Form 8-K Scynexis Inc for July 17

Sample Employee Benefits Covenant

This Sample Employee Benefits Covenant sets forth the employee benefits matters applicable to the joint venture and the transfer of employees between ABC, XYZ, and JV Company.

Section 1.1 ABC Employee Benefits Matters.

(a) "ABC JV Employees" means:

(1) all individuals employed by ABC or any other member of the ABC Group who perform services primarily for the ABC JV Business who are actively at work immediately before the Closing;

(2) all individuals employed by ABC or any other member of the ABC Group who perform services primarily for the ABC JV Business who are absent from work with the ABC JV Business on account of sickness, maternity leave or other approved leave of absence or layoff immediately before the Closing and who return to active employment within 91 days following the Closing Date, or who have a right to return to active status or to be rehired under applicable law at any time after the Closing Date; and

(3) all individuals employed by ABC or any other member of the ABC Group who are not primarily employed in the ABC JV Business immediately before the Closing but who, with the consent of XYZ and ABC, and subject to any restrictions on solicitation and hiring of employees, are either designated by ABC before the Closing to become employees of JV Company, as the case may be, or, with consent of ABC, become employees of JV Company within ninety-one (91) days after the Closing Date.

(b) ABC Final List. Schedule 1.1(b) sets forth a preliminary list of ABC JV Employees who are to be offered employment with JV Company. As soon as reasonably practicable prior to the Closing Date, the initial JV Company CEO and the JV Company Chairman (or individuals designated by them) will agree on a final list of ABC JV Employees.

(c) Transfers of Employment; Employee Benefits.

(1) Transfers of Employment. JV Company shall continue the employment effective from and after the Closing of each of the ABC JV Employees included on the ABC Final List, with the same compensation and substantially identical benefits.

(2) Retention. ABC shall take commercially reasonable actions to encourage transfer of employment to JV Company, including possible retention incentives for certain ABC key employees.

(3) Establishment of Mirror Employee Benefit Plans. JV Company shall establish employee benefit plans that mirror the ABC employee benefit plans listed in Exhibit 1.1(c)(3).

(4) Crediting of Service. ABC Transferred Employees shall receive credit for years of service with ABC and its Affiliates before the Transfer Date.

(d) Severance Benefits. JV Company shall establish a severance plan that mirrors the ABC severance plan.

(e) Welfare Benefits.

(1) General. Each of ABC and its Affiliates shall be responsible for providing welfare benefits with respect to Claims incurred before the applicable Transfer Date.

(2) Flexible Spending Accounts. JV Company shall establish health care and dependent care reimbursement accounts substantially identical to the ABC FSA Plan.

(3) Employee Educational Assistance Plan. ABC shall reimburse eligible expenses completed prior to the Transfer Date; JV Company shall reimburse eligible expenses after the Transfer Date.

(f) Qualified Plans.

(1) Defined Contribution Plans.

(A) Effective as of the applicable Transfer Date, each ABC Transferred Employee shall cease further participation in the ABC Savings Plan and Trust.

(B) JV Company shall establish a defined contribution plan and related trust substantially similar to the ABC 401(k) Plan.

(2) Defined Benefit Pension Plans. ABC Transferred Employees shall receive credit for service and compensation with JV Company under the ABC DB Plan.

(g) Nonqualified Excess Retirement Plans.

(1) Excess Savings Plan. JV Company shall establish an excess savings plan mirroring the ABC Excess Savings Plan.

(2) Excess Pension Plan. ABC Transferred Employees shall continue to participate in the ABC Excess Pension Plan, subject to the stated conditions.

(h) Retiree Life and Medical. ABC Transferred Employees shall receive credit for service with JV Company for post-retirement medical and life insurance eligibility.

(i) Paid Time Off. Each ABC Transferred Employee shall have a PTO account balance with JV Company equal to the balance immediately prior to the Transfer Date.

(j) Worker's Compensation. JV Company shall assume liability for workers' compensation claims incurred on or after the Closing.

(k) Plant Closing Laws. JV Company shall be responsible for providing required notices after the Closing.

(l) Payroll Taxes. ABC and JV Company shall treat the transfer as described in the applicable Treasury Regulations.

(m) Miscellaneous. ABC and its Affiliates agree to furnish JV Company with necessary information and reasonable action to effect the transactions.

(n) Costs and Expenses. ABC shall bear certain design and pre-Closing establishment costs, and certain costs caused by pre-Closing resignation, redundancy, dismissal, or acts or omissions of the ABC Group.

Section 1.2 XYZ Employee Benefits Matters.

(a) "XYZ JV Employees" means:

(1) all individuals employed by XYZ or any other member of the XYZ Group who perform services primarily for the XYZ JV Business who are actively at work immediately before the Closing;

(2) all individuals employed by XYZ or any other member of the XYZ Group who perform services primarily for the XYZ JV Business who are absent from work with the XYZ JV Business on account of sickness, maternity leave or other approved leave of absence or layoff immediately before the Closing and who return to active employment within ninety-one (91) days following the Closing Date, or who have a right to return to active status or to be rehired under applicable law at any time after the Closing Date; and

(3) all individuals employed by XYZ or any other member of the XYZ Group who are not primarily employed in the XYZ JV Business immediately before the Closing but who, with the consent of XYZ and ABC, are designated by XYZ before the Closing or become employees of JV Company within ninety-one (91) days after the Closing Date.

(b) XYZ Final List. Schedule 1.1(b) sets forth a preliminary list of XYZ JV Employees who are to be offered employment with JV Company.

(c) Transfers of Employment; Employee Benefits.

(1) Transfers of Employment. JV Company shall continue the employment of each XYZ JV Employee included on the XYZ Final List with the same compensation and benefits pursuant to the JV Company Plans.

(2) Retention. XYZ shall take commercially reasonable actions to encourage transfer of employment to JV Company, including possible retention incentives for certain XYZ key employees.

(3) Crediting of Service. XYZ Transferred Employees shall be credited with years of service and may participate in the JV Company Plans on substantially similar terms.

(d) Severance Benefits. XYZ Transferred Employees shall be eligible to participate in the JV Company Severance Plan.

(e) Welfare Benefits.

(1) General. XYZ and its Affiliates shall be responsible for welfare benefits incurred before the applicable Transfer Date.

(2) Flexible Spending Accounts. JV Company shall honor payroll deduction elections and reimburse claims under the JV Company FSA Plan in accordance with the terms described herein.

(3) Employee Educational Assistance Plan. XYZ Transferred Employees shall be eligible to participate in the JV Company Employee Educational Assistance Plan.

(f) Qualified Plans.

(1) Defined Contribution Plans.

(A) Effective as of the applicable Transfer Date, each XYZ Transferred Employee shall cease further participation in the XYZ Savings Plan and Trust.

(B) XYZ shall direct a trust-to-trust transfer of account balances to the JV Company 401(k) Trust.

(C) ABC and XYZ shall develop a second qualified defined contribution retirement plan or add special enhanced features to the JV Company 401(k) Plan.

(2) Nonqualified Excess Savings Plan. XYZ Transferred Employees shall be eligible to participate in the JV Company Excess Savings Plan.

(3) Paid Time Off. JV Company shall assume accrued PTO obligations of each XYZ Transferred Employee through the Transfer Date.

(4) Worker's Compensation. JV Company shall assume liability for workers' compensation claims incurred on or after the Closing.

(5) Plant Closing Laws. JV Company shall be responsible for providing required notices after the Closing.

(6) Payroll Taxes. XYZ and JV Company shall treat the transfer as described in the applicable Treasury Regulations.

(7) Miscellaneous. XYZ and its Affiliates agree to furnish JV Company with necessary information and reasonable action to effect the transactions.

(8) Costs and Expenses. XYZ shall be liable for costs attributable to the splitting of the assets and Liabilities of the XYZ Employee Plans into the JV Company Benefit Plans.

Section 1.3 JV Company Incentive Plans and Programs. Prior to the Closing Date, ABC and XYZ shall develop annual and long-term incentive plans or programs for the ABC and XYZ Transferred Employees.

Section 1.4 Reserved Amendment Rights. JV Company shall have the ability to amend or terminate any of the JV Company Plans after the Closing Date, as it in its sole discretion decides.

Acknowledgements

I acknowledge that I have read and agree to the employee benefits covenant terms.

I acknowledge the transfer and continuation of benefits as applicable.

Comments