Exhibit 2(e)
EMPLOYEE AND
EMPLOYEE BENEFITS
TRANSITIONAL SERVICES AGREEMENT
This Employee and Employee Benefits Transitional Services Agreement (the
"Agreement") is made and entered into the 9th day of October, 2001 (the
"Closing Date") by and between Hunt Corporation ("Seller") and Seal Graphics
Technologies Corporation and Seal Graphics Americas Corporation (collectively
the "Buyers").
WHEREAS, Seller and Buyers have entered into an Asset Purchase Agreement dated
October 7, 2001 (the "Asset Purchase Agreement") pursuant to which the Buyers
agreed to purchase and the Seller agreed to sell certain assets of the Seller
related to the Business (as defined in the Asset Purchase Agreement) effective
as of September 30, 2001 at 11:59 p.m. (the "Effective Time"); and
WHEREAS, Buyers wish to hire certain employees of Seller to operate the Business
on behalf of the Buyers; and
WHEREAS, Seller and Buyers desire to enter into a separate agreement concerning
the rights of the parties respecting employment and employee benefit matters for
employees of the Business in the United States and Canada; and
WHEREAS, Seller and Buyers desire that except for relevant provisions in the
Asset Purchase Agreement, this Agreement shall be the exclusive agreement
covering such matters and shall supersede any and all prior written or oral
understandings respecting employment and employee benefit matters for employees
of the Business in the United States and Canada; and
NOW, THEREFORE, the parties hereto, intending to be bound hereby, agree as
follows:
I. Employees
As of the Effective Time, Buyers shall offer employment at will to those
employees actively employed by the Seller in the United States and Canada on
that date and who are identified on Schedule 9.7 of the Asset Purchase Agreement
("Scheduled Employees"). Except as otherwise set forth herein with respect to
the benefits to be provided by Buyers, any such offer of employment by Buyers to
a Scheduled Employee shall be at such wages and subject to such conditions as
Buyers shall determine. Scheduled Employees who accept employment with the
Buyers and those persons listed on Schedule 1 hereto shall become employees of
Buyers as of the Effective Time and shall be identified herein as "Buyers'
Employees".
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II. Benefits Transition Services
Seller agrees to handle all aspects of administration of Seller's plans
identified at Schedule II on behalf of Buyers' Employees during the period
commencing as of the Effective Time and ending on the date Buyers' Employees
participation in those plans terminates in accordance with the provisions of
Section IV.
III. Responsibility for Salary
Seller shall be responsible for all salary and salary related administrative
costs for all Business employees for the period prior to the Effective Time and
all salary and salary related administrative costs for Business employees other
than Buyers' Employees until their employment with the Seller is terminated.
Seller shall indemnify, defend and hold harmless Buyers from and against any
liability for all such salary and salary related administrative costs. Buyers
shall be responsible for all salary and salary related administrative costs for
Buyers' Employees for the period commencing as of the Effective Time. Seller
agrees to administer the payroll with respect to Buyers' Employees during the
period commencing as of the Effective Time and terminating on December 31, 2001
or on any earlier date designated by Buyers following reasonable notice (the
"Transition Period") at the compensation level in effect for each such Buyers'
Employee as of the Effective Time; no compensation adjustments (other than
cessation of compensation as a result of termination of employment or an unpaid
leave of absence) shall be made during such Transition Period. Buyers shall
indemnify, defend and hold harmless Seller from and against any liability for
all such salary and salary related administrative costs. For purposes of this
Agreement, salary related administrative costs shall include, but not be limited
to, FICA, FUTA and all administrative costs associated with administration of
the payroll (including payroll provider, consultant and attorney's fees), the
administrative costs to be determined, where possible, on a per capita basis.
IV. Termination of Coverage Under the Seller Health and Welfare Plans
Except as may otherwise be specifically provided in this Agreement,
participation of all Buyers' Employees in each Seller employee benefit plan
identified on Schedule II attached hereto shall terminate effective as of the
earliest to occur of (a) December 31, 2001, (b) the first date the employee is
eligible to participate in a plan maintained by Buyers providing a similar type
of benefit, or (c) the date the employee's employment with Buyers terminates,
except as otherwise provided under Section X with respect to COBRA continuation
coverage.
V. Seller 401(k) and Pension Plan
Except as may otherwise be specifically provided in this Agreement,
participation of all Buyers' Employees in Seller's 401(k) Plan and Seller's
Pension Plan shall terminate effective as of the Effective Time. Any Buyers'
Employee with an outstanding loan under Seller's 401(k) Plan may, however,
continue to repay such loan until the earliest of (a) December 31, 2001, (b) the
date the employee's employment with Buyers terminates or (c) the date such
employee's account balance is transferred to a 401(k) plan established by
Buyers.
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Seller shall make contributions to Seller's 401(k) plan for the Buyers'
Employees participating in such plan respecting salary deferral and matching
contributions for the period ending on the later of the Effective Time or the
date of termination of employment with Seller in accordance with the provisions
of such plan.
VI. Life and Travel Accident
All Buyers' Employees participating in Seller's life insurance, supplemental
life, business travel accident, and accidental death and disability plans shall
continue to participate in those plans in accordance with the terms of those
plans through the date their participation in those plans terminates in
accordance with the provisions of Section IV. Buyers shall be responsible for
the costs of such benefits normally paid by the Seller (determined in accordance
with Seller's standard practices and procedures and including any related
administrative costs) for the Buyers' Employees for the period commencing as of
the Effective Time and ending on the date they cease participation in the plans
in accordance with the provisions of Section IV.
VII. Health Plans
All Buyers' Employees participating in Seller's medical, dental, vision,
employee assistance, and prescription drug plans (collectively, "Seller's health
plans") shall continue to participate in those plans in accordance with the
terms of those plans through the date their participation in those plans
terminates in accordance with the provisions of Section IV. Seller shall charge
back a premium equivalent rate for purposes of Seller's health plans whereby
Buyers pay the premium and Seller is responsible for all Buyers' Employees'
claims incurred during the period commencing as of the Effective Time and ending
on the date they cease participation in the plans in accordance with the
provisions of Section IV. If the cost of the services provided to Buyers'
Employees under the health plan option administered by CIGNA (the "CIGNA
option") during the period commencing as of the Effective Time and ending on the
date of cessation of participation in Seller's health plans in accordance with
the provisions of Section IV (other than those services for which Seller is
responsible as provided in the next paragraph) exceeds the premium equivalent
paid by Buyers, Buyers shall be responsible for and shall reimburse Seller for
the difference between such actual cost and the premium equivalent, provided,
however, that Buyers' total cost with respect to the CIGNA option shall not
exceed $95,000. The cost of services provided to Buyers' Employees during the
period commencing as of the Effective Time and ending on the date Buyers'
Employees cease participation in the plans in accordance with the provisions of
Section IV shall be determined at the end of the claim run-out period under the
contract with CIGNA.
Seller shall be responsible for any expense for Buyers' Employees participating
in the plans in connection with services covered under the plans performed prior
to the Effective Time, regardless of when a claim is submitted; provided,
however, that claims for services performed prior to the Effective Time must be
submitted within the time limitations and in accordance with the terms and
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conditions contained in Seller's health plans. With respect to any Buyers'
Employee or his or her insured eligible dependents who as of the Effective Time
are confined in a hospital, sanitarium or other health care facility, Seller
shall also be responsible for any expense in connection with services covered
under the medical plan performed after the Effective Time and prior to discharge
from such facility or any facility to which the insured eligible dependent or
Buyers' Employee is directly transferred. For purposes of the dental plan,
Seller shall also be responsible for services provided after the Effective Time
during the "run-off" period specified under the particular dental option for
dentures, crowns, root canal therapy and orthodontic services if such services
initially commenced prior to the Effective Time.
VIII. Spending Accounts
All Buyers' Employees participating in Seller's medical and dependent care
spending accounts shall continue to participate in those plans in accordance
with the terms of those plans through the date their participation in those
plans terminates in accordance with the provisions of Section IV. Seller shall
be responsible for all claims submitted under its medical and dependent care
spending account plans by a Buyers' Employee who participates in such plan,
provided such claims were incurred prior to the date such Buyers' Employee's
participation in the plan terminates and provided such claims meet the
requirements set forth in the plan. Buyers' Employees must submit all such
claims prior to the 90th day following the date their participation in such plan
terminates.
IX. Disability
Buyers have contracted for short-term and long-term disability insurance
providing disability benefits substantially similar to those under Seller's
plans. Payroll deductions for these benefits shall continue during the
Transition Period referred to in Section III in the same amounts as prior to the
Effective Time.
X. COBRA Continuation Coverage
Each Buyers' Employee shall be permitted to continue coverage under Seller's
group health plans as required by applicable law. No Buyers' Employee shall be
entitled to COBRA continuation coverage from Buyers unless such individual or
his or her eligible dependents is a Buyers' Employee and thereafter incurs an
event which is covered by COBRA. Notwithstanding the foregoing, if any of
Buyers' Employees elect COBRA continuation coverage under Seller's group health
plans, Buyers shall remain responsible for and shall reimburse Seller for the
cost of the services provided to Buyers' Employees during such COBRA
continuation coverage period (even if the period extends beyond the Employees'
employment with Buyers) to the extent such cost exceeds the premium paid by such
Buyers' Employees, provided, however, that the amount to be paid by Buyer shall
not exceed 175 percent of the aggregate COBRA premium for such Buyers' Employees
minus the aggregate COBRA premium paid by such Buyers' Employees.
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XI. Notice Requirement
Buyers shall promptly notify Seller of any change in employment status of a
Buyers' Employee or of any other change affecting the compensation and/or
benefits payable or to be provided to any Buyers' Employee. Seller shall have no
obligation to attempt to recoup any amount paid to a Buyers' Employee for which
Seller did not receive timely notice that such Buyers' Employee was not entitled
to such amount and Buyers shall also reimburse Seller for all expenses,
including administrative-related expenses, incurred by Seller as a result of
Buyers' failure to provide timely notice.
XII. Reimbursement of Expenses
Buyers will reimburse Seller for any salaries, benefits, cost and expenses
Buyers are responsible for under this Agreement to the extent those salaries,
benefits, costs and expenses have been paid by Seller.
XIII. No Third Party Rights
Nothing in this Agreement is intended to or shall create any third party
beneficiary rights, it being understood that the agreements set forth herein are
between and for the benefit of only Seller and Buyers.
XIV. Amendments and Waivers
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
XV. Severability
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
XVI. Headings
Descriptive headings are for convenience only and shall not control or affect
the meaning or construction of any provision of this Agreement.
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XVII. Incorporation of Attachments
Any schedules annexed hereto are incorporated into this Agreement and shall be
deemed a part hereof as if set forth herein.
XVIII. Agreement; Asset Purchase Agreement
To the extent that the terms of this Agreement conflict with the terms of the
Asset Purchase Agreement, the terms of the Asset Purchase Agreement shall
prevail with respect to the interpretation of any right or obligation set forth
herein.
XVIII. Governing Law
This Agreement shall be governed by the laws of the State of Delaware.
This Agreement may be signed in one or more counterparts.
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Hunt Corporation
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Seal Graphics Technologies
Corporation
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Seal Graphics Americas Corporation