees employed during the 90-day period preceding the Effective Time, and (ii) Company Employees employed by Buyer or Buyer Bank after the Effective Time, Buyer shall be solely responsible for compliance with, and any liabilities incurred pursuant to, the WARN Act. Company and Company Bank shall cooperate in providing information reasonably requested by Buyer that is necessary for Buyer to prepare and distribute notices that Buyer may desire to provide prior to the Effective Time under the WARN Act.
(g) Company and Company Bank shall take or cause to be taken all such actions as may be necessary to effect the actions set forth below relating to the ESOP and ESOP Loan. At least five Business Days prior to the Closing Date, and no more than seven Business Days prior to the Closing Date, the ESOP shall be terminated (the “ESOP Termination Date”). No new participants shall be admitted on or after the ESOP Termination Date and all ESOP participants’ accounts shall become fully vested and 100% non-forfeitable. On the ESOP Termination Date, Company Bank shall direct the ESOP trustee to remit a sufficient number of shares of Company Common Stock held in the ESOP Loan suspense account (the “Suspense Shares”) back to Company Bank to repay the outstanding ESOP Loan in full. All remaining shares of Company Common Stock held by the ESOP as of immediately prior to the Effective Time, including any unallocated shares held in the ESOP Loan suspense account (which shall not include any shares of Company Common Stock used for purposes of repaying or forgiving the ESOP Loans) shall be converted into the right to receive the Merger Consideration. Following the Effective Time, the unallocated shares of Buyer Common Stock held in the ESOP Loan suspense account and any other remaining unallocated assets shall be deemed to be earnings and shall be allocated as earnings to the accounts of the ESOP participants, whether or not such participant is actively employed by Company Bank on the ESOP Termination Date, based on their account balances under the ESOP as of the ESOP Termination Date and distributed to ESOP participants after the receipt of a favorable determination letter from the IRS (only if Buyer requests that Company and Company Bank file such determination letter request with the IRS pursuant to this Section 5.11(g)), except as may be required by applicable Law or the terms of the ESOP. The ESOP shall be amended to provide that distributions under the ESOP after the Closing shall be made only in the form of Buyer Common Stock except with respect to any fractional shares or other de minimis cash distributions, which shall be distributed in the form of de minimus cash, or as otherwise required by applicable Law. If requested by Buyer, prior to the Effective Time, Company and Company Bank, and following the Effective Time, Buyer shall use their commercially reasonable efforts in good faith to commence the process to obtain such favorable determination letter (including, but not limited to, making such changes to the ESOP as may be required by the IRS as a condition to its issuance of a favorable determination letter). Company, Company Bank, and following the Effective Time, Buyer, shall adopt such amendments to the ESOP and related trusts and resolutions to effect the provisions of this Section 5.11(g) (which amendments or resolutions shall be provided to Buyer at least five (5) Business Days prior to adoption for Buyer’s review and approval).
(h) Nothing in this Section 5.11, expressed express or implied, is intended to confer upon any other Person any rights or remedies of any nature whatsoever under or by reason of this Section 5.11. Without limiting the foregoing, no provision of this Section 5.11 shall will create any third party beneficiary rights in any current or former employee, director, director or consultant of Company or its Subsidiaries in respect of continued employment (or resumed employment) or any other matter. Nothing in this Section 5.11 is intended (i) to amend any Company Benefit Plan or any Buyer Benefit Plan, (ii) interfere with Buyer’s or the Surviving Entity’s right from and after the Closing Date to amend or terminate any Company Benefit Plan that is not terminated prior to the Effective Time or Buyer Benefit Plan or Plan, (iii) interfere with Buyer’s or the Surviving Entity’s right from and after the Effective Time to terminate the employment or provision of services by any director, employee, independent contractorcontractor or consultant or (iv) interfere with Buyer’s indemnification obligations set forth in Section 5.10.
(h) Prior to the Effective Time, all unvested Company Restricted Shares, if any, granted under the Company Stock Plans shall vest in full so as to no longer be subject to any forfeiture or consultantvesting requirements pursuant to the terms of the Company Stock Plans, and all such Company Restricted Shares shall be considered outstanding shares of Company Common Stock for all purposes of this Agreement, including, without limitation, for purposes of the right to receive the Merger Consideration with respect thereto and the Company Board (or, if appropriate, any committee thereof) shall adopt such resolutions or take such other actions as may be required to effect the foregoing prior to the Effective Time.
(i) If Buyer terminates Company’s 401(k) plan prior to On or before the Business Day immediately preceding the Closing Date, Buyer the Company shall use its commercially reasonable efforts terminate and cancel each issued and outstanding Company Stock Option. No consideration shall be payable to permit the holder of a Company 401(k) participants who are employed by Stock Option that is cancelled if the Company Stock Option is out-of-the-money. Company shall take all requisite action so that, prior to the Effective Time, each Company Stock Option and any other Right, contingent or accrued, to acquire or receive Company Common Stock or any of its Subsidiaries as other Company securities or benefits measured by the value of such date securities, and each award of any kind consisting of Company Common Stock that may be held, awarded, outstanding, payable or reserved for issuance under the Company Stock Plans, or otherwise, will be terminated and cancelled. Prior to roll over the Effective Time, the Company Board (or, if appropriate, any eligible rollover distributions in Company’s 401(kcommittee thereof) plan into Buyer’s 401(kshall adopt any resolutions and take any actions (including obtaining any consents) plan, excluding those related that may be necessary to plan loans under Company’s 401(k) planeffectuate the foregoing prior to the Effective Time.
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