EXHIBIT 10.1

EMPLOYEE MATTERS AGREEMENT

BY AND BETWEEN

HENRY SCHEIN, INC.,

HS SPINCO,

AND

DIRECT VET MARKETING, INC.

DATED AS OF APRIL 20, 2018

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TABLE OF CONTENTS

 

          Page  

ARTICLE I DEFINITIONS

     4  

Section 1.1

   Definitions      4  

Section 1.2

   Interpretation      8  

ARTICLE II ASSIGNMENT OF EMPLOYEES

     8  

Section 2.1

   Transfer of Employment      8  

Section 2.2

   Employee Records      10  

ARTICLE III BENEFIT ARRANGEMENTS AND OTHER MATTERS

     11  

Section 3.1

   Termination of Participation in Harbor Benefit Plans      11  

Section 3.2

   Accrued Time Off      11  

Section 3.3

   Leaves of Absence      11  

Section 3.4

   Continuation or Establishment of Spinco Dedicated Benefit Plans; Continuation
of Voyager Benefit Plans      11  

Section 3.5

   Transition to Combined Company Benefit Plans; Service for Eligibility,
Vesting, and Benefit Purposes      12  

Section 3.6

   No Duplication or Acceleration of Benefits      13  

Section 3.7

   Employment Conditions      13  

Section 3.8

   Business Associate Agreement      13  

ARTICLE IV CASH AND EQUITY INCENTIVE COMPENSATION PLANS

     14  

Section 4.1

   Cash Incentives      14  

Section 4.2

   Equity Awards      14  

ARTICLE V QUALIFIED RETIREMENT PLANS

     16  

Section 5.1

   Defined Contribution Plans      16  

ARTICLE VI WELFARE PLANS

     17  

Section 6.1

   Spinco Welfare Plans      17  

Section 6.2

   Transitional Matters Under Spinco Welfare Plans      17  

Section 6.3

   Waiver of Conditions or Restrictions      19  

Section 6.4

   Insurance Contracts      19  

Section 6.5

   Third-Party Vendors      19  

Section 6.6

   Workers’ Compensation      19  

Section 6.7

   Flexible Spending Accounts      20  

ARTICLE VII GENERAL PROVISIONS, SECTION 280G, AND INDEMNIFICATION

     20  

Section 7.1

   Preservation of Rights to Amend      20  

Section 7.2

   Entire Agreement      20  

Section 7.3

   Binding Effect; No Third-Party Beneficiaries or Plan Amendment; Assignment   
  20  

Section 7.4

   Amendment; Waivers      21  

Section 7.5

   Remedies Cumulative      21  

Section 7.6

   Notices      21  

Section 7.7

   Counterparts      21  

 

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Section 7.8

   Severability      21  

Section 7.9

   Governing Law, Consent to Jurisdiction and Waiver of Right to Jury Trial     
21  

Section 7.10

   Performance      21  

Section 7.11

   Termination      21  

Section 7.12

   Headings      21  

Section 7.13

   Assignment      21  

Section 7.14

   280G Waivers and Consent      22  

Section 7.15

   Survival and Indemnification      22  

 

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EMPLOYEE MATTERS AGREEMENT

This EMPLOYEE MATTERS AGREEMENT, made and entered into effective as of April 20,
2018 (this “Agreement”), is by and between Henry Schein, Inc., a Delaware
corporation (“Harbor”), HS Spinco, Inc., a Delaware corporation and wholly owned
subsidiary of Harbor (“Spinco”), and Direct Vet Marketing, Inc. (“Voyager”).
Harbor, Spinco and Voyager are also referred to in this Agreement individually
as a “Party” and collectively as the “Parties.” Capitalized terms used herein
and not otherwise defined shall have the meanings ascribed to them in the
Agreement and Plan of Merger, by and among Harbor, Spinco, HS Merger Sub, Inc.,
a Delaware corporation and a direct, wholly-owned subsidiary of Spinco (“Merger
Sub”), Voyager, and Shareholder Representative Services LLC, of even date
herewith (as such agreement may be amended from time to time, the “Merger
Agreement”). Terms capitalized but not defined in this Agreement shall have the
meaning set forth in the Merger Agreement.

RECITALS

WHEREAS, Harbor has determined that it would be appropriate, desirable and in
the best interests of Harbor and the stockholders of Harbor to separate the
Spinco Business from Harbor;

WHEREAS, the Distribution Agreement and the Merger Agreement provide for the
execution and delivery of certain other agreements, including this Agreement, in
order to facilitate and provide for the separation of Spinco and its
subsidiaries from Harbor;

WHEREAS, pursuant to the Merger Agreement at the Effective Time, Merger Sub will
merge with and into Voyager, with Voyager surviving the Merger as a direct,
wholly-owned subsidiary of Spinco; and

WHEREAS, in order to ensure an orderly transition under the Distribution
Agreement and Merger Agreement, it will be necessary for the Parties to allocate
between them certain assets and liabilities with respect to certain employee
compensation and benefit plans and programs, and to address certain other
employment matters related to the transactions contemplated by the Distribution
Agreement and the Merger Agreement, and they have chosen to do so in this
Agreement.

NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the Parties hereby agree as follows:

 

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ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, the following terms shall
have the meanings set forth in this Section 1.1:

“Adjustment Ratio” means the quotient obtained by dividing the Spinco Stock
Value by the Harbor Stock Value.

“Agreement” means this Employee Matters Agreement, together with all Schedules
hereto and all amendments, modifications, and changes hereto entered into
pursuant to Section 7.4.

“Benefit Plan” means each “employee benefit plan” (as defined in Section 3(3) of
ERISA), and all other employee compensation, benefit, pension, profit-sharing,
savings, deferred compensation, bonus, incentive compensation, commission, stock
ownership, stock option, stock appreciation right, stock purchase, phantom
stock, restricted stock, restricted stock unit or other equity compensation,
performance, retirement, thrift, savings, employee loan, stock bonus, excess
benefits, supplemental unemployment, paid time off, vacation, perquisite,
tuition reimbursement, outplacement, sick leave, workers’ compensation,
cafeteria, disability, death benefit, severance, retention, termination,
redundancy, change in control, health and welfare (including post-retirement
health and life insurance), accidental death and disability insurance, pre-tax
premium conversion benefits, dependent care assistance programs, employee
assistance programs, flexible spending and fringe benefit plans, policies,
programs, contracts, agreements and arrangements, whether or not subject to
ERISA, written or unwritten, insured or self-insured, domestic or foreign;
provided, however, the term “Benefit Plan” does not include (i) any plan,
program or arrangement sponsored, maintained or administered by a Governmental
Authority or (ii) any multiemployer pension plan, multiemployer health and
welfare plan or other plan maintained by a joint board of union and employer
appointed trustees and to which employers are required to contribute for the
benefit of union employees as part of a collective bargaining agreement.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
codified at Section 601 et seq. of ERISA and at Section 4980B of the Code, and
any similar state or local Law.

“Combined Company Benefit Plan” means any Benefit Plan sponsored, maintained or
contributed to by Spinco or any of its Subsidiaries or which the Board of
Directors of Spinco or its designee following the Distribution affirmatively
establishes or designates as a Benefit Plan in which Spinco Group Employees
and/or Voyager Employees shall participate (which, for avoidance of doubt, may
be a Spinco Dedicated Benefit Plan, a Voyager Benefit Plan or a newly
established Benefit Plan) or in which, following the Distribution, Spinco Group
Employees and/or Voyager Employees shall participate by operation of law.

“Combined Company Welfare Plan” means any Combined Company Benefit Plan that is
a Welfare Plan.

“Disabled Employee” has the meaning set forth in Section 2.1(b).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations promulgated thereunder.

“Exchange” shall mean a stock exchange located in the United States to be
mutually agreed upon by the Parties in accordance with the Merger Agreement.

“FICA” has the meaning set forth in Section 2.1(c).

 

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“FUTA” has the meaning set forth in Section 2.1(c).

“Harbor” has the meaning set forth in the preamble to this Agreement.

“Harbor 401(k) Plan” means the Henry Schein, Inc. 401(k) Savings Plan, as
amended from time to time.

“Harbor Benefit Plan” means any Benefit Plan sponsored, maintained or
contributed, or required to be contributed to, by a Harbor Entity on or
immediately prior to the Distribution that is not a Spinco Dedicated Benefit
Plan.

“Harbor Former Employee” means an employee of any of the Harbor Entities at any
time prior to the Distribution whose employment with the applicable Harbor
Entity terminates before the Distribution (and who is not actively employed by
any of the Spinco Entities as of the Distribution), and who has not provided
services primarily to the Spinco Business while employed.

“Harbor Nonqualified Plans” means the deferred compensation plans (other than
the Harbor 401(k) Plan) sponsored, maintained or contributed to by the Harbor
Entities as of the Distribution, including without limitation the Harbor, Inc.
Supplemental Executive Retirement Plan and the Harbor, Inc. Deferred
Compensation Plan.

“Harbor Performance Restricted Stock” means a share of Harbor Common Stock
granted pursuant to the 2013 Plan that, as of immediately prior to the Effective
Time, is subject to forfeiture, the vesting of which is based on continued
service and the satisfaction of performance goals.

“Harbor PSU Award” means an award issued under the 2013 Plan representing a
general unsecured promise by Harbor to deliver to a participant shares of Harbor
Common Stock, the vesting of which is based on continued service and the
satisfaction of performance goals.

“Harbor Restricted Stock” means a share of Harbor Common Stock granted pursuant
to the 2013 Plan that, as of immediately prior to the Effective Time, is subject
to forfeiture, the vesting of which is based on continued service.

“Harbor Retained Employees” has the meaning set forth in Section 2.1(a).

“Harbor RSU Award” means an award issued under the 2013 Plan representing a
general unsecured promise by Harbor to deliver to a participant shares of Harbor
Common Stock, the vesting of which is based on continued service.

“Harbor Stock Value” means the average volume-weighted average price per share
of Harbor Common Stock on the Nasdaq based upon all trades on Nasdaq in shares
of Harbor Common Stock during the primary trading session on Nasdaq beginning at
9:30 a.m., New York City time (or such other time as is the official open of
trading on the Exchange) and ending at 4:00 p.m., New York City time (or such
other time as is the official close of trading on the Exchange) for the twenty
(20) Trading Days prior to the Effective Time, as listed on Nasdaq.

 

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“Harbor Transfer Employee” mean each employee of a Harbor Entity who is
transferred to a Spinco Entity on or before the Distribution.

“Harbor Welfare Plan” means any Welfare Plan sponsored, maintained or
contributed to by any one or more of the Harbor Entities on or immediately prior
to the Distribution, that is not a Spinco Welfare Plan.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996,
as amended, and the regulations promulgated thereunder.

“IRS” means the Internal Revenue Service.

“LTD” means long-term disability benefits.

“Nasdaq” means the NASDAQ Global Select Market.

“Parachute Payment Waiver” has the meaning set forth in Section 7.14(a).

“Party” or “Parties” has the meaning set forth in the preamble to this
Agreement.

“Performance Calculation” means (i) if the Distribution Date occurs in 2018, the
payout for the entire 2018 will be calculated based on actual performance
through the end of the last calendar month immediately prior to the Distribution
Date but adjusted up to the Distribution Date (with the targets being equitably
prorated), (ii) if the Distribution Date occurs between January 1, 2019, and
January 31, 2019, inclusive, the payout for the portion of 2019 occurring prior
to the Distribution Date shall be deemed to be achieved at 95% of target, and
the payout for the portion of 2019 occurring on or after the Distribution Date
shall be based on actual performance compared to targets established by Spinco,
and (iii) if the Distribution Date occurs on or after February 1, 2019, the
payout for the portion of 2019 occurring prior to the Distribution Date shall be
based on actual performance through the end of the last calendar month
immediately prior to the Distribution Date but adjusted up to the Distribution
Date (with the targets being equitably prorated), and the payout for the portion
of 2019 shall be based on actual performance compared to targets established by
Spinco.

“Spinco” has the meaning set forth in the preamble to this Agreement.

“Spinco 401(k) Plan” has the meaning set forth in Section 5.1(b).

“Spinco Dedicated Benefit Plan” means any Benefit Plan (i) sponsored, maintained
or contributed to by a Harbor or any of its Subsidiaries (including Spinco or
any of the Spinco Subsidiaries) or to which Harbor or any of its Subsidiaries
(including Spinco) is a party and (ii) in which any Spinco Group Employee,
Spinco Former Employee (or their beneficiaries) of Spinco who is a participant
following the Distribution, including without limitation, any Benefit Plan
sponsored, maintained, or contributed to by a Spinco Entity on or prior to the
Distribution.

“Spinco Entities” means Spinco and each of the Spinco Subsidiaries, including,
following the Distribution, the Surviving Corporation.

 

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“Spinco Former Employee” means (i) an employee of any of the Spinco Entities at
any time prior to the Distribution whose employment with the applicable Spinco
Entity terminates before the Distribution (and who is not actively employed by
any of the Harbor Entities as of the Distribution), and (ii) an employee of any
of the Harbor Entities at any time prior to the Distribution whose employment
with the applicable Harbor Entity terminates before the Distribution (and who is
not actively employed by any of the Spinco Entities as of the Distribution) who
provided services primarily to the Spinco Business while employed.

“Spinco Group Employee” means (i) any individual based in the U.S. who is an
active employee of a Harbor Entity primarily working in the Spinco Business
immediately prior to the transfer pursuant to Section 2.1(a) hereof, (ii) any
individual based outside of the U.S. who is an active employee of a Harbor
Entity who is dedicated exclusively to the Spinco Business immediately prior to
the transfer pursuant to Section 2.1(a) hereof, (iii) any individual who is an
active employee of a Spinco Entity immediately prior to the Distribution, and
(iv) any individual who otherwise would be included in (i) (ii), or (iii) above
but for the fact that he or she is absent from active employment on such date on
account of vacation, ordinary sick leave reasonably expected to result in an
absence of short duration, short-term disability, long-term disability, leave
under the federal Family and Medical Leave Act or leave under any similar Law,
or any other reason that is similar in nature and duration, including without
limitation and the avoidance of doubt, each Disabled Employee; provided,
however, that no individual shall be a “Spinco Group Employee” if his or her
employment is not transferred from the applicable Harbor Entity to a Spinco
Entity; and provided further that (x) if at least 30 days prior to the
Distribution Date, either of the two employees set forth on subsection (x) of
Annex A hereto notifies Harbor in writing that such employee does not wish to
have his or her employment transferred to a Spinco Entity in the Distribution,
and Harbor elects to retain such employee as a Harbor Retained Employee, such
employee shall remain a Harbor Retained Employee and shall not be treated as a
Spinco Group Employee, and (y) with the prior written consent of Voyager, one or
more individuals, including any individuals set forth on subsection (y) of Annex
A, who are active employees of a Harbor Entity but not primarily working in the
Spinco Business immediately prior to the Distribution may also be treated as
Spinco Group Employees.

“Spinco Option” means an option to purchase shares of Spinco Common Stock.

“Spinco Restricted Stock” means a share of Spinco Common Stock that is subject
to forfeiture, the vesting of which is based solely on continued service.

“Spinco RSU Award” means an award representing a general unsecured promise by
Spinco to deliver to a participant shares of Spinco Common Stock, the vesting of
which is based solely on continued service.

“Spinco Stock Value” means the closing price of Spinco Common Stock on the
Exchange immediately prior to the Effective Date (as traded on the “when-issued”
market).

“Spinco Welfare Plan” means any Welfare Plan sponsored, maintained or
contributed to by any one or more of the Spinco Entities as of the Distribution.

“Spinco Welfare Plan Participants” has the meaning set forth in Section 6.1.

 

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“STD” means short-term disability benefits.

“2013 Plan” means the Henry Schein, Inc. 2013 Stock Incentive Plan, as amended
from time to time.

“280G Approval” has the meaning set forth in Section 7.14(b).

“Voyager Benefit Plan” means any Benefit Plan (i) sponsored, maintained or
contributed to or required to be contributed to by Voyager or any of its
Subsidiaries or to which Voyager or any of its Subsidiaries is a party and
(ii) in which any current or former Voyager Employee or current or former
director or consultant or other service provider (or their beneficiaries) of
Voyager is a participant, on or immediately prior to the Effective Time.

“Voyager Common Stock” means the common stock of Voyager, par value $0.001 per
share.

“Voyager Employee” means as of any date, any individual who is an employee of
Voyager or its Subsidiaries (including employees who are not actively at work on
such date by reason of illness, vacation, leave of absence, short-term
disability or long-term disability).

“Voyager Option” means an option to purchase shares of Voyager Common Stock.

“Voyager Ratio” means the number of shares of Voyager Common Stock exchanged for
each share of Spinco Common Stock in the Merger.

“Welfare Plan” means, where applicable, a Benefit Plan that is a “welfare plan”
(as defined in Section 3(1) of ERISA) or a “cafeteria plan” under Section 125 of
the Code, and any benefits offered thereunder, and any other plan offering
health benefits (including medical, prescription drug, dental, vision, and
mental health and substance abuse), disability benefits, or life, accidental
death and disability, and business travel insurance, pre-tax premium conversion
benefits, dependent care assistance programs, employee assistance programs or
flexible spending accounts; provided, however, the term “Welfare Plan” does not
include (x) any workers compensation or similar insurance plans, programs or
policies or governmental plans or programs or (y) any plan or arrangement
providing for severance pay or termination benefits.

Section 1.2 Interpretation. The provisions of Section 10.3 of the Distribution
Agreement are hereby incorporated by reference.

ARTICLE II

ASSIGNMENT OF EMPLOYEES

Section 2.1 Transfer of Employment.

(a) Spinco Group Employees and Employee-Related Liabilities. Except as otherwise
set forth in this Agreement and subject to applicable Law, prior to the
Distribution, each Harbor Entity and Spinco Entity shall have taken such
actions, if any, as are necessary to ensure that each Spinco Group Employee,
whether or not actively working at the time of the Distribution, is employed by
a Spinco Entity effective not later than the Distribution, provided,

 

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that, with respect to Spinco Group Employees located outside of the United
States, subject to applicable Law, such transfer, if any, shall occur by the
Distribution or as soon as commercially reasonable thereafter, and, in
furtherance thereof, the parties shall cooperate reasonably and in good faith to
give effect to this covenant with respect to those Spinco Group Employees who
are currently employed outside of the United States by a Harbor Entity in
jurisdictions in which there is no Spinco Entity. If, despite its commercially
reasonable efforts, Harbor identifies, after the Distribution, an employee who
was inadvertently not employed by a Spinco Entity as of the Distribution, Harbor
shall promptly notify Spinco or its successor, as applicable, of such fact, and
the employment of such individual shall be transferred from a Harbor Entity to a
Spinco Entity as soon as commercially reasonable thereafter in accordance with
applicable Law. Any individual so transferred shall, from the effective date of
such transfer, be deemed a Spinco Group Employee under this Agreement. Each of
the Parties agrees to execute such documentation and take such other actions,
and, if necessary to comply with applicable Law, to seek to have the applicable
employees and/or their representatives execute such documentation or take such
other actions, if any, as may be necessary to effect the assignment and transfer
of employment to a Spinco Entity as described herein; provided, that the failure
of a Spinco Group Employee to execute any such documentation or take any such
action shall not prevent such Spinco Group Employee from being transferred to a
Spinco Entity unless otherwise required under applicable Law. Any employee who
Harbor intends to retain as an employee of a Harbor Entity on or following the
Distribution are collectively referred to herein as the “Harbor Retained
Employees.” The Harbor Entities shall assume or retain all employment-related
Liabilities related to the Harbor Retained Employees and Harbor Former
Employees, regardless of whether such Liability arises prior to, on, or after
the Distribution. Subject to Section 3.1 hereof and except as otherwise
specifically provided in this Agreement or Section 6.25 of the Merger Agreement,
the Spinco Entities shall automatically assume and/or retain all Liabilities to
or relating to (i) Spinco Group Employees and Spinco Former Employees (other
than with respect to payments to or relating to the Spinco Group Employees
payable, or that have accrued or been incurred, under any applicable Harbor
Benefit Plans for the time period prior to the Distribution Date), (ii) Spinco
Dedicated Benefit Plans, and (iii) Voyager Benefit Plans, in each case, unless
otherwise provided in this Section 2.1(a), regardless of whether such Liability
arises prior to, on or after the Distribution (including without limitation, but
subject to applicable Law, with respect to the Spinco Entities’ non-U.S.
operations). In addition, and for the avoidance of doubt, the Spinco Entities
shall assume or retain any Liabilities for severance, termination, redundancy,
retention or similar types of compensation or benefits payable to any Spinco
Group Employee arising out of the transfer of employment from the applicable
Harbor Entity to a Spinco Entity as described in this Section 2.1(a) (it being
the intention of the Harbor Entities that no such liability shall arise out of
any such transfer).

(b) Disabled Spinco Group Employees. Each Spinco Group Employee who, on or prior
to the Distribution, (i) participated in any Harbor Welfare Plan that provides
short and/or long-term disability benefits, (ii) became disabled as defined in
such plan, and (iii) who retains such status as of the Distribution (a “Disabled
Employee”) shall, except as otherwise required by applicable Law and
notwithstanding Section 2.1(a), remain a participant in the applicable Harbor
Welfare Plans to the extent provided therein in order to provide the STD or LTD
benefits as described in Section 6.2(a), and shall become an employee of a
Spinco Entity as of the date such Disabled Employee is able to return to active
employment; provided that such return-to-work date occurs within one year
following the Distribution Date, or at such later date if, but only to the
extent and under the conditions, required by applicable Law. To the extent
applicable, Spinco shall reimburse the applicable Harbor Entity for all costs
associated with providing benefits to any Disabled Employee in accordance with
Section 6.2 of this Agreement.

 

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(c) Payroll and Related Taxes. Unless provided otherwise by applicable Law, with
respect to the portion of the tax year ending on and including the Distribution
Date, Harbor will (i) be responsible for all payroll obligations, tax
withholding and reporting obligations and (ii) furnish a Form W-2 or similar
earnings statement (as applicable) to all Spinco Group Employees. Unless
provided otherwise by applicable Law, with respect to the remaining portion of
such tax year and thereafter, Spinco or its successor will (i) be responsible
for all payroll obligations, tax withholding, and reporting obligations for the
Spinco Group Employees and (ii) furnish a Form W-2 or similar earnings statement
(as applicable) to all Spinco Group Employees. With respect to each affected
Spinco Group Employee, Harbor and Spinco shall, and shall cause their respective
Affiliates to (to the extent permitted by applicable Law and practicable) (i) to
the extent applicable, treat Spinco (or the applicable Spinco Entity and any
successors thereto) as a “successor employer” and Harbor (or the applicable
Harbor Entity) as a “predecessor,” within the meaning of Sections 3121(a)(1) and
3306(b)(1) of the Code, to the extent appropriate, for purposes of taxes imposed
under the United States Federal Insurance Contributions Act, as amended
(“FICA”), or the United States Federal Unemployment Tax Act, as amended (“FUTA”)
and related state unemployment insurance laws, (ii) cooperate with each other to
avoid, to the extent possible, the restart of FICA and FUTA and related state
unemployment insurance laws upon or following the Distribution Date with respect
to each such Spinco Group Employee for the tax year during which the
Distribution Date occurs, and (iii) file tax returns, exchange wage payment
information, and report wage payments made by the respective predecessor and
successor employer on separate IRS Forms W-2 or similar earnings statements to
each such Spinco Group Employee for the tax year in which the Distribution Date
occurs, in a manner provided in Section 4.02(1) of Revenue Procedure 2004-53.

(d) At-Will Status. Notwithstanding the above or any other provision of this
Agreement (and except as provided under an applicable written employment
agreement or as required by Law), nothing in this Agreement shall create any
obligation on the part of any Harbor Entity or any Spinco Entity to (i) continue
the employment of any employee or (except as required by this Agreement or
applicable Law) permit the return from a leave of absence for any period
following the date of this Agreement or the Distribution or (ii) change the
employment status of any employee from “at will,” to the extent such employee is
an “at will” employee under applicable Law.

Section 2.2 Employee Records. Not later than seven (7) days prior to the
Distribution, subject to applicable Law, Harbor shall use commercially
reasonable standards to provide or cause to be provided to Spinco any and all
employment records and information (including, but not limited to, any personnel
files, Form I-9, Form W-2 or other IRS forms, and any non-U.S. documents) with
respect to the Spinco Group Employees in the possession of Harbor and its
Subsidiaries reasonably required by Spinco to enable Spinco to properly employ
the Spinco Group Employees and to carry out its obligations under this Agreement
and any applicable Law. Following the date on which such records and information
are provided, Spinco shall permit Harbor reasonable access to such records and
information, to the extent reasonably necessary for Harbor’s reasonable business
needs or as required for Harbor to comply with applicable Law.

 

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Each Party will indemnify and hold harmless the other from all Liabilities
arising from the indemnifying Party’s willful or grossly negligent misuse of the
records and information made available to the indemnifying Party by the
indemnified Party under the terms of this Agreement. All transfers of employee
records pursuant to this Section 2.2 shall be conducted in all material respects
in accordance with applicable Law, including, without limitation, all applicable
Laws concerning data protection or data privacy, and each of the Parties agrees
to execute such documentation and take such other actions, if any, as may be
necessary to effect the transfer of records and information as described herein
in accordance with applicable Law.

ARTICLE III

BENEFIT ARRANGEMENTS AND OTHER MATTERS

Section 3.1 Termination of Participation in Harbor Benefit Plans. Except as
otherwise specifically provided under this Agreement, effective as of the
Distribution, Spinco Group Employees shall cease active participation in
(including eligibility to contribute to) any Harbor Benefit Plan (unless
otherwise provided under the terms of the applicable Harbor Benefit Plan, the
terms of this Agreement, or applicable Law). Harbor shall retain (i) all
Liabilities to or relating to Harbor Retained Employees and Harbor Former
Employees under the Harbor Benefit Plans regardless of whether such Liability
arises, accrues, is incurred or is reported prior to, on, or after the
Distribution, and (ii) the obligation to make payments to or relating to Spinco
Group Employees and Spinco Former Employees under any applicable Harbor Benefit
Plans solely for the time period prior to the Distribution Date. The obligations
and Liabilities so retained by Harbor under this Section 3.1 include obligations
and Liabilities to or relating to Harbor Retained Employees and Harbor Former
Employees under the Harbor Nonqualified Plans, and, except to the extent set
forth in Article VI, the Harbor 401(k) Plan and the Harbor Welfare Plans. To the
extent that Harbor retains Liabilities under this Agreement, any Assets in
respect of such Liabilities shall also be retained by Harbor.

Section 3.2 Accrued Time Off. Following the Distribution, Spinco or its
successor, as applicable, shall recognize the Spinco Group Employees’ unused
vacation, holiday, sick leave, flex days, personal days, paid-time off and other
leave benefits that have been earned or awarded and are unused as of the
Distribution Date in such amounts as are reflected in the applicable HRIS system
as of the Distribution Date. Following the Distribution, Spinco or its
successor, as applicable, shall permit such earned or awarded leave benefits to
be utilized consistent with all applicable Laws, the business needs of the
Spinco Entities, and any applicable policy.

Section 3.3 Leaves of Absence. Following the Distribution, the applicable Spinco
Entity will continue to apply the leave policies applicable to inactive Spinco
Group Employees who are on an approved leave of absence as of the Distribution
Date in accordance with the terms of such policies applicable to the Spinco
Group Employees as of immediately prior to the Distribution Date. For purposes
of such policies, leaves of absence taken by Spinco Group Employees prior to the
Distribution shall be deemed to have been taken as employees of a Spinco Entity.

Section 3.4 Continuation or Establishment of Spinco Dedicated Benefit Plans;
Continuation of Voyager Benefit Plans.

 

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(a) For Spinco Group Employees. Subject to Sections 3.4(c) and 3.5, the Spinco
Dedicated Benefit Plans shall remain in effect and continue to cover eligible
Spinco Group Employees (and eligible former Spinco Group Employees) in
accordance with the terms of such plans (as may be modified from time to time in
accordance with such terms), applicable Law, or any applicable contractual
obligations. Except as otherwise as provided for in this Agreement, prior to the
Distribution, Spinco may in consultation with Voyager, (i) establish Spinco
Dedicated Benefit Plans for the Spinco Group Employees, to be effective no later
than the Distribution, and (ii) terminate Spinco Dedicated Benefit Plans, as
permitted pursuant to the applicable benefit plan. Harbor and Spinco shall
reasonably cooperate to make sure that, to the extent commercially reasonable,
no Harbor Transfer Employee experiences a lapse in coverage as a result of the
Distribution, taking into account any special considerations that may apply in
the event that the Distribution Date occurs near the end of a calendar year.

(b) For Voyager Employees. Subject to Section 3.4(c) and 3.5, the Voyager
Benefit Plans shall remain in effect and continue to cover eligible Voyager
Employees (and eligible former Voyager Employees) in accordance with the terms
of such plans (as may be modified from time to time in accordance with such
terms), applicable Law, or any applicable contractual obligations.

(c) After the Effective Time. As of the Effective Time and during subsequent
periods, the Board of Directors of Spinco or its successor, as applicable, or
its designee shall have full discretion to determine the scope, terms and
conditions of the Spinco Dedicated Benefit Plans, the Voyager Benefit Plans and
the Combined Company Benefit Plans, subject only to applicable Law and the terms
of any applicable contractual obligations.

Section 3.5 Transition to Combined Company Benefit Plans; Service for
Eligibility, Vesting, and Benefit Purposes. Whenever following the date of this
Agreement a Spinco Group Employee or Voyager Employee commences to participate
in a Combined Company Benefit Plan in which such Spinco Group Employee or
Voyager Employee did not previously participate, Spinco or its successor, as
applicable, shall use its commercially reasonable efforts to cause there to be
no interruption of coverage with respect to the type of benefit being provided
under such Combined Company Benefit Plan. In addition, except as otherwise
provided in any other provision of this Agreement, and except as shall derive
from application of a uniform rule applied to all similarly situated employees,
from and after the Distribution, the Combined Company Benefit Plans shall, and
Spinco shall use commercially reasonable efforts to cause each Spinco Entity to,
recognize each Spinco Group Employee’s and Voyager Employee’s service prior to
the Distribution Date (including (x) for the Spinco Group Employees, service
with any Harbor Entity or Spinco Entity, as applicable prior to the Distribution
Date, and (y) for the Voyager Employees, service with Voyager or any Subsidiary
prior to the Distribution Date) for purposes of eligibility and vesting under
any Combined Company Benefit Plan and for determination of level of benefits
under any Combined Company Benefit Plan that is a vacation, paid leave,
paid-time off or similar plan or severance or other termination benefit plan, to
the same extent such service was recognized as of the Distribution Date.
Notwithstanding the foregoing, nothing herein shall require a Spinco Entity or
any Combined Company Benefit Plan to credit service prior to the Distribution
Date for purposes of any equity award or other equity-based benefit or
equity-based compensation, or retention benefit, that may be established by a
Spinco Entity at any time prior to, on or after the Distribution Date, except as
otherwise may be required by applicable Law.

 

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Section 3.6 No Duplication or Acceleration of Benefits. Notwithstanding anything
to the contrary in this Agreement, the Distribution Agreement or any other
Transaction Agreement, no participant in the Harbor Benefit Plans, Spinco
Dedicated Benefit Plans, Voyager Benefit Plans, or Combined Company Benefit
Plans shall receive benefits to the extent that receipt of such benefits would
result in duplication of benefits provided by another Harbor Benefit Plan,
Spinco Dedicated Benefit Plan, Voyager Benefit Plan, or Combined Company Benefit
Plan. Furthermore, unless expressly provided for in this Agreement, the
Distribution Agreement or in any other Transaction Agreement or required by
applicable Law, no provision in this Agreement shall be construed to create any
right to accelerated vesting or entitlements under any Benefit Plan on the part
of any Harbor Retained Employee, Harbor Former Employee, Spinco Former Employee,
Spinco Group Employee or Voyager Employee.

Section 3.7 Employment Conditions. Spinco hereby covenants that for the period
commencing on the Effective Date and ending on the date nine months immediately
following the Effective Date (or, if earlier, the date of termination of the
applicable Spinco Group Employee), (i) each Spinco Group Employee shall receive
an annual base rate of salary or wages and annual target cash incentive
opportunities that in each case are no less favorable to such Spinco Group
Employee than those in effect on the date of this Agreement, (ii) Spinco Group
Employees, in the aggregate, shall receive qualified defined contribution plan
or similar benefits, health and welfare plan benefits, severance benefits, and
target equity opportunities, that are substantially comparable in the aggregate
to those qualified defined contribution plan or similar benefits, health and
welfare plan benefits, severance benefits, and target equity opportunities,
provided by the Harbor Entities, Spinco Entities or their Affiliates, as
applicable, to Spinco Group Employees in effect on the date of this Agreement;
provided that Spinco Group Employees located outside of the U.S. shall, to the
extent required by applicable Law, also receive substantially comparable defined
benefit pension benefits. Notwithstanding the foregoing, the Parties understand
and agree that, any time prior to the Effective Time, at the request of a Spinco
Entity, or at the request of Voyager, the Parties shall take any actions
reasonably necessary to amend, adopt or terminate any Spinco 401(k) Plan or
Voyager Benefit Plan that is a 401(k) plan, and any other Spinco Dedicated
Benefit Plans and Voyager Plans, in each case, effective as of immediately prior
to the Effective Time, contingent upon consummation of the Closing; provided
that any such amendment, adoption, or termination shall not affect or in any way
interfere with Spinco’s covenants under this Section 3.7, and shall not create
any additional Liability for any Harbor Entity or Spinco Entity. It is the
Parties’ intent that actions pursuant to this Section 3.7 will not trigger
severance, redundancy, or similar obligations or Liabilities with respect to any
Spinco Group Employees. Spinco also hereby covenants that for the period
commencing on the Effective Date and ending on the date nine months immediately
following the Effective Date, each Harbor Transfer Employee shall be entitled to
receive severance and other termination benefits that are no less favorable to
such Harbor Transfer Employee than those in effect on the date of this
Agreement.

Section 3.8 Business Associate Agreement. The Parties acknowledge that the
Harbor Entities or the Spinco Entities may provide administrative services for
certain of the other Party’s benefit programs for a transitional period under
the terms of the Transition Services Agreement.

 

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The Parties agree to enter into a business associate agreement (if required by
HIPAA or other applicable health information privacy Laws) in a customary form
to be mutually agreed in connection with the provision of such services.

ARTICLE IV

CASH AND EQUITY INCENTIVE COMPENSATION PLANS

Section 4.1 Cash Incentives. With respect to the fiscal year in which the
Distribution occurs, (x) the applicable Spinco Entity shall maintain a bonus
plan for the benefit of Spinco Group Employees with substantially the same terms
and conditions (including performance goals and bonus targets, as equitably
adjusted by Spinco following the Distribution to the extent necessary or
appropriate to provide a substantially similar incentive opportunity) as the
annual bonus plan applicable to such Spinco Group Employees immediately prior to
the Distribution, (y) as soon as reasonably practicable following the end of
such fiscal year, the applicable Spinco Entity will pay bonuses payable to each
Spinco Group Employee based on the Performance Calculation, and (z) to the
extent that such annual bonuses are not reflect in the Spinco Working Capital
Adjustment (as the term is defined in the Distribution Agreement), Harbor shall
reimburse Spinco for the prorated portion of the total of such bonus payments
based on the applicable Spinco Group Employees’ service from the start of such
fiscal year until immediately prior to the Distribution Date promptly but in no
event later than thirty (30) days after the presentation of a statement setting
forth the amount of reimbursement to which Spinco is entitled; provided,
however, that, for the avoidance of doubt, no such reimbursement shall be
payable with respect to any discretionary bonus payments made by any Spinco
Entity to any Spinco Group Employee. Except as provided in the immediately
preceding sentence, from and after the Distribution, Spinco shall be solely
responsible for funding, paying, and discharging all obligations and Liabilities
relating to the cash incentive awards that any Spinco Group Employee is eligible
to receive under any commission plan in which the Spinco Group Employees
participate, whether such obligation or Liability arises, accrues, is incurred
or is reported prior to, on, or after the Distribution, and no Harbor Entity
shall have any obligations or Liabilities with respect thereto.

Section 4.2 Equity Awards.

(a) Harbor PSU Awards or Harbor Performance Restricted Stock. Each outstanding
Harbor PSU Award or share of Harbor Performance Restricted Stock that is held by
a Spinco Group Employee as of the Effective Time shall, subject to any
requirements and restrictions under applicable Law, be converted into a Spinco
RSU Award or share of Spinco Restricted Stock, as applicable, and shall
otherwise be subject to the same terms and conditions and contain the same
features (including, without limitation, the “rule of 70” feature, to the extent
applicable) after the Effective Time as the terms and conditions applicable to,
and the features contained in, such Harbor PSU Award or Harbor Performance
Restricted Stock immediately prior to the Effective Time; provided, however,
that (x) from and after the Effective Time, the number of shares of Spinco
Common Stock covered by such Spinco RSU Award or share of Spinco Restricted
Stock, rounded to the nearest whole share, shall be equal to the quotient
obtained by dividing (i) 100 % of the target number of shares of Harbor Common
Stock covered by such Harbor PSU Award or Harbor Performance Restricted Stock
immediately prior to the Effective Time by (ii) the Adjustment Ratio,
(y) immediately prior to the Effective Time,

 

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the Harbor PSU Awards and shares of Harbor Performance Restricted Stock held by
Spinco Group Employees shall partially performance-vest to the extent described
in the immediately following sentence, and (z) subject to the immediately
following sentence, the performance goals for vesting of the unvested portion of
such Spinco RSU Award or share of Spinco Restricted Stock shall be adjusted to
reflect the new Spinco business in a manner intended to be reasonably equitable,
as determined by Spinco after good faith consultation with Harbor. With respect
to the Harbor PSU Awards and shares of Harbor Performance Restricted Stock held
by Spinco Group Employees immediately prior to the Effective Time: (i) if the
Distribution Date occurs in 2018, performance-vesting through the end of the
2018 performance year will be calculated based on actual performance from the
start of the performance cycle for such award through the end of the last
calendar month immediately prior to the Distribution Date but adjusted up to the
Distribution Date, and (ii) if the Distribution Date occurs on or after
January 1, 2019, performance-vesting through the end of the last calendar month
immediately prior to the Distribution Date will be calculated based on actual
performance from the start of the performance cycle for such award through the
end of the last calendar month immediately prior to the Distribution Date but
adjusted up to the Distribution Date. Nothing herein is intended to change the
time-based vesting schedule that applies to the awards or the timing of payment
of the award in accordance with the terms and conditions of the existing award
agreements.

(b) Harbor RSU or Restricted Stock. Each outstanding Harbor RSU Award or share
of Harbor Restricted Stock that is held by a Spinco Group Employee as of the
Effective Time shall, subject to any requirements and restrictions under
applicable Law, be converted into a Spinco RSU Award or share of Spinco
Restricted Stock, as applicable, and shall otherwise be subject to the same
terms and conditions and contain the same features (including, without
limitation, the “rule of 70” feature, to the extent applicable) after the
Effective Time as the terms and conditions applicable to, and the features
contained in, such Harbor RSU Award or Harbor Restricted Stock immediately prior
to the Effective Time. The number of shares of Spinco Common Stock covered by
such Spinco RSU Award or share of Spinco Restricted Stock, rounded to the
nearest whole share, shall be equal to the quotient obtained by dividing (i) the
number of shares of Harbor Common Stock covered by such Harbor RSU Award or
Harbor Restricted Stock immediately prior to the Effective Time by (ii) the
Adjustment Ratio.

(c) Voyager Options. Each Voyager Option held by a Voyager Employee that by its
terms (in the normal course without regard to acceleration) is scheduled to vest
after the Effective Time shall, subject to any requirements and restrictions
under applicable Law, be converted into a Spinco Option and shall otherwise be
subject to the same terms and conditions and contain the same features after the
Effective Time as the terms and conditions applicable to, and the features
contained in, such Voyager Option immediately prior to the Effective Time;
provided, however, that from and after the Effective Time:

(i) the number of shares of Spinco Common Stock subject to such Voyager Option,
rounded down to the nearest whole share, shall be equal to the quotient obtained
by dividing (A) the number of shares of Voyager Common Stock subject to such
Voyager Option immediately prior to the Effective Time by (B) the Voyager Ratio;
and

 

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(ii) the per share exercise price of such Spinco Option, rounded up to the
nearest whole cent, shall be equal to the product obtained by multiplying
(A) the per share exercise price of such Voyager Option immediately prior to the
Effective Time by (B) the Voyager Ratio.

(d) Miscellaneous. Harbor, Spinco, and Voyager shall take any and all actions
reasonably necessary to effectuate the transactions contemplated by this
Section 4.2. Without limiting the generality of the foregoing, as soon as
practicable after the Effective Time, Spinco or its successor, as applicable,
shall prepare and file with the SEC a registration statement registering a
number of shares of Spinco Common Stock necessary to fulfill Spinco’s
obligations under this Section 4.2. Following the conversions contemplated by
this Section 4.2, no Harbor Entity shall have any obligation or Liability with
respect to any Harbor PSU Award, Harbor RSU Award, share of Harbor Restricted
Stock or share of Harbor Performance Restricted Stock to or with respect any
Spinco Group Employee or Spinco Former Employee.

ARTICLE V

QUALIFIED RETIREMENT PLANS

Section 5.1 Defined Contribution Plans.

(a) Vesting under Harbor 401(k) Plan. As of the Distribution, the Harbor
Entities agrees to take all necessary action to fully vest each Spinco Group
Employee who is a participant in any Harbor 401(k) Plan.

(b) Amendment of the Spinco 401(k) Plans. Effective as of the Distribution Date,
Spinco shall, or shall have caused one or more of its Subsidiaries to, continue
to maintain, establish or adopt one or more defined contribution savings plans
and related trusts intended to satisfy the requirements of Sections 401(a) and
401(k) of the Code (each such defined contribution savings plan, a “Spinco
401(k) Plan”).

(c) Spinco Group Employee Accounts Rollover from Harbor 401(k) Plan. As soon as
commercially possible following the Distribution Date, Harbor shall use
commercially reasonable efforts to cause that, effective as of the Distribution
Date, the Spinco Group Employees who, prior to the Distribution, participated in
the Harbor 401(k) Plan that is not a Spinco Dedicated Benefit Plan, shall be
entitled to distribution from such Harbor 401(k) Plan, and Spinco shall use its
commercially reasonable efforts to cause one or more Spinco 401(k) Plans to
accept a “direct rollover” (as described in Section 401(a)(31) of the Code) to
the applicable Spinco 401(k) Plan. If such a Spinco Group Employee elects a
“direct rollover” (as described in Section 401(a)(31) of the Code) of the
account balances (including direct rollovers of outstanding loans and any
promissory notes or other documents evidencing such loans, but solely to the
extent permitted under the terms and conditions of the applicable Spinco 401(k)
Plan) each of the applicable Harbor Entities and the applicable Spinco Entities
shall use commercially reasonable efforts to cause the administrators of their
respective 401(k) plans to accomplish such rollover. During the period following
the Distribution Date and preceding any rollover pursuant to this
Section 5.1(c), the applicable Harbor Entities shall use commercially reasonable
efforts to take such action as is necessary to prevent a default by any such
Spinco Group Employee with an outstanding loan under the Harbor 401(k) Plan
unless and until such

 

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Spinco Group Employee fails to make a timely payment on such loan. With respect
to the fiscal year in which the Effective Date occurs, Spinco shall make to the
Spinco 401(k) Plan all employer contributions (including employer matching
contributions) that would have been made by Harbor on behalf of the Spinco Group
Employees that participated in the Harbor 401(k) Plan as if the transactions
contemplated by this Agreement had not occurred, regardless of any service or
end of year employment requirements and assuming the Spinco Group Employees
would have continued to contribute 401(k) contributions at the level immediately
in effect prior to the Distribution Date.

ARTICLE VI

WELFARE PLANS

Section 6.1 Spinco Welfare Plans. In accordance with Section 3.4, on or prior to
the Distribution, Spinco shall, or shall cause another Spinco Entity (in
consultation with Voyager) to, continue to maintain, or establish and adopt
Spinco Welfare Plans which will provide welfare benefits to each Spinco Group
Employee who is a participant in any of the Harbor Welfare Plans or Spinco
Welfare Plans (and their eligible spouses, domestic partners and dependents, as
the case may be) (collectively, the “Spinco Welfare Plan Participants”).
Coverage and benefits under any Spinco Welfare Plans shall, following the
Effective Time, be provided to the Spinco Welfare Plan Participants on an
uninterrupted basis, to the extent commercially reasonable, under the same
Spinco Welfare Plan or under any analogous or newly established Spinco Welfare
Plans.

Section 6.2 Transitional Matters Under Spinco Welfare Plans.

(a) Treatment of Claims Incurred.

(i) Liability for Claims. With respect to unpaid covered claims incurred on or
prior to the Distribution by any Spinco Welfare Plan Participant under any
Harbor Welfare Plans, including claims that are self-insured and claims that are
fully insured through third-party insurance, Harbor shall retain and be
responsible for the payment for such claims or shall cause such Harbor Welfare
Plans to fully perform, pay and discharge all such claims, as the case may be,
and except as provided in Section 6.2(a)(iv), no Spinco Entity shall be
responsible for any Liability with respect to any such claims. Claims incurred
by Spinco Welfare Plan Participants (i) in the ordinary course of business under
any Spinco Welfare Plan prior to the Distribution, and (ii) after the
Distribution, shall be the sole responsibility of the Spinco Welfare Plan and
the Spinco Entities. In the event that a claim incurred by a Spinco Welfare Plan
Participant after the Distribution is paid by Harbor or an Harbor Welfare Plan,
Spinco shall reimburse Harbor for such payment, solely to the extent such claim
is a covered claim under a Spinco Welfare Plan by its express terms but is not
paid by Spinco or its insurance carriers, in full within thirty (30) days after
the delivery by Harbor to Spinco of an invoice therefor together with such
supporting documentation as Spinco may reasonably request.

(ii) Claims Incurred. For purposes of this Section 6.2(a), a claim or expense is
deemed to be incurred (A) with respect to medical (including continuous
hospitalization), dental, vision and/or prescription drug benefits, upon the
rendering of health services giving rise to such claim or expense; (B) with
respect to life insurance,

 

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accidental death and dismemberment and business travel accident insurance, upon
the occurrence of the event giving rise to such claim or expense; and (C) with
respect to short- and long-term disability benefits, upon the date of an
individual’s disability, as determined by the disability benefit insurance
carrier or claim administrator, giving rise to such claim or expense. For
avoidance of doubt, unless required otherwise by applicable Law, a claim
incurred by a Person who is actively at work shall for purposes of this
Section 6.2 be deemed unrelated to any prior claim notwithstanding that the
claim may be the same as, or substantially similar to, a prior claim made by
such Person.

(iii) Long Term Disability Benefits. The applicable Harbor Welfare Plan
providing LTD to Disabled Employees on or immediately prior to the Distribution,
if any, shall continue to provide such benefits to such employees after the
Distribution to the extent required by applicable Law as permitted under the
terms and conditions of such Harbor Welfare Plan. After the Distribution, the
Spinco Entities shall be solely responsible for providing LTD to eligible
employees under Spinco Welfare Plans who become disabled after the Distribution.

(iv) Disability Benefits. With respect to Disabled Employees who are receiving
STD on or immediately prior to the Distribution under applicable Harbor Welfare
Plans, the applicable Harbor Welfare Plan shall continue to provide such STD,
but Spinco will be responsible for paying for such benefits for the period after
the Distribution until such time as those STD benefits terminate in accordance
with the terms of such Harbor Welfare Plan. In the event any such Disabled
Employee or Spinco Group Employee, after the Distribution becomes eligible to
transition directly from receiving STD to receiving LTD, Harbor, the applicable
Harbor Entity, or the applicable Harbor Welfare Plan will provide the LTD to
which such Disabled Employee is entitled (taking into account, if applicable,
the extent to which such Disabled Employee has elected such coverage and has
made the required contributions therefor). After the Distribution, the Spinco
Entities shall be solely responsible for providing STD and LTD to eligible
employees under Spinco Welfare Plans who become disabled after the Distribution.

(b) COBRA. The Harbor Entities and the applicable Harbor Welfare Plans shall be
solely responsible for providing continued health coverage required by COBRA to
employees (and their qualifying beneficiaries) who experience a COBRA qualifying
event (as defined in Section 4980B of the Code) under such Harbor Welfare Plans
on or prior to the Distribution, and shall be solely responsible for all claims,
obligations and Liabilities incurred under the applicable Harbor Welfare Plan as
a result of such COBRA coverage. Spinco or its successor, as applicable, and the
applicable Spinco Welfare Plans shall be solely responsible for providing
continued health coverage to the extent required by COBRA to (i) Spinco Group
Employees and Spinco Former Employees who were employed by a Spinco Entity but
were not covered by a Harbor Welfare Plan prior to the Distribution, and
(ii) all Spinco Group Employees who experience a COBRA qualifying event after
the Distribution, and shall be solely responsible for all claims, obligations
and Liabilities incurred under the applicable Spinco Welfare Plan as a result of
such COBRA coverage.

 

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Section 6.3 Waiver of Conditions or Restrictions. Without limiting the
generality of Section 3.5, with respect to Spinco Group Employees who
participated in Harbor Welfare Plans prior to the Distribution, the Spinco
Welfare Plans will use commercially reasonable efforts to have waived all
eligibility periods, limitations as to preexisting conditions, exclusions,
service conditions, waiting periods or evidence of insurability requirements
that would otherwise be applicable to the Spinco Welfare Plan Participant
following the Distribution Date to the extent that such employee had previously
satisfied any such limitation or requirement under the corresponding Harbor
Welfare Plan as of the Distribution Date. In addition, following the
Distribution Date, (a) the Combined Company Welfare Plans will use commercially
reasonable efforts to have waived all eligibility periods, limitations as to
preexisting conditions, exclusions, service conditions, waiting periods or
evidence of insurability requirements that would otherwise be applicable to any
Spinco Group Employee or Voyager Employee to the extent that such employee had
previously satisfied any such limitation or requirement under the corresponding
Harbor Benefit Plan, Spinco Welfare Plan or Voyager Benefit Plan as the date of
commencement of participation in such Combined Company Welfare Plan and
(b) Spinco shall use commercially reasonable efforts to cause the Combined
Company Welfare Plans to credit Spinco Group Employees and Voyager Employees
(and their respective eligible dependents) for any deductibles, co-payments or
other co-insurance and out-of-pocket expenses paid in the plan year under the
Harbor Benefit Plan, Spinco Welfare Plan or Voyager Benefit Plan prior to the
transition of coverage for purposes of satisfying applicable deductible,
co-insurance and maximum out-of-pocket expenses under any corresponding
applicable Combined Company Welfare Plan with respect to the plan year in which
the transition occurs.

Section 6.4 Insurance Contracts. To the extent any Harbor Welfare Plan or Spinco
Welfare Plan is funded through the purchase of an insurance contract or is
subject to any stop loss contract, Harbor and Spinco will cooperate and each
will use its reasonable best efforts to maintain any pricing discounts or other
preferential terms for both Harbor and Spinco for a reasonable term. Neither
Party shall be liable for failure to obtain such insurance contracts, pricing
discounts, or other preferential terms for the other Party. Each Party shall be
responsible for any new or additional premiums, charges, or administrative fees
that such Party may incur with respect to its insurance coverage pursuant to
this Section 6.4.

Section 6.5 Third-Party Vendors. Except as provided below, to the extent any
Harbor Welfare Plan or Spinco Welfare Plan is administered by a third-party
vendor, Harbor and Spinco will cooperate and each will use its reasonable best
efforts to replicate any contract with such third-party vendor for Spinco, to
the extent necessary, and to maintain any pricing discounts or other
preferential terms for both Harbor and Spinco for a reasonable term. Neither
Party shall be liable for failure to obtain such pricing discounts or other
preferential terms for the other Party. Each Party shall be responsible for any
new or additional premiums, charges, or administrative fees that such Party may
incur with respect to its contracts pursuant to this Section 6.5.

Section 6.6 Workers’ Compensation. With respect to claims for workers
compensation, (a) the Harbor Entities shall be responsible for claims for
workers compensation incurred in respect of Harbor Former Employees and Harbor
Retained Employees, whether incurred prior to, at or following the Distribution,
and (b) the Spinco Entities shall be responsible for all claims for workers
compensation in respect of Spinco Former Employees and Spinco Group Employees
whether incurred prior to, at or following the Distribution. For purposes of
this Section 6.6, claims shall be deemed to be incurred upon the occurrence of
the injury giving rise to such claim.

 

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Section 6.7 Flexible Spending Accounts. The applicable Spinco Entity shall use
commercially reasonable efforts to establish, effective as of the Effective
Date, flexible spending accounts for medical and dependent care expenses for the
Harbor Transfer Employees and shall credit such accounts with the amounts
credited as of the Effective Date under comparable flexible spending accounts
maintained for the benefit of the Harbor Transfer Employees by Harbor from the
beginning of the plan year to the Effective Date. As soon as administratively
practicable after the Effective Date, (i) Harbor shall pay, or cause to be paid,
to Spinco in cash the amount, if any, by which aggregate contributions made by
Harbor Transfer Employees to flexible spending accounts maintained by Harbor
exceeded the aggregate benefits provided to such Harbor Transfer Employees as of
the Effective Date, or (ii) Spinco shall pay, or cause to be paid, to Harbor, in
cash the amount, if any, by which aggregate benefits provided to Harbor Transfer
Employees under the flexible spending accounts maintained by Harbor exceeded the
aggregate contributions made by the Harbor Transfer Employees to such accounts
as of the Effective Date.

ARTICLE VII

GENERAL PROVISIONS, SECTION 280G, AND INDEMNIFICATION

Section 7.1 Preservation of Rights to Amend. The rights of each Harbor Entity,
each Spinco Entity and Voyager and its Subsidiaries to amend, waive, or
terminate any plan, arrangement, agreement, program, or policy referred to
herein shall not be limited in any way by this Agreement.

Section 7.2 Entire Agreement. Section 10.8 of the Distribution Agreement is
incorporated herein by reference. To the extent any provision of this Agreement
conflicts with the provisions of the Distribution Agreement, the Merger
Agreement or any other Transaction Agreement, the provisions of this Agreement
shall be deemed to control with respect to the subject matter hereof (except
that the provision by Harbor of employee- or human resource-related services to
Spinco to the extent set forth in the Transition Services Agreement shall not be
deemed to result in such a conflict).

Section 7.3 Binding Effect; No Third-Party Beneficiaries or Plan Amendment;
Assignment. This Agreement shall inure to the benefit of and be binding upon the
Parties and their respective successors and permitted assigns. This Agreement is
solely for the benefit of the Parties and should not be deemed to confer upon
any third parties (including without limitation any current or former employee,
director, officer, service provider or other individual associated therewith)
any remedy, claim, Liability, reimbursement, cause of action, or other right in
excess of those existing without reference to this Agreement. Except with
respect to rights and obligations of the parties to each other under this
Agreement, nothing in this Agreement, express or implied, shall (i) limit the
ability of Harbor, Spinco, Voyager, or any of their respective Affiliates from
terminating the employment of any employee (including any Spinco Group
Employee); (ii) be construed to establish, amend or modify any Benefit Plan or
other benefit or compensation plan, program, agreement, policy, contract or
arrangement; or (iii) limit the ability of Harbor, Spinco, Voyager, or any of
their respective Affiliates to amend, modify or terminate any Benefit Plan or
other benefit or compensation plan, program, agreement, policy, contract or
arrangement at any time assumed, established, sponsored or maintained by any of
them. This Agreement may not be assigned by any Party, except with the prior
written consent of the other Parties.

 

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Section 7.4 Amendment; Waivers. Section 10.11 of the Distribution Agreement is
incorporated herein by reference.

Section 7.5 Remedies Cumulative. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available to the Parties hereunder.

Section 7.6 Notices. Unless otherwise expressly provided herein, all notices,
claims, certificates, requests, demands and other communications hereunder shall
be made or given in accordance with the provisions of Section 10.2 of the
Distribution Agreement.

Section 7.7 Counterparts. Section 10.10 of the Distribution Agreement is
incorporated herein by reference.

Section 7.8 Severability. Section 10.5 of the Distribution Agreement is
incorporated herein by reference.

Section 7.9 Governing Law, Consent to Jurisdiction and Waiver of Right to Jury
Trial. The provisions of Sections 10.9, 10.13 and 10.14 of the Distribution
Agreement are incorporated herein by reference.

Section 7.10 Performance. Each of Harbor and Spinco or its successor, as
applicable, shall cause to be performed, and hereby guarantees the performance
of, all actions, agreements and obligations set forth herein to be performed by
any Harbor Entity and any Spinco Entity, respectively. The Parties each agree to
take such further actions and to execute, acknowledge, and deliver, or to cause
to be executed, acknowledged, and delivered, all such further documents as are
reasonably requested by the other for carrying out the purposes of this
Agreement or of any document delivered pursuant to this Agreement. The
provisions of Section 10.15 of the Distribution Agreement governing specific
performance are incorporated herein by reference.

Section 7.11 Termination. The provisions of Section 10.12 of the Distribution
Agreement are incorporated herein by reference.

Section 7.12 Headings. The provisions of Section 10.4 of the Distribution
Agreement are incorporated herein by reference.

Section 7.13 Assignment. The provisions of Section 10.6 of the Distribution
Agreement are incorporated herein by reference.

 

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Section 7.14 280G Waivers and Consent. Prior to the Effective Date, Voyager and
its Subsidiaries shall determine in good faith within the meaning of
Section 280G of the Code and the regulations promulgated thereunder, whether any
“disqualified individual” is expected to receive, or has the right or
entitlement to receive, any payments and/or other benefits that would reasonably
be expected to constitute “parachute payments,” in which case, each of Voyager
and its Subsidiaries:

(a) To the extent applicable, will use reasonable best efforts to obtain a
waiver (a “Parachute Payment Waiver”), prior to the initiation of the 280G
Approval described below, from each Person who, with respect to such entity,
would reasonably be expected to be a “disqualified individual” (within the
meaning of Section 280G of the Code and the regulations promulgated thereunder
and as determined immediately prior to the initiation of the 280G Approval), and
who would otherwise reasonably be expected to receive, have received, or have
the right or entitlement to receive any payments and/or other benefits
(including, without limitation, acceleration of vesting) that would otherwise
constitute “parachute payments” under Section 280G of the Code, of such Person’s
right or entitlement to receive a portion of such payments and benefits (such
that all remaining payments and benefits to such Person would not be deemed to
be “parachute payments”), unless the 280G Approval has been obtained in a manner
satisfying the applicable requirements of Section 280G(b)(5)(B) of the Code and
the regulations promulgated thereunder.

(b) To the extent applicable, will submit to its respective stockholders for a
vote all such waived payments in a manner such that, if such vote is adopted by
such stockholders in a manner which satisfies the requirements of
Section 280G(b)(5)(B) of the Code and the treasury regulations thereunder,
including Q-7 of Section 1.280G-1 of such treasury regulations, no payment or
benefit received by such “disqualified individual” would be a “parachute
payment” for purposes of Section 280G of the Code (the “280G Approval”). Prior
to the Effective Date, each of Voyager and its Subsidiaries, to the extent
applicable, shall deliver to Harbor and Spinco evidence that a vote of the
stockholders was solicited in accordance with the foregoing provisions of this
Section 7.14 and that either (i) 280G Approval was obtained, or (ii) 280G
Approval was not obtained, and as a consequence, the parachute payments subject
to the Parachute Payment Waivers shall not be made or provided in accordance
with such Parachute Payment Waivers. Voyager shall provide Harbor with drafts of
all such solicitation materials and consents for review and comment prior to
delivery to stockholders or disqualified individuals, as applicable (such review
and comment not to be unreasonably withheld, conditioned or delayed).

Section 7.15 Survival and Indemnification. The provisions of Section 6.1 of the
Distribution Agreement regarding the survival of covenants, obligations and
agreements of the Parties shall apply to the covenants, obligations and
agreements described in this Agreement as if they were set forth in the
Distribution Agreement. Without limiting the generality of the Distribution
Agreement, any Liabilities described in this Agreement as being assumed or
retained by Harbor or a Harbor Entity shall be Excluded Liabilities, and any
Liabilities described in this Agreement as being assumed or retained by Spinco
or a Spinco Entity shall be Spinco Liabilities and, in each case, the provisions
of the Distribution Agreement (including the indemnification provision of
Section 6.3 of the Distribution Agreement) shall apply to such Liabilities.

[Signatures of the Parties on Next Page]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in
their names by a duly authorized officer as of the date first written above.

 

HENRY SCHEIN, INC.

By:   /s/ Stanley Bergman Name:   Stanley Bergman Title:   Chairman of the Board
and Chief Executive Officer

 

HS SPINCO, INC. By:   /s/ Steven Paladino Name:   Steven Paladino Title:  
Treasurer and Chief Financial Officer

 

DIRECT VET MARKETING, INC. By:   /s/ Benjamin Shaw Name:   Benjamin Shaw Title:
  President

 

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