CONFORMED COPY
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AGREEMENT AND PLAN OF DISTRIBUTION
dated as of December 6, 1996
among
ROCKWELL INTERNATIONAL CORPORATION,
NEW ROCKWELL INTERNATIONAL CORPORATION
▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY, INC.,
ROCKWELL ▇▇▇▇▇▇▇, INC.,
ROCKWELL SEMICONDUCTOR SYSTEMS, INC.,
ROCKWELL LIGHT VEHICLE SYSTEMS, INC.
and
ROCKWELL HEAVY VEHICLE SYSTEMS, INC.
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.......................... 2
1.1. Definitions.......................... 2
ARTICLE II CONTRIBUTION AND ASSUMPTION.......... 13
2.1. Contribution......................... 13
2.2. Assumption of Liabilities............ 17
2.3. Transfer and Assumption
Documentation..................... 20
2.4. Nonassignable Contracts.............. 20
2.5. Intercompany Arrangements............ 21
ARTICLE III RECAPITALIZATION OF NEWCO; MECHANICS
OF DISTRIBUTION...................... 22
3.1. Newco Capitalization................. 22
3.2. Recapitalization of Newco............ 22
3.3. Mechanics of Distribution............ 22
3.4. Timing of Distribution............... 23
ARTICLE IV OTHER AGREEMENTS..................... 23
4.1. Employment........................... 23
4.2. Cross-License of Intellectual
Property.......................... 25
4.3. Use of Names, Trademarks, etc........ 26
4.4. Further Assurances................... 29
4.5. Cooperation.......................... 29
ARTICLE V TAX MATTERS.......................... 30
5.1. Tax Allocation....................... 30
5.2. Tax Matters ......................... 30
5.3. Transfer Taxes....................... 30
ARTICLE VI MUTUAL RELEASE....................... 30
6.1. Mutual Release, etc.................. 30
i
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ARTICLE VII ACCESS TO INFORMATION....................... 32
7.1. Provision of Corporate Records....... 32
7.2. Access to Information................ 32
7.3. Production of Witnesses.............. 34
7.4. Retention of Records................. 35
7.5. Confidentiality...................... 35
ARTICLE VIII EMPLOYEE BENEFIT PLANS...................... 36
8.1. Employee Benefits Generally.......... 36
8.2. Retirement Plans..................... 36
8.3. Savings Plans........................ 43
8.4. Deferred Compensation Plans and
Nonqualified Retirement and
Savings Plans..................... 44
8.5. Employee Stock Options............... 46
8.6. Long-Term Incentive Plan............. 46
8.7. Welfare Benefit Plans................ 47
8.8. Retiree Medical and Life Insurance... 49
8.9. Retention and Severance
Obligations....................... 50
8.10. Free-Standing Plans ................ 51
8.11. Employment, Consulting and Severance
Agreements ...................... 51
8.12. Welfare Plan Funding................ 52
8.13. Indemnification..................... 54
8.14. Cooperation ........................ 55
8.15. Amendment, Modification or
Termination of Benefits Plan..... 55
ARTICLE IX CONDITIONS.................................. 55
9.1. Conditions to Obligations of the
Company........................... 55
ARTICLE X MISCELLANEOUS AND GENERAL................... 56
10.1. Modification or Amendment........... 56
10.2. Waiver; Remedies.................... 56
10.3. Counterparts........................ 57
10.4. Governing Law....................... 57
10.5. Notices............................. 57
10.6. Entire Agreement.................... 58
10.7. Certain Obligations................. 58
ii
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10.8. Assignment........................... 58
10.9. Captions............................. 59
10.10. Specific Performance................. 59
10.11. Severability......................... 59
10.12. Third Party Beneficiaries............ 59
10.13. Schedules............................ 60
10.14. Consent to Jurisdiction.............. 60
iii
AGREEMENT AND PLAN OF DISTRIBUTION, dated as of December 6,
1996 (this "Agreement"), among ROCKWELL INTERNATIONAL CORPORATION, a
Delaware corporation (the "Company"), NEW ROCKWELL INTERNATIONAL
CORPORATION, a Delaware corporation ("Newco"), ▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY,
INC., a Wisconsin corporation ("A-B"), ROCKWELL ▇▇▇▇▇▇▇, INC., a
Delaware corporation ("▇▇▇▇▇▇▇"), ROCKWELL SEMICONDUCTOR SYSTEMS,
INC., a Delaware corporation ("RSS"), ROCKWELL LIGHT VEHICLE SYSTEMS,
INC., a Delaware corporation ("LVS"), and ROCKWELL HEAVY VEHICLE
SYSTEMS, INC., a Delaware corporation ("HVS"; and together with A-B,
▇▇▇▇▇▇▇, RSS and LVS, the "Operating Subsidiaries").
W I T N E S S E T H :
WHEREAS, the Company, The Boeing Company, a Delaware
corporation ("Acquiror"), and Boeing NA, Inc., a Delaware corporation
and a wholly-owned subsidiary of Acquiror ("Sub"), have entered into
an Agreement and Plan of Merger dated as of July 31, 1996 (the "Merger
Agreement"), providing for the Merger (as defined in the Merger
Agreement) of Sub with and into the Company;
WHEREAS, immediately prior to the Conversion (as defined in
the recitals to the Merger Agreement), the Company's Board of
Directors, subject to the approval of the Company's stockholders,
expects to distribute to the holders of Common Stock, par value $1.00
per share, of the Company ("Company Common Stock") and Class A Common
Stock, par value $1.00 per share, of the Company ("Company Class A
Common Stock"), other than shares held in the treasury of the Company,
on a pro rata basis all of the issued and outstanding shares of Common
Stock, par value $1.00 per share, of Newco ("Newco Common Stock") and
Class A Common Stock, par value $1.00 per share, of Newco ("Newco
Class A Common Stock"), in each case with the associated Rights (as
defined in Section 1.1) (the "Distribution");
WHEREAS, immediately prior to the Distribution, the
Company's Board of Directors, subject to the approval of the Company's
stockholders, expects to cause (i) the Company to contribute certain
assets to the Operating Subsidiaries as a capital contribution or in
exchange for shares of their stock, (ii) the Company to contribute the
stock of the Operating Subsidiaries and certain other assets to Newco
as a capital contribution and (iii) Newco and the Operating
Subsidiaries to assume certain liabilities of the Company,
all as more specifically provided herein (the transactions described
in clauses (i), (ii) and (iii) are referred to collectively as the
"Contribution");
WHEREAS, the purpose of the Distribution is to make possible
the Merger by divesting the Company of the businesses and operations
to be conducted by Newco and the Operating Subsidiaries, which
Acquiror is unwilling to acquire;
WHEREAS, it is the intention of the parties to this
Agreement that the Contribution and Distribution will qualify as
transactions described in Sections 351 and Section 355 of the Internal
Revenue Code of 1986, as amended (the "Code") and/or a
"reorganization" within the meaning of Section 368(a)(1)(D) of the
Code; and
WHEREAS, this Agreement sets forth or provides for certain
agreements by and among the Company, Newco and the Operating
Subsidiaries in consideration of the separation of the ownership of
the Company and Newco;
NOW, THEREFORE, in consideration of the premises, and of the
respective covenants and agreements set forth herein, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. Capitalized terms used in this Agreement
and not otherwise defined herein shall have the meanings assigned to
such terms in the Merger Agreement. As used in this Agreement, the
following terms shall have the following respective meanings:
"A-B Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries and their
respective predecessors of designing, building, selling, installing,
modifying, repairing, servicing and supporting automation products and
systems, including, without limitation, programmable controllers,
human/machine interface devices, communications networks, programming
and application software, AC/DC drives and drive systems, sensing and
motion control devices, machine vision products, computer numeric
control systems, data acquisition products, standard and engineered
motors, mechanical power
transmission equipment, and support services for all of the foregoing,
and activities related thereto, and shall include any former or
discontinued operations primarily related to the A-B Business as
previously conducted.
"Accrued Interest" shall mean all accrued and unpaid
interest on the Company Debt to the Closing Date other than accretion
on commercial paper to the extent such accretion is included in
Company Debt.
"Additional Retained Facilities" shall mean the Company's
Seal Beach, California world headquarters, the Company's Systems
Development Center, the Company's Information Systems Center and the
Company's Government Affairs, Marketing and International Offices
located in Washington, D.C. (Arlington, VA) and related international
and field offices listed on Schedule 2.1(b)(i)(D).
"Aerospace Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries and their
respective predecessors of designing, building, selling, installing,
modifying, repairing, servicing and supporting spacecraft,
liquid-fueled rocket engines, military and civilian aircraft, tactical
weapons, unmanned missiles, applied energy technologies (including,
without limitation, solar, kinetic and laser), and parts, components
and materials for the foregoing, contract work for the National
Aeronautics and Space Administration and the Company's interest in
United Space Alliance, LLC, and activities related thereto, and shall
include any former or discontinued operations primarily related to the
Aerospace Business as previously conducted, including, without
limitation, the former or discontinued operations listed on Schedule
1.1(a)(i); provided, however, that Aerospace Business does not include
any part of the ▇▇▇▇▇▇▇ Business, any Contributed A&D Assets or any
Divested Business of the Aerospace Business, including, without
limitation, the Divested Businesses listed on Schedule 1.1(a)(ii).
"Affiliate" shall mean, with respect to any specified
Person, a Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control
with, such specified Person; provided, however, that for purposes of
this Agreement and the Post-Closing Covenants Agreement, from and
after the Time of Contribution, no member of either Group shall be
deemed to be an Affiliate of any member of the other Group.
"Assets" shall mean any and all assets, properties and
rights, whether tangible or intangible, whether real, personal or
mixed, whether fixed, contingent or otherwise, and wherever located,
including, without limitation, the following:
(i) real property interests (including leases), land,
plants, buildings and improvements;
(ii) machinery, equipment, tooling, vehicles, furniture and
fixtures, leasehold improvements, repair parts, tools, plant,
laboratory and office equipment and other tangible personal
property, together with any rights or claims arising out of the
breach of any express or implied warranty by the manufacturers or
sellers of any of such assets or any component part thereof;
(iii) inventories, including raw materials, work-
in-process, finished goods, parts, accessories and supplies;
(iv) cash, bank accounts, notes, loans and accounts
receivable (whether current or not current), interests as
beneficiary under letters of credit, advances and performance and
surety bonds;
(v) certificates of deposit, banker's acceptances, shares of
stock, bonds, debentures, evidences of indebtedness, certificates
of interest or participation in profit-sharing agreements,
collateral-trust certificates, preorganization certificates or
subscriptions, transferable shares, investment contracts,
voting-trust certificates, puts, calls, straddles, options,
swaps, collars, caps and other securities or hedging arrangements
of any kind;
(vi) financial, accounting and operating data and records
including, without limitation, books, records, notes, sales and
sales promotional data, advertising materials, credit
information, cost and pricing information, customer and supplier
lists, reference catalogs, payroll and personnel records, minute
books, stock ledgers, stock transfer records and other similar
property, rights and information;
(vii) patents, patent applications, trademarks,
trademark applications and registrations, trade names,
service marks, service names, copyrights and copyright
applications and registrations, commercial and technical
information including engineering, production and other
designs, drawings, specifications, formulae, technology,
computer and electronic data processing programs and
software, inventions, processes, trade secrets, know-how,
confidential information and other proprietary property,
rights and interests;
(viii) agreements, leases, contracts, sale orders, purchase
orders, open bids and other commitments and all rights therein;
(ix) prepaid expenses, deposits and retentions held by third
parties;
(x) claims, causes of action, choses in action, rights under
insurance policies, rights under express or implied warranties,
rights of recovery, rights of set- off, rights of subrogation and
all other rights of any kind;
(xi) licenses, franchises, permits, authorizations and
approvals; and
(xii) goodwill and going concern value.
"▇▇▇▇▇▇▇ Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries and their
respective predecessors of designing, building, selling, installing,
modifying, repairing, servicing and supporting avionics, communication
and navigation products and systems and parts, components and
materials for the foregoing, including without limitation: electronic
equipment for flight control, cockpit display, navigation, voice and
data communication, cockpit management, radar, global positioning and
other systems for airlines, corporate aircraft, government and
military applications; call center products and systems; mobile
communication and information systems to the land transportation
market (including the Company's Automatic Vehicle Locating System and
Vision Sensor Initiatives Programs) and flat panel displays and other
optical components, and activities related thereto, and shall include
the ▇▇▇▇▇▇▇ Avionics and Communications Division, ▇▇▇▇▇▇▇ Commercial
Avionics, the Communication Systems Division and any former or
discontinued operations primarily related to the ▇▇▇▇▇▇▇ Business as
previously conducted;
provided, however, that ▇▇▇▇▇▇▇ Business does not include ▇▇▇▇▇▇▇
International Service Company located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Rockwell Australia Limited and its Subsidiaries or
any business thereof (which shall constitute part of the Defense
Business); provided, further, however, that the ▇▇▇▇▇▇▇ Business shall
include the Tullamarine Service Center.
"Communication Systems Division" shall mean the business
heretofore and currently engaged in by the Company and its
Subsidiaries and their respective predecessors of designing, building,
selling, installing, modifying, repairing, servicing and supporting
information message handling and communication systems and products
that support command, control and communications for land, sea and air
applications, including without limitation: integrated command and
control systems for military and civilian agencies; fixed and airborne
VLF communications; multispectrum tactical HF through satellite
communications for fixed and transportable applications; satellite
communications through the EHF band; airborne communication systems
including platform integration; avionics and special mission systems
integration and aircraft modification; medical information systems;
global private networks; satellite-based air traffic management and
worldwide service and support for operations and maintenance,
construction and EF&I (engineer, furnish and install), and activities
related thereto, and shall include any former or discontinued
operations primarily related to the Communication Systems Division as
previously conducted; provided, however, that the Communication
Systems Division does not include ▇▇▇▇▇▇▇ International Service
Company located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Rockwell
Australia Limited and its Subsidiaries or any business thereof (which
shall constitute part of the Defense Business).
"Company Debt" shall mean indebtedness of the Company in an
aggregate principal amount of $2,165,000,000, consisting of:
(i) Old Company Notes in the aggregate principal amount of
$1,600,000,000, as the same may be amended pursuant to the
Consent Solicitation;
(ii) commercial paper or other short-term borrowings in the
aggregate principal amount of $565,000,000 (with respect to
commercial paper issued at a discount, the accreted value at the
Closing Date
shall be deemed to be the principal amount thereof), less the
aggregate principal amount of any outstanding Rockwell Australia
Debt (as defined below), or any indebtedness issued in
replacement thereof or in exchange therefor; and
(iii) bank borrowings of Rockwell Australia Limited in the
aggregate principal amount of not more than a United States
dollar equivalent of $30,000,000 (the "Rockwell Australia Debt")
(it being understood that it is the current intention of the
Company to repay the Rockwell Australia Debt prior to the Time of
Contribution);
provided that no short-term debt other than commercial paper shall
constitute "Company Debt" unless it is prepayable in full at any time
without premium or penalty and no commercial paper shall constitute
"Company Debt" unless it matures or is payable or prepayable in full
within 60 days after the Effective Time without premium or penalty.
For purposes of calculating the United States dollar equivalent of any
Rockwell Australia Debt, the New York foreign exchange selling rate
applicable to Australian dollars as published in The Wall Street
Journal, Eastern Edition, for the second business day preceding the
Closing Date shall be used.
"Company Group" shall mean the Company and its Subsidiaries,
other than Newco and its Subsidiaries (determined after giving effect
to the transfers contemplated by Article II of this Agreement).
"Contributed A&D Assets" shall have the meaning set forth in
Section 2.1(a)(vii).
"DOE" shall mean the United States Department of Energy or
any predecessor Governmental Entity.
"Defense Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries (including,
without limitation, ▇▇▇▇▇▇▇ International Service Company and Rockwell
Australia Limited but excluding the Tullamarine Service Center) and
their respective predecessors of designing, building, selling,
installing, modifying, repairing, servicing and supporting the
following for defense markets: aircraft electronic upgrades and
modifications, tactical weapons, space defense
sensors and electronics, navigation and guidance systems for strategic
missiles, tactical weapons, ships and submarines, naval combat systems
for ships and submarines, proprietary programs, and parts, components
and materials for the foregoing, and activities related thereto, and
shall include any former or discontinued operations primarily related
to the Defense Business as previously conducted, including, without
limitation, the former or discontinued operations listed on Schedule
1.1(b)(i); provided, however, that the Defense Business does not
include any part of the ▇▇▇▇▇▇▇ Business (including the Company's
Automatic Vehicle Locating System and Vision Sensor Initiatives
Programs heretofore conducted by the Autonetics & Missile Systems
Division of the Company), any Contributed A&D Assets or any Divested
Business of the Defense Business, including, without limitation, the
Divested Businesses listed on Schedule 1.1(b)(ii).
"Divested Business" shall mean any corporation, division or
other business unit (including any Assets and Liabilities comprising
the same) that has been sold, conveyed, assigned, transferred or
otherwise divested, in whole or in part, by the Company or any of its
Subsidiaries to any third party prior to the Time of Contribution, but
shall not include any corporation, division, other business unit,
product line or contract the operations or production of which has
been discontinued, completed or otherwise terminated by the Company or
any of its Subsidiaries, but not sold, conveyed, assigned, transferred
or otherwise divested to a third party.
"Environmental Law" shall mean any Federal, state, local or
foreign statute, law, regulation, rule or common law of, or any
judgment, injunction, order or decree of or settlement agreement with,
any Governmental Entity, relating to (x) the protection of the
environment or (y) the use, storage, treatment, generation,
transportation, processing, handling, release or disposal of Hazardous
Substances, in each case as in effect on the date hereof or in the
future.
"Environmental Liabilities" shall mean all Liabilities
relating to or arising out of any Environmental Law or contract or
agreement relating to environmental, health or safety matters
(including removal, remediation or cleanup costs, investigatory costs,
governmental response costs and administrative oversight costs,
environmental monitoring costs, natural resources damages, property
damages, personal injury damages, costs of medical
monitoring, costs of compliance with any settlement, judgment or other
determination of Liability and indemnity, contribution or similar
obligations) irrespective of whether such Liabilities are asserted, in
the first instance, to be the responsibility of a Governmental Entity
or any other Person.
"Group" shall mean the Company Group or the Newco Group.
"HVS Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries and their
respective predecessors of designing, building, selling, installing,
modifying, repairing, servicing and supporting drivetrain components
and systems for heavy- and medium-duty commercial trucks, trailers,
buses, off-highway commercial vehicles and government heavy-duty
wheeled vehicles, and activities related thereto, and shall include
any former or discontinued operations primarily related to the HVS
Business as previously conducted.
"Information" shall mean all records, books, contracts,
instruments, computer data and other data and information.
"Liabilities" shall mean any and all debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute,
matured or unmatured, liquidated or unliquidated, accrued or not
accrued, known or unknown, whenever or however arising and whether or
not the same would be required by generally accepted accounting
principles to be reflected in financial statements or disclosed in the
notes thereto.
"Litigation Matters" shall mean actual, threatened or future
litigations, investigations, proceedings (including arbitration
proceedings), claims or other legal matters that have been or may be
asserted by or against, or otherwise affect, the Company and/or Newco
(or members of either Group).
"LVS Business" shall mean the business heretofore and
currently engaged in by the Company and its Subsidiaries and their
respective predecessors of designing, building, selling, installing,
modifying, repairing, servicing and supporting sunroof, door access
control and seat adjusting systems, suspensions and wheels,
anti-squeeze windows, electronic controls and automobile global
positioning
systems for passenger car and light truck industries, and activities
related thereto, and shall include any former or discontinued
operations primarily related to the LVS Business as previously
conducted.
"Newco Group" shall mean Newco and its Subsidiaries,
including the Operating Subsidiaries (determined after giving effect
to the transfers contemplated by Article II of this Agreement).
"Paydown Amount" shall be the excess, if any, of $2.165
billion over the aggregate principal amount of the Company Debt at the
Effective Time (calculated as set forth in the definition of Company
Debt).
"Person" shall mean an individual, a partnership, a joint
venture, a corporation, a limited liability entity, a trust, an
unincorporated organization or other entity or a government or any
department or agency thereof.
"Preexisting Environmental Conditions" shall mean conditions
of the environment (including ambient air, the ocean, natural
resources (including flora and fauna), soil, surface water,
groundwater (including potable water, navigable water and wetlands),
the land surface or subsurface strata or as otherwise defined in any
Environmental Law) existing at the Time of Contribution relating to or
arising from the presence, use, treatment, or Release or threatened
Release of any Hazardous Substance but does not include any Special
Liabilities. For purposes of the definition of the term "Preexisting
Environmental Condition", the term "Hazardous Substance" shall include
any waste, substance, material, pollutant or contaminant now, or in
the future, listed, defined, designated or classified as hazardous,
toxic or radioactive, or otherwise regulated, now or in the future,
under any Environmental Law, and any waste, material or substance
contaminated by, or alleged to be contaminated by, any Hazardous
Substance.
"Privileged Information" shall mean, with respect to either
Group, Information regarding a member of such Group, or any of its
operations, employees, Assets or Liabilities (whether in documents or
stored in any other form or known to its employees or agents) that is
or may be protected from disclosure pursuant to the attorney-client
privilege, the work product doctrine or other applicable privileges,
that a member of the other Group may come into
possession of or obtain access to pursuant to this Agreement or
otherwise.
"Release" shall have the same meaning given such term in the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. ss. 9601(22).
"Representatives" shall mean directors, officers, employees,
agents, consultants, advisors, accountants, attorneys and
representatives.
"Retained Facilities" shall mean the Company's facilities
identified on Schedule 2.1(b)(i)(A) and all buildings, improvements
and fixtures at such facilities.
"Right" shall mean a preferred share purchase right issued
pursuant to the Rights Agreement dated as of November 30, 1996 between
Newco and ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
"Science Center" shall mean the Company's Science Center
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and other
related facilities located at ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ and Building 241, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇.
"Semiconductor Systems Business" shall mean the business
heretofore and currently engaged in by the Company and its
Subsidiaries and their respective predecessors of designing, building,
selling, installing, modifying, repairing, servicing and supporting
semiconductors for fax, voice and data modems for fax machines,
personal computers and other uses, chipsets for cellular and cordless
phones, wireless modem devices for laptop computers and modules for
global positioning system receivers, and activities related thereto,
and shall include any former or discontinued operations primarily
related to the Semiconductor Systems Business as previously conducted.
"Special Liabilities" shall mean any Liabilities of the
Company or any of its Subsidiaries (including any Environmental
Liability) arising out of or relating to (i) the Rocky Flats Plant,
Golden, Colorado, (ii) the Hanford Nuclear Reservation, Hanford,
Washington, (iii) the INEL complex in Idaho, (iv) the Company's or any
of its Subsidiaries decontamination and decommissioning work at
various atomic or nuclear facilities throughout the United
States (excluding, for purposes of the definition of Special
Liabilities only, Santa ▇▇▇▇▇▇ and Canoga Park, California) and (v)
the Company's work relating to Interatom (Internationale
Atomreaktorbau GmbH), and any Liabilities of the Company or any of its
Subsidiaries (including any Environmental Liabilities), arising out of
or relating to any products manufactured or any services provided by
the Company or any of its Subsidiaries which involved the use,
storage, treatment, generation, transportation, processing, handling,
release or disposal of radioactive, fissionable or fusionable
materials or any waste products or by-products of any process
involving radioactive, fissionable or fusionable materials (other than
activities of the Company and its Subsidiaries at Santa ▇▇▇▇▇▇ and
Canoga Park, California).
"Tax" or "Taxes" shall have the meaning assigned to such
term in the Tax Allocation Agreement.
"Time of Contribution" shall mean the time immediately prior
to the Time of Distribution as of which the Contribution is effective.
"Time of Distribution" shall mean the time as of which the
Distribution is effective.
"Transfer Agent" shall mean ChaseMellon Shareholder
Services, L.L.C., ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telephone (800)
▇▇▇-▇▇▇▇, the transfer agent for the Company Common Stock and Company
Class A Common Stock.
ARTICLE II
CONTRIBUTION AND ASSUMPTION
2.1. Contribution.
(a) Subject to Section 2.1(b) and effective as of the Time
of Contribution, the Company hereby contributes, grants, conveys,
assigns, transfers and delivers to Newco and the Operating
Subsidiaries all the Company's right, title and interest in and to any
and all Assets of the
Company (collectively, the "Contributed Assets"), allocated as follows
or as Newco shall otherwise direct:
(i) all Assets of the Company that are used primarily or
that are held primarily for use in the A-B Business (other than
the capital stock of A-B) and all of the issued and outstanding
shares of capital stock of Reliance Electric Company, a Delaware
corporation, are contributed to A-B as a capital contribution;
(ii) all Assets of the Company that are used primarily or
that are held primarily for use in the ▇▇▇▇▇▇▇ Business are
contributed to ▇▇▇▇▇▇▇ in exchange for 1,000 shares of the Common
Stock, par value $1.00 per share, of ▇▇▇▇▇▇▇, constituting all of
the outstanding shares of ▇▇▇▇▇▇▇;
(iii) all Assets of the Company that are used primarily or
that are held primarily for use in the Semiconductor Systems
Business and all of the issued and outstanding shares of capital
stock of Brooktree Corporation, a California corporation, are
contributed to RSS in exchange for 1,000 shares of the Common
Stock, par value $1.00 per share, of RSS, constituting all of the
outstanding shares of RSS;
(iv) all Assets of the Company that are used primarily or
that are held primarily for use in the LVS Business are
contributed to LVS in exchange for 1,000 shares of the Common
Stock, par value $1.00 per share, of LVS, constituting all of the
outstanding shares of LVS;
(v) all Assets of the Company that are used primarily or
that are held primarily for use in the HVS Business are
contributed to HVS in exchange for 1,000 shares of the Common
Stock, par value $1.00 per share, of HVS, constituting all of the
outstanding shares of HVS;
(v [intentionally omitted];
(vii) the Company's properties at El Segundo, California,
Lakewood, California, and Building 37 at Canoga Park, California
more specifically identified on Schedule 2.1(a)(vii)
(collectively, the "Contributed A&D Assets") are contributed to
A-B as a capital contribution;
(viii) the Science Center (other than physical assets
related to extrinsic silicon detectors and MEMS gyros located at
Building 241, 3370 Miraloma Avenue, Anaheim, California, which
shall constitute Retained Assets) is contributed to Newco as a
capital contribution;
(ix) all issued and outstanding shares of Atomics
International, Inc., Narland Corporation and Rockwell Aerospace &
Electronics, Inc. are contributed to Newco as a capital
contribution;
(x) the Health Care Claims (as defined in the Post-Closing
Covenants Agreement) are contributed to Newco as a capital
contribution; and
(xi) immediately following the contributions referred to in
clauses (i) through (x) above, all of the issued and outstanding
shares of Common Stock of A-B, ▇▇▇▇▇▇▇, RSS, LVS, HVS and all
other Assets of the Company (other than the Retained Assets) not
otherwise specifically contributed to an Operating Subsidiary
pursuant to this Section 2.1(a), including (x) all cash and cash
equivalents of the Company and its Subsidiaries (other than as
listed on Schedule 2.1(b)(i)(C) and other than cash (including
for this purpose cash held by Rockwell Australia Limited in an
amount not to exceed the aggregate outstanding principal amount
of the Rockwell Australia Debt) in an amount equal to the excess,
if any, of (A) the sum of (1) $4,320,000 and (2) the Accrued
Interest over (B) the Paydown Amount), and (y) the Company's
rights under Article II of the Merger Agreement, the last
sentence of Section 3.1 of the Merger Agreement, Section 4.2(j)
of the Merger Agreement, Section 4.2(d)(iii) of the Merger
Agreement, the second sentence of Section 5.9(a) of the Merger
Agreement, Section 5.13(a) of the Merger Agreement, Section 5.18
of the Merger Agreement and Section 8.17 of the Merger Agreement,
are contributed to Newco as a capital contribution.
If any Assets that are used primarily or that are held
primarily for use in the A-B Business, the ▇▇▇▇▇▇▇ Business, the
Semiconductor Systems Business, the LVS Business or the HVS Business
are held in a Subsidiary of the Company that would not be owned
directly or indirectly by ▇-▇, ▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇ or HVS,
respectively, as a result of
the foregoing allocation, then, notwithstanding the foregoing
allocation, the Company shall cause each such Subsidiary to contribute
such Assets to the appropriate Operating Subsidiary or a Subsidiary
thereof or as Newco otherwise directs.
(b) Notwithstanding Section 2.1(a), the Company hereby
retains and does not contribute to Newco or the Operating Subsidiaries
all the Company's right, title and interest in and to the following
Assets (collectively, the "Retained Assets"):
(i) all the Company's right, title and interest (including
minority interests) in and to (A) all Assets of the Company or
any of its Subsidiaries that are used primarily in or that are
held primarily for use in or that are otherwise necessary for the
operation, as presently conducted, of (1) the Aerospace Business
and the Defense Business, including, without limitation, in the
Company's Autonetics and Missile Systems Division, the Company's
North American Aircraft Division, the Company's North American
Aircraft Modification Division, the Company's Rocketdyne
Division, the Company's Space Systems Division and the Company's
Airborne Laser Program (excluding the Communication Systems
Division, but including ▇▇▇▇▇▇▇ International Service Company and
Rockwell Australia Limited), and including, without limitation,
the Retained Facilities, and (2) the Additional Retained
Facilities (other than miscellaneous furnishings, artwork,
computers and other equipment and personal property used by
Company employees who will become Newco Group Continuing
Employees following the Time of Contribution), (B) an undivided
one-half interest in the helicopters and corporate jet aircraft
included on Schedule 2.1(b)(i)(B), and (C) whether or not
included within the Assets set forth in clause (A) above, all
Assets (including, without limitation, capital stock and
partnership interests) reflected on the June 30 Balance Sheet, as
such Assets may have been added to, sold in the ordinary course
of business or otherwise changed since such date; provided,
however, that cash or cash equivalents (other than as listed on
Schedule 2.1(b)(i)(C) and cash (including for this purpose cash
held by Rockwell Australia Limited in an amount not to exceed the
aggregate outstanding principal amount of the Rockwell Australia
Debt) in an amount equal to the excess, if any, of (D) the sum of
(1)$4,320,000 and (2) the Accrued Interest over (E) the Paydown
Amount), the Contributed A&D Assets, the assets associated with
services to be provided by Newco pursuant to Schedule 3.4 of the
Post-Closing Covenants Agreement and the assets associated with
the headquarters functions described in the Retained Business
Audited Financial Statements shall not constitute Retained
Assets;
(ii) all issued and outstanding shares of capital stock of
the Subsidiaries of the Company identified on Schedule 2.1(b)(ii)
(the "Retained Subsidiaries");
(iii) all rights in and use of the names "Autonetics",
"North American Aviation" and "Rocketdyne" and all derivatives
thereof;
(iv) all rights of the Company under the Reorganization
Agreements (including the Merger Agreement), except as otherwise
specifically provided therein and except that the Company's
rights under Section 2.1(a)(xi)(y) of this Agreement shall not
constitute Retained Assets; and
(v) the Environmental Coverage Claims.
If any Assets that are used primarily or that are held primarily for
use in or that are otherwise necessary for the operation, as presently
conducted, of the Aerospace Business, the Defense Business or the
Additional Retained Facilities (other than miscellaneous furnishings,
artwork, computers and other equipment and personal property used by
Company employees who will become Newco Group Continuing Employees
following the Time of Contribution and other than the assets excluded
from the definition of Retained Assets by the proviso to Section
2.1(b)(i)) are held in a Subsidiary of the Company that is not a
Retained Subsidiary, then the Company shall cause each such Subsidiary
to contribute such Assets to the appropriate Retained Subsidiary.
2.2. Assumption of Liabilities.
(a) Subject to Section 2.2(b) and effective as of the Time
of Contribution, Newco and the Operating Subsidiaries, in partial
consideration for the Contribution, hereby unconditionally assume and
undertake to pay, satisfy and discharge when due in accordance with
their terms the
following Liabilities of the Company and any of its Subsidiaries
(collectively, the "Assumed Liabilities"), allocated as follows or as
Newco shall otherwise direct:
(i) all Liabilities relating primarily to or arising
primarily from the A-B Business are assumed by A- B and Newco;
(ii) all Liabilities relating primarily to or arising
primarily from the ▇▇▇▇▇▇▇ Business are assumed by ▇▇▇▇▇▇▇ and
Newco;
(iii) all Liabilities relating primarily to or arising
primarily from the Semiconductor Systems Business are assumed by
RSS and Newco;
(iv) all Liabilities relating primarily to or arising
primarily from the LVS Business are assumed by LVS and Newco;
(v) all Liabilities relating primarily to or arising
primarily from the HVS Business are assumed by HVS and Newco;
(vi) [intentionally omitted];
(vii) all Special Liabilities are assumed by Newco;
(viii) all Liabilities (including without limitation
indemnification obligations) relating primarily to or arising
primarily from (A) the reports, registration statements and other
documents filed by the Company with the SEC prior to the Time of
Contribution (including the Company's consolidated financial
statements for periods prior to the Time of Contribution included
or incorporated by reference therein) and (B) any breach or
alleged breach by any director of the Company of his fiduciary
duties to the Company and its stockholders occurring at or prior
to the Time of Contribution, in each case referred to in the
foregoing clauses (A) and (B) notwithstanding the fact that such
Liabilities may relate primarily to or arise primarily from the
Aerospace Business, the Defense Business or the Additional
Retained Facilities, are assumed by Newco, but excluding any
matter for which the Company would be required to provide
indemnification pursuant to Section 2.2(ii) of the Post-Closing
Covenants Agreement;
(ix) all Liabilities relating primarily to or arising
primarily from any Divested Business of the Aerospace Business or
the Defense Business, including, without limitation, the Divested
Businesses listed on Schedules 1.1(a)(ii) and 1.1(b)(ii), are
assumed by Newco;
(x) all Liabilities relating primarily to or arising
primarily from Atomics International, Inc., Narland Corporation
and Rockwell Aerospace & Electronics, Inc. are assumed by Newco;
(xi) all Liabilities relating to the Contributed A&D Assets
are assumed by Newco;
(xii) all Liabilities in respect of indebtedness for
borrowed money (including any guarantees in respect of
indebtedness for borrowed money of any third party of the Company
and any of its Subsidiaries) other than the Company Debt are
assumed by Newco;
(xiii) all Liabilities that are contemplated by the
Reorganization Agreements as Liabilities to be retained by any
member of the Newco Group, and any agreements, obligations and
Liabilities of the Newco Group under the Reorganization
Agreements (including any Liabilities of the Company described in
Sections 4.1(p) and 5.13 of the Merger Agreement) are assumed by
Newco; and
(xiv) all other Liabilities, other than the Retained
Liabilities, are assumed by Newco.
The Liabilities referred to in clauses (i) - (xiii) above are referred
to collectively as the "Newco Liabilities". If any Liabilities
relating primarily to or arising primarily from the A-B Business, the
▇▇▇▇▇▇▇ Business, the Semiconductor Systems Business, the LVS Business
or the HVS Business are obligations of a Subsidiary of the Company
other than A-B, ▇▇▇▇▇▇▇, RSS, LVS or HVS, or a direct or indirect
Subsidiary thereof, as a result of the allocation of Assets of the
Company set forth in Section 2.1, then, notwithstanding the foregoing
allocation or the allocation of Assets of the Company set forth in
Section 2.1, the appropriate Operating Subsidiary or a Subsidiary
thereof shall assume each such Liability.
(b) Notwithstanding Section 2.2(a), the Company hereby
retains, and Newco and the Operating Subsidiaries do not assume and
will have no liability with respect to, the following Liabilities
(collectively, the "Retained Liabilities"):
(i) the Company Debt, together with the Accrued Interest;
(ii) all Liabilities (A) relating primarily to or arising
primarily from the Aerospace Business or the Defense Business as
conducted at any time prior to, on or after the Time of
Contribution or any other Retained Assets or (B) associated with
the current and former operations of the Additional Retained
Facilities; provided, however, that the Retained Liabilities
shall not include any Newco Liabilities; and
(iii) all Liabilities that are contemplated by the
Reorganization Agreements (including the Schedules thereto)
(other than the Merger Agreement) as Liabilities to be retained
by any member of the Company Group, and any agreements,
obligations and Liabilities of the Company Group under the
Reorganization Agreements (other than the Merger Agreement),
except as otherwise specifically provided herein or therein and
except for obligations which are required or contemplated to be
performed prior to the Effective Time.
If any Liabilities relating primarily to or arising primarily from the
Aerospace Business, the Defense Business or the Additional Retained
Facilities are obligations of a Subsidiary of the Company other than a
Retained Subsidiary as a result of the allocation of Assets of the
Company set forth in Section 2.1, then, notwithstanding the foregoing
allocation or the allocation of Assets of the Company set forth in
Section 2.1, the Company shall, or shall cause the appropriate
Retained Subsidiary to, assume each such Liability.
2.3. Transfer and Assumption Documentation. In furtherance
of the contribution, grant, conveyance, assignment, transfer and
delivery of the Contributed Assets and the assumption of the Assumed
Liabilities set forth in this Article II, at the Time of Contribution
or as promptly as practicable thereafter (i) the Company shall execute
and deliver, and cause its Subsidiaries to execute and deliver,
such deeds, bills of sale, stock powers, certificates of title,
assignments of leases and contracts and other instruments of
contribution, grant, conveyance, assignment, transfer and delivery
necessary to evidence such contribution, grant, conveyance,
assignment, transfer and delivery and (ii) Newco or the appropriate
member of the Newco Group shall execute and deliver such instruments
of assumption as and to the extent necessary to evidence such
assumption.
2.4 Nonassignable Contracts. Anything contained herein to
the contrary notwithstanding, this Agreement shall not constitute an
agreement to assign any lease, license agreement, contract, agreement,
sales order, purchase order, open bid or other commitment or Asset if
an assignment or attempted assignment of the same without the consent
of the other party or parties thereto would constitute a breach
thereof or in any way impair the rights of the Newco Group or the
Company Group thereunder. The Company shall, prior to the Time of
Contribution, use reasonable best efforts (it being understood that
such efforts shall not include any requirement of the Company Group to
expend money or offer or grant any financial accommodation) as
requested by Newco, and Newco shall cooperate in all reasonable
respects with the Company, to obtain all consents and waivers and to
resolve all impracticalities of assignments or transfers necessary to
convey to Newco and the Operating Subsidiaries the Contributed Assets.
If any such consent is not obtained or if an attempted assignment
would be ineffective or would impair either Group's rights under any
such lease, license agreement, contract, agreement, sales order,
purchase order, open bid or other commitment or Asset so that Newco or
the Operating Subsidiaries would not receive all such rights, then (x)
the Company shall use reasonable best efforts (it being understood
that such efforts shall not include any requirement of the Company
Group to expend money or offer or grant any financial accommodation)
to provide or cause to be provided to Newco or the appropriate
Operating Subsidiary, to the extent permitted by law, the benefits of
any such lease, license agreement, contract, agreement, sales order,
purchase order, open bid or other commitment or Asset and the Company
shall promptly pay or cause to be paid to Newco or the appropriate
Operating Subsidiary when received all moneys received by the Company
Group with respect to any such lease, license agreement, contract,
agreement, sales order, purchase order, open bid or other commitment
or Asset and (y) in consideration thereof Newco or the appropriate
Operating Subsidiary shall pay, perform and discharge on
behalf of the Company Group all of the Company Group's debts,
liabilities, obligations and commitments thereunder in a timely manner
and in accordance with the terms thereof. In addition, the Company
shall take such other actions (at Newco's expense) as may reasonably
be requested by Newco in order to place Newco, insofar as reasonably
possible, in the same position as if such lease, license agreement,
contract, agreement, sales order, purchase order, open bid or other
commitment or Asset had been transferred as contemplated hereby and so
all the benefits and burdens relating thereto, including possession,
use, risk of loss, potential for gain and dominion, control and
command, shall inure to the Newco Group. If and when such consents and
approvals are obtained, the transfer of the applicable Asset shall be
effected in accordance with the terms of this Agreement.
2.5. Intercompany Arrangements. All agreements, contracts,
arrangements and commitments between the Retained Business or any
operating unit thereof, on the one hand, and the Company or any
operating unit thereof (other than the Retained Business or any
operating unit thereof), on the other hand, entered into prior to the
Closing Date for the purchase or sale of goods or services
("Intercompany Arrangements") including, without limitation, Rockwell
Internal Customer Agreements, shall remain in effect on and after the
Closing Date (subject to amendment as provided in the Transition
Agreement). All amounts under such Intercompany Arrangements which are
unbilled and have not been charged to the related prime contract as of
the Closing Date shall be billed and payable on and after the Closing
Date in accordance with the terms thereof. At or before the Closing,
the Company shall cause all intercompany indebtedness (which shall
include payables and receivables but which shall not include unbilled
amounts under Intercompany Arrangements) between the Retained Business
or any operating unit thereof, on the one hand, and the Company or any
operating unit thereof (other than the Retained Business or any
operating unit thereof), on the other hand, to be settled or otherwise
eliminated.
ARTICLE III
RECAPITALIZATION OF NEWCO; MECHANICS OF DISTRIBUTION
3.1. Newco Capitalization. The current equity capitalization
of Newco consists of 1,000 issued and outstanding shares of Newco
Common Stock (the "Existing
Newco Common Stock"), all of which is outstanding and owned
beneficially and of record by the Company.
3.2. Recapitalization of Newco. Immediately prior to the
Time of Distribution, the Company shall cause Newco to amend its
Certificate of Incorporation to, among other things, (i) increase the
authorized number of shares of capital stock of Newco to 1,125,000,000
shares, consisting of 25,000,000 shares of Preferred Stock, without
par value, 1,000,000,000 shares of Newco Common Stock and 100,000,000
shares of Newco Class A Common Stock, and (ii) exchange the Existing
Newco Common Stock owned by the Company for a total number of shares
of Newco Common Stock and Newco Class A Common Stock, in each case
with the associated Rights, equal to the total number of shares of
Company Common Stock and Company Class A Common Stock, respectively
(other than Company Common Stock and Company Class A Common Stock held
in the treasury of the Company), outstanding as of the Record Date (as
defined below).
3.3. Mechanics of Distribution. The Distribution shall be
effected by the distribution to each holder of record of Company
Common Stock and Company Class A Common Stock, as of the record date
designated for the Distribution by or pursuant to the authorization of
the Board of Directors of the Company (the "Record Date"), of
certificates representing one share of Newco Common Stock and one
associated Right for each share of Company Common Stock and one share
of Newco Class A Common Stock and one associated Right for each share
of Company Class A Common Stock held by such holder.
3.4. Timing of Distribution. The Board of Directors of the
Company shall formally declare the Distribution and shall authorize
the Company to pay it immediately prior to the Effective Time, subject
to the satisfaction or waiver of the conditions set forth in Article
IX, by delivery of certificates for Newco Common Stock and Newco Class
A Common Stock to the Transfer Agent for delivery to the holders
entitled thereto. The Distribution shall be deemed to be effective
upon notification by the Company to the Transfer Agent that the
Distribution has been declared and that the Transfer Agent is
authorized to proceed with the distribution of Newco Common Stock and
Newco Class A Common Stock.
ARTICLE IV
OTHER AGREEMENTS
4.1. Employment. Newco or one of its Subsidiaries shall
offer employment or continued employment from the Time of Contribution
(or such later time as Newco Inactive Employees (as defined herein)
first become eligible to return to employment, it being understood
that each Newco Inactive Employee will continue to be eligible to
receive from the Newco Group the same compensation and benefits
payable during the period prior to such Newco Inactive Employee's
return to employment that such Newco Inactive Employee is entitled to
receive during such Newco Inactive Employee's absence from employment
immediately prior to the Time of Contribution) to all employees of the
Company and its Subsidiaries (including employees not actively at work
at the Time of Contribution due to leave of absence, disability leave,
military leave or layoff with recall rights ("Newco Inactive
Employees")), except those to whom Acquiror or the Company Group has
an obligation to offer employment or continued employment pursuant to
Section 5.12(a) of the Merger Agreement (collectively "Company Group
Continuing Employees"), on terms that are substantially the same as
the terms on which they were employed by the Company or a Subsidiary
of the Company immediately prior to the Time of Contribution;
provided, however, that nothing contained in this Section 4.1 is
intended to confer upon any employee who so continues to be employed
or who accepts such an offer of employment by Newco or any of its
Subsidiaries ("Newco Group Continuing Employees") any right to
continued employment after the Time of Contribution. The Company
hereby consents to Newco or one of its Subsidiaries making such
offers. Newco shall recognize the service with the Company and its
Subsidiaries through the Time of Contribution of each Newco Group
Continuing Employee and, where applicable, each former employee of the
businesses which, at the Time of Contribution, comprise the Newco
Group (a "Newco Group Former Employee"), and shall credit, as of the
Time of Contribution, such service with Newco (i) for all plan
purposes under any employee benefit plan, arrangement or policy of the
Newco Group in effect as of the Time of Contribution in which they are
then participating and (ii) for eligibility and vesting purposes only
under any employee benefit plan, arrangement or policy for which they
become eligible on or following the Time of Contribution; provided,
however, that, except as otherwise required by law or by the terms of
any collective bargaining agreement,
service will be recognized under clause (i) or (ii) only to the extent
such service was recognized under the Company's comparable plan or
program prior to the Time of Contribution. Newco shall, or shall cause
the applicable member of the Newco Group to, assume or maintain (as
applicable) as of the Time of Contribution and perform the obligations
of each of the Company and its Subsidiaries under the collective
bargaining agreements relating to Newco Group Continuing Employees and
Newco Group Former Employees and any and all collateral agreements
related thereto, including those affecting all terms and conditions of
employment, and to be bound by such agreements. The Company shall, or
shall cause the applicable member of the Company Group to, assume or
maintain (as applicable) as of the Time of Contribution and perform
the obligations of each of the Company and its Subsidiaries under the
collective bargaining agreements relating to Company Group Continuing
Employees and former employees of the businesses which, at the Time of
Contribution, comprise the Company Group ("Company Group Former
Employees"), and any and all collateral agreements related thereto,
including those affecting all terms and conditions of employment, and
to be bound by such agreements.
4.2. Cross-License of Intellectual Property. (a) Effective
as of the Time of Distribution, the Company on behalf of itself and
its Subsidiaries, in consideration for the rights granted by Newco and
its Subsidiaries pursuant to Section 4.2(b), hereby grants to the
Newco Group a royalty-free, world-wide, irrevocable, non-exclusive
license, under all intellectual property rights (including, without
limitation, patents, patent applications, trade secrets, copyrights or
other similar industrial property rights, except for trademarks, trade
names, service marks, trade dress or any other form of trade identity)
which are owned by the Company Group as Retained Assets immediately
after the Time of Contribution or under which the Company Group has a
right to license as Retained Assets immediately after the Time of
Contribution, and which are used in the conduct of the businesses of
the Company other than the Aerospace Business or the Defense Business
(whether or not such rights are also used in the conduct of the
Aerospace Business or the Defense Business) at the Time of
Contribution to make, have made, use, import, sell or otherwise
dispose of products, or to practice any process in connection
therewith, in the businesses of the Newco Group as conducted by the
Company at the Time of Contribution; said non-exclusive license being
transferable only in
connection with the sale of all or any part of the Newco Group's
business to which such intellectual property rights relate. To the
extent that the Newco Group does not have copies of any information or
materials relating to such intellectual property rights, the Company
shall upon reasonable request supply to the Newco Group copies of any
such information or materials relating to such intellectual property
rights. The Company makes no representations or warranties of any kind
with respect to the validity, scope or enforceability of any such
intellectual property rights licensed hereunder and the Company has no
obligation to file or prosecute any patent applications or maintain
any patents in force in connection therewith. The Company will, at no
cost to Newco, promptly execute or cause a member of the Company Group
promptly to execute such further documents as Newco may reasonably
request as necessary or desirable to carry out the terms of this
Section 4.2(a).
(b) Effective as of the Time of Distribution, Newco on
behalf of itself and its Subsidiaries, in consideration for the rights
granted by the Company and its Subsidiaries pursuant to Section
4.2(a), hereby grants to the Company Group a royalty-free, world-wide,
irrevocable, non-exclusive license, under all intellectual property
rights (including, without limitation, patents, patent applications,
trade secrets, copyrights or other similar industrial property rights,
except for trademarks, trade names, service marks, trade dress or any
other form of trade identity), which are owned by the Newco Group as
Contributed Assets immediately after the Time of Contribution or under
which the Newco Group has a right to license as Contributed Assets
immediately after the Time of Contribution, and which are used in the
conduct of the Aerospace Business or the Defense Business (whether or
not such rights are also used in the conduct of the other businesses
of the Company) at the Time of Contribution to make, have made, use,
import, sell or otherwise dispose of products, or to practice any
process in connection therewith, in the Aerospace Business and the
Defense Business as conducted by the Company at the Time of
Contribution; said non-exclusive license being transferable only in
connection with the sale of all or any part of the Company Group's
business to which such intellectual property rights relate. To the
extent that the Company Group does not have copies of any information
or materials relating to such intellectual property rights, Newco
shall upon reasonable request supply to the Company Group copies of
any such information or materials relating to such intellectual
property rights. Newco makes no
representations or warranties of any kind with respect to the
validity, scope or enforceability of any such intellectual property
rights licensed hereunder and Newco has no obligation to file or
prosecute any patent applications or maintain any patents in force in
connection therewith. Newco will, at no cost to the Company, promptly
execute or cause a member of the Newco Group promptly to execute such
further documents as the Company may reasonably request as necessary
or desirable to carry out the terms of this Section 4.2(b).
(c) No provision in the Reorganization Agreements shall be
construed to permit any transfer of intellectual property relating to
the Airborne Laser Program from any member of the Company Group to
Acquiror or any other Subsidiary of Acquiror prior to award of a
Government Contract for the Airborne Laser Program.
4.3. Use of Names, Trademarks, etc. (a) From and after the
Effective Time, Newco shall have all rights in and, except as provided
in Section 4.3(b), use of the names "Rockwell", "Rockwell
International", and "▇▇▇▇▇▇▇" and all other names, marks, scripts,
type fonts, forms, styles, logos, designs, devices, trade dress,
symbols and other forms of trade identity constituting Contributed
Assets, and all derivatives thereof. From and after the Effective
Time, the Company shall have all rights in and, except as provided in
Section 4.3(c), use of the names "Autonetics", "North American
Aviation" and "Rocketdyne" and all other names, marks, scripts, type
fonts, forms, styles, logos, designs, devices, trade dress, symbols
and other forms of trade identity constituting Retained Assets, and
all derivatives thereof. Prior to or promptly after the Effective
Time, the Company shall change the name of any Subsidiary or other
Person under its control to eliminate therefrom the names "Rockwell",
"Rockwell International" and "▇▇▇▇▇▇▇" and all derivatives thereof,
and Newco shall change the name of any Subsidiary or other Person
under its control to eliminate therefrom the names "Autonetics",
"North American Aviation" and "Rocketdyne" and all derivatives
thereof.
(b) From and after the Effective Time, except as permitted
in this Section 4.3(b), the Company Group shall not use or have any
rights to the names "Rockwell", "Rockwell International" and "▇▇▇▇▇▇▇"
or any derivatives thereof or any trademark, trade name, service ▇▇▇▇
or logo of the Newco Group constituting a Contributed Asset, including
the trademarks, trade names and service marks
"Rockwell", "Rockwell International" and "▇▇▇▇▇▇▇", or any
corporate symbol related thereto or any thereof or any name or ▇▇▇▇
which includes the words "Rockwell", "Rockwell International" or
"▇▇▇▇▇▇▇" or any other Contributed Asset or any derivative thereof or
name or ▇▇▇▇ confusingly similar thereto or special script, type font,
form, style, logo, design, device, trade dress, or symbol used or
possessed by the Company before the Effective Time or Newco after the
Effective Time which contains the trademark, trade name or service
▇▇▇▇ "▇▇▇▇▇▇▇▇", "▇▇▇▇▇▇▇▇ International" or "▇▇▇▇▇▇▇" or any other
Contributed Asset or any derivative thereof or name or ▇▇▇▇
confusingly similar thereto and the Company Group will not hold itself
out as having any affiliation with the Newco Group. However, the
Company Group may utilize without obligation to pay royalties to Newco
the trademarks or trade names "Rockwell", "Rockwell International" or
"▇▇▇▇▇▇▇" or any corporate symbol related thereto or any thereof in
connection with stationery, supplies, labels, catalogs, vehicles,
signs, finished goods inventory and work-in-process constituting
Retained Assets as of the Time of Contribution, subject to the terms
and conditions of this Section 4.3:
(i) All documents constituting Retained Assets as of the
Time of Contribution within the following categories may be used
for the duration of the periods following the Effective Time
indicated below or until the supply is exhausted, whichever is
the first to occur:
Maximum Period of
Permitted Use
Following the
Category of Documents Effective Time
--------------------- -----------------
A. Stationery 4 months
B. Invoices, purchase orders,
debit and credit memos and
other similar documents of a
transactional nature 4 months
C. Business cards 3 months
D. Other outside forms such as
packing lists, labels,
packing materials and 4 months
cartons, etc.
E. Forms for internal use only 12 months
F. Product literature 12 months;
provided, however, that no document within any of the above
categories A, B or F may be used by the Company Group for any
purpose within the stated period unless such document clearly and
prominently displays a statement, the form of which is approved
by Newco, to the effect that the Aerospace Business or the
Defense Business, as the case may be, is no longer affiliated
with Newco.
(ii) All vehicles constituting Retained Assets as of the
Time of Contribution may continue to be used without re-marking
(except as to legally required permit numbers, license numbers,
etc.) for a period not to exceed six months following the
Effective Time or the date of disposition of the vehicle,
whichever is the first to occur. The Company shall cause all
markings on such vehicles to be removed or permanently obscured
prior to disposition of such vehicles.
(iii) Within three months following the Effective Time, the
Company shall cause to be removed from display at all facilities
constituting Retained Assets as of the Time of Contribution all
demountable displays which contain the trademarks or trade names
"Rockwell", "Rockwell International" or "▇▇▇▇▇▇▇" or any
corporate symbol related thereto or any thereof constituting
Contributed Assets and the Company shall remove, or shall cause
the removal of all signs displaying any such trademark, trade
name or corporate symbol constituting Contributed Assets at all
such facilities no later than six months following the Effective
Time.
(iv) Products in finished goods inventory and
work-in-process constituting Retained Assets as of the Time of
Contribution may be disposed of by the Company Group following
the Effective Time without re-marking.
(c) From and after the Effective Time, the Newco Group will
not hold itself out as having an affiliation with the Company Group.
However, the Newco Group shall have rights to use trademarks or trade
names or corporate symbols related thereto or any thereof constituting
Retained Assets of the Company Group in connection with stationery,
supplies, labels, catalogs, vehicles, signs and finished goods
inventory constituting Contributed Assets as of the
Time of Contribution on the same terms and subject to the same
conditions as are set forth in Section 4.3(b).
4.4. Further Assurances. Each of the parties hereto, at its
own cost and expense, promptly shall execute such documents and other
instruments and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and to
consummate the transactions contemplated hereby.
4.5. Cooperation. The parties shall cooperate with each
other in all reasonable respects to ensure the transfer to Newco or to
one of the Operating Subsidiaries of the Contributed Assets, the
Assumed Liabilities and the businesses related thereto, and the
retention by the Company of the Retained Business, including, without
limitation, (i) allocating rights and obligations under contracts,
agreements and other arrangements, if any, of the Company that relate
to both the Retained Business and the businesses contributed to Newco
or the Operating Subsidiaries and (ii) determining whether to enter
into any service or other sharing agreements on a mutually acceptable
arms-length basis that may be necessary to assure a smooth and orderly
transition.
ARTICLE V
TAX MATTERS
5.1. Tax Allocation. Prior to the Time of Distribution,
Newco, Acquiror and the Company shall enter into a Tax Allocation
Agreement in substantially the form attached as Annex B to the Merger
Agreement.
5.2. Tax Matters. Notwithstanding anything to the contrary
in this Agreement, liabilities of the parties for Taxes are subject to
the terms of the Tax Allocation Agreement. All obligations of Newco
under the Tax Allocation Agreement shall be treated as Assumed
Liabilities and not as Retained Liabilities under this Agreement and
all obligations of the Company under the Tax Allocation Agreement
shall be treated as Retained Liabilities and not as Assumed
Liabilities under this Agreement. The Contribution and Distribution
are intended to qualify as transactions described in Sections 351 and
355 of the Code and/or a "reorganization" within the meaning of
Section 368(a)(1)(D) of the Code and the Merger is intended
to qualify as a "reorganization" within the meaning of Section
368(a)(1)(B) of the Code.
5.3. Transfer Taxes. Newco (or, if actually paid prior to
the Effective Time, the Company) shall pay or cause to be paid any
Transfer Taxes (as defined in the Tax Allocation Agreement) imposed in
connection with or as a result of the Contribution or the
Distribution.
ARTICLE VI
MUTUAL RELEASE
6.1. Mutual Release, etc. Effective as of the Time of
Distribution and except as otherwise specifically set forth in the
Reorganization Agreements or the Transition Agreement, each of Newco,
on the one hand, and the Company, on the other hand, on its own behalf
and on behalf of each of its respective Subsidiaries, releases and
forever discharges the other and its Subsidiaries, and its and their
respective officers, directors, agents, Affiliates, record and
beneficial security holders (including, without limitation, trustees
and beneficiaries of trusts holding such securities), advisors and
Representatives (in their respective capacities as such) and their
respective heirs, executors, administrators, successors and assigns,
of and from all debts, demands, actions, causes of action, suits,
accounts, covenants, contracts, agreements, damages, claims and
Liabilities whatsoever of every name and nature, both in law and in
equity, which the releasing party has or ever had, which arise out of
or relate to events, circumstances or actions taken by such other
party occurring or failing to occur or any conditions existing on or
prior to the Time of Distribution; provided, however, that the
foregoing general release shall not apply to (i) any Liabilities
(including Liabilities with respect to indemnification) under the
Transition Agreement or assumed, transferred, assigned, allocated or
arising under any of the Reorganization Agreements and shall not
affect any party's right to enforce the Reorganization Agreements or
the Transition Agreement in accordance with their terms, (ii) any
Liability arising from or relating to Intercompany Arrangements to the
extent such Liabilities are not required pursuant to Section 2.5 to be
settled or otherwise eliminated at or before the Closing, (iii) any
Liability the release of which would result in the release of any
Person other than a Person released pursuant to this Section 6.1
(provided that the parties agree not to
bring suit or permit any of their Subsidiaries to bring suit against
any Person with respect to any Liability to the extent such Person
would be released with respect to such Liabilities by this Section 6.1
but for the proviso to this clause (iii)) or (iv) any matter set forth
on Schedule 6.1. Each party understands and agrees that, except as
otherwise specifically provided in the Reorganization Agreements,
neither Group is, in the Reorganization Agreements or otherwise,
representing or warranting in any way as to the Assets, business or
Liabilities transferred, assumed or retained as contemplated hereby or
as to any consents or approvals required in connection with the
consummation of the transactions contemplated by the Reorganization
Agreements, it being agreed and understood that each party shall take
or keep all of its Assets "as is" and that it shall bear the economic
and legal risk that conveyance of such Assets shall prove to be
insufficient or that the title to any Assets shall be other than good
and marketable and free from encumbrances of any nature whatsoever.
ARTICLE VII
ACCESS TO INFORMATION
7.1. Provision of Corporate Records. Prior to or as promptly
as practicable after the Time of Contribution the Company shall
deliver to Newco all minute books and other records of meetings of the
Board of Directors, committees of the Board of Directors, stockholders
and security owners of the Company and its predecessors, all
stockholder and security owner records of the Company and its
predecessors, all corporate books and records of the Newco Group in
its possession and the relevant portions (or copies thereof) of all
corporate books and records of the Company Group relating directly and
primarily to the Contributed Assets or the Assumed Liabilities,
including, in each case, all active agreements, active litigation
files and government filings. From and after the Time of Contribution,
all such books, records and copies shall be the property of Newco.
Prior to or as promptly as practicable after the Time of Contribution,
Newco shall deliver to the Company all corporate books and records of
the Retained Subsidiaries in Newco's possession and the relevant
portions (or copies thereof) of all corporate books and records of the
Newco Group relating directly and primarily to the Retained Assets,
the Aerospace Business, the Defense Business, the Additional Retained
Facilities
(except to the extent relating primarily to the business of
the Newco Companies) or the Retained Liabilities, including, in each
case, all active agreements, active litigation files and government
filings. From and after the Time of Contribution, all such books,
records and copies shall be the property of the Company.
7.2. Access to Information. From and after the Time of
Contribution, each of the Company and Newco shall afford to the other
and to the other's Representatives reasonable access and duplicating
rights (at the requesting party's expense) during normal business
hours and upon reasonable advance notice to all Information within the
possession or control of any member of the Company Group or the Newco
Group, as the case may be, relating to the business, Assets or
Liabilities as they existed prior to the Time of Contribution or
relating to or arising in connection with the relationship between the
constituent elements of the Groups on or prior to the Time of
Contribution, insofar as such access is reasonably required for a
reasonable purpose, subject to the provisions below regarding
Privileged Information. Without limiting the foregoing, Information
may be requested under this Section 7.2 for audit, accounting, claims,
litigation and Tax purposes, as well as for purposes of fulfilling
disclosure and reporting obligations. In furtherance of the foregoing:
(a) Each party hereto acknowledges that (i) each of the
Company and Newco (and the members of the Company Group and the
Newco Group, respectively) has or may obtain Privileged
Information; (ii) there are a number of Litigation Matters
affecting each or all of the Company, Newco and the Operating
Subsidiaries; (iii) the Company, Newco and the Operating
Subsidiaries have a common legal interest in Litigation Matters,
in the Privileged Information, and in the preservation of the
confidential status of the Privileged Information, in each case
relating to the business of the Company Group or the Newco Group
as it existed prior to the Time of Contribution or relating to or
arising in connection with the relationship between the
constituent elements of the Groups on or prior to the Time of
Contribution; and (iv) both the Company and Newco intend that the
transactions contemplated by the Reorganization Agreements and
any transfer of Privileged Information in connection therewith
shall not operate as a waiver of any potentially applicable
privilege.
(b) Each of the Company and Newco agrees, on behalf of
itself and each member of the Group of which it is a member, not
to disclose or otherwise waive any privilege attaching to any
Privileged Information relating to the business of the Newco
Group or the Company Group as it existed prior to the Time of
Contribution, respectively, or relating to or arising in
connection with the relationship between the Groups on or prior
to the Time of Contribution, without providing prompt written
notice to and obtaining the prior written consent of the other,
which consent shall not be unreasonably withheld and shall not be
withheld if the other party certifies that such disclosure is to
be made in response to a likely threat of suspension or debarment
or similar action; provided, however, that the Company and Newco
may make such disclosure or waiver with respect to Privileged
Information if such Privileged Information relates solely to the
business of the Company Group as it existed prior to the Time of
Contribution in the case of the Company or the business of the
Newco Group as it existed prior to the Time of Contribution in
the case of Newco. In the event of a disagreement between any
member of the Company Group and any member of the Newco Group
concerning the reasonableness of withholding such consent, no
disclosure shall be made prior to a final, nonappealable
resolution of such disagreement by a court of competent
jurisdiction.
(c) Upon any member of the Company Group or any member of
the Newco Group receiving any subpoena or other compulsory
disclosure notice from a court, other governmental agency or
otherwise which requests disclosure of Privileged Information, in
each case relating to the business of the Newco Group or the
Company Group, respectively, as it existed prior to the Time of
Contribution or relating to or arising in connection with the
relationship between the constituent elements of the Groups on or
prior to the Time of Contribution, the recipient of the notice
shall promptly provide to the other Group (following the notice
provisions set forth herein) a copy of such notice, the intended
response, and all materials or information relating to the other
Group that might be disclosed. In the event of a disagreement as
to the intended response or disclosure, unless and until the
disagreement is resolved as provided in subsection (b), the
parties shall cooperate to assert all defenses to
disclosure claimed by either Group, at the cost and expense of
the Group claiming such defense to disclosure, and shall not
disclose any disputed documents or information until all legal
defenses and claims of privilege have been finally determined.
7.3. Production of Witnesses. Subject to Section 7.2, after
the Time of Contribution, each of the Company and Newco shall, and
shall cause each member of the Company Group and the Newco Group,
respectively, to, make available to Newco or any member of the Newco
Group or to the Company or any member of the Company Group, as the
case may be, upon written request, such Group's directors, officers,
employees and agents as witnesses to the extent that any such Person
may reasonably be required in connection with any Litigation Matters,
administrative or other proceedings in which the requesting party may
from time to time be involved and relating to the business of the
Newco Group or the Company Group as it existed prior to the Time of
Contribution or relating to or in connection with the relationship
between the constituent elements of the Groups on or prior to the Time
of Contribution, provided that the same shall not unreasonably
interfere with the conduct of business by the Group of which the
request is made. The Group requesting such assistance shall reimburse
the other Group for all reasonable out-of-pocket expenses incurred by
the other Group in complying with any such request.
7.4. Retention of Records. Except as provided in the
Reorganization Agreements or as otherwise agreed in writing, if any
Information relating to the business, Assets or Liabilities of a
member of a Group as they existed prior to the Time of Contribution is
retained by a member of the other Group, each of the Company and Newco
shall, and shall cause the members of the Group of which it is a
member to, retain all such Information in such Group's possession or
under its control until such Information is at least ten years old
except that if, prior to the expiration of such period, any member of
either Group wishes to destroy or dispose of any such Information that
is at least three years old, prior to destroying or disposing of any
of such Information, (1) Newco or the Company, on behalf of the member
of its Group that is proposing to dispose of or destroy any such
Information, shall provide no less than 30 days' prior written notice
to the other party, specifying the Information proposed to be
destroyed or disposed of, and (2) if, prior to the scheduled date for
such destruction or disposal, the other party requests in writing that
any of
the Information proposed to be destroyed or disposed of be delivered
to such other party, the party whose Group is proposing to dispose of
or destroy such Information promptly shall arrange for the delivery of
the requested Information to a location specified by, and at the
expense of, the requesting party.
7.5. Confidentiality. Subject to Section 7.2, which shall
govern Privileged Information, from and after the Time of
Contribution, each of the Company and Newco shall hold, and shall use
reasonable efforts to cause its Affiliates and Representatives to
hold, in strict confidence all Information concerning the other
party's Group obtained by it prior to the Time of Contribution or
furnished to it by such other party's Group pursuant to the
Reorganization Agreements and shall not release or disclose such
Information to any other Person, except its Affiliates and
Representatives, who shall be bound by the provisions of this Section
7.5, and each party shall be responsible for a breach of this Section
7.5 by any of its Affiliates or Representatives; provided, however,
that any member of the Company Group or the Newco Group may disclose
such Information to the extent that (a) disclosure is compelled by
judicial or administrative process or, in the opinion of such Person's
counsel, by other requirements of law, or (b) such Person can show
that such Information was (i) available to such Person on a
nonconfidential basis (other than from a member of the other party's
Group) prior to its disclosure by such Person, (ii) in the public
domain through no fault of such Person or (iii) lawfully acquired by
such Person from another source after the time that it was furnished
to such Person by the other party's Group, and not acquired from such
source subject to any confidentiality obligation on the part of such
source, or on the part of the acquiror, known to the acquiror.
Notwithstanding the foregoing, each of the Company and Newco shall be
deemed to have satisfied its obligations under this Section 7.5 with
respect to any Information (other than Privileged Information) if it
exercises the same care with regard to such Information as it takes to
preserve confidentiality for its own similar Information.
ARTICLE VIII
EMPLOYEE BENEFIT PLANS
8.1. Employee Benefits Generally. All obligations of the
Newco Group under this Article VIII with respect to employee benefit
plans, arrangements or policies for the benefit of employees and
former employees (and their beneficiaries) of the Company and its
Subsidiaries in place immediately prior to the Time of Contribution
shall be treated as Assumed Liabilities and not as Retained
Liabilities under this Agreement. All obligations of the Company Group
under this Article VIII with respect to the employee benefit plans,
arrangements or policies for the benefit of employees and former
employees (and their beneficiaries) of the Company and its
Subsidiaries in place immediately prior to the Time of Contribution
shall be treated as Retained Liabilities and not as Assumed
Liabilities under this Agreement.
8.2. Retirement Plans.
(a) Rockwell Retirement Plan for Eligible Employees.
(i) Prior to the Time of Contribution, the Company shall
have established a new group trust under the Rockwell Retirement
Plan, which shall be exempt from taxation under Section 501(a) of
the Code (the "Newco Group Trust") and the purpose of which shall
be to hold, as provided below, certain assets of the Rockwell
Retirement Plan and assets attributable to the liabilities under
the defined benefit pension plans set forth in Schedule 8.2(b)
hereto (the "Reliance Retirement Plans"). Prior to the Time of
Contribution, an amount of assets equal to the sum of (A) the
accumulated benefit obligation ("ABO") (as determined in the
following sentence) of the current and former employees of the
Company and its Subsidiaries who are expected to be, as of the
Time of the Contribution, Newco Group Transferred Participants
(as defined in Section 8.2(a)(ii) hereof) and (B) $200,000,000
shall have been transferred from the Rockwell Group Trust to the
Newco Group Trust in the amounts, form and manner described in
Section 8.2(c) below. Such ABO shall have been determined as of
December 31, 1995 in accordance with the Statement of Financial
Accounting Standards No. 87 ("FAS 87") utilizing a discount rate
of 7% and
actuarial assumptions (other than such discount rate) specified
in the actuarial valuation for the Rockwell Retirement Plan
prepared as of January 1, 1996 (the "January 1, 1996 Actuarial
Valuation"). Such ABO shall have been determined by an enrolled
actuary appointed by Newco (the "Newco Actuary") and shall be
binding and conclusive upon Newco, the Company and Acquiror other
than as provided in Sections 8.2(a)(iv) and 8.2(a)(v) hereof.
(ii) Prior to the Time of Contribution, the Company or Newco
shall have established a defined benefit pension plan which shall
be qualified under Section 401(a) of the Code (the "Newco
Retirement Plan") effective as of the Time of Contribution
covering (A) Newco Group Continuing Employees and (B) former
employees of the Company and its Subsidiaries who terminated
employment on or after January 1, 1996 (other than Company Group
Former Employees) (such Newco Group Continuing Employees and such
former employees are hereinafter referred to as "Newco Group
Transferred Participants"). The Newco Retirement Plan shall
contain provisions comparable in all material respects to and no
less favorable in the aggregate than those of the Rockwell
Retirement Plan immediately prior to the time of adoption of the
Newco Retirement Plan. As soon as practicable following the
establishment of the Newco Retirement Plan, but in no event later
than 30 days prior to the Time of Contribution, the Company and
Newco shall have filed with the IRS proper notice on IRS Forms
5310-A regarding the transfer of assets and liabilities from the
Rockwell Retirement Plan to the Newco Retirement Plan.
(iii) Effective as of the Time of Contribution, Newco shall
sponsor the Newco Retirement Plan and assume the Newco Group
Trust. Effective as of the Time of Contribution, the Company
shall continue to sponsor the Rockwell Retirement Plan and
Rockwell Group Trust, and shall change the name of the Rockwell
Retirement Plan and Rockwell Group Trust to eliminate any
reference to "Rockwell". The Company and Newco shall take such
further actions as may be necessary or appropriate to (A)
establish Newco as the sponsor of the Newco Retirement Plan and
provide for the assumption of the Newco Group Trust by Newco and
(B) provide for the continued sponsorship of the
Rockwell Retirement Plan and the Rockwell Group Trust by the
Company. As soon as practicable following the latest of (A) the
Time of Contribution, (B) the expiration of the applicable
waiting period without receiving an adverse response from the
appropriate government agencies and (C) receipt by the Company of
an opinion of Newco's counsel, in a form reasonably satisfactory
to the Company, that the form of the Newco Retirement Plan meets
the requirements of Section 401(a) of the Code, the Rockwell
Retirement Plan shall transfer to the Newco Retirement Plan (1)
all accrued benefits and other liabilities attributable to Newco
Group Transferred Participants (collectively, the "Transferred
Benefits") and (2) the assets attributable thereto (the
"Transferred Amount") in the amounts, form and manner described
in this Section 8.2(a) and Section 8.2(c) below. Following the
transfers of the Transferred Amount and the Transferred Benefits
from the Rockwell Retirement Plan and Rockwell Group Trust to the
Newco Retirement Plan and Newco Group Trust as provided herein,
the Company Group shall have no further liability whatsoever
(either under this Agreement or otherwise) with respect to the
Newco Group Transferred Participants for benefits under the
Rockwell Retirement Plan and, except as otherwise provided in
Section 8.2(a)(vi), the Newco Group shall have no further
liability whatsoever (either under this Agreement or otherwise)
with respect to the participants under the Rockwell Retirement
Plan. The Rockwell Retirement Plan shall retain liability for the
Newco Group Former Employees who were participants in the
Rockwell Retirement Plan and who terminated employment with the
Company or any of its Subsidiaries prior to January 1, 1996.
(iv) Within 150 days following the Time of Contribution,
Newco shall cause the Newco Actuary to prepare and deliver to
Newco an actuarial valuation (the "Actuarial Valuation") which
shall: (A) certify the ABO for Newco Group Transferred
Participants and the ABO for all other participants in the
Rockwell Retirement Plan and the Newco Retirement Plan as of the
Time of Contribution, each of which ABO shall be determined in
accordance with FAS 87, utilizing a discount rate of 8% and
actuarial assumptions (other than such discount rate) specified
in the January 1, 1996 Actuarial Valuation; (B) set forth the
fair market value of the assets for the Rockwell Retirement Plan
and the Newco Retirement Plan as of the Time of Contribution and
(C) set forth the calculation of the Transferred Amount (equal to
the product of (A) multiplied by (B) as defined in Section
8.2(a)(v)), which amount shall be calculated in accordance with
Section 414(l) of the Code, the Treasury Regulations thereunder
and this Section 8.2(a)(iv). Newco shall deliver to the Company
the Actuarial Valuation. Within 60 days of receipt of the
Actuarial Valuation, the Company shall (A) cause an enrolled
actuary selected by the Company (the "Company Actuary") to
confirm the accuracy (based upon the assumptions referred to in
clause (A) of this Section 8.2(a)(iv)) of the Actuarial Valuation
(including the underlying data used by the Newco Actuary to
prepare such Actuarial Valuation) and (B) provide to Newco a
written statement of whether the Company Actuary has confirmed
the accuracy of such Actuarial Valuation. In the event that the
Company Actuary disputes the accuracy of the Actuarial Valuation
within such 60-day period, Newco and the Company shall, within 30
days following the end of the 60-day period described in the
preceding sentence, make all reasonable efforts to cause the
Newco Actuary and the Company Actuary to resolve the dispute or,
if such dispute cannot be resolved, select an actuarial firm of
national repute (the "Third Actuary") to determine the amounts
referred to in clauses (A), (B) and (C) of the first sentence of
this Section 8.2(a)(iv), which determination shall be final and
binding upon Newco, the Company and the Acquiror. In the event
that Newco and the Company are unable to select a Third Actuary
within such 30-day period, an arbitrator shall appoint such Third
Actuary, which determination shall be final and binding upon
Newco, the Company and the Acquiror. Such arbitrator shall be
appointed in accordance with the rules of the New York, New York
office of the American Arbitration Association. The Company shall
pay the cost of the Company Actuary, Newco shall pay the cost of
the Newco Actuary and, to the extent necessary, the cost of the
Third Actuary and arbitrator shall be shared equally by the
Company and Newco. The use of a Third Actuary and arbitrator and
the allocation of the costs thereof shall be referred to as the
"Actuarial Dispute Resolution Process".
(v) As soon as practicable following the satisfaction of the
conditions set forth in Section 8.2(a)(iv), an amount determined
in accordance with
this Section 8.2(a)(v) shall be transferred from the Rockwell
Retirement Plan to the Newco Retirement Plan (or from the Newco
Retirement Plan to the Rockwell Retirement Plan, as the case may
be). For purposes of this Section 8.2(a)(v), (A) is the fraction,
the numerator of which is the ABO for the Newco Group Transferred
Participants as of the Time of Contribution, and the denominator
of which is the total ABO for all participants covered under the
Rockwell Retirement Plan and Newco Retirement Plan as of the Time
of Contribution, (B) is the total combined fair market value of
the assets of the Rockwell Retirement Plan and Newco Retirement
Plan as of the Time of Contribution, (C) is the fair market value
of the assets in the Newco Retirement Plan as of the Time of
Contribution and (D) is an amount equal to the product of (A)
multiplied by (B). For all purposes of this Section 8.2(a)(v),
the amount of ABO shall be determined in accordance with Section
8.2(a)(iv). If (D) is greater than (C), then an amount equal to
the excess of (D) over (C) shall be transferred from the Rockwell
Retirement Plan to the Newco Retirement Plan. If (D) is less than
(C), then an amount equal to the excess of (C) over (D) shall be
transferred from the Newco Retirement Plan to the Rockwell
Retirement Plan. Any amount to be transferred pursuant to this
Section 8.2(a)(v) shall bear interest from the Time of
Contribution to the date of payment (calculated based on actual
days elapsed in a 365-day year) at a rate of 8% per annum and, to
the extent applicable, shall be decreased by the amount of any
benefit payments and normal expenses of administration not
attributable to participants in the plan from which the amount is
transferable.
(vi) Newco shall reimburse the Company, on an annual
plan-year basis, for any additional amounts paid to or in respect
of Newco Group Former Employees who are not Newco Group
Transferred Participants and their beneficiaries under the
Rockwell Retirement Plan as a result of any increase in the
benefits provided to such Newco Group Former Employees and their
beneficiaries over the benefits payable to such persons at the
Time of Contribution which increase is implemented by the Company
upon the written request of Newco. Such increase for each year
shall be the aggregate amount actually paid under the Rockwell
Retirement Plan to or in respect of the Newco Group Former
Employees who are
not Newco Group Transferred Participants and their beneficiaries
during such plan year over the aggregate amount payable to such
persons under the Rockwell Retirement Plan as in effect at the
Time of Contribution. The determination of the amount to be
reimbursed to the Company by Newco shall be made by the Company
Actuary and shall be subject to review by the Newco Actuary. If
the Company Actuary and the Newco Actuary shall disagree as to
the amount to be reimbursed, the Company and Newco shall use the
Actuarial Dispute Resolution Process to determine the amount of
reimbursement.
(b) Reliance Retirement Plans.
(i) Prior to the Time of Contribution, the assets
attributable to the liabilities under the Reliance Retirement
Plans shall have been transferred from the Rockwell Group Trust
to the Newco Group Trust. The assets transferred from the
Rockwell Group Trust to the Newco Group Trust to fund the
liabilities under the Reliance Retirement Plans shall have been
determined in the manner set forth in Section 8.2(c).
(ii) Effective as of the Time of Contribution, Newco shall
cause the appropriate member or members of the Newco Group to
continue sponsorship of the Reliance Retirement Plans. Prior to,
on and after the Time of Contribution, the Company and Newco and
the appropriate member of the Newco Group each shall have taken
and shall take such actions as may be necessary or appropriate to
establish the appropriate member of the Newco Group to continue
the sponsorship of the Reliance Retirement Plans.
(c) Selection of Assets.
(i) The assets that shall have been transferred from the
Rockwell Group Trust to the Newco Group Trust pursuant to
Sections 8.2(a)(i) and 8.2(b) shall have been selected as
hereinafter set forth in this Section 8.2(c)(i). First, assets
invested in insurance and annuity contracts that were
attributable specifically to the subplans and groups of Newco
Group Transferred Participants or participants in the Reliance
Retirement Plans (the "Earmarked Investments") shall have been
transferred to the Newco Group Trust. Second, the remaining
assets transferred from the
Rockwell Group Trust to the Newco Group Trust shall have been
comprised of assets invested by each such investment manager set
forth on Schedule 8.2(c) (each, an "Investment Manager"). The
amount of assets managed by each Investment Manager that shall
have been allocated to the Newco Group Trust from the Rockwell
Group Trust shall be an amount equal to the product of (A)
multiplied by (B), where (A) equals a fraction, the numerator of
which is the fair market value of the assets managed by such
individual Investment Manager as of the close of business on the
day immediately preceding the date of transfer and the
denominator of which is the aggregate fair market value of the
assets as of the close of business on the day immediately
preceding the date of transfer managed by all of the Investment
Managers, and where (B) equals the amount of assets transferred
to the Newco Group Trust pursuant to Section 8.2(a)(i) and 8.2(b)
minus the amount of Earmarked Assets. The selection of specific
assets managed by each Investment Manager transferred to the
Newco Group Trust or liquidated to fund such transfer, in the
amount determined in accordance with the immediately preceding
sentence, shall have been made on a pro rata basis among the
assets managed by such Investment Manager. Notwithstanding the
foregoing, if the total fair market value of the assets managed
by the Investment Managers as of the close of business on the day
immediately preceding the date of the transfer was less than the
amount set forth in clause (B) of the preceding sentence, then
the remaining assets that shall have been transferred to the
Newco Group Trust shall have been determined on a basis mutually
agreed upon by the Company and Newco.
(ii) The assets to be transferred from the Rockwell Group
Trust to the Newco Group Trust or from the Newco Group Trust to
the Rockwell Group Trust, as the case may be, pursuant to Section
8.2(a)(v) shall be in cash and marketable securities as mutually
agreed upon by the Company and Newco.
(d) The Company and Newco shall use and shall have used
their reasonable best efforts to effectuate the actions contemplated
under this Section 8.2 on a timely basis as provided herein.
8.3. Savings Plans.
(a) Rockwell International Corporation Savings Plan.
Effective as of the Time of Contribution, Newco shall assume
sponsorship of the Rockwell International Corporation Savings Plan
(the "Rockwell Savings Plan") and trust related thereto and shall
cause each Company Group Continuing Employee to have a fully
nonforfeitable right to such Continuing Employee's account balances,
if any, under the Rockwell Savings Plan. The account balances of each
Company Group Continuing Employee shall be maintained under the
Rockwell Savings Plan until distributed in accordance with the terms
of the Rockwell Savings Plan and applicable law.
(b) Rockwell Hourly Savings Plans. Effective as of the Time
of Contribution, Newco shall, or shall cause one or more of its
Subsidiaries to, assume sponsorship of the Rockwell Retirement Savings
Plan for Certain Employees (the "Rockwell Hourly Savings Plan") and
the trust related thereto and shall cause each Company Group
Continuing Employee to have a fully nonforfeitable right to such
Company Group Continuing Employee's account balances, if any, under
the Rockwell Hourly Savings Plan. The account balances of each Company
Group Continuing Employee shall be maintained under the Rockwell
Hourly Savings Plan until distributed in accordance with the terms of
the Rockwell Hourly Savings Plan and applicable law.
(c) Plant Savings Plans. Effective as of the Time of
Contribution, Newco shall, or shall cause one or more of its
Subsidiaries to, assume sponsorship of the Asheville Employees
Retirement Savings Plan Truck Axle Division, the Rockwell
International Corporation Gordonsville, Tennessee Employees Savings
Plan, the Rockwell International Corporation Retirement Plan for
Hourly Employees, Gordonsville, Tennessee and the York Employees
Retirement Savings Plan Truck Axle Division and the respective trusts
related thereto.
(d) Rockwell Savings Plan for Certain Eligible Employees. If
the Rockwell Savings Plan for Certain Eligible Employees has not been
merged into and with the Rockwell International Corporation Savings
Plan as of the Time of Contribution, then effective as of the Time of
Contribution, the Company shall, or shall cause a member of the
Company Group to, assume sponsorship of the Rockwell Savings Plan for
Certain Eligible Employees and the trust related thereto and shall
cause each Newco Group Continuing
Employee to have a fully nonforfeitable right to such Newco Group
Continuing Employee's account balances, if any, under the Rockwell
Savings Plan for Certain Eligible Employees. The account balances of
each Newco Group Continuing Employee shall be maintained under the
Rockwell Savings Plan for Certain Eligible Employees until distributed
in accordance with the terms thereof and applicable law.
8.4. Deferred Compensation Plans and Nonqualified Retirement
and Savings Plans.
(a) Deferred Compensation Plans. Effective as of the Time of
Contribution, Newco shall assume liability for and shall pay when due
all benefits accrued as of the Time of Contribution (including, in the
case of Company Group Continuing Employees and, if any, Company Group
Former Employees, such individuals' vested and nonvested benefits
which are accrued as of the Time of Contribution) by, and attributable
to, all employees and former employees of the Company and its
Subsidiaries and all present and former non-employee directors of the
Company under the Rockwell International Corporation Deferred
Compensation Plan as amended and restated effective July 1, 1995, the
Rockwell International Corporation Annual Incentive Compensation Plan
for Senior Executive Officers effective as of October 1, 1995 and the
Rockwell International Corporation Deferred Compensation Policy for
Non-Employee Directors (the "Deferred Compensation Plans"), and shall
perform, pay and discharge fully all of the Company's and its
Subsidiaries' duties, liabilities or obligations thereunder with
respect to such employees, former employees and present and former
non-employee directors of the Company and its Subsidiaries. Effective
as of the Time of Contribution, Newco shall cause each Company Group
Continuing Employee and Company Group Former Employee to have a fully
nonforfeitable right to such individual's entire account balance, if
any, under the Deferred Compensation Plans.
(b) Nonqualified Retirement Plans. Effective as of the Time
of Contribution, Newco shall assume liability for and shall pay when
due all benefits accrued as of the Time of Contribution by, and
attributable to, employees and former employees of the Company and its
Subsidiaries (other than Company Group Continuing Employees and
Company Group Former Employees) under the Rockwell International
Corporation Supplemental Retirement Plan for Highly Compensated
Employees, the Rockwell International Corporation Excess Benefit
Retirement Plan and the Rockwell
International Corporation Excess Benefit Plan (the "Nonqualified
Retirement Plans"), and shall perform, pay and discharge fully all of
the Company's and its Subsidiaries' duties, liabilities or obligations
thereunder with respect to such employees and former employees.
Effective as of the Time of Contribution, the Company shall assume
liability for and shall pay when due all benefits accrued as of the
Time of Contribution by, and attributable to, Company Group Continuing
Employees and Company Group Former Employees (including such
individual's vested and nonvested benefits which are accrued as of the
Time of Contribution) under the Nonqualified Retirement Plans and
shall perform, pay and discharge fully all of the Company's and its
Subsidiaries' duties, liabilities or obligations with respect thereto.
(c) Nonqualified Savings Plans. Effective as of the Time of
Contribution, Newco shall assume liability for and shall pay when due
all benefits accrued as of the Time of Contribution (including, in the
case of Company Group Continuing Employees and, if any, Company Group
Former Employees, such individuals' vested and nonvested benefits
which are accrued as of the Time of Contribution) by, and attributable
to, all employees and former employees of the Company and its
Subsidiaries under the Rockwell International Corporation Supplemental
Savings Plan for Highly Compensated Employees and the Rockwell
International Corporation Excess Benefit Savings Plan (the
"Nonqualified Savings Plans"), and shall perform, pay and discharge
fully all of the Company's and its Subsidiaries' duties, liabilities
or obligations thereunder with respect thereto. Effective as of the
Time of Contribution, Newco shall cause each Company Group Continuing
Employee and Company Group Former Employee to have a fully
nonforfeitable right to such individual's entire account balance, if
any, under the Nonqualified Savings Plans.
8.5. Employee Stock Options. Effective as of the Time of
Contribution, Newco shall assume the Company Stock Plans. The Board of
Directors of the Company shall amend the Company Stock Plans, make
adjustments and take actions (and Newco shall take such actions as are
reasonably required to implement the same) with respect to options to
acquire shares of Company Common Stock or Company Class A Common
Stock, as the case may be, pursuant to any Company Stock Plan
("Company Options") which are outstanding immediately prior to the
Time of Distribution to provide that, pursuant to the equitable
adjustment provisions of the
applicable Company Stock Plan under which such Company Options were
granted, effective as of the Time of Distribution such Company Options
will be converted into and represent the right to acquire shares of
Newco Common Stock and Newco Class A Common Stock, in each case with
the associated Rights, with such other amendments and adjustments as
are reasonable and appropriate, including such amendments as are
reasonable and appropriate to ensure that any optionholder who becomes
a Company Group Continuing Employee or a Company Group Former Employee
as of the Time of Contribution will not forfeit any such converted
options on such date under the termination of employment provisions of
such plans as a result of not becoming a Newco Group Continuing
Employee or a Newco Group Former Employee, and will be entitled to
vesting and exercisability rights comparable to those that such
optionholder has immediately prior to the Time of Contribution to the
extent that such optionholder remains in continuous employment with
any member of the Company Group.
8.6. Long-Term Incentive Plan. Effective as of the Time of
Contribution, (i) the Company shall retain liability for all amounts
due under the Rockwell International Business Unit Long-Term Incentive
Plan (the "LTIP") with respect to the Company Group Continuing
Employees and Company Group Former Employees and (ii) Newco shall
assume liability for all amounts due under the LTIP with respect to
the Newco Group Continuing Employees and Newco Group Former Employees.
The amounts payable under clause (i) of the preceding sentence shall
be determined by the Company on the basis that (x) the target award
for each uncompleted cycle will be prorated to reflect the portion of
such cycle completed as of the Time of Contribution and (y) where
payment is based, in whole or in part, on the trading price of the
Company Common Stock, such price shall be the average closing price
per share of Company Common Stock reported on the NYSE for each full
trading day during the months of August and September immediately
preceding the Time of Contribution. The amount due each participant
under the LTIP who is a Company Group Continuing Employee shall be
paid by the Company within 90 days following the Time of Contribution.
Newco shall promptly reimburse the Company, upon written request from
the Company therefor, for any amount paid by the Company under the
LTIP as a result of this Section 8.6 the expense of which is not
reimbursed by the United States of America under applicable Government
Contracts, provided, however, that Newco shall have the opportunity to
participate in any negotiations with the
applicable Governmental Entity with respect to such reimbursement or
to designate counsel or a representative reasonably satisfactory to
the Company to so participate on Newco's behalf unless such
participation by Newco (or its counsel or representative) is barred by
such agency, in which case, the Company shall consult with Newco and
keep Newco apprised of any developments with respect to such
negotiations. The Company shall not establish, or cause to be
established, any new performance cycles under the LTIP with respect to
Company Group Continuing Employees and Company Group Former Employees
prior to the Time of Contribution.
8.7. Welfare Benefit Plans.
(a) Effective as of the Time of Contribution, the Company
shall, or shall cause a member of the Company Group to, maintain each
"employee welfare benefit plan", as defined in Section 3(1) of ERISA,
and each other employee welfare benefit or fringe benefit arrangement
(collectively, "Company Group Welfare Benefit Plans") sponsored or
maintained by the Company or any of its Subsidiaries immediately prior
to the Time of Contribution for the benefit of Company Group
Continuing Employees and Company Group Former Employees (including but
not limited to those plans set forth on Schedule 8.7(a)). The Company
shall credit the dollar amount of all expenses incurred by Company
Group Continuing Employees and Company Group Former Employees and
their respective eligible dependents during the applicable plan year
in which occurs the Time of Contribution for purposes of satisfying
such plan year's deductible and co-payment limitations and shall
credit service with the Company and its Subsidiaries earned prior to
the Time of Contribution under the relevant welfare benefit plans of
the Company Group. The Company shall credit each Company Group
Continuing Employee with the unused vacation days and any personal and
sickness days accrued in accordance with the vacation and personnel
policies and labor agreements of the Company and its Subsidiaries
applicable to such employees in effect as of the Time of Contribution.
(b) Effective as of the Time of Contribution, Newco shall,
or shall cause a member of the Newco Group to, establish or maintain
"employee welfare benefit plans", as defined in Section 3(1) of ERISA,
and other employee welfare benefit or fringe benefit arrangements
(collectively, "Newco Group Welfare Benefit Plans") which are
comparable in the
aggregate to the "employee welfare benefit plans" and other employee
benefit welfare or fringe benefit arrangements which had been
maintained by the Company and its Subsidiaries immediately prior to
the Time of Contribution for the benefit of Newco Group Continuing
Employees and Newco Group Former Employees. Newco shall credit the
dollar amount of all expenses incurred by Newco Group Continuing
Employees and Newco Group Former Employees and their respective
eligible dependents during the applicable plan year in which occurs
the Time of Contribution for purposes of satisfying such plan year's
deductible and co-payment limitations and shall credit service with
the Company and its Subsidiaries earned prior to the Time of
Contribution under the relevant welfare benefit plans of the Newco
Group. Newco shall credit each Newco Group Continuing Employee with
the unused vacation days and any personal and sickness days accrued in
accordance with the vacation and personnel policies and labor
agreements of the Company and its Subsidiaries applicable to such
employees in effect as of the Time of Contribution.
(c) As of the Time of Contribution, the Company shall retain
and continue to be responsible for all welfare benefit programs
(including, but not limited to, medical, dental, life, travel
accident, short- and long-term disability, hospitalization and other
insurance benefits) under which claims have been incurred for expenses
prior to the Time of Contribution by Company Group Continuing
Employees, Company Group Former Employees and their dependents and
such reimbursement for such medical and dental expenses associated
with such claims (including claims submitted on behalf of disabled
employees and their dependents) shall be determined in accordance with
the terms of the welfare benefit programs of the Company Group as in
effect immediately prior to the Time of Contribution. As of the Time
of Contribution, Newco shall assume and be responsible for all welfare
benefit programs (including, but not limited to, medical, dental,
life, travel accident, short- and long-term disability,
hospitalization and other insurance benefits) under which claims have
been incurred for expenses incurred prior to the Time of Contribution
by Newco Group Continuing Employees, Newco Group Former Employees and
their dependents and such reimbursement for such medical and dental
expenses associated with such claims (including claims submitted on
behalf of disabled employees and their dependents) shall be determined
in accordance with the terms of the welfare benefit programs of the
Company
Group as in effect immediately prior to the Time of Contribution.
8.8. Retiree Health and Life Insurance.
(a) The Company and the Company Group, or where appropriate,
the Company Group Welfare Benefit Plans, shall retain liability for
all retiree health benefits and retiree life insurance which were
payable prior to the Time of Contribution and/or are payable on or
after the Time of Contribution to (i) all eligible Company Group
Continuing Employees (and their beneficiaries) and (ii) all eligible
Company Group Former Employees (and their beneficiaries). The Company
shall credit the dollar amount of all expenses incurred by Company
Group Continuing Employees and Company Group Former Employees and
their respective eligible dependents during the applicable plan year
in which occurs the Time of Contribution for purposes of satisfying
such plan year's deductible and co-payment limitations and shall
credit service with the Company and its Subsidiaries earned prior to
the Time of Contribution under the relevant retiree welfare benefit
plans of the Company Group.
(b) Newco and the Newco Group, or where appropriate, the
Newco Group Welfare Benefit Plans, shall assume liability for all
retiree health benefits and retiree life insurance benefits which were
payable prior to the Time of Contribution and/or are payable on or
after the Time of Contribution to (i) all eligible Newco Group
Continuing Employees (and their beneficiaries) and (ii) all eligible
Newco Group Former Employees (and their beneficiaries). Newco shall
credit the dollar amount of all expenses incurred by Newco Group
Continuing Employees and Newco Group Former Employees and their
respective eligible dependents during the applicable plan year in
which occurs the Time of Contribution for purposes of satisfying such
plan year's deductible and co-payment limitations and shall credit
service with the Company and its Subsidiaries earned prior to the Time
of Contribution under the relevant retiree welfare benefit plans of
the Newco Group.
(c) As of the Time of Contribution, the Company shall retain
and continue to be responsible for all retiree welfare benefit
programs (including, but not limited to, medical, dental, life, travel
accident, short- and long-term disability, hospitalization and other
insurance benefits) under which claims have been incurred for expenses
prior to the Time of Contribution by Company Group Continuing
Employees, Company Group Former Employees and their dependents and
such reimbursement for such medical and dental expenses associated
with such claims (including claims submitted on behalf of disabled
employees and their dependents) shall be determined in accordance with
the terms of the welfare benefit programs of the Company and its
Subsidiaries as in effect immediately prior to the Time of
Contribution. As of the Time of Contribution, Newco shall assume and
be responsible for all retiree welfare benefit programs (including,
but not limited to, medical, dental, life, travel accident, short- and
long-term disability, hospitalization and other insurance benefits)
under which claims have been incurred for expenses incurred prior to
the Time of Contribution by Newco Group Continuing Employees, Newco
Group Former Employees and their dependents and such reimbursement for
such medical and dental expenses associated with such claims
(including claims submitted on behalf of disabled employees and their
dependents) shall be determined in accordance with the term of the
retiree welfare benefit programs of the Company and its Subsidiaries
as in effect immediately prior to the Time of Contribution.
8.9. Retention and Severance Obligations. The Company and
Newco agree that the transactions contemplated by this Agreement shall
not constitute a severance of employment of any Company Group
Continuing Employee and Newco Group Continuing Employee prior to or as
a result of the consummation of the transactions contemplated hereby,
and that such employees will have continuous and uninterrupted
employment with the Company Group or Newco Group, as applicable,
before and immediately after the Time of Contribution. Without
limiting the generality of Section 8.9, effective as of the Time of
Contribution, the Company shall retain liability for and shall pay
when due all amounts which may become payable under the Rockwell
Retention and Severance Arrangement.
8.10. Free-Standing Plans. Effective as of the Time of
Contribution, Newco shall assume, or shall cause the Newco Group to
assume, all liabilities and obligations under each employee benefit
plan, arrangement or policy which, prior to the Time of Contribution,
is exclusively for the benefit of Newco Group Continuing Employees,
Newco Group Former Employees, and their eligible beneficiaries (the
"Newco Group Free-Standing Plans"). Effective as of the Time of
Contribution, the Company shall retain, or shall cause the Company
Group to retain, all liabilities and obligations under each employee
benefit plan, arrangement or
policy which, prior to the Time of Contribution, is exclusively for
the benefit of Company Group Continuing Employees, Company Group
Former Employees, and their eligible beneficiaries (the "Company Group
Free-Standing Plans"). The Company and Newco shall take, or cause to
be taken, all such action as may be necessary or appropriate to
establish the Newco Group as successor to the Company or its
Subsidiaries as to all rights, assets, duties, liabilities and
obligations under, or with respect to, the Newco Group Free-Standing
Plans and to establish the Company Group as successor to the Company
or its Subsidiaries as to all rights, assets, duties, liabilities and
obligations with respect to the Company Group Free-Standing Plans.
8.11. Employment, Consulting and Severance Agreements.
Effective as of the Time of Contribution, Newco shall assume, or cause
the Newco Group to assume, all liabilities and obligations
attributable to Newco Group Continuing Employees and Newco Group
Former Employees under their respective employment, consulting and
severance agreements with the Company or its Subsidiaries, as the same
are in effect immediately prior to the Time of Contribution.
Effective as of the Time of Contribution, the Company shall
retain, or cause the Company Group to retain, all
liabilities and obligations attributable to Company Group
Continuing Employees and Company Group Former Employees
under their respective employment, consulting and severance
agreements with the Company or its Subsidiaries, as the same
are in effect immediately prior to the Time of Contribution.
8.12. Welfare Plan Funding.
(a) Non-Collectively Bargained Voluntary Employees'
Beneficiary Association. Prior to the Time of Contribution, Newco
shall have established a voluntary employees' beneficiary association
(the "Newco VEBA") under Section 501(c)(9) of the Code covering Newco
Group Continuing Employees and Newco Group Former Employees who are
covered under the Trust for Employee Welfare Benefit Programs of
Rockwell International Corporation (the "Rockwell VEBA"). The Newco
VEBA shall contain provisions comparable in all material respects to
and no less favorable in the aggregate to its participants than those
of the Rockwell VEBA. Prior to the Time of Contribution, the Rockwell
VEBA shall have transferred to the Newco VEBA assets attributable to
the Newco Group Continuing Employees and Newco Group Former Employees
covered under the Rockwell VEBA. The amount of assets transferred from
the Rockwell
VEBA to the Newco VEBA pursuant to this Section 8.12(a) shall have
been based upon the value of the assets in the applicable employee
group insurance plan as of the date of the transfer multiplied by the
ratio that the costs allocated for the Newco Group Continuing
Employees and Newco Group Former Employees bear to the total costs
allocated under the Rockwell VEBA for the Company's government
accounting fiscal year in which such transfer occurs to the date of
the transfer. The Company and Newco agree to adjust the initial asset
allocation set forth in the preceding sentence, based upon actual
claims cost experience at such time as the actual experience is known
pursuant to the Company's practices existing on the date hereof.
Effective as of the Time of Contribution, Newco shall continue to
sponsor the Newco VEBA. Effective as of the Time of Contribution, the
Company shall continue to sponsor the Rockwell VEBA and shall change
the name of the Rockwell VEBA to eliminate any reference to
"Rockwell".
(b) Collectively Bargained Voluntary Employees' Beneficiary
Association. Prior to the Time of Contribution, Newco shall have
established a voluntary employees' beneficiary association (the "Newco
Collectively Bargained VEBA") under Section 501(c)(9) covering Newco
Group Continuing Employees and Newco Group Former Employees who are
covered under the Agreement of Trust for Certain Collectively
Bargained Welfare Benefit Plans of Rockwell International Corporation
(the "Rockwell Collectively Bargained VEBA"). The Newco Collectively
Bargained VEBA shall contain provisions comparable in all material
respects to and no less favorable in the aggregate to its participants
than those of the Rockwell Collectively Bargained VEBA. Prior to the
Time of Contribution, the Rockwell Collectively Bargained VEBA shall
have transferred to the Newco Collectively Bargained VEBA assets
attributable to the Newco Group Continuing Employees and Newco Group
Former Employees covered under the Rockwell Collectively Bargained
VEBA. The amount of assets transferred from the Rockwell Collectively
Bargained VEBA to the Newco Collectively Bargained VEBA pursuant to
this Section 8.12(b) shall have been based upon the value of the
assets in the Rockwell Collectively Bargained VEBA as of the date of
the transfer multiplied by the ratio that the costs allocated for the
Newco Group Continuing Employees and Newco Group Former Employees bear
to the total costs allocated under the applicable employee group
insurance plan for the Company's government accounting fiscal year in
which such transfer occurs to the date of the transfer. Effective as
of the
Time of Contribution, Newco shall continue to sponsor the Newco
Collectively Bargained VEBA. Effective as of the Time of Contribution,
the Company shall continue to sponsor the Rockwell Collectively
Bargained VEBA and shall change the name of the Rockwell Collectively
Bargained VEBA to eliminate any reference to "Rockwell".
(c) Continued Life Insurance Reserve Fund. Prior to the Time
of Contribution, Newco shall have established a continued life
insurance reserve fund (the "Newco CLIR Fund") covering Newco Group
Continuing Employees and Newco Group Former Employees who are covered
under the Continued Life Insurance Reserve Fund (the "Rockwell CLIR
Fund"). The Newco CLIR Fund shall contain provisions comparable in all
material respects to and no less favorable in the aggregate to its
participants than those of the Rockwell CLIR Fund. Prior to the Time
of Contribution, the Rockwell CLIR Fund shall have transferred to the
Newco CLIR Fund assets attributable to the Newco Group Continuing
Employees and Newco Group Former Employees covered under the Rockwell
CLIR Fund. The amount of assets transferred from the Rockwell CLIR
Fund to the Newco CLIR Fund pursuant to this Section 8.12(c) shall
have been based upon the proportionate values of the assets in the
Rockwell CLIR Fund attributable to Newco Group Continuing Employees
and Newco Group Former Employees as of the most recent actuarial
valuation for the Rockwell CLIR Fund prepared by the Newco Actuary,
subject to review by the Company Actuary. In the event of a dispute
between the Newco Actuary and the Company Actuary, the Actuarial
Dispute Resolution Process shall be used to determine the amount of
assets to be transferred. Effective as of the Time of Contribution,
Newco shall continue to sponsor the Newco CLIR Fund. Effective as of
the Time of Contribution, the Company shall continue to sponsor the
Rockwell CLIR Fund and shall change the name of the Rockwell CLIR Fund
to eliminate any reference to "Rockwell".
(d) Additional Action. Prior to, on and after the Time of
Contribution, the Company and Newco each shall take and shall have
taken such further actions as may be necessary or appropriate to (i)
establish Newco as the sponsor of the Newco VEBA, Newco Collectively
Bargained VEBA and Newco CLIR Fund, (ii) provide for the continued
sponsorship by the Company of the Rockwell VEBA, Rockwell Collectively
Bargained VEBA and Rockwell CLIR Fund and (iii) cause the transfers
described in this Section 8.12 to be made in accordance with
applicable law and the terms of any applicable collective bargaining
agreement.
8.13. Indemnification. Except as otherwise provided in this
Article VIII, Newco shall indemnify, defend and hold harmless the
Company Group from and against, and pay or reimburse the Company Group
for, any claims made by any Newco Group Continuing Employee or Newco
Group Former Employee for severance or other separation benefits, any
claims based on breach of contract and any other claims arising out of
or in connection with the employment or the failure to offer
employment to, or the termination of employment of, any Newco Group
Continuing Employee or Newco Group Former Employee. The Company shall
indemnify, defend and hold harmless the Newco Group from and against,
and pay or reimburse the Newco Group for, any claims made by any
Company Group Continuing Employee or Company Group Former Employee for
severance or other separation benefits, any claims based on breach of
contract and any other claims arising out of or in connection with the
employment or the failure to offer employment to, or the termination
of employment of, any Company Group Continuing Employee or Company
Group Former Employee. Newco shall indemnify, defend and hold harmless
the Company Group from and against, and pay or reimburse the Company
Group for, all liabilities resulting from any failure to file a
determination letter request with the IRS within the remedial
amendment period prescribed under Section 401(b) of the Code with
respect to compliance with the Tax Reform Act of 1986 for any Company
Pension Plan that is intended to be tax-qualified under Section 401(a)
of the Code.
8.14. Cooperation. Without limiting the generality of
Article VII hereof, the Company Group and Newco Group agree to
promptly furnish each other with such information concerning employees
and employee benefit plans, arrangements or policies as is necessary
and appropriate to effect the transactions contemplated by this
Article VIII.
8.15. Amendment, Modification or Termination of Benefit
Plans. From and after the Time of Contribution, (i) the Company Group
expressly reserves the right, in accordance with applicable law and
the terms of any applicable collective bargaining agreement, to amend,
modify or terminate any Benefit Plan it sponsors or maintains for
Company Group Continuing Employees and Company Group Former Employees
and (ii) the Newco Group expressly reserves the right, in accordance
with applicable law and the terms of any applicable collective
bargaining agreement, to amend, modify or terminate any Benefit Plan
it sponsors or
maintains for Newco Group Continuing Employees or Newco Group Former
Employees.
ARTICLE IX
CONDITIONS
9.1. Conditions to Obligations of the Company. The
obligations of the Company to consummate the Distribution hereunder
shall be subject to the fulfillment of each of the following
conditions:
(a) All of the transactions contemplated by Article II shall
have been consummated.
(b) The recapitalization of Newco in accordance with Section
3.2 shall have been consummated.
(c) Each condition to the Closing of the Merger Agreement
set forth in Article VI thereof, other than (i) the condition set
forth in Sections 6.1(f) thereof as to the consummation of the
Contribution and the Distribution and (ii) the condition to the
Acquiror's obligations set forth in Section 6.3(d) thereof as to the
satisfaction of conditions contained in this Agreement, shall have
been fulfilled or waived by the party for whose benefit such condition
exists.
(d) The Board of Directors of the Company shall be
reasonably satisfied that, after giving effect to the Contribution,
(i) the Company will not be insolvent and will not have unreasonably
small capital with which to engage in its businesses and (ii) the
Company's surplus would be sufficient to permit, without violation of
Section 170 of the DGCL, the Distribution.
(e) Acquiror, the Company and Newco shall each have
received, in form and substance reasonably satisfactory to each, the
advance agreements and approvals of Governmental Entities concerning
the matters described on Schedule 9.1(e).
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1. Modification or Amendment. The parties hereto may
modify or amend this Agreement only by written agreement executed and
delivered by duly authorized officers of the respective parties.
10.2. Waiver; Remedies. The conditions to the Company's
obligation to consummate the Distribution are for the sole benefit of
the Company and may be waived in writing by the Company in whole or in
part to the extent permitted by applicable law. No delay on the part
of 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. Unless
otherwise provided, 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.
10.3. Counterparts. For the convenience of the parties, this
Agreement may be executed in any number of separate counterparts, each
such counterpart being deemed to be an original instrument, and all
such counterparts shall together constitute the same agreement.
10.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New
York applicable to contracts made and to be performed entirely within
such State, without regard to the conflicts of law principles of such
State.
10.5. Notices. Any notice, request, instruction or other
communication to be given hereunder by any party to any other party
shall be in writing and shall be deemed to have been duly given (i) on
the date of delivery if delivered personally, or by telecopy or
telefacsimile, upon confirmation of receipt, (ii) on the first
business day following the date of dispatch if delivered by Federal
Express or other nationally reputable next-day courier service, or
(iii) on the third business day following the date of mailing if
delivered by registered or certified
mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered 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 Newco or the Operating Subsidiaries:
New Rockwell International Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Senior Vice President, General
Counsel and Secretary
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Company:
Boeing NA, Inc.
▇/▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
M/S 13-08
Seattle, Washington 98124-2207
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Vice President & General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
10.6. Entire Agreement. The Reorganization Agreements
(including the Annexes and Schedules thereto), the Transition
Agreement and the Confidentiality Agreement constitute the entire
agreement, and supersede all other prior agreements, understandings,
representations and warranties, both written and oral, among the
parties, with respect to the subject matter hereof and thereof.
10.7. Certain Obligations. Whenever this Agreement requires
any of the Subsidiaries of any party to take any action, this
Agreement will be deemed to include an undertaking on the part of such
party to cause such Subsidiary to take such action.
10.8. Assignment. No party to this Agreement shall convey,
assign or otherwise transfer any of its rights or obligations under
this Agreement without the express written consent of the other
parties hereto in their sole and absolute discretion, except that any
party hereto may assign any of its rights hereunder to a successor to
all or any part of its business. Except as aforesaid, any such
conveyance, assignment or transfer without the express written consent
of the other parties shall be void ab initio. No assignment of this
Agreement shall relieve the assigning party of its obligations
hereunder.
10.9. Captions. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part
of this Agreement and shall not be deemed to limit or otherwise affect
any of the provisions hereof.
10.10. Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and
provisions of this Agreement, the party or parties who are or are to
be thereby aggrieved shall have the right of specific performance and
injunctive relief giving effect to its or their rights under this
Agreement, in addition to any and all other rights and remedies at law
or in equity, and all such rights and
remedies shall be cumulative. The parties agree that the remedies at
law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any
action for specific performance that a remedy at law would be adequate
is waived.
10.11. 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, shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse
to any party. Upon any such determination, the parties shall negotiate
in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
10.12. Third Party Beneficiaries. Acquiror shall be a third
party beneficiary of this Agreement. Nothing contained in this
Agreement is intended to confer upon any Person or entity other than
the parties hereto and their respective successors and permitted
assigns (other than Acquiror), any benefit, right or remedies under or
by reason of this Agreement, except that the provisions of Sections
6.1 and 8.13 hereof shall inure to the benefit of the persons referred
to therein.
10.13. Schedules. All Schedules attached hereto or referred
to herein are hereby incorporated in and made a part of this Agreement
as if set forth in full herein. Matters reflected on the Schedules are
not necessarily limited to matters required by this Agreement to be
reflected on such Schedules. Such additional matters are set forth for
informational purposes only and do not necessarily include other
matters of a similar nature. Capitalized terms used in any Schedule
but not otherwise defined therein shall have the respective meanings
assigned to such terms in this Agreement.
10.14. Consent to Jurisdiction. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of (i) the Superior
Court of the State of
California, San Francisco County and (ii) the United States District
Court for the Northern District of California 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 hereto except in such courts).
Each of the parties hereto further agrees that service of any process,
summons, notice or document hand delivered or sent by registered mail
to such party's respective address set forth in Section 10.5 will be
effective service of process for any action, suit or proceeding in
California with respect to any matters to which it has submitted to
jurisdiction as set forth in the immediately preceding sentence. Each
of the parties hereto 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 Superior Court of the State of California, San Francisco
County or (ii) the United States District Court for the Northern
District of California, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such
court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as
of the date first hereinabove written.
ROCKWELL INTERNATIONAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
NEW ROCKWELL INTERNATIONAL
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Senior Vice President
▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
ROCKWELL ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
ROCKWELL SEMICONDUCTOR SYSTEMS,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
ROCKWELL LIGHT VEHICLE SYSTEMS,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President
ROCKWELL HEAVY VEHICLE SYSTEMS,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President