ESOP Matters Clause Samples
The "ESOP Matters" clause addresses the treatment and administration of Employee Stock Option Plans (ESOPs) within the context of a contract or transaction. It typically outlines how existing or future ESOPs will be handled, including the allocation, vesting, or exercise of stock options for employees, especially in scenarios such as mergers, acquisitions, or company restructuring. This clause ensures that both parties have a clear understanding of employee equity arrangements, thereby preventing disputes and providing certainty regarding employee incentives and ownership interests during significant corporate events.
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ESOP Matters. (a) As of the Closing, the ESOP Trustee shall have received the ESOP Fairness Opinion from its independent financial advisor.
(b) Prior to Closing, the Company shall adopt an amendment to the ESOP terminating the ESOP and providing for final allocations thereunder effective immediately prior to the Closing. Such amendments to the ESOP shall, among other necessary changes to effect the termination of the ESOP, provide for 100% vesting as required by law upon plan termination and for a distribution of the benefits due each participant thereunder as soon as reasonably practicable after Closing (the “Plan Amendment”). The Plan Amendment will by its terms become effective as of the Closing Date. The Plan, as amended, shall be referred to as the “Amended Plan”.
(c) The Company will continue as sponsor of the Amended Plan after the Closing Date until all distributions are complete in accordance with the Amended Plan. Promptly after the Closing, the Company will file an application requesting the Internal Revenue Service to issue a final determination letter (the “ESOP Termination Determination Letter”) with respect to the ESOP. Prior to the Closing, the Company shall secure fiduciary liability insurance with coverage until the ESOP is fully liquidated, and shall procure and pay the premiums for “tail” coverage thereafter, with no deductibles and on a claims made basis, covering the Company and its agents and plan administrators (the “Fiduciary Policy”). The Company shall cause the newly-appointed plan administrators to promptly arrange for update of ESOP participant account balances through the closing/plan termination date, payment of partial distributions (if any), and final distributions under the ESOP after receipt of the ESOP Termination Determination Letter. The Company shall pay all filing fees, costs and expenses associated with implementing the termination of the ESOP, including making participant distributions from the ESOP and those related to the ESOP Termination Determination Letter.
ESOP Matters. (a) The ESOP Trust was validly authorized and established in accordance with all applicable laws, regulations, and rulings. The ESOP Trust is a trust duly formed in accordance with the laws of the Commonwealth of Pennsylvania. The ESOP Trustee has been duly appointed by TF Financial to serve as the trustee of the ESOP Trust.
(b) Except as set forth in Section 3.30(b) of the TF Financial Disclosure Schedule, the ESOP is now and has been at all times since its inception, in form, an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the IRC and Section 407(d)(6) of ERISA, which, in form, qualifies under Section 401(a) of the IRC. The ESOP Trust is now and has at all times since inception been, qualified under Section 501(a) of the IRC. The shares of TF Financial Common Stock held by the ESOP Trust constitute “employer securities,” as defined in Section 409(l) of the IRC, and “qualifying employer securities”, as defined in Section 407(d)(5) of ERISA.
(c) Since January 1, 2011, the ESOP complies, and has been administered and operated in compliance, in all material respects, in accordance with its terms and all provisions of applicable Law. Since January 1, 2011, all amendments and actions required to bring the ESOP into conformity in all material respects with all of the applicable provisions of the IRC, ERISA and other applicable laws have been made or taken except to the extent that such amendments or actions are not required by law to be made or taken until a date after the Effective Date and as disclosed on Section 3.30(c) of the TF Financial Disclosure Schedule. Since January 1, 2011, no individual who has performed services for TF Financial has been improperly excluded from participation in the ESOP. As of the Closing Date, neither TF Financial nor any participant in the ESOP is or may be subject to liability by reason of Section 4979A of the IRC.
(d) Neither TF Financial nor any “party in interest” or “disqualified person” with respect to the ESOP has engaged in a non-exempt “prohibited transaction” within the meaning of Section 4975 of the IRC or Section 406 of ERISA. No fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. The transactions contemplated by this Agreement and all prior transactions involving the ESOP, do not constitute transactions which would subject any such party to either a civil penalty a...
ESOP Matters. The ESOP is an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the Code and fully satisfies in form and operation, all relevant provisions of the Code, including the requirements of Section 409 of the Code, except where the failure to do so could not reasonably be expected to subject the ESOP or any Loan Party to liability in excess of $1,500,000 under the Code, ERISA or any other applicable laws, rules, and regulations. The ESOP has been duly established in accordance with, and under, applicable law, and the ESOP trust is a tax-exempt trust under Section 501(a) of the Code. The securities of the Company held by the ESOP will be employer securities that are readily tradable on an established securities market within the meaning of Section 409(l)(1) of the Code.
ESOP Matters. The ESOP and the Trust have been duly authorized, organized and established by all necessary corporate action on the part of the Company. The ESOP is a legal and valid employee stock ownership plan within the meaning of Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the “Code”), is qualified under Section 401(a) of the Code, and the Trust is exempt from taxation under Section 501(a) of the Code, subject to the receipt of a favorable determination letter from the Internal Revenue Service (the “IRS”).
ESOP Matters. The Alaska Pacific ESOP shall be terminated by Alaska Pacific in accordance with its terms effective as of the Effective Time and other appropriate amendments thereto necessary to effectuate such ESOP termination. Alaska Pacific shall continue to make contributions to the ESOP in accordance with applicable accruals and in the ordinary course of business. The accounts of all participants and beneficiaries in the ESOP as of the Effective Time shall become fully vested as of the Effective Time. Any Shares held in the ESOP shall be converted into the Common Stock Merger Consideration and shall be allocated to the accounts of ESOP participants who have account balances in the ESOP in accordance with the applicable provisions of the ESOP. As soon as practicable, Alaska Pacific shall prepare and file or cause to be filed all necessary documents with the IRS for a determination letter with respect to the termination of the ESOP. As soon as practicable following the Effective Time or the receipt of a favorable determination letter from the IRS regarding the qualified status of the ESOP upon its termination, the account balances in the ESOP shall be either distributed to participants and beneficiaries or transferred to an eligible tax-qualified retirement plan or individual retirement account as a participant or beneficiary may direct.
ESOP Matters. (a) Not later than the Closing, the Company and Seller shall adopt, subject to the review and consent of the ESOP Trustee and Buyer (which consent shall not be unreasonably withheld, conditioned or delayed), an amendment to the ESOP (the “ESOP Amendment”) to provide that, subject to the consummation of the Closing, effective at, immediately following or after the Closing as may be applicable, (i) Seller shall become the plan sponsor and have all the power and authority of the “Company” as defined in and for purposes of the ESOP with respect to periods thereafter (and without assuming any responsibility with respect to prior periods), (ii) the ESOP shall be a profit sharing plan (within the meaning of Section 401 of the Code), and shall cease to be a stock bonus plan and an employee stock ownership plan (within the meaning of Sections 401 and 4975 of the Code), (iii) the ESOP shall be terminated; (iv) pursuant to the termination of the ESOP, no further contributions will be made to the ESOP as of the Closing except for contributions that have been accrued on behalf of participants and beneficiaries prior to the Closing Date, or that are otherwise required by the IRS in connection with the issuance of a favorable determination letter with respect to the termination of the ESOP, (v) pursuant to the termination of the ESOP, all ESOP participants whose account balances had not previously been distributed in full will be fully vested, (vi) no new participants will be admitted to the ESOP after the Closing, and (vii) such other changes as Seller deems appropriate, which may include, by way of example, provisions regarding the exercise of voting power with respect to the equity of Seller after the Closing and constraints on amendments to the ESOP or the replacement of the administrator or administrative committees of the ESOP after the Closing. The ESOP Amendment shall further provide for full distribution of plan benefits in one or more payments as Seller, in consultation with the ESOP Trustee, may determine, with such distributions being completed as provided in Section 8.6.4(c).
(b) Following the Closing, Seller shall administer and operate the ESOP in all material respects in accordance with the qualification and tax-exemption requirements of the Code and the requirements of ERISA. Pursuant to the termination of the ESOP by the ESOP Amendment, within 120 days after the Closing, the Seller shall file an application with the IRS for a determination for terminati...
ESOP Matters. Purchaser shall have received evidence that the ESOP Trustee, after consultation with independent advisors and in reliance on the ESOP Fairness Opinion, has, on behalf of the ESOT, as of the Closing Date (i) approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement, subject to the terms and conditions set forth herein, and (ii) determined that the sale of the ESOP Shares is in the best interest of the ESOP participants, and the consideration to be received by ESOT for the ESOP Shares pursuant to the transactions contemplated by this Agreement is not less than “adequate consideration” within the meaning of Section 3(18) of ERISA.
ESOP Matters. Prior to the Acquisition Effective Time, the Company shall provide such notice (if any) to the extent required under the terms of the ESOP, obtain any necessary consents, waivers or releases, adopt applicable resolutions, amend the terms of the ESOP or any outstanding awards and take all other appropriate actions to: (a) effectuate the provisions of Section 2.3(e)(iv), Section 2.3(e)(v) and Section 2.3(e)(vi); and (b) ensure that after the Acquisition Effective Time, no holder of Company Options, Key Executive Options, Company Restricted Stock, Key Executive Restricted Stock, Company RSUs or Key Executive RSUs (or any beneficiary thereof) nor any other participant in the ESOP shall have any right thereunder to acquire any securities of the Surviving Corporation or to receive any payment or benefit with respect to any award previously granted under the ESOP, except as provided in Section 2.3(e)(iv), Section 2.3(e)(v) and 2.3(e)(vi).
ESOP Matters. (a) The Company has sponsored an employee stock ownership plan (the “ESOP”) that is a Company Benefit Plan. The ESOP is funded through a trust (the “ESOP Trust”).
(b) The ESOP is now and at all times since its inception has been an employee stock ownership plan described in Section 4975(e)(7) of the Code and the regulations thereunder, and the ESOP has at all times primarily invested in “qualifying employer securities” in accordance with Sections 4975(e)(8) and 409(l) of the Code and all other applicable laws and regulations. The ESOP Trust is a trust duly formed in accordance with applicable state law and is, and at all times has been, a trust described in Section 501(a) of the Code.
(c) The ESOP is and at all times has been, maintained and administered in compliance with its terms, ERISA, the Code and all other applicable laws, and the Company, the ESOP and the trustee of the ESOP (the “Trustee”) have received no notice to the contrary or otherwise has any knowledge to the contrary. No breach of fiduciary duties under ERISA or prohibited transactions (within the meaning of Section 4975(c) of the Code) have occurred with respect to the ESOP for which an exemption is not available, including with respect to the initial acquisition of securities by the ESOP, and no fiduciary has any liability for breach of fiduciary duty or any other failure to act or comply in connection with the administration or investment of the assets of the ESOP. No prior purchase of the capital stock of the Company, or distribution or sale of capital stock of the Company, by the Trustee has adversely affected the qualified status of the ESOP under Section 401(a) of the Code or the status of the ESOP as an employee stock ownership plan under Section 4975(e)(7) of the Code.
(d) The shares of capital stock of the Company acquired by the ESOP Trust and held by the Trustee are and at all times have been “employer securities” under Section 407(d)(1) of ERISA and Section 409(l) of the Code and “qualifying employer securities” for purposes of Section 407(d)(5) of ERISA and Section 4975(e)(8) of the Code.
(e) The ESOP is subject to a favorable determination letter from the Department of Treasury with respect to the tax-qualification of the ESOP document. To the knowledge of the Company, no facts exist that would jeopardize the Company’s reliance on such determination letter. The ESOP is tax-qualified under Section 401(a) and 4975(c)(7) of the Code, and its related trust is tax-exempt under Se...
ESOP Matters. The Company Employee Stock Ownership Plan (the “ESOP”) shall be terminated by the Company in accordance with its terms effective as of the Effective Time. The accounts of all participants and beneficiaries in the ESOP as of the Effective Time shall become fully vested as of the Effective Time. Any shares of Company Common Stock held in the ESOP shall be converted into the Merger Consideration and shall be allocated as earnings to the accounts of ESOP participants who have account balances in the ESOP in accordance with the applicable provisions of the ESOP. As soon as practicable after the Effective Time, the Parent shall file or cause to be filed all necessary documents with the IRS for a determination letter for termination of the ESOP. As soon as practicable following the Effective Time or the receipt of a favorable determination letter from the IRS regarding the qualified status of the ESOP upon its termination, the account balances in the ESOP shall be either distributed to participants and beneficiaries or transferred to an eligible tax-qualified retirement plan or individual retirement account as a participant or beneficiary may direct. Parent agrees to permit continuing employees to rollover the cash portion of their account balances in the ESOP to Parent’s 401(k) Plan. During the period from the date of this Agreement to the Effective Time, Company shall refrain from allocating any additional shares of Company Common Stock under the ESOP, except as required by the ESOP and the applicable ESOP loan documents.