Exhibit 10.3
EMPLOYEE BENEFITS AGREEMENT
by and between
XXXXXXX-XXXXX SQUIBB COMPANY
and
XXXXXX HOLDINGS, INC.
Dated as of [ ], 2001
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.................................................1
ARTICLE II
GENERAL PRINCIPALS
Section 2.01. Assumption of Liabilities......................................8
Section 2.02. Employment-Related Claims......................................8
Section 2.03. Amendment and Termination of Zimmer Plans......................9
Section 2.04. Service Credit.................................................9
Section 2.05. Continuity of Employment.......................................9
Section 2.06. Expatriates...................................................10
Section 2.07. Collective Bargaining Agreements..............................10
Section 2.08. Union Plans...................................................10
Section 2.09. International Retirement and Welfare Benefit Plans............10
ARTICLE III
U.S. PENSION AND SAVINGS PLANS
Section 3.01. U.S. Pension Plan.............................................11
Section 3.02. U.S. Savings Plans............................................12
Section 3.03. Non-Qualified Plans...........................................14
ARTICLE IV
HEALTH AND WELFARE PLANS
Section 4.01. Health and Welfare Plans Continuance..........................15
Section 4.02. Establishment of LTD VEBA.....................................16
Section 4.03. Establishment of Health and Welfare Plans.....................17
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Section 4.04. Liabilities under Health and Welfare Plans....................17
Section 4.05. Post-Retirement Medical and Life Insurance Obligations........18
Section 4.06. HCFA..........................................................18
Section 4.07. Health and Welfare Plan Subrogation Recovery..................19
Section 4.08. FMLA and Leave of Absences....................................19
ARTICLE V
EQUITY PLANS
Section 5.01. Establishment of Zimmer Stock Plans...........................19
Section 5.02. Xxxxxxx-Xxxxx Squibb Options..................................19
Section 5.03. Xxxxxxx-Xxxxx Squibb Stock Appreciation Rights................20
ARTICLE VI
FRINGE AND OTHER BENEFITS
Section 6.01. Retention Bonus Arrangements..................................21
Section 6.02. Annual Bonus..................................................21
Section 6.03. Vacation Pay/Paid Time Off....................................21
Section 6.04. Severance.....................................................21
Section 6.05. Relocation Benefits...........................................21
Section 6.06. Educational Assistance Program................................22
Section 6.07. Adoption Assistance Program...................................22
Section 6.08. Workers' Compensation.........................................22
Section 6.09. Other Agreements and Benefits.................................22
ARTICLE VII
INDEMNIFICATION
Section 7.01. Indemnification by Zimmer.....................................23
Section 7.02. Indemnification by Xxxxxxx-Xxxxx Squibb.......................22
Section 7.03. Indemnification Procedures....................................23
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ARTICLE VIII
MISCELLANEOUS
Section 8.01. Effect if Distribution Does Not Occur.........................23
Section 8.02. Parties in Interest...........................................23
Section 8.03. Consent of Third Parties......................................23
Section 8.04. Further Assurances and Consents...............................24
Section 8.05. Non-Solicitation of Employees.................................24
Section 8.06. Sharing of Participant Information............................24
Section 8.07. Reporting and Disclosure and Communications to
Participants................................................24
Section 8.08. Beneficiary Designations......................................25
Section 8.09. Incorporation of the Contribution and Distribution
Agreement...................................................25
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EMPLOYEE BENEFITS AGREEMENT
THIS EMPLOYEE BENEFITS AGREEMENT, dated as of [ ], 2001, is by
and between XXXXXXX-XXXXX SQUIBB COMPANY, a Delaware corporation ("XXXXXXX-XXXXX
SQUIBB") and XXXXXX HOLDINGS, INC., a Delaware corporation ("ZIMMER").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in Article I hereof.
R E C I T A L S:
WHEREAS, the Board of Directors of Xxxxxxx-Xxxxx Squibb has
determined that it is in the best interests of Xxxxxxx-Xxxxx Squibb and its
stockholders to make a distribution to the holders of Xxxxxxx-Xxxxx Squibb
Common Stock (as defined herein) of all of the shares of Zimmer Common Stock (as
defined herein) (the "Distribution"); and
WHEREAS, in furtherance of the foregoing, Xxxxxxx-Xxxxx Squibb
and Zimmer have entered into a Contribution and Distribution Agreement, dated as
of ________________, 2001 (the "CONTRIBUTION AND DISTRIBUTION AGREEMENT").
NOW THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties, intending to
be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For purposes of this Agreement, the
following terms (other than the formal names of the Xxxxxxx-Xxxxx Squibb Plans
(as defined below)) and not otherwise defined shall have the following meanings:
"ACQUIRED RIGHTS DIRECTIVE" means the European Council
Directive of February 14, 1977 on the Approximation of the Laws of the Member
States relating to the Safeguarding of Employee's Rights in the Event of
Transfers of Undertakings, Business or Parts of Businesses (77/187/EC) and its
subsequent transposition into local laws.
"ACTION" has the meaning given such term in the Contribution
and Distribution Agreement.
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"ACTIVE ZIMMER EMPLOYEE" means any individual who is employed
in the Zimmer Business as of the Distribution Date, including any individual
employed within or outside the United States, any individual who is absent from
work on the Distribution Date on account of sick leave, short term disability,
long-term disability, leave of absence or otherwise, any individual receiving
severance payments and any individual who was employed by Xxxxxx Xxxx & Company,
Inc., Xomed-Xxxxxx, Inc., Linvatec Corporation, Medical Engineering Corporation
or Aspen Labs at the time such individual began receiving long-term
disability benefits and who is receiving such benefits from a Xxxxxxx-Xxxxx
Squibb Plan as of the Distribution Date; PROVIDED, HOWEVER, that Active
Zimmer Employee does not include any independent contractor or individual who
is not a common law employee of a member of the Xxxxxx Group. An alternate
payee under a QDRO, an alternate recipient under a QMCSO, a beneficiary or a
covered dependent, in each case of an employee described in the preceding
sentence shall also be an Active Zimmer Employee with respect to that
employee's benefit under the applicable Plans. Such an alternate payee,
alternate recipient, beneficiary or covered dependent shall not otherwise be
considered an Active Zimmer Employee with respect to his or her own benefits
under any applicable Plans unless he or she is an Active Zimmer Employee by
virtue of the first sentence of this definition.
"AFFILIATE" of any Person means a Person that controls, is
controlled by, or is under common control with such Person. As used herein,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through ownership of voting securities or other interests, by contract or
otherwise.
"AGREEMENT" means this Employee Benefits Agreement, including
all of the schedules and appendices hereto.
"ANCILLARY AGREEMENT" has the meaning given such term in the
Contribution and Distribution Agreement.
"BEP-RIP" when immediately preceded by "Xxxxxxx-Xxxxx Squibb"
means the Benefits Equalization Plan of Xxxxxxx-Xxxxx Squibb Company and its
Subsidiary or Affiliated Corporations Participating in the Xxxxxxx-Xxxxx Squibb
Company Retirement Income Plan or the Xxxxxxx-Xxxxx Squibb Company Puerto Rico,
Inc. Retirement Income Plan and when immediately preceded by "Zimmer" means the
non-qualified defined benefit plans to be established by Zimmer pursuant to this
Agreement.
"BEP-SIP" when immediately preceded by "Xxxxxxx-Xxxxx Squibb"
means the Benefits Equalization Plan of Xxxxxxx-Xxxxx Squibb Company and its
Subsidiary or Affiliated Corporations Participating in the Xxxxxxx-Xxxxx Squibb
Company Savings and Investment Program and when immediately preceded by "Zimmer"
means the non-qualified defined contribution plans to be established by Zimmer
pursuant to this Agreement.
"XXXXXXX-XXXXX SQUIBB" has the meaning set forth in the
Preamble.
"XXXXXXX-XXXXX SQUIBB COMMON STOCK" means the common stock of
Xxxxxxx-Xxxxx Squibb Company, par value $.10 per share.
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"XXXXXXX-XXXXX SQUIBB GROUP" has the meaning given such term
in the Contribution and Distribution Agreement.
"XXXXXXX-XXXXX SQUIBB INDEMNITEES" has the meaning given such
term in the Contribution and Distribution Agreement.
"XXXXXXX-XXXXX SQUIBB KEY INTERNATIONAL PENSION PLAN" means
the Xxxxxxx-Xxxxx Squibb Company Key International Pension Plan.
"XXXXXXX-XXXXX SQUIBB STOCK FUND" means the fund under the
Xxxxxxx-Xxxxx Squibb Savings and Investment Program or the Zimmer Savings and
Investment Program which is primarily invested in Xxxxxxx-Xxxxx Squibb Common
Stock.
"CLAIM LIABILITIES" means the present value of the Liabilities
associated with claims by Active Zimmer Employees who are receiving benefits
under the Xxxxxxx-Xxxxx Squibb Company Long-Term Disability Income Plan and
Active Zimmer Employees who are receiving benefits under the Xxxxxxx-Xxxxx
Squibb Company Short-Term Disability Plan on or prior to the Transition
Termination Date.
"COBRA" means the continuation coverage requirements for
"group health plans" under Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended and codified in Code Section 4980B and
ERISA Sections 601 through 608.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time. Reference to a specific Code section also includes any
proposed, temporary or final regulation in force under that section.
"COLLECTIVE BARGAINING AGREEMENTS" means collectively, the
agreement dated May 16, 2000, between Xxxxxx Laboratories, Inc. and the United
Steelworkers of America, AFL- CIO-CLC on behalf of Local 2737-15 and the
agreement dated March 1, 1978, between Xxxxxx Xxxxxxxx (UK) Limited and the
Association of Scientific, Technical and Managerial Staff.
"COMBINED INTERNATIONAL ENTITIES" has the meaning given such
term in the Contribution and Distribution Agreement.
"CONTRIBUTION AND DISTRIBUTION AGREEMENT" has the meaning
given such term in the Recitals.
"DISTRIBUTION" has the meaning given such term in the
Recitals.
"DISTRIBUTION DATE" has the meaning given such term in the
Contribution and Distribution Agreement.
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"EMPLOYMENT-RELATED CLAIM" means any pending or potential
claim, action, suit, arbitration, proceeding or other Liability that may
directly or indirectly arise out of, or result from, any employment, labor,
employee benefit, labor action or related dispute of any kind including, without
limitation, any complaint or proceeding before any federal, state or local
court, agency or tribunal.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time. References to a specific section of ERISA
also include any proposed, temporary or final regulations in force under that
section.
"EXPATRIATE" means each Active Zimmer Employee who is
temporarily assigned to work at a location outside such Active Zimmer Employee's
home country.
"FMLA" means the Family Medical Leave Act of 1993, as amended
from time to time.
"FORMER ZIMMER EMPLOYEE" means any former employee of the
Zimmer Business as of the Distribution Date (including, without limitation, an
employee of the Zimmer Business who retired or otherwise terminated employment
before the Distribution Date) whose last day of active employment was with a
member of the Xxxxxxx-Xxxxx Squibb Group or the Zimmer Group; PROVIDED, HOWEVER,
a Former Zimmer Employee shall not include any employee who is receiving
payments under a Xxxxxxx-Xxxxx Squibb Severance Plan or Zimmer Xxxxxxxxx Plan as
of the Distribution Date.
"HCFA" means the United States Health Care Financing
Administration.
"HEALTH AND WELFARE PLANS" means all Plans that provide
medical, dental, life insurance, accident, survivor, short term disability, long
term disability, long term care, flexible benefit, adoption assistance or other
welfare benefits; PROVIDED, HOWEVER, Health and Welfare Plans does not include
any Plans that provide post-retirement benefits. When immediately preceded by
"Xxxxxxx-Xxxxx Squibb", Health and Welfare Plans means the Health and Welfare
Plans maintained by Xxxxxxx-Xxxxx Squibb prior to the Distribution Date and when
immediately preceded by "Zimmer", Health and Welfare Plans means the Health and
Welfare Plans to be established by a member of the Xxxxxx Group pursuant to this
Agreement.
"HIPAA" means the Health Insurance Portability and
Accountability Act of 1996, as amended from time to time.
"LEAVE OF ABSENCE PROGRAMS" when immediately preceded by
"Xxxxxxx-Xxxxx Squibb" means the personal, medical, military and FMLA leave
offered from time to time under the personnel policies and practices of
Xxxxxxx-Xxxxx Squibb and when immediately preceded by "Zimmer" means the leave
of absence programs to be established by Zimmer pursuant to this Agreement.
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"LIABILITIES" has the meaning given such term in the
Contribution and Distribution Agreement.
"LTD VEBA" when immediately preceded by "Xxxxxxx-Xxxxx Squibb"
means the welfare benefit fund established by Xxxxxxx-Xxxxx Squibb to fund
certain long-term disability benefits and when immediately preceded by "Zimmer"
means the welfare benefit fund to be established by Zimmer pursuant to this
Agreement.
"OPTION" when immediately preceded by "Xxxxxxx-Xxxxx Squibb"
means an option to purchase Xxxxxxx-Xxxxx Squibb Common Stock pursuant to a
Xxxxxxx-Xxxxx Squibb Stock Plan and when immediately preceded by "Zimmer" means
an option to purchase Zimmer Common Stock pursuant to a Zimmer Stock Plan.
"PERSON" means an individual, a general or limited
partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, a limited liability entity, and a
governmental entity or any department, agency or political subdivision thereof.
"PLAN" means any plan, policy, program, scheme, payroll
practice, arrangement, contract, trust, insurance policy, or any agreement or
funding vehicle, whether written or unwritten, providing compensation or
benefits to Active Zimmer Employees, Former Zimmer Employees, or directors or
consultants of the Zimmer Business. When immediately preceded by "Xxxxxxx-Xxxxx
Squibb", Plan means those Plans listed on Schedule 1.1 that are maintained by
Xxxxxxx-Xxxxx Squibb for the benefit of Active Zimmer Employees in effect as of
the Distribution Date. When immediately preceded by "Zimmer", Plan means those
Plans to be established by Zimmer pursuant to this Agreement.
"PRESENT VALUE OF FUTURE SCHEDULED CONTRIBUTIONS" means the
present value of the portion of the Claim Liabilities which are not funded as of
the Transition Termination Date.
"QDRO" means a domestic relations order which qualifies under
Code Section 414(p) and ERISA Section 206(d) and which creates or recognizes an
alternate payee's right to, or assigns an alternate payee, all or a portion of
the benefits payable to a participant under a Xxxxxxx-Xxxxx Squibb Plan.
"QMCSO" means a medical child support order which qualifies
under ERISA Section 609(a) and which creates or recognizes the existence of an
alternate recipient's right to, or assigns to an alternate recipient the right
to, receive benefits for which a participant or beneficiary is eligible under a
Xxxxxxx-Xxxxx Squibb Health and Welfare Plan.
"RATIO" means the ratio determined by dividing the
Xxxxxxx-Xxxxx Squibb Stock Value by the Zimmer Stock Value; PROVIDED, HOWEVER,
that adjustments may be made to the
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Ratio to minimize the independent, determinable and verifiable effect of
events other than the Distribution on the price of Xxxxxxx-Xxxxx Squibb
Common Stock, the price of Zimmer Common Stock or the price of both.
"RETIREMENT INCOME PLAN" when immediately preceded by
"Xxxxxxx-Xxxxx Squibb" means the Xxxxxxx-Xxxxx Squibb Company Retirement Income
Plan and when immediately preceded by "Zimmer" means the U.S. tax-qualified
defined benefit pension plan to be established by Zimmer pursuant to this
Agreement.
"SAVINGS AND INVESTMENT PROGRAM" when immediately preceded by
"Xxxxxxx-Xxxxx Squibb" means the Xxxxxxx-Xxxxx Squibb Company Savings and
Investment Program and when immediately preceded by "Zimmer" means the U.S.
tax-qualified defined contribution plan and trust to be established by Zimmer
pursuant to this Agreement.
"SEVERANCE PLAN" when immediately preceded by "Xxxxxxx-Xxxxx
Squibb" means the Xxxxxxx-Xxxxx Squibb Company Severance Plan and any other
plans and policies maintained by a member of the Xxxxxxx-Xxxxx Squibb Group that
provide for severance benefits upon termination of employment, including
statutorily required payments, and when immediately preceded by "Zimmer" means
the plans or policies to be established or maintained by a member of the Xxxxxx
Group to provide severance benefits upon termination of employment, including
any statutorily required payments.
"STOCK APPRECIATION RIGHT" when immediately preceded by
"Xxxxxxx-Xxxxx Squibb" means a right to receive the dollar value of the
appreciation of a share of Xxxxxxx-Xxxxx Squibb Common Stock over the price per
share at which the right was granted, and when immediately preceded by "Zimmer"
means a right to receive the dollar value of the appreciation of a share of
Zimmer Common Stock over the price per share at which the right was granted.
"STOCK PLAN" when immediately preceded by "Xxxxxxx-Xxxxx
Squibb" means any plan, program or arrangement, pursuant to which any Active
Zimmer Employee holds Xxxxxxx-Xxxxx Squibb Options, Xxxxxxx-Xxxxx Squibb Stock
Appreciation Rights or other Xxxxxxx-Xxxxx Squibb equity incentives, and when
immediately preceded by "Zimmer" means such plans, programs or arrangements to
be established by Zimmer pursuant to this Agreement.
"STOCK VALUE" when immediately preceded by "Xxxxxxx-Xxxxx
Squibb" means the closing price of Xxxxxxx-Xxxxx Squibb Common Stock reported
on the New York Stock Exchange on the Distribution Date, or on the first day
prior to the Distribution Date that the New York Stock Exchange is open for
trading if the New York Stock Exchange is not open for trading on the
Distribution Date and when immediately preceded by "Zimmer" means the opening
price of Zimmer Common Stock reported on the New York Stock Exchange on the
first day following the Distribution Date that the New York Stock Exchange is
open for trading.
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"TRANSITION HEALTH AND WELFARE PLANS" has the meaning given
such term in Section 4.01.
"TRANSITION PERIOD" means the period beginning on the
Distribution Date and ending at midnight on the day just prior to the
Transaction Termination Date.
"TRANSITION TERMINATION DATE" means January 1, 2002 (or such
other date(s) that Zimmer and Xxxxxxx-Xxxxx Squibb mutually agree with respect
to each Plan).
"UNION PLANS" means collectively, the Xxxxxx Laboratories,
Inc. Union Employees' Pension Plan, the Medical Plan for United Steelworkers of
America Local #2737-15, and the Zimmer Patient Care - United Steelworkers of
America Local #2737-15 Plan.
"WELFARE CLAIMS" means all claims for benefits under the
Health and Welfare Plans and any expenses related thereto.
"ZIMMER" has the meaning set forth in the Preamble.
"ZIMMER BUSINESS" has the meaning given such term in the
Contribution and Distribution Agreement.
"ZIMMER COMMON STOCK" means the common stock of Zimmer, par
value $.01 per share.
"ZIMMER FRINGE BENEFIT RATE" means the rate determined by
Xxxxxxx-Xxxxx Squibb Company's Benefits Department and Corporate Finance
Department which represents the cost of providing benefits to Active Zimmer
Employees in the U.S. as a percentage of payroll.
"XXXXXX GROUP" has the meaning given such term in the
Contribution and Distribution Agreement.
"ZIMMER INDEMNITEES" has the meaning given such term in the
Contribution and Distribution Agreement.
"ZIMMER INTERNATIONAL HEALTH AND WELFARE PLANS" has the
meaning given such term in Section 2.09.
"ZIMMER STOCK FUND" means the fund under the Xxxxxxx-Xxxxx
Squibb Savings and Investment Program or the Zimmer Savings and Investment
Program which is primarily invested in Zimmer Common Stock.
"ZIMMER UNION EMPLOYEE" means an Active Zimmer Employee who is
covered by a Collective Bargaining Agreement.
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ARTICLE II
GENERAL PRINCIPALS
Section 2.01. ASSUMPTION OF LIABILITIES. (a) Effective as of
the Distribution Date, the Xxxxxx Group shall assume and be responsible for all
employment and employee benefit-related matters, obligations and Liabilities
that are payable on or after the Distribution Date, whether such matters,
obligations and Liabilities arise before, on or after the Distribution Date,
with respect to all Active Zimmer Employees, except as specifically provided
otherwise in this Agreement. From and after the Distribution Date, (i) the
Xxxxxx Group shall assume all responsibilities, Liabilities and obligations with
respect to Active Zimmer Employees and their beneficiaries, including any claims
incurred at any time and including any responsibilities, Liabilities or
obligations that arise under any retention letter agreements that have been
entered into between Zimmer, Xxxxxxx-Xxxxx Squibb and certain Active Zimmer
Employees, and (ii) the Xxxxxxx-Xxxxx Squibb Group shall have no
responsibilities, Liabilities or obligations with respect to the Active Zimmer
Employees and their beneficiaries, except as specifically provided otherwise in
this Agreement. Xxxxxxx-Xxxxx Squibb shall retain all responsibilities,
Liabilities and obligations with respect to Former Zimmer Employees and their
beneficiaries that arise before, on or after the Distribution Date.
(b) Effective as of the Distribution Date, the Xxxxxx Group
will assume all contracts, obligations and Liabilities with respect to
independent contractors, consultants and temporary employees of the Zimmer
Business (including any sales agents and other independent contractors who are
not Active Zimmer Employees). From and after the Distribution Date,
Xxxxxxx-Xxxxx Squibb shall have no contract obligations or Liabilities with
respect to independent contractors, consultants and temporary employees of the
Zimmer Business.
Section 2.02. EMPLOYMENT-RELATED CLAIMS. (a) On the
Distribution Date, the legal responsibility for all Employment-Related Claims
regarding Active Zimmer Employees shall be transferred in their entirety from
the Xxxxxxx-Xxxxx Squibb Group to Zimmer. Thereafter, Zimmer shall assume the
defense of these Employment-Related Claims and all Liabilities arising with
respect to such Employment-Related Claims. Zimmer shall reimburse the
Xxxxxxx-Xxxxx Squibb Group for any reasonable attorneys fees and other expenses
reasonably incurred by the Xxxxxxx-Xxxxx Squibb Group on and after the
Distribution Date in connection with investigating and/or defending against any
such Employment-Related Claims, including reimbursement for any services
provided by members of the Xxxxxxx-Xxxxx Squibb legal staff.
(b) The Xxxxxx Group shall have the sole responsibility for
all Employment- Related Claims regarding Active Zimmer Employees that exist, or
come into existence, on or after the Distribution Date that arise out of or
relate to their employment with a member of the Xxxxxx Group.
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Section 2.03. AMENDMENT AND TERMINATION OF ZIMMER PLANS.
Except as specified otherwise in this Agreement, nothing in this Agreement shall
preclude any member of the Xxxxxx Group, at any time after the Distribution
Date, from amending, merging, modifying, terminating, eliminating, reducing or
otherwise altering in any respect any Zimmer Plan or any trust, insurance policy
or funding vehicle related to any Zimmer Plan (to the extent permitted by law).
Section 2.04. SERVICE CREDIT. Except as specifically provided
for in this Agreement, each member of the Xxxxxx Group shall cause each Active
Zimmer Employee's service with each member of the Xxxxxxx-Xxxxx Squibb Group and
the Xxxxxx Group before the Distribution Date to be credited for all purposes
with respect to all employee benefit plans and arrangements and
employment-related entitlements maintained or contributed to by the members of
the Xxxxxx Group for Active Zimmer Employees after the Distribution Date.
Section 2.05. CONTINUITY OF EMPLOYMENT. (a) Zimmer and
Xxxxxxx-Xxxxx Squibb intend that there shall be continuity of employment with
respect to all Active Zimmer Employees as of the Distribution Date. Effective as
of the Distribution Date, (i) each member of the Xxxxxx Group that employs
Active Zimmer Employees shall continue the employment of each such Active Zimmer
Employee, and (ii) each of the appropriate members of the Xxxxxx Group shall
offer employment to each Active Zimmer Employee who is employed by one of the
Combined International Entities; PROVIDED, HOWEVER, the effective date of
employment offers to Active Zimmer Employees located in Russia and China shall
be postponed to a date or dates that Zimmer and Xxxxxxx-Xxxxx Squibb mutually
agree with respect to each such country and, provided further, in the event that
the appropriate member of the Xxxxxx Group does not offer employment to all or
any of the Zimmer Employees located in Russia and China effective on or before
the Transition Termination Date, Xxxxxxx-Xxxxx Squibb or the appropriate Member
of the Xxxxxxx-Xxxxx Squibb Group may at any time on or after the Transition
Termination Date without notice to and without the consent of Zimmer or any
member of the Xxxxxx Group, terminate the employment of any or all such Zimmer
Employees and Zimmer shall reimburse and indemnify Xxxxxxx-Xxxxx Squibb for and
against any and all costs, expenses or Liabilities incured by Xxxxxxx-Xxxxx
Squibb or any member of the Xxxxxxx-Xxxxx Squibb Group that result from such
terminations of employment.
(b) Anything in this Agreement to the contrary
notwithstanding, as of the Distribution Date, each member of the Xxxxxx Group
shall continue the employment of Active Zimmer Employees based in locations
outside the United States as required by the Acquired Rights Directive or any
similar law in the relevant jurisdiction. In addition, anything in this
Agreement to the contrary notwithstanding, as of the Distribution Date, each
member of the Xxxxxx Group shall offer and continue the employment of the Active
Zimmer Employees on the same terms and conditions, including compensation and
benefits, as in effect before the Distribution Date, where necessary to avoid
the imposition of severance or similar obligations on any member of the
Xxxxxxx-Xxxxx Squibb Group or where otherwise required by law.
(c) The Xxxxxx Group will be responsible for complying with
all applicable fair employment practice laws in the employment offer and hiring
process and the Xxxxxx Group shall be solely responsible for any Liabilities or
claims that are based upon the conduct of the Xxxxxx Group during such
employment offer and hiring process. Without limiting the foregoing, the Xxxxxx
Group will not discriminate in favor against any employee or applicant for
employment because of race, religion, sex, national origin, disability, age or
veteran status as
9
ordered by the Secretary of Labor pursuant to Section 202 of Executive Order
11246, Section 503 of the Rehabilitation Act of 1973, and Section 401 of the
Vietnam Era Veterans Readjustment Assistance Act of 1974.
Section 2.06. EXPATRIATES. Effective as of the Distribution
Date, the Xxxxxx Group shall assume all obligations, Liabilities and
responsibilities with respect to each Expatriate as of the Distribution Date.
Such obligations, Liabilities and responsibilities shall include, without
limitation, compensation increments, housing expenses, travel expenses,
relocation expenses and all other applicable benefits, all of which shall be
provided by the appropriate member of the Xxxxxx Group according to the terms of
the Expatriates' agreements with a member of the Xxxxxxx-Xxxxx Squibb Group as
in effect before the Distribution Date. The Xxxxxx Group shall have all rights,
obligations and Liabilities of the Xxxxxxx-Xxxxx Squibb Group with respect to
Expatriates, including rights, obligations and Liabilities that have arisen
prior to, on or after the Distribution Date under tax equalization agreements
with the Expatriates.
Section 2.07. COLLECTIVE BARGAINING AGREEMENTS. Effective as
of the Distribution Date, the Xxxxxx Group shall assume all Liabilities,
responsibilities and obligations under the Collective Bargaining Agreements with
respect to Zimmer Union Employees arising under, INTER ALIA, the terms of the
Collective Bargaining Agreements, the National Labor Relations Act, the Labor
Management Relations Act and all other laws and regulations applicable in the
jurisdictions in which Zimmer Union Employees are employed. From and after the
Distribution Date, the Xxxxxxx-Xxxxx Squibb Group shall have no Liabilities,
responsibilities or obligations in connection with the Collective Bargaining
Agreements with respect to Zimmer Union Employees and their beneficiaries.
Section 2.08. UNION PLANS. Effective as of the Distribution
Date, Xxxxxx Group shall retain, assume and perform, fulfill and discharge all
responsibilities, Liabilities and obligations under the Union Plans whether they
arose prior to, on or after the Distribution Date. From and after the
Distribution Date, the Xxxxxxx-Xxxxx Squibb Group shall have no
responsibilities, Liabilities or obligations in connection with the Union Plans.
Section 2.09. INTERNATIONAL RETIREMENT AND WELFARE BENEFIT
PLANS. (a) Appendix A sets forth the provisions applicable to certain pension
and retirement savings plans to be adopted or maintained for Active Xxxxxx
Employees who are employed outside the United States.
(b) On or prior to the Distribution Date, Xxxxxx shall take,
or cause the appropriate members of the Xxxxxx Group to take, all actions
necessary for the Xxxxxx Group to adopt and implement Health and Welfare Plans
for the benefit of Active Xxxxxx Employees located in countries outside the
United States (the "XXXXXX INTERNATIONAL HEALTH AND WELFARE PLANS"). Each of the
Xxxxxx International Health and Welfare Plans will provide benefits (i) that are
substantially similar to those provided to the applicable Active Zimmer
Employees under the Xxxxxxx-Xxxxx Squibb Health and Welfare Plans that such
Active Zimmer Employees participated
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in prior to the Distribution Date and (ii) that meet the requirements of
applicable local law with respect to continuity of benefits. To the extent
necessary, the appropriate members of the Xxxxxx Group shall adopt the
International Xxxxxx Health and Welfare Plans and enroll the Active Xxxxxx
Employees in such International Health and Welfare Plans, as soon as
practicable, but, no later than the Transition Termination Date. To the extent
that Xxxxxx has not established certain Zimmer International Health and Welfare
Plans as of the Distribution Date, subject to applicable law and mutual
agreement between Xxxxxxx-Xxxxx Squibb and Zimmer, during the Transition Period
Active Zimmer Employees who are located in countries outside the United
States shall continue to be enrolled and participate in the Xxxxxxx-Xxxxx
Squibb Health and Welfare Plans that such Active Zimmer Employees
participated in prior to the Distribution Date. Except as otherwise
authorized by Xxxxxxx-Xxxxx Squibb, the foregoing shall only apply if Active
Zimmer Employees participate in the Xxxxxxx-Xxxxx Squibb Health and Welfare
Plans on the same basis and in a manner that is identical in all respects to
that of other participants, to the extent permissible under applicable law.
No member of the Xxxxxxx-Xxxxx Squibb Group shall have any obligation to
continue such enrollment or participation in the Xxxxxxx-Xxxxx Squibb Health
and Welfare Plans on or after the Transition Termination Date and Zimmer
shall reimburse and indemnify Xxxxxxx-Xxxxx Squibb for and against any and
all costs, expenses or Liabilities incurred by Xxxxxxx-Xxxxx Squibb or any
member of the Xxxxxxx-Xxxxx Squibb Group that result from the termination of
such enrollment or participation. Commencing upon the Distribution Date,
Zimmer or the appropriate members of the Xxxxxx Group shall pay or reimburse
the appropriate member of the Xxxxxxx-Xxxxx Squibb Group for the cost of
permitting the Active Zimmer Employees to participate in the Xxxxxxx-Xxxxx
Squibb Health and Welfare Plans. Zimmer shall reimburse Xxxxxxx-Xxxxx Squibb
for the costs associated with its participation in the Xxxxxxx-Xxxxx Squibb
Health and Welfare Plans as provided on Schedule 2.09(b). During the
Transition Period, the appropriate member of the Xxxxxx Group will be deemed
to be a participating company (to the extent required) in the relevant
Xxxxxxx-Xxxxx Squibb Health and Welfare Plans. Once enrolled in each
applicable Zimmer International Health and Welfare Plan, the Active Zimmer
Employee shall no longer be enrolled in, or accrue additional benefits or
rights under, the commensurate Xxxxxxx-Xxxxx Squibb Health and Welfare Plan.
ARTICLE III
U.S. PENSION AND SAVINGS PLANS
Section 3.01 U.S. PENSION PLAN. (a) Effective as of the
Distribution Date, Xxxxxx shall establish, or cause to be established, the
Zimmer Retirement Income Plan which shall be substantially identical in all
material respects to the Xxxxxxx-Xxxxx Squibb Retirement Income Plan as of the
Distribution Date, and which shall cover Active Zimmer Employees who are
participants in the Xxxxxxx-Xxxxx Squibb Retirement Income Plan immediately
prior to the Distribution Date. Xxxxxxx-Xxxxx Squibb shall retain responsibility
for all benefits accrued before the Distribution Date by Former Zimmer Employees
and Active Zimmer Employees under the Xxxxxxx-Xxxxx Squibb Retirement Income
Plan, and the Xxxxxx Group shall have no responsibilities, Liabilities or
obligations with respect to such Xxxxxxx-Xxxxx Squibb Plan. Except as provided
in Section 3.01(a)(ii), Active Zimmer Employees shall receive credit for their
service with the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group prior to the
Distribution Date for all purposes under the Zimmer Retirement Income Plan,
including for purposes of eligibility, vesting and benefit accrual, to the
extent that the Xxxxxxx-Xxxxx Squibb Retirement
11
Income Plan gives employees credit for such service. Xxxxxxx-Xxxxx Squibb shall
cause all Active Zimmer Employees on the Distribution Date to have a fully
vested interest in their benefits accrued under the Xxxxxxx-Xxxxx Squibb
Retirement Income Plan as of the Distribution Date. The Xxxxxx Retirement Income
Plan shall provide benefits to Active Zimmer Employees at least equal to the
Active Zimmer Employee's benefit computed under the Zimmer Retirement Income
Plan based on credit for all service the Xxxxxxx-Xxxxx Squibb Group and the
Xxxxxx Group (before, on and after the Distribution Date), with an offset for
the accrued benefits of the Active Zimmer Employee under the Xxxxxxx-Xxxxx
Squibb Retirement Income Plan as of the Distribution Date. If the amount defined
in the previous sentence is zero or less, the Xxxxxx Retirement Income Plan
shall provide the Active Xxxxxx Employee's benefits computed under the Xxxxxx
Retirement Income Plan based on credit for service with the Xxxxxx Group on and
after the Distribution Date for benefit accrual purposes.
(b) Xxxxxxx-Xxxxx Squibb will provide early retirement
subsidies under the Xxxxxxx-Xxxxx Squibb Retirement Income Plan to the following
categories of Active Zimmer Employees as of the Distribution Date: (i) Active
Zimmer Employees who have attained age 55 and have at least 10 years of service
(as defined in the Xxxxxxx-Xxxxx Squibb Retirement Income Plan) with the
Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group as of the day before the
Distribution Date; (ii) Active Zimmer Employees who are age 50-54 and have at
least 10 years of service (as defined in the Xxxxxxx-Xxxxx Squibb Retirement
Income Plan) with the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group as of the
day before the Distribution Date; and (iii) Active Zimmer Employees whose age,
plus years of service measured in years, months and days of completed service
with the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group, equals at least 70 as
of the day before the Distribution Date.
(c) Xxxxxxx-Xxxxx Squibb and Zimmer mutually agree that
effective as of the Distribution Date all Active Zimmer Employees will be
treated as terminated employees under the Xxxxxxx-Xxxxx Squibb Retirement Income
Plan and will be eligible for distributions from the Xxxxxxx-Xxxxx Squibb
Retirement Income Plan as provided under the terms of the Xxxxxxx-Xxxxx Squibb
Retirement Income Plan.
Section 3.02 U.S. SAVINGS PLANS. (a) Effective as of the
Distribution Date, or as soon as practicable thereafter, Xxxxxx shall establish,
or cause to be established, the Zimmer Savings and Investment Program which
shall be substantially identical in all material respects to the Xxxxxxx-Xxxxx
Squibb Savings and Investment Program. Each Active Zimmer Employee participating
in the Xxxxxxx-Xxxxx Squibb Savings and Investment Program as of the
Distribution Date shall become a participant in the Zimmer Savings and
Investment Program as of the Distribution Date. Active Zimmer Employees shall
receive credit for all service with the Xxxxxxx-Xxxxx Squibb Group and the
Xxxxxx Group prior to the Distribution Date for all purposes under the Zimmer
Savings and Investment Program, including for purposes of eligibility and
vesting, to the extent that the Xxxxxxx-Xxxxx Squibb Savings and Investment
Program gives employees credit for service. All Active Zimmer Employees shall
have a fully vested interest in their accounts under the Xxxxxxx-Xxxxx Squibb
Savings and Investment Program that are transferred to the
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Zimmer Savings and Investment Program as of the Distribution Date. All amounts
withheld from Active Xxxxxx Employees' pay with respect to payroll periods
ending on or after the Distribution Date pursuant to such Active Xxxxxx
Employees' deferral elections will be contributed on behalf of such Active
Zimmer Employees to the Zimmer Savings and Investment Program, without pro-rata
contributions to the Xxxxxxx-Xxxxx Squibb Savings and Investment Plan for
service performed prior to the Distribution Date.
(b) As soon as practicable following the Distribution Date,
assets of the Xxxxxxx-Xxxxx Squibb Savings and Investment Program equal to the
aggregate account balances of Active Zimmer Employees shall be transferred to
the Zimmer Savings and Investment Program. The transfer shall be made in cash
and/or property (including shares of Xxxxxxx-Xxxxx Squibb Common Stock, to the
extent the accounts of Active Zimmer Employees are invested in Xxxxxxx-Xxxxx
Squibb Common Stock), according to the investment of each Active Zimmer Employee
as of the date the transfer is made. Any outstanding balances of plan loans in
the Xxxxxxx-Xxxxx Squibb Savings and Investment Program of the Active Zimmer
Employees shall be transferred with the underlying accounts. The account
balances of Active Xxxxxx Employees shall be valued as of the date on which the
transfer is made, which value shall include the earnings, gains and losses,
appreciation and depreciation of the investment funds in which the accounts are
invested through the date on which the transfer is made. Xxxxxxx-Xxxxx Squibb
will remain responsible for providing benefits accrued under the Xxxxxxx-Xxxxx
Squibb Savings and Investment Program for Former Zimmer Employees. Xxxxxxx-Xxxxx
Squibb shall debit the accounts of each Active Zimmer Employee under the
Xxxxxxx-Xxxxx Squibb Savings and Investment Program by the amount transferred to
the Zimmer Savings and Investment Program, and Zimmer shall allocate the cash
and property transferred to the Xxxxxx Savings and Investment Program to the
accounts of Active Xxxxxx Employees by crediting such accounts in relative
proportion to the amount debited from the accounts of Active Zimmer Employees
under the Xxxxxxx-Xxxxx Squibb Savings and Investment Program. For
administrative purposes, during a period of limited duration, no transactions
will be permitted under the Xxxxxx Savings and Investment Program. In the event
that any Former Xxxxxx Employee who, as of the date of such Former Zimmer
Employee's termination of employment with Zimmer, had an account under the
Xxxxxxx-Xxxxx Squibb Savings and Investment Program that was not fully vested,
is employed by Zimmer following the Distribution Date and if the Zimmer Savings
and Investment Program is required to restore the forfeited benefit,
Xxxxxxx-Xxxxx Squibb shall transfer to the Zimmer Savings and Investment Program
the amount that is necessary to restore such individual's forfeited benefit to
the Xxxxxx Savings and Investment Program.
(c) Effective as of the Distribution Date, Zimmer shall
establish a Zimmer Stock Fund and a Xxxxxxx-Xxxxx Squibb Stock Fund under the
Zimmer Savings and Investment Program. After the Distribution Date, Zimmer shall
allow participants in the Zimmer Savings and Investment Program to retain their
investment in shares of Xxxxxxx-Xxxxx Squibb Common Stock in the Xxxxxxx-Xxxxx
Squibb Stock Fund under the Zimmer Savings and Investment Program for a
twenty-four month period following the Distribution Date. Participants shall be
permitted to transfer investments out of the Xxxxxxx-Xxxxx Squibb Stock Fund
under the Xxxxxx
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Savings and Investment Program, but no new contributions may be invested in and
no investments may be transferred into the Xxxxxxx-Xxxxx Squibb Stock Fund under
the Zimmer Savings and Investment Program.
(d) Effective as of the Distribution Date, Xxxxxxx-Xxxxx
Squibb shall establish a Zimmer Stock Fund under the Xxxxxxx-Xxxxx Squibb
Savings and Investment Program. After the Distribution Date, Xxxxxxx-Xxxxx
Squibb shall allow participants in the Xxxxxxx-Xxxxx Squibb Savings and
Investment Program to retain their investment in shares of Zimmer Common Stock
under the Xxxxxxx-Xxxxx Squibb Savings and Investment Program for a twenty-four
month period following the Distribution Date. Participants shall be permitted to
transfer investments out of the Zimmer Stock Fund under the Xxxxxxx-Xxxxx Squibb
Savings and Investment Program, but no new contributions maybe invested in and
no investments may be transferred into the Zimmer Stock Fund under the
Xxxxxxx-Xxxxx Squibb Savings and Investment Program.
(e) Following the transfer of cash or property described in
Section 3.02(b), (i) Zimmer shall assume all Liabilities under the Xxxxxxx-Xxxxx
Squibb Savings and Investment Program with respect to Active Zimmer Employees
and their beneficiaries, and (ii) the Xxxxxxx-Xxxxx Squibb Group shall have no
Liability in connection with the Zimmer Savings and Investment Program with
respect to Active Zimmer Employees and their beneficiaries.
(f) Each party shall provide to the other party in a timely
manner such proxy statements, annual reports, and other materials with respect
to the party's stock as may be reasonably requested by the other party.
Section 3.03 NON-QUALIFIED PLANS. (a) Effective as of the
Distribution Date, Xxxxxx shall have in effect the Xxxxxx BEP-SIP and the Zimmer
BEP-RIP which shall provide benefits to Active Zimmer Employees who are
participating in the Xxxxxxx-Xxxxx Squibb BEP-SIP and the Xxxxxxx-Xxxxx Squibb
BEP-RIP prior to the Distribution Date. Xxxxxxx-Xxxxx Squibb shall retain
responsibility for all benefits accrued prior to the Distribution Date by Active
and Former Zimmer Employees under (i) the Xxxxxxx-Xxxxx Squibb BEP-RIP and (ii)
the Xxxxxxx-Xxxxx Squibb Key International Pension Plan.
(b) The Xxxxxx BEP-SIP shall provide those Active Zimmer
Employees who are participating before the Distribution Date in the
Xxxxxxx-Xxxxx Squibb BEP-SIP with account balances under the Zimmer BEP-SIP
equal to the account balances of the Active Zimmer Employees under the
Xxxxxxx-Xxxxx Squibb BEP-SIP as of the Distribution Date. Active Zimmer
Employees shall receive credit for service with the Xxxxxxx-Xxxxx Squibb Group
and the Xxxxxx Group prior to the Distribution Date for all purposes under the
Zimmer BEP-SIP, including for purposes of eligibility, vesting and benefit
accrual, to the extent that the Xxxxxxx-Xxxxx Squibb BEP-SIP gives employees
credit for such service. All Active Zimmer Employees shall have a fully vested
interest in their accounts under the Xxxxxxx-Xxxxx Squibb BEP-SIP that are
transferred to the Zimmer BEP-SIP as of the Distribution Date. Zimmer shall
assume and be
14
responsible for paying all benefits accrued by Active Zimmer Employees under the
Xxxxxxx-Xxxxx Squibb BEP-SIP before, on and after the Distribution Date.
(c) Xxxxxxx-Xxxxx Squibb will provide early retirement
subsidies under the Xxxxxxx-Xxxxx Squibb BEP-RIP to the following categories of
Active Zimmer Employees as of the Distribution Date: (i) Active Zimmer Employees
who have attained age 55 and have at least 10 years of service (as defined in
the Xxxxxxx-Xxxxx Squibb Retirement Income Plan) with the Xxxxxxx-Xxxxx Squibb
Group and the Xxxxxx Group as of the day before the Distribution Date; (ii)
Active Zimmer Employees who are age 50-54 and have at least 10 years of service
(as defined in the Xxxxxxx-Xxxxx Squibb Retirement Income Plan) with the
Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group as of the day before the
Distribution Date; and (iii) Active Zimmer Employees whose age, plus years of
service measured in years, months and days of completed service with the
Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group, equals at least 70 as of the
day before the Distribution Date.
(d) Active Zimmer Employees shall receive credit for their
service with the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group prior to the
Distribution Date for all purposes under the Zimmer BEP-RIP, including for
purposes of eligibility, vesting and benefit accrual, to the extent that the
Xxxxxxx-Xxxxx Squibb BEP-RIP gives employees credit for such service. For
purposes of determining the amount of benefits payable under the BEP-RIP, Xxxxxx
will determine the total benefit that would be payable to a participant after
taking into account all service with any members of the Xxxxxx Group and the
Xxxxxxx-Xxxxx Squibb Group, and all compensation paid to such participant,
without regard to any limitations or cut- backs imposed by the Code, offset by
all benefits payable under (i) the Xxxxxxx-Xxxxx Squibb Retirement Income Plan
(including the same early retirement subsidies as described in Section 3.01(b)),
(ii) the Xxxxxxx-Xxxxx Squibb BEP-RIP (including the same early retirement
subsidies as described in Section 3.03(c)) and, (iii) the Zimmer Retirement
Income Plan.
ARTICLE IV
HEALTH AND WELFARE PLANS
Section 4.01 HEALTH AND WELFARE PLANS CONTINUANCE. (a) Except
as otherwise agreed by Xxxxxxx-Xxxxx Squibb and Zimmer, with respect to each
Health and Welfare Plan, during the Transition Period, Active Zimmer Employees
employed in the U.S. shall continue to participate in the Xxxxxxx-Xxxxx Squibb
Health and Welfare Plans that such Active Zimmer Employees participated in prior
to the Distribution Date as listed on Schedule 4.01(a)(i) ("TRANSITION HEALTH
AND WELFARE PLANS"). During the Transition Period, the appropriate member of the
Xxxxxx Group will be deemed to be a participating company (to the extent
required by the relevant Plan) in the Transition Health and Welfare Plans.
Except as otherwise agreed by Xxxxxxx-Xxxxx Squibb and Zimmer, Xxxxxxx-Xxxxx
Squibb shall administer claims incurred under the Transition Health and Welfare
Plans by Active Zimmer Employees which are submitted to
15
Xxxxxxx-Xxxxx Squibb before the first anniversary of the Transition Termination
Date and any determinations made or settlements entered into by Xxxxxxx-Xxxxx
Squibb with respect to such claims shall be final and binding. Zimmer shall
reimburse Xxxxxxx-Xxxxx Squibb for the costs associated with its participation
in the Transition Health and Welfare Plans as provided on Schedule 4.01(a)(ii).
The foregoing undertakings by Xxxxxxx-Xxxxx Squibb shall only be effective if
the terms of the Transition Health and Welfare Plans are identical in all
respects to the Xxxxxxx-Xxxxx Squibb Health and Welfare Plans, except as
otherwise authorized by Xxxxxxx-Xxxxx Squibb.
(b) During the Transition Period, Xxxxxxx-Xxxxx Squibb and
Zimmer shall cause the Transition Health and Welfare Plans to recognize and
maintain all coverage and contribution elections made by Active Zimmer
Employees, including, but not limited to the elections made under the
Xxxxxxx-Xxxxx Squibb Company Flexible Benefit Plan, Xxxxxxx-Xxxxx Squibb Company
Health Care Reimbursement Account and the Xxxxxxx-Xxxxx Squibb Company Dependant
Care Reimbursement Account.
Section 4.02. ESTABLISHMENT OF LTD VEBA. (a) Effective as of
the Transition Termination Date, Zimmer shall establish, or cause to be
established, the Xxxxxx LTD VEBA, for the purpose of funding long-term
disability benefits under the Xxxxxx Health and Welfare Plans. Such trust shall
constitute a voluntary employees' beneficiary association under Code Sec.
501(c)(9) which is exempt from the imposition of federal income tax under Code
Sec. 501(a).
(b) As soon as practicable after the Transition Termination
Date, Xxxxxxx-Xxxxx Squibb shall transfer an amount from the Xxxxxxx-Xxxxx
Squibb LTD VEBA equal to the amount of the Claim Liabilities, less the Present
Value of Future Scheduled Contributions which are attributable to Active Zimmer
Employees, valued as of the Transition Termination Date.
(c) The value of the assets transferred from the Xxxxxxx-Xxxxx
Squibb LTD VEBA to the Xxxxxx LTD VEBA shall be computed using the actuarial
assumptions generally used for the Xxxxxxx-Xxxxx Squibb LTD VEBA.
(d) Xxxxxxx-Xxxxx Squibb and Zimmer shall make such
applications to regulatory agencies, including the Internal Revenue Service and
the United States Department of Labor, as may be necessary to ensure that any
transfers of assets from the Xxxxxxx-Xxxxx Squibb LTD VEBA to the Xxxxxx LTD
VEBA will neither (i) result in any adverse tax, legal or fiduciary consequences
to Xxxxxxx-Xxxxx Squibb and Zimmer, the Xxxxxxx-Xxxxx Squibb LTD VEBA, the
Xxxxxx LTD VEBA, any participant therein or beneficiaries thereof, any successor
welfare benefit funds established by or on behalf of Xxxxxx, or the trustees of
such trusts, nor (ii) contravene any statute, regulation or technical
pronouncement issued by any regulatory agency. Prior to the Distribution Date,
Xxxxxx shall prepare all forms required to obtain favorable determination
letters from the Internal Revenue Service with respect to the tax-exempt status
of the Xxxxxx LTD VEBA. Zimmer and Xxxxxxx-Xxxxx Squibb agree to cooperate with
each other to fulfill any filing and/or regulatory reporting obligations with
respect to such transfers.
16
Section 4.03 ESTABLISHMENT OF HEALTH AND WELFARE PLANS. (a)
Effective as of the Transition Termination Date, Active Xxxxxx Employees shall
cease to participate in the Transition Health and Welfare Plans. Effective as of
the Distribution Date, or the Transition Termination Date, where applicable,
Xxxxxx shall take, or cause to be taken, all actions necessary and appropriate
on behalf of Active Xxxxxx Employees to adopt, or to cause the appropriate
member of the Xxxxxx Group to adopt, such Xxxxxx Health and Welfare Plans as are
necessary to provide uninterrupted health and welfare benefits to the Active
Xxxxxx Employees substantially similar to those offered prior to the
Distribution Date or the Transition Termination Date, except as otherwise set
forth in this Agreement. All waiting periods and pre-existing condition clauses
shall be waived under the Zimmer Health and Welfare Plans for Active Zimmer
Employees and their eligible dependents who were participating in the
Xxxxxxx-Xxxxx Squibb Health and Welfare Plans before the Distribution Date or
the Transition Termination Date, as applicable. Zimmer shall cause the Zimmer
Health and Welfare Plans to recognize any out-of-pocket medical and dental
expenses incurred by each of the Active Xxxxxx Employees and their eligible
dependents prior to the Distribution Date or the Transition Termination Date,
as applicable, and during the calendar year in which the Distribution Date or
the Transition Termination Date, as applicable, occurs for purposes of
determining deductibles and out-of-pocket maximums under the Zimmer Health
and Welfare Plans, if any for that calendar year. Where applicable, elections
made under Xxxxxxx-Xxxxx Squibb Health and Welfare Plans shall continue in
effect under Zimmer Health and Welfare Plans, except to the extent Zimmer
determines otherwise, including, but not limited to elections under the
Xxxxxxx-Xxxxx Squibb Company Flexible Benefit Plan, Xxxxxxx-Xxxxx Squibb
Company Health Care Reimbursement Account and the Xxxxxxx-Xxxxx Squibb
Company Dependant Care Reimbursement Account.
Section 4.04. LIABILITIES UNDER HEALTH AND WELFARE PLANS. (a)
Except as otherwise provided in this Article IV, the Xxxxxx Group shall be
liable for all Welfare Claims that are incurred on or after the Distribution
Date or the Transition Termination Date, where applicable, under the Health and
Welfare Plans or Transition Health and Welfare Plans, where applicable, with
respect to Active Xxxxxx Employees and their beneficiaries and dependents.
(b) If either party pays any Welfare Claim that is a Liability
of the other party, the responsible party shall reimburse the paying party for
all such payments.
(c) For purposes of this Section 4.04, a Welfare Claim is
incurred when the medical services are rendered and a life insurance Welfare
Claim is incurred when the covered employee dies. A Welfare Claim for hospital
admission shall be deemed to have been incurred on the date of admission to the
hospital, PROVIDED, HOWEVER, that financial responsibility for any costs
associated with the hospital confinement of an Active Xxxxxx Employee shall be
assumed by Xxxxxx immediately following the Transition Termination Date. A
long-term disability Welfare Claim or life insurance disability Welfare Claim
shall be deemed to have been incurred on the date the condition causing the
disability rendered the employee disabled, as determined by
17
the committee or plan administrator making the determination; costs for
long-term disability benefits relating to the Welfare Claim shall be included in
the Welfare Claim, PROVIDED, HOWEVER, that financial responsibility for all
short-term and long-term disability benefits for Active Xxxxxx Employees shall
be assumed by Zimmer immediately following the Transition Period, regardless of
when the disability was incurred.
(d) Except as otherwise agreed to between Xxxxxxx-Xxxxx Squibb
and Zimmer, during the Transition Period, Xxxxxxx-Xxxxx Squibb shall be
responsible for COBRA continuation coverage for Active Zimmer Employees and
their "qualified beneficiaries" (as that term is used in Section 4980B of the
Code) and any continuation coverage requirements applicable under all other laws
and regulations with respect to the Active Zimmer Employees their beneficiaries,
and Xxxxxxx-Xxxxx Squibb will be responsible for the portability and
certification requirements of HIPAA with respect to Active Zimmer Employees and
their beneficiaries. Except as otherwise agreed to by Xxxxxxx-Xxxxx Squibb and
Zimmer, effective as of January 1, 2002, Zimmer shall assume all
responsibilities and obligations for COBRA continuation coverage with respect to
Active Xxxxxx Employees and their qualified beneficiaries and any continuation
coverage requirements applicable under all other laws and regulations with
respect to the Active Xxxxxx Employees and their beneficiaries, and Xxxxxx shall
assume all responsibilities for the portability and certification requirements
of HIPAA with respect to Active Zimmer Employees and their beneficiaries.
Section 4.05. POST-RETIREMENT MEDICAL AND LIFE INSURANCE
OBLIGATIONS. The Xxxxxxx-Xxxxx Squibb Group shall retain all Liabilities,
responsibilities and obligations for all post-retirement medical, dental and
life insurance benefits under the Xxxxxxx-Xxxxx Squibb Plans with respect to
Former Zimmer Employees and with respect to Active Zimmer Employees who, as of
the Distribution Date are at least age 55 and have at least 10 years of service
(as defined in the Xxxxxxx-Xxxxx Squibb Retirement Income Plan) with a member of
the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group and the Xxxxxx Group shall
have no Liabilities, responsibilities or obligations with respect to such
benefits under the Xxxxxxx-Xxxxx Squibb Plans. With respect to any individual
who is receiving post-retirement benefits under any Xxxxxxx-Xxxxx Squibb Plan
and who becomes eligible for coverage under Zimmer Plans which provide the same
type of benefits as being provided under the Xxxxxxx-Xxxxx Squibb Plans, such
coverage in the Zimmer Plans shall be the primary coverage with respect to such
individuals and their dependants and beneficiaries and Xxxxxxx-Xxxxx Squibb can
condition the right of the individuals and their respective dependants and
beneficiaries to receive post-retirement benefits under the Xxxxxxx-Xxxxx
Squibb Plans on such individuals enrolling in the corresponding Zimmer Plans.
Section 4.06. HCFA As of the Distribution Date, Zimmer shall
assume all Liabilities relating to, arising out of or resulting from claims
verified by Zimmer or Xxxxxxx-Xxxxx Squibb under the HCFA data match reports
that relate to Active Zimmer Employees and their beneficiaries regardless of the
date the claim was incurred.
18
Section 4.07. HEALTH AND WELFARE PLAN SUBROGATION RECOVERY.
Any amounts recovered by Xxxxxx through subrogation or otherwise for claims
incurred by Active Zimmer Employees or Former Zimmer Employees and their
beneficiaries and dependants that were paid or payable under the Xxxxxxx-Xxxxx
Squibb Health and Welfare Plans or the Transition Health and Welfare Plans shall
be paid to Xxxxxxx-Xxxxx Squibb.
Section 4.08. FMLA AND LEAVE OF ABSENCES. (a) Effective as of
the Distribution Date, (i) Zimmer shall adopt Leave of Absence Programs which
are identical in all material respects to the Xxxxxxx-Xxxxx Squibb Leave of
Absence Programs in effect as of the Distribution Date, (ii) Zimmer shall honor
all terms and conditions of leaves of absences which have been granted to any
Active Zimmer Employee under a Xxxxxxx-Xxxxx Squibb Leave of Absence Program
maintained by a member of the Xxxxxxx-Xxxxx Squibb Group before the Distribution
Date, including such leaves that are to commence on or after the Distribution
Date, (iii) Zimmer shall be solely responsible for administering leaves of
absence and complying with FMLA with respect to Active Zimmer Employees and (iv)
Zimmer shall recognize all periods of service of Active Zimmer Employees with
the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group, to the extent such service
is recognized by Xxxxxxx-Xxxxx Squibb for the purpose of eligibility for leave
entitlement under Xxxxxxx-Xxxxx Squibb Leave of Absence Programs; PROVIDED,
HOWEVER, that no duplication of benefits shall, to the extent permitted by law,
be required by the foregoing.
(b) As soon as administratively practicable after the
Distribution Date, Xxxxxxx-Xxxxx Squibb shall provide to Zimmer copies of all
records pertaining to the Xxxxxxx-Xxxxx Squibb Leave of Absence Programs with
respect to Active Zimmer Employees to the extent such records have not been
previously provided.
ARTICLE V
EQUITY PLANS
Section 5.01. ESTABLISHMENT OF XXXXXX STOCK PLANS. Effective
as of the Distribution Date, Xxxxxx shall have in effect Zimmer Stock Plans for
the benefit of Active Zimmer Employees. Each Active Zimmer Employee
participating in the Xxxxxxx-Xxxxx Squibb Stock Plans as of the Distribution
Date shall become a participant in the Zimmer Stock Plans as of the Distribution
Date. Active Zimmer Employees shall receive credit for all service with the
Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group prior to the Distribution Date
for purposes of eligibility and vesting under the Zimmer Stock Plans.
Section 5.02. XXXXXXX-XXXXX SQUIBB OPTIONS. Effective as of
the Distribution Date, each outstanding Xxxxxxx-Xxxxx Squibb Option held by
Active Zimmer Employees, other than Active Zimmer Employees who are receiving
severance payments from a member of the Xxxxxxx-Xxxxx Squibb Group or the Xxxxxx
Group on the Distribution Date, whether vested or unvested, shall be assumed by
Zimmer and converted into a Zimmer Option, subject to
19
applicable law and except in certain foreign jurisdictions where certain
laws, rules or regulations make it inadvisable, in the sole discretion of
Xxxxxxx-Xxxxx Squibb or Zimmer, to convert into a Zimmer Option. Each
Xxxxxxx-Xxxxx Squibb Option so assumed shall continue to have, and be subject
to, the same terms and conditions set forth in the Xxxxxxx-Xxxxx Squibb Stock
Plans and as provided in the respective option agreements governing such
Xxxxxxx-Xxxxx Squibb Options as of the Distribution Date, except that (i) the
number of shares of Zimmer Common Stock subject to each assumed Xxxxxxx-Xxxxx
Squibb Option shall equal the number of shares of Xxxxxxx-Xxxxx Squibb Common
Stock subject to such Xxxxxxx-Xxxxx Squibb Option as of the Distribution
Date, multiplied by the Ratio, with fractional shares rounded to the nearest
whole number of shares of Zimmer Common Stock, (ii) the per share exercise
price for the shares of Zimmer Common Stock issuable upon exercise of each
assumed Xxxxxxx-Xxxxx Squibb Option shall equal the per share exercise price
of each assumed Xxxxxxx-Xxxxx Squibb Option divided by the Ratio, rounded to
the nearest one-hundredth of a cent, and (iii) references to any member of
the Xxxxxxx-Xxxxx Squibb Group shall be amended to refer to appropriate
member of the Zimmer Group. Xxxxxxx-Xxxxx Squibb Options not assumed under
this Section 5.02 shall be governed by the Xxxxxxx-Xxxxx Squibb Stock Plans.
Section 5.03. XXXXXXX-XXXXX SQUIBB STOCK APPRECIATION
RIGHTS. Effective as of the Distribution Date, each outstanding Xxxxxxx-Xxxxx
Squibb Stock Appreciation Right held by Active Zimmer Employees, other than
Active Zimmer Employees who are receiving severance payments from a member of
the Xxxxxxx-Xxxxx Squibb Group or the Xxxxxx Group on the Distribution Date,
whether vested or unvested, shall be assumed by Zimmer and converted into a
Zimmer Stock Appreciation Right, subject to applicable law and except in
certain foreign jurisdictions where certain laws, rules or regulations make
it inadvisable, in the sole discretion of Xxxxxxx-Xxxxx Squibb or Zimmer, to
convert into a Zimmer Stock Appreciation Right. Each Xxxxxxx-Xxxxx Squibb
Stock Appreciation Right so assumed shall continue to have, and be subject
to, the same terms and conditions set forth in the Xxxxxxx-Xxxxx Squibb Stock
Plans as provided in the respective agreements governing such Xxxxxxx-Xxxxx
Squibb Stock Appreciation Rights as of the Distribution Date, except that (i)
the number of shares of Zimmer Common Stock underlying each assumed
Xxxxxxx-Xxxxx Squibb Stock Appreciation Right shall equal the number of
shares of Xxxxxxx-Xxxxx Squibb Common Stock underlying such Xxxxxxx-Xxxxx
Squibb Stock Appreciation Right as of the Distribution Date, multiplied by
the Ratio, with fractional shares rounded to the nearest whole number of
shares of Zimmer Common Stock, (ii) the per share xxxxx xxxxx for the shares
of Zimmer Common Stock underlying each assumed Xxxxxxx-Xxxxx Squibb Stock
Appreciation Right shall equal the per share xxxxx xxxxx of each
Xxxxxxx-Xxxxx Squibb Stock Appreciation Right divided by the Ratio, rounded
to the nearest one-hundredth of a cent, and (iii) references to any member of
the Xxxxxxx-Xxxxx Squibb Group shall be amended to refer to the appropriate
member of the Zimmer Group. Xxxxxxx-Xxxxx Squibb Stock Appreciation Rights
not assumed under this Section 5.03 shall be governed by the Xxxxxxx-Xxxxx
Squibb Stock Plans.
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ARTICLE VI
FRINGE AND OTHER BENEFITS
Section 6.01. RETENTION BONUS ARRANGEMENTS. The Xxxxxx Group
shall administer and make any and all retention bonus payments required to be
made to Active Zimmer Employees pursuant to the retention bonus arrangements
of Xxxxxxx-Xxxxx Squibb that are applicable to Active Zimmer Employees, as
set forth in retention bonus announcements to Active Zimmer Employees dated
October 2000 from Xxxxxxx X. Xxxxx, including any follow-up correspondence
regarding such retention bonus arrangements. As of the Distribution Date, the
Xxxxxx Group shall assume all responsibilities, Liabilities and obligations
with respect to such retention bonus payments.
Section 6.02. ANNUAL BONUS. As of the Distribution Date, the
Xxxxxx Group shall assume responsibility for, and shall pay, all annual bonuses,
including annual incentive bonuses that are payable to Active Zimmer Employees
for the year 2001, including bonuses accrued before the Distribution Date under
the annual bonus plans of the Xxxxxxx-Xxxxx Squibb Group.
Section 6.03. VACATION PAY/PAID TIME OFF. As of the
Distribution Date, the Xxxxxx Group shall recognize all the Active Zimmer
Employees' accrued and unused vacation benefits consistent with the terms of the
vacation policies of Xxxxxxx-Xxxxx Squibb applicable to the Active Zimmer
Employees as is in effect on the Distribution Date and shall assume or retain
Liability for all unpaid vacation pay, sick pay and personal leave accrued by
Active Zimmer Employees as of the Distribution Date.
Section 6.04. SEVERANCE. Effective as of the Distribution
Date, the Xxxxxx Group shall adopt and maintain Zimmer Severance Plans which
shall be identical in all material respects (including the Rule of 70 provisions
and six-month minimum severance benefits for certain terminations within 90 days
of the Distribution Date, as described in the Xxxxxxx-Xxxxx Squibb Severance
Plans and other written communications to Active Zimmer Employees) to the
Xxxxxxx-Xxxxx Squibb Severance Plans as in effect as of the Distribution Date.
The Xxxxxx Group shall assume and be responsible for paying any severance
obligations (including termination indemnities, notice liabilities and statutory
severance obligations) that are payable as a result of the Distribution, or that
are otherwise payable with respect to Active Zimmer Employees on or after the
Distribution Date. Each Active Zimmer Employee shall receive credit for all
service with a member of the Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group
prior to the Distribution Date for purposes of eligibility and benefits under
the Zimmer Xxxxxxxxx Plans.
Section 6.05. RELOCATION BENEFITS. Effective as of the
Transition Termination Date or such earlier date as Xxxxxxx-Xxxxx Squibb and
Zimmer may mutually agree, Zimmer shall perform or cause to be performed all
obligations of Xxxxxxx-Xxxxx Squibb with respect to Active Zimmer Employees'
existing relocation arrangements, and the Xxxxxx Group shall have all
rights and obligations of Xxxxxxx-Xxxxx Squibb under such relocation
arrangements with respect to Active Zimmer Employees.
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Section 6.06. EDUCATIONAL ASSISTANCE PROGRAM. Effective as of
the Transition Termination Date or such earlier date as Xxxxxxx-Xxxxx Squibb and
Zimmer may mutually agree, Zimmer shall provide a Zimmer educational assistance
program to Active Zimmer Employees which is substantially similar in all
material respects to the Xxxxxxx-Xxxxx Squibb Company Educational Assistance
Tuition Aid Program. Zimmer shall cease to be a Participating Company in the
Xxxxxxx-Xxxxx Squibb Company Educational Assistance Tuition Aid Program
coincident with Xxxxxx'x establishment of the Zimmer educational assistance
program. At such time, any and all outstanding approved reimbursements under the
Xxxxxxx-Xxxxx Squibb Company Educational Assistance Tuition Aid Program for
Active Zimmer Employees shall be made by Zimmer.
Section 6.07. ADOPTION ASSISTANCE PROGRAM. Effective as of the
Transition Termination Date or such earlier date as Xxxxxxx-Xxxxx Squibb and
Zimmer may mutually agree, Zimmer shall provide a Zimmer adoption assistance
program to Active Zimmer Employees which is substantially similar in all
material respects to the Xxxxxxx-Xxxxx Squibb Company Adoption Assistance
Program. Effective as of the Transition Termination Date or such other date as
Xxxxxxx-Xxxxx Squibb and Zimmer may mutually agree, the Xxxxxxx-Xxxxx Squibb
Company Adoption Assistance Program shall cease to provide reimbursement to any
Active Zimmer Employees and any and all outstanding approved reimbursements
shall be made by Zimmer.
Section 6.08. WORKERS' COMPENSATION. Effective as of the
Distribution Date, Zimmer shall assume all Liabilities for Active Zimmer
Employees related to any and all workers' compensation matters under any law of
any state, territory or possession of the U.S. or other country and Zimmer shall
be fully responsible for the administration of all such claims. If Zimmer is
unable to assume such Liability or the administration of any such claim because
of the operation of applicable state law or for any other reason, Zimmer shall
fully indemnify Xxxxxxx-Xxxxx Squibb for all such Liabilities, including costs
of any administration that Zimmer has not been able to assume.
Section 6.09. OTHER AGREEMENTS AND BENEFITS. Without limiting
the foregoing, as of the Distribution Date, the Xxxxxx Group shall assume all
Liabilities and responsibilities, and shall perform or cause to be performed,
all obligations of the Xxxxxxx-Xxxxx Squibb Group under the following
agreements, programs and policies in effect with respect to Active Zimmer
Employees as of the Distribution Date: (i) employment and supplemental benefit
agreements with respect to Active Zimmer Employees based in countries outside
the United States, (ii) automobile policies, and (iii) statutory benefits
applicable to Active Zimmer Employees and their beneficiaries.
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ARTICLE VII
INDEMNIFICATION
Section 7.01. INDEMNIFICATION BY ZIMMER. Without limiting any
rights or obligations provided for under the Contribution and Distribution
Agreement, Zimmer shall indemnify defend and hold harmless each of the
Xxxxxxx-Xxxxx Squibb Indemnitees from and against any and all Liabilities of the
Xxxxxxx-Xxxxx Squibb Indemnitees relating to, arising out of or resulting from
the failure of any member of the Xxxxxx Group to pay, perform or otherwise
discharge, any of the employment and employee benefit Liabilities and
obligations assumed or retained, and agreements made, by Zimmer pursuant to this
Agreement.
Section 7.02. INDEMNIFICATION BY XXXXXXX-XXXXX SQUIBB. Without
limiting any rights or obligations provided for under the Contribution and
Distribution Agreement, Xxxxxxx-Xxxxx Squibb shall indemnify, defend and hold
harmless each of the Zimmer Indemnitees from and against any and all Liabilities
of the Zimmer Indemnitees relating to, arising out of or resulting from the
failure of any member of the Xxxxxxx-Xxxxx Squibb Group to pay, perform or
otherwise discharge, any of the employment and employee benefit Liabilities and
obligations assumed or retained, and agreements made, by Xxxxxxx-Xxxxx Squibb
pursuant to this Agreement.
Section 7.03. INDEMNIFICATION PROCEDURES. The procedures for
claiming indemnification, the treatment of insurance proceeds, third-party
claims, cumulative remedies with respect to indemnification and the survival of
indemnification rights and obligations with respect to this Agreement shall be
the same as those provided for under the Contribution and Distribution
Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the
Distribution does not occur, then all actions and events that are, under this
Agreement, to be taken or occur effective as of the Distribution Date, or
otherwise in connection with the Distribution, shall not be taken or occur
except to the extent specifically agreed by Zimmer and Xxxxxxx-Xxxxx Squibb.
Section 8.02 PARTIES IN INTEREST. Neither of the parties
hereto may assign its rights or delegate any of its duties under this Agreement
without the prior written consent of each other party. This Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and permitted assigns.
Section 8.03 CONSENT OF THIRD PARTIES. If any provision in
this Agreement is dependant on the consent of any third party (such as a vendor)
and such consent is withheld, Xxxxxxx-Xxxxx Squibb and Zimmer shall use their
reasonable best efforts to implement the applicable provisions of this Agreement
to the fullest extent practicable. If any provision of this Agreement cannot be
implemented due to failure of such third party to consent, Xxxxxxx-Xxxxx
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Squibb and Zimmer shall negotiate in good faith to implement the provision in a
mutually satisfactory manner. The phrase "reasonable best efforts" as used in
this Agreement shall not be construed as to require the incurrence of any
non-routine or commercially unreasonable expense or liability or the waiver of
any right.
Section 8.04 FURTHER ASSURANCES AND CONSENTS. In addition to
the actions specifically provided for elsewhere in this Agreement, each of the
parties hereto will use its reasonable efforts to (a) execute and deliver such
further instruments and documents and take such other actions as any other party
may reasonably request in order to effectuate the purposes of this Agreement and
to carry out the terms hereof and (b) take, or cause to be taken, all actions,
and to do, or cause to be done, all things, reasonably necessary, proper or
advisable under applicable laws, regulations and agreements or otherwise to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, using its reasonable efforts to obtain any
consents and approvals and to make any filings and applications necessary or
desirable in order to consummate the transactions contemplated by this
Agreement; provided that no party hereto shall be obligated to pay any
consideration therefor (except for filing fees and other similar charges) to any
third party from whom such consents, approvals and amendments are requested or
to take any action or omit to take any action if the taking of or the omission
to take such action would be unreasonably burdensome to the party or the
business thereof.
Section 8.05 NON-SOLICITATION OF EMPLOYEES. Xxxxxxx-Xxxxx
Squibb and Zimmer each agree not to directly solicit or recruit the other
party's employees for a period of one year following the Distribution Date, if
such solicitation or recruitment would be disruptive or damaging or would
interfere with the operation of business of the other party. Notwithstanding the
foregoing, this prohibition on solicitation does not apply to actions taken by a
party either: (a) as a result of an employee's affirmative response to a general
recruitment effort carried out through a public solicitation or general
solicitation, or (b) as a result of an employee's initiative.
Section 8.06 SHARING OF PARTICIPANT INFORMATION. The
Xxxxxxx-Xxxxx Squibb Group and the Xxxxxx Group shall, subject to applicable
laws on confidentiality, share with each other and their respective agents and
vendors (without obtaining releases) all participant information necessary for
the efficient and accurate administration of each of the Xxxxxxx-Xxxxx Squibb
Plans and the Zimmer Plans. Xxxxxxx-Xxxxx Squibb and Zimmer and their respective
authorized agents shall be given, subject to applicable laws on confidentiality,
reasonable and timely access to, any may make copies of, all information
relating to the subjects of this Agreement in the custody of the other party, to
the extent necessary for such administration.
Section 8.07 REPORTING AND DISCLOSURE AND COMMUNICATIONS TO
PARTICIPANTS. While Zimmer is a Participating Company in the Xxxxxxx-Xxxxx
Squibb Health and Welfare Plans, Zimmer shall take all actions necessary or
appropriate to facilitate the distribution of all Xxxxxxx-Xxxxx Squibb Health
and Welfare Plan-related communications and materials to employees,
participants, and beneficiaries, including, but not limited to, summary plan
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descriptions and related summaries of material modification, summary annual
reports, investment information, prospectuses, notices, and enrollment materials
for the Xxxxxxx-Xxxxx Squibb Health and Welfare Plans. The Xxxxxxx-Xxxxx Squibb
Group and the Xxxxxx Group shall cooperate with each other and take all actions
to insure compliance with all reporting and disclosure requirements, including
the reporting and disclosure requirements of ERISA, which includes the
preparation of Form 5500 annual reports for the Xxxxxxx-Xxxxx Squibb Plans and
Zimmer Plans, where applicable.
Section 8.08 BENEFICIARY DESIGNATIONS. All beneficiary
designations made by Active Zimmer Employees for Xxxxxxx-Xxxxx Squibb Plans
shall be transferred to and be in full force and effect under the corresponding
Zimmer Plans until such beneficiary designations are replaced or revoked by the
Active Zimmer Employee who made the beneficiary designation.
Section 8.09 INCORPORATION OF THE CONTRIBUTION AND
DISTRIBUTION AGREEMENT. All provisions of the Contribution and Distribution
Agreement and any Ancillary Agreements are hereby incorporated by reference to
this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
XXXXXXX-XXXXX SQUIBB COMPANY
BY:
-----------------------------------------
Name:
Title:
XXXXXX HOLDINGS, INC.
BY:
-----------------------------------------
Name:
Title:
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