EXHIBIT 10.1

EXECUTION VERSION

 

EMPLOYEE MATTERS AGREEMENT

 

BY AND AMONG

 

Ecolab Inc.,

 

ChampionX Holding Inc.,

 

AND

 

Apergy Corporation

 

 

 

Dated as of December 18, 2019

 

 

 

 

TABLE OF CONTENTS

 

    Page

ARTICLE I

 

DEFINITIONS

Section 1.1 General 5

ARTICLE II

 

GENERAL PRINCIPLES

 

Section 2.1 Nature of Liabilities and Assets 12 Section 2.2 Transfers of
Employees and Independent Contractors Generally 12 Section 2.3 Assumption and
Retention of Liabilities Generally 14 Section 2.4 Treatment of Compensation and
Benefit Arrangements; Terms of Employment 15 Section 2.5 Participation in
Everest Benefit Arrangements 16 Section 2.6 Service Recognition 16 Section 2.7
Collective Bargaining Agreements 16 Section 2.8 Information and Consultation;
Notification 17 Section 2.9 WARN 17 Section 2.10 Non-U.S. Jurisdictions 17

ARTICLE III

 

CERTAIN BENEFIT PLAN PROVISIONS

 

Section 3.1 Health and Welfare Benefit Plans 18 Section 3.2 U.S. Savings Plans
19 Section 3.3 U.S. Defined Benefit Plans 19 Section 3.4 U.S. OPEB Plan 19
Section 3.5 Everest Deferred Compensation Plans 20 Section 3.6 Everest Canadian
Retirement Plans 20 Section 3.7 Non-U.S. Plans 21 Section 3.8 Non-U.S. Defined
Benefit Plans 21 Section 3.9 Individual Agreements 21

ARTICLE IV

 

EQUITY INCENTIVE AWARDS

 

Section 4.1 Treatment of Everest Stock Options 23 Section 4.2 Treatment of
Everest Restricted Stock Units 23 Section 4.3 Treatment of Everest Performance
Based Restricted Stock Units 23 Section 4.4 Everest Stock Purchase Plan 24
Section 4.5 Replacement Awards  24 Section 4.6 General Terms 24

 

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ARTICLE V

 

ADDITIONAL MATTERS

 

Section 5.1 Cash Incentive Programs 26 Section 5.2 Time-Off Benefits 26 Section
5.3 Workers’ Compensation Liabilities 26 Section 5.4 COBRA Compliance in the
United States 26 Section 5.5 Retention Bonuses 27 Section 5.6 Code Section 409A
27 Section 5.7 Payroll Taxes and Reporting 27 Section 5.8 Regulatory Filings 27
Section 5.9 Disability 28 Section 5.10 Certain Requirements 28 Section 5.11
Fiduciary Matters 29 Section 5.12 No Hire and No Solicitation of Employees 29

ARTICLE VI

 

GENERAL AND ADMINISTRATIVE

 

Section 6.1 Employer Rights 29 Section 6.2 Effect on Employment 29 Section 6.3
Consent of Third Parties 29 Section 6.4 Access to Employees 30 Section 6.5
Beneficiary Designation/Release of Information/Right to  Reimbursement 30
Section 6.6 No Third Party Beneficiaries 30 Section 6.7 No Acceleration of
Benefits 30 Section 6.8 Employee Benefits Administration 30 Section 6.9 Exhibits
31

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.1 Entire Agreement 31 Section 7.2 Survival of Agreements 31 Section
7.3 Notices 31 Section 7.4 Waiver 32 Section 7.5 Assignment 33 Section 7.6
Termination 33 Section 7.7 Amendment 33 Section 7.8 Subsidiaries 33 Section 7.9
Governing Law; Jurisdiction; Specific Performance; Remedies 33

 

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Section 7.10 Severability 34 Section 7.11 No Duplication; No Double Recovery 34
Section 7.12 Tax Treatment of Payments 34 Section 7.13 Construction. 35 Section
7.14 Relation to Other Documents 36

 

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EMPLOYEE MATTERS AGREEMENT

 

This EMPLOYEE MATTERS AGREEMENT (this “Agreement”) is entered into as of
December 18, 2019 by and among: (i) Ecolab Inc., a Delaware corporation
(“Everest”); (ii) ChampionX Holding Inc., a Delaware corporation and wholly
owned Subsidiary of Everest (“Newco”); and (iii) Apergy Corporation, a Delaware
corporation (“Athena”) (each a “Party” and together, the “Parties”). Terms used
but not defined herein shall have the meaning ascribed to them in the Separation
and Distribution Agreement.

 

W I T N E S S E T H:

 

WHEREAS, Everest is engaged, directly and indirectly, in the Newco Business;

 

WHEREAS, the Board of Directors of Everest (the “Everest Board”) has determined
that it is appropriate, desirable and in the best interests of Everest and
Everest’s stockholders to separate the Newco Business from the other businesses
of Everest and to divest the Newco Business in the manner contemplated by the
Agreement and Plan of Merger and Reorganization, dated as of December 18, 2019
(as it may be amended, modified or supplemented from time to time, the “Merger
Agreement”), by and among Everest, Newco, Athena, and Athena Merger Sub, Inc., a
Delaware corporation and a wholly owned Subsidiary of Athena (“Merger Sub”), and
the Separation and Distribution Agreement by and among the Parties, dated as of
December 18, 2019 (the “Separation and Distribution Agreement”);

 

WHEREAS, Everest currently owns all of the shares of common stock of Newco (the
“Newco Common Stock”);

 

WHEREAS, on the terms and subject to the conditions set forth in the Separation
and Distribution Agreement, in order to effect such separation, Everest will
undertake the Internal Restructuring and, in connection therewith, effect the
Newco Contribution and, in exchange therefor, Newco shall (i) issue to Everest
additional shares of Newco Common Stock and (ii) pay to Everest the Cash
Payment;

 

WHEREAS, on the terms and subject to the conditions set forth in the Separation
and Distribution Agreement, following the completion of the Internal
Restructuring, the Newco Contribution and the payment of the Cash Payment,
Everest shall own all of the issued and outstanding shares of Newco Common Stock
and shall effect the distribution of all of such outstanding shares of Newco
Common Stock to the holders of Everest Common Stock in accordance with the
Separation and Distribution Agreement (the “Distribution”);

 

WHEREAS, the Parties contemplate that, pursuant to the Merger Agreement,
immediately after the Distribution and at the Separation Effective Time, Merger
Sub shall be merged (the “Merger”) with and into Newco, with Newco surviving the
Merger as a wholly owned subsidiary of Athena, and the shares of Newco Common
Stock shall be converted into the right to receive shares of common stock of
Athena (“Athena Common Stock”) on the terms and subject to the conditions of the
Merger Agreement and in accordance with the Delaware General Corporation Law;
and

 

 

 

WHEREAS, pursuant to the Separation and Distribution Agreement, the Parties have
agreed to enter into this Agreement for the purpose of allocating Assets,
Liabilities and responsibilities with respect to certain employee matters and
employee compensation and benefit plans and programs between them and to address
certain other employment-related matters.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements,
provisions and covenants contained in this Agreement, the Parties, intending to
be legally bound, hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

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

 

(1)               “Accrued Incentive Amount” shall mean the aggregate amount
accrued by Everest through the Separation Effective Time consistent with past
practice in respect of all Newco Employees under any incentive compensation and
sales commission programs, including those material incentive compensation and
sales commissions programs listed on Schedule 2.16(b) of the Everest Disclosure
Letter, that are applicable to such Newco Employees and unpaid as of the
Separation Effective Time.

 

(2)               “Agreement” shall have the meaning set forth in the Preamble.

 

(3)               “Automatic Transfer Newco Employees” shall mean any Newco
Employee, where local employment Legal Requirements, including the Transfer
Regulations, provide for an automatic transfer of such employees to a member of
the Newco Group by operation of law upon the transfer of a business and such
business transfer occurs as a result of the transactions contemplated by the
Separation and Distribution Agreement.

 

(4)               “Automatic Transfer Everest Employees” shall mean any Everest
Employee, where local employment Legal Requirements, including the Transfer
Regulations, provide for an automatic transfer of such employees to a member of
the Everest Group by operation of law upon the transfer of a business as a going
concern and such business transfer occurs as a result of the transactions
contemplated by the Separation and Distribution Agreement.

 

(5)               “Athena Adjusted Performance-Based Restricted Stock Unit”
shall have the meaning set forth in Section 4.3.

 

(6)               “Athena Common Stock” shall have the meaning set forth in the
Recitals.

 

(7)               “Athena Group” shall have the meaning set forth in the
Separation and Distribution Agreement.

 

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(8)               “Athena Option” shall have the meaning set forth in Section
4.1.

 

(9)               “Athena Restricted Stock Unit” shall have the meaning set
forth in Section 4.2.

 

(10)           “Benefit Arrangement” shall mean each Benefit Plan and PTO
Policy.

 

(11)           “Benefit Plan” shall mean, with respect to an Entity, each
compensation or employee benefit plan, program, policy, agreement or other
arrangement, whether or not “employee benefit plans” (within the meaning of
Section 3(3) of ERISA, whether or not subject to ERISA), including any benefit
plan, program, policy, agreement or arrangement providing cash- or equity-based
compensation or incentives, health, medical (including self-funded medical with
stop-loss insurance), dental, vision, disability, accident or life insurance
benefits, severance, retention, change in control, termination, deferred
compensation, individual employment or consulting, retirement, pension or
savings benefits, supplemental income, retiree benefit or other fringe benefit
(whether or not taxable), that are sponsored or maintained by such Entity (or to
which such Entity contributes or is required to contribute or in which it
participates), and excluding workers’ compensation plans, policies, programs and
arrangements.

 

(12)           “Closing Date” shall have the meaning set forth in the Merger
Agreement.

 

(13)           “Collective Bargaining Agreement” shall mean all agreements with
the collective bargaining representatives, employee representatives, trade
unions, labor or management organizations, groups of employees, or works
councils or similar representative bodies of Newco Employees, including all
national or sector specific collective agreements which are applicable to Newco
Employees, in each case in effect immediately prior to the date on which the
applicable Newco Employees become employed by a member of the Newco Group, that
set forth terms and conditions of employment of Newco Employees, and all
modifications of, or amendments to, such agreements and any rules, procedures,
awards or decisions of competent jurisdiction interpreting or applying such
agreements.

 

(14)           “Delayed Transfer Date” shall mean the date on which it is
determined by Everest in consultation with Athena that (i) a Delayed Transfer
Newco Employee or Delayed Transfer Everest Employee is permitted to transfer
from the Everest Group to the Newco Group or from the Newco Group to the Everest
Group, respectively, in accordance with applicable Legal Requirements, or (ii)
the necessary business operations are set up in the relevant jurisdiction to
enable employment of the Everest Employee by the Everest Group. Delayed Transfer
Everest Employees and Delayed Transfer Newco Employees shall become Everest
Employees or Newco Employees, respectively, if such employees return to active
service within twelve (12) months following the Separation Effective Time or
such longer period as required by applicable Legal Requirements or otherwise
agreed to by the Parties (including as agreed to in the Transition Services
Agreement).

 

(15)           “Delayed Transfer Everest Employee” shall mean any Everest
Employee whose employment is determined by Everest in consultation with Athena
to not be eligible to be transferred from a member of the Newco Group to a
member of the Everest Group at or prior to the Separation Effective Time as a
result of (i) requirements under applicable Legal Requirements, (ii) the Everest
Employee being on a disability, workers’ compensation or similar leave, (iii) a
delay in a transferring or obtaining a visa in order to work for a member of the
Everest Group, (iv) a delay in setting up Everest operations in a particular
jurisdiction sufficient to employ such Everest Employee, or (v) any delay as a
result of the Transition Services Agreement.

 

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(16)           “Delayed Transfer Equity Award Effective Date” shall have the
meaning set forth in Section 4.5.

 

(17)           “Delayed Transfer Newco Employee” shall mean any Newco Employee
whose employment is determined by Everest in consultation with Athena to not be
eligible to be transferred to a member of the Newco Group at or prior to the
Separation Effective Time as a result of (i) requirements under applicable Legal
Requirements, (ii) the Newco Employee being on a disability, workers
compensation, or similar leave, (iii) a delay in a transferring or obtaining a
visa in order to work for a member of the Newco Group, (iv) a delay in setting
up Newco operations in a particular jurisdiction sufficient to employ such Newco
Employee, or (v) any delay as a result of the Transition Services Agreement.

 

(18)           “Designated Individual Agreements” shall mean those Individual
Newco Agreements set forth on Exhibit A hereto.

 

(19)           “Distribution” shall have the meaning set forth in the Recitals.

 

(20)           “Effective Time” shall have the meaning set forth in the Merger
Agreement.

 

(21)           “Employee Representative” shall mean any works council, employee
representative, trade union, labor or management organization, group of
employees or similar representative body for Newco Employees.

 

(22)           “Equity Award Adjustment Ratio” shall mean (A) the closing
trading price per share of Everest Common Stock immediately prior to the
Separation Effective Time divided by (B) the closing trading price per share of
Athena Common Stock immediately prior to the Separation Effective Time.

 

(23)           “ERISA” shall mean the Employee Retirement Income Security Act of
1974, as amended.

 

(24)           “Everest” shall have the meaning set forth in the Preamble.

 

(25)           “Everest Benefit Arrangement” shall mean any Benefit Arrangement
sponsored, maintained or contributed to by any member of the Everest Group.

 

(26)           “Everest Board” shall have the meaning set forth in the Recitals.

 

(27)           “Everest Deferred Compensation Plan” shall mean the Everest
Mirror Savings Plan.

 

7

 

 

(28)           “Everest Employee” shall mean each employee of Everest or any of
its Subsidiaries or Affiliates who does not qualify as a Newco Employee.

 

(29)           “Everest Independent Contractor” shall mean each independent
contractor or consultant of Everest or any of its Subsidiaries or Affiliates who
does not qualify as a Newco Independent Contractor.

 

(30)           “Everest Option” shall mean an option to purchase shares of
Everest Common Stock granted pursuant to an Everest Stock Incentive Plan.

 

(31)           “Everest Performance Based Restricted Stock Unit” shall mean an
award granted by Everest pursuant to an Everest Stock Incentive Plan that was
denominated as a “Performance Stock Unit” under the terms of such plan and the
related award agreement.

 

(32)           “Everest Restricted Stock Unit” shall mean an award granted by
Everest pursuant to an Everest Stock Incentive Plan that was denominated as a
“Restricted Stock Unit” under the terms of such plan and the related award
agreement and vests solely based on the continued employment or service of the
recipient.

 

(33)           “Everest Stock Purchase Plan” shall mean the Everest Stock
Purchase Plan as amended through February 28, 2004.

 

(34)           “Everest Stock Incentive Plans” shall mean, collectively, (i) the
Everest Inc. 2010 Stock Incentive Plan, as amended and restated, and (ii) the
Second Amended and Restated Nalco Holding Company 2004 Stock Incentive Plan.

 

(35)           “Everest U.S. OPEB Plan” shall mean the Everest Post Retirement
Benefits Plan, or any other Everest Benefit Arrangement maintained primarily in
respect of individuals who are located in the United States that provides for
post-termination or post-retirement health and welfare benefits.

 

(36)           “Everest U.S. Retirement Plan” shall mean the Everest Pension
Plan.

 

(37)           “Everest U.S. Savings Plans” shall mean (i) the Everest Savings
Plan and ESOP, (ii) the Everest Savings Plan and ESOP for Traditional Benefit
Employees, and (iii) any other defined contribution retirement plan maintained
by Everest or any of its Affiliates (other than a member of the Newco Group)
that is intended to be qualified under Section 401(a) of the Code.

 

(38)           “Everest Welfare Plans” shall mean any Welfare Plan maintained by
Everest or any member of the Everest Group.

 

(39)           “Former Everest Service Provider” shall mean any former employee,
independent contractor or consultant of Everest or any of its Subsidiaries or
Affiliates who is not a Former Newco Service Provider.

 

(40)           “Former Newco Service Provider” shall mean (i) any individual who
would qualify as a Newco Employee or Newco Independent Contractor, but whose
employment or service with Everest or any of its Subsidiaries or Affiliates
terminated for any reason prior to the date on which such individual’s
employment or service would otherwise have transferred to Newco pursuant to this
Agreement and (ii) any former employee, independent contractor or consultant of
Everest or any of its Subsidiaries or Affiliates who was exclusively or
primarily engaged in a Newco Former Business (A) at the time either (x) such
business was sold, conveyed, assigned, transferred or otherwise disposed of or
divested (in whole or in part) to a Person that is not a member of the Newco
Group or the Everest Group or (y) the operations, activities or production of
which were discontinued, abandoned, completed or otherwise terminated (in whole
or in part), or (B) at any other time, but in such case only to the extent
relating to his or her service with such Newco Former Business.

 

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(41)           “Individual Agreement” shall mean each Individual Everest
Agreement and each Individual Newco Agreement.

 

(42)           “Individual Everest Agreement” shall mean any individual (i)
employment contract, (ii) retention, severance or change of control agreement,
(iii) expatriate (including any international assignee) contract or agreement
(including agreements and obligations regarding repatriation, relocation,
equalization of taxes and living standards in the host country), or (iv) other
agreement containing restrictive covenants (including confidentiality,
non-competition and non-solicitation provisions) by and between a member of the
Newco Group and an Everest Group Employee, as in effect immediately prior to the
Individual Agreement Effective Time.

 

(43)           “Individual Newco Agreement” shall mean any individual (i)
employment contract, (ii) retention, severance or change of control agreement,
(iii) expatriate (including any international assignee) contract or agreement
(including agreements and obligations regarding repatriation, relocation,
equalization of taxes and living standards in the host country), or (iv) other
agreement containing restrictive covenants (including confidentiality,
non-competition and non-solicitation provisions) by and between a member of the
Everest Group and a Newco Group Employee, as in effect immediately prior to the
Individual Agreement Effective Time but, in each case, other than the Excluded
Individual Agreements.

 

(44)           “Individual Agreement Effective Time” shall have the meaning set
forth in Section 3.9(a).

 

(45)           “Key Athena Employee” shall mean those employees of Athena who
are in the Athena compensation bands N, N-1, N-2 and N-3, as well as all
employees of Athena with a title of “Manager.”

 

(46)           “Key Everest Employee” shall mean those Everest Employees who are
in the following Everest compensation bands: E1, E2, E3, S1, S2 and C5.

 

(47)           “Merger” shall have the meaning set forth in the Recitals.

 

(48)           “Merger Agreement” shall have the meaning set forth in the
Recitals.

 

(49)           “Merger Sub” shall have the meaning set forth in the Recitals.

 

(50)           “Newco” shall have the meaning set forth in the Preamble.

 

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(51)           “Newco Benefit Arrangement” shall mean any Benefit Arrangement
sponsored, maintained or contributed to exclusively by any member of the Newco
Group including, from and after the Closing, any member of the Athena Group.

 

(52)           “Newco Common Stock” shall have the meaning set forth in the
Recitals.

 

(53)           “Newco Contribution” shall have the meaning set forth in the
Recitals.

 

(54)           “Newco Deferred Compensation Plan” shall have the meaning set
forth in Section 3.5(a).

 

(55)           “Newco Employee” shall mean each individual who is employed by
Everest or any of its Subsidiaries (with respect to the Newco Business) or any
of the Newco Companies as of the date on which Everest determines to transfer
the employment of applicable individuals to a Newco Company and who Everest
determines as of such date (or as of prior to the Separation Effective Time for
those individuals who are hired by a Newco Company in accordance with the terms
of the Merger Agreement) (i) is exclusively or primarily engaged in the Newco
Business, or (ii) is necessary for the ongoing operation of the Newco Business
following the Separation Effective Time, in each case regardless of whether any
such employee is actively at work or is not actively at work as a result of
disability or illness, an approved leave of absence (including military leave
with reemployment rights under federal Law and leave under the Family and
Medical Leave Act of 1993), vacation, personal day or similar short- or
long-term absence.

 

(56)           “Newco Group” shall have the meaning set forth in the Separation
and Distribution Agreement.

 

(57)           “Newco Independent Contractor” shall mean each individual who is
engaged as an independent contractor or consultant by Everest or any of its
Subsidiaries (with respect to the Newco Business) or any of the Newco Companies
as of the date on which Everest determines to transfer the contracts of service
of applicable individuals to the Newco Group and who Everest determines as of
such date (i) is exclusively or primarily engaged in the Newco Business, or (ii)
is necessary for the ongoing operation of the Newco Business following the
Separation Effective Time.

 

(58)           “Newco RSP” shall have the meaning set forth in Section 3.6(a).

 

(59)           “Newco U.S. Savings Plan” shall have the meaning set forth in
Section 3.2(a).

 

(60)           “Newco Welfare Plans” shall mean any Welfare Plan maintained
exclusively by Newco or any member of the Newco Group including, from and after
the Closing, any member of the Athena Group.

 

(61)           “Non-Automatic Transfer Newco Employee” shall mean any Newco
Employee who is not an Automatic Transfer Newco Employee.

 

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(62)           “Non-Automatic Transfer Everest Employee” shall mean any Everest
Employee who is not an Automatic Transfer Everest Employee.

 

(63)           “Non-Solicit Period” shall have the meaning set forth in Section
5.12.

 

(64)           “Non-U.S. Plans” shall have the meaning set forth in Section 3.7.

 

(65)           “Non-U.S. Defined Benefit Plans” shall have the meaning set forth
in Section 3.8.

 

(66)           “Party” and “Parties” shall have the meanings set forth in the
Preamble.

 

(67)           “PTO Policy” shall mean, with respect to an Entity, each plan,
program, arrangement, agreement or commitment that is a vacation pay or other
paid or unpaid leave policy or practice, excluding disability pay or leave,
sponsored or maintained by such Entity (or to which such Entity contributes or
is required to contribute) or in which it participates.

 

(68)           “Replacement Award” shall have the meaning set forth in Section
4.5.

 

(69)           “Separation and Distribution Agreement” shall have the meaning
set forth in the Recitals.

 

(70)           “Transfer Regulations” shall mean (i) all Legal Requirements of
any EU Member State or, if it is no longer an EU Member State, the United
Kingdom, implementing the EU Council Directive 2001/23/EC of 12 March 2001 on
the approximation of the Legal Requirements of the Member States or, if it is no
longer an EU Member State, the United Kingdom, relating to the safeguarding of
employees’ rights in the event of transfers of undertakings, businesses or parts
of undertakings or businesses (the “Acquired Rights Directive”) and legislation
and regulations of any EU Member State or, if it is no longer an EU Member
State, the United Kingdom, implementing such Acquired Rights Directive, and (ii)
any similar Legal Requirements in any jurisdiction providing for an automatic
transfer, by operation of law, of employment in the event of a transfer of
business.

 

(71)           “Transferred Newco Employee” shall mean all (i) Newco Employees
that are employed by the Newco Group as of immediately following the Separation
Effective Time and (ii) Delayed Transfer Newco Employees who commence employment
with the Newco Group following the Separation Effective Time.

 

(72)           “Transferred Newco Independent Contractor” shall mean all Newco
Independent Contractors that are retained by or otherwise provide services to
the Newco Group as of immediately following the Separation Effective Time.

 

(73)           “Welfare Plan” shall mean, where applicable, a “welfare plan” (as
defined in Section 3(1) of ERISA and in 29 C.F.R. §2510.3-1) 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 use disorder), disability
benefits, or life, accidental death and disability, pre-tax premium conversion
benefits, dependent care assistance programs, employee assistance programs,
contribution funding toward a health savings account, flexible spending
accounts, tuition reimbursement or adoption assistance programs or cashable
credits.

 

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ARTICLE II

 

GENERAL PRINCIPLES

 

Section 2.1            Nature of Liabilities and Assets. All Liabilities and
Assets assumed or retained by a member of the Everest Group under this Agreement
shall be Everest Retained Liabilities or Everest Retained Assets, respectively,
for purposes of the Separation and Distribution Agreement. All Liabilities and
Assets assumed or retained by a member of the Newco Group under this Agreement
shall be Newco Liabilities or Newco Assets, respectively, for purposes of the
Separation and Distribution Agreement.

 

Section 2.2            Transfers of Employees and Independent Contractors
Generally.

 

(a)               Subject to applicable Legal Requirements, through and until
immediately prior to the Separation Effective Time, Everest shall use its
reasonable best efforts to (i) cause the employment of any Newco Employee and
the contract of services of any Newco Independent Contractor to be transferred
to a member of the Newco Group and (ii) cause the employment of any Everest
Employee who is employed by a member of the Newco Group and the contract of
services between any independent contractor or consultant that does not qualify
as a Newco Independent Contractor and a member of the Newco Group to be
transferred to a member of the Everest Group.

 

(b)               Everest shall use its reasonable best efforts to cause each
Automatic Transfer Newco Employee to be employed by a member of the Newco Group
no later than the Separation Effective Time in accordance with applicable Legal
Requirements, or as of the applicable Delayed Transfer Date, if applicable, and
Newco agrees to take all actions reasonably necessary to cause the Newco
Employees to be so employed. If an Automatic Transfer Newco Employee objects to
the transfer of employment to a member of the Newco Group as permitted under
applicable law and consequently does not become an employee of the Newco Group
and is terminated from employment by the Everest Group as a result, then Newco
or a member of the Newco Group shall reimburse the Everest Group in accordance
with Section 2.3(c) in an amount equal to fifty percent (50%) of any severance
or termination costs incurred by the Everest Group in connection with such
termination of employment.

 

(c)               Everest shall use its reasonable best efforts to cause each
Automatic Transfer Everest Employee to be employed by a member of the Everest
Group no later than the Separation Effective Time in accordance with applicable
Legal Requirements, or as of the applicable Delayed Transfer Date, if
applicable, and Everest agrees to take all actions reasonably necessary to cause
the Everest Employees to be so employed. If an Automatic Transfer Everest
Employee objects to the transfer of employment to a member of the Everest Group
as permitted under applicable law and consequently does not become an employee
of the Everest Group and is terminated from employment by the Newco Group as a
result, then Everest or a member of the Everest Group shall reimburse Newco or a
member of the Newco Group in accordance with Section 2.3(c) for any severance or
termination costs incurred by the Newco Group in connection with such
termination of employment.

 

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(d)               A member of the Newco Group shall make a qualifying offer of
employment in accordance with Section 2.4 to each Non-Automatic Transfer Newco
Employee prior to the Separation Effective Time to become employed by a member
of the Newco Group effective as of no later than the Separation Effective Time,
or as of the applicable Delayed Transfer Date, if applicable; provided that if
(i) the consent of such Non-Automatic Transfer Newco Employee is required by the
applicable Legal Requirements and (ii) such Non-Automatic Transfer Newco
Employee does not consent and does not become employed by a member of the Newco
Group and is terminated by the Everest Group as a result, then Newco or a member
of the Newco Group shall reimburse Everest or a member of the Everest Group in
accordance with Section 2.3(c) in an amount equal to fifty percent (50%) of any
severance or termination costs incurred by the Everest Group in connection with
such termination of employment (provided that Everest shall consult with Athena
prior to terminating the employment of any such Non-Automatic Transfer Newco
Employee); provided, further, that Newco or a member of the Newco Group shall
reimburse Everest or a member of the Everest Group in accordance with Section
2.3(c) for any statutory severance or termination indemnity incurred by the
Everest Group in connection with the transfer of any Non-Automatic Transfer
Newco Employee to Newco.

 

(e)               Everest shall make an offer of employment in accordance with
applicable Law to each Non-Automatic Transfer Everest Employee prior to the
Separation Effective Time to become employed by a member of the Everest Group
effective as of no later than the Separation Effective Time, or as of the
applicable Delayed Transfer Date, if applicable; provided that if (i) the
consent of such Non-Automatic Transfer Everest Employee is required by the
applicable Legal Requirements and (ii) such Non-Automatic Transfer Everest
Employee does not consent and does not become employed by a member of the
Everest Group and is terminated by the Newco Group as a result, then Everest or
a member of the Everest Group shall reimburse Newco or a member of the Newco
Group in accordance with Section 2.3(c) for any severance or termination costs
incurred by Newco in connection with such termination of employment; provided,
further, that Everest or a member of the Everest Group shall reimburse Newco or
a member of the Newco Group in accordance with Section 2.3(c) for any statutory
severance or termination indemnity incurred by Newco or a member of the Newco
Group in connection with the transfer of any Non-Automatic Transfer Everest
Employee to Everest.

 

(f)                The Everest Group and Newco Group agree to execute, and to
seek to have the applicable Newco Employees and Everest Employees execute, such
documentation, if any, as may be necessary to reflect the transfer of employment
described in this Section 2.2. Notwithstanding any provision of the Merger
Agreement or this Agreement to the contrary, to the extent that an Automatic
Transfer Newco Employee or Non-Automatic Transfer Newco Employee does not agree
to the transfer of employment in accordance with this Section 2.2, Everest,
following consultation with Athena, shall be permitted to, or shall be permitted
to cause the Newco Group to, increase the annual compensation or provide
incentive bonuses (in the form of cash or equity-based awards) to incentivize
such transfer of employment, with any such increases in annual compensation
limited to no more than 10% and any such incentive bonuses limited to a maximum
of $750,000 in the aggregate and $75,000 per employee; provided, that (x) fifty
percent (50%) of the Liability of any such compensatory payments that are
one-time payments shall be assumed or retained by the Newco Group or Everest
Group, respectively, and (y) Newco Group shall be solely liable for any such
compensatory payments that are not one-time payments.

 

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Section 2.3            Assumption and Retention of Liabilities Generally.

 

(a)               Except as otherwise provided pursuant to this Agreement, any
Ancillary Agreement, Exhibit or appendix hereto, in connection with the Internal
Restructuring and the Newco Contribution, or, if applicable, from and after the
Separation Effective Time, Everest shall, or shall cause one or more members of
the Everest Group to, accept, assume (or, as applicable, retain) and perform,
discharge and fulfill (i) all Liabilities under all Everest Benefit
Arrangements, whenever incurred; (ii) all Liabilities not associated with an
Everest Benefit Arrangement or Newco Benefit Arrangement but with respect to the
employment, service, termination of employment or termination of service of all
Everest Employees, Former Everest Service Providers and Everest Independent
Contractors and their respective dependents and beneficiaries (and any alternate
payees in respect thereof), whenever incurred; and (iii) all other Liabilities
or obligations expressly assigned to or assumed by a member of the Everest Group
under this Agreement.

 

(b)               Except as otherwise provided pursuant to this Agreement, any
Ancillary Agreement, Exhibit or appendix hereto, in connection with the Internal
Restructuring and the Newco Contribution, or, if applicable, from and after the
Separation Effective Time, Newco shall, or shall cause one or more members of
the Newco Group to, accept, assume (or, as applicable, retain) and perform,
discharge and fulfill (i) all Liabilities under all Newco Benefit Arrangements,
whenever incurred; (ii) all Liabilities not associated with a Newco Benefit
Arrangement or Everest Benefit Arrangement but with respect to the employment,
service, termination of employment or termination of service of all Newco
Employees, Former Newco Service Providers and Newco Independent Contractors and
their respective dependents and beneficiaries (and any alternate payees in
respect thereof), whenever incurred; and (iii) all other Liabilities or
obligations expressly assigned to or assumed by a member of the Newco Group
under this Agreement.

 

(c)               The Parties shall promptly reimburse one another, upon
reasonable request of the Party requesting reimbursement and the presentation by
such Party of such substantiating documentation as the other Party shall
reasonably request, for the cost of any obligations or Liabilities satisfied or
assumed by the Party requesting reimbursement or its Group that are, or that
have been made pursuant to this Agreement, the responsibility of the other Party
or any of its Group.

 

(d)               Notwithstanding that a Delayed Transfer Newco Employee or
Delayed Transfer Everest Employee shall not become employed by a member of the
Newco Group or Everest Group, respectively, until the Delayed Transfer Date
applicable to such employee, (i) the Newco Group or the Everest Group shall be
responsible for, and shall timely reimburse the other for, all Liabilities
incurred by the Everest Group or Newco Group, respectively, with regard to each
such Delayed Transfer Newco Employee or Delayed Transfer Everest Employee from
the Separation Effective Time to the Delayed Transfer Date applicable to such
employee and (ii) the Parties shall use their reasonable efforts to effect the
provisions of this Agreement with respect to the compensation and benefits of
such Delayed Transfer Newco Employees and Delayed Transfer Everest Employees
following the Delayed Transfer Date applicable to such employee, it being
understood that it may not be possible to replicate the effect of such
provisions under such circumstances. Notwithstanding the foregoing, for
compensation subject to Section 409A of the Code, any such subsequent transfer
(including as of the applicable Delayed Transfer Date) shall be a “separation
from service” (within the meaning of Section 409A of the Code) from the
applicable employer for purposes of such compensation, and the consequences of
such separation from service shall be determined in accordance with the terms of
the applicable plan or agreement.

 

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Section 2.4            Treatment of Compensation and Benefit Arrangements; Terms
of Employment.

 

(a)               Except as otherwise (i) required by a Collective Bargaining
Agreement, the Transfer Regulations or applicable Legal Requirements, or (ii)
expressly provided for in this Agreement, any Ancillary Agreement, Exhibit or
appendix hereto, for the period commencing on the Separation Effective Time and
ending on the first anniversary of the Closing Date (or if shorter, during the
period of employment), Newco (and, following the Effective Time, Athena) shall,
or shall cause a member of the Newco Group to provide or cause to be provided to
each Transferred Newco Employee (A) a base salary or hourly wage rate, as
applicable, that is at least equal to the base salary or hourly wage rate
provided to such Newco Employee immediately prior to the Separation Effective
Time, (B) subject to Section 5.1, an annual or short-term cash incentive target
opportunity or sales commission opportunity no less favorable than the annual or
short-term cash incentive target opportunity or sales commission opportunity in
effect for such Newco Employee, if any, immediately prior to the Separation
Effective Time, (C) health, welfare, and retirement benefits that are
substantially similar to those provided to such Newco Employee immediately prior
to the Separation Effective Time (without regard to any employee stock purchase
plan, defined benefit pension plan benefits or post-employment benefit plan
(including retiree medical and retiree death benefit or life insurance
arrangements)), and (D) severance benefits that are no less favorable than those
that would have been provided to such Newco Employee under an Everest Benefit
Arrangement or Newco Benefit Arrangement immediately prior to the Separation
Effective Time. Notwithstanding the foregoing, (i) except as otherwise set forth
in ARTICLE IV, nothing contained in this Agreement shall require Athena to make
any grants of equity awards relating to shares of Newco Common Stock or Athena
Common Stock to Newco Employees following the Separation Effective Time, (ii)
Athena, Newco and each member of the Newco Group shall be permitted to suspend
the compensation contemplated under clauses (A)-(B) of this Section 2.4 in
connection with customary furloughs and work stoppages and (iii) subject to the
terms of any Newco Benefit Arrangement (including any Individual Newco
Agreement), a Collective Bargaining Agreement, the Transfer Regulations or
applicable Legal Requirements, Athena, Newco and each member of the Newco Group
shall be permitted to decrease the compensation provided in clauses (A)-(B) of
this Section 2.4 in connection with any reduction in such compensation that
similarly affects similarly situated employees of Athena Group (provided that
any such reduction shall not exceed ten percent (10%) of the base salary, hourly
wage rate, annual or short-term cash incentive target opportunity or sales
commission opportunity, as applicable, in effect prior to the Separation
Effective Time).

 

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(b)               To the extent that the Effective Time occurs prior to April 1,
2020, Athena shall implement the 2020 global annual merit compensation increases
for Newco Employees listed on Exhibit 2.4(b) hereto.

 

Section 2.5            Participation in Everest Benefit Arrangements. Effective
no later than the Separation Effective Time, (i) Newco and each member of the
Newco Group, to the extent applicable, shall cease to be a participating company
in any Everest Benefit Arrangement and (ii) each Newco Employee shall cease to
participate in, be covered by, accrue benefits under, be eligible to contribute
to or have any rights under any Everest Benefit Arrangement (except to the
extent of previously accrued obligations that remain a Liability of any member
of the Everest Group pursuant to this Agreement).

 

Section 2.6            Service Recognition.

 

(a)               In addition to any applicable obligations under the Transfer
Regulations or other applicable Legal Requirements, the Newco Group shall
provide each Newco Employee who was employed by the Newco Group as of the
Distribution with full credit for purposes of eligibility, vesting, and
determination of level of benefits (including for purposes of vacation and
separation/end of service Liabilities but not for other benefit accruals) under
any Newco Benefit Arrangement for such Newco Employee’s prior service with any
member of the Everest Group or Newco Group or any predecessor thereto, to the
same extent such service was recognized by the applicable Everest Benefit
Arrangement; provided, that, such service shall not be recognized to the extent
it would result in the duplication of benefits.

 

(b)               Except to the extent prohibited by applicable Legal
Requirements, as soon as administratively practicable on or after the Separation
Effective Time (or, following the Effective Time, Athena): (i) the Newco Group
shall use commercially reasonable efforts to waive or cause to be waived all
limitations as to preexisting conditions or waiting periods with respect to
participation and coverage requirements applicable to each Transferred Newco
Employee under any Newco Welfare Plan in which Newco Employees participate (or
are eligible to participate) to the same extent that such conditions and waiting
periods were satisfied or waived under an analogous Everest Welfare Plan, and
(ii) Athena and Newco shall use commercially reasonable efforts to provide or
cause each Transferred Newco Employee to be provided with credit for any
co-payments, deductibles or other out-of-pocket amounts paid during the plan
year in which the Newco Employees become eligible to participate in the Newco
Welfare Plans in satisfying any applicable co-payments, deductibles or other
out-of-pocket requirements under any such plans for such plan year.

 

Section 2.7            Collective Bargaining Agreements.

 

(a)               Notwithstanding anything in this Agreement to the contrary,
Athena, Everest and Newco shall, to the extent required by applicable Legal
Requirements, take or cause to be taken all actions that are necessary (if any)
for Everest or a member of the Everest Group and Newco or a member of the Newco
Group to continue to maintain or to assume and honor any Collective Bargaining
Agreements and any pre-existing collective bargaining relationships (in each
case including obligations that arise in respect of the period both before and
after the date of employment by the Newco Group) in respect of any Everest
Employees or Newco Employees, respectively, and any Employee Representatives.

 

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(b)               Effective no later than the Separation Effective Time, Athena
and Newco shall, or shall cause a member of the Newco Group to, continue to
maintain or to assume and honor, to the extent required by applicable Legal
Requirements or the terms of any Collective Bargaining Agreement, all Collective
Bargaining Agreements and pre-existing collective bargaining relationships (in
each case including obligations that arise in respect of the period both before
and after the date of a Newco Employee’s employment by the Newco Group) that are
applicable to any Newco Employee.

 

(c)               Nothing in this Agreement is intended to alter the provisions
of any Collective Bargaining Agreement or modify in any way the obligations of
the Everest Group or the Newco Group to any Employee Representative or any other
Person as described in such agreement.

 

Section 2.8            Information and Consultation; Notification. The Parties
shall comply with all requirements and obligations to inform, consult or
otherwise notify any Newco Employees or Employee Representatives in relation to
the transactions contemplated by this Agreement and the Separation and
Distribution Agreement, whether required pursuant to any Collective Bargaining
Agreement, the Transfer Regulations or other applicable Legal Requirements. From
and after the Separation Effective Time, Newco Group, at its earliest reasonable
opportunity, shall notify Everest Group of any union organizing activities
regarding which it becomes aware at or in connection with Newco Leased Real
Property or any other facility shared with a member of the Everest Group, and
shall cooperate in good faith with Everest Group regarding such matters.

 

Section 2.9            WARN. Notwithstanding anything set forth in this
Agreement to the contrary, none of the transactions contemplated by or
undertaken by this Agreement is intended to and shall not constitute or give
rise to an “employment loss” or employment separation within the meaning of the
federal Worker Adjustment and Retraining Notification (WARN) Act, or any other
federal, state, or local Legal Requirement addressing mass employment
separations.

 

Section 2.10        Non-U.S. Jurisdictions. Except as expressly set forth
herein, the provisions of this Agreement shall apply in respect of all
jurisdictions wherever situated; provided, however, that to the extent of any
Ancillary Agreement, Exhibit or appendix attached hereto, the terms of such
Ancillary Agreement, Exhibit or appendix shall govern in respect of matters
relating to employees employed in the applicable jurisdiction. Following
consultation with Athena, until the Separation Effective Date Everest shall have
authority to (i) adjust the treatment described in this Agreement (including any
appendix attached hereto) or an Ancillary Agreement with respect to Newco
Employees who are located outside of the United States in order to address
different plans or benefits not addressed herein or to address applicable plans
and benefits in a manner appropriate to the jurisdiction; provided that no such
adjustment shall increase the cost of any such plans or benefits in any material
respect, (ii) ensure compliance with the applicable Legal Requirements of
countries outside of the United States, and (iii) preserve the tax benefits
provided under local tax law or regulation prior to the Separation Effective
Time.

 

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ARTICLE III

 

CERTAIN BENEFIT PLAN PROVISIONS

 

Section 3.1            Health and Welfare Benefit Plans.

 

(a)               (i) Effective no later than the Separation Effective Time, the
participation of each Newco Employee who is a participant in an Everest Welfare
Plan shall automatically cease and (ii) Everest shall cause Newco or a member of
the Newco Group (A) to have in effect, no later than the earlier of the date of
cessation described in subsection (i) above or the Business Day immediately
prior to the Separation Effective Time, Newco Welfare Plans providing health and
welfare benefits for the benefit of each Newco Employee with terms that are
substantially similar to those provided to the applicable Newco Employee
immediately prior to the date on which such Newco Welfare Plans become effective
(excepting any benefits under an Everest U.S. OPEB Plan); and (B) effective on
and after the date of cessation described in subsection (i) above, to fully
perform, pay and discharge all claims of Newco Employees or Former Newco Service
Providers (excepting any claims of any Former Newco Service Providers under an
Everest U.S. OPEB Plan) where such claims are incurred on or following the date
of cessation described in subsection (i) above. For the avoidance of doubt, and
except as otherwise required by the Transfer Regulations, Everest and the
Everest Welfare Plans shall retain, fully perform, pay and discharge all claims
of Newco Employees and Former Newco Service Providers incurred under any Everest
Welfare Plan on or prior to the date of such cessation described in subsection
(i) above.

 

(b)               For any claims related to Newco Employees or Former Newco
Service Providers paid by an Everest Welfare Plan prior to the Separation
Effective Time, where the cost of coverage applicable to such claim(s) have not
been previously charged to the applicable member of the Newco Group prior to the
Separation Effective Time in the ordinary course of business, the Everest
Welfare Plan will retain the right, for no longer than one (1) year after the
Separation Effective Time, to receive reimbursement from the applicable member
of the Newco Group for any claims described in this Section 3.1(b).

 

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Section 3.2            U.S. Savings Plans.

 

(a)               (i) Effective no later than the Separation Effective Time,
Everest shall cause a member of the Newco Group to have in effect one or more
defined contribution savings plans and related trusts that satisfy the
requirements of Sections 401(a) and 401(k) of the Code in which each Newco
Employee who participated in an Everest U.S. Savings Plan immediately prior
thereto shall be eligible to participate (the “Newco U.S. Savings Plan”), with
terms that are substantially similar to those provided by the applicable Everest
Savings Plan and ESOP immediately prior to the date on which such Newco U.S.
Savings Plan becomes effective (other than the ability to make additional
investments in an investment fund invested primarily in Everest Common Stock)
and which also provides for a 3% nonelective contribution, (ii) the
participation of each Newco Employee who is a participant in an Everest U.S.
Savings Plan shall automatically cease effective upon the date on which the
Newco U.S. Savings Plan becomes effective, (iii) as soon as practicable after
the Newco U.S. Savings Plan becomes effective, Everest shall cause the accounts
(including any outstanding participant loan balances) in the Everest U.S.
Savings Plans attributable to such Newco Employees and all of the Assets in the
Everest U.S. Savings Plans related thereto to be transferred in-kind to the
applicable Newco U.S. Savings Plan, provided that Athena shall have the right to
participate in any administrative procedures related to such transfer, and any
required adjustments or true-ups related to such transfer shall be made by
Everest and its Subsidiaries or Athena or a member of the Newco Group to be
mutually agreed as promptly as possible following the Closing Date, and (iv)
effective as of the Separation Effective Time, Everest shall cause the Newco
U.S. Savings Plan (including all applicable accounts and underlying Assets) to
be transferred to Newco and Newco shall thereafter fully pay, perform and
discharge, all obligations thereunder.

 

(b)               The respective investment committees and other fiduciaries of
the Newco U.S. Savings Plan and the Everest U.S. Savings Plan shall determine
(i) the period of time, if any, following the adoption of the Newco U.S. Savings
Plan, during which Newco Employees and Everest Employees may receive
distributions in kind from, respectively, the Newco U.S. Savings Plan and the
Everest U.S. Savings Plan, if, and to the extent, investments under such plans
are comprised of Athena Common Stock or Everest Common Stock, and (ii) the
extent to which and when Everest Common Stock (in the case of the Newco U.S.
Savings Plans) and Athena Common Stock (in the case of the Everest U.S. Savings
Plans) shall cease to be investment alternatives in the respective plans.

 

(c)               Everest shall retain all accounts and all Assets and
Liabilities relating to the Everest U.S. Savings Plans in respect of each Former
Newco Service Provider; provided, that if any Newco Employee whose account
balance is transferred from the Everest U.S. Savings Plans to the applicable
Newco U.S. Savings Plan as set forth in Section 3.2(a) thereafter terminates
employment prior to the Separation Effective Time, such individual’s account
balance shall nonetheless continue to be held in, and subject to the terms and
conditions of, the applicable Newco U.S. Savings Plan.

 

Section 3.3            U.S. Defined Benefit Plans(a). Effective no later than
the Separation Effective Time, and except as provided in an Ancillary Agreement,
Exhibit or appendix hereto, no Newco Employee shall accrue benefits under the
Everest U.S. Retirement Plan. Everest shall retain all Assets and Liabilities
relating to the Everest U.S. Retirement Plan, including Liabilities in respect
of pension benefits accrued thereunder by each Newco Employee and Former Newco
Service Provider. No Assets or Liabilities of any Everest U.S. Retirement Plan
shall be transferred to a retirement plan maintained by any member of the Newco
Group.

 

Section 3.4            U.S. OPEB Plan. Effective no later than the Separation
Effective Time, no Newco Employee shall accrue benefits under the Everest U.S.
OPEB Plan. Everest shall retain all Assets and Liabilities relating to the
Everest U.S. OPEB Plan, including Liabilities in respect of benefits accrued
thereunder by each Newco Employee and Former Newco Service Provider. No Assets
or Liabilities of the Everest U.S. OPEB Plan shall be transferred to a
post-employment benefit plan (including retiree medical and retiree life
insurance arrangements) maintained by any member of the Newco Group.

 

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Section 3.5            Everest Deferred Compensation Plans.

 

(a)               (i) Effective no later than the Separation Effective Time, the
active participation of each Newco Employee who is a Participant in an Everest
Deferred Compensation Plan shall cease (except that the deferral elections for
such Newco Employee Participants shall remain in effect in respect of the
deferral of 2019 annual incentive bonuses) and (ii) effective no later than the
date of such cessation, Newco shall or shall cause a member of the Newco Group
to have in effect one or more non-qualified deferred compensation plans for the
benefit of Transferred Newco Employees (the “Newco Deferred Compensation Plans”)
with terms that are substantially similar to those provided to the applicable
Newco Employee under the Everest Mirror Savings Plan (and as though such plan
provided for a 3% nonelective contribution) immediately prior to the date on
which the Newco Deferred Compensation Plans become effective.

 

(b)               Except as provided in an Exhibit or appendix hereto, Everest
shall retain all Assets and Liabilities relating to the Everest Deferred
Compensation Plans in respect of Everest Employees (including any Assets
relating to corporate owned life insurance policies) and all Assets and
Liabilities relating to the Everest Deferred Compensation Plans in respect of
Newco Employees and Former Newco Service Providers (including any Assets
relating to corporate owned life insurance policies).

 

(c)               The Parties acknowledge and agree that the consummation of the
transactions contemplated by the Separation and Distribution Agreement shall not
trigger a payment or distribution of compensation under any Everest Deferred
Compensation Plan or any other nonqualified deferred compensation plan sponsored
or maintained by any member of the Everest Group in which any Newco Employee
participates. Following the Separation Effective Time, Athena and Newco shall,
or shall cause the applicable member of the Newco Group to, notify Everest as
soon as reasonably practicable if any Transferred Newco Employee who
participates in any Everest Deferred Compensation Plan or any other nonqualified
deferred compensation plan sponsored or maintained by any member of the Everest
Group experiences a “separation from service” within the meaning of Section 409A
of the Code on or following the Separation Effective Time.

 

Section 3.6            Everest Canadian Retirement Plans.

 

(a)               (i) Effective no later than the Separation Effective Time, the
active participation of each Newco Employee who is a Participant in any Canadian
savings, registered savings or pension plan sponsored or maintained by a member
of the Everest Group (the “Everest Canadian Retirement Plans”) shall cease, (ii)
effective no later than the date of such cessation, Newco shall or shall cause a
member of the Newco Group to have in effect one or more Canadian savings and or
pension plans (the “Newco Canadian Retirement Plans”) with terms that are
substantially similar to those provided to the applicable Newco Employee under
the Everest Canadian Savings Plans immediately prior to the date on which the
applicable Newco Canadian Retirement Plans become effective, and (iii) as soon
as practicable after the Newco Canadian Retirement Plans become effective,
Everest shall cause the accounts (including any outstanding participant loan
balances) in the Everest Canadian Retirement Plans attributable to such Newco
Employees and all of the Assets in the Everest Canadian Retirement Plans related
thereto to be transferred in-kind to the applicable Newco Canadian Retirement
Plan, provided that Athena shall have the right to participate in any
administrative procedures related to such transfer, and any required adjustments
or true-ups related to such transfer shall be made by Everest and its
Subsidiaries or Athena or a member of the Newco Group to be mutually agreed as
promptly as possible following the Closing Date and transfer of such assets.

 

20

 

 

(b)               Everest shall retain all Assets and Liabilities relating to
the Everest Canadian Savings Plans in respect of each Former Newco Service
Provider.

 

Section 3.7            Non-U.S. Plans. Except as expressly provided in Section
3.6, Section 3.8, or Section 3.9, the treatment of each Everest Benefit
Arrangement and Newco Benefit Arrangement that is maintained primarily in
respect of individuals who are located outside of the United States (together,
the “Non-U.S. Plans”) shall be subject to the terms and conditions set forth in
the applicable Ancillary Agreement, Exhibit or an appendix attached hereto;
provided, that if the treatment of any such Non-U.S. Plan is not specifically
covered by such Ancillary Agreement, Exhibit or an appendix attached hereto,
then unless otherwise agreed by the Parties or as required by applicable Legal
Requirements, (i) Athena and Newco shall fully perform, pay and discharge all
obligations of the Non-U.S. Plans relating to Newco Employees, Newco Independent
Contractors and Former Newco Service Providers, whenever incurred, (ii) Everest
shall fully perform, pay and discharge all obligations of the Non-U.S. Plans
relating to Everest Employees, Everest Independent Contractors and Former
Everest Service Providers whenever incurred, and (iii) any Assets held in
respect of such Non-U.S. Plans related to Newco Employees, Newco Independent
Contractors and Former Newco Service Providers shall be transferred to Newco.

 

Section 3.8            Non-U.S. Defined Benefit Plans. Effective no later than
the Separation Effective Time, and except as required by applicable Legal
Requirements or the terms of a Collective Bargaining Agreement, no Newco
Employee shall accrue benefits under any Non-U.S. Plan that is a defined benefit
pension plan (each, a “Non-U.S. Defined Benefit Plan”). Except as required by
applicable Legal Requirements or as provided in an Ancillary Agreement, Exhibit
or an appendix attached hereto, Everest shall retain all Assets and Liabilities
relating to any Non-U.S. Defined Benefit Plan, including Liabilities in respect
of pension benefits accrued thereunder by each Newco Employee and Former Newco
Service Provider.

 

Section 3.9            Individual Agreements.

 

(a)               To the extent permissible by the terms of any Individual
Agreement and by applicable Legal Requirements, (i) Everest shall, or shall
cause a member of the Everest Group to, assign to Newco or another member of the
Newco Group, as designated by Newco, all Individual Newco Agreements and (ii)
Newco shall, or shall cause a member of the Newco Group to, assign to Everest or
another member of the Everest Group, as designated by Everest, all Individual
Everest Agreements, in either case, with such assignment to be effective no
later than the Separation Effective Time (the date of such assignment, the
“Individual Agreement Effective Time”). Effective as of the Individual Agreement
Effective Time, (i) Newco shall, or shall cause a member of the Newco Group to,
assume and honor each Individual Newco Agreement assigned by Everest or a member
of the Everest Group and (ii) Everest shall, or shall cause a member of the
Everest Group to, assume and honor each Individual Everest Agreement assigned by
Newco or a member of the Newco Group, in either case, in accordance with this
Section 3.9(a).

 

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(b)               To the extent that assignment of any such Individual Agreement
is not permitted by the terms of such Individual Agreement or by applicable
Legal Requirements, effective as of the Separation Effective Time, each member
of the Newco Group or the Everest Group, respectively, shall be considered to be
a successor to each member of the Everest Group or the Newco Group,
respectively, for purposes of, and a third-party beneficiary with respect to,
such Individual Agreement, such that each member of the Newco Group or the
Everest Group, respectively, shall enjoy all of the rights and benefits under
such agreement (including rights and benefits as a third-party beneficiary),
with respect to the business operations of the Newco Group or the Everest Group,
respectively; provided, however, that in no event shall (i) Everest be permitted
to enforce any Individual Agreement (including any agreement containing
non-competition or non-solicitation covenants) against a Newco Employee or
Former Newco Service Provider for action taken in such individual’s capacity as
a Newco Employee or Former Newco Service Provider, or (ii) Newco be permitted to
enforce any Individual Agreement (including any agreement containing
non-competition or non-solicitation covenants) against an Everest Employee or
Former Everest Service Provider for action taken in such individual’s capacity
as an Everest Employee or Former Everest Service Provider; provided, further,
that Everest and Newco, respectively, shall only be permitted to enforce any
Individual Agreement on Everest’s or Newco’s own behalf for twelve (12) months
following the Separation Effective Time.

 

(c)               To the extent that any such Individual Agreement is assigned
to Newco or another member of the Newco Group or Everest or another member of
the Everest Group, as applicable, then each member of the Everest Group or Newco
Group, as applicable, shall be considered to be a third-party beneficiary with
respect to such Individual Agreement, such that each member of the Everest Group
or the Newco Group, as applicable, shall enjoy all of the rights and benefits
under such agreement (including rights and benefits as a third-party
beneficiary), with respect to the business operations of the Everest Group or
the Newco Group, as applicable; provided, however, that in no event shall (i)
Everest be permitted to enforce any Individual Agreement (including any
agreement containing non-competition or non-solicitation covenants) against a
Newco Employee or Former Newco Service Provider for action taken in such
individual’s capacity as a Newco Group Employee or Former Newco Service
Provider, or (ii) Newco be permitted to enforce any Individual Agreement
(including any agreement containing non-competition or non-solicitation
covenants) against an Everest Employee or Former Everest Service Provider for
action taken in such individual’s capacity as an Everest Group Employee or
Former Everest Service Provider; provided, further, that Everest or Newco, as
applicable shall only be considered a third-party beneficiary with respect to
any such Individual Agreement for twelve (12) months following the Separation
Effective Time.

 

(d)               Notwithstanding any provision in Section 3.9(a) or Section
3.9(c) to the contrary, effective as of the Separation Effective Time, Newco
shall expressly assume in writing the Designated Individual Agreements and honor
the obligations of Everest in accordance with the terms of the Designated
Individual Agreements in respect of each Transferred Newco Employee who is a
party to such agreements, in the same manner and to the same extent that Everest
would be required to perform if no assumption had taken place. For purposes of
the Designated Individual Agreements, each Party hereby acknowledges and agrees
that (i) the consummation of the transactions contemplated by the Merger
Agreement and the Separation and Distribution Agreement constitute an RMT
Separation (within the meaning of the Designated Individual Agreements), and
(ii) from and after the Separation Effective Time, the “Company” and the
“Company Group” (each as defined in the Designated Individual Agreements) shall
mean Athena and the Athena Group.

 

(e)               Notwithstanding any provision of this Agreement to the
contrary, Everest shall retain the Excluded Individual Agreements and all
Liabilities associated therewith.

 

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ARTICLE IV

EQUITY INCENTIVE AWARDS

 

Section 4.1            Treatment of Everest Stock Options. Each Everest Option
that is outstanding immediately prior to the Effective Time and that is held by
a Newco Employee (other than a Delayed Transfer Newco Employee) who continues in
employment through the Effective Time, whether vested or unvested, shall
automatically be assumed by Athena at the Effective Time (each, an “Athena
Option”) and shall have, and be subject to, the same terms and conditions as
were applicable to the corresponding Everest Option immediately prior to the
Effective Time, except that each Athena Option shall (i) relate to a number of
shares of Athena Common Stock (with each discrete grant rounded down to the
nearest whole share) equal to the product of (x) the number of shares of Everest
Common Stock issuable upon the exercise of the corresponding Everest Option
immediately prior to the Effective Time and (y) the Equity Award Adjustment
Ratio and (ii) have a per-share exercise price (rounded up to the nearest whole
cent) equal to the quotient determined by dividing (x) the per share exercise
price of the corresponding Everest Option by (y) the Equity Award Adjustment
Ratio.

 

Section 4.2            Treatment of Everest Restricted Stock Units. Each Everest
Restricted Stock Unit that is outstanding immediately prior to the Effective
Time and that is held by a Newco Employee (other than a Delayed Transfer Newco
Employee) who continues in employment through the Effective Time, whether vested
or unvested, shall automatically be assumed by Athena at the Effective Time
(each, an “Athena Restricted Stock Unit”) and shall have, and be subject to, the
same terms and conditions as were applicable to the corresponding Everest
Restricted Stock Unit immediately prior to the Effective Time, except that each
grant of Athena Restricted Stock Units shall (i) relate to that number of shares
of Athena Common Stock (with each discrete grant rounded up to the nearest whole
share) equal to the product of (x) the number of shares of Everest Common Stock
that were issuable upon the vesting of such Everest Restricted Stock Units
immediately prior to the Effective Time and (y) the Equity Award Adjustment
Ratio and (ii) be subject to vesting solely based upon the satisfaction of any
applicable continued employment requirements that apply to the corresponding
Everest Restricted Stock Units immediately prior to the Effective Time.

 

Section 4.3            Treatment of Everest Performance Based Restricted Stock
Units. Each Everest Performance Based Restricted Stock Unit that is outstanding
immediately prior to the Effective Time and that is held by a Newco Employee
(other than a Delayed Transfer Newco Employee) who continues in employment
through the Effective Time, whether vested or unvested, shall be assumed by
Newco at the Effective Time and converted into a restricted stock unit
denominated in shares of Athena Common Stock (each, an “Athena Adjusted
Performance Based Restricted Stock Unit”) and shall have, and be subject to, the
same terms and conditions as were applicable to the corresponding Everest
Performance Based Restricted Stock Unit immediately prior to the Effective Time,
except that (i) the performance-based vesting conditions applicable to such
Everest Performance Based Restricted Stock Unit immediately prior to the
Effective Time shall not apply from and after the Effective Time, and (ii) each
grant of Athena Adjusted Performance Based Restricted Stock Units shall (x)
relate to that number of shares of Athena Common Stock (with each discrete grant
rounded up to the nearest whole share) equal to the product of (A) the number of
shares of Everest Common Stock that were issuable upon the vesting of such
Everest Performance Based Restricted Stock Unit immediately prior to the
Effective Time assuming attainment of the applicable performance metrics at the
target level of performance and (B) the Equity Award Adjustment Ratio and (y) be
subject to vesting solely based upon the satisfaction of any applicable
continued employment or service requirements that apply to the corresponding
Everest Performance-Based Restricted Stock Unit immediately prior to the
Effective Time.

 

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Section 4.4            Everest Stock Purchase Plan. The administrator of the
Everest Stock Purchase Plan shall take all actions necessary and appropriate to
provide that: (i) the purchase period (if any) established for the Everest Stock
Purchase Plan during which the Record Date is to occur shall end at a reasonable
time before the Record Date to allow participants to purchase shares of Everest
Common Stock under the Everest Stock Purchase Plan prior to the Record Date;
(ii) all participant payroll deductions and other contributions under the
Everest Stock Purchase Plan shall cease on or before the Record Date described
in clause (i) of this Section 4.4; (iii) Newco Group Employees in the Everest
Stock Purchase Plan shall not be eligible to participate in any future purchase
period that begins following the Record Date; (iv) any cash remaining in the
Everest Stock Purchase Plan account of any Newco Group Employee described in
clause (iii) shall be refunded to such Newco Group Employee without interest as
soon as administratively practicable; and (v) the next following purchase period
shall be established by the administrator of the Everest Stock Purchase Plan in
its sole discretion.

 

Section 4.5            Replacement Awards. Each Everest Stock Option, Everest
Restricted Stock Unit and Everest Performance Based Restricted Stock Unit that
is outstanding immediately prior to the Effective Time and that is held by a
Delayed Transfer Newco Employee shall remain outstanding in accordance with the
terms of applicable Everest Stock Incentive Plan and award agreement thereunder
(including with respect to terms applicable to termination of employment or
service). Effective as of the Delayed Transfer Date applicable to any such
Delayed Transfer Newco Employee, (i) each then outstanding Everest Stock Option,
Everest Restricted Stock Unit and Everest Performance Based Restricted Stock
Unit shall vest or be forfeited by such Delayed Transfer Newco Employee in
accordance with its terms (such date, “Delayed Transfer Equity Award Effective
Date”) and (ii) as soon as administratively practicable following the Delayed
Transfer Equity Award Effective Date, Athena shall grant such Delayed Transfer
Newco Employee an incentive award (each, a “Replacement Award”) that is
equivalent in value to the value of, and has substantially the same terms and
conditions as were applicable to, the Everest Stock Options, Everest Restricted
Stock Units and Everest Performance Based Restricted Stock Units forfeited by
such Delayed Transfer Newco Employee as of the Delayed Transfer Equity Award
Effective Date.

 

Section 4.6            General Terms.

 

(a)               At or prior to the Effective Time, Athena shall take such
actions as are necessary for the grant of the Athena Options, Athena Restricted
Stock Units, and Athena Adjusted Performance-Based Restricted Stock Units
pursuant to this ARTICLE IV, including the reservation, issuance and listing of
Athena Common Stock issuable pursuant to the awards granted pursuant this
ARTICLE IV in compliance with applicable Legal Requirements and the rules and
regulations of any applicable United States securities exchange. As soon as
reasonably practicable following the date of this Agreement, Athena shall file
with the SEC a registration statement on Form S-3 or Form S-8, as the case may
be (or any successor form), or another appropriate form with respect to such
Athena Common Stock issuable pursuant to this ARTICLE IV and shall use
commercially reasonable efforts to have such registration statement declared
effective as soon as practicable following each such filing (as applicable) but
in any event before the Closing and, thereafter, Athena shall use commercially
reasonable efforts to maintain the effectiveness of such registration
statements.

 

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(b)               All of the adjustments described in this ARTICLE IV shall be
effected in accordance with Sections 424 and 409A of the Code, in each case to
the extent applicable. Notwithstanding the foregoing, (i) if the treatment set
forth in this ARTICLE IV would cause adverse Tax consequences to any Newco
Employee located outside of the United States, the Parties shall use their
reasonable best efforts to cause the treatment to be conformed in a manner that
does not give rise to such adverse Tax consequences, to the extent practicable;
(ii) each Everest Option, Everest Restricted Stock Unit and Everest
Performance-Based Restricted Stock Unit held by a Newco Employee located in
Canada shall be assumed and adjusted as described in this ARTICLE IV immediately
prior to, but contingent upon the occurrence of, the Effective Time; and (iii)
each discrete grant of Newco Restricted Stock Units and Newco Adjusted
Performance-Based Restricted Stock Units held by a Newco Employee located in
Canada shall in all events be rounded down to the nearest whole share.

 

(c)               For purposes of the vesting and termination provisions of the
Athena Options, Athena Restricted Stock Units, and Athena Adjusted
Performance-Based Restricted Stock Units, (i) continued service with a member of
the Athena Group shall be considered to be continued service for purposes of
such award (and prior service with a member of the Everest Group and Newco Group
shall be credited for purposes of any Athena Group award), (ii) all references
in such awards to the “Company” shall be references to Athena, and (iii) any
reference to a “change in control,” “change of control,” or similar definition
in any agreement applicable to such awards shall be deemed to refer to a “Change
in Control” as defined in the Athena 2018 Equity and Cash Incentive Plan or any
successor thereto.

 

(d)               The Parties hereby acknowledge that the provisions of this
ARTICLE IV are intended to achieve certain tax, legal and accounting objectives
and, in the event such objectives are not achieved, the Parties agree to
negotiate in good faith regarding such other actions that may be necessary or
appropriate to achieve such objectives.

 

25

 

 

ARTICLE V

 

ADDITIONAL MATTERS

 

Section 5.1            Cash Incentive Programs. Prior to the Separation
Effective Time, Everest shall transfer to Newco the Accrued Incentive Amount.
For the remainder of the applicable cash incentive or sales commission period in
effect as of the date on which the transfer of such employment occurs, and in
addition to any applicable obligations under the Transfer Regulations or other
applicable Legal Requirements, Athena and Newco shall provide that each
applicable Transferred Newco Employee shall continue to be eligible to receive
an annual and/or short-term cash incentive bonus or sales commission payment in
accordance with similar terms and conditions (except with regard to any
performance-related metrics) as applied to such Newco Employee under the
corresponding Everest annual or short-term incentive or sales commission program
as in effect immediately prior to the date of such transfer, as equitably
adjusted by the Compensation Committee of the Board of Everest in consultation
with Athena prior to the Separation Effective Time to the extent necessary to
reflect the effect of the transactions contemplated by the Separation and
Distribution Agreement and the Merger Agreement on the applicable performance
metrics; provided that in no event shall the aggregate incentive amounts paid to
the applicable Newco Employees in respect of such applicable period be less than
the Accrued Incentive Amount; provided, further, that this provision is only
effective to the extent that these annual and/or short-term cash incentive bonus
or sales commission programs were established in the ordinary course of business
consistent with past practice.

 

Section 5.2            Time-Off Benefits. Unless otherwise required in a
Collective Bargaining Agreement, the Transfer Regulations or applicable Legal
Requirements, Athena and Newco shall (i) credit each Transferred Newco Employee
with the amount of accrued but unused vacation time, paid time-off and other
time-off benefits as such Newco Employee had with the Everest Group as of
immediately before the date on which the employment of the Newco Employee
transfers to Newco (the “PTO Accruals”) and (ii) permit each such Newco Employee
to use such accrued but unused vacation time, paid time off and other time-off
benefits in the same manner and upon substantially the same terms and conditions
as the Newco Employee would have been so permitted under the terms and
conditions of the applicable Everest policies in effect for the year in which
such transfer of employment occurs. Effective no later than the Separation
Effective Time, Athena and Newco shall assume all Liabilities for the PTO
Accruals.

 

Section 5.3            Workers’ Compensation Liabilities. Effective no later
than the Separation Effective Time, Athena and Newco shall assume all
Liabilities for Transferred Newco Employees, Transferred Newco Independent
Contractors and Former Newco Service Providers related to any and all workers’
compensation injuries, incidents, conditions, claims or coverage, on and after
the Separation Effective Time, and Newco shall be fully responsible for the
administration, management and payment of all such claims and satisfaction of
all such Liabilities.

 

Section 5.4            COBRA Compliance in the United States. Effective no later
than the Separation Effective Time, Athena and Newco shall assume and be
responsible for administering compliance with the health care continuation
requirements of COBRA in accordance with the provisions of the Newco Welfare
Plans, with respect to Transferred Newco Employees or Newco Former Service
Providers who incurred a COBRA qualifying event or loss of coverage under an
Everest Welfare Plan at any time on or after the Separation Effective Time.
Newco shall also be responsible for administering and ensuring compliance with
the health care continuation requirements of COBRA and the corresponding
provisions of the Newco Welfare Plans with respect to Transferred Newco
Employees and their covered dependents who incur a COBRA qualifying event or
loss of coverage under the Newco Welfare Plans at any time after the Separation
Effective Time.

 

26

 

 

Section 5.5            Retention Bonuses. Any retention bonuses payable to any
Newco Employees that become payable after the date on which the employment of
the Newco Employee transfers to a member of the Newco Group shall be assumed by
the Newco Group as of the date of such transfer and the applicable member of the
Newco Group shall pay all amounts payable thereunder to the applicable Newco
Employees in accordance with the terms thereof; provided, that such bonuses (i)
do not exceed $2,000,000 in the aggregate and $75,000 per employee, (ii) are
subject to continued employment through the date that is six (6) months
following the Separation Effective Time unless earlier terminated without just
cause, and (iii) are awarded in consultation with Athena, including with respect
to the terms and conditions thereof.

 

Section 5.6            Code Section 409A. Notwithstanding anything in this
Agreement to the contrary, the Parties shall negotiate in good faith regarding
the need for any treatment different from that otherwise provided herein with
respect to the payment of compensation to ensure that the treatment of such
compensation does not cause the imposition of a Tax under Section 409A of the
Code. In no event, however, shall any Party be liable to another in respect of
any Taxes imposed under, or any other costs or Liabilities relating to, Section
409A of the Code; provided, that the Newco Group shall promptly reimburse
Everest for any Taxes, costs or Liabilities incurred by Everest as a result of
the failure to timely notify Everest of a “separation from service” in
accordance with Section 3.5(c).

 

Section 5.7            Payroll Taxes and Reporting. The Parties shall, to the
extent practicable, (i) treat Newco or a member of the Newco Group as a
“successor employer” and Everest (or the appropriate member of the Everest
Group) as a “predecessor,” within the meaning of Sections 3121(a)(1) and
3306(b)(1) of the Code, with respect to Transferred Newco Employees for purposes
of Taxes imposed under the United States Federal Unemployment Tax Act or the
United States Federal Insurance Contributions Act, and (ii) agree to implement
this treatment by utilizing solely Section 4 of Revenue Procedure 2004-53,
STANDARD PROCEDURE FOR PREDECESSORS AND SUCCESSORS.

 

Section 5.8            Regulatory Filings. Subject to applicable Legal
Requirements and the Tax Matters Agreement, Everest shall retain responsibility
for all employee-related regulatory filings for reporting periods ending at or
prior to the Separation Effective Time, except for Equal Employment Opportunity
Commission EEO-1 reports and affirmative action program (AAP) reports and
responses to Office of Federal Contract Compliance Programs (OFCCP) submissions,
for which the Parties shall cooperate in good faith to provide data and
information (to the extent permitted by applicable Legal Requirements) to Newco,
which shall be responsible for making such filings in respect of Newco
Employees.

 

27

 

 

Section 5.9            Disability.

 

(a)               Except as required by applicable Legal Requirements and
notwithstanding any provision of Section 2.5 or Section 3.1(a) to the contrary,
to the extent any Newco Welfare Plan is underwritten to only cover disability
claims incurred following the Separation Effective Time, with respect to any
Newco Employee that has, as of the Separation Effective Time, incurred a claim
as part of any short- or long-term disability program under an Everest Welfare
Plan, such Newco Employee’s rights to continued short- or long-term disability
benefits shall remain with, and be according to the terms of, the applicable
Everest Welfare Plan as of the Separation Effective Time and to the extent such
Newco Employee is able to return to work within twelve (12) months of the
disability event, Newco shall provide a qualifying offer of employment to such
Newco Employee in accordance with Section 2.2; provided, that to the extent the
applicable Newco Welfare Plan accepts claims incurred prior to the Separation
Effective Time, such claims shall transfer to a Newco Welfare Plan on or before
the Separation Effective Time, and the remainder (if any) of such Transferred
Newco Employee’s short- or long-term disability benefits will be paid by a Newco
Welfare Plan. If the claims described in the first sentence of this Section
5.9(a) transfer to a Newco Welfare Plan effective on or before the Separation
Effective Time and if any Newco Employee described above shall have any dispute
with such benefits that such Newco Employee is receiving or has filed a claim to
receive under a Newco Welfare Plan, any and all appeal rights of such Newco
Employee shall be realized through the Newco Welfare Plans (and any appeal
rights such Newco Employee may have under any Everest Welfare Plan will be
limited to benefits received and time periods occurring prior to the Separation
Effective Time). If the claims described in the first sentence of this Section
5.9(a) do not transfer to a Newco Welfare Plan effective as of the Separation
Effective Time, then a member of the Newco Group shall promptly reimburse the
Everest Welfare Plan for the cost of such continued coverage.

 

(b)               For any Newco Employee or Former Newco Service Provider who
is, as of the Separation Effective Time, receiving payments as part of any
short- or long-term disability program that is part of an Everest Welfare Plan,
and has been receiving short- or long-term disability payments from such plan
for twelve (12) months or fewer before the Separation Effective Time, and to the
extent such Newco Employee or Former Newco Service Provider is able to return to
work within twelve (12) months of the disability event, Newco shall provide a
qualifying offer of employment to such Newco Employee or Former Newco Service
Provider in accordance with Section 2.2; provided, however that, notwithstanding
the foregoing, no Newco Employee or Former Newco Service Provider described in
this Section 5.9(b) will be eligible for re-employment as described in this
subsection after the first anniversary of the Separation Effective Time.

 

Section 5.10        Certain Requirements. Notwithstanding anything in this
Agreement to the contrary, if the Transfer Regulations, the terms of a
Collective Bargaining Agreement or applicable Legal Requirements require that
any Assets or Liabilities be retained by the Everest Group or transferred to or
assumed by the Newco Group in a manner that is different from that set forth in
this Agreement, such retention, transfer or assumption shall be made in
accordance with the terms of such Collective Bargaining Agreement or applicable
Legal Requirement and shall not be made as otherwise set forth in this
Agreement.

 

28

 

 

Section 5.11          Fiduciary Matters. The Parties each acknowledge that
actions required to be taken pursuant to this Agreement may be subject to
fiduciary duties or standards of conduct under ERISA or other applicable Legal
Requirement, and no Party shall be deemed to be in violation of this Agreement
if it fails to comply with any provisions hereof based upon its good-faith
determination (as supported by advice from counsel experienced in such matters)
that to do so would violate such a fiduciary duty or standard. Subject to
Section 5.6, each Party shall be responsible for taking such actions as are
deemed necessary and appropriate to comply with its own fiduciary
responsibilities and shall fully release and indemnify the other Party for any
Liabilities caused by the failure to satisfy any such responsibility.

 

Section 5.12        No Hire and No Solicitation of Employees. Everest and Athena
each agree that, except as specifically set forth below, for a period of (i)
twenty-four (24) months for those Key Everest Employees in compensation band E3
and for those Key Athena Employees in compensation bands N, N-1 and N-2 and (ii)
eighteen (18) months for each other Key Everest Employee and Key Athena
Employee, in either case, from and after the Closing Date (the “Non-Solicit
Period”), without the prior written consent of the other applicable party, they
shall not, and they shall cause their respective Subsidiaries not to, directly
or indirectly, hire or solicit to hire (or cause or seek to cause to leave the
employ of the other party or the other party’s Subsidiary), or solicit to enter,
or enter into, a consulting agreement with, any employee who is a Key Everest
Employee or Key Athena Employee on the Closing Date, as applicable. The
restrictions set forth in this Section 5.12 shall not apply to (i) any Key
Everest Employee or Key Athena Employee whose employment has been involuntarily
terminated by a party or a party’s Subsidiary without cause, including in
connection with a layoff or reduction in force; or (ii) Key Everest Employee or
Key Athena Employee who has voluntarily terminated his or her employment with a
party or a party’s Subsidiary, after six (6) months from the date of termination
of such employee’s employment, or such longer period as required by applicable
law.

 

ARTICLE VI

GENERAL AND ADMINISTRATIVE

 

Section 6.1            Employer Rights. Nothing in this Agreement shall be
deemed to be an amendment to any Everest Benefit Arrangement or Newco Benefit
Arrangement or to prohibit any member of the Everest Group or Newco Group, as
the case may be, from amending, modifying or terminating any Everest Benefit
Arrangement or Newco Benefit Arrangement at any time within its sole discretion.

 

Section 6.2            Effect on Employment. Nothing in this Agreement is
intended to or shall confer upon any employee or former employee of Everest,
Newco or any of their respective Affiliates any right to continued employment,
or any recall or similar rights to any such individual on layoff or any type of
approved leave.

 

Section 6.3            Consent of Third Parties. If any provision of this
Agreement is dependent on the Consent of any third party and such Consent is
withheld, the Parties shall use their reasonable best efforts to implement the
applicable provisions of this Agreement to the fullest extent practicable. If
any provision of this Agreement cannot be implemented due to the failure of such
third party to consent, the Parties hereto shall negotiate in good faith to
implement the provision (as applicable) in a mutually satisfactory manner.

 

29

 

 

Section 6.4            Access to Employees. On and after the Separation
Effective Time, Everest and Newco shall, or shall cause each of their respective
Affiliates to, make available to each other those of their employees who may
reasonably be needed in order to defend or prosecute any legal or administrative
action (other than a legal action between Everest and Newco) to which any
employee or director of the Everest Group or the Newco Group or any Everest
Benefit Arrangement or Newco Benefit Arrangement is a party and which relates to
an Everest Benefit Arrangement or Newco Benefit Arrangement. The Party to whom
an employee is made available in accordance with this Section 6.4 shall pay or
reimburse the other Party for all reasonable expenses which may be incurred by
such employee in connection therewith, including all reasonable travel, lodging,
and meal expenses, but excluding any amount for such employee’s time spent in
connection herewith.

 

Section 6.5            Beneficiary Designation/Release of Information/Right to
Reimbursement. To the extent permitted by applicable Legal Requirements and
except as otherwise provided for in this Agreement, all beneficiary
designations, authorizations for the release of Information and rights to
reimbursement made by or relating to Transferred Newco Employees under Everest
Benefit Arrangements shall be transferred to and be in full force and effect
under the corresponding Newco Benefit Arrangements until such beneficiary
designations, authorizations or rights are replaced or revoked by, or no longer
apply, to the relevant Newco Employee.

 

Section 6.6            No Third Party Beneficiaries. This Agreement is solely
for the benefit of the Parties and, except to the extent otherwise expressly
provided herein, nothing in this Agreement, express or implied, is intended to
confer any rights, benefits, remedies, obligations or Liabilities under this
Agreement upon any Person, including any Newco Employee or other current or
former employee, officer, director or contractor of the Athena Group, Everest
Group or Newco Group, other than the Parties and their respective successors and
assigns.

 

Section 6.7            No Acceleration of Benefits. Except as otherwise provided
in this Agreement, no provision of this Agreement shall be construed to create
any right, or accelerate vesting or entitlement, to any compensation or benefit
whatsoever on the part of any Newco Employee or other former, current or future
employee of the Everest Group or Newco Group under any Benefit Arrangement of
the Everest Group or Newco Group.

 

Section 6.8            Employee Benefits Administration. At all times following
the date hereof, the Parties will cooperate in good faith as necessary to
facilitate the administration of employee benefits and the resolution of related
employee benefit claims with respect to Transferred Newco Employees, Former
Newco Service Providers and employees and other service providers of Everest, as
applicable, including with respect to the provision of employee level
information necessary for the other Party to manage, administer, finance and
file required reports with respect to such administration.

 

30

 

 

Section 6.9            Exhibits. Everest Group shall, or shall cause Newco
Group, to provide the Exhibits, Schedules and appendices contemplated by this
Agreement to Athena no later than thirty (30) days prior to the Separation
Effective Time; provided, that, to the extent any Exhibit, Schedule or appendix
is not attached hereto as of the date this Agreement is entered into, or if any
such Exhibit, Schedule or appendix is amended (in each case, a “Subsequent
Exhibit”), Everest shall consult with Athena regarding such Subsequent Exhibit
and shall consider any comment from Athena in good faith; provided, further,
that, to the extent that the terms of or actions contemplated by any such
Subsequent Exhibit materially increase the cost to Athena under this Agreement
or are otherwise materially inconsistent with this Agreement, such Subsequent
Exhibit shall be subject to the consent of Athena, which shall not be
unreasonably withheld.

 

ARTICLE VII

MISCELLANEOUS

 

Section 7.1            Entire Agreement; Counterparts; Exchanges by Facsimile.
This Agreement and the Separation and Distribution Agreement, including the
Exhibits and Schedules thereto and the other agreements referred to herein and
therein, shall constitute the entire agreement and shall supersede all prior
agreements and understandings, both written and oral, among or between any of
the Parties with respect to the subject matter hereof and thereof. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original and all of which shall constitute one and the same instrument. The
exchange of a fully executed Agreement (in counterparts or otherwise) by
facsimile or electronic transmission shall be sufficient to bind the Parties to
the terms and conditions of this Agreement.

 

Section 7.2            Survival of Agreements. The covenants and agreements that
by their terms are to be performed following the Separation Effective Time
pursuant to this Agreement shall survive the Separation Effective Time in
accordance with their terms, and all other covenants and agreements herein shall
terminate and shall not survive the Separation Effective Time.

 

Section 7.3            Notices. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given or made as follows: (a) if sent by registered or certified
mail in the U.S. return receipt requested, upon receipt; (b) if sent by
nationally recognized overnight air courier (such as Federal Express), two
Business Days after mailing; (c) if sent by facsimile transmission or e-mail
before 5:00 p.m. Eastern Time, when transmitted and receipt is confirmed; (d) if
sent by facsimile transmission or e-mail after 5:00 p.m. Eastern Time and
receipt is confirmed, on the following Business Day; or (e) if otherwise
actually personally delivered, when delivered; provided that such notices,
requests, demands and other communications are delivered to the physical
address, e-mail address or facsimile number set forth below, or to such other
address as any Party shall provide by like notice to the other Parties to this
Agreement:

 

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  if to Athena or Newco (after the Separation Effective Time):

 

    Apergy Corporation
2445 Technology Forest Blvd., 12th Floor
The Woodlands, TX 77381     Attn: General Counsel     Email:
general.counsel@apergy.com

 

  with a copy (which shall not constitute notice) to:

 

    Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153     Attn: Michael J. Aiello       Sachin Kohli     Email:
michael.aiello@weil.com       sachin.kohli@weil.com     Fax: (212) 310-8007

 

  if to Everest or Newco (prior to the Separation Effective Time):       c/o
Ecolab Inc.     1 Ecolab Place     Saint Paul, MN 55102     Attn: General
Counsel     Email: generalcounsel@ecolab.com

 

  with a copy (which shall not constitute notice) to:

 

    Skadden, Arps, Slate, Meagher & Flom LLP     Attn: Charles W. Mulaney, Jr.  
    Richard C. Witzel, Jr.     155 N. Wacker Drive, Suite 2700     Chicago, IL
60606     Email: charles.mulaney@skadden.com       rich.witzel@skadden.com    
Fax: (312) 407-0411

 

Section 7.4            Waiver.

 

(a)               No failure on the part of any Party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Party in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy. The rights and remedies hereunder are cumulative and not
exclusive of any rights or remedies that any Party would otherwise have.

 

(b)               No Party shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.

 

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Section 7.5            Assignment. This Agreement shall be binding upon, and
shall be enforceable by and inure solely to the benefit of, the Parties and
their respective successors and permitted assigns; provided, however, that
neither this Agreement nor any Party’s rights or obligations hereunder may be
assigned or delegated by such Party without the prior written consent of the
other Parties, and any attempted assignment or delegation of this Agreement or
any of such rights or obligations by any Party without the prior written consent
of the other Parties shall be void and of no effect.

 

Section 7.6            Termination. This Agreement shall terminate without
further action at any time before the Separation Effective Time upon termination
of the Merger Agreement. If so terminated, no Party shall have any Liability of
any kind to any other Party or any other Person on account of this Agreement,
except as provided in the Merger Agreement.

 

Section 7.7            Amendment. This Agreement may not be amended except by an
instrument in writing signed by an authorized Representative of each of the
Parties.

 

Section 7.8            Subsidiaries. Each of the Parties shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such Party or
by any Entity that becomes a Subsidiary of such Party at and after the
Separation Effective Time, to the extent such Subsidiary remains a Subsidiary of
the applicable Party.

 

Section 7.9            Governing Law; Jurisdiction; Specific Performance;
Remedies. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof. In any Legal
Proceeding between any of the Parties arising out of or relating to this
Agreement or any of the transactions contemplated hereby: (a) each of the
Parties irrevocably and unconditionally consents and submits to the exclusive
jurisdiction and venue of the Court of Chancery of the State of Delaware or, if
under applicable Legal Requirements, exclusive jurisdiction over such matter is
vested in the federal courts, any federal court in the State of Delaware and any
appellate court from any thereof; (b) each of the Parties irrevocably waives the
right to trial by jury; and (c) each of the Parties irrevocably and
unconditionally waives, and agrees not to assert, by way of motion or as a
defense, counterclaim or otherwise, any claim (i) that it is not personally
subject to the jurisdiction of the courts in Delaware as described herein for
any reason; (ii) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts; and (iii)
that (x) the claim, action, suit or other Legal Proceeding in any such court is
brought in an inconvenient forum; (y) the venue of such claim, action, suit or
other Legal Proceeding is improper; or (z) this Agreement or the subject matter
hereof may not be enforced in or by such courts. Each of the Parties further
agrees that, to the fullest extent permitted by applicable Legal Requirements,
service of any process, summons, notice or document by U.S. registered mail to
such Person’s respective address set forth in Section 7.3 will be effective
service of process for any claim, action, suit or other Legal Proceeding in the
Court of Chancery of the State of Delaware or, to the extent required by Legal
Requirements, any federal court in the State of Delaware, with respect to any
matters to which it has submitted to jurisdiction as set forth in this
paragraph. The Parties hereby agree that a final judgment in any such claim,
suit, action or other Legal Proceeding will be conclusive, subject to any
appeal, and may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by applicable Legal Requirements. The Parties agree
that irreparable damage would occur and that the parties would not have any
adequate remedy at law in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled to
specific performance and injunctive or other equitable relief to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement without the requirement for the posting of any bond, this
being in addition to any other remedy to which they are entitled at law or in
equity. All rights and remedies existing under this Agreement are cumulative to,
and not exclusive of, any rights or remedies otherwise available.

 

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Section 7.10        Severability. Any term or provision of this Agreement (or
part thereof) that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining
terms and provisions of this Agreement or the validity or enforceability of the
offending term or provision (or part thereof) in any other situation or in any
other jurisdiction. If a final judgment of a court of competent jurisdiction
declares that any term or provision of this Agreement (or part thereof) is
invalid or unenforceable, the Parties agree that the court making such
determination shall have the power to limit such term or provision (or part
thereof), to delete specific words or phrases or to replace such term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision (or part thereof), and this Agreement shall be valid and enforceable
as so modified. In the event such court does not exercise the power granted to
it in the prior sentence, the Parties agree to replace such invalid or
unenforceable term or provision (or part thereof) with a valid and enforceable
term or provision that will achieve, to the extent possible, the economic,
business and other purposes of such invalid or unenforceable term or provision.

 

Section 7.11        No Duplication; No Double Recovery. Nothing in this
Agreement is intended to confer to or impose upon any Party a duplicative right,
entitlement, obligation or recovery with respect to any matter arising out of
the same facts and circumstances.

 

Section 7.12        Tax Treatment of Payments. The Parties agree that any
payment made among the Parties pursuant to this Agreement shall be treated, to
the extent permitted by applicable Legal Requirement, for all U.S. federal
income tax purposes as either (i) a non-taxable contribution by Everest to
Newco, or (ii) a distribution by Newco to Everest, in each case, made
immediately prior to the Distribution. Any such payment made by a Party under
this Agreement shall be increased as necessary so that after making all payments
in respect to Taxes imposed on or attributable to such payment, the recipient
Party receives an amount equal to the sum it would have received had no such
Taxes been imposed.

 

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Section 7.13          Construction.

 

(a)               For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
masculine and feminine genders.

 

(b)               The Parties agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting Party shall not be
applied in the construction or interpretation of this Agreement.

 

(c)               As used in this Agreement, unless otherwise specified, the
words “include” and “including,” and variations thereof, shall not be deemed to
be terms of limitation, but rather shall be deemed to be followed by the words
“without limitation.”

 

(d)               As used in this Agreement, the word “extent” in the phrase “to
the extent” shall mean the degree to which a subject or other thing extends, and
such phrase shall not mean simply “if.”

 

(e)               As used in this Agreement, the word “will” shall be deemed to
have the same meaning and effect as the word “shall.”

 

(f)                As used in this Agreement, the terms “or,” “any” or “either”
are not exclusive.

 

(g)               Except as otherwise indicated, all references in this
Agreement to “Articles,” “Sections,” “Exhibits” and “Schedules” are intended to
refer to Sections or Articles of this Agreement and Exhibits or Schedules to
this Agreement.

 

(h)               As used in this Agreement, the terms “hereunder,” “hereof,”
“hereto,” herein and words of similar import shall be deemed to refer to this
Agreement as a whole and not to any particular Section or other provision.

 

(i)                 The headings contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.

 

(j)                 Any payment to be made pursuant hereto shall be made in U.S.
dollars and by wire transfer of immediately available funds.

 

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(k)               Unless the context requires otherwise, references in this
Agreement to “Athena” shall also be deemed to refer to the applicable member of
the Athena Group, references to “Everest” shall also be deemed to refer to the
applicable member of the Everest Group, references to “Newco” shall also be
deemed to refer to the applicable member of the Newco Group and, in connection
therewith, any references to actions or omissions to be taken, or refrained from
being taken, as the case may be, by Athena, Everest or Newco shall be deemed to
require Everest or Newco, as the case may be, to cause the applicable members of
the Athena Group, the Everest Group or the Newco Group, respectively, to take,
or refrain from taking, any such action. In the event of any inconsistency or
conflict which may arise in the application or interpretation of any of the
definitions set forth in Section 1.1, for the purpose of determining what is and
is not included in such definitions, any item explicitly included on a Schedule
referred to in any such definition shall take priority over any provision of the
text thereof.

 

Section 7.14        Relation to Other Documents. To the extent there is any
inconsistency between this Agreement and the terms of another agreement
pertaining to the Distribution or Mergers (other than any Collective Bargaining
Agreement) that is the subject of this Agreement and such inconsistency (i)
arises in connection with or as a result of employment with or the performance
of services before or after the Distribution for any member of the Athena Group,
Everest Group or Newco Group and (ii) relates to the allocation of Liabilities
attributable to the employment, service, termination of employment or
termination of service of all present or former Everest Employees or Newco
Employees or any of their dependents and beneficiaries (and any alternate payees
in respect thereof) and other service providers (including any individual who
is, or was or is determined to be an independent contractor, temporary employee,
temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker, or non-payroll worker or in any
other employment, non-employment, or retainer arrangement, or relationship with
any member of the Everest Group or the Newco Group), the terms of this Agreement
shall prevail.

 

[Signature Page Follows]

 

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In Witness Whereof, the Parties have caused this Agreement to be duly executed
as of the day and year first above written.

 

  Ecolab Inc.     By: /s/ Douglas M. Baker, Jr   Name: Douglas M. Baker, Jr  
Title: Chairman of the Board and Chief Executive Officer

 

  Championx Holding Inc.       By: /s/ Douglas M. Baker, Jr   Name: Douglas M.
Baker, Jr   Title: Chairman of the Board

 

  Apergy Corporation       By: /s/ Sivasankaran Somasundaram   Name:
Sivasankaran Somasundaram   Title: President and Chief Executive Officer

 

[Employee Matters Agreement Signature Page]