Common use of ERISA and Other Compliance Clause in Contracts

ERISA and Other Compliance. (a) Section 2.8 of the SCO Disclosure Letter lists each employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit Arrangements"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO Disclosure Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA ("Employee Benefit Plan"), in which any of the Employees participate (collectively, the "Group Employee Plans"). Copies of all Group Benefit Arrangements have been made available to Caldera or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 Group Balance Sheet or will be made prior to the Effective Time. Any Contributed Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an Internal Revenue Service opinion letter has been obtained by the

ERISA and Other Compliance. (a) Section 2.8 of the SCO Disclosure Letter lists each ---------------------------------------- employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit Arrangements"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO Disclosure -------------- Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA ("Employee Benefit Plan"), in which any of the Employees participate (collectively, the "Group Employee Plans"). Copies of all Group Benefit Arrangements have been made available to Caldera or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 Group Balance Sheet or will be made prior to the Effective Time. Any Contributed Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an Internal Revenue Service opinion letter has been obtained by thethe plan sponsor and is valid as to the adopting employer. Each Contributed Company has made available upon Newco's request the most recent Internal Revenue Service determination or opinion letter issued with respect to each such Contributed Company Employee Plan, and nothing has occurred since the issuance of each such letter which could reasonably be expected to cause the loss of the tax-qualified status of any Contributed Company Employee Plan subject to Code Section 401(a).

ERISA and Other Compliance. (a) Section 2.8 of the SCO SSI Disclosure Letter lists each employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit ArrangementsGROUP BENEFIT ARRANGEMENTS"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO SSI Disclosure Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA ("Employee Benefit PlanEMPLOYEE BENEFIT PLAN"), in which any of the Employees participate (collectively, the "Group Employee PlansGROUP EMPLOYEE PLANS"). Copies of all Group Benefit Arrangements have been made available to Caldera VERITAS or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 1998 Group Balance Sheet or will be made prior to the Effective Time. Any Contributed Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an Internal Revenue Service opinion letter has been obtained by the.

ERISA and Other Compliance. (a) Section 2.8 of the SCO SSI Disclosure Letter lists each employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit ArrangementsGROUP BENEFIT ARRANGEMENTS"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO SSI Disclosure Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA ("Employee Benefit PlanEMPLOYEE BENEFIT PLAN"), in which any of the Employees participate (collectively, the "Group Employee PlansGROUP EMPLOYEE PLANS"). Copies of all Group Benefit Arrangements have been made available to Caldera VERITAS or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 1998 Group Balance Sheet or will be made prior to the Effective Time. Any (b) None of the Group Employee Plans maintained by any of the Contributing Companies or any member of the Contributed Company Employee Plan intended to be qualified Group (i) is a multiemployer plan, within the meaning of Section 3(37) or 4001(a)(3) of ERISA (a "MULTIEMPLOYER PLAN"), or a single employer pension plan, within the meaning of Section 4001(a)(15) of ERISA, for which Newco could incur liability under Section 401(a4063 or 4064 of ERISA (a "MULTIPLE EMPLOYER PLAN"), or (ii) provides or promises to provide retiree medical or life insurance benefits except in connection with (a) benefit coverage mandated by applicable law, including without limitation, coverage provided pursuant to Section 4980B of the Code; (b) death or disability benefits under any of the Group Benefit Arrangements; (c) benefits arising in connection with a separation or severance program, plan or arrangement; and (d) life insurance benefits for any employee who dies while in service with any of the Contributing Companies or any member of the Contributed Company Group. None of the Contributing Companies or any member of the Contributed Company Group has incurred or will incur prior to or as of the Effective Time any material liability under, arising out of or by operation of Title IV of ERISA (other than liability for premiums to the Pension Benefit Guaranty Corporation arising in the ordinary course), including any liability in connection with (i) the termination or reorganization of any employee pension benefit plan subject to Title IV of ERISA or (ii) with withdrawal from any Multiemployer Plan or Multiple Employer Plan. (c) The appropriate Contributing Company or Contributed Company has timely provided, or will have provided prior to the Effective Time, to Employees entitled thereto all required notices and made coverage available pursuant to Section 4980B of the Internal Revenue Code and the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the Internal Revenue Code). The appropriate Contributing A-21 23 Company or Contributed Company will timely provide to Employees entitled thereto all required notices and make coverage available pursuant to Internal Revenue Code has either obtained from Section 4980B and COBRA with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the Internal Revenue Service a favorable determination letter as Code) occurring prior to its qualified status under and including the Code, including all amendments to the Code effected by the Effective Time. No material Tax Reform Act payable on account of 1986, or has applied to Section 4980B of the Internal Revenue Service Code has been incurred by the Contributing Companies or any of the Contributed Companies with respect to any current Employees (or their beneficiaries). (d) No benefit payable or which may become payable by any of the Contributed Companies or by any of the Contributing Companies with respect to any Employee shall constitute a "parachute payment" (as defined in Section 280G(b)(2) of the Internal Revenue Code). (e) The Contributed Company Group and the Contributing Companies are in compliance with all applicable laws, agreements and contracts relating to employment, employment practices, wages, hours, and terms and conditions of employment (including, but not limited to, employee compensation matters) with respect in all such cases to the Employees, except where the failure to be in compliance would not have a Material Adverse Effect on Newco. (f) The Contributed Company Group and the Contributing Companies have, to Seagate's Knowledge, good labor relations and to Seagate's Knowledge there are no facts indicating that the consummation of the transactions contemplated hereby will have a material adverse effect on labor relations with Employees or that any of the Employees intends to leave its or their employ, where in either case the same would have a Material Adverse Effect on the Group Business. (g) To Seagate's Knowledge, no Employee who is a key developer of a Group Product is subject to any agreement, obligation, order or other legal hindrance that impedes or might impede such Employee from devoting his or her full business time to the affairs of Newco after the Effective Time. (h) The Contributed Company Group and the Contributing Companies have, to Seagate's Knowledge and with respect only to the Employees, complied with all laws, rules and regulations relating to the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other Taxes, except where non-compliance would not have a Material Adverse Effect on the Group Business. (i) None of the Contributed Companies are indebted to any executive officer or director of any such Contributed Company, whether by loan, advance or otherwise, other than for such a determination letter salaries accrued but not yet payable and reimbursable out-of-pocket expenses incurred in the ordinary course of business consistent with past practice and not yet payable, nor, except as described in Section 2.8(i) to the SSI Disclosure Letter or except as disclosed in the 1998 Group Balance Sheet or the Seagate SEC Documents, is any officer, director, employee or shareholder so indebted to any of SSI or any of the Contributed Companies, nor does any Employee have any right to force SSI or any Contributing Company to repurchase any stock. A-22 24 2.9 Absence of Certain Changes or Events. Except as disclosed in the Seagate SEC Documents filed prior to October 5, 1998, since the expiration Group Balance Sheet Date (i.e., July 3, 1998) there has not occurred: (a) any change or event which could reasonably be expected to have a Material Adverse Effect on the Group Business; (b) any amendments or changes in the Certificate of Incorporation or Bylaws of any member of the requisite period under applicable Treasury Regulations Contributed Company Group; (c) any damage, destruction or Internal Revenue Service pronouncements loss to or of the Group Assets not covered by insurance, which would have a Material Adverse Effect on the Group Business; (d) any redemption, repurchase or other acquisition of shares of any member of the Contributed Company Group, or any declaration, setting aside or payment of any dividend or other distribution by any Contributing Company or any member of the Contributed Company Group to any entity other than a member of the Contributed Company Group (whether in which cash, stock or property) of the Group Assets or any proceeds generated by the conduct of the Group Business; (e) any material increase in or modification of the compensation or benefits payable, or to apply for such determination letter become payable, by the Contributed Companies to the Employees, except in the ordinary course of the business, consistent with past practice and to make any amendments except as necessary to obtain respond to third party solicitation of Employees; (f) other than as required by applicable statute or governmental regulation, any material increase in or modification of any Group Benefit Arrangement (including, but not limited to, the granting of stock options, restricted stock awards or stock appreciation rights) that will become binding upon Newco upon consummation of the transactions contemplated herein, for or with respect to any of the Employees, other than (i) in the ordinary course of the business, consistent with past practice, or to respond to third party solicitation of Employees and (ii) if occurring after October 5, 1998, which is authorized, if required, pursuant to Section 4.3 below; (g) any sale of a favorable determination material amount of the Group Assets, or has been established any acquisition by any member of the Contributed Company Group of a material amount of assets, other than in the ordinary course of the business, consistent with past practice; (h) any alteration in any term of any outstanding capital stock or rights to acquire capital stock of SSI or any member of the Contributed Company Group, including, but not limited to, acceleration of the vesting or any change in the terms of any outstanding stock options; (i) other than in the ordinary course of business, consistent with past practice, (A) any incurrence, assumption or guarantee by any member of the Contributed Company Group of any debt of any person, other than any member of the Contributed Company Group, for borrowed money in an amount exceeding $2,500,000 in the aggregate; (B) issuance or sale by any member of the Contributed Company Group of any securities convertible into or exchangeable for their respective debt securities; or (C) issuance or sale of options or other rights to acquire from SSI, STI, or the Contributed Company Group, directly or indirectly, debt securities of any member of the Contributed Company Group, or any securities convertible into or exchangeable for any such debt securities; (j) any creation or assumption by a Contributing Company or a member of the Contributed Company Group of any Encumbrance (other than Group Permitted Encumbrances) on any Group Asset in excess of $2,500,000 individually or in the A-23 25 aggregate, other than to refinance a liability reflected in the SSI Financial Statements or the Group Financial Statements in the ordinary course of business; (k) any making by any member of the Contributed Company Group of any loan, advance or capital contribution to or investment in any person other than to refinance a liability reflected in the SSI Financial Statements or the Group Financial Statements and other than (i) loans, advances or capital contributions made in the ordinary course of the business, and (ii) other loans and advances, where the aggregate amount of any such items outstanding at any time does not exceed $2,500,000; (l) any amendment of, relinquishment, termination or non-renewal by the Contributing Companies or the Contributed Company Group of any Contributed Contract, other than in the ordinary course of business consistent with past practice; (m) any transfer or grant of a right under Intellectual Property Rights included in the Group Assets, other than those transferred or granted in the ordinary course of business, consistent with past practice, except for any grant of a standardized prototype plan for right to source code or grant of any exclusive rights to any Intellectual Property Rights included in the Group Assets, each of which an Internal Revenue Service opinion letter has been obtained shall be set forth in Section 2.9(m) of the SSI Disclosure Letter; (n) any labor dispute with, or charge of unfair labor practice by, SSI (relating to Employees) or any member of the Contributed Company Group (other than routine individual grievances), any activity or proceeding by thea labor union or representative thereof to organize any Employees or, to Seagate's Knowledge, any campaign being conducted to solicit authorization from Employees to be represented by such labor union, where such dispute, practice, activity, proceeding, or campaign would have a Material Adverse Effect on the Group Business; or (o) any agreement by any member of the Contributed Company Group to take any of the actions described in the preceding clauses (a) through (n) (other than the transactions contemplated by this Agreement or the Ancillary Agreements); or any change to accounting methods. 2.10

ERISA and Other Compliance. (a) Section 2.8 of the SCO SSI Disclosure Letter lists each employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn appreciation or other forms of incentive compensation or post-post- retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit ArrangementsGROUP BENEFIT ARRANGEMENTS"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO SSI Disclosure Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA the Employee Retirement Income Security Act of 1974, as amended ("Employee Benefit PlanERISA") ("EMPLOYEE BENEFIT PLAN"), in which any of the Employees participate (collectively, the "Group Employee PlansGROUP EMPLOYEE PLANS"). Copies of all Group Benefit Arrangements have been made available to Caldera VERITAS or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 1998 Group Balance Sheet or will be made prior to the Effective Time. Any Contributed Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an Internal Revenue Service opinion letter has been obtained by the.

ERISA and Other Compliance. (a) Section 2.8 of the SCO SSI Disclosure Letter lists each employment, severance, compensation or other similar contract, arrangement or policy and each plan or arrangement (written or oral, contractual or discretionary) providing for insurance coverage (including any self-insured arrangements), workers' benefits, vacation benefits, severance benefits, disability or permanent health insurance benefits, death benefits, hospitalization or other medical benefits, retirement benefits, deferred compensation, profit-sharing, bonuses, commissions, stock options, stock purchase, phantom stock, stock appreciation, save as you earn appreciation or other forms of incentive compensation or post-retirement insurance, compensation or benefits for employees, consultants or directors (other than workers compensation, unemployment compensation and other government mandated programs) which both (A) is entered into, maintained or contributed to, as the case may be, by any member of the Contributed Company Group or any of the Contributing Companies, and (B) covers any Employee (collectively as the "Group Benefit ArrangementsGROUP BENEFIT ARRANGEMENTS"). Each Group Benefit Arrangement maintained by any member of the Contributed Company Group has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Group Benefit Arrangement except as would not have a Material Adverse Effect on the Group Business. Section 2.8(a) of the SCO SSI Disclosure Letter also identifies each "employee benefit plan," as defined in Section 3(3) of ERISA the Employee Retirement Income Security Act of 1974, as amended ("Employee Benefit PlanERISA") ("EMPLOYEE BENEFIT PLAN"), in which any of the Employees participate (collectively, the "Group Employee PlansGROUP EMPLOYEE PLANS"). Copies of all Group Benefit Arrangements have been made available to Caldera VERITAS or its counsel. All contributions or premiums currently due and payable with respect to any of the Group Employee Plans have been made as required under ERISA or have been accrued on the 2000 1998 Group Balance Sheet or will be made prior to the Effective Time. Any Contributed Company Employee Plan intended to be qualified under Section 401(a) of the Code has either obtained from the Internal Revenue Service a favorable determination letter as to its qualified status under the Code, including all amendments to the Code effected by the Tax Reform Act of 1986, or has applied to the Internal Revenue Service for such a determination letter prior to the expiration of the requisite period under applicable Treasury Regulations or Internal Revenue Service pronouncements in which to apply for such determination letter and to make any amendments necessary to obtain a favorable determination or has been established under a standardized prototype plan for which an Internal Revenue Service opinion letter has been obtained by the.