Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal immediately prior to the Effective Time ("Heritage's Employees") shall, at the Effective Time, continue as employees of Heritage Federal ("Continuing Employees"). Subject to paragraph (f) of this Section 4.11, all Continuing Employees shall be employed at the will of Heritage Federal and no contractual right to employment shall inure to such employees because of this Agreement. (b) Except as provided in Section 4.11(e), from and after the Effective Time, unless otherwise mutually determined, the SouthBanc Employee Plans and the Heritage Employee Plans in effect as of the date of this Agreement shall remain in effect with respect to employees of SouthBanc and Heritage and their respective Subsidiaries covered by such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employees. Prior to the Effective Time, SouthBanc and Heritage shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit Plans. (c) The foregoing subparagraph (b) notwithstanding, SouthBanc agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement. (d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions. (e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated as of the Effective Time. In connection with the termination of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect to the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan in accordance with past practice. (f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. --------- (g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Time.
Appears in 1 contract
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal Macon Building & Loan immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")Citizens Bank; PROVIDED, HOWEVER, that in no event shall any of MBLA's employees be officers of Citizens Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Citizens Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal Citizens Bank and no contractual right to employment shall inure to such employees because of this Agreement. Citizens will use its best efforts to retain all of the employees of Macon Building & Loan, subject to the qualifications of such employees and the needs of Citizens Bank.
(b) Except as otherwise provided in Section 4.11(e)paragraph (d) of this SECTION 4.11, from and after appropriate steps shall be taken to terminate all MBLA Employee Plans as of the Effective Time or as promptly as practical thereafter. Immediately following the Effective Time, unless otherwise mutually determined, each Continuing Employee shall be eligible to participate in Citizens' benefit plans on the SouthBanc Employee Plans and the Heritage Employee Plans same basis as a new employee of Citizens or Citizens Bank (it being understood that inclusion of Continuing Employees in effect as of the date of this Agreement shall remain in effect Citizens' benefit plans may occur at different times with respect to different plans). Service with MBLA or Macon Building & Loan shall be treated as service with Citizens Bank for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any preexisting condition limitation with respect to any Citizens or Citizens Bank "welfare benefit plan", as defined in Section 3(1) of ERISA, but not with respect to any pension, profit sharing or any other employee benefit plan. Each Continuing Employee shall receive credit for service with MBLA or Macon Building & Loan for purposes of computing vacation pay benefits.
(c) Citizens agrees to honor existing employment and salary continuation agreements, including the change in control provisions of such agreements, between MBLA and Macon Building & Loan and certain employees of SouthBanc and Heritage and their respective Subsidiaries covered as set forth in MBLA's Disclosure Letter. Such payments may be made by such plans and arrangements at MBLA immediately prior to the Effective Time until if so agreed to by Citizens, or on such time other schedule as SouthBanc shall, subject may be mutually agreed upon by the individual employee and Citizens. Citizens also agrees to applicable law, honor the terms Directors' Consultation and Retirement Plan of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries MBLA.
("New Benefit Plans"), including all Continuing Employees. d) Prior to the Effective Time, SouthBanc and Heritage MBLA shall cooperate in reviewing, evaluating and analyzing terminate the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit Plans.
(c) The foregoing subparagraph (b) notwithstanding, SouthBanc agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank MBLA Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated as by proper action of the Effective TimeBoard of Directors of MBLA. In connection with the termination of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or As soon as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and administratively practicable after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by ESOP shall apply any cash received in the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken Merger with respect to unallocated shares of MBLA Common Stock to the Heritage repayment in full of the outstanding ESOP following indebtedness. Any surplus cash remaining after repayment of such indebtedness shall be allocated as investment earnings of the Effective Time. On ESOP to the stock accounts of ESOP participants (and, if required, to the accounts of former participants or their beneficiaries) in proportion to their stock account balances in a manner consistent with the terms of the ESOP plan document.
(e) MBLA shall use its best efforts to obtain from each holder of an MBLA Option and to deliver to Citizens at or before the Effective Time, Heritage may make such contributions Closing ( as defined in SECTION 7.1) an agreement to the Heritage ESOP cancellation of such holder's MBLA Options in exchange for a cash payment as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan described in accordance with past practiceSECTION 1.5.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Time.
Appears in 1 contract
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal Target Bank immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesContinuing Employee") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")Acquiror Bank; provided, however, that in no event shall any of Target's employees be officers of Acquiror Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Acquiror Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal Acquiror Bank and no contractual right to employment shall inure to such employees because of this Agreement.
(b) As of the Effective Time, each Target employee who is a participant in the Target Pension Plan shall become fully vested in his or her accrued benefit in the Target Pension Plan and the Target Pension Plan will either be merged into the pension plan of Acquiror Bank (the "Acquiror Bank Pension Plan") effective as of a date following the Effective Time selected by Acquiror Bank or, if so elected by Acquiror Bank, terminated immediately prior to, on, or after the Effective Time. The determination as to whether the Target Pension Plan shall be terminated or merged into the Acquiror Bank Pension Plan shall be made by Acquiror Bank. Effective as of the date of the merger of the Target Pension Plan into the Acquiror Bank Pension Plan, if applicable, or the termination of the Target Pension Plan (or the Effective Time, if subsequent to such termination), if applicable, Continuing Employees who are then participating in the Target Pension Plan shall become participants in the Acquiror Bank Pension Plan. If the Target Pension Plan is terminated, the service with Target and Target Bank shall not be recognized for purposes of benefit accrual under the Acquiror Bank Pension Plan. Except as provided set forth above in this paragraph, once a Continuing Employee becomes a participant in the Acquiror Bank Pension Plan, such Continuing Employee's service with Target and Target Bank shall be treated as service with Acquiror Bank for purposes of determining eligibility, vesting and benefit accrual, to the extent that such recognition of service would not result in a duplication of benefits.
(c) Immediately following the Effective Time, each Continuing Employee shall be eligible to participate in the Acquiror Bank 401(k) Plan and, subject to Section 4.11(e4.11(b), from the Acquiror Bank Pension Plan, on the same basis as any newly hired employee of Acquiror Bank (it being understood that inclusion of eligible Continuing Employees in the Acquiror Bank 401(k) Plan may occur at different times with respect to different employees); provided, however, that except as otherwise provided for in this paragraph, for purposes of determining eligibility and vesting for purposes of the Acquiror Bank 401(k) Plan, each eligible Continuing Employee's service with Target and Target Bank shall be treated as service with Acquiror Bank to the extent that such recognition of service would not result in a duplication of benefits.
(d) As of the Effective Time, Acquiror shall make available employer-provided health insurance to each Continuing Employee on the same basis as it provides such coverage to Acquiror employees except that any pre- existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered (without such limitation) under a similar Target plan on the Effective Date of the Merger.
(e) As of the Effective Time, participation in the Acquiror Bank Long-Term Disability Plan, Life Insurance Program and Employee Assistance Program shall be made available to each Continuing Employee on the same basis as Acquiror provides to Acquiror Bank employees, except that service with Target and Target Bank by such Continuing Employees shall be considered as service with Acquiror Bank for purposes of any eligibility waiting period or other limitation or exclusions otherwise applicable under such plans.
(f) After the Effective Time, Continuing Employees shall be eligible to participate in Acquiror Bank's bonus incentive plans, commencing at the beginning of the next bonus payout period commencing after the Effective Time, unless otherwise mutually determinedon the same basis as other employees of Acquiror Bank.
(g) Continuing Employees shall retain their unused vacation and sick leave to which they were entitled at Target Bank for use at Acquiror Bank in accordance with the practices and policies of Acquiror Bank. Effective on the later of January 1, 2001 or the SouthBanc beginning of the first calendar quarter after the Effective Time, Continuing Employees shall be entitled to participate in Acquiror Bank's vacation and sick leave plans on the same basis as Acquiror Bank employees, and such Continuing Employees shall be credited with their service with Target and Target Bank for purposes of the level of vacation and sick leave benefits to which they would be entitled. Employees of Target Bank whose employment is terminated at or prior to the Effective Time shall be entitled to receive payment for accrued but unused personal, vacation and sick leave to the same extent as they would be entitled to such payment by Target Bank upon termination of employment or year end. Target's Disclosure Letter sets forth the number of personal days, sick days and vacation days that each such employee is expected to accrue during 2000.
(h) The Target Employee Plans and the Heritage Employee Plans in effect Stock Ownership Plan ("Target ESOP") shall be amended to provide for its termination as of the date Effective Time and all ESOP Participants shall fully vest and have a nonforfeitable interest in their accounts under the Target ESOP as of this Agreement the termination date. In connection with its termination, the Target ESOP, as amended, shall remain provide that the trustee shall use cash consideration received from Acquiror for the unallocated shares of Target Common Stock held in effect with respect the Target ESOP to employees repay the loan to the Target ESOP in full and that any unallocated portion of SouthBanc the consideration remaining after repayment of the loan to the Target ESOP shall be allocated to the accounts of participants and Heritage beneficiaries (such individuals hereinafter referred as the "ESOP Participants") as earnings and their respective Subsidiaries covered by such plans and arrangements at not as "annual additions." Acquiror agrees not to amend the Target ESOP subsequent to the Effective Time until such time as SouthBanc shallin any manner that would change or expand the class of persons entitled to receive benefits under the Target ESOP. From and after the date hereof, subject to applicable law, the terms of this Agreement and the terms in anticipation of such planstermination, adopt new benefit plans Acquiror and arrangements with respect Target shall use their best efforts to apply for and obtain a favorable determination letter from the IRS as to the employees tax-qualified status of SouthBanc the Target ESOP upon its termination under Sections 401(a) and its Subsidiaries 4975(e)(7) of the Code (the "New Benefit PlansFinal Determination Letter")) and may amend the Target ESOP to the extent necessary to do so. Following the receipt of the Final Determination Letter, including all Continuing Employeesdistributions of the account balances under the Target ESOP shall be made promptly to the ESOP Participants. Prior In the event that Acquiror and Target, prior to the Effective Time, SouthBanc and Heritage Acquiror after the Effective Time, reasonably determine that the Target ESOP cannot obtain favorable Final Determination Letter, or that the amounts held therein cannot be allocated or distributed in accordance with the terms of the Target ESOP, as amended, without causing the Target ESOP to lose its tax-qualified status, Target prior to the Effective Time and Acquiror after the Effective Time shall cooperate take such action as they may reasonably determine with respect to the allocation and distribution of account balances to the ESOP Participants, provided that the assets of the Target ESOP shall be held or paid solely for the benefit of the ESOP Participants and provided further that in reviewingno event shall any portion of the amounts held in the Target ESOP revert, evaluating and analyzing directly or indirectly, to Target or any affiliate thereof, or to Acquiror or any affiliate thereof. The current administrator of the SouthBanc Employee Plans Target ESOP, or another administrator selected by Target, shall continue to administer the Target ESOP subsequent to the Effective Time, and the Heritage Employee Plans with a view toward developing appropriate New Benefit Planscurrent Trustee of the Target ESOP, or such other trustee(s) selected by Target or the administrators, shall continue to be the Trustee subsequent to the Effective Time, until all assets have been distributed from the plan. Continuing Employees shall have no right to participate in Acquiror Bank's ESOP, except to the extent that such participation would be required under applicable law.
(ci) The foregoing subparagraph (b) notwithstandingExcept as otherwise provided in this Agreement, SouthBanc Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under plans, contracts, arrangement arrangements, commitments or understandings described disclosed in Schedule -------- 2.1(nSection 4.11(i) and Schedule 2.2(n)of Target's Disclosure Letter, including with respect to benefits which vest or are otherwise ------ --------------- accrued or payable as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc . Acquiror acknowledges and agrees that Continuing Employees shall receive (i) full credit the receipt of all required regulatory approvals for prior service with Heritage and Heritage Federal consummation of the Merger constitutes a change in control for purposes of eligibility for participation the plans, contracts, arrangements, commitments or understandings, which specifically provide that such action constitutes a change in control, and vestingwhich are disclosed in Section 4.11(i) of Target's Disclosure Letter. Set forth in Target's Disclosure Letter in reasonable detail are estimates of the payments and benefits due under Target's employment agreements, (ii) a waiver of all waiting periods change in control agreements and preexisting condition exclusions or penalties severance plan. It is intended by Acquiror and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to Target that the plan year procedures and methodologies used in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in preparing such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank Employee Stock Ownership Plan (the "Heritage ESOP") estimates shall be terminated as of followed in determining the Effective Time. In connection with the termination of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination actual payments or benefits due under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect to the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan in accordance with past practice.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Time.
(j) Subject to Section 1.4(b),Target shall use its best efforts to obtain from each holder of a Target Option and to deliver to Acquiror at or before the Closing (as defined in Section 7.1) an agreement to the cancellation of such holder's Target Options in exchange for a cash payment as described in Section 1.4.
(k) The employees of Security may be paid bonuses immediately prior to the Effective Time which in the aggregate shall not exceed $20,000. Such bonuses, on an individual basis, shall be determined by Target.
(l) Acquiror agrees to use its best efforts to cause three members of Target's Board of Directors as disclosed in Target's Disclosure Letter to be appointed as directors of Acquiror Bank as of the Effective Time (such appointments to be evenly distributed among classes of Acquiror Bank directors).
(m) Acquiror agrees to use its best efforts to cause one member of Target's Board of Directors as disclosed in Target's Disclosure Letter to be appointed as a director of Northeast Pennsylvania Trust Co. as of the Effective Time.
Appears in 1 contract
Samples: Merger Agreement (Security of Pennsylvania Financial Corp)
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal Target or a Subsidiary of Target immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Acquiror or a Subsidiary of Acquiror, as appropriate; provided, however, that in no event shall any of Target's employees be officers of Acquiror or a Subsidiary of Acquiror, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Acquiror or a Subsidiary of Acquiror, as appropriate. Except for Continuing Employees"). Subject to paragraph (f) Employees who have employment agreements with Target or a Subsidiary of this Section 4.11Target, all of the Continuing Employees shall be employed at the will of Heritage Federal Acquiror or a Subsidiary of Acquiror and no contractual right to employment shall inure to such employees because of this Agreement.
(b) Except Each Continuing Employee of Target Bank ("TARGET BANK CONTINUING EMPLOYEE") shall be eligible to participate in the Acquiror Pension Plan and the Acquiror 401(k) Plan with credit for prior service with Target Bank for purposes of eligibility and vesting, but not for purposes of benefit accrual under the acquiror Pension Plan and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of providing benefits comparable to those available to Target Bank Continuing Employees. Each Target Bank Continuing Employee shall be treated as provided in Section 4.11(e), from a new employee of Acquiror for purposes of the Acquiror Employee Stock Ownership Plan following the Effective Date and after Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of the Acquiror Employee Stock Ownership Plan. As of the Effective Time, unless Acquiror shall make available employer-provided health and other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Acquiror employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise mutually determined, applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered under a similar Target plan on the SouthBanc Employee Plans and the Heritage Employee Plans in effect as Effective Date of the date of this Agreement Merger. Acquiror shall remain in effect with respect cause its health and dental plans to employees of SouthBanc provide full credit under such plans for any deductibles, co-payments and Heritage out-of- pocket expenses incurred by the Continuing Employees and their respective Subsidiaries covered by dependents during the portion of the calendar year prior to their participation in such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employees. Prior to the Effective Time, SouthBanc and Heritage shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit PlansAcquiror.
(c) Target shall take such action as may be necessary under the plan and applicable law to freeze benefit accruals under the Target Pension Plan as of a date not later than the Effective Date. Following the Effective Date, Acquiror may, in its sole discretion, cause the Target Pension Plan to be terminated, merged into the Acquiror Pension Plan, or Acquiror may maintain the frozen plan as a separate plan. Target shall also take such action to terminate the Target 401(k) Plan not later than immediately prior to the Effective Date. Subject to receipt of a favorable determination letter from the IRS regarding the termination of the Target 401(k) Plan, distributions shall be made to participants as provided in the Target 401(k) Plan.
(d) The foregoing subparagraph (b) notwithstanding, SouthBanc Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Target Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement arrangements commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n)Target's Disclosure Letter, including benefits and amounts which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect , in each case to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.the
(e) Notwithstanding anything in this Agreement Prior to the contraryEffective Date, the Heritage Federal Bank Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated as of the Effective Time. In connection with the termination of the Heritage ESOP, Heritage shall promptly apply Target will designate by notice to the IRS for a determination letter on the Heritage ESOPAcquiror one director from Target's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the reasonably acceptable to Acquiror and Acquiror's Board of Directors shall nominate such person to be elected as a director for a three year term by the stockholders of Heritage Acquiror at its annual meeting to be held in consultation with SouthBanc2002. The committee person appointed to Acquiror's Board of Directors shall advise and consult with SouthBanc regarding all actions taken with respect be the same person appointed to the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan Acquiror Bank's Board of Directors in accordance with past practiceSection 1.10 hereof.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Time.
Appears in 1 contract
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal CNS Bank immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")ENB Bank; PROVIDED, HOWEVER, that in no event shall any of CNS's employees be officers of ENB Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of ENB Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal ENB Bank and no contractual right to employment shall inure to such employees because of this Agreement. ENB will use its best efforts to retain all of the employees of CNS Bank, subject to the qualifications of such employees and the needs of ENB Bank.
(b) Except as otherwise provided in paragraph (d) of this Section 4.11(e)4.11, from and after appropriate steps shall be taken to terminate all CNS Employee Plans as of the Effective Time or as promptly as practical thereafter. Immediately following the Effective Time, unless otherwise mutually determined, each Continuing Employee shall be eligible to participate in ENB's benefit plans on the SouthBanc Employee Plans and the Heritage Employee Plans same basis as a new employee of ENB or ENB Bank (it being understood that inclusion of Continuing Employees in effect as of the date of this Agreement shall remain in effect ENB's benefit plans may occur at different times with respect to employees different plans). Service with CNS or CNS Bank shall be treated as service with ENB Bank for purposes of SouthBanc satisfying any waiting periods, evidence of insurability requirements, or the application of any preexisting condition limitation with respect to any ENB or ENB Bank "welfare benefit plan", as defined in Section 3(1) of ERISA, but not with respect to any pension, profit sharing or any other employee benefit plan unless the Continuing Employee remains in the service of ENB for at least one year immediately following the Effective Time. Each Continuing Employee shall receive credit for service with CNS or CNS Bank for purposes of computing vacation pay benefits.
(c) ENB agrees to honor the existing employment agreement with CNS's chief executive officer, including the change in control provisions of such agreement, CNS's Executive Deferred Compensation Plan, and Heritage CNS's Management Recognition and their respective Subsidiaries covered Development Plan. Payments under such agreement and plans may be made by such plans and arrangements at CNS immediately prior to the Effective Time until if so agreed to by ENB, or on such time other schedule as SouthBanc shall, subject may be mutually agreed upon by the individual employee and ENB. ENB also agrees to applicable law, honor the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements deferred fee arrangement with respect to the employees of SouthBanc and its Subsidiaries Director Rixxxxx X. Xxxxxxxxx.
("New Benefit Plans"), including all Continuing Employees. Prior d) At or immediately prior to the Effective Time, SouthBanc and Heritage shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit Plans.
(c) The foregoing subparagraph (b) notwithstanding, SouthBanc agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank CNS Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated on such terms and conditions as CNS shall determine. As soon as administratively practicable after the Effective Time, any loan between CNS and the ESOP shall be repaid in full from the Cash Consideration received for unallocated shares of CNS Common Stock held by the ESOP (or, if such amount is insufficient to repay the loan, through the sale of a sufficient number of shares of ENB Common Stock) upon the conversion pursuant to the Merger of such shares of CNS Common Stock held by the ESOP. Any remaining Cash Consideration or ENB Common Stock received for such unallocated shares after such repayment shall be allocated as investment earnings of the ESOP to the ESOP accounts of those CNS or CNS Bank employees who are ESOP participants and beneficiaries (the "ESOP PARTICIPANTS") in accordance with the terms of the ESOP as amended with respect to such termination and as in effect on the Effective Time. All ESOP Participants shall fully vest and have a nonforfeitable interest in their accounts under the ESOP determined as of the Effective Time. In connection with As soon as practicable after the termination receipt of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable determination letter from the IRS related as to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage its termination under Section 401(a) and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest4975(e) of the IRC, distributions of the benefits under the ESOP Loan. The parties agree that, pursuant shall be made to the applicable ESOP Participants in accordance with the provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to . To the extent provided under that ENB Common Stock is not "readily tradeable on an established securities market" within the Heritage ESOP upon termination meaning of Section 409(h) of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In additionIRC, Heritage may take such other actions, including ENB shall honor the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status provisions of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect relating to the Heritage ESOP following put option provided by Section 409(h) and will comply with the Effective Time. On independent appraisal requirements of Section 401(a)(28)(C) of the IRC.
(e) CNS shall use its best efforts to obtain from each holder of an CNS Option and to deliver to ENB at or before the Effective Time, Heritage may make such contributions Closing (as defined in Section 7.1) an agreement to the Heritage ESOP cancellation of such holder's CNS Options in exchange for a cash payment as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan described in accordance with past practiceSection 1.5.
(f) From Any employee of CNS or any CNS Subsidiary (i) whose employment with ENB or any ENB Subsidiary is terminated by ENB or (ii) who voluntarily terminates employment in circumstances where, without the employee's consent, there has occurred (x) a material reduction in the employee's level of compensation and after benefits as in effect immediately prior to the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman (y) a material change in the employee's functions, duties or responsibilities which would cause the employee's position to be one of SouthBanclesser responsibility, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At importance or scope than immediately prior to the Effective TimeTime or (z) a change in location of the location of the employee's job or office immediately prior to the Effective Time by more than 25 miles, SouthBanc at the Effective Time and Heritage Federal for a one (1) year period thereafter and shall enter into be entitled to receive (a) a lump-sum severance benefit in an amount equal to one weeks' pay for each year of employment agreements with J. Xxxxxx Xxxxx substantially CNS or any CNS Subsidiary, (with partial years of service included in the form attached hereto calculation on a pro-rated basis), up to a maximum of eight weeks' pay, and (b) continuation of health benefits, on the same terms and conditions applicable to ENB's active employees, for the same number of weeks factored into the calculation of severance payments, up to a maximum of eight weeks, and thereafter COBRA benefits for an additional period of time determined as Exhibits D and E, respectively. At though the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as employee terminated employment upon expiration of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated period covered by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Timesaid continued health benefits.
Appears in 1 contract
Samples: Merger Agreement (CNS Bancorp Inc)
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal CNS Bank immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesContinuing Employee") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")ENB Bank; provided, however, that in no event shall any of CNS's employees be officers of ENB Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of ENB Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal ENB Bank and no contractual right to employment shall inure to such employees because of this Agreement. ENB will use its best efforts to retain all of the employees of CNS Bank, subject to the qualifications of such employees and the needs of ENB Bank.
(b) Except as otherwise provided in paragraph (d) of this Section 4.11(e)4.11, from and after appropriate steps shall be taken to terminate all CNS Employee Plans as of the Effective Time or as promptly as practical thereafter. Immediately following the Effective Time, unless otherwise mutually determined, each Continuing Employee shall be eligible to participate in ENB's benefit plans on the SouthBanc Employee Plans and the Heritage Employee Plans same basis as a new employee of ENB or ENB Bank (it being understood that inclusion of Continuing Employees in effect as of the date of this Agreement shall remain in effect ENB's benefit plans may occur at different times with respect to employees different plans). Service with CNS or CNS Bank shall be treated as service with ENB Bank for purposes of SouthBanc and Heritage and their respective Subsidiaries covered by such plans and arrangements at satisfying any waiting periods, evidence of insurability requirements, or the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms application of this Agreement and the terms of such plans, adopt new benefit plans and arrangements any preexisting condition limitation with respect to any ENB or ENB Bank "welfare benefit plan", as defined in Section 3(1) of ERISA, but not with respect to any pension, profit sharing or any other employee benefit plan unless the employees Continuing Employee remains in the service of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employees. Prior to ENB for at least one year immediately following the Effective Time, SouthBanc and Heritage . Each Continuing Employee shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans receive credit for service with a view toward developing appropriate New Benefit PlansCNS or CNS Bank for purposes of computing vacation pay benefits.
(c) The foregoing subparagraph (b) notwithstanding, SouthBanc ENB agrees to honor the existing employment agreement with CNS's chief executive officer, including the change in accordance with their terms all benefits vested as control provisions of such agreement, CNS's Executive Deferred Compensation Plan, and CNS's Management Recognition and Development Plan. Payments under such agreement and plans may be made by CNS immediately prior to the Effective Time under if so agreed to by ENB, or on such other schedule as may be mutually agreed upon by the SouthBanc Employee Plans individual employee and ENB. ENB also agrees to honor the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, deferred fee arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreementwith Director Richard E. Caplinger.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions At or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contraryimmediatelx xxxxx xx xxx Xxxxxtive Time, the Heritage Federal Bank CNS Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated on such terms and conditions as CNS shall determine. As soon as administratively practicable after the Effective Time, any loan between CNS and the ESOP shall be repaid in full from the Cash Consideration received for unallocated shares of CNS Common Stock held by the ESOP (or, if such amount is insufficient to repay the loan, through the sale of a sufficient number of shares of ENB Common Stock) upon the conversion pursuant to the Merger of such shares of CNS Common Stock held by the ESOP. Any remaining Cash Consideration or ENB Common Stock received for such unallocated shares after such repayment shall be allocated as investment earnings of the ESOP to the ESOP accounts of those CNS or CNS Bank employees who are ESOP participants and beneficiaries (the "ESOP Participants") in accordance with the terms of the ESOP as amended with respect to such termination and as in effect on the Effective Time. All ESOP Participants shall fully vest and have a nonforfeitable interest in their accounts under the ESOP determined as of the Effective Time. In connection with As soon as practicable after the termination receipt of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable determination letter from the IRS related as to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage its termination under Section 401(a) and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest4975(e) of the IRC, distributions of the benefits under the ESOP Loan. The parties agree that, pursuant shall be made to the applicable ESOP Participants in accordance with the provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to . To the extent provided under that ENB Common Stock is not "readily tradeable on an established securities market" within the Heritage ESOP upon termination meaning of Section 409(h) of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In additionIRC, Heritage may take such other actions, including ENB shall honor the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status provisions of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect relating to the Heritage ESOP following put option provided by Section 409(h) and will comply with the Effective Time. On independent appraisal requirements of Section 401(a)(28)(C) of the IRC.
(e) CNS shall use its best efforts to obtain from each holder of an CNS Option and to deliver to ENB at or before the Effective Time, Heritage may make such contributions Closing (as defined in Section 7.1) an agreement to the Heritage ESOP cancellation of such holder's CNS Options in exchange for a cash payment as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan described in accordance with past practiceSection 1.5.
(f) From Any employee of CNS or any CNS Subsidiary (i) whose employment with ENB or any ENB Subsidiary is terminated by ENB or (ii) who voluntarily terminates employment in circumstances where, without the employee's consent, there has occurred (x) a material reduction in the employee's level of compensation and after benefits as in effect immediately prior to the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman (y) a material change in the employee's functions, duties or responsibilities which would cause the employee's position to be one of SouthBanclesser responsibility, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At importance or scope than immediately prior to the Effective TimeTime or (z) a change in location of the location of the employee's job or office immediately prior to the Effective Time by more than 25 miles, SouthBanc at the Effective Time and Heritage Federal for a one (1) year period thereafter and shall enter into be entitled to receive (a) a lump-sum severance benefit in an amount equal to one weeks' pay for each year of employment agreements with J. Xxxxxx Xxxxx substantially CNS or any CNS Subsidiary, (with partial years of service included in the form attached hereto calculation on a pro-rated basis), up to a maximum of eight weeks' pay, and (b) continuation of health benefits, on the same terms and conditions applicable to ENB's active employees, for the same number of weeks factored into the calculation of severance payments, up to a maximum of eight weeks, and thereafter COBRA benefits for an additional period of time determined as Exhibits D and E, respectively. At though the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as employee terminated employment upon expiration of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated period covered by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Timesaid continued health benefits.
Appears in 1 contract
Samples: Merger Agreement (Exchange National Bancshares Inc)
Employees, Directors and Officers. (a) All persons who are employees of Heritage Harbor Federal immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")Provident Bank; provided, however, that in no event shall any of Harbor's employees be officers of Provident Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Provident Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal Provident Bank and no contractual right to employment shall inure to such employees because of this Agreement.
(b) Except As soon as provided in Section 4.11(e), from and after administratively practicable following the Effective Time, unless otherwise mutually determinedeach Continuing Employee shall be eligible to participate in the Provident Bank 401(k) Plan and Provident Pension Plan with full credit for prior service with Harbor and Harbor Federal for purposes of eligibility and vesting, the SouthBanc Employee Plans and the Heritage Employee Plans in effect as but not for purposes of the date benefit accruals. As of this Agreement shall remain in effect with respect to employees of SouthBanc and Heritage and their respective Subsidiaries covered by such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employees. Prior to the Effective Time, SouthBanc Provident shall make available employer-provided health and Heritage other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Provident employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise applicable under such plans to new employees shall cooperate in reviewing, evaluating and analyzing not apply to a Continuing Employee or their covered dependents who were covered under a similar Harbor plan on the SouthBanc Employee Plans and Effective Date of the Heritage Employee Plans with a view toward developing appropriate New Benefit PlansMerger.
(c) The foregoing subparagraph (b) notwithstanding, SouthBanc Provident agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Harbor Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n)Harbor's Disclosure Letter, including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank The Harbor Employee Stock Ownership Plan (the "Heritage HARBOR ESOP") shall be terminated as of, or prior to, the Effective Time. As of the Effective Time, all shares held by the Harbor ESOP shall be converted into the right to receive the Merger Consideration. In connection with As soon as administratively practicable following the termination Effective Time, all outstanding indebtedness of the Heritage ESOP, Heritage shall promptly apply to the IRS for a determination letter on the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage Harbor ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full and the balance remaining with respect to unallocated shares previously held by the Heritage Harbor ESOP upon such termination or shall be allocated and distributed to Harbor ESOP participants as soon thereafter as practicableprovided in the Harbor ESOP, subject to receipt of a favorable determination letter from the IRS and unless otherwise required by applicable law. The parties further acknowledge thatHarbor Money Purchase Defined Contribution Pension Plan ("HARBOR PENSION PLAN") shall be terminated as of, as of the date hereofor prior to, the Heritage ESOP has unallocated assets with Effective Time and, subject to receipt of a current fair market value exceeding favorable determination letter from the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree thatIRS, pursuant distributions shall be made to the applicable provisions of the Heritage ESOP, participants as provided in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after .
(e) At the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board employees of Directors of Heritage Federal Harbor shall be exercised by a committee appointed by eligible for the Board payment of Directors of Heritage bonuses for 2000 pursuant to Harbor's existing bonus program; provided, however, that the aggregate bonus payments to be made to Harbor's employees pursuant to this provision shall in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect to no event be greater than the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make amount Harbor has accrued for such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest bonus payments on any outstanding exempt loan in accordance with past practice.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage , and Harbor shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBancaccrue no more than $19,000 per month for such bonus payments for each month beginning January, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of 2000 through the Effective Time.
Appears in 1 contract
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal Fuxxxx Xavings immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Continuing Employees")Central Bank; PROVIDED, HOWEVER, that in no event shall any of Fuxxxx'x xmployees be officers of Central Bank, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Central Bank. Subject to paragraph (f) All of this Section 4.11, all the Continuing Employees shall be employed at the will of Heritage Federal Central Bank and no contractual right to employment shall inure to such employees because of this Agreement. Central will use its best efforts to retain all of the employees of Fuxxxx Xavings, subject to the qualifications of such employees and the needs of Central Bank.
(b) Except as otherwise provided in Section 4.11(eparagraph (d) of this SECTION 4.11, appropriate steps shall be taken to terminate all Fuxxxx Xmployee Plans as of the Effective Time or as promptly as practical thereafter. Immediately following the Effective Time, each Continuing Employee shall be eligible to participate in Central's benefit plans on the same basis as a new employee of Central or Central Bank (it being understood that inclusion of Continuing Employees in Central's benefit plans may occur at different times with respect to different plans); PROVIDED, HOWEVER, that with respect to each Central benefit plan, for purposes of determining eligibility to participate and vesting (but not for the accrual of benefits), from service with Fuxxxx xr Fuxxxx Xavings shall be treated as service with Central Bank. Service with Fuxxxx xr Fuxxxx Xavings also shall be treated as service with Central Bank for purposes of satisfying any waiting periods, evidence of insurability requirements, or the application of any preexisting condition limitation with respect to any Central or Central Bank "welfare benefit plan", as defined in Section 3(1) of ERISA. Each Continuing Employee shall receive credit for service with Fuxxxx xr Fuxxxx Xavings for purposes of computing vacation pay benefits.
(c) Central agrees to honor existing employment agreements, including the change in control provisions of such agreements, between Fuxxxx xnd Fuxxxx Xavings and certain employees as set forth in Fuxxxx'x Xisclosure Letter. Such payments may be made by Fuxxxx xmmediately prior to the Effective Time if so agreed to by Central, or on such other schedule as may be mutually agreed upon by the individual employee and Central.
(d) Prior to the Effective Time, Fuxxxx xhall terminate the Fuxxxx Xmployee Stock Ownership Plan ("ESOP") by proper action of the Board of Directors of Fuxxxx. As soon as administratively practicable after the Effective Time, unless otherwise mutually determinedthe ESOP shall apply any cash received in the Merger with respect to unallocated shares of Fuxxxx Xommon Stock to the repayment in full of the outstanding ESOP indebtedness. Any surplus cash remaining after repayment of such indebtedness shall be allocated as investment earnings of the ESOP to the stock accounts of ESOP participants (and, if required, to the SouthBanc Employee Plans and accounts of former participants or their beneficiaries) in proportion to their stock account balances in a manner consistent with the Heritage Employee Plans in effect terms of the ESOP plan document.
(e) Central shall cause all of the members of Fuxxxx'x Xoard of Directors as of the date of this Agreement shall remain in effect with respect Agreement, who are willing to employees so serve, to be elected to or appointed as members of SouthBanc and Heritage and their respective Subsidiaries covered by such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries an advisory board ("New Benefit Plans"), including all Continuing Employees. Prior to the Effective Time, SouthBanc and Heritage shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit Plans.
(c) The foregoing subparagraph (b) notwithstanding, SouthBanc agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n), including benefits which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect to the plan year in which the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in such plan on the earliest date required by ERISA and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributions.
(e) Notwithstanding anything in this Agreement to the contrary, the Heritage Federal Bank Employee Stock Ownership Plan (the "Heritage ESOPADVISORY BOARD") shall be terminated as of the Effective Time. In connection with Central shall maintain the termination of the Heritage ESOP, Heritage shall promptly apply to the IRS Advisory Board for a determination letter on period of not less than one year, but may modify or dissolve the Heritage ESOP's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid Advisory Board in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and its sole discretion after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the Board of Directors of Heritage in consultation with SouthBanc. The committee shall advise and consult with SouthBanc regarding all actions taken with respect to the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan in accordance with past practice.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as first anniversary of the Effective Time. Heritage The function of the Advisory Board shall cause Heritage Federal be to appoint Xxxxxx X. Xxx advise Central with respect to deposit and one other lending activities in Fuxxxx'x xarket area and to maintain and develop customer relationships. Each member of the Advisory Board shall receive a monthly fee of Directors of SouthBanc$200, who plus appropriate fees for any additional services such member shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Timeperform.
Appears in 1 contract
Employees, Directors and Officers. (a) All persons who are employees of Heritage Federal Target or a Subsidiary of Target immediately prior to the Effective Time and whose employment is not specifically terminated at or prior to the Effective Time (a "Heritage's EmployeesCONTINUING EMPLOYEE") shall, at the Effective Time, continue as become employees of Heritage Federal ("Acquiror or a Subsidiary of Acquiror, as appropriate; PROVIDED, HOWEVER, that in no event shall any of Target's employees be officers of Acquiror or a Subsidiary of Acquiror, or have or exercise any power or duty conferred upon such an officer, unless and until duly elected or appointed to such position in accordance with the bylaws of Acquiror or a Subsidiary of Acquiror, as appropriate. Except for Continuing Employees"). Subject to paragraph (f) Employees who have employment agreements with Target or a Subsidiary of this Section 4.11Target, all of the Continuing Employees shall be employed at the will of Heritage Federal Acquiror or a Subsidiary of Acquiror and no contractual right to employment shall inure to such employees because of this Agreement.
(b) Except Each Continuing Employee of Target Bank ("TARGET BANK CONTINUING EMPLOYEE") shall be eligible to participate in the Acquiror Pension Plan and the Acquiror 401(k) Plan with credit for prior service with Target Bank for purposes of eligibility and vesting, but not for purposes of benefit accrual under the acquiror Pension Plan and Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of providing benefits comparable to those available to Target Bank Continuing Employees. Each Target Bank Continuing Employee shall be treated as provided in Section 4.11(e), from a new employee of Acquiror for purposes of the Acquiror Employee Stock Ownership Plan following the Effective Date and after Acquiror shall evaluate the eligibility of all other Continuing Employees for purposes of the Acquiror Employee Stock Ownership Plan. As of the Effective Time, unless Acquiror shall make available employer-provided health and other employee welfare benefit plans to each Continuing Employee on the same basis as it provides such coverage to Acquiror employees except that any pre-existing condition, eligibility waiting period or other limitations or exclusions otherwise mutually determined, applicable under such plans to new employees shall not apply to a Continuing Employee or their covered dependents who were covered under a similar Target plan on the SouthBanc Employee Plans and the Heritage Employee Plans in effect as Effective Date of the date of this Agreement Merger. Acquiror shall remain in effect with respect cause its health and dental plans to employees of SouthBanc provide full credit under such plans for any deductibles, co-payments and Heritage out-of-pocket expenses incurred by the Continuing Employees and their respective Subsidiaries covered by dependents during the portion of the calendar year prior to their participation in such plans and arrangements at the Effective Time until such time as SouthBanc shall, subject to applicable law, the terms of this Agreement and the terms of such plans, adopt new benefit plans and arrangements with respect to the employees of SouthBanc and its Subsidiaries ("New Benefit Plans"), including all Continuing Employees. Prior to the Effective Time, SouthBanc and Heritage shall cooperate in reviewing, evaluating and analyzing the SouthBanc Employee Plans and the Heritage Employee Plans with a view toward developing appropriate New Benefit PlansAcquiror.
(c) Target shall take such action as may be necessary under the plan and applicable law to freeze benefit accruals under the Target Pension Plan as of a date not later than the Effective Date. Following the Effective Date, Acquiror may, in its sole discretion, cause the Target Pension Plan to be terminated, merged into the Acquiror Pension Plan, or Acquiror may maintain the frozen plan as a separate plan. Target shall also take such action to terminate the Target 401(k) Plan not later than immediately prior to the Effective Date. Subject to receipt of a favorable determination letter from the IRS regarding the termination of the Target 401(k) Plan, distributions shall be made to participants as provided in the Target 401(k) Plan.
(d) The foregoing subparagraph (b) notwithstanding, SouthBanc Acquiror agrees to honor in accordance with their terms all benefits vested as of the Effective Time under the SouthBanc Employee Plans and the Heritage Target Employee Plans and all vested benefits or other vested amounts earned or accrued through such time under contracts, arrangement arrangements commitments or understandings described in Schedule -------- 2.1(n) and Schedule 2.2(n)Target's Disclosure Letter, including benefits and amounts which vest or are otherwise ------ --------------- accrued as a result of the consummation of the transactions contemplated by this Agreement.
(d) With respect to all New Benefit Plans, SouthBanc agrees that Continuing Employees shall receive (i) full credit for prior service with Heritage and Heritage Federal for purposes of eligibility for participation and vesting, (ii) a waiver of all waiting periods and preexisting condition exclusions or penalties and (iii) credit for deductibles, copayments or similar out-of-pocket expenses incurred under any Heritage Employee Plan with respect in each case to the plan year extent permitted by Government Regulators; provided, that Acquiror shall cooperate with Target in which seeking any consents or approvals that may be necessary in connection with the Effective Time occurs. Notwithstanding anything herein to the contrary, with respect to participation in Perpetual Bank's Employee Stock Ownership Plan, Continuing Employees will be eligible to participate in payment of such plan on the earliest date required by ERISA benefits and the IRC and with Continuing Employees receiving credit for years of service with Heritage or any of its Subsidiaries for the purpose of vesting, but not for the purpose of accrual of benefits or allocation of employer contributionsamounts.
(e) Notwithstanding anything in this Agreement Prior to the contraryEffective Date, the Heritage Federal Bank Employee Stock Ownership Plan (the "Heritage ESOP") shall be terminated as of the Effective Time. In connection with the termination of the Heritage ESOP, Heritage shall promptly apply Target will designate by notice to the IRS for a determination letter on the Heritage ESOPAcquiror one director from Target's tax-qualified status upon termination under Code Sections 401(a) and 4975. Prior to any distributions to any Heritage ESOP participants, the trustees for the Heritage ESOP shall have received a favorable letter from the IRS related to the tax qualified status of the Heritage ESOP upon termination. The parties acknowledge that the existing loan between Heritage and the Heritage ESOP (the "ESOP Loan") shall be repaid in full by the Heritage ESOP upon such termination or as soon thereafter as practicable. The parties further acknowledge that, as of the date hereof, the Heritage ESOP has unallocated assets with a current fair market value exceeding the outstanding balance (principal and accrued interest) of the ESOP Loan. The parties agree that, pursuant to the applicable provisions of the Heritage ESOP, participants in the Heritage ESOP shall benefit from these assets as an allocation of earnings in the manner and to the extent provided under the Heritage ESOP upon termination of the Heritage ESOP. Heritage may take such actions as it deems necessary or appropriate to effectuate this intent. In addition, Heritage may take such other actions, including the making of other amendments to the plan, that it deems necessary or appropriate to preserve the tax-qualified status of the Heritage ESOP or the exempt status of the ESOP Loan. From and after the Effective Time, the administrative and other authority previously exercised solely by a committee appointed by the Board of Directors of Heritage Federal shall be exercised by a committee appointed by the reasonably acceptable to Acquiror and Acquiror's Board of Directors shall nominate such person to be elected as a director for a three year term by the stockholders of Heritage Acquiror at its annual meeting to be held in consultation with SouthBanc2002. The committee person appointed to Acquiror's Board of Directors shall advise and consult with SouthBanc regarding all actions taken with respect be the same person appointed to the Heritage ESOP following the Effective Time. On or before the Effective Time, Heritage may make such contributions to the Heritage ESOP as may be necessary to permit the Heritage ESOP to make scheduled principal and interest payments on any outstanding exempt loan Acquiror Bank's Board of Directors in accordance with past practiceSECTION 1.10 hereof.
(f) From and after the Effective Time, J. Xxxxxx Xxxxx shall serve as Chairman of SouthBanc, X.X. Xxxxxxx, Xx. shall serve as Vice Chairman of SouthBanc and Xxxxxx X. Xxx shall serve as President and Chief Executive Officer of SouthBanc. At the Effective Time, SouthBanc and Heritage Federal shall enter into employment agreements with J. Xxxxxx Xxxxx substantially in the form attached hereto as Exhibits D and E, respectively. At the Effective Time, ---------- - SouthBanc and Heritage Federal shall enter into Change in Control Agreements with Xxxxx X. Xxxxxx, Will X. Xxxxxxxx, Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx, Xx. substantially in the form attached hereto as Exhibit F. ---------
(g) SouthBanc shall cause Perpetual Bank to appoint J. Xxxxxx Xxxxx to the Board of Directors of Perpetual Bank as of the Effective Time. Heritage shall cause Heritage Federal to appoint Xxxxxx X. Xxx and one other member of the Board of Directors of SouthBanc, who shall be designated by SouthBanc, to the Board of Directors of Heritage Federal as of the Effective Time.
Appears in 1 contract
