Employee Benefit Plans; Labor Matters (a) With respect to each employee benefit plan, program, policy, arrangement and contract (including, without limitation, any "employee benefit plan," as defined in Section 3(3) of ERISA), maintained or contributed to at any time by KFI or any entity required to be aggregated with KFI pursuant to Section 414 of the Code (each, a "KFI Employee Plan"), no event has occurred and, to the knowledge of KFI, no condition or set of circumstances exists in connection with which KFI or any of its subsidiaries could reasonably be expected to be subject to any liability which would have a Material Adverse Effect on KFI. (b) (i) No KFI Employee Plan is or has been subject to Title IV of ERISA or Section 412 of the Code; and (ii) each KFI Employee Plan intended to qualify under Section 401(a) of the Code and each trust intended to qualify under Section 501(a) of the Code is the subject of a favorable Internal Revenue Service determination letter, and nothing has occurred which could reasonably be expected to adversely affect such determination. (c) Schedule 3.10(c) of the KFI Disclosure Schedule sets forth a true and complete list, as of the date of this Agreement, of each person who holds any KFI Stock Options, together with the number of KFI Shares which are subject to such option, the date of grant of such option, the extent to which such option is vested (or will become vested as a result of the Merger), the option price of such option (to the extent determined as of the date hereof), whether such option is a nonqualified stock option or is intended to qualify as an incentive stock option within the meaning of Section 422(b) of the Code, and the expiration date of such option. Schedule 3.10(c) of the KFI Disclosure Schedule also sets forth the total number of such incentive stock options and such nonqualified options. KFI has furnished CALIPSO with complete copies of the plans pursuant to which the KFI Stock Options were issued. Other than the automatic vesting of KFI Stock Options that may occur without any action on the part of KFI or its officers or directors, KFI has not taken any action that would result in any KFI Stock Options that are unvested becoming vested in connection with or as a result of the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby. (d) KFI has made available to CALIPSO: (i) a description of the terms of employment and compensation arrangements of all officers of KFI and a copy of each such agreement currently in effect; (ii) copies of all agreements with consultants who are individuals obligating KFI to make annual cash payments in an amount exceeding $60,000; (iii) a schedule listing all officers of KFI who have executed a non-competition agreement with KFI and a copy of each such agreement currently in effect; (iv) copies (or descriptions) of all severance agreements, programs and policies of KFI with or relating to its employees, except programs and policies required to be maintained by law; and (v) copies of all plans, programs, agreements and other arrangements of the KFI with or relating to its employees which contain change in control provisions. (e) Except as disclosed by KFI on Schedule 3.10(e) of the KFI Disclosure Schedule, there shall be no payment, accrual of additional benefits, acceleration of payments, or vesting in any benefit under any KFI Employee Plan or any agreement or arrangement disclosed under this Section 3.10 solely by reason of entering into or in connection with the transactions contemplated by this Agreement. (f) Except as disclosed by KFI on Schedule 3.10(f) of the KFI Disclosure Schedule, there are no controversies pending or, to the knowledge of KFI threatened, between KFI and any of its employees, which controversies have or could reasonably be expected to have a Material Adverse Effect on KFI. KFI is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by KFI (and KFI does not have any outstanding material liability with respect to any terminated collective bargaining agreement or labor union contract), nor does KFI know of any activities or proceedings of any labor union to organize any of its employees. KFI has no knowledge of any strike, slowdown, work stoppage, lockout or threat thereof by or with respect to any of its employees.
Sweatshop Labor If this Agreement provides for the laundering of apparel, garments or corresponding accessories, or for furnishing equipment, materials, or supplies other than for public works, this section is applicable. Contractor certifies that no apparel, garments or corresponding accessories, equipment, materials, or supplies furnished to the JBE under this Agreement have been laundered or produced in whole or in part by sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor or exploitation of children in sweatshop labor, or with the benefit of sweatshop labor, forced labor, convict labor, indentured labor under penal sanction, abusive forms of child labor or exploitation of children in sweatshop labor. Contractor adheres to the Sweatfree Code of Conduct as set forth on the California Department of Industrial Relations website located at ▇▇▇.▇▇▇.▇▇.▇▇▇, and PCC 6108. Contractor agrees to cooperate fully in providing reasonable access to Contractor’s records, documents, agents, and employees, and premises if reasonably required by authorized officials of the Department of Industrial Relations, or the Department of Justice to determine Contractor’s compliance with the requirements under this section and shall provide the same rights of access to the JBE.
Child Labor The Contractor represents and warrants that neither it, its parent entities (if any), nor any of the Contractor’s subsidiary or affiliated entities (if any) is engaged in any practice inconsistent with the rights set forth in the Convention on the Rights of the Child, including Article 32 thereof, which, inter alia, requires that a child shall be protected from performing any work that is likely to be hazardous or to interfere with the child’s education, or to be harmful to the child’s health or physical, mental, spiritual, moral, or social development.
Benefit Plans; ERISA (a) The Company Disclosure Schedule sets forth a complete list of all "employee benefit plans" (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), bonus, pension, profit sharing, deferred compensation, incentive compensation, excess benefit, stock, stock option, severance, termination pay, change in control or other material employee benefit plans, programs, arrangements or agreements currently maintained, or contributed to, or required to be maintained or contributed to, by the Company, the Majority Stockholder or any Person that, together with the Company, is treated as a single employer under Section 414 of the Code for the benefit of any current or former employees, officers, directors or independent contractors of the Company or any Subsidiary and with respect to which the Company or any Subsidiary has any liability (collectively, the "Benefit Plans"). The Company has delivered or made available to Parent true, complete and correct copies of each Benefit Plan. (b) Each Benefit Plan has been administered in accordance with its terms and in compliance with the applicable provisions of ERISA, the Code and other applicable law, except where the failure to so administer or comply would not have a Company Material Adverse Effect. (c) All Benefit Plans intended to be qualified under Section 401(a) of the Code have been the subject of determination letters from the Internal Revenue Service to the effect that such Benefit Plans are qualified and exempt from federal income taxes under Section 401(a) and 501(a), respectively, of the Code as amended at least through the statutory changes implemented under the Tax Reform Act of 1986, and no such determination letter has been revoked nor, to the knowledge of the Company, has revocation been threatened, nor has any such Benefit Plan been amended since the date of its most recent determination letter or application therefor in any respect that would adversely affect its qualification. (d) No Benefit Plan is subject to Title IV of ERISA or Section 412 of the Code and no Benefit Plan is a "multiemployer plan" (as defined in Section 3(37) of ERISA). (e) No Person has incurred any material liability under Title IV of ERISA or Section 412 of the Code during the time such Person was required to be treated as a single employer with the Company under Section 414 of the Code that would have a Company Material Adverse Effect. (f) With respect to any Benefit Plan that is an employee welfare benefit plan (as defined in Section 3(l) of ERISA), (i) no such Benefit Plan provides benefits, including without limitation, death or medical benefits, beyond termination of employment or retirement other than (A) coverage mandated by law or (B) death or retirement benefits under a Benefit Plan qualified under Section 401(a) of the Code, and (ii) each such Benefit Plan (including any such Plan covering retirees or other former employees) may be amended or terminated without liability that would have a Company Material Adverse Effect. (g) The execution of, and performance of the transactions contemplated in, this Agreement will not (either alone or upon the occurrence of any additional or subsequent events) (i) constitute an event under any Benefit Plan that will or may result in any payment (whether of severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund benefits with respect to any employee of the Company or any of its Subsidiaries, or (ii) result in the triggering or imposition of any restrictions or limitations on the right of the Company or Parent to cause any such Benefit Plan to be amended or terminated (or which would result in any materially adverse consequence for so doing). No payment or benefit that will or may be made by the Company, Parent, or any of their respective subsidiaries or affiliates with respect to any employee of the Company or any of its Subsidiaries under any Benefit Plan in connection with the Offer and the Merger will be characterized as an "excess parachute payment," within the meaning of Section 280G(b)(1) of the Code. The parties hereby agree to use their commercially reasonable efforts to limit the application of Section 280G(b)(1) of the Code to the transactions contemplated hereby.
Employee Benefit Plans; ERISA (a) With respect to the ADS Employees, Section 3.11(a) of the Company Disclosure Schedule sets forth a true, correct and complete list of all employee benefit plans, programs, agreements or arrangements, including pension, retirement, profit sharing, deferred compensation, stock option, change in control, retention, equity or equity-based compensation, stock purchase, employee stock ownership, severance pay, vacation, bonus or other incentive plans, all medical, vision, dental or other health plans, all life insurance plans, and all other employee benefit plans or fringe benefit plans, including “employee benefit plans” as that term is defined in Section 3(3) of ERISA, in each case, whether oral or written, funded or unfunded, or insured or self-insured, maintained by the Company or any Company Subsidiary, or to which the Company or any Company Subsidiary contributed or is obligated to contribute thereunder, or with respect to which the Company or any Company Subsidiary has or may have any Liability, in each case, for or to any current or former ADS Employees (collectively, the “Company Benefit Plans”). (b) All Company Benefit Plans that are intended to be subject to Code Section 401(a) and any trust agreement that is intended to be tax exempt under Code Section 501(a) have been determined by the Internal Revenue Service to be qualified under Code Section 401(a) and exempt from taxation under Code Section 501(a), and, to the knowledge of the Company, nothing has occurred that would adversely affect the qualification of any such plan. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (i) each Company Benefit Plan and any related trust subject to ERISA complies with and has been administered in substantial compliance with, (A) the provisions of ERISA, (B) all provisions of the Code, (C) all other applicable laws and (D) its terms and the terms of any collective bargaining or collective labor agreements; (ii) neither the Company nor any Company Subsidiary has received any written notice from any Governmental Entity questioning or challenging such compliance; (iii) there are no unresolved claims or disputes under the terms of, or in connection with, the Company Benefit Plans other than claims for benefits which are payable in the ordinary course; (iv) there has not been any “prohibited transaction” (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Company Benefit Plan; (v) no litigation has been commenced with respect to any Company Benefit Plan and, to the knowledge of the Company, no such litigation is threatened (other than routine claims for benefits in the normal course); (vi) there are no governmental audits or investigations pending or, to the knowledge of the Company, threatened in connection with any Company Benefit Plan; and (vii) to the knowledge of the Company, there are not any facts that could give rise to any liability in the event of any governmental audit or investigation. (c) Except as set forth in Section 3.11(c) of the Company Disclosure Schedule, neither the Company nor any ERISA Affiliate of the Company (as defined below) (i) sponsors or contributes to a Company Benefit Plan that is a “defined benefit plan” (as defined in ERISA Section 3(35)); (ii) has an “obligation to contribute” (as defined in ERISA Section 4212) to a Company Benefit Plan that is a “multiemployer plan” (as defined in ERISA Sections 4001(a)(3) and 3(37)(A)); (iii) has any Liability under Title IV of ERISA with respect to a Company Benefit Plan, either directly or through any ERISA Affiliate; and (iv) sponsors, maintains or contributes to any plan, program or arrangement that provides for post-retirement or other post-employment welfare benefits (other than health care continuation coverage as required by applicable law). (d) With respect of each of the Company Benefit Plans which is subject to Title IV of ERISA, the present value of accrued benefits under such plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such plan’s actuary with respect to such plan, did not, as of its latest valuation date, exceed the then current value of the assets of such plan allocable to such accrued benefits. No Company Benefit Plan nor any trust established under a Company Benefit Plan has incurred any “accumulated funding deficiency” (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of the last day of the most recent fiscal year of each of the Company Benefit Plans ended prior to the date of this Agreement. (e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, all reports, returns and similar documents with respect to all Company Benefit Plans required to be filed by the Company or any Company Subsidiary with any Governmental Entity or distributed to any Company Benefit Plan participant have been duly and timely filed or distributed. (f) Section 3.11(f) of the Company Disclosure Schedule discloses whether each Company Benefit Plan that is an employee welfare benefit plan is (i) unfunded or self-insured, (ii) funded through a “welfare benefit fund”, as such term is defined in Code Section 419(e) or other funding mechanism or (iii) insured. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each such employee welfare benefit plan may be amended or terminated (including with respect to benefits provided to retirees and other former employees) without liability (other than benefits then payable under such plan without regard to such amendment or termination) to the Company or any Company Subsidiary at any time. The Company and each Company Subsidiary complies in all material respects with the applicable requirements of Section 4980B(f) of the Code or any similar state statute with respect to each Company Benefit Plan that is a group health plan within the meaning of Section 5000(b)(1) of the Code or such state statute. Neither the Company nor any Company Subsidiary has any material obligations for retiree health or life insurance benefits under any Company Benefit Plan (other than for continuation coverage under Section 4980B(f) of the Code). (g) Except as may be required by applicable law, or as contemplated under this Agreement, neither the Company nor any Company Subsidiary has any plan or commitment to create any additional Company Benefit Plans, or to amend or modify any existing Company Benefit Plan in such a manner as to materially increase the cost of such Company Benefit Plan to the Company or any Company Subsidiary. (h) Section 3.11(h) of the Company Disclosure Schedule discloses: (i) each material payment (including any bonus, severance, unemployment compensation, deferred compensation, forgiveness of indebtedness or golden parachute payment) becoming due to any current or former ADS Employee under any Company Benefit Plan; (ii) any increase in any material respect any benefit otherwise payable under any Company Benefit Plan; (iii) any acceleration in any material respect of the time of payment or vesting of any such benefits under any Company Benefit Plan; or (iv) any material obligation to fund any trust or other arrangement with respect to compensation or benefits under a Company Benefit Plan in each case caused or triggered by the execution and delivery of this Agreement or the consummation of the Offer, the Merger or the other Transactions. No payment or benefit which has been, will or may be made by the Company or any Company Subsidiary with respect to any current or former ADS Employee located in the United States in connection with the execution and delivery of this Agreement or the consummation of the Transactions would be characterized as an “excess parachute payment” with the meaning of Section 280G(b)(1) of the Code or fail to be deductible under Section 162(m) of the Code. (i) True, correct and complete copies have been delivered or made available to the Purchaser by the Company of all Company Benefit Plans (including all amendments and attachments thereto); written summaries of any Company Benefit Plan not in writing, all related trust documents; all insurance contracts or other funding arrangements to the degree applicable; the two (2) most recent annual information filings (Form 5500) and annual financial reports for those Company Benefit Plans (where required); the most recent determination letter from the Internal Revenue Service (where required); and the most recent summary plan descriptions for the Company Benefit Plans and in respect of defined Company Benefit Plans, the most recent actuarial valuation and any subsequent valuation or funding advice (including draft valuations). (j) None of the Company or any Company Subsidiary has entered into any contract, agreement, arrangement or understanding with any officer or director of the Company or any Company Subsidiary in connection with or in contemplation of the Transactions. (k) None of the Company nor any Company Subsidiary has any non-U.S. employees.
