DISTRIBUTION AND INDEMNITY AGREEMENT
DATED AS OF _________, 1997
BY AND AMONG
▇▇▇▇▇▇▇ CORPORATION,
HUSSMANN INTERNATIONAL, INC.
and
HUSSMANN CORPORATION
DISTRIBUTION AND INDEMNITY AGREEMENT
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . .1
Section 1.01 General . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE II. THE DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . .7
Section 2.01 The Distribution. . . . . . . . . . . . . . . . . . . . .7
Section 2.02 Cooperation Prior to the Distribution . . . . . . . . . .8
Section 2.03 Conditions to the Distribution. . . . . . . . . . . . . .9
ARTICLE III. TRANSACTIONS RELATING TO THE DISTRIBUTION. . . . . . . . . . .9
Section 3.01 Intercorporate Reorganization . . . . . . . . . . . . . .9
Section 3.02 Repayment of Intercompany Indebtedness
and Cash Dividend . . . . . . . . . . . . . . . . . . 10
Section 3.03 Satisfaction and Waiver of Any Claims . . . . . . . . . 10
Section 3.04 Hussmann Tax Sharing Agreement. . . . . . . . . . . . . 11
Section 3.05 Employee Benefit Plans and Other
Compensation Arrangements . . . . . . . . . . . . . . 11
Section 3.06 Board of Directors and Resignations . . . . . . . . . . 21
Section 3.07 Hussmann Rights Agreement . . . . . . . . . . . . . . . 21
Section 3.08 Insurance . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 22
Section 4.01 Indemnification by ▇▇▇▇▇▇▇. . . . . . . . . . . . . . . 23
Section 4.02 Indemnification by Hussmann and
Hussmann Operating Company. . . . . . . . . . . . . . 23
Section 4.03 Limitations on Indemnification
Obligations . . . . . . . . . . . . . . . . . . . . . 23
Section 4.04 Procedures for Indemnification. . . . . . . . . . . . . 25
Section 4.05 Remedies Cumulative . . . . . . . . . . . . . . . . . . 27
Section 4.06 Survival of Indemnities . . . . . . . . . . . . . . . . 27
ARTICLE V. ACCESS TO INFORMATION. . . . . . . . . . . . . . . . . . . . 28
Section 5.01 Access to Information . . . . . . . . . . . . . . . . . 28
Section 5.02 Production of Witnesses . . . . . . . . . . . . . . . . 28
Section 5.03 Retention of Records. . . . . . . . . . . . . . . . . . 28
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Section 5.04 Confidentiality . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI. ADDITIONAL COVENANTS. . . . . . . . . . . . . . . . . . . . . 29
Section 6.01 Corporate Names . . . . . . . . . . . . . . . . . . . . . 29
Section 6.02 Privileged Matters. . . . . . . . . . . . . . . . . . . . 30
Section 6.03 Limitation on Solicitation of Employees . . . . . . . . . 32
Section 6.04 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 6.05 Further Assurances. . . . . . . . . . . . . . . . . . . . 33
Section 6.06 Qualification as Tax-Free Distribution. . . . . . . . . . 33
Section 6.07 Insurance Coverage Litigation . . . . . . . . . . . . . . 34
ARTICLE VII. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.01 Complete Agreement; Conflict with Hussmann
Tax Sharing Agreement . . . . . . . . . . . . . . . . . 34
Section 7.02 Survival of Agreements. . . . . . . . . . . . . . . . . 35
Section 7.03 Governing Law . . . . . . . . . . . . . . . . . . . . . 35
Section 7.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.05 Amendments. . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.06 Successors and Assigns. . . . . . . . . . . . . . . . . 35
Section 7.07 Termination . . . . . . . . . . . . . . . . . . . . . . 35
Section 7.08 No Third Party Beneficiaries. . . . . . . . . . . . . . 36
Section 7.09 Titles and Headings . . . . . . . . . . . . . . . . . . 36
Section 7.10 Severability. . . . . . . . . . . . . . . . . . . . . . 36
Section 7.11 Specific Performance. . . . . . . . . . . . . . . . . . 36
Section 7.12 Waivers . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 7.13 Execution in Counterparts . . . . . . . . . . . . . . . 37
SCHEDULE A: Hussmann Limits of Liability . . . . . . . . . . . . . . . .A-1
SCHEDULE B: ▇▇▇▇▇▇▇ Indemnification of Hussmann Indemnitees . . . . . . .B-1
SCHEDULE C: Hussmann and Hussmann Operating Company Indemnification
of ▇▇▇▇▇▇▇ Indemnitees. . . . . . . . . . . . . . . . . . . .C-1
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DISTRIBUTION AND INDEMNITY AGREEMENT
DISTRIBUTION AND INDEMNITY AGREEMENT (this "AGREEMENT"), dated as of
______________, 1997, by and among ▇▇▇▇▇▇▇ CORPORATION, a Delaware
corporation ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC., a Delaware corporation
and, as of the date hereof, a wholly-owned subsidiary of ▇▇▇▇▇▇▇
("HUSSMANN"), and HUSSMANN CORPORATION, a Missouri corporation and, as of the
Distribution Date, a wholly-owned subsidiary of Hussmann ("HUSSMANN OPERATING
COMPANY").
WHEREAS, the ▇▇▇▇▇▇▇ Board has determined that it is appropriate and
desirable to spin off Hussmann by distributing all of the shares of Hussmann
Common Stock owned by ▇▇▇▇▇▇▇ on the Distribution Date on a pro rata basis to
the holders of record of ▇▇▇▇▇▇▇ Common Stock as of the Record Date; and
WHEREAS, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Operating Company have
determined that it is appropriate and desirable to set forth the principal
corporate transactions required to effect such distribution and certain other
agreements that will govern certain matters relating to such distribution;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 GENERAL. In this Agreement, the following terms have
the meanings specified or referred to in this Article I and shall be equally
applicable to both the singular and plural forms. Any agreement referred to
below shall mean such agreement as amended, supplemented and modified from time
to time to the extent permitted by the applicable provisions thereof and by this
Agreement. Unless the context clearly indicates otherwise, the word "including"
means "including but not limited to."
ACTION: any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
AFFILIATE: when used with respect to a specified Person, another
Person that controls, is controlled by, or is under common control with the
Person specified. As used in this Agreement, "control" means the possession,
directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or other
interests, by contract or otherwise.
AGENT: First Chicago Trust Company of New York, as distribution
agent.
AVAILABLE ▇▇▇▇▇▇▇ RESERVES: has the meaning specified in SECTION
3.05(c)(3).
CODE: the Internal Revenue Code of 1986, as amended, and the Treasury
regulations promulgated thereunder, including any successor legislation.
COMMISSION: the Securities and Exchange Commission.
CONVEYANCE AND ASSUMPTION INSTRUMENTS: collectively, the various
agreements, instruments and other documents to be entered into to effect the
transfer of assets and the assumption of Liabilities contemplated by this
Agreement.
DISTRIBUTION: the distribution to holders of record of ▇▇▇▇▇▇▇ Common
Stock as of the Record Date of all of the shares of Hussmann Common Stock owned
by ▇▇▇▇▇▇▇ on the Distribution Date.
DISTRIBUTION DATE: the date determined by the ▇▇▇▇▇▇▇ Board (or a
duly authorized committee thereof) on which the Distribution shall be effected.
EMPLOYEE BENEFIT PLAN: an employee welfare benefit plan or an
employee pension benefit plan as defined in Sections 3(1) and 3(2) of ERISA or a
plan which is both an employee welfare benefit plan and an employee pension
benefit plan.
ENVIRONMENTAL COVERAGE LITIGATION: has the meaning specified in
SECTION 6.07.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended, or any successor legislation.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, including any successor
legislation.
FOREIGN EXCHANGE RATE: with respect to any currency other than United
States dollars as of any date of determination, the average of the opening bid
and asked rates on such date at which such currency may be exchanged for United
States dollars as quoted by The First National Bank of Chicago or, if not quoted
by said Bank, by Citicorp, N.A.
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HUSSMANN: Hussmann International, Inc., a Delaware corporation and,
as of the date hereof, a wholly-owned subsidiary of ▇▇▇▇▇▇▇.
HUSSMANN COMMON STOCK: the Common Stock, $.001 par value, of
Hussmann.
HUSSMANN DEBT REPAYMENT: has the meaning specified in SECTION
3.02(a).
HUSSMANN ERP: has the meaning specified in SECTION 3.05(e)(1).
HUSSMANN FORM 10: the registration statement on Form 10 filed by
Hussmann with the Commission to effect the registration of the Hussmann Common
Stock pursuant to the Exchange Act.
HUSSMANN FUNDED WELFARE PLAN: has the meaning specified in SECTION
3.05(c)(1).
HUSSMANN INDEMNITEES: has the meaning specified in SECTION
3.05(a)(2)(II).
HUSSMANN MANAGEMENT INCENTIVE COMPENSATION PLAN: has the meaning
specified in SECTION 3.05(a)(1).
HUSSMANN MASTER TRUST: has the meaning specified in SECTION
3.05(e)(2).
HUSSMANN OPERATING COMPANY: Hussmann Corporation, a Missouri
corporation and, as of the Distribution Date, a wholly-owned subsidiary of
Hussmann.
HUSSMANN PARTICIPANTS: has the meaning specified in SECTION
3.05(d)(1)(I).
HUSSMANN PENSION PLAN BENEFICIARIES: has the meaning specified in
SECTION 3.05(e)(1).
HUSSMANN PENSION PLANS: has the meaning specified in SECTION
3.05(e)(1).
HUSSMANN RIGHTS: Preferred Stock Purchase Rights of Hussmann issued
pursuant to the Hussmann Rights Agreement.
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HUSSMANN RIGHTS AGREEMENT: the Rights Agreement, to be entered into
on or prior to the Distribution Date, between Hussmann and First Chicago Trust
Company of New York.
HUSSMANN RSP PLANS: has the meaning specified in SECTION
3.05(d)(1)(I).
HUSSMANN RSP TRUST: has the meaning specified in SECTION
3.05(d)(1)(I).
HUSSMANN SEPARATED EMPLOYEE: any individual (i) who, on or prior to
the Distribution Date, was employed by ▇▇▇▇▇▇▇ or any of its subsidiaries
(including Hussmann or any subsidiary of Hussmann) and who, prior to the
Distribution Date, was last employed by Hussmann or any Hussmann Subsidiary or
(ii) who, on or after the Distribution Date or otherwise in connection with the
Distribution, remains or becomes employed by Hussmann or any Hussmann
Subsidiary, including any beneficiary or dependent of such individual, as
applicable.
HUSSMANN SPLIT DOLLAR PLAN: has the meaning specified in SECTION
3.05(f)(1).
HUSSMANN STOCK INCENTIVE PLAN: has the meaning specified in SECTION
3.05(b)(2).
HUSSMANN SUBSIDIARY: any subsidiary of Hussmann on the Distribution
Date that will remain a subsidiary of Hussmann immediately following the
Distribution Date, including Hussmann Operating Company, and any other
subsidiary of Hussmann which thereafter may be organized or acquired.
HUSSMANN TAX SHARING AGREEMENT: the Tax Sharing Agreement, dated the
date hereof, between ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Operating Company.
HUSSMANN WELFARE BENEFIT PLANS: has the meaning specified in SECTION
3.05(c)(1).
HUSSMANN WELFARE TRUST: has the meaning specified in SECTION
3.05(c)(1).
INDEMNIFYING PARTY: has the meaning specified in SECTION 4.03(a).
INDEMNITEE: has the meaning specified in SECTION 4.03(a).
INFORMATION: has the meaning specified in SECTION 5.01.
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INFORMATION STATEMENT: the Information Statement sent to the holders
of ▇▇▇▇▇▇▇ Common Stock in connection with the Distribution.
INSURANCE PROCEEDS: those monies (i) received by an insured from an
insurance carrier or (ii) paid by an insurance carrier on behalf of an insured,
in either case net of any applicable premium adjustments (including reserves),
retrospectively rated premium adjustments, deductibles, retentions, costs paid
by such insured or repayments by such insured to such insurance carrier of any
monies previously received by such insured from such insurance carrier.
IRS: the Internal Revenue Service.
LIABILITIES: any and all debts, liabilities and obligations, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising (unless otherwise specified in
this Agreement), including all costs and expenses relating thereto, and
including, without limitation, those debts, liabilities and obligations arising
under any law, rule, regulation, Action, threatened Action, order or consent
decree of any governmental entity or any award of any arbitrator of any kind,
and those arising under any contract, commitment or undertaking.
LOSS and LOSSES: have the meanings specified in SECTION 3.05(a)(1).
MANAGEMENT COMMITTEE: has the meaning specified in SECTION
3.05(e)(2).
MIDAS COMMON STOCK: the Common Stock, $.001 par value, of Midas
Group, Inc.
OPTION: any option granted under the ▇▇▇▇▇▇▇ Stock Incentive Plan.
PENSION EFFECTIVE DATE: has the meaning specified in SECTION
3.05(e)(2).
PERSON: any natural person, corporation, business trust, joint
venture, limited liability company, association, company, partnership or
government, or any agency or political subdivision thereof.
PNEUMO ABEX: has the meaning specified in SECTION 6.07.
RECORD DATE: the close of business, New York time, on the date to be
determined by the ▇▇▇▇▇▇▇ Board (or a duly authorized committee thereof) as the
record date for the Distribution.
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REPRESENTATIVES: has the meaning specified in SECTION 5.01.
RESTRICTED STOCK: any award of restricted shares of ▇▇▇▇▇▇▇ Common
Stock granted under the Restricted Stock Award provisions of the ▇▇▇▇▇▇▇ Stock
Incentive Plan.
RSP COMMITTEE: has the meaning specified in SECTION 3.05(d)(2).
RSP EFFECTIVE DATE: has the meaning specified in SECTION
3.05(d)(1)(I).
SPLIT DOLLAR EFFECTIVE DATE: has the meaning specified in SECTION
3.05(f)(1).
SPREAD: has the meaning specified in SECTION 3.05(b)(1).
SUBSIDIARIES: the term "subsidiaries" as used herein with respect to
any entity shall mean any corporation, partnership or other entity of which such
entity (i) owns, directly or indirectly, ownership interests sufficient to elect
a majority of the board of directors (or individuals performing similar
functions) (irrespective of whether at the time any other class or classes of
ownership interests of such corporation, partnership or other entity shall or
might have such voting power upon the occurrence of any contingency) or (ii) is
a general partner or an entity performing similar functions, and
shall, unless otherwise indicated, be deemed to refer to both direct and
indirect subsidiaries of such entity.
TAXING SAVING: has the meaning specified in SECTION 4.03(b).
THIRD PARTY CLAIM: has the meaning specified in SECTION 4.04(b)(1).
WELFARE COMMITTEE: has the meaning specified in SECTION 3.05(c)(3).
WELFARE EFFECTIVE DATE: has the meaning specified in SECTION
3.05(c)(1).
▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇ Corporation, a Delaware corporation.
▇▇▇▇▇▇▇ BOARD: the Board of Directors of ▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇ COMMON STOCK: the Common Stock, without par value, of
▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇ FUNDED WELFARE PLAN: has the meaning specified in SECTION
3.05(c)(1).
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▇▇▇▇▇▇▇ INDEMNITEES: has the meaning specified in SECTION 3.05(a)(1).
▇▇▇▇▇▇▇ MASTER TRUST: has the meaning specified in SECTION
3.05(e)(1).
▇▇▇▇▇▇▇ MIC PLAN: has the meaning specified in SECTION 3.05(a)(2).
▇▇▇▇▇▇▇ RSP PLANS: has the meaning specified in SECTION
3.05(d)(1)(I).
▇▇▇▇▇▇▇ RSP TRUST: has the meaning specified in SECTION
3.05(d)(1)(I).
▇▇▇▇▇▇▇ SPLIT DOLLAR PLAN: has the meaning specified in SECTION
3.05(d)(1).
▇▇▇▇▇▇▇ STOCK INCENTIVE PLAN: the ▇▇▇▇▇▇▇ Corporation Stock Incentive
Plan.
▇▇▇▇▇▇▇ SUBSIDIARY: any subsidiary of ▇▇▇▇▇▇▇ other than Hussmann or
any Hussmann Subsidiary.
▇▇▇▇▇▇▇ WELFARE TRUST: has the meaning specified in SECTION
3.05(c)(1).
ARTICLE II
THE DISTRIBUTION
Section 2.01 THE DISTRIBUTION.
(a) Subject to SECTION 2.03 and SECTION 7.07 hereof, prior to the
Distribution Date, ▇▇▇▇▇▇▇ shall deliver to the Agent, for the benefit of the
holders of record of ▇▇▇▇▇▇▇ Common Stock on the Record Date, one or more stock
certificates, endorsed by ▇▇▇▇▇▇▇ in blank, representing all of the then
outstanding shares of Hussmann Common Stock owned by ▇▇▇▇▇▇▇, and shall instruct
the Agent on the Distribution Date either to distribute in certificated form, or
make book-entry credits for, the appropriate number of such shares of Hussmann
Common Stock to each such holder (and, if applicable, cash in lieu of any
fractional shares obtained in the manner provided in SECTION 2.01(c)). Each of
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall provide to the Agent all share certificates and any
information required in order to complete the Distribution on the basis of one
share of Hussmann Common Stock for every ___ shares of ▇▇▇▇▇▇▇ Common Stock
outstanding on the Record Date. With respect to any Restricted Stock
outstanding as of the close of business on the Distribution Date that is then
held on behalf of a Hussmann Separated Employee, the shares of Hussmann Common
Stock and Midas Common Stock distributed in the Distribution in
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respect of such Restricted Stock shall be treated in the manner set forth in
SECTION 3.05(b)(3).
(b) The Distribution shall be effective as of the close of business,
New York time, on the Distribution Date.
(c) No certificates representing fractional shares of Hussmann Common
Stock shall be distributed in the Distribution. Holders that request or receive
delivery of physical certificates representing Hussmann Common Stock in the
Distribution and holders that would receive less than one whole share of
Hussmann Common Stock in the Distribution will receive cash in lieu of any
fractional shares. As soon as practicable after the Distribution Date, ▇▇▇▇▇▇▇
shall instruct the Agent to determine the number of fractional shares of
Hussmann Common Stock allocable to each holder of record of ▇▇▇▇▇▇▇ Common Stock
as of the Record Date who will receive cash in lieu of a fractional share of
Hussmann Common Stock, to aggregate all such fractional shares and sell the
whole shares obtained thereby on the New York Stock Exchange or otherwise, in
each case at then prevailing trading prices, and to cause to be distributed to
each such holder, in lieu of any fractional share, such holder's ratable share
of the proceeds of such sale, after deducting an amount equal to all brokerage
charges, commissions and transfer taxes attributed to such sale.
Section 2.02 COOPERATION PRIOR TO THE DISTRIBUTION.
(a) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ have prepared, and ▇▇▇▇▇▇▇ shall mail, prior
to the Distribution Date, to the holders of ▇▇▇▇▇▇▇ Common Stock as of the
Record Date, the Information Statement, which shall set forth appropriate
disclosure concerning Hussmann, the Distribution and other matters. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ have prepared, and Hussmann has filed with the Commission, the Hussmann
Form 10, which includes or incorporates by reference portions of the Information
Statement. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall use reasonable efforts to cause the
Hussmann Form 10 to become effective under the Exchange Act as soon as
practicable.
(b) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall cooperate in preparing, filing with
the Commission and causing to become effective any registration statements or
amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans contemplated by the
Distribution and this Agreement.
(c) ▇▇▇▇▇▇▇ and Hussmann shall take all such action as may be
necessary or appropriate under the securities or blue sky laws of states or
other political subdivisions of the United States (and any comparable laws of
any foreign jurisdiction), in connection with the transactions contemplated by
this Agreement.
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(d) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ have prepared, and Hussmann has filed in
preliminary form and shall seek to make effective, an application to permit
listing of the Hussmann Common Stock (as well as the associated Hussmann Rights)
on the New York Stock Exchange. In the event that the Hussmann Common Stock is
not accepted for listing on the New York Stock Exchange, Hussmann shall apply
for quotation of the Hussmann Common Stock (as well as the associated Hussmann
Rights) on The Nasdaq Stock Market.
Section 2.03 CONDITIONS TO THE DISTRIBUTION. This Agreement and the
consummation of each of the transactions provided for herein shall be subject to
approval of the ▇▇▇▇▇▇▇ Board. The ▇▇▇▇▇▇▇ Board (or a duly authorized
committee thereof) shall in its discretion establish the Record Date and the
Distribution Date and all appropriate procedures in connection with the
Distribution, but in no event shall the Distribution Date occur prior to such
time as each of the following have occurred or have been waived by the ▇▇▇▇▇▇▇
Board in its sole discretion: (1) the ▇▇▇▇▇▇▇ Board shall have formally
approved the Distribution; (2) the Hussmann Form 10 shall have been declared
effective by the Commission; (3) a ruling(s) from the IRS shall have been
obtained, and continue in effect, that in substance provides that the
Distribution will qualify as a tax-free "spin-off" under Section 355 of the
Code, and such ruling(s) shall be in form and substance satisfactory to ▇▇▇▇▇▇▇
in its sole discretion; (4) the Board of Directors of Hussmann, comprised as
contemplated by SECTION 3.06(a), shall have been duly elected; (5) the Hussmann
Common Stock shall have been accepted for listing on the New York Stock Exchange
or for quotation on The Nasdaq Stock Market; (6) the transactions contemplated
by SECTION 3.01 and SECTION 3.02 shall have been consummated in all material
respects; and (7) no order, injunction or decree issued by any court or agency
of competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Distribution shall be in effect and no other event shall
have occurred or failed to occur that prevents the consummation of the
Distribution; PROVIDED, HOWEVER, that the satisfaction of such conditions shall
not create any obligation on the part of ▇▇▇▇▇▇▇ to effect the Distribution or
in any way limit ▇▇▇▇▇▇▇'▇ power of termination set forth in SECTION 7.07 or
alter the consequences of any such termination from those specified in such
Section.
ARTICLE III
TRANSACTIONS RELATING TO THE DISTRIBUTION
Section 3.01 INTERCORPORATE REORGANIZATION.
(a) At least one business day prior to the Distribution Date, a
series of steps shall be consummated for the purpose of separating from ▇▇▇▇▇▇▇
any assets that are related to the business of Hussmann. The steps to be taken,
the specific form
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and sequence of which shall be in the sole discretion of the management of
▇▇▇▇▇▇▇ shall, among other things, result in Hussmann directly owning all of
the outstanding capital stock of Hussmann Operating Company and directly or
indirectly owning all of the foreign Subsidiaries and Affiliates of ▇▇▇▇▇▇▇
that are related to the business of Hussmann. The transfer of capital stock
shall be effected by means of delivery of one or more stock certificates duly
endorsed or accompanied by duly executed stock powers and notation on the
stock records books of the corporation or other legal entities involved and,
to the extent required by applicable law, by notation on appropriate
registries.
(b) In connection with transfers of assets other than capital stock
and the assumptions of any Liabilities, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall execute or
cause to be executed by the appropriate entities the Conveyance and Assumption
Instruments in such forms as ▇▇▇▇▇▇▇ and Hussmann shall reasonably agree,
including the transfer of any real property by deed.
(c) Prior to the Distribution Date, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall take
all steps necessary to increase the outstanding shares of Hussmann Common Stock
so that immediately prior to the Distribution, ▇▇▇▇▇▇▇ shall own the number of
shares of Hussmann Common Stock necessary to effect the Distribution.
Section 3.02 REPAYMENT OF INTERCOMPANY INDEBTEDNESS AND CASH
DIVIDEND.
(a) Prior to the Distribution, Hussmann shall repay to ▇▇▇▇▇▇▇ all
intercompany indebtedness owing by Hussmann and the Hussmann Subsidiaries to
▇▇▇▇▇▇▇ and the ▇▇▇▇▇▇▇ Subsidiaries at the time of such repayment (the
"HUSSMANN DEBT REPAYMENT").
(b) Prior to the Distribution, Hussmann shall pay a cash dividend to
▇▇▇▇▇▇▇ in an amount which, when added to the amount of the Hussmann Debt
Repayment, equals an aggregate of $____ million.
Section 3.03 SATISFACTION AND WAIVER OF ANY CLAIMS. Hussmann agrees,
on behalf of itself and each Hussmann Subsidiary, except as may otherwise be
provided in the Hussmann Tax Sharing Agreement, that Hussmann and each Hussmann
Subsidiary hereby waives any claim they might otherwise have against ▇▇▇▇▇▇▇ or
any ▇▇▇▇▇▇▇ Subsidiary by reason of dividends or tax benefits paid or made
available to ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, by Hussmann or any Hussmann
Subsidiary at any time prior to the Distribution.
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Section 3.04 HUSSMANN TAX SHARING AGREEMENT. On or prior to the date
hereof, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Operating Company will execute and
deliver the Hussmann Tax Sharing Agreement.
Section 3.05 EMPLOYEE BENEFIT PLANS AND OTHER COMPENSATION
ARRANGEMENTS.
(a) MANAGEMENT INCENTIVE COMPENSATION PLAN.
(1) Hussmann shall establish a Management Incentive Compensation Plan
(the "HUSSMANN MANAGEMENT INCENTIVE COMPENSATION PLAN"). Hussmann and the
Hussmann Subsidiaries shall be solely liable and responsible for all Liabilities
whatsoever arising under the Hussmann Management Incentive Compensation Plan,
and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any Liabilities in
respect thereof at any time. Hussmann and Hussmann Operating Company shall
indemnify, defend and hold harmless ▇▇▇▇▇▇▇, each Affiliate of ▇▇▇▇▇▇▇ and each
of ▇▇▇▇▇▇▇'▇ directors, officers and employees and each of the heirs, executors,
successors and assigns of any of the foregoing (the "▇▇▇▇▇▇▇ INDEMNITEES") from
and against any and all losses, Liabilities, claims, damages, payments, absolute
or contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown (including, without limitation, the costs and
expenses of any and all Actions, threatened Actions, demands, assessments,
judgments, settlements and compromises relating thereto and attorneys' fees and
any and all expenses whatsoever reasonably incurred in investigating, preparing
or defending against any such Actions or threatened Actions (collectively,
"LOSSES" and, individually, a "LOSS")) of the ▇▇▇▇▇▇▇ Indemnitees arising out of
or due to the failure or alleged failure of Hussmann or any of its Affiliates to
pay, perform or otherwise discharge such Liabilities.
(2) With respect to the ▇▇▇▇▇▇▇ Corporation Management Incentive
Compensation Plan (the "▇▇▇▇▇▇▇ MIC PLAN"):
(i) Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever arising under the ▇▇▇▇▇▇▇ MIC
Plan in connection with any claims made by or on behalf of any Hussmann
Separated Employee, and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall
have any Liabilities in respect thereof at any time. Hussmann and Hussmann
Operating Company shall indemnify, defend and hold harmless the ▇▇▇▇▇▇▇
Indemnitees from and against any and all Losses of the ▇▇▇▇▇▇▇ Indemnitees
arising out of or due to the failure or alleged failure of Hussmann or any
of its Affiliates to pay, perform or otherwise discharge such Liabilities.
(ii) Except as set forth in SECTION 3.05(a)(2)(I), ▇▇▇▇▇▇▇ shall be
solely liable and responsible for all Liabilities whatsoever arising under
the ▇▇▇▇▇▇▇
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MIC Plan in connection with any claims made by or on behalf of
any individual, and neither Hussmann nor any Hussmann Subsidiary shall have
any Liabilities in respect thereof at any time. ▇▇▇▇▇▇▇ shall indemnify,
defend and hold harmless Hussmann, each Affiliate of Hussmann and each of
Hussmann's and Hussmann Operating Company's directors, officers and
employees and each of the heirs, executors, successors and assigns of any
of the foregoing (the "HUSSMANN INDEMNITEES") from and against any and all
Losses of the Hussmann Indemnitees arising out of or due to the failure or
alleged failure of ▇▇▇▇▇▇▇ or any of its Affiliates to pay, perform or
otherwise discharge such Liabilities.
(b) STOCK INCENTIVE PLAN.
(1) With respect to any Options issued to Hussmann Separated
Employees, the Distribution constitutes a termination of employment from ▇▇▇▇▇▇▇
and its subsidiaries under the terms of Section 7(E) of the ▇▇▇▇▇▇▇ Stock
Incentive Plan. Each Option held by a Hussmann Separated Employee which is
exercisable on, and not exercised on or prior to, the Distribution Date and with
respect to which the holder has elected prior to the Distribution Date not to
surrender for an option to purchase shares of Hussmann Common Stock shall be
considered outstanding and exercisable according to its terms and the terms of
the ▇▇▇▇▇▇▇ Corporation Stock Incentive Plan. The number of shares of ▇▇▇▇▇▇▇
Common Stock subject to, and the exercise price of such Option to be determined
in accordance with the requirements of Section 424 of the Code and the
regulations promulgated thereunder. The exercise price of any such Option shall
be rounded to the nearest $.01; the number of shares subject to any such Option
shall be rounded down to the nearest whole share; the aggregate Spread of such
Option immediately after the Distribution Date shall be equal to the Spread of
such Option immediately before the Distribution Date. "SPREAD" means, as of the
same date, the excess of the fair market value of the shares subject to the
option over the aggregate option price.
(2) ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall cooperate and take all action
necessary so that as of the Distribution Date, each Option held by a Hussmann
Separated Employee and which is either (i) exercisable on, and not exercised on
or prior to, the Distribution Date and with respect to which the holder has
elected prior to the Distribution Date to surrender in exchange for an option to
purchase shares of Hussmann Common Stock; or (ii) not exercisable on or prior to
the Distribution Date, shall both, without any action on the part of the holder
thereof, be considered to be surrendered to ▇▇▇▇▇▇▇ in exchange for an option to
be issued from the Stock Incentive Plan to be established by Hussmann (the
"HUSSMANN STOCK INCENTIVE PLAN") to purchase shares of Hussmann Common Stock.
The number of shares of Hussmann Common Stock subject to and the exercise price
of such option shall be determined in accordance with the requirements of
Section 424 of the Code and the regulations promulgated thereunder. The
exercise price of any such option shall be rounded to the
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nearest $.01; the number of shares subject to any such option shall be
rounded down to the nearest whole share; the aggregate Spread of such option
immediately after the Distribution Date shall be equal to the Spread of each
Option surrendered for it immediately before the Distribution Date; and such
options shall be granted under the Hussmann Stock Incentive Plan with an
outstanding exercise period and vesting schedule which is the same as the
exercise period and vesting schedule of the Option surrendered for it.
(3) The parties agree that Hussmann Separated Employees holding
shares of Restricted Stock on the Record Date will receive shares of Hussmann
Common Stock and Midas Common Stock as a dividend on the Distribution Date, in
common with all other shareholders of ▇▇▇▇▇▇▇, free of any restriction but
subject to applicable withholding taxes. ▇▇▇▇▇▇▇ and Hussmann will separately
arrange for the payment of such withholding taxes by the recipient. With
respect to any shares of Restricted Stock outstanding as of the close of
business on the Distribution Date that are then held by a Hussmann Separated
Employee, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall cooperate and take all action necessary so
that as of the close of business on the Distribution Date such shares of
Restricted Stock and the underlying Restricted Stock Award Agreement will be
canceled and replaced with shares of restricted Hussmann Common Stock of
equivalent value and a Restricted Stock Award Agreement issued under the
Hussmann Stock Incentive Plan having the same vesting schedule as that contained
in the Agreement which it replaced.
(4) Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever arising under the ▇▇▇▇▇▇▇ Stock
Incentive Plan or Options or Restricted Stock issued thereunder in connection
with any claims made by or on behalf of any Hussmann Separated Employee, and
neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any Liabilities in respect
thereof at any time. Hussmann and Hussmann Operating Company shall indemnify,
defend and hold harmless the ▇▇▇▇▇▇▇ Indemnitees from and against any and all
Losses of the ▇▇▇▇▇▇▇ Indemnitees arising out of or due to the failure or
alleged failure of Hussmann or any of its Affiliates to pay, perform or
otherwise discharge such Liabilities or the failure by any Hussmann Separated
Employee to pay the applicable withholding taxes referred to in SECTION
3.05(b)(3).
(5) Except as set forth in SECTION 3.05(b)(4), ▇▇▇▇▇▇▇ shall be
solely liable and responsible for all Liabilities whatsoever arising under the
▇▇▇▇▇▇▇ Stock Incentive Plan in connection with any claims made by or on behalf
of any individual, and neither Hussmann nor any Hussmann Subsidiary shall have
any Liabilities in respect thereof at any time. ▇▇▇▇▇▇▇ shall indemnify, defend
and hold harmless the Hussmann Indemnitees from and against any and all Losses
of the Hussmann Indemnitees arising out of or due to the failure or alleged
failure of ▇▇▇▇▇▇▇ or any of its Affiliates to pay, perform or otherwise
discharge such Liabilities.
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(6) Hussmann shall establish the Hussmann Stock Incentive Plan
substantially in the form in which it has been filed as an Exhibit to the
Hussmann Form 10. The Hussmann Stock Incentive Plan shall become effective as
of the Distribution Date for Hussmann Separated Employees. ▇▇▇▇▇▇▇ shall
approve the Hussmann Stock Incentive Plan as the sole shareholder of Hussmann.
Hussmann and the Hussmann Subsidiaries shall be solely liable and responsible
for all Liabilities whatsoever arising under the Hussmann Stock Incentive Plan,
and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any Liabilities in
respect thereof at any time. Hussmann and Hussmann Operating Company shall
indemnify, defend and hold harmless the ▇▇▇▇▇▇▇ Indemnitees from and against any
and all Losses of the ▇▇▇▇▇▇▇ Indemnitees arising out of or due to the failure
or alleged failure of Hussmann or any of its Affiliates to pay, perform or
otherwise discharge such Liabilities.
(c) WELFARE BENEFITS.
(1) Hussmann shall, effective on a date which is on or prior to the
Distribution Date ("WELFARE EFFECTIVE DATE"), establish the Hussmann Corporation
Group Benefits Plan ("HUSSMANN FUNDED WELFARE PLAN") and the Hussmann
Corporation Welfare Benefit Trust ("HUSSMANN WELFARE TRUST"), each substantially
similar to the ▇▇▇▇▇▇▇ Corporation Group Benefits Plan ("▇▇▇▇▇▇▇ FUNDED WELFARE
PLAN") and the ▇▇▇▇▇▇▇ Corporation Welfare Benefit Trust ("▇▇▇▇▇▇▇ WELFARE
TRUST"), respectively. The Hussmann Funded Welfare Plan and the Hussmann
Welfare Trust shall, as of the Welfare Effective Date, assume all Liabilities
whatsoever arising (before, on or after the Welfare Effective Date) under the
▇▇▇▇▇▇▇ Funded Welfare Plan or the ▇▇▇▇▇▇▇ Welfare Trust, respectively, at any
time with respect to each and every Hussmann Separated Employee. Hussmann shall
continue to provide, effective on the Distribution Date, welfare benefit plans
(as described in ERISA Section 3(c)) it or any Hussmann Subsidiary currently
sponsors to each and every Hussmann Separated Employee substantially similar to
the welfare benefits provided to each and every Hussmann Separated Employee on
the date hereof (all such plans herein referred to as "HUSSMANN WELFARE BENEFIT
PLANS").
(2) Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever arising under all Hussmann Welfare
Benefit Plans or the Hussmann Welfare Trust, and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary shall have any Liabilities in respect thereof at any time. Hussmann
and the Hussmann Subsidiaries shall be solely liable and responsible for all
Liabilities whatsoever to each and every Hussmann Separated Employee with
respect to the Hussmann Welfare Benefit Plans or the Hussmann Welfare Trust at
any time. Hussmann and Hussmann Operating Company shall indemnify, defend and
hold harmless the ▇▇▇▇▇▇▇ Funded Welfare Plan, the ▇▇▇▇▇▇▇ Welfare Trust, and
the ▇▇▇▇▇▇▇ Indemnitees from and against any and all Losses of the ▇▇▇▇▇▇▇
Funded Welfare Plan, the ▇▇▇▇▇▇▇ Welfare Trust, and the ▇▇▇▇▇▇▇ Indemnitees
arising out of
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or due to the failure or alleged failure of the Hussmann Welfare Benefit
Plans, the Hussmann Welfare Trust, Hussmann or any of its Affiliates to pay,
perform or otherwise discharge such Liabilities.
(3) ▇▇▇▇▇▇▇ shall provide to Hussmann, as of the Welfare Effective
Date, a determination of the fair market value of the assets held by the ▇▇▇▇▇▇▇
Welfare Trust as of the Welfare Effective Date (but excluding the sum of
$__________) ("AVAILABLE ▇▇▇▇▇▇▇ RESERVES"). The ▇▇▇▇▇▇▇ Welfare Trust shall
deliver to the Hussmann Welfare Trust an amount, as determined by the Welfare
Benefit Trust Committee for the ▇▇▇▇▇▇▇ Benefit Trust ("WELFARE COMMITTEE"), of
the Available ▇▇▇▇▇▇▇ Reserves, equal to (1) minus (2) where (1) is an amount
determined by multiplying the Available ▇▇▇▇▇▇▇ Reserves times a fraction, the
numerator of which is ▇▇▇▇▇▇▇'▇ estimate of claim reserve for the fiscal year
ended December 31, 1997, based on historical and current transactions of the
▇▇▇▇▇▇▇ Welfare Trust attributable to each and every Hussmann Separated
Employee, and the denominator of which is the aggregate claim reserve for the
fiscal year ended December 31, 1997, based on historical and current
transactions of the ▇▇▇▇▇▇▇ Welfare Trust attributable to all activity under the
▇▇▇▇▇▇▇ Funded Welfare Plan; and (2) is an amount equal to expenses and
contributions incurred but not paid on and prior to the Welfare Effective Date
attributable to each and every Hussmann Separated Employee.
(4) As of the Welfare Effective Date, ▇▇▇▇▇▇▇, the Welfare Committee,
the ▇▇▇▇▇▇▇ Funded Welfare Plan, and the ▇▇▇▇▇▇▇ Welfare Trust, each to the
extent applicable, shall cause to be issued to Hussmann, the Hussmann Funded
Welfare Plan or the Hussmann Welfare Trust, respectively, for the benefit only
of a Hussmann Separated Employee, all insurance contracts (including health
maintenance organization contracts), administration contracts, or other service
contracts which are either substantially similar to such contracts held by each
or applicable only with respect to a Hussmann Separated Employee. Each such
contract shall include, if any, reserves or retrospective refunds or premiums
due based on the experience realized thereunder with respect to each and every
Hussmann Separated Employee.
(d) RETIREMENT SAVINGS PLANS.
(1)(i) Hussmann shall, as of a date which is on or prior to the
Distribution Date ("RSP EFFECTIVE DATE"), establish two defined
contribution plans and related trust(s) with a trustee designated by
Hussmann (respectively referred to below as the "HUSSMANN RSP PLANS" and
"HUSSMANN RSP TRUST") substantially similar to the ▇▇▇▇▇▇▇ Corporation
Retirement Savings Plan and the ▇▇▇▇▇▇▇ Corporation Master Retirement
Savings Plan (with the exception that on and after the Distribution Date
instead of a ▇▇▇▇▇▇▇ Common Stock fund in both there will be offered a
Hussmann Common Stock fund) and the ▇▇▇▇▇▇▇ Corporation Defined
Contribution Master Trust (respectively referred to below as
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the "▇▇▇▇▇▇▇ RSP PLANS" and the "▇▇▇▇▇▇▇ RSP TRUST") covering, among
others, each and every Hussmann Separated Employee or beneficiary
thereof who, on or prior to the RSP Effective Date, is either a
participant or a beneficiary, respectively, in either of the ▇▇▇▇▇▇▇
RSP Plans who has or has accrued a right to an account balance in either
of the ▇▇▇▇▇▇▇ RSP Plans (such persons are referred to as "HUSSMANN
PARTICIPANTS"). Each of the Hussmann RSP Plans and the Hussmann RSP
Trust shall, effective as of the RSP Effective Date, assume all
Liabilities whatsoever arising (before, on or after the RSP Effective
Date) under each of the respective ▇▇▇▇▇▇▇ RSP Plans and the respective
portion of the ▇▇▇▇▇▇▇ RSP Trust with respect to Hussmann Participants.
(ii) Hussmann and the Hussmann Subsidiaries shall be solely liable
and responsible for all Liabilities whatsoever arising under the Hussmann
RSP Plans and Hussmann RSP Trust, and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary shall have any Liabilities in respect thereof at any time.
Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever to Hussmann Participants with
respect to the Hussmann RSP Plans and Hussmann RSP Trust at any time.
Hussmann and Hussmann Operating Company shall indemnify, defend and hold
harmless the ▇▇▇▇▇▇▇ RSP Plans, the ▇▇▇▇▇▇▇ RSP Trust and the ▇▇▇▇▇▇▇
Indemnitees from and against any and all Losses of the ▇▇▇▇▇▇▇ RSP Plans,
the ▇▇▇▇▇▇▇ RSP Trust and the ▇▇▇▇▇▇▇ Indemnitees arising out of or due to
the failure or alleged failure of the Hussmann RSP Plans, the Hussmann RSP
Trust, Hussmann or any of its Affiliates to pay, perform or otherwise
discharge such Liabilities.
(2) As of a valuation date not later than 30 calendar days after the
RSP Effective Date, as provided in the ▇▇▇▇▇▇▇ RSP Trust, there shall be
transferred to the Hussmann RSP Trust assets the value of which as of such
valuation date is equal to, as determined by the Administrative Committee of the
▇▇▇▇▇▇▇ RSP Trust ("RSP COMMITTEE"), the value of the account balances of, and
liabilities with respect to, all Hussmann Participants, as of such valuation
date not otherwise distributed or to be distributed pursuant to the ▇▇▇▇▇▇▇ RSP
Plans, less expenses or contributions incurred or due but not paid as of such
date of transfer with respect to each and every Hussmann Separated Employee.
Such assets shall consist of cash, contract rights, beneficial interests in
collective funds, and shares of stock to the extent that the accounts of
Hussmann Participants under the ▇▇▇▇▇▇▇ RSP Plans were invested in such
investment alternatives. Hussmann shall cause all assets so transferred to the
Hussmann RSP Trust to be allocated among the Hussmann RSP Plans in a manner such
that the value of the assets of each of the Hussmann RSP Plans so allocated
shall be equal to the value of assets transferred from each of the respective
▇▇▇▇▇▇▇ RSP Plans.
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(3) As of the RSP Effective Date, ▇▇▇▇▇▇▇, the RSP Committee, the
▇▇▇▇▇▇▇ RSP Plans, and the ▇▇▇▇▇▇▇ RSP Trust, each to the extent applicable,
shall cause to be issued to Hussmann, the Hussmann RSP Plans or the Hussmann RSP
Trust, respectively, for the benefit only of Hussmann Participants, all
insurance contracts, administration contracts, or other service contracts which
are either substantially similar to such contracts held by each or applicable
only with respect to Hussmann Participants.
(e) DEFINED BENEFIT PENSION PLANS.
(1) Hussmann shall continue, on and after the Distribution Date,
qualified defined benefit pension plans ("HUSSMANN PENSION PLANS"), which are
presently being funded by the ▇▇▇▇▇▇▇ Corporation Defined Benefit Master Trust
("▇▇▇▇▇▇▇ MASTER TRUST"), and a nonqualified Hussmann Corporation Executive
Retirement Plan ("HUSSMANN ERP"), all of which Hussmann or a Hussmann Subsidiary
currently sponsors for current and former employees and beneficiaries of
employees or former employees of Hussmann and Hussmann Subsidiaries (the
"HUSSMANN PENSION PLAN BENEFICIARIES"). Hussmann and the Hussmann Subsidiaries
shall be solely liable and responsible for all Liabilities whatsoever arising
under the Hussmann Pension Plans and Hussmann ERP, and neither ▇▇▇▇▇▇▇ nor any
▇▇▇▇▇▇▇ Subsidiary shall have any Liabilities in respect thereof at any time,
except to the extent such Liabilities relate to a benefit accrued by the
Hussmann Participant under a qualified defined benefit pension plan maintained
by ▇▇▇▇▇▇▇ or a ▇▇▇▇▇▇▇ Subsidiary which is offset by the Hussmann Pension Plans
against any benefit accrual under the Hussmann Pension Plans based on the same
period of credited service. Hussmann and the Hussmann Subsidiaries shall be
solely liable and responsible to all Hussmann Pension Plan Beneficiaries for all
Liabilities whatsoever with respect to the Hussmann Pension Plans and Hussmann
ERP at any time. Hussmann and Hussmann Operating Company shall indemnify,
defend and hold harmless the ▇▇▇▇▇▇▇ Master Trust and the ▇▇▇▇▇▇▇ Indemnitees
from and against any and all Losses of the ▇▇▇▇▇▇▇ Master Trust and the ▇▇▇▇▇▇▇
Indemnitees arising out of or due to the failure or alleged failure of the
Hussmann Pension Plans, Hussmann Master Trust (defined below), Hussmann or any
of its Affiliates to pay, perform or otherwise discharge such Liabilities.
(2) Hussmann shall, as of a date on or prior to the Distribution Date
("PENSION EFFECTIVE DATE"), adopt a Hussmann Corporation Defined Benefit Master
Trust ("HUSSMANN MASTER TRUST") substantially similar to the ▇▇▇▇▇▇▇ Master
Trust and designate a trustee for the Hussmann Master Trust for each of the
Hussmann Pension Plans. As provided in the ▇▇▇▇▇▇▇ Master Trust, the Management
Committee of the ▇▇▇▇▇▇▇ Master Trust ("MANAGEMENT COMMITTEE") shall cause the
▇▇▇▇▇▇▇ Master Trust to transfer to the Hussmann Master Trust, a PRO RATA
portion (net of accrued expenses, contributions and benefits attributable to
each and every Hussmann Separated Employee) of the cash, securities and other
assets in the ▇▇▇▇▇▇▇ Master
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Trust as determined solely by the Management Committee on or as soon as
practicable after the Pension Effective Date.
Hussmann shall cause all assets so transferred to the Hussmann Master
Trust to be allocated among the Hussmann Pension Plans in a manner such that the
value of the assets of each of the Hussmann Pension Plans (net of accrued
expenses, contributions, and benefits attributable to each such Hussmann Pension
Plan) so allocated shall be equal to the value of such assets immediately prior
to the transfer from the ▇▇▇▇▇▇▇ Master Trust.
(3) On or as soon as administratively possible after the Distribution
Date, ▇▇▇▇▇▇▇ shall terminate the Canadian Master Trust and the Management
Committee shall cause the Canadian Master Trust to transfer assets to trusts
participating in the Canadian Master Trust in accordance with the terms of the
Canadian Master Trust.
(f) EXECUTIVE SPLIT DOLLAR LIFE INSURANCE PLAN
(1) Hussmann shall, effective on a date which is on or prior to the
Distribution Date ("SPLIT DOLLAR EFFECTIVE DATE"), establish the Hussmann
Executive Split Dollar Life Insurance Plan ("HUSSMANN SPLIT DOLLAR PLAN")
substantially similar to the ▇▇▇▇▇▇▇ Corporation Executive Split Dollar Life
Insurance Plan ("▇▇▇▇▇▇▇ SPLIT DOLLAR PLAN"). The Hussmann Split Dollar Plan
shall, as of the Split Dollar Effective Date, assume all Liabilities whatsoever
arising (before, on or after the Split Dollar Effective Date) under the ▇▇▇▇▇▇▇
Split Dollar Plan at any time with respect to each and every Hussmann Separated
Employee.
(2) ▇▇▇▇▇▇▇ shall provide to Hussmann on or before the Split Dollar
Effective Date a list of outstanding life insurance policies issued pursuant to
the ▇▇▇▇▇▇▇ Split Dollar Plan to Hussmann Separated Employees and premiums paid
by ▇▇▇▇▇▇▇ for such policies since the inception of the ▇▇▇▇▇▇▇ Split Dollar
Plan. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall cooperate in obtaining new Split Dollar
Agreements and Collateral Assignments by Hussmann Split Dollar Plan participants
assigning to Hussmann the right to ▇▇▇▇▇▇▇'▇ Corporate Capital Interest as
provided in the ▇▇▇▇▇▇▇ Split Dollar Plan with respect to past premium
contributions made by ▇▇▇▇▇▇▇ in respect of Hussmann Separated Employees.
Subject to the execution of such Split Dollar Agreements and Collateral
Assignments by Hussmann Split Dollar Plan participants, Hussmann shall reimburse
▇▇▇▇▇▇▇ for all premium contributions made by ▇▇▇▇▇▇▇ in respect of Hussmann
Separated Employees since the inception of the ▇▇▇▇▇▇▇ Split Dollar Plan
pursuant to SECTION 3.02(a).
(3) Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever arising under the Hussmann Split
Dollar Plan, and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any
Liabilities in respect
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thereof at any time. Hussmann and the Hussmann Subsidiaries shall be solely
liable and responsible for all Liabilities whatsoever to each and every
Hussmann Separated Employee with respect to the Hussmann Split Dollar Plan at
any time. Hussmann and Hussmann Operating Company shall indemnify, defend
and hold harmless the ▇▇▇▇▇▇▇ Split Dollar Plan and the ▇▇▇▇▇▇▇ Indemnitees
from and against any and all Losses of the ▇▇▇▇▇▇▇ Split Dollar Plan and the
▇▇▇▇▇▇▇ Indemnitees arising out of or due to the failure or alleged failure
of the Hussmann Split Dollar Plan, Hussmann or any of its Affiliates to pay,
perform or otherwise discharge such Liabilities.
(g) SEVERANCE PAY.
(1) The parties agree that, with respect to any individual who, in
connection with the Distribution, ceases to be an employee of ▇▇▇▇▇▇▇ or a
▇▇▇▇▇▇▇ Subsidiary and becomes or continues to be a Hussmann Separated Employee,
such cessation shall not be deemed to be a severance or termination of
employment from ▇▇▇▇▇▇▇ or a ▇▇▇▇▇▇▇ Subsidiary for purposes of any policy,
plan, program or agreement of ▇▇▇▇▇▇▇ or a ▇▇▇▇▇▇▇ Subsidiary that provides for
the payment of severance or salary continuation benefits. The parties agree
that, as of the Distribution Date, all severance compensation agreements between
▇▇▇▇▇▇▇ or a ▇▇▇▇▇▇▇ Subsidiary and Hussmann Separated Employees shall be
terminated, and that Hussmann will adopt and approve agreements between Hussmann
and such Hussmann Separated Employees, in lieu of such terminated agreements,
which agreements shall be substantially in the form of the Change in Control
Agreement filed as an Exhibit to the Hussmann Form 10.
(2) Hussmann and the Hussmann Subsidiaries shall be solely liable and
responsible for all Liabilities whatsoever arising in connection with any claims
made by or on behalf of Hussmann Separated Employees in respect of severance pay
or salary continuation obligations relating to the termination or alleged
termination of any such individual's employment as of the Distribution Date or
in connection with the Distribution, and neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇
Subsidiary shall have any Liabilities in respect thereof at any time. Hussmann
and Hussmann Operating Company shall indemnify, defend and hold harmless the
▇▇▇▇▇▇▇ Indemnitees from and against any and all Losses of the ▇▇▇▇▇▇▇
Indemnitees arising out of or due to the failure or alleged failure of Hussmann
or any of its Affiliates to pay, perform or otherwise discharge such
Liabilities.
(3) Except as set forth in SECTION 3.05(g)(2), ▇▇▇▇▇▇▇ shall be
solely liable and responsible for all Liabilities whatsoever arising in
connection with any claims made by or on behalf of any individual in respect of
severance pay or salary continuation obligations relating to the termination or
alleged termination of employment of such individual, other than any claim
relating to the termination or alleged termination of employment of a Hussmann
Separated Employee as of the
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Distribution Date or in connection with the Distribution, and neither
Hussmann nor any Hussmann Subsidiary shall have any Liabilities in respect
thereof at any time. ▇▇▇▇▇▇▇ shall indemnify, defend and hold harmless the
Hussmann Indemnitees from and against any and all Losses of the Hussmann
Indemnitees arising out of or due to the failure or alleged failure of
▇▇▇▇▇▇▇ or any of its Affiliates to pay, perform or otherwise discharge such
Liabilities.
(h) HUSSMANN LIABILITY TO HUSSMANN SEPARATED EMPLOYEES. As of the
Distribution Date, Hussmann and the Hussmann Subsidiaries shall be solely liable
and responsible for all Liabilities whatsoever arising in connection with any
claims made by or on behalf of Hussmann Separated Employees in respect of any
Employee Benefit Plan or Liabilities not otherwise provided for in this
Agreement, as well as with respect to any employee benefit or payment to a
Hussmann Separated Employee not otherwise provided for in this Agreement, and
neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any Liabilities in respect
thereof at any time. Hussmann and Hussmann Operating Company shall indemnify,
defend and hold harmless the ▇▇▇▇▇▇▇ Indemnitees and any relevant Employee
Benefit Plan of the ▇▇▇▇▇▇▇ Indemnitees from and against any and all Losses of
the ▇▇▇▇▇▇▇ Indemnitees and any such Employee Benefit Plan arising out of or due
to the failure or alleged failure of Hussmann or any of its Affiliates to pay,
perform or otherwise discharge such Liabilities. To the extent not otherwise
provided in this Agreement, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall take such action as is
necessary to effect an adjustment to the books of ▇▇▇▇▇▇▇ and of Hussmann and of
their subsidiaries so that, as of the Distribution Date, the prepaid expense
balances and accrued employee Liabilities, if any, with respect to any employee
Liabilities assumed or retained as of the Distribution Date by ▇▇▇▇▇▇▇ and the
▇▇▇▇▇▇▇ Subsidiaries, on the one hand, and Hussmann and the Hussmann
Subsidiaries, on the other hand, are appropriately reflected on their respective
balance sheets as of the Distribution Date. To the extent that ▇▇▇▇▇▇▇ pays for
any other expenses or Liabilities in respect of a Hussmann Separated Employee
not otherwise provided for in this Agreement, Hussmann and the Hussmann
Subsidiaries shall reimburse ▇▇▇▇▇▇▇ as of the Distribution Date, to the extent
not previously reimbursed.
(i) ▇▇▇▇▇▇▇ LIABILITY TO ▇▇▇▇▇▇▇ EMPLOYEES. Except as otherwise
specifically provided in this SECTION 3.05, this Agreement shall not affect any
Employee Benefit Plan or other compensation arrangement of ▇▇▇▇▇▇▇ in respect of
any employees of ▇▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Subsidiaries who are not Hussmann
Separated Employees. Except as otherwise specifically provided, (1) this
Agreement shall not affect any Hussmann or Hussmann Subsidiary Employee Benefit
Plans or other compensation arrangements which Hussmann or the Hussmann
Subsidiaries have maintained on or before the Distribution Date and (2) ▇▇▇▇▇▇▇
shall have no Liabilities with respect to such Employee Benefit Plans or
arrangements at any time.
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(j) COOPERATION. ▇▇▇▇▇▇▇ and Hussmann shall, in connection with the
transactions and transfers described in SECTION 3.05(d) and SECTION 3.05 (e),
cooperate in making any and all appropriate filings required under the Code or
ERISA and the regulations thereunder and any applicable securities laws and take
all such action as may be necessary to cause such transactions and transfers to
take place on or as soon as practicable after the Distribution Date.
(k) MISCELLANEOUS. Nothing in this Agreement shall be interpreted as
requiring ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ or any subsidiary of ▇▇▇▇▇▇▇ or Hussmann to
maintain any Employee Benefit Plan or other benefit plan for any period of time
or shall impair the right of any of the foregoing to amend or terminate any such
Employee Benefit Plan or other benefit plan in accordance with its terms or
applicable law. Nothing in this Agreement shall be construed to create a right
in any employee or dependent or beneficiary of any employee under an Employee
Benefit Plan or other benefit plan which such employee, dependent or beneficiary
would not otherwise have under the terms of such Employee Benefit Plan or other
benefit plan.
Section 3.06 BOARD OF DIRECTORS AND RESIGNATIONS.
(a) Hussmann and ▇▇▇▇▇▇▇ shall take all actions which may be required
to elect as directors of Hussmann, on or prior to the Distribution Date, the
persons named in the Hussmann Form 10 to constitute the Board of Directors of
Hussmann on the Distribution Date.
(b) ▇▇▇▇▇▇▇ shall cause each of its employees to resign, effective as
of the close of business on the Distribution Date, from all positions as a
director and/or officer of Hussmann and any Hussmann Subsidiary; and Hussmann
shall cause each of its employees to resign, effective as of the close of
business on the Distribution Date, from all positions as a director and/or
officer of ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary; PROVIDED, HOWEVER, that no
individual shall be required by any party hereto to resign from any position or
office with another party hereto (or a subsidiary of such other party) if such
individual is named or identified in the Information Statement as the individual
who is to hold such position or office after the Distribution.
Section 3.07 HUSSMANN RIGHTS AGREEMENT. Hussmann shall enter into
the Hussmann Rights Agreement substantially in the form attached as an Exhibit
to the Hussmann Form 10.
Section 3.08 INSURANCE.
(a) Since April 1, 1979, ▇▇▇▇▇▇▇ has provided insurance coverage to
Hussmann and the Hussmann Subsidiaries through ▇▇▇▇▇▇▇'▇ wholly-owned insurance
subsidiary, ▇▇▇▇▇▇▇ Insurance Co., Ltd., for workers' compensation, general
liability,
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automobile liability and products liability. Hussmann Operating Company has
paid premiums to ▇▇▇▇▇▇▇ Insurance Co., Ltd. to provide such insurance,
without deductibles, and for varying limits of liability, as detailed on
SCHEDULE ▇. ▇▇▇▇▇▇▇ shall cause ▇▇▇▇▇▇▇ Insurance Co., Ltd. to provide
coverage to Hussmann and the Hussmann Subsidiaries for all those coverages
named above, without deductibles, and up to the limits shown on SCHEDULE A,
for all insured incidents occurring from the date such coverage first
commenced through and including the Distribution Date. The provisions of
insurance coverage applicable to the above are stipulated in policies of
insurance issued to ▇▇▇▇▇▇▇ by Continental Insurance Co., National Union Fire
Insurance Co. and Old Republic Insurance Co.
(b) Since April 1, 1994, ▇▇▇▇▇▇▇ has provided Employment Practices
Liability insurance coverage to Hussmann and the Hussmann Subsidiaries through
▇▇▇▇▇▇▇ Insurance Co., Ltd. for $900,000 per occurrence with an aggregate of
$2,000,000 per policy period for ▇▇▇▇▇▇▇ and its Subsidiaries excess of the per
occurrence deductible of $100,000, as shown on SCHEDULE A. The insurance
applicable to this coverage is stipulated in policies of insurance issued to
▇▇▇▇▇▇▇ by Lexington Insurance Co. and ▇▇▇▇▇▇▇ Insurance Co., Ltd.
(c) Since April 1, 1996 ▇▇▇▇▇▇▇ has provided General Liability and
since July 1, 1996 ▇▇▇▇▇▇▇ has provided All Risk Property insurance coverage to
Hussmann and the Hussmann Subsidiaries located outside of the United States and
Canada through ▇▇▇▇▇▇▇ Insurance Co., Ltd. for varying limits excess of varying
deductibles, as shown on SCHEDULE A. The insurance applicable to this coverage
is stipulated in policies of insurance issued to ▇▇▇▇▇▇▇ by Cigna Insurance
Company, CNA and Winterthur Insurance Company.
(d) The parties agree that Hussmann shall have the right to present
claims to ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ insurers under all policies of insurance placed
by ▇▇▇▇▇▇▇ on behalf of Hussmann or any Hussmann Subsidiary or which include
Hussmann or any Hussmann Subsidiary within them, whether placed through ▇▇▇▇▇▇▇
Insurance Co., Ltd. or otherwise, for insured incidents occurring from the date
said coverage first commenced until the Distribution Date. The parties agree
that any such policies written on a "claims made" rather than "occurrence" basis
may not provide coverage to Hussmann for incidents occurring on or prior to the
Distribution Date but which are first reported after the Distribution Date.
ARTICLE IV
INDEMNIFICATION
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Section 4.01 INDEMNIFICATION BY ▇▇▇▇▇▇▇. Except with respect to
employee benefits or other Liabilities to employees, which shall be governed by
SECTION 3.05 hereof, ▇▇▇▇▇▇▇ shall indemnify, defend and hold harmless the
Hussmann Indemnitees from and against any and all Losses of the Hussmann
Indemnities arising out of or due to the failure or alleged failure of ▇▇▇▇▇▇▇
or any of its Affiliates to pay, perform or otherwise discharge in due course
any item set forth on SCHEDULE B. Anything in this SECTION 4.01 to the contrary
notwithstanding, neither ▇▇▇▇▇▇▇ nor any ▇▇▇▇▇▇▇ Subsidiary shall have any
Liabilities whatsoever to Hussmann or any Hussmann Subsidiary in respect of any
Tax (as such term is defined in the Hussmann Tax Sharing Agreement), except as
otherwise provided on SCHEDULE B hereto or in the Hussmann Tax Sharing
Agreement.
Section 4.02 INDEMNIFICATION BY HUSSMANN AND HUSSMANN OPERATING
COMPANY. Except with respect to employee benefits or other Liabilities to
employees, which shall be governed by SECTION 3.05 hereof, Hussmann and Hussmann
Operating Company shall indemnify, defend and hold harmless the ▇▇▇▇▇▇▇
Indemnitees from and against any and all Losses of the ▇▇▇▇▇▇▇ Indemnitees
arising out of or due to the failure or alleged failure of Hussmann or any of
its Affiliates to pay, perform or otherwise discharge in due course any item set
forth on SCHEDULE C. Anything in this SECTION 4.02 to the contrary
notwithstanding, neither Hussmann nor any Hussmann Subsidiary shall have any
Liabilities whatsoever to ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary in respect of any
Tax (as such term is defined in the Hussmann Tax Sharing Agreement), except as
otherwise provided on SCHEDULE C hereto or in the Hussmann Tax Sharing
Agreement.
Section 4.03 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
(a) The amount which any party (an "INDEMNIFYING PARTY") is or may be
required to pay to any other Person (an "INDEMNITEE") pursuant to the
indemnification provisions contained in SECTION 3.05, SECTION 4.01 or SECTION
4.02 shall be reduced (including, without limitation, retroactively) by any
Insurance Proceeds or other amounts actually recovered by or on behalf of such
Indemnitee, in reduction of the related Loss. If an Indemnitee shall have
received the payment required by SECTION 3.05, 4.01 or 4.02 of this Agreement
from an Indemnifying Party in respect of any Loss and shall subsequently
actually receive Insurance Proceeds or other amounts in respect of such Loss,
then such Indemnitee shall pay to such Indemnifying Party a sum equal to the
amount of such Insurance Proceeds or other amounts actually received (subject to
the enforcement of the following sentence and up to but not in excess of the
amount of any indemnity payment made hereunder). An insurer who would otherwise
be obligated to pay any claim shall not be relieved of the responsibility with
respect thereto, or, solely by virtue of the indemnification provisions hereof,
have any subrogation rights with respect thereto, it being expressly understood
and agreed that no insurer or any other third party shall be entitled to a
"windfall" (I.E., a benefit they
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would not be entitled to receive in the absence of the indemnification
provisions) by virtue of the indemnification provisions hereof.
(b) If an Indemnitee shall actually realize a tax saving by reason of
having incurred a Loss for which such Indemnitee shall have received a payment
from an Indemnifying Party, then such Indemnitee shall pay to such Indemnifying
Party an amount equal to such tax saving. Whenever there is a substantial
likelihood that an Indemnitee will receive a tax saving by reason of a Loss,
such Indemnitee shall file its tax returns in a manner designed to do so,
provided that such Indemnitee shall have the sole responsibility for the
preparation of its tax returns and reporting thereon such Loss and any payments
received from such Indemnifying Party. An Indemnitee shall be deemed actually
to have realized a tax saving with respect to a Loss if, and to the extent that,
for any taxable period, whether ending before, on or after the Distribution
Date, the aggregate federal, state, local and foreign tax liability actually
payable by such Indemnitee and any of its wholly-owned subsidiaries, computed by
taking into account any deductions, credits or other items attributable to a
Loss (including the receipt of an Indemnity Payment with respect thereto and the
payment of any amounts pursuant to this SECTION 4.03(b)), is less than such
aggregate tax liability, computed without regard to such deductions, credits or
other items attributable to a Loss (including the receipt of an indemnity
payment with respect thereto and the payment of any amounts pursuant to this
SECTION 4.03(b)). In the event that, following a payment by an Indemnitee
pursuant to this SECTION 4.03(b) in respect of a tax saving, there shall be an
adjustment to the amount of such tax saving as a result of an audit or other
proceeding in respect of such Indemnitee's tax returns, the parties shall take
appropriate actions to reflect such adjustment. The term "TAX SAVING" shall
also be deemed to include any interest received from a governmental tax
authority, net of any federal, state, local or foreign taxes payable thereon.
(c) In the event that an indemnity payment shall be denominated in a
currency other than United States dollars, the amount of such payment shall be
translated into United States dollars using the Foreign Exchange Rate for such
currency determined in accordance with the following rules:
(1) with respect to a Loss arising from payment by a financial
institution under a guarantee, comfort letter, letter of credit, foreign
exchange contract or similar instrument, the Foreign Exchange Rate for such
currency shall be determined as of the date on which such financial
institution shall have been reimbursed;
(2) with respect to a Loss covered by insurance, the Foreign Exchange
Rate for such currency shall be the Foreign Exchange Rate employed by the
insurance company providing such insurance in settling such Loss with the
Indemnifying Party; and
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(3) with respect to a Loss not covered by clause (1) or (2) of this
SECTION 4.03(c), the Foreign Exchange Rate for such currency shall be
determined as of the date that notice of the claim with respect to such
Loss shall be given to the Indemnitee.
(d) If the amount of any Loss shall, at any time subsequent to the
payment required by this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, less any expenses incurred in
connection therewith, shall promptly be repaid by the Indemnitee to the
Indemnifying Party.
Section 4.04 PROCEDURES FOR INDEMNIFICATION.
(a) Any claim under SECTION 3.05, SECTION 4.01 or SECTION 4.02 or any
other Section of this Agreement on account of a Loss which does not result from
a Third Party Claim shall be asserted by written notice given by or on behalf of
an Indemnitee to the relevant Indemnifying Party. Such Indemnifying Party shall
have a period of 30 calendar days after the receipt of such notice within which
to respond thereto. If any such claim is not paid in full by an Indemnifying
Party within 30 calendar days after written notice has been received by the
Indemnifying Party, such Indemnitee and Indemnifying Party shall negotiate in
good faith for a reasonable period of time to settle such amount claimed;
PROVIDED, HOWEVER, that such reasonable period shall not, unless otherwise
agreed by such Indemnitee and Indemnifying Party in writing, exceed 45 calendar
days from the time they began such negotiations; PROVIDED, FURTHER, that if such
Indemnifying Party does not respond within such 30-day period or rejects such
claim in whole or in part, such Indemnifying Party shall be deemed to have
refused to accept responsibility to make payment. The Indemnitee may, but need
not, at any time thereafter bring an Action against the Indemnifying Party to
recover the unpaid amount of the claim and, if successful in whole or in part,
the Indemnitee also shall be entitled to be paid the expenses of prosecuting
such claim; PROVIDED, HOWEVER, that in the event of any such Action, neither the
Indemnitee nor the Indemnifying Party shall assert the defenses of statute of
limitations and laches arising for the period beginning after the date they
began negotiations hereunder as provided in the preceding sentence.
(b) Procedures for indemnification of Third Party Claims shall be as
follows:
(1) If an Indemnitee shall receive notice or otherwise learn of the
assertion by a Person (including, without limitation, any governmental entity)
who is not a party to this Agreement of any claim or of the commencement by any
such Person of any Action (a "THIRD PARTY CLAIM") with respect to which an
Indemnifying Party may be obligated to provide indemnification pursuant to
SECTION 3.05, SECTION 4.01 or SECTION 4.02 or any other Section of this
Agreement, such Indemnitee or other party shall give such Indemnifying Party
written notice thereof promptly (and in any event within 30
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calendar days) after becoming aware of such Third Party Claim; PROVIDED,
HOWEVER, that the failure of any Indemnitee to give notice as provided in
this SECTION 4.04(b)(1) shall not relieve such Indemnifying Party of its
obligations under this Article IV, except and only to the extent that such
Indemnifying Party is prejudiced by such failure to give notice. Such notice
shall describe the Third Party Claim in reasonable detail and, if
ascertainable, shall indicate the amount (estimated if necessary) of the Loss
that has been or may be sustained by such Indemnitee.
(2) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 calendar days of the
receipt of notice from an Indemnitee in accordance with SECTION 4.04(b)(1) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnifying Party shall not be liable to such Indemnitee under this
Article IV for any legal or other expenses (except expenses approved in writing
in advance by the Indemnifying Party) subsequently incurred by such Indemnitee
in connection with the defense thereof; PROVIDED, HOWEVER, that if the
defendants in any such Third Party Claim include both the Indemnifying Party and
one or more Indemnitees and in any Indemnitee's reasonable judgment a conflict
of interest between one or more of such Indemnitees and such Indemnifying Party
exists in respect of such Third Party Claim or if the Indemnifying Party shall
have assumed responsibility for such Third Party Claim with any reservations or
exceptions, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel (other than local
counsel) reasonably satisfactory to the Indemnifying Party) shall be paid by
such Indemnifying Party. If an Indemnifying Party elects not to assume
responsibility for defending a Third Party Claim, or fails to notify an
Indemnitee of its election as provided in this SECTION 4.04(b)(2), such
Indemnitee may defend or (subject to the remainder of this SECTION 4.04(b)(2))
seek to compromise or settle such Third Party Claim. Notwithstanding the
foregoing, neither an Indemnifying Party nor an Indemnitee may settle or
compromise any Third Party Claim over the objection of the other; PROVIDED,
HOWEVER, that consent to settlement or compromise shall not be unreasonably
withheld. Neither an Indemnifying Party nor an Indemnitee shall consent,
without the written approval of the Indemnitee or Indemnifying Party (as the
case may be) to entry of any judgment or enter into any settlement of any Third
Party Claim which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such Indemnitee, in the case of a consent or
settlement by an Indemnifying Party, or the Indemnifying Party, in the case of a
consent or settlement by the Indemnitee, of a written release from all
Liabilities in respect to such Third Party Claim.
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(3) If an Indemnifying Party chooses to defend or to seek to
compromise or settle any Third Party Claim, the related Indemnitee shall make
available to such Indemnifying Party any personnel or any books, records or
other documents within its control or which it otherwise has the ability to make
available that are necessary or appropriate for such defense, settlement or
compromise, and shall otherwise cooperate in the defense, settlement or
compromise of such Third Party Claim.
(4) Notwithstanding anything else in this SECTION 4.04(b) to the
contrary, if an Indemnifying Party notifies the related Indemnitee in writing of
such Indemnifying Party's desire to settle or compromise a Third Party Claim on
the basis set forth in such notice (provided that such settlement or compromise
includes as an unconditional term thereof the giving by the claimant or
plaintiff of a written release of the Indemnitee from all Liabilities in respect
thereof) and the Indemnitee shall notify the Indemnifying Party in writing that
such Indemnitee declines to accept any such settlement or compromise, such
Indemnitee may continue to contest such Third Party Claim, free of any
participation by such Indemnifying Party, at such Indemnitee's sole expense. In
such event, the obligation of such Indemnifying Party to such Indemnitee with
respect to such Third Party Claim shall be equal to (i) the costs and expenses
of such Indemnitee prior to the date such Indemnifying Party notifies such
Indemnitee of the offer to settle or compromise (to the extent such costs and
expenses are otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) the
amount of any offer of settlement or compromise which such Indemnitee declined
to accept and (B) the actual out-of-pocket amount such Indemnitee is obligated
to pay subsequent to such date as a result of such Indemnitee's continuing to
pursue such Third Party Claim.
(5) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated right
or claim.
Section 4.05 REMEDIES CUMULATIVE. The remedies provided in this
Article IV shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all other remedies
against any Indemnifying Party.
Section 4.06 SURVIVAL OF INDEMNITIES. The obligations of each of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ Operating Company under this Article IV shall
survive the sale or other transfer by it of any assets or businesses or the
assignment by
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it of any Liabilities, with respect to any Loss of the other parties related
to such assets, businesses or Liabilities.
ARTICLE V
ACCESS TO INFORMATION
Section 5.01 ACCESS TO INFORMATION. Subject to SECTION 6.02, from
and after the Distribution Date, each party hereto shall afford to each other
party and its authorized accountants, counsel and other designated
representatives (collectively, "REPRESENTATIVES") reasonable access (including
using reasonable efforts to give access to Persons possessing information) and
duplicating rights during normal business hours to all business records, books,
contracts, instruments, computer data and other data and information
(collectively, "INFORMATION") within such party's possession relating to such
other party or any subsidiary of such other party, insofar as such access is
reasonably required by such other party. Information may be requested under
this Article V for, without limitation, audit, accounting, claims, litigation
and tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the transactions contemplated
hereby.
Section 5.02 PRODUCTION OF WITNESSES. After the Distribution Date,
each of ▇▇▇▇▇▇▇ and Hussmann and their respective subsidiaries shall use
reasonable efforts to make available to the other parties and their
subsidiaries, upon written request, their present and former directors,
officers, employees and agents as witnesses to the extent that any such
individual may reasonably be required in connection with any legal,
administrative or other proceedings in which the requesting party may from time
to time be involved.
Section 5.03 RETENTION OF RECORDS. Except as otherwise required by
law or agreed to in writing, each of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ shall retain, and
shall cause its subsidiaries to retain, for a period of at least seven years
following the Distribution Date, all significant Information relating to the
business of the other parties and the other parties' subsidiaries. In addition,
after the expiration of such seven-year period, such Information shall not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such Information shall provide no less than 30 calendar days' prior written
notice to the party to which such Information relates, specifying in reasonable
detail the Information proposed to be destroyed or disposed of and (b) if a
recipient of such notice shall request in writing prior to the scheduled date
for such destruction or disposal that any of the Information proposed to be
destroyed or disposed of be delivered to such requesting party, the party
proposing the destruction or disposal shall
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promptly arrange for the delivery of such of the Information as was requested
at the expense of the party requesting such Information.
Section 5.04 CONFIDENTIALITY. Each party shall hold, and shall
cause its subsidiaries and Representatives to hold, in strict confidence, all
Information concerning the other parties in its possession or furnished by the
other parties or the other parties' Representatives pursuant to either this
Agreement or the Hussmann Tax Sharing Agreement (except to the extent that such
Information (a) is on the date hereof or hereafter becomes generally available
to the public other than as a result of a disclosure, directly or indirectly, by
such party or its Representatives or (b) was or becomes available to such party
on a nonconfidential basis prior to its disclosure to such party or its
Representatives, in each case from a source other than the party furnishing such
Information, which source was not itself bound by a confidentiality agreement
with the party furnishing such Information and had not received such
Information, directly or indirectly, from a Person so bound), and each party
shall not release or disclose such Information to any other Person, except its
auditors, attorneys, financial advisors, bankers and other consultants and
advisors, unless compelled to disclose by judicial or administrative process or,
as advised by its counsel, by other requirements of law.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.01 CORPORATE NAMES.
(a) As soon as reasonably practicable after the Distribution Date but
in any event within six months thereafter, at Hussmann's expense, Hussmann
shall, and shall cause the Hussmann Subsidiaries to, remove (or, if necessary,
on an interim basis, cover up) any and all exterior signs and other identifiers
located on any of Hussmann's or any Hussmann Subsidiary's property or premises
or on the property or premises used by any of the foregoing which refer or
pertain to ▇▇▇▇▇▇▇ or which include the ▇▇▇▇▇▇▇ name, logo or other trademark or
other ▇▇▇▇▇▇▇ intellectual property.
(b) As soon as is reasonably practicable after the Distribution Date
but in any event within 90 calendar days thereafter, at Hussmann's expense,
Hussmann shall, and shall cause the Hussmann Subsidiaries to, remove from all
letterhead, envelopes, business cards, invoices and other communications media
of any kind, all references to ▇▇▇▇▇▇▇, including the ▇▇▇▇▇▇▇ name, logo and any
other trademark or other ▇▇▇▇▇▇▇ intellectual property (except that Hussmann
shall not be required to take any such action with respect to materials in the
possession of customers), and neither
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Hussmann nor any Hussmann Subsidiary shall use or display the ▇▇▇▇▇▇▇ name,
logo or other trademarks or ▇▇▇▇▇▇▇ intellectual property without the prior
written consent of ▇▇▇▇▇▇▇.
(c) If ▇▇▇▇▇▇▇ Netherlands B.V. shall be a Subsidiary of Hussmann
on and after the Distribution Date, Hussmann shall cause said ▇▇▇▇▇▇▇
Netherlands B.V. to change its name within 90 calendar days after the
Distribution Date to a name that does not include "▇▇▇▇▇▇▇."
(d) ▇▇▇▇▇▇▇ acknowledges that it has no interest in nor any right to
use or display the Hussmann name or any Hussmann trademark or intellectual
property in any way, and shall cease any such use or display within 90 calendar
days after the Distribution Date.
Section 6.02 PRIVILEGED MATTERS. The parties hereto recognize that
legal and other professional services that have been and will be provided on and
prior to the Distribution Date have been and will be rendered for the benefit of
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ and their subsidiaries, and that each of the foregoing
should be deemed to be the client for the purposes of asserting all privileges
which may be asserted under applicable law. To allocate the interests of each
party in the Information as to which any party or any its subsidiaries is
entitled to assert a privilege, the parties agree as follows:
(a) ▇▇▇▇▇▇▇ shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged Information
which relates solely to ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary or the business of
▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, whether or not the privileged Information is
in the possession of or under the control of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ or any of their
subsidiaries. ▇▇▇▇▇▇▇ shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged Information
that relates solely to the subject matter of any claims arising out of any item
set forth on SCHEDULE B or any claims which may be asserted in the future in any
lawsuits or other proceedings (not involving Hussmann or any Hussmann
Subsidiary) initiated against or by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary, whether
or not the privileged Information is in the possession of or under the control
of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ or any of their subsidiaries.
(b) Hussmann shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged Information
which relates solely to Hussmann or any Hussmann Subsidiary or the business of
Hussmann or any Hussmann Subsidiary, whether or not the privileged Information
is in the possession of or under the control of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ or any of
their subsidiaries. Hussmann shall also be entitled, in perpetuity, to control
the assertion or waiver of all privileges in connection with privileged
Information which relates solely to the subject matter of any
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claims arising out of any item set forth on SCHEDULE C or any claims which
may be asserted in the future in any lawsuits or other proceedings (not
involving ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary) initiated against or by Hussmann
or any Hussmann Subsidiary, whether or not the privileged Information is in
the possession of or under the control of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇▇ or any of their
subsidiaries.
(c) The parties hereto agree that they shall have a shared privilege,
with equal right to assert or waive, subject to the restrictions in this SECTION
6.02, with respect to all privileges not allocated pursuant to the terms of
SECTIONS 6.02(a) and (b); PROVIDED, HOWEVER, that no party shall have a shared
privilege in connection with privileged Information that does not relate to such
party, any of its subsidiaries or their respective businesses. All privileges
relating to any claims, proceedings, litigation, disputes, or other matters
which involve ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary and/or Hussmann or any Hussmann
Subsidiary in respect of which each party retains any responsibility or
liability under this Agreement, shall be subject to a shared privilege among
them.
(d) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which any other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation as provided in
SUBSECTION (e) below. Consent shall be in writing, or shall be deemed to be
granted unless written objection is made within 20 calendar days after
written notice from the party requesting such consent.
(e) In the event of any litigation or dispute between or among the
parties hereto, any party and a subsidiary of another party hereto, or a
subsidiary of one party hereto and a subsidiary of another party hereto, either
such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party; PROVIDED, HOWEVER,
that such waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the relevant
parties and/or their subsidiaries, and shall not operate as a waiver of the
shared privilege with respect to third parties.
(f) If a dispute arises between or among the parties hereto or their
respective subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any subsidiary thereof of
any subpoena, discovery or other request which arguably calls for the production
or
-31-
disclosure of Information subject to a shared privilege or as to which
another party has the sole right hereunder to assert a privilege, or if any
party obtains knowledge that any of its or any of its subsidiaries' current or
former directors, officers, agents or employees has received any subpoena,
discovery or other requests which arguably calls for the production or
disclosure of such privileged Information, such party shall promptly notify the
other party or parties of the existence of the request and shall provide the
other party or parties a reasonable opportunity to review the Information and to
assert any rights it or they may have under this SECTION 6.02 or otherwise to
prevent the production or disclosure of such privileged Information.
(h) The furnishing and delivery of Information pursuant to this
Agreement is made in reliance on the agreement of the parties, as set forth in
SECTION 5.04, to maintain the confidentiality of confidential or privileged
Information and to assert and maintain all applicable privileges. The access to
Information being granted pursuant to SECTION 5.01, the agreement to provide
witnesses pursuant to SECTION 5.02, and the furnishing of notices and documents
and other cooperative efforts contemplated by Article IV, shall not be deemed a
waiver of any privilege that has been or may be asserted under this Agreement or
otherwise.
Section 6.03 LIMITATION ON SOLICITATION OF EMPLOYEES.
(a) ▇▇▇▇▇▇▇ agrees on behalf of itself, its subsidiaries and
Affiliates which it controls, without any separate bargained for consideration,
but rather as an integral part of the Distribution provided for in this
Agreement, that it shall not directly or indirectly, through a subsidiary or
otherwise, until one year after the Distribution Date, employ or attempt to
employ any Hussmann Separated Employee or induce or attempt to induce any
Hussmann Separated Employee to leave his or her employment.
(b) Hussmann agrees on behalf of itself, its subsidiaries and
Affiliates which it controls, without any separate bargained for consideration,
but rather as an integral part of the Distribution provided for in this
Agreement, that it shall not directly or indirectly, through a subsidiary or
otherwise, until one year after the Distribution Date, employ or attempt to
employ any employee of ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary or induce or attempt to
induce any employee of ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇ Subsidiary to leave his or her
employment.
(c) The parties agree and acknowledge that the restrictions contained
in this SECTION 6.03 are reasonable in scope and duration and are necessary to
protect the other party hereto.
Section 6.04 EXPENSES. Except as otherwise set forth in this
Agreement, all costs and expenses arising on or prior to the Distribution Date
(whether or not then payable) in connection with the Distribution shall be paid
by ▇▇▇▇▇▇▇ to the extent that
-32-
appropriate documentation concerning such costs and expenses shall be
provided to ▇▇▇▇▇▇▇, other than (1) costs incurred in connection with any
financing arrangements entered into by Hussmann or any of its subsidiaries,
(2) listing fees of any national securities exchange or fees of the National
Association of Securities Dealers, Inc. incurred with respect to listing or
quoting the Hussmann Common Stock, (3) fees charged by rating agencies for
rating Hussmann securities, (4) one-third of the legal fees and expenses of
Sidley & Austin and ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, (5) one-half of the fees and
expenses of KPMG Peat Marwick which directly relate to the Distribution, (6)
the fees and expenses of any outside consultant retained by Hussmann or
Hussmann Operating Company, (7) costs incurred in printing and engraving the
stock certificates of Hussmann, and (8) one-third of the cost of printing and
distributing the Hussmann Form 10, the Information Statement and related
documents, all of which shall be paid by Hussmann and Hussmann Operating
Company, whether invoiced by ▇▇▇▇▇▇▇ before or after the Distribution Date.
Section 6.05 FURTHER ASSURANCES. From time to time after the
Distribution Date, each party shall do, execute and deliver, or cause to be
done, executed and delivered, to another party hereto, or its successors and
assigns, all such further acts, deeds, assignments, powers of attorney and
other instruments of conveyance and transfer as such party may reasonably
request as may be necessary to consummate the Distribution and the
transactions contemplated hereby, including filings with, and obtaining the
approval of, any governmental body.
Section 6.06 QUALIFICATION AS TAX-FREE DISTRIBUTION.
(a) After the Distribution Date, neither ▇▇▇▇▇▇▇ nor Hussmann shall
take, or permit any of its subsidiaries to take, any action which could
reasonably be expected to prevent the Distribution from qualifying as a tax-free
distribution within the meaning of Section 355 of the Code or any other
transaction contemplated by this Agreement which is intended by the parties to
be tax-free from failing so to qualify.
(b) After the Distribution Date, ▇▇▇▇▇▇▇ shall not, nor cause or
permit, any ▇▇▇▇▇▇▇ Subsidiary to take any action or enter into any transaction
which could reasonably be expected to materially adversely impact the expected
tax consequences to Hussmann which are known to ▇▇▇▇▇▇▇ of any transaction
contemplated by this Agreement; PROVIDED, HOWEVER, nothing in this SECTION
6.06(b) shall prohibit ▇▇▇▇▇▇▇ from taking any action, or entering into any
transaction (or permitting or causing any ▇▇▇▇▇▇▇ Subsidiary so to act or
enter), in the ordinary course of business or in connection with the settlement
of any audit issue or the filing of any tax return. After the Distribution
Date, Hussmann shall not, nor cause or permit, any Hussmann Subsidiary to take
any action or enter into any transaction which could reasonably be expected to
materially adversely impact the reasonably expected tax consequences to ▇▇▇▇▇▇▇
which are known to Hussmann of any transaction contemplated by this
-33-
Agreement; PROVIDED, HOWEVER, nothing in this SECTION 6.06(b) shall prohibit
Hussmann from taking any action, or entering into any transaction (or
permitting or causing any Hussmann Subsidiary so to act or enter) in the
ordinary course of business or in connection with the settlement of any audit
issue or the filing of any tax return.
Section 6.07 INSURANCE COVERAGE LITIGATION. Hussmann Operating
Company together with ▇▇▇▇▇▇▇ and its former subsidiaries, Pneumo Abex
Corporation ("PNEUMO ABEX") and ▇▇▇▇▇▇-▇▇▇▇▇ Corporation, are co-plaintiffs in
an environmental coverage lawsuit filed in 1992 in the Superior Court of the
State of California, County of Los Angeles, entitled ▇▇▇▇▇▇-▇▇▇▇▇ CORPORATION V.
ALLIANZ INSURANCE CO., ET AL., Case No. BC069018 (the "ENVIRONMENTAL COVERAGE
LITIGATION"). The Environmental Coverage Litigation seeks recovery for
environmental liabilities at numerous sites involving present or former
Subsidiaries or Affiliates of ▇▇▇▇▇▇▇, including one or more sites attributable
to Hussmann Operating Company or any Subsidiary of Hussmann. Hussmann and
Hussmann Operating Company agree that, from and after the Distribution Date,
they will continue to cooperate at their expense in the prosecution by ▇▇▇▇▇▇▇
and Pneumo Abex of the Environmental Coverage Litigation to the extent
reasonably requested by ▇▇▇▇▇▇▇ and/or Pneumo Abex, which cooperation will
include but not be limited to the production of documents and the furnishing of
testimony. Such cooperation shall extend to any other insurance coverage action
to which ▇▇▇▇▇▇▇ may be a party and involving any present or former properties
or activities of Hussmann Operating Company or Hussmann Subsidiaries which are
not currently part of the Environmental Coverage Litigation. In exchange for
such cooperation, ▇▇▇▇▇▇▇ agrees to pay to Hussmann Operating Company any
insurance proceeds it may receive in settlement of those claims pertaining to
Hussmann properties and activities, net of attorneys' fees and other reasonable
costs and expenses incurred by ▇▇▇▇▇▇▇ in prosecuting or defending the same.
ARTICLE VII
MISCELLANEOUS
Section 7.01 COMPLETE AGREEMENT; CONFLICT WITH HUSSMANN TAX SHARING
AGREEMENT. This Agreement and the Hussmann Tax Sharing Agreement, including any
schedules and exhibits hereto or thereto, and other agreements and documents
referred to herein, shall constitute the entire agreement between the parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there shall be a conflict between the provisions of
this Agreement and the Hussmann Tax Sharing Agreement, the provisions of the
Hussmann Tax Sharing Agreement shall control.
-34-
Section 7.02 SURVIVAL OF AGREEMENTS. Except as otherwise
specifically contemplated by this Agreement, all covenants and agreements of the
parties contained in this Agreement shall survive the Distribution Date.
Section 7.03 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of laws thereof.
Section 7.04 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be delivered by
hand, mailed by registered or certified mail (postage prepaid and return receipt
requested) or sent by telecopy (confirmed by regular, first-class mail, postage
prepaid) to the parties at the following addresses (or at such other addresses
for a party as shall be specified by like notice) and shall be deemed given on
the date on which such notice is received:
if to ▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
if to Hussmann or Hussmann Operating Company:
Hussmann International, Inc.
▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Section 7.05 AMENDMENTS. This Agreement may not be modified or
amended except by an agreement in writing signed by each of the parties.
Section 7.06 SUCCESSORS AND ASSIGNS. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. No party may assign its
respective rights or delegate its respective obligations under this Agreement
without the express prior written consent of the other parties hereto.
Section 7.07 TERMINATION. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Distribution Date by and in the
sole discretion of the ▇▇▇▇▇▇▇ Board without the approval of either Hussmann or
of ▇▇▇▇▇▇▇'▇ shareholders. In the event of such termination, no party shall
have any Liabilities of any kind to any other party on account of such
termination except that
-35-
expenses incurred in connection with the transactions contemplated hereby
shall be paid as provided in SECTION 6.04.
Section 7.08 NO THIRD PARTY BENEFICIARIES. Except for the provisions
of SECTION 3.03, SECTION 3.05 and ARTICLE IV relating to Indemnitees, this
Agreement is solely for the benefit of the parties hereto and their respective
Affiliates and should not be deemed to confer upon third parties (including any
employee of ▇▇▇▇▇▇▇, any ▇▇▇▇▇▇▇ Subsidiary, Hussmann or any Hussmann
Subsidiary) any remedy, claim, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.
Section 7.09 TITLES AND HEADINGS. Titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be part of or to affect the meaning or interpretation of this Agreement.
Section 7.10 SEVERABILITY. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions 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 such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.
Section 7.11 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 to specific performance and injunctive or other equitable
relief of its 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. Any requirements for the securing or
posting of any bond with such remedy are waived.
Section 7.12 WAIVERS. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. Any such waiver shall be validly and
sufficiently authorized for the purposes of this Agreement if, as to any party,
it is authorized in writing by an authorized representative of such party. The
failure of any party hereto to enforce at any time any provision of this
Agreement shall not be construed to be a waiver of such
-36-
provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.
Section 7.13 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be considered an original
instrument, but all of which shall be considered one and the same agreement, and
shall become binding when such counterparts have been signed by each of the
parties hereto and delivered to each of the other parties hereto.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
▇▇▇▇▇▇▇ CORPORATION
By: ___________________
Name:
Title:
HUSSMANN INTERNATIONAL, INC.
By: ___________________
Name:
Title:
HUSSMANN CORPORATION
By: ___________________
Name:
Title:
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SCHEDULE A
HUSSMANN LIMITS OF LIABILITY
POLICY PERIOD LIMITS OF LIABILITY
4/1/79 - 4/1/80 50% of the first $250,000 each and every
loss, all lines
4/1/80 - 4/1/81 50% of the first $250,000 each and every
loss, all lines*
4/1/81 - 4/1/82 $250,000 each and every loss, all lines*
4/1/82 - 4/1/83 50% of the first $250,000 each and every
loss, all lines*
4/1/83 - 4/1/84 $250,000 each and every loss, all lines*
4/1/84 - 4/1/85 $250,000 each and every loss, all lines*
4/1/85 - 4/1/86 $500,000 each and every loss, General
Liability
$250,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/86 - 4/1/87 $2,000,000 each and every loss, General
Liability
$500,000 each and every loss, Automobile
Liability
$250,000 each and every loss,
Workers' Compensation
4/1/87 - 4/1/88 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/88 - 4/1/89 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
A-1
4/1/89 - 4/1/90 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/90 - 4/1/91 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/91 - 4/1/92 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/92 - 4/1/93 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/93 - 4/1/94 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/94 - 4/1/95 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/95 - 4/1/96 $2,000,000 each and every loss, General
Liability
$1,000,000 each and every loss, Workers'
Compensation and Automobile Liability
4/1/96 - 4/1/97 $2,000,000 each and every loss, General
Liability, Workers' Compensation and
Automobile Liability
4/1/97 - Distribution Date $2,000,000 each and every loss, General
Liability, Workers' Compensation and
Automobile Liability
A-2
4/1/94 - 4/1/95 $900,000 excess of a $100,000 deductible per
occurrence with an overall aggregate of
$2,000,000 on a Claims made basis, Employment
Practices Liability Coverage.
4/1/95 - 4/1/96 $900,000 excess of a $100,000 deductible per
occurrence with an overall aggregate of
$2,000,000 on a Claims made basis, Employment
Practices Liability Coverage.
4/1/96 - 4/1/97 $900,000 excess of a $100,000 deductible per
occurrence with an overall aggregate of
$2,000,000 on a Claims made basis, Employment
Practices Liability Coverage.
4/1/97 - Distribution Date $900,000 excess of a $100,000 deductible
per occurrence with an overall aggregate
of $2,000,000 on a Claims made basis,
Employment Practices Liability Coverage.
4/1/96 - 4/1/97 $25,000 per occurrence less underlying
deductible for non - U.S. and Canadian
exposures of General Liability.
Underlying Deductibles:
U.K. $10,000
Mexico $10,000
Elsewhere $ 4,500
4/1/97 - Distribution Date $25,000 per occurrence less underlying
deductible for non - U.S. and Canadian
exposures of General Liability.
Underlying Deductibles:
U.K. $10,000
Mexico $10,000
Elsewhere $ 4,500
7/1/96 - 7/1/97 $100,000 per occurrence less underlying
deductible for non - U.S. and Canadian
exposures of $25,000 for All Risk Property
Insurance
*General Liability (including Products Liability), Automobile Liability and
Workers' Compensation.
A-3
SCHEDULE B
▇▇▇▇▇▇▇ INDEMNIFICATION OF HUSSMANN INDEMNITEES
Items with respect to which ▇▇▇▇▇▇▇ will indemnify the Hussmann
Indemnitees in accordance with SECTION 4.01 of this Agreement:
(1) All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by ▇▇▇▇▇▇▇ (whether directly or through a
subsidiary or Affiliate of ▇▇▇▇▇▇▇), the ▇▇▇▇▇▇▇ Subsidiaries, and any
previously-owned division, subsidiary or Affiliate of ▇▇▇▇▇▇▇, whether such
Losses relate to events occurring, or whether such Losses are asserted, before,
on or after the Distribution Date; PROVIDED, HOWEVER, that ▇▇▇▇▇▇▇ shall not be
liable for Losses arising out of (i) the businesses conducted (formerly or
currently) or to be conducted by Hussmann or Hussmann Operating Company (whether
directly or through a subsidiary or Affiliate of Hussmann or Hussmann Operating
Company), the Hussmann Subsidiaries or any previously-owned division, subsidiary
or Affiliate of Hussmann or Hussmann Operating Company; and PROVIDED, FURTHER,
that, except as set forth in SUBSECTION (3) below, ▇▇▇▇▇▇▇ shall be liable for
Losses arising out of the businesses of ▇▇▇▇▇▇▇ that are otherwise not related
to the business of Hussmann.
(2) All Losses arising out of or based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading, with respect to all information set forth in the Information
Statement or any supplement thereto (i) on the cover page of the Information
Statement and in the body of the Information Statement under the headings (a)
"Summary - The Distribution," (b) "Summary -Midas," (c) "Introduction," (d)
"The Distribution" and (e) any information derived from such information and
(ii) in Annex A and Annex C of the Information Statement.
(3) All Losses arising out of any Action brought by shareholders of
▇▇▇▇▇▇▇ or Hussmann because the Distribution is or becomes taxable to such
shareholders for any reason other than as a result of the occurrence of a
transaction on or after the Distribution Date involving either the stock or
assets (or any combination thereof) of Hussmann or any Hussmann Subsidiary or a
breach by Hussmann or Hussmann Operating Company of the Hussmann Tax Sharing
Agreement.
(4) All Losses arising out of any breach by ▇▇▇▇▇▇▇ or any ▇▇▇▇▇▇▇
Subsidiary of this Agreement or the Hussmann Tax Sharing Agreement.
B-1
SCHEDULE C
HUSSMANN AND HUSSMANN OPERATING COMPANY INDEMNIFICATION OF ▇▇▇▇▇▇▇ INDEMNITEES
Items with respect to which Hussmann and Hussmann Operating Company
will indemnify the ▇▇▇▇▇▇▇ Indemnitees in accordance with SECTION 4.02 of this
Agreement:
(1) All Losses arising out of the businesses conducted (formerly or
currently) or to be conducted by Hussmann or Hussmann Operating Company (whether
directly or through a subsidiary or Affiliate of Hussmann or Hussmann Operating
Company), the Hussmann Subsidiaries and any previously-owned division,
subsidiary or Affiliate of Hussmann or Hussmann Operating Company, whether such
Losses relate to events occurring, or whether such Losses are asserted, before,
on or after the Distribution Date.
(2) All Losses arising out of or based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading, with
respect to all information set forth in the Information Statement or any
supplement thereto, except for information with respect to which ▇▇▇▇▇▇▇ will
indemnify the Hussmann Indemnitees as set forth in Paragraph (2) of SCHEDULE B
of this Agreement.
(3) All Losses arising out of any Action brought by shareholders of
▇▇▇▇▇▇▇ or Hussmann because the Distribution is or becomes taxable to such
shareholders as a result of the occurrence of a transaction on or after the
Distribution Date involving either the stock or assets (or any combination
thereof) of Hussmann or any Hussmann Subsidiary or a breach by Hussmann or
Hussmann Operating Company of the Hussmann Tax Sharing Agreement.
(4) All Losses arising out of any breach by Hussmann or Hussmann
Operating Company of this Agreement or the Hussmann Tax Sharing Agreement.
C-1