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Exhibit 10.6
[5/30/01]
FORM OF
TAX ALLOCATION AGREEMENT
by and between
ROCKWELL INTERNATIONAL CORPORATION
and
NEW ROCKWELL ▇▇▇▇▇▇▇, INC.
June __, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS......................................... 1
1.01 General........................................... 1
1.02 Schedules, etc.................................... 8
ARTICLE II FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS.... 8
2.01 Preparation of Tax Returns........................ 8
2.02 Payment of Taxes.................................. 11
2.03 Tax Refunds and Carrybacks........................ 14
2.04 Allocation of Straddle Period Taxes............... 15
2.05 Schedule of Foreign Income Tax Returns and
Payments........................................ 16
ARTICLE III TAX INDEMNIFICATION; TAX CONTESTS................... 16
3.01 Indemnification................................... 16
3.02 Rockwell ▇▇▇▇▇▇▇ Tax Acts......................... 18
3.03 Notice of Indemnity............................... 19
3.04 Payments.......................................... 20
3.05 Tax Contests...................................... 22
ARTICLE IV OPTIONS; COMPENSATION PAYMENTS; INTEREST CHARGE FOR
LATE PAYMENTS; CURRENCY CALCULATIONS; EFFECTIVE
TIME OF TRANSACTIONS............................... 23
4.01 Stock Options..................................... 23
4.02 Compensation Payments............................. 25
4.03 Change in Law..................................... 26
4.04 Interest Charge for Late Payments................. 26
4.05 Currency Calculations............................. 26
4.06 Effective Time of Transactions.................... 26
ARTICLE V COOPERATION AND EXCHANGE OF INFORMATION............. 27
5.01 Inconsistent Actions.............................. 27
5.02 Ruling Request.................................... 27
5.03 Cooperation and Exchange of Information........... 27
5.04 Tax Records....................................... 28
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Page
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ARTICLE VI MISCELLANEOUS....................................... 28
6.01 Entire Agreement; Construction.................... 28
6.02 Effectiveness..................................... 29
6.03 Survival of Agreements............................ 29
6.04 Governing Law..................................... 29
6.05 Notices........................................... 29
6.06 Consent to Jurisdiction............................ 31
6.07 Amendments........................................ 31
6.08 Successors and Assigns............................ 31
6.09 Captions; Currency................................ 32
6.10 Severability...................................... 32
6.11 No Third Party Beneficiaries...................... 32
6.12 Schedules......................................... 32
6.13 Termination....................................... 33
6.14 Waivers; Remedies................................. 33
6.15 Counterparts...................................... 33
6.16 Performance....................................... 33
6.17 Interpretation.................................... 33
SCHEDULE 2.01(c) FOREIGN INCOME TAX RETURNS TO BE FILED BY ROCKWELL
▇▇▇▇▇▇▇
SCHEDULE 2.01(g) TAX RETURNS TO BE FILED BY NON-RESPONSIBLE PARTY
SCHEDULE 2.03(c) CLAIMS FOR REFUND OF TAXES
SCHEDULE 3.01(a) PRE-DISTRIBUTION TAX-FREE TRANSACTIONS
SCHEDULE 3.01(b)(v) FOREIGN TRANSACTIONS FOR WHICH ROCKWELL ▇▇▇▇▇▇▇ IS LIABLE
SCHEDULE 3.02(a) ROCKWELL ▇▇▇▇▇▇▇ TAX ACT
SCHEDULE 3.02(b) ROCKWELL ▇▇▇▇▇▇▇ TAX REPRESENTATION LETTER
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TAX ALLOCATION AGREEMENT
TAX ALLOCATION AGREEMENT (this "AGREEMENT") dated as of June __,
2001, by and between ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation
("ROCKWELL"), and NEW ROCKWELL ▇▇▇▇▇▇▇, INC., a Delaware corporation and, as of
the date hereof, a wholly-owned subsidiary of Rockwell ("ROCKWELL ▇▇▇▇▇▇▇").
W I T N E S S E T H :
WHEREAS, the Rockwell Board (as hereinafter defined) has determined
that it is appropriate and desirable to distribute all outstanding shares of
Rockwell ▇▇▇▇▇▇▇ Common Stock (as hereinafter defined) on a pro rata basis to
the holders of Rockwell Common Stock (as hereinafter defined);
WHEREAS, the Rockwell Board has determined that it is appropriate
and desirable to effectuate the Distribution (as hereinafter defined) in a
transaction that will qualify under Section 368(a)(1)(D) of the Code (as
hereinafter defined) as a tax-free reorganization; and
WHEREAS, Rockwell and Rockwell ▇▇▇▇▇▇▇ wish to provide for and agree
upon the allocation between the Rockwell Tax Group (as hereinafter defined) and
the Rockwell ▇▇▇▇▇▇▇ Tax Group (as hereinafter defined) of all responsibilities,
liabilities and benefits relating to or affecting Taxes (as hereinafter defined)
paid or payable by either of them for all taxable periods, whether beginning
before, on or after the Distribution Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and of the
respective agreements and covenants contained in this Agreement, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01 GENERAL. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
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"ACTUALLY REALIZED" shall mean, for purposes of determining the
timing of any Taxes (or related Tax cost or benefit) relating to any payment,
transaction, occurrence or event, the time at which the amount of Taxes
(including estimated Taxes) payable by any person is increased above or reduced
below, as the case may be, the amount of Taxes that such person would be
required to pay but for the payment, transaction, occurrence or event.
"AUTOMOTIVE DISTRIBUTION" shall mean the distribution of the Meritor
Automotive, Inc. common stock on a pro rata basis to holders of Rockwell Common
Stock on September 30, 1997 pursuant to the Distribution Agreement by and
between Rockwell and Meritor Automotive, Inc. dated September 30, 1997.
"AUTOMOTIVE RULING REQUEST" shall mean the private letter ruling
request dated March 17, 1997 filed by Rockwell with the IRS (as modified or
supplemented by any materials submitted to the IRS), seeking rulings that, inter
alia, the Automotive Distribution qualified for U.S. federal Income Tax purposes
as a tax-free reorganization under Section 368(a)(1)(D) of the Code.
"AUTOMOTIVE TRANSACTION AGREEMENTS" shall have the meaning ascribed
thereto in the Distribution Agreement by and between Rockwell and Meritor
Automotive, Inc. dated September 30, 1997.
"BOEING" shall mean The Boeing Company, a Delaware corporation.
"BOEING TAX GROUP" shall mean Boeing and its affiliates.
"CODE" shall mean the Internal Revenue Code of 1986, as amended, or
any successor legislation.
"COMPENSATION PAYMENTS" shall mean all non-qualified employee
benefit plan and welfare benefit plan payments made by any member of the
Rockwell ▇▇▇▇▇▇▇ Tax Group under the Employee Matters Agreement dated as of June
__, 2001 by and between Rockwell and Rockwell ▇▇▇▇▇▇▇.
"CONEXANT" shall mean Conexant Systems, Inc., a Delaware
corporation.
"DISTRIBUTION" shall mean the distribution of the Rockwell ▇▇▇▇▇▇▇
Common Stock on a pro rata basis to holders of Rockwell Common Stock on the
Distribution Date pursuant to the Distribution Agreement.
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"DISTRIBUTION AGREEMENT" shall mean the Distribution Agreement dated
as of June __, 2001 by and among Rockwell, Rockwell ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇
Scientific Company, LLC.
"DISTRIBUTION DATE" shall mean the date on which the Distribution
occurs (or, if different, the date on which the Distribution is deemed to occur
for U.S. federal Income Tax purposes). For purposes of this Agreement, the
Distribution shall be deemed effective as of the end of the day on the
Distribution Date.
"DISTRIBUTION TRANSACTION" shall mean any transaction undertaken in
connection with the Distribution and described in the Ruling Request.
"FOREIGN INCOME TAX" shall mean any Income Tax other than a U.S.
federal, state or local Income Tax.
"FOREIGN INCOME TAX RETURNS" shall mean any Income Tax Return which
is not a U.S. federal, state or local Income Tax Return.
"INCOME TAX" shall mean (a) any Tax based upon, measured by, or
calculated with respect to (i) net income or profits (including, but not limited
to, any capital gains, minimum Tax and any Tax on items of Tax preference, but
not including sales, use, real or personal property, gross or net receipts,
transfer or similar Taxes) or (ii) multiple bases (including, but not limited
to, corporate franchise, doing business or occupation Taxes) if one or more of
the bases upon which such Tax may be based, measured by, or calculated with
respect to, is described in clause (i) above, or (b) any U.S. state or local
franchise Tax; including in the case of each of (a) and (b) any related interest
and any penalties, additions to such Tax or additional amounts imposed with
respect thereto by any Tax Authority.
"INCOME TAX BENEFIT" shall mean for any taxable period the excess of
(i) the hypothetical Income Tax liability of the taxpayer for the taxable period
calculated as if the Timing Difference or Reverse Timing Difference, as the case
may be, had not occurred but with all other facts unchanged, over (ii) the
actual Income Tax liability of the taxpayer for the taxable period, calculated
taking into account the Timing Difference or Reverse Timing Difference, as the
case may be (treating an Income Tax refund or credit as a negative Income Tax
liability for purposes of such calculation).
"INCOME TAX DETRIMENT" shall mean for any taxable period the excess
of (i) the actual Income Tax liability of the taxpayer for the taxable period,
calculated taking into account the Timing Difference or Reverse Timing
Difference, as the case may be, over (ii) the hypothetical Income Tax liability
of the taxpayer for the taxable
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period, calculated as if the Timing Difference or Reverse Timing Difference, as
the case may be, had not occurred but with all other facts unchanged (treating
an Income Tax refund or credit as a negative Income Tax liability for purposes
of such calculation).
"INCOME TAX RETURN" shall mean any Tax Return that relates to Income
Taxes.
"INDEMNITEE" shall have the meaning set forth in Section 3.03.
"INDEMNITOR" shall have the meaning set forth in Section 3.03.
"INDEMNITY ISSUE" shall have the meaning set forth in Section 3.03.
"INTRAGROUP TRANSACTION" shall mean any transfer of intellectual
property between members of the Rockwell Tax Group, members of the Rockwell
▇▇▇▇▇▇▇ Tax Group or between a member of the Rockwell Tax Group and a member of
the Rockwell ▇▇▇▇▇▇▇ Tax Group which occurs on or before the Distribution Date.
"IRS" shall mean the Internal Revenue Service.
"KAISER TAX GROUP" shall mean for any taxable period (or portion
thereof) ending on or before December 1, 2000 (i) K Systems, Inc., a California
corporation, and (ii) any corporation or legal entity which K Systems, Inc.
directly or indirectly owned on or before December 1, 2000.
"OLD ROCKWELL" shall mean the corporation, formerly named Rockwell
International Corporation, which owned all of the Rockwell Common Stock prior to
the distribution of the Rockwell Common Stock to the shareholders of such
corporation on December 6, 1996.
"PRE-DISTRIBUTION TAXABLE PERIOD" shall mean a taxable period ending
on or before the Distribution Date.
"POST-DISTRIBUTION TAX ACT" shall have the meaning set forth in
Section 3.01(a).
"POST-DISTRIBUTION TAXABLE PERIOD" shall mean a taxable period
beginning after the Distribution Date.
"POST-TAX INDEMNIFICATION PERIOD" shall mean any Post-Distribution
Taxable Period and that portion of any Straddle Period that begins on the day
after the Distribution Date.
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"REVERSE TIMING DIFFERENCE" shall mean an increase in income, gain
or recapture, or a decrease in deduction, loss or credit, as calculated for
Income Tax purposes, of the taxpayer for the Tax Indemnification Period coupled
with an increase in deduction, loss or credit, or a decrease in income, gain or
recapture, of the taxpayer for any Post-Tax Indemnification Period.
"RIGHTS" shall have the meaning ascribed thereto in the Distribution
Agreement.
"ROCKWELL" shall have the meaning ascribed thereto in the preamble.
"ROCKWELL BOARD" shall mean the Board of Directors of Rockwell or a
duly authorized committee thereof.
"ROCKWELL ▇▇▇▇▇▇▇" shall have the meaning ascribed thereto in the
preamble.
"ROCKWELL ▇▇▇▇▇▇▇ COMMON STOCK" shall mean, collectively, the Common
Stock, par value $1 per share, of Rockwell ▇▇▇▇▇▇▇ and the related Rights.
"ROCKWELL ▇▇▇▇▇▇▇ COMMON STOCK OPTIONS" shall mean options to
acquire Rockwell ▇▇▇▇▇▇▇ Common Stock.
"ROCKWELL ▇▇▇▇▇▇▇ GROUP EMPLOYEES AND FORMER EMPLOYEES" shall mean
individuals (i) who are employees of any member of the Rockwell ▇▇▇▇▇▇▇ Tax
Group on the date of the event giving rise to a deduction in respect of any
Compensation Payments made to such individuals or Stock Options held by such
individuals, (ii) who were employees of any member of the Rockwell ▇▇▇▇▇▇▇ Tax
Group and were not thereafter employees of any member of the Rockwell Tax Group,
or (iii) who were employees of Old Rockwell and its affiliates who were engaged
in the Rockwell ▇▇▇▇▇▇▇ business and who retired on or before December 6, 1996
and were not thereafter employees of any member of the Rockwell Tax Group.
"ROCKWELL ▇▇▇▇▇▇▇ TAX ACT" shall have the meaning set forth in
Section 3.02(a).
"ROCKWELL ▇▇▇▇▇▇▇ TAX GROUP" shall mean (i) Rockwell ▇▇▇▇▇▇▇ and
(ii) any corporation or other legal entity which Rockwell ▇▇▇▇▇▇▇ directly or
indirectly owns immediately following the Distribution other than (A) any member
of the Kaiser Tax Group or its business, assets or activities for any taxable
period (or portion thereof) ending on or before December 1, 2000 or (B) Rockwell
Scientific
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Company, LLC or any corporation or other legal entity which Rockwell Scientific
Company, LLC directly or indirectly owns immediately following the Distribution.
"ROCKWELL ▇▇▇▇▇▇▇ TAX REPRESENTATION LETTER" shall mean the letter
delivered by Rockwell ▇▇▇▇▇▇▇ to ▇▇▇▇▇▇▇▇ on the Distribution Date,
substantially in the form set forth in Schedule 3.02(b) attached hereto.
"ROCKWELL COMMON STOCK" shall mean the Common Stock, par value $1.00
per share, of Rockwell.
"ROCKWELL COMMON STOCK OPTIONS" shall mean options to acquire
Rockwell Common Stock.
"ROCKWELL TAX GROUP" shall mean (i) Rockwell, (ii) any corporation
or other legal entity which Rockwell directly or indirectly owns immediately
following the Distribution (but with respect to Rockwell Scientific Company,
LLC, only for any taxable period (or portion thereof) ending on or before the
Distribution Date), (iii) any other corporation or other legal entity which
Rockwell or Old Rockwell directly or indirectly owned at any time prior to the
Distribution (but only with respect to the period such corporation or other
entity was so owned by Rockwell or Old Rockwell) other than a member of the
Rockwell ▇▇▇▇▇▇▇ Tax Group or the Kaiser Tax Group, and (iv) solely for purposes
of this Agreement and not for purposes of any other Transaction Agreement, for
any taxable period up to or including December 6, ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ and any
other corporation or legal entity owned by Old Rockwell other than a member of
the Rockwell ▇▇▇▇▇▇▇ Tax Group.
"RULING" shall mean the private letter ruling issued by the IRS in
reply to the Ruling Request including any amendment or supplement thereto.
"RULING REQUEST" shall mean the private letter ruling request dated
January 12, 2001 filed by Rockwell with the IRS (as modified or supplemented by
any materials submitted to the IRS), seeking rulings that, inter alia, the
Distribution will qualify for U.S. federal Income Tax purposes as a tax-free
reorganization under Section 368(a)(1)(D) of the Code.
"SEMICONDUCTOR DISTRIBUTION" shall mean the distribution of the
Conexant common stock on a pro rata basis to holders of Rockwell Common Stock on
December 31, 1998 pursuant to the Distribution Agreement by and between Rockwell
and Conexant dated December 31, 1998.
"SEMICONDUCTOR RULING REQUEST" shall mean the private letter ruling
request dated June 29, 1998 filed by Rockwell with the IRS (as modified or
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supplemented by any materials submitted to the IRS), seeking rulings that, inter
alia, the Semiconductor Distribution qualified for U.S. federal Income Tax
purposes as a tax-free reorganization under Section 368(a)(1)(D) of the Code.
"SEMICONDUCTOR TRANSACTION AGREEMENTS" shall have the meaning
ascribed to the phrase "Transaction Agreements" in the Distribution Agreement by
and between Rockwell and Conexant dated December 31, 1998.
"STOCK OPTIONS" shall mean Rockwell ▇▇▇▇▇▇▇ Common Stock Options or
Rockwell Common Stock Options.
"STRADDLE PERIOD" shall mean a taxable period that includes but does
not end on the Distribution Date.
"TAX" and "TAXES" shall mean all forms of taxation, whenever created
or imposed, and whether of the United States or elsewhere, and whether imposed
by a federal, state, municipal, governmental, territorial, local, foreign or
other body, and without limiting the generality of the foregoing, shall include
net income, gross income, gross receipts, sales, use, value added, ad valorem,
transfer, recording, franchise, profits, license, lease, service, service use,
payroll, wage, withholding, employment, unemployment insurance, workers
compensation, social security, excise, severance, stamp, business license,
business organization, occupation, premium, property, environmental, windfall
profits, customs, duties, alternative minimum, estimated or other taxes, fees,
premiums, assessments or charges of any kind whatever imposed or collected by
any governmental entity or political subdivision thereof, together with any
related interest and any penalties, additions to such tax or additional amounts
imposed with respect thereto by any Tax Authority.
"TAX AUTHORITY" shall mean, with respect to any Tax, any
governmental entity, quasi-governmental body or political subdivision thereof
that imposes such Tax and the agency (if any) charged with the determination or
collection of such Tax for such entity, body or subdivision.
"TAX GROUP" shall mean the Rockwell Tax Group or the Rockwell
▇▇▇▇▇▇▇ Tax Group, as the case may be.
"TAX INDEMNIFICATION PERIOD" shall mean any Pre-Distribution Taxable
Period and that portion of any Straddle Period that ends on the Distribution
Date.
"TAX RETURN" shall mean any return, filing, questionnaire,
information return, election or other document required or permitted to be
filed, including requests
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for extensions of time, filings made with respect to estimated tax payments,
claims for refund and amended returns that may be filed, for any period with any
Tax Authority (whether domestic or foreign) in connection with any Tax (whether
or not a payment is required to be made with respect to such filing).
"TIMING DIFFERENCE" means an increase in income, gain or recapture,
or a decrease in deduction, loss or credit, as calculated for Income Tax
purposes, of the taxpayer for any Post-Tax Indemnification Period coupled with
an increase in deduction, loss or credit, or a decrease in income, gain or
recapture, of the taxpayer for the Tax Indemnification Period.
"TRANSACTION AGREEMENTS" shall have the meaning ascribed thereto in
the Distribution Agreement.
Any capitalized term not otherwise defined in this Agreement shall
have the meaning ascribed to it in the Distribution Agreement.
1.02 SCHEDULES, ETC. References to a "SCHEDULE" are, unless
otherwise specified, to the Schedule attached to this Agreement; references to
"SECTION" or "ARTICLE" are, unless otherwise specified, to one of the Sections
or Articles of this Agreement; references to "SUB-SECTION" are, unless the
context otherwise requires, references to the section in which the reference
appears; and references to this Agreement include the Schedules.
ARTICLE II
FILING OF TAX RETURNS; PAYMENT OF TAXES; REFUNDS
2.01 PREPARATION OF TAX RETURNS.
(a) UNITED STATES FEDERAL INCOME TAX RETURNS. (i) Rockwell
shall prepare and file or cause to be prepared and filed all U.S. federal
Income Tax Returns (including amendments thereto) which include a member of
the Rockwell Tax Group which are required to be filed for any
Pre-Distribution Taxable Period or Straddle Period. Rockwell ▇▇▇▇▇▇▇ hereby
irrevocably designates, and agrees to cause each of its affiliates to so
designate, Rockwell as its agent to take any and all actions necessary or
incidental to the preparation and filing of such U.S. federal Income Tax
Returns.
(ii) Rockwell ▇▇▇▇▇▇▇ shall prepare and file or cause to be prepared
and filed all U.S. federal Income Tax Returns (including amendments thereto)
which
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include a member of the Kaiser Tax Group but which do not include a member of
the Rockwell Tax Group and which are required to be filed for any
Pre-Distribution Taxable Period.
(b) UNITED STATES STATE AND LOCAL INCOME TAX RETURNS. (i) Rockwell
shall prepare and file or cause to be prepared and filed all U.S. state and
local Income Tax Returns (including amendments thereto) (A) which are required
to be filed for any Pre-Distribution Taxable Period which include a member of
the Rockwell Tax Group or a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group and (B)
which are required to be filed for any Straddle Period which (I) relate to a
member or members of the Rockwell Tax Group or their respective businesses,
assets or activities, (II) relate to members of each of the Rockwell Tax Group
and the Rockwell ▇▇▇▇▇▇▇ Tax Group or their respective businesses, assets or
activities, or (III) relate to a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group for a
period in which such member conducts or has conducted both a Rockwell ▇▇▇▇▇▇▇
business and a non-Rockwell ▇▇▇▇▇▇▇ business. Rockwell ▇▇▇▇▇▇▇ hereby
irrevocably designates, and agrees to cause each of its affiliates to so
designate, Rockwell as its agent to take any and all actions necessary or
incidental to the preparation and filing of such U.S. state and local Income Tax
Returns.
(ii) All U.S. state and local Income Tax Returns (including
amendments thereto) which relate to a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group
or the Kaiser Tax Group or their respective businesses, assets or activities for
all Pre-Distribution Taxable Periods or Straddle Periods which are not the
responsibility of the Rockwell Tax Group shall be the responsibility of the
Rockwell ▇▇▇▇▇▇▇ Tax Group.
(c) FOREIGN INCOME TAX RETURNS. (i) Rockwell ▇▇▇▇▇▇▇ shall prepare
and file or cause to be prepared and filed all Foreign Income Tax Returns which
are required to be filed for any Pre-Distribution Taxable Period or any Straddle
Period which relate to the entities set forth on Schedule 2.01(c) attached
hereto. Rockwell hereby irrevocably designates, and agrees to cause each of its
affiliates to so designate, Rockwell ▇▇▇▇▇▇▇ as its agent to take any and all
actions necessary or incidental to the preparation and filing of such Foreign
Income Tax Returns.
(ii) Rockwell shall prepare and file or cause to be prepared and
filed all Foreign Income Tax Returns (including amendments thereto) which
include a member of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group
which are required to be filed for any Pre-Distribution Taxable Period or any
Straddle Period other than those which relate to the entities set forth on
Schedule 2.01(c) attached hereto. Rockwell ▇▇▇▇▇▇▇ hereby irrevocably
designates, and agrees to cause each of its affiliates to so designate, Rockwell
as its agent to take any and all actions
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necessary or incidental to the preparation and filing of such Foreign Income Tax
Returns.
(d) NON-INCOME TAX RETURNS. (i) All Tax Returns (including
amendments thereto) which are not Income Tax Returns for all Pre-Distribution
Taxable Periods and all Straddle Periods shall be the responsibility of the
Rockwell Tax Group if such Tax Returns (A) relate to a member or members of the
Rockwell Tax Group or their respective businesses, assets or activities, (B)
relate to members of each of the Rockwell Tax Group and the Rockwell ▇▇▇▇▇▇▇ Tax
Group or their respective businesses, assets or activities, or (C) relate to a
member of the Rockwell ▇▇▇▇▇▇▇ Tax Group for a period in which such member
conducts or has conducted both a Rockwell ▇▇▇▇▇▇▇ business and a non-Rockwell
▇▇▇▇▇▇▇ business. Rockwell ▇▇▇▇▇▇▇ hereby irrevocably designates, and agrees to
cause each of its affiliates to so designate, Rockwell as its agent to take any
and all actions necessary or incidental to the preparation and filing of such
Tax Returns.
(ii) All Tax Returns (including amendments thereto) which are not
Income Tax Returns which relate to a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group or
the Kaiser Tax Group or their respective businesses, assets or activities for
all Pre-Distribution Taxable Periods and Straddle Periods which are not the
responsibility of the Rockwell Tax Group shall be the responsibility of the
Rockwell ▇▇▇▇▇▇▇ Tax Group.
(e) POST-DISTRIBUTION DATE TAX RETURNS. All Tax Returns (including
amendments thereto) for all Post-Distribution Taxable Periods shall be the
responsibility of the Rockwell Tax Group if such Tax Returns relate to a member
or members of the Rockwell Tax Group or their respective businesses, assets or
activities, and shall be the responsibility of the Rockwell ▇▇▇▇▇▇▇ Tax Group if
such Tax Returns relate to a member or members of the Rockwell ▇▇▇▇▇▇▇ Tax Group
or their respective businesses, assets or activities.
(f) CONSISTENT WITH PAST PRACTICE; REVIEW BY NON-RESPONSIBLE PARTY.
Unless Rockwell and Rockwell ▇▇▇▇▇▇▇ otherwise agree in writing, all Tax Returns
(including amendments thereto) described in this Section 2.01 filed after the
date of this Agreement for Pre-Distribution Taxable Periods or Straddle Periods,
in the absence of a controlling change in law or circumstances, shall be
prepared on a basis consistent with the elections, accounting methods,
conventions and principles of taxation used for the most recent taxable periods
for which Tax Returns involving similar matters have been filed. Upon the
request of the non-responsible party, the party responsible under this Section
2.01 for preparation of a particular Tax Return for Pre-Distribution Taxable
Periods or Straddle Periods shall make available a draft of such Tax Return (or
relevant portions thereof) for review and comment by such
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non-responsible party. Subject to the provisions of this Agreement, all
decisions relating to the preparation of Tax Returns shall be made in the sole
discretion of the party responsible under this Agreement for such preparation.
(g) RESPONSIBILITY FOR FILING. Although, pursuant to this Agreement,
Rockwell or Rockwell ▇▇▇▇▇▇▇ may be responsible for filing a particular Tax
Return, Rockwell and Rockwell ▇▇▇▇▇▇▇ have agreed that the actual preparation
and filing of certain Tax Returns will be done by the non-responsible party.
Schedule 2.01(g) attached hereto sets forth a schedule specifying such Tax
Returns. Rockwell and Rockwell ▇▇▇▇▇▇▇ may agree from time to time to additions
to or deletions from Schedule 2.01(g).
2.02 PAYMENT OF TAXES.
(a) UNITED STATES FEDERAL INCOME TAXES. Except as otherwise
provided in this Agreement:
(i) Rockwell shall pay or cause to be paid, on a timely basis, all
Taxes due with respect to the consolidated U.S. federal Income Tax liability (A)
for all Pre-Distribution Taxable Periods of all members of the Rockwell Tax
Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group and (B) for the Straddle Period Tax
Return which includes members of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇
Tax Group; and
(ii) Rockwell ▇▇▇▇▇▇▇ shall pay or cause to be paid, on a timely
basis, all Taxes due with respect to the U.S. federal Income Tax liability of
all members of the Kaiser Tax Group for all taxable periods (or portions
thereof) ending on or before December 1, 2000.
(b) UNITED STATES STATE AND LOCAL INCOME TAXES. Except as
otherwise provided in this Agreement:
(i) Rockwell shall pay or cause to be paid, on a timely basis, all
Taxes due with respect to the U.S. state and local Income Tax liability (A) for
all Pre-Distribution Taxable Periods of all members of the Rockwell Tax Group or
the Rockwell ▇▇▇▇▇▇▇ Tax Group and (B) for all Straddle Periods which relate to
(I) a member or members of the Rockwell Tax Group or their respective
businesses, assets or activities, (II) members of each of the Rockwell Tax
Group, on the one hand, and the Rockwell ▇▇▇▇▇▇▇ Tax Group, on the other, or
their respective businesses, assets or activities, or (III) a member of the
Rockwell ▇▇▇▇▇▇▇ Tax Group for a period in which such member conducts or has
conducted both a Rockwell ▇▇▇▇▇▇▇ business and a non-Rockwell ▇▇▇▇▇▇▇ business,
provided, however, that Rockwell ▇▇▇▇▇▇▇, on behalf of
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the Rockwell ▇▇▇▇▇▇▇ Tax Group, hereby assumes and agrees to pay directly to or
at the direction of Rockwell, at least two days prior to the date payment
(including estimated payment) thereof is due, the portion of such U.S. state and
local Income Taxes for that portion of any Straddle Period which begins on the
day after the Distribution Date which relates to a member of the Rockwell
▇▇▇▇▇▇▇ Tax Group or its business, assets or activities; and
(ii) Rockwell ▇▇▇▇▇▇▇ shall pay or cause to be paid, on a timely
basis, all U.S. state and local Income Taxes (A) for all Straddle Periods which
relate to a member or members of the Rockwell ▇▇▇▇▇▇▇ Tax Group, their
businesses, assets or activities which are not the responsibility of the
Rockwell Tax Group other than any U.S. state and local Income Taxes imposed in
connection with the transactions contemplated by the Transaction Agreements or
any other agreement entered into for the purpose of implementing the
Distribution, and (B) for all taxable periods (or portions thereof) ending on or
before December 1, 2000 which relate to a member or members of the Kaiser Tax
Group .
(c) FOREIGN INCOME TAXES. Except as otherwise provided in this
Agreement:
(i) Rockwell ▇▇▇▇▇▇▇ shall pay or cause to be paid, on a timely
basis, all Foreign Income Taxes due with respect to the Foreign Income Tax
liability for all Pre-Distribution Taxable Periods and all Straddle Periods
which relate to the entities set forth on Schedule 2.01(c) attached hereto; and
(ii) Except as provided in Section 2.02(c)(i) above, Rockwell shall
pay or cause to be paid, on a timely basis, all Foreign Income Taxes due with
respect to the Foreign Income Tax liability of all members of the Rockwell
▇▇▇▇▇▇▇ Tax Group or Rockwell Tax Group for all Pre-Distribution Taxable Periods
and Straddle Periods, provided, however, that Rockwell ▇▇▇▇▇▇▇, on behalf of the
Rockwell ▇▇▇▇▇▇▇ Tax Group, hereby assumes and agrees to pay directly to or at
the direction of Rockwell, at least two days prior to the date payment
(including estimated payment) thereof is due the portion of such Foreign Income
Taxes for that portion of any Straddle Period which begins on the day after the
Distribution Date which relates to a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group or
its business, assets or activities.
(d) NON-INCOME TAXES. Except as otherwise provided in this
Agreement:
(i) Rockwell shall pay or cause to be paid, on a timely basis, all
Taxes due with respect to the non-Income Tax liability for all Pre-Distribution
Taxable Periods and Straddle Periods which relate to (A) a member or members of
the
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Rockwell Tax Group or their respective businesses, assets or activities, (B)
members of each of the Rockwell Tax Group, on the one hand, and the Rockwell
▇▇▇▇▇▇▇ Tax Group, on the other, or their respective businesses, assets or
activities, or (C) a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group for a period in
which such member conducts or has conducted both a Rockwell ▇▇▇▇▇▇▇ business and
a non-Rockwell ▇▇▇▇▇▇▇ business, provided, however, that Rockwell ▇▇▇▇▇▇▇, on
behalf of the Rockwell ▇▇▇▇▇▇▇ Tax Group, hereby assumes and agrees to pay
directly to or at the direction of Rockwell, at least two days prior to the date
payment (including estimated payment) thereof is due the portion of such
non-Income Taxes which relates to a member of the Rockwell ▇▇▇▇▇▇▇ Tax Group or
the Rockwell ▇▇▇▇▇▇▇ business, assets or activities for such Pre-Distribution
Taxable Periods and Straddle Periods other than any such non-Income Taxes
resulting from any Distribution Transaction or Intragroup Transaction; and
(ii) Rockwell ▇▇▇▇▇▇▇ shall pay or cause to be paid, on a timely
basis, all non-Income Taxes for all Pre-Distribution Taxable Periods and
Straddle Periods which relate to the Rockwell ▇▇▇▇▇▇▇ Tax Group or the Kaiser
Tax Group business, assets or activities which are not the responsibility of the
Rockwell Tax Group other than any non-Income Taxes imposed in connection with
any Intragroup Transaction or the transactions contemplated by the Transaction
Agreements or any other agreement entered into for the purpose of implementing
the Distribution.
(e) POST-DISTRIBUTION DATE TAXES. Except as otherwise provided in
this Agreement, all Taxes for all Post-Distribution Taxable Periods shall be
paid or caused to be paid by the party responsible under this Agreement for
filing the Tax Return pursuant to which such Taxes are due or, if no such Tax
Returns are due, by the party liable for such Taxes.
(f) CREDIT FOR PRIOR TAX PAYMENTS. To the extent any member of a Tax
Group has made a payment of Taxes (including estimated Taxes) on or before the
Distribution Date, the party liable for paying such Taxes under this Agreement
shall be entitled to treat the payment as having been paid or caused to have
been paid by such party, and such party shall not be required to reimburse the
party which actually paid such Taxes.
(g) RESPONSIBILITY FOR PAYMENT; NOTICE OF PAYMENT DUE. Although
Rockwell or Rockwell ▇▇▇▇▇▇▇ may be responsible for paying a particular Tax
liability, Rockwell and Rockwell ▇▇▇▇▇▇▇ may agree that the actual payment to a
Taxing Authority of certain Tax liabilities will be made by the non-responsible
party. Rockwell and Rockwell ▇▇▇▇▇▇▇ may agree to prepare a schedule setting
forth such Tax liabilities and may agree from time to time to additions to or
deletions from such schedule. In each case where Rockwell or Rockwell ▇▇▇▇▇▇▇,
as the case may be, is
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required to make payment of Taxes to the other party, Rockwell or Rockwell
▇▇▇▇▇▇▇, as the case may be shall notify the other party as to the amount of
Taxes due from the other party at least five days prior to the date payment
(including estimated payment) is due.
2.03 TAX REFUNDS AND CARRYBACKS.
(a) RETENTION AND PAYMENT OF TAX REFUNDS. Except as otherwise
provided in this Agreement, Rockwell shall be entitled to retain, and to receive
within ten days after Actually Realized by the Rockwell ▇▇▇▇▇▇▇ Tax Group, the
portion of all refunds or credits of Taxes for which the Rockwell Tax Group is
liable pursuant to Section 2.02 or Section 3.01(a) or is treated as having paid
or caused to have been paid pursuant to Section 2.02(f), and Rockwell ▇▇▇▇▇▇▇
shall be entitled to retain, and to receive within ten days after Actually
Realized by the Rockwell Tax Group, the portion of all refunds or credits of
Taxes for which the Rockwell ▇▇▇▇▇▇▇ Tax Group is liable pursuant to Section
2.02 or Section 3.01(b) (including all non-Income Taxes for which Rockwell
▇▇▇▇▇▇▇ would have been liable pursuant to Section 2.02(d) had such non-Income
Taxes been due and not paid) or is treated as having paid or caused to have been
paid pursuant to Section 2.02(f). The amount of any refund or credit of Taxes to
which Rockwell or Rockwell ▇▇▇▇▇▇▇ is entitled to retain or receive pursuant to
the foregoing sentence shall be reduced to take account of any Taxes incurred by
the Rockwell ▇▇▇▇▇▇▇ Tax Group, in the case of a refund or credit to which
Rockwell is entitled, or the Rockwell Tax Group, in the case of a refund or
credit to which Rockwell ▇▇▇▇▇▇▇ is entitled, upon the receipt of such refund or
credit.
(b) CARRYBACKS. Unless the parties otherwise agree in writing,
Rockwell ▇▇▇▇▇▇▇ shall elect and shall cause each member of the Rockwell ▇▇▇▇▇▇▇
Tax Group to elect, where permitted by law, to carry forward any net operating
loss, net capital loss, charitable contribution or other item arising after the
Distribution Date that could, in the absence of such election, be carried back
to a Pre-Distribution Taxable Period. Except as otherwise provided in this
Agreement, notwithstanding the provisions of Section 2.03(a), (i) any refund or
credit of Taxes resulting from the carryback of any item of Taxes attributable
to the Rockwell ▇▇▇▇▇▇▇ Tax Group arising in a Post-Tax Indemnification Period
to a Tax Indemnification Period shall be for the account and benefit of the
Rockwell ▇▇▇▇▇▇▇ Tax Group, and (ii) any refund or credit of Taxes resulting
from the carryback of any item of Taxes attributable to the Rockwell Tax Group
arising in a Post-Tax Indemnification Period to a Tax Indemnification Period
shall be for the account and benefit of the Rockwell Tax Group.
(c) REFUND CLAIMS. Rockwell shall be permitted to file at Rockwell's
sole expense, and Rockwell ▇▇▇▇▇▇▇ shall reasonably cooperate with Rockwell in
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18
connection with, any claims for refund of Taxes to which Rockwell is entitled
pursuant to this Section 2.03 or any other provision of this Agreement,
including those described on Schedule 2.03(c). Rockwell shall reimburse Rockwell
▇▇▇▇▇▇▇ for any reasonable out-of-pocket costs and expenses incurred by any
member of the Rockwell ▇▇▇▇▇▇▇ Tax Group in connection with such cooperation.
Rockwell ▇▇▇▇▇▇▇ shall be permitted to file at Rockwell Collins's sole expense,
and Rockwell shall reasonably cooperate with Rockwell ▇▇▇▇▇▇▇ in connection
with, any claims for refunds of Taxes to which Rockwell ▇▇▇▇▇▇▇ is entitled
pursuant to this Section 2.03 or any other provision of this Agreement. Rockwell
▇▇▇▇▇▇▇ shall reimburse Rockwell for any reasonable out-of-pocket costs and
expenses incurred by any member of the Rockwell Tax Group in connection with
such cooperation.
2.04 ALLOCATION OF STRADDLE PERIOD TAXES. In the case of any
Straddle Period:
(a) Periodic Taxes. (i) The periodic Taxes of a member of the
Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group or its business, assets or
activities that are not based on income or receipts (e.g., property Taxes) for
the portion of any Straddle Period ending on the Distribution Date shall be
computed based on the ratio of the number of days in such portion of the
Straddle Period and the number of days in the entire taxable period; and (ii)
the periodic taxes of a member of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇
Tax Group or its business, assets or activities that are not based on income or
receipts for the portion of any Straddle Period beginning on the day after the
Distribution Date shall be computed based on the ratio of the number of days in
such portion of the Straddle Period and the number of days in the entire taxable
period.
(b) Non-Periodic Taxes. (i) The Taxes of a member of the Rockwell
Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group or its business, assets or
activities for that portion of any Straddle Period ending on the Distribution
Date (other than Taxes described in Section 2.04(a) above), shall be computed on
a "closing-of-the-books" basis as if such taxable period ended as of the close
of business on the Distribution Date, and, in the case of any Taxes of a member
of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group or its business,
assets or activities with respect to any equity interest in any partnership or
other "flowthrough" entity, as if the taxable period of such partnership or
other "flowthrough" entity ended on the Distribution Date; and (ii) the Taxes of
a member of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group or its
business, assets or activities for that portion of any Straddle Period beginning
after the Distribution Date (other than Taxes described in Section 2.04(a)
above), shall be computed on a "closing-of-the-books" basis as if such taxable
period began on the day after the Distribution Date, and, in the case of any
Taxes of a member of the Rockwell Tax Group or the Rockwell ▇▇▇▇▇▇▇ Tax Group or
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19
its business, assets or activities with respect to any equity interest in any
partnership or other "flowthrough" entity, as if the taxable period of such
partnership or other "flowthrough" entity began as of the day after the
Distribution Date.
(c) The Taxes of the Rockwell Tax Group and the Rockwell ▇▇▇▇▇▇▇ Tax
Group with respect to any Tax Return for a Straddle Period which includes a
member of each of the Rockwell Tax Group and the Rockwell ▇▇▇▇▇▇▇ Tax Group or
their respective businesses, assets or activities shall be allocated between the
Rockwell Tax Group, on the one hand, and the Rockwell ▇▇▇▇▇▇▇ Tax Group, on the
other hand, determined in a manner analogous to that set forth in Treasury
Regulation Section 1.1552-1(a)(2).
2.05 SCHEDULE OF FOREIGN INCOME TAX RETURNS AND PAYMENTS. Following
the Distribution Date, Rockwell and Rockwell ▇▇▇▇▇▇▇ agree to use their best
efforts to jointly prepare a schedule showing (a) each Foreign Income Tax Return
required to be filed by a member of the Rockwell Tax Group and each Foreign
Income Tax Return required to be filed by a member of the Rockwell ▇▇▇▇▇▇▇ Tax
Group for taxable periods ending after September 30, 2000 and (b) the party
responsible for filing such Foreign Income Tax Returns.
ARTICLE III
TAX INDEMNIFICATION; TAX CONTESTS
3.01 INDEMNIFICATION.
(a) ROCKWELL INDEMNIFICATION. Subject to Section 3.01(b) and
Section 3.02, Rockwell shall indemnify, defend and hold harmless each member of
the Rockwell ▇▇▇▇▇▇▇ Tax Group and each of their respective shareowners,
directors, officers, employees and agents and each of the heirs, executors,
successors and assigns of any of the foregoing from and against:
(i) all Taxes of the Rockwell Tax Group;
(ii) all Taxes of the Rockwell ▇▇▇▇▇▇▇ Tax Group for all
Pre-Distribution Taxable Periods and all Straddle Periods for which Rockwell is
liable pursuant to Section 2.02;
(iii) all liability as a result of Treasury Regulation Section
1.1502-6(a) (which imposes several liability on members of an affiliated group
that file a U.S. federal consolidated Income Tax return) or comparable U.S.
state or local provision
16
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for Income Taxes of any person which is or has ever been affiliated with any
member of the Rockwell Tax Group or with which any member of the Rockwell Tax
Group joins or has ever joined (or is or has ever been required to join) in
filing any consolidated, combined or unitary Income Tax Return for any Tax
period ending on or before or including the Distribution Date, but only for such
period during which such person is or was affiliated with a member of the
Rockwell Tax Group or with which a member of the Rockwell Tax Group joins or
joined (or is or was required to join) in filing any consolidated, combined or
unitary Income Tax Return;
(iv) all Taxes for any Tax period (whether beginning before, on or
after the Distribution Date) that would not have been payable but for the breach
by any member of the Rockwell Tax Group of any representation, warranty,
covenant or obligation under this Agreement;
(v) all liability for a breach by any member of the Rockwell Tax
Group of any representation, warranty, covenant or obligation under this
Agreement;
(vi) all Income Taxes and non-Income Taxes imposed in connection
with the transactions contemplated by the Transaction Agreements or any other
agreement entered into for the purpose of implementing the Distribution other
than any Foreign Income Taxes imposed in connection with the transactions
specified on Schedule 3.01(b)(v);
(vii) all Taxes for which Rockwell is liable pursuant to Section
3.02; and
(viii) all liability for any reasonable legal, accounting,
appraisal, consulting or similar fees and expenses relating to the foregoing.
Notwithstanding the foregoing and subject to Section 3.01(b) and Section 3.02,
Rockwell shall not indemnify, defend or hold harmless any member of the Rockwell
▇▇▇▇▇▇▇ Tax Group from any liability for Taxes (other than Taxes resulting from
(I) the failure of the Distribution to qualify as a reorganization described in
Section 368(a)(1)(D) of the Code, (II) the failure of the Distribution to
qualify as tax-free to Rockwell under Section 361(c) of the Code or (III) the
failure of any pre-Distribution transaction specified in Schedule 3.01(a) to be
non-taxable) attributable to any action (including the making of an election
under Section 338 of the Code) taken by any member of the Rockwell ▇▇▇▇▇▇▇ Tax
Group after the Distribution (other than any such action expressly required or
otherwise expressly contemplated by the Transaction Agreements or any other
agreement entered into for the purpose of implementing the Distribution or taken
in the ordinary course of business) (a "POST-DISTRIBUTION TAX ACT").
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(b) ROCKWELL ▇▇▇▇▇▇▇ INDEMNIFICATION. Rockwell ▇▇▇▇▇▇▇ shall be
liable for, and shall indemnify, defend and hold harmless each member of the
Rockwell Tax Group and each of the respective shareowners, directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing from and against:
(i) all Taxes of any member of the Rockwell ▇▇▇▇▇▇▇ Tax Group or the
Kaiser Tax Group (other than Taxes for which Rockwell provides indemnification
pursuant to Section 3.01(a));
(ii) all Taxes for any Tax period (whether beginning before, on or
after the Distribution Date) that would not have been payable but for the breach
by any member of the Rockwell ▇▇▇▇▇▇▇ Tax Group of any representation, warranty,
covenant or obligation under this Agreement;
(iii) all liability for a breach by any member of the Rockwell
▇▇▇▇▇▇▇ Tax Group of any representation, warranty, covenant or obligation under
this Agreement;
(iv) all Taxes for which Rockwell ▇▇▇▇▇▇▇ is liable pursuant to
Section 3.02;
(v) all Foreign Income Taxes imposed in connection with the
transactions specified on Schedule 3.01(b)(v);
(vi) all Taxes attributable to a Post-Distribution Tax Act; and
(vii) all liability for any reasonable legal, accounting, appraisal,
consulting or similar fees and expenses relating to the foregoing.
3.02 ROCKWELL ▇▇▇▇▇▇▇ TAX ACTS.
(a) Notwithstanding Section 3.01, Rockwell ▇▇▇▇▇▇▇ agrees to
indemnify, defend and hold harmless each member of the Rockwell Tax Group and
each of the respective shareowners, directors, officers, employees and agents
and each of the heirs, executors, successors and assigns of any of the foregoing
from and against any Taxes resulting from any Rockwell ▇▇▇▇▇▇▇ Tax Act which
causes (i) the Distribution to fail to qualify as a reorganization described in
Section 368(a)(1)(D) of the Code, (ii) the Distribution to fail to qualify as
tax-free to Rockwell under Section 361(c) of the Code, or (iii) any
pre-Distribution transaction specified in Schedule 3.01(a) undertaken in
connection with the Distribution, the Automotive Distribution
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or the Semiconductor Distribution to become taxable. A Rockwell ▇▇▇▇▇▇▇ Tax Act
shall mean any action specified on Schedule 3.02(a) attached hereto.
(b) Rockwell ▇▇▇▇▇▇▇ shall, and shall cause each member of the
Rockwell ▇▇▇▇▇▇▇ Tax Group to, comply with and take no action inconsistent with
the Rockwell ▇▇▇▇▇▇▇ Tax Representation Letter, unless, pursuant to a favorable
ruling letter obtained from the IRS which is satisfactory to Rockwell or the
advice of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP or other nationally recognized tax counsel to
Rockwell, which advice shall be satisfactory to Rockwell, such act or omission
would not adversely affect the U.S. federal Income Tax consequences of the
Distribution to Rockwell or the shareowners of Rockwell. Notwithstanding
Sections 3.01(b)(iii), 3.01(b)(iv) and 3.01(b)(vi), the parties intend that the
sole remedy for breach of the covenants contained in this Section 3.02(b) shall
be as set forth in Section 3.02(a).
(c) Notwithstanding the foregoing, a Rockwell ▇▇▇▇▇▇▇ Tax Act shall
not include any transaction or action specifically disclosed or specifically
described in any of the Transaction Agreements or, except as specifically set
forth in Schedule 3.01(a) occurring on or prior to the Distribution Date, any
action taken on or prior to the Distribution Date. A Rockwell ▇▇▇▇▇▇▇ Tax Act
shall not include any action on the part of any member of the Rockwell Tax
Group. Rockwell agrees to indemnify and hold each member of the Rockwell ▇▇▇▇▇▇▇
Tax Group harmless from and against any Taxes resulting from the failure of the
Distribution to qualify (i) as a reorganization described in Section
368(a)(1)(D) of the Code or (ii) as tax-free to Rockwell under Section 361(c) of
the Code, except where such failure is attributable to a Rockwell ▇▇▇▇▇▇▇ Tax
Act.
3.03 NOTICE OF INDEMNITY. Whenever a party hereto (hereinafter an
"INDEMNITEE") becomes aware of the existence of an issue raised by any Tax
Authority which could reasonably be expected to result in a determination that
would increase the liability for any Tax of the other party hereto or any member
of its Tax Group for any Tax period or require a payment hereunder by the other
party (hereinafter an "INDEMNITY ISSUE"), the Indemnitee shall in good faith
promptly give notice to such other party (hereinafter the "INDEMNITOR") of such
Indemnity Issue. The failure of the Indemnitee to give such notice shall not
relieve the Indemnitor of its obligations under this Agreement, except to the
extent such Indemnitor or a member of its Tax Group is actually prejudiced by
such failure to give notice.
3.04 PAYMENTS.
(a) TIMING ADJUSTMENTS. (i) Timing Differences. If a Tax audit
proceeding or an amendment of a Tax Return results in a Timing Difference, and
such Timing Difference results in a decrease in an indemnity obligation Rockwell
has
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23
or would otherwise have under Section 3.01(a) and/or an increase in the amount
of a Tax refund or credit to which Rockwell is entitled under Section 2.03, then
in each Post-Tax Indemnification Period in which the Rockwell ▇▇▇▇▇▇▇ Tax Group
Actually Realizes an Income Tax Detriment, Rockwell shall pay to Rockwell
▇▇▇▇▇▇▇ an amount equal to such Income Tax Detriment; provided, however, that
the aggregate payments which Rockwell shall be required to make under this
Section 3.04(a)(i) with respect to any Timing Difference shall not exceed the
aggregate amount of the Income Tax Benefits realized by the Rockwell Tax Group
for all taxable periods and the Rockwell ▇▇▇▇▇▇▇ Tax Group for all Tax
Indemnification Periods as a result of such Timing Difference. Rockwell shall
make all such payments within ten days after Rockwell ▇▇▇▇▇▇▇ notifies Rockwell
that the relevant Income Tax Detriment has been Actually Realized.
(ii) Reverse Timing Differences. If a Tax audit proceeding or an
amendment to a Tax Return results in a Reverse Timing Difference, and such
Reverse Timing Difference results in an increase in an indemnity payment
obligation of Rockwell under Section 3.01 and/or a decrease in the amount of a
Tax refund or credit to which Rockwell is or would otherwise be entitled under
Section 2.03, then in each Post-Tax Indemnification Period in which the Rockwell
▇▇▇▇▇▇▇ Tax Group Actually Realizes an Income Tax Benefit, Rockwell ▇▇▇▇▇▇▇
shall pay to Rockwell within ten days after Rockwell ▇▇▇▇▇▇▇ has Actually
Realized such Income Tax Benefit an amount equal to such Income Tax Benefit,
provided, however, that the aggregate payments which Rockwell ▇▇▇▇▇▇▇ shall be
required to make under this Section 3.04(a)(ii) with respect to Reverse Timing
Differences shall not exceed the aggregate amount of the Income Tax Detriments
realized by the Rockwell ▇▇▇▇▇▇▇ Tax Group and the Rockwell Tax Group for all
Tax Indemnification Periods as a result of such Reverse Timing Difference.
(b) TIME FOR PAYMENT. Except as otherwise provided in this Section
3.04(b), any indemnity payment required to be made pursuant to this Agreement
shall be paid within thirty days after the indemnified party makes written
demand upon the indemnifying party, provided that in no event shall such payment
be required to be made earlier than five business days prior to the date on
which the relevant Taxes (including estimated Taxes) are required to be paid (or
would be required to be paid if no such Taxes are due) to the relevant Tax
Authority. Notwithstanding any other provision in this Agreement, to simplify
the administration of this Agreement, the payment of any amount less than
$100,000 required to be made pursuant to this Agreement by one party hereto to
another party hereto need not be made to such other party prior to thirty days
following the later of (i) the close of the calendar quarter during which such
payment obligation arose and (ii) the day during such calendar quarter when the
aggregate amount of all such less than $100,000 payment obligations arising
during such calendar quarter exceeds $500,000. Unless otherwise
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24
specified by the recipient for items exceeding $250,000, any such payment may be
made on a net Tax basis (i.e., reduced to take account of any net Tax benefit to
be realized by the recipient (computed at the effective Tax rate set forth in
Section 3.04(c)) to the extent such recipient is entitled to a corresponding
deduction.
(c) PAYMENTS NET OF TAXES AND TAX BENEFITS. The amount of any
payment under this Agreement shall be (i) reduced to take into account any net
Tax benefit realized by the recipient's Tax Group arising from the incurrence or
payment by such recipient's Tax Group of any amount in respect of which such
payment is made and (ii) increased to take into account any net Tax cost
incurred by the recipient's Tax Group as a result of the receipt or accrual of
payments hereunder (grossed-up for such increase), in each case determined by
treating the recipient as recognizing all other items of income, gain, loss,
deduction or credit before recognizing any item arising from the receipt of
accrual of any payment hereunder. In determining the amount of any such Tax
benefit or Tax cost, the recipient's Tax Group shall be deemed to be subject to
(A) U.S. federal Income Taxes and foreign Income Taxes at the maximum statutory
rate then in effect and (B) U.S. state and local Income Taxes at an assumed rate
of five percent (tax effected at such maximum statutory U.S. federal Income Tax
rate). Except as otherwise provided in this Agreement or unless the parties
otherwise agree to an alternative method for determining the present value of
any such anticipated Tax benefit or Tax cost, any payment hereunder shall
initially be made without regard to this section and shall be increased or
reduced to reflect any such net Tax cost (including gross-up) or net Tax benefit
only after the recipient's Tax Group has Actually Realized such Tax cost or Tax
benefit.
(d) RIGHT TO OFFSET. Any party making a payment under this Agreement
shall have the right to reduce any such payment by any undisputed amounts owed
to it by the other party to this Agreement.
(e) CHARACTERIZATION OF PAYMENTS. It is the intention of the parties
to this Agreement that payments made pursuant to this Agreement are to be
treated as relating back to the Distribution as an adjustment to capital (i.e.,
capital contribution or distribution), and the parties shall not take any
position inconsistent with such intention before any Tax Authority, except to
the extent that a final determination (as defined in Section 1313 of the Code)
with respect to the recipient party causes any such payment not to be so
treated.
3.05 TAX CONTESTS. The Indemnitor and its representatives, at the
Indemnitor's expense, shall be entitled to participate (a) in all conferences,
meetings and proceedings with any Tax Authority, the subject matter of which is
or includes an Indemnity Issue and (b) in all appearances before any court, the
subject matter of
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which is or includes an Indemnity Issue. The party who has responsibility for
filing the Tax Return under this Agreement (the "RESPONSIBLE PARTY") with
respect to which there could be an increase in liability for any Tax or with
respect to which a payment could be required hereunder shall have the right to
decide as between the parties hereto how such matter is to be dealt with and
finally resolved with the appropriate Tax Authority and shall control all audits
and similar proceedings. If no Tax Return is or was required to be filed in
respect of an Indemnity Issue, the Indemnitor shall be treated as the
Responsible Party with respect thereto. The Responsible Party agrees to
cooperate in the settlement of any Indemnity Issue with the other party and to
take such other party's interests into account. Notwithstanding any other
provision of this Agreement, if Rockwell has materially satisfied its
obligations under this Agreement and if Rockwell ▇▇▇▇▇▇▇ fails to permit
Rockwell to control any audit or proceeding regarding any Indemnity Issue
relating to (i) the qualification of the Distribution as a "reorganization"
within the meaning of Section 368(a)(1)(D) of the Code or as tax-free to
Rockwell under Section 361(c) of the Code, (ii) the qualification of any
transactions undertaken pursuant to the Transaction Agreements or described in
the Ruling Request as transactions described in Section 355 of the Code,
"reorganizations" within the meaning of Section 368(a)(1)(D) of the Code or as
otherwise tax-free transactions, (iii) the qualification of any transactions
undertaken pursuant to the Automotive Transaction Agreements or described in the
Automotive Ruling Request as transactions described in Section 355 of the Code,
"reorganizations" within the meaning of Section 368(a)(1)(D) of the Code or as
otherwise tax-free transactions, or (iv) the qualification of any transactions
undertaken pursuant to the Semiconductor Transaction Agreements or described in
the Semiconductor Ruling Request as transactions described in Section 355 of the
Code, "reorganizations" within the meaning of Section 368(a)(1)(D) of the Code
or as otherwise tax-free transactions, then Rockwell shall not be liable for and
shall not indemnify the Rockwell ▇▇▇▇▇▇▇ Tax Group for any Tax deficiency
resulting from an adverse determination of such Indemnity Issue.
ARTICLE IV
OPTIONS; COMPENSATION PAYMENTS; INTEREST CHARGE
FOR LATE PAYMENTS; CURRENCY CALCULATIONS; EFFECTIVE TIME OF TRANSACTIONS
4.01 STOCK OPTIONS.
(a) STOCK OPTION ADJUSTMENTS. Pursuant to the terms of the
Employee Matters Agreement, Rockwell Common Stock Options outstanding at the
time of the Distribution will be adjusted as follows:
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(i) Rockwell Common Stock Options held by employees of the Rockwell
▇▇▇▇▇▇▇ Tax Group at the time of the Distribution (other than certain former
Rockwell corporate employees who become employees of the Rockwell ▇▇▇▇▇▇▇ Tax
Group in connection with the Distribution) will be replaced with Rockwell
▇▇▇▇▇▇▇ Common Stock Options;
(ii) Rockwell Common Stock Options held by active employees of the
Rockwell Tax Group at the time of the Distribution (other than certain former
Rockwell corporate employees who become employees of the Rockwell Tax Group in
connection with the Distribution) will remain Rockwell Common Stock Options; and
(iii) Rockwell Common Stock Options held by persons who, immediately
after the Distribution are (A) active employees of Rockwell Scientific Company,
LLC or active employees of any divested Rockwell business, (B) former Rockwell
corporate employees (including those who become employees of the Rockwell
▇▇▇▇▇▇▇ Tax Group or the Rockwell Tax Group in connection with the
Distribution), (C) former employees of any business of Rockwell, including
former employees of the Rockwell Tax Group, the Rockwell Tax Group, Rockwell
Scientific Company, LLC or any divested Rockwell business, or (D) active or
former outside directors of Rockwell, will be adjusted so that following the
Distribution each such holder will hold Rockwell Common Stock Options and
Rockwell ▇▇▇▇▇▇▇ Common Stock Options.
(b) TAX DEDUCTIONS. Notwithstanding anything to the contrary in this
Agreement, unless the IRS issues a contrary private letter ruling to Rockwell or
Rockwell ▇▇▇▇▇▇▇, or ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ otherwise agree in writing,
(i) the Rockwell Tax Group (and not the Rockwell ▇▇▇▇▇▇▇ Tax Group) shall claim
any Post-Distribution Date Tax deductions in respect of Rockwell Common Stock
Options exercised by current employees of any member of the Rockwell Tax Group
or former employees of any member of the Rockwell Tax Group who are not Rockwell
▇▇▇▇▇▇▇ Group Employees and Former Employees, (ii) the Rockwell Tax Group (and
not the Rockwell ▇▇▇▇▇▇▇ Tax Group) shall claim any Post-Distribution Date Tax
deductions of Rockwell ▇▇▇▇▇▇▇ Common Stock Options exercised by current
employees of any member of the Rockwell Tax Group or former employees of any
member of the Rockwell Tax Group who are not Rockwell ▇▇▇▇▇▇▇ Group Employees
and Former Employees and Rockwell shall pay to Rockwell ▇▇▇▇▇▇▇, on or before
the due date for the U.S. federal income tax return on which such deduction is
claimed, an amount equal to the product of (x) the amount of the deduction and
(y) the maximum statutory U.S. federal income tax rate plus 5 percent (tax
effected at the maximum statutory U.S. federal income tax rate), (iii) the
Rockwell ▇▇▇▇▇▇▇ Tax Group (and not the Rockwell Tax Group) shall claim any
Post-Distribution Date Tax
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deductions in respect of Rockwell Common Stock Options exercised by Rockwell
▇▇▇▇▇▇▇ Group Employees and Former Employees and Rockwell ▇▇▇▇▇▇▇ shall pay to
Rockwell, on or before the due date for the U.S. federal income tax return on
which such deduction is claimed, an amount equal to the product of (x) the
amount of the deduction and (y) the maximum statutory U.S. federal income tax
rate plus 5 percent (tax effected at the maximum statutory U.S. federal income
tax rate), and (iv) the Rockwell ▇▇▇▇▇▇▇ Tax Group (and not the Rockwell Tax
Group) shall claim the Post-Distribution Date Tax deductions in respect of the
Rockwell ▇▇▇▇▇▇▇ Common Stock Options exercised by Rockwell ▇▇▇▇▇▇▇ Group
Employees and Former Employees. At the present maximum statutory U.S. federal
income tax rate of 35%, the formula described above would be as follows:
deduction x (35% + (5% x 35%)).
(c) NOTICES, WITHHOLDING, REPORTING. (i) Rockwell shall promptly
notify Rockwell ▇▇▇▇▇▇▇ of any post-Distribution Date event giving rise to
income to any Rockwell ▇▇▇▇▇▇▇ Group Employees and Former Employees in
connection with the Rockwell Common Stock Options and, if required by law,
Rockwell ▇▇▇▇▇▇▇ shall withhold applicable Taxes and satisfy applicable Tax
reporting obligations in connection therewith. Rockwell shall within ten days of
demand thereof reimburse Rockwell ▇▇▇▇▇▇▇ for all reasonable out-of-pocket
expenses incurred in connection with the Rockwell Common Stock Options,
including with respect to incremental Tax reporting obligations and any
incremental employment Tax obligations; provided that Rockwell ▇▇▇▇▇▇▇ shall use
reasonable efforts to collect any such amounts required to be paid by Rockwell
▇▇▇▇▇▇▇ Group Employees and Former Employees from such Rockwell ▇▇▇▇▇▇▇ Group
Employees and Former Employees.
(ii) Rockwell ▇▇▇▇▇▇▇ shall promptly notify Rockwell of any
post-Distribution Date event giving rise to income to any non-Rockwell ▇▇▇▇▇▇▇
Group Employees and Former Employees in connection with the Rockwell ▇▇▇▇▇▇▇
Common Stock Options and, if required by law, Rockwell shall withhold applicable
Taxes and satisfy applicable Tax reporting obligations in connection therewith.
Rockwell ▇▇▇▇▇▇▇ shall within ten days of demand thereof reimburse Rockwell for
all reasonable out-of-pocket expenses incurred in connection with the Rockwell
▇▇▇▇▇▇▇ Common Stock Options, including with respect to incremental Tax
reporting obligations and any incremental employment Tax obligations; provided
that Rockwell shall use reasonable efforts to collect any such amounts required
to be paid by non-Rockwell ▇▇▇▇▇▇▇ Group Employees and Former Employees from
such non-Rockwell ▇▇▇▇▇▇▇ Group Employees and Former Employees.
(d) TAX AUDIT ADJUSTMENTS. Notwithstanding the provisions of Section
4.01(b), in the event a Tax audit proceeding shall determine (by settlement or
otherwise), or the parties otherwise determine pursuant to Section 4.03, that
all or a portion of the Tax deductions in respect of Rockwell Common Stock
Options or
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▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Stock Options should have been claimed by the Rockwell
▇▇▇▇▇▇▇ Tax Group or the Rockwell Tax Group, respectively, the Rockwell ▇▇▇▇▇▇▇
Tax Group or the Rockwell Tax Group, respectively, shall claim such Tax
deductions (by an amended Tax Return or otherwise) and shall pay to Rockwell or
Rockwell ▇▇▇▇▇▇▇, as the case may be, the amount of any Tax refund or credit
arising in respect of such Tax deduction within ten days after such Tax refund
or credit is Actually Realized by the Rockwell ▇▇▇▇▇▇▇ Tax Group or the Rockwell
Tax Group, as the case may be.
4.02 COMPENSATION PAYMENTS.
(a) TAX DEDUCTIONS. Notwithstanding anything to the contrary in this
Agreement, unless Rockwell and Rockwell ▇▇▇▇▇▇▇ otherwise agree in writing, (i)
the Boeing Tax Group (and not the Rockwell ▇▇▇▇▇▇▇ Tax Group or the Rockwell Tax
Group) shall claim the Post-Distribution Date Tax deductions in respect of
Compensation Payments paid to Rockwell ▇▇▇▇▇▇▇ Group Employees and Former
Employees who ceased employment on or before December 6, 1996 and Rockwell shall
pay to Rockwell ▇▇▇▇▇▇▇ the amount received from Boeing as a result of any Tax
benefit realized arising in respect of such Tax deductions within ten days after
such amount is received by Rockwell, (ii) the Rockwell ▇▇▇▇▇▇▇ Tax Group (and
not the Rockwell Tax Group) shall claim the Post-Distribution Date Tax
deductions in respect of Compensation Payments paid by the Rockwell ▇▇▇▇▇▇▇ Tax
Group to all other Rockwell ▇▇▇▇▇▇▇ Group Employees and Former Employees, and
(iii) the Rockwell Tax Group (and not the Rockwell ▇▇▇▇▇▇▇ Tax Group) shall
claim the Post-Distribution Date Tax deductions in respect of Compensation
Payments paid by the Rockwell Tax Group to all other Rockwell ▇▇▇▇▇▇▇ Group
Employees and Former Employees.
(b) NOTICES, WITHHOLDING, REPORTING. The party responsible for
making the Compensation Payments pursuant to the Employee Matters Agreement
shall withhold applicable Taxes and satisfy applicable Tax reporting obligations
in connection with the Compensation Payments made to all Rockwell ▇▇▇▇▇▇▇ Group
Employees and Former Employees.
(c) TAX AUDIT ADJUSTMENTS. Notwithstanding the provisions of Section
4.02(a), in the event a Tax audit proceeding shall determine (by settlement or
otherwise), or the parties otherwise determine pursuant to Section 4.03, that
all or a portion of the Tax deductions in respect of Compensation Payments paid
to Rockwell ▇▇▇▇▇▇▇ Group Employees or Former Employees was not available to the
party claiming the Tax deduction, then the appropriate party shall claim such
Tax deductions (by an amended Tax Return or otherwise) and shall pay to the
party which had previously claimed such Tax deduction, within ten days after
such Tax deduction
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has been Actually Realized by the such appropriate party, the amount of the
resulting Tax benefit to such appropriate party.
4.03 CHANGE IN LAW. Notwithstanding the agreement with respect to
reporting of Tax items and the claiming of the deductions set forth in Article 4
of this Agreement, neither the Rockwell ▇▇▇▇▇▇▇ Tax Group nor the Rockwell Tax
Group shall have any obligation to report any such Tax items or claim such
deductions as set forth in such Article in the event that either such party
determines, based on an opinion of nationally recognized tax counsel, which
opinion shall be satisfactory to the other party, that there is no substantial
authority to support reporting such Tax items or claiming such deductions on a
Tax Return filed by such party as a result of a change in or amendment to any
law or regulation, or any change in the official interpretation thereof,
effective or occurring after the date of this Agreement, and such Tax Group
provides prompt notice to the other Tax Group of any such determination.
4.04 INTEREST CHARGE FOR LATE PAYMENTS. Any amount due and owing by
one party to the other party pursuant to this Agreement that is not paid when
due shall bear interest from the due date thereof until paid at a rate equal to
the ____________ prime rate in effect from time to time during such period plus
1%.
4.05 CURRENCY CALCULATIONS. All currency calculations shall be
made in accordance with Section 6.19 of the Distribution Agreement.
4.06 EFFECTIVE TIME OF TRANSACTION. Rockwell and Rockwell ▇▇▇▇▇▇▇
agree that any transaction that, pursuant to the Distribution Agreement, is
expressly effective immediately after the Time of Distribution shall be treated
for federal Income Tax purposes as occurring at the beginning of the day
following the Distribution Date.
ARTICLE V
COOPERATION AND EXCHANGE OF INFORMATION
5.01 INCONSISTENT ACTIONS. Each party to this Agreement agrees (i)
to, and to cause each of the relevant members of its Tax Group to, report the
Distribution as a transaction described in Section 368(a)(1)(D) of the Code on
all Tax Returns and other filings, (ii) to use its best efforts to ensure that
the Distribution receives such treatment for U.S. federal Tax purposes and (iii)
that, unless it has obtained the prior written consent of the other party, it
(and the members of its Tax
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Group) shall not take any action inconsistent with, or fail to take any action
required by, the Transaction Agreements.
5.02 RULING REQUEST. Each party hereto represents that neither it
(nor any of the members of its Tax Group) will take or has any plan or intention
to take any action which is inconsistent with any factual statements,
representations or other similar conditions contained in the Ruling Request or
in the Ruling.
5.03 COOPERATION AND EXCHANGE OF INFORMATION. Each party hereto
agrees to provide, and to cause each member of its Tax Group to provide, such
cooperation and information as such other party shall request, on a timely
basis, in connection with the preparation or filing of any Tax Return or claim
for Tax refund not inconsistent with this Agreement or in conducting any Tax
audit, Tax dispute, or otherwise in respect of Taxes or to carry out the
provisions of this Agreement. To the extent necessary to carry out the purposes
of this Agreement and subject to the other provisions of this Agreement, such
cooperation and information shall include without limitation promptly forwarding
copies of appropriate notices and forms or other communications received from or
sent to any Tax Authority which relate to the Rockwell ▇▇▇▇▇▇▇ Tax Group for the
Tax Indemnification Period and providing copies of all relevant Tax Returns for
the Tax Indemnification Period, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by Tax
Authorities, including without limitation, foreign Tax Authorities, and records
concerning the ownership and Tax basis of property, which either party may
possess. Each party to this Agreement shall make, or shall cause its affiliates
to make, its employees and facilities available on a mutually convenient basis
to provide an explanation of any documents or information provided hereunder.
5.04 TAX RECORDS.
(a) Rockwell and Rockwell ▇▇▇▇▇▇▇ agree to (and to cause each member
of their respective Tax Group to) (i) retain all Tax Returns, related schedules
and workpapers, and all material records and other documents as required under
Section 6001 of the Code and the regulations promulgated thereunder relating
thereto existing on the date hereof or created through the Distribution Date,
for a period of at least ten years following the Distribution Date and (ii)
allow the party to this Agreement, at times and dates reasonably acceptable to
the retaining party, to inspect, review and make copies of such records, as
Rockwell and Rockwell ▇▇▇▇▇▇▇ may reasonably deem necessary or appropriate from
time to time. In addition, after the expiration of such ten-year period, such
Tax Returns, related schedules and workpapers, and material records shall not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (A) the party proposing to destroy or otherwise dispose
of such records shall provide no less than 30 days' prior
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written notice to the other party, specifying in reasonable detail the records
proposed to be destroyed or disposed of and (B) if a recipient of such notice
shall request in writing prior to the scheduled date for such destruction or
disposal that any of the records proposed to be destroyed or disposed of be
delivered to such requesting party, the party proposing the destruction or
disposal shall promptly arrange for the delivery of such requested records at
the expense of the party requesting such records.
(b) Notwithstanding anything in this Agreement to the contrary, if
any party fails to comply with the requirements of Section 5.04(a) hereof, the
party failing so to comply shall be liable for, and shall hold the other party,
harmless from, any Taxes (including without limitation, penalties for failure to
comply with the record retention requirements of the Code) and other costs
resulting from such party's failure to comply.
ARTICLE VI
MISCELLANEOUS
6.01 ENTIRE AGREEMENT; CONSTRUCTION. This Agreement, the
Distribution Agreement, all other Transaction Agreements, including, without
limitation, any annexes, schedules and exhibits hereto or thereto, and other
agreements and documents referred to herein and therein, will together
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and will supersede all prior negotiations, agreements
and understandings of the parties of any nature, whether oral or written, with
respect to such subject matter. Notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be a
conflict relating to Taxes between the provisions of this Agreement and the
provisions of the Distribution Agreement or any other Transaction Agreement, the
provisions of this Agreement shall control.
6.02 EFFECTIVENESS. All covenants and agreements of the parties
contained in this Agreement shall be subject to and conditioned upon the
Distribution becoming effective.
6.03 SURVIVAL OF AGREEMENTS. Except as otherwise contemplated by
this Agreement, all covenants and agreements of the parties contained in this
Agreement will remain in full force and effect and will survive the Time of
Distribution.
6.04 GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the internal laws of the State of New York applicable to
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contracts made and to be performed entirely within such State, without regard to
the conflicts of law principles of such State.
6.05 NOTICES. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand or telecopied, e-mailed or sent, postage prepaid,
by registered, certified or express mail or reputable overnight courier service
and will be deemed given when so delivered by hand or telecopied, when e-mail
confirmation is received if delivered by e-mail, or three business days after
being so mailed (one business day in the case of express mail or overnight
courier service). All such notices, requests, claims, demands and other
communications will be addressed as set forth below, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice:
(a) If to Rockwell:
Rockwell International Corporation
Firstar Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. Bless
Senior Vice President,
Finance and Planning and
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
Rockwell International Corporation
Firstar Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Senior Vice President,
General Counsel and
Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
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(b) If to Rockwell ▇▇▇▇▇▇▇:
New Rockwell ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
New Rockwell ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Senior Vice President,
General Counsel and
Secretary
Telecopy: (319) [ ]
E-mail: [ ]
6.06 CONSENT TO JURISDICTION. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of (a) the Court of Chancery in and for
the State of Delaware and the Superior Court in and for the State of Delaware
and (b) the U.S. District Court for the District of Delaware, for the purposes
of any suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby (and agrees not to commence any action, suit or
proceeding relating thereto except in such courts). Each of the parties further
agrees that service of any process, summons, notice or document hand delivered
or sent by U.S. registered mail to such party's respective address set forth in
Section 6.05 will be effective service of process for any action, suit or
proceeding in Delaware with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each of the
parties irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Court of Chancery in and for the
State of Delaware and the Superior Court in and for the State of Delaware or
(ii) the U.S. District Court for the District of Delaware, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any
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such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, each party agrees that a
final judgment in any action, suit or proceeding so brought shall be conclusive
and may be enforced by suit on the judgment in any jurisdiction or in any other
manner provided in law or in equity.
6.07 AMENDMENTS. This Agreement may not be amended, modified or
supplemented except by a written agreement executed by Rockwell and Rockwell
▇▇▇▇▇▇▇.
6.08 SUCCESSORS AND ASSIGNS. The rights and benefits under this
Agreement may not be conveyed, assigned or otherwise transferred and the duties
and obligations may not be delegated by any party in whole or in part without
the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns.
6.09 CAPTIONS; CURRENCY. The article, section and paragraph captions
herein and the table of contents hereto are for convenience of reference only,
do not constitute part of this Agreement and will not be deemed to limit or
otherwise affect any of the provisions hereof. Unless otherwise specified, all
references herein to numbered articles or sections are to articles and sections
of this Agreement and all references herein to schedules are to schedules to
this Agreement. Unless otherwise specified, all references contained in this
Agreement or in any schedule referred to herein to dollars or "$" shall mean
U.S. dollars.
6.10 SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
6.11 NO THIRD PARTY BENEFICIARIES. Except for the provisions of
Article III relating to Tax Indemnification, this Agreement is solely for the
benefit of the parties hereto and the respective members of their Tax Group and
should not be deemed to confer upon third parties (including any employee of
Rockwell or
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35
Rockwell ▇▇▇▇▇▇▇ or of any Rockwell or Rockwell ▇▇▇▇▇▇▇ subsidiary) any remedy,
claim, reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
6.12 SCHEDULES. All schedules attached hereto are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
6.13 TERMINATION. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Time of Distribution by and in
the sole discretion of the Rockwell Board without the approval of Rockwell
▇▇▇▇▇▇▇ or of ▇▇▇▇▇▇▇▇'▇ shareowners. In the event of such termination, no party
will have any liability of any kind to any other party on account of such
termination.
6.14 WAIVERS; REMEDIES. No failure or delay by any party hereto in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any waiver on the part of any party hereto of any right, power
or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor will any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which the parties may otherwise have at law or in equity.
6.15 COUNTERPARTS. This Agreement may be executed in separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement.
6.16 PERFORMANCE. Each party hereto will cause to be performed, and
hereby guarantees the performance of all actions, agreements and obligations set
forth herein to be performed by any subsidiary or any member of such party's Tax
Group.
6.17 INTERPRETATION. Any reference to any federal, state, local, or
foreign law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. For the purposes
of this Agreement, (i) words in the singular shall be held to include the plural
and vice versa and words of one gender shall be held to include the other gender
as the context requires, (ii) the terms "hereof", "herein", and "herewith" and
words of similar import shall, unless otherwise stated, be construed to refer to
this Agreement as a whole and not to any particular provision of this Agreement
and (iii) the word "including" and
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words of similar import when used in this Agreement shall mean "including,
without limitation".
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
hereinabove written.
ROCKWELL INTERNATIONAL CORPORATION
By:
------------------------------------
Name:
Title:
NEW ROCKWELL ▇▇▇▇▇▇▇, INC.
By:
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Name:
Title:
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