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Exhibit 10.3
FORM OF EMPLOYEE BENEFITS AGREEMENT
BETWEEN
ALLEGHENY TELEDYNE INCORPORATED
AND
WATER PIK TECHNOLOGIES, INC.
DATED AS OF _______________, 1999
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INDEX
ARTICLE I DEFINITIONS ........................................................................................... 1
ARTICLE II GENERAL PRINCIPLES ................................................................................... 6
2.1 ASSUMPTION OF LIABILITIES ................................................................................ 6
2.2 ESTABLISHMENT OF WATER PIK PLANS ......................................................................... 6
2.3 TERMS OF PARTICIPATION BY WATER PIK INDIVIDUALS IN WATER PIK PLANS ....................................... 7
ARTICLE III DEFINED BENEFIT PLANS ............................................................................... 8
3.1 FREEZING OF PENSION PLAN BENEFITS ........................................................................ 8
3.2 CREDITING SERVICE UNDER ATI'S PENSION PLAN ............................................................... 8
ARTICLE IV DEFINED CONTRIBUTION PLANS ........................................................................... 9
4.1 401(k) PLAN .............................................................................................. 9
ARTICLE V HEALTH AND WELFARE PLANS .............................................................................. 11
5.1 ASSUMPTION OF HEALTH AND WELFARE PLAN LIABILITIES ........................................................ 11
5.2 VENDOR CONTRACTS ......................................................................................... 11
5.3 PROCEDURES FOR AMENDMENTS TO PLANS, PLAN DESIGNS, ADMINISTRATIVE PRACTICES, AND VENDOR CONTRACTS ......... 13
5.4 ATI SICKNESS AND ACCIDENT, LONG TERM DISABILITY AND PENSION DISABILITY BENEFITS .......................... 14
5.5 POST-RETIREMENT HEALTH AND LIFE INSURANCE BENEFITS ....................................................... 14
5.6 COBRA AND DIRECT PAY ..................................................................................... 14
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5.7 POST-DISTRIBUTION TRANSITIONAL ARRANGEMENTS .............................................................. 14
5.8 APPLICATION OF ARTICLE V TO WATER PIK ENTITIES ........................................................... 15
ARTICLE VI EXECUTIVE BENEFITS AND NON-EMPLOYEE DIRECTOR BENEFITS ................................................ 15
6.1 ASSUMPTION OF OBLIGATIONS ................................................................................ 15
6.2 CONSENTS AND NOTIFICATIONS ............................................................................... 15
6.3 ATI 1999 BONUS PLAN ...................................................................................... 16
6.4 ATI INCENTIVE PLANS ...................................................................................... 16
6.5 ATI NONQUALIFIED DEFERRED COMPENSATION PROGRAMS .......................................................... 18
6.6 NON-EMPLOYEE DIRECTOR BENEFITS ........................................................................... 19
6.7 CONFIDENTIALITY AND PROPRIETARY INFORMATION .............................................................. 19
ARTICLE VII GENERAL AND ADMINISTRATIVE .......................................................................... 19
7.1 INTERIM SERVICES AGREEMENT ............................................................................... 19
7.2 PAYMENT OF LIABILITIES, PLAN EXPENSES AND RELATED MATTERS ................................................ 19
7.3 SHARING OF PARTICIPANT INFORMATION ....................................................................... 20
7.4 REPORTING AND DISCLOSURE AND COMMUNICATIONS TO PARTICIPANTS .............................................. 20
7.5 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES .............................................. 21
7.6 BENEFICIARY DESIGNATIONS ................................................................................. 22
7.7 REQUESTS FOR IRS RULINGS AND DOL OPINIONS ................................................................ 22
7.8 FIDUCIARY MATTERS ........................................................................................ 22
7.9 COLLECTIVE BARGAINING .................................................................................... 22
7.10 CONSENT OF THIRD PARTIES ................................................................................ 22
7.11 INDEMNIFICATION OF ATI .................................................................................. 23
ARTICLE VIII MISCELLANEOUS ...................................................................................... 23
8.1 FOREIGN PLANS ............................................................................................ 23
8.2 EFFECT IF DISTRIBUTION DOES NOT OCCUR .................................................................... 23
8.3 RELATIONSHIP OF PARTIES .................................................................................. 23
8.4 AFFILIATES ............................................................................................... 23
8.5 COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER .......................................................... 24
8.6 GOVERNING LAW; CONSENT TO JURISDICTION ................................................................... 24
8.7 ASSIGNABILITY ............................................................................................ 25
8.8 THIRD PARTY BENEFICIARIES ................................................................................ 25
8.9 NOTICES .................................................................................................. 25
8.10 SEVERABILITY ............................................................................................ 26
8.11 FORCE MAJEURE ........................................................................................... 26
8.12 HEADINGS ................................................................................................ 26
8.13 WAIVERS OF DEFAULT ...................................................................................... 26
8.14 SPECIFIC PERFORMANCE .................................................................................... 26
8.15 AMENDMENTS .............................................................................................. 27
8.16 INTERPRETATION .......................................................................................... 27
8.17 DISPUTES ................................................................................................ 27
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EMPLOYEE BENEFITS AGREEMENT
_____________ , 1999
The parties to this Employee Benefits Agreement, dated as of the date
written above, are Allegheny Teledyne Incorporated, a Delaware corporation
("ATI"), and Water Pik Technologies, Inc., a Delaware corporation ("Water Pik").
Capitalized terms used herein (other than the formal names of ATI Plans (as
defined below) and related trusts of ATI) and not otherwise defined shall have
the respective meanings assigned to them in Article I hereof or as assigned to
them in the Separation and Distribution Agreement (as defined below).
WHEREAS, the Board of Directors of ATI has determined that it is in the
best interests of ATI and its stockholders to separate ATI's consumer products
businesses into an independent business entity;
WHEREAS, in furtherance of the foregoing, ATI and Water Pik have
entered into a Separation and Distribution Agreement, dated as of the date
hereof (the "Separation and Distribution Agreement"), and certain other
agreements that will govern certain matters relating to the Separation, the
Distribution and the relationship of ATI and Water Pik, and their respective
Subsidiaries following the Distribution; and
WHEREAS, pursuant to the Separation and Distribution Agreement, ATI and
Water Pik have agreed to enter into this agreement allocating assets,
liabilities and responsibilities with respect to certain employee compensation
and benefit plans and programs between them.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement the following terms shall have the
following meanings:
1.1 Agreement means this Employee Benefits Agreement, including all the
Schedules and Exhibits hereto.
1.2 ASO Contract is defined in Section 5.2(a)(i).
1.3 ATI Entity means any entity that is, at the relevant time, an
Affiliate of ATI, except that, for periods beginning Immediately After the
Distribution Date, the term "ATI Entity" shall not include Water Pik or a Water
Pik Entity.
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1.4 ATI Executive means an employee or former employee of ATI, an ATI
Entity, Water Pik or a Water Pik Entity, who immediately before the Close of the
Distribution Date is eligible to participate in or receive a benefit under any
ATI Executive Benefit Plan.
1.5 ATI Master Pension Trust means the master trust under which the
assets of the ATI Pension Plan are held.
1.6 ATI Pension Plan means the Allegheny Teledyne Incorporated Pension
Plan.
1.7 ATI Stock Value means the average of the daily high and low
per-share trading prices of the ATI Common Stock as listed on the NYSE during
each of the twenty trading days immediately prior to the Distribution Date.
1.8 Award means an award under the Incentive Plan, including
Performance Awards and SARP Awards. When immediately preceded by "ATI," the term
Award (including the term Performance Award or SARP Award) means an award under
the ATI Incentive Plan. When immediately preceded by "Water Pik," the term Award
(including the term Performance Award or SARP Award) means an award under the
Water Pik Incentive Plan.
1.9 Benefit Liabilities means any Liabilities (as defined in the
Separation and Distribution Agreement) relating to any contributions,
compensation or other benefits accrued or payable under any profit sharing,
pension, savings, deferred compensation, fringe benefit, insurance, medical,
medical reimbursement, life, disability, accident, post-retirement health or
welfare benefit, stock option, stock purchase, sick pay, vacation, employment,
severance, termination or other compensation or benefit plan, agreement,
contract, policy, trust fund or arrangement.
1.10 Change is defined in Section 5.3(b)(i).
1.11 Close of the Distribution Date means 5:00 P.M., Eastern Standard
Time or Eastern Daylight Time (whichever shall then be in effect), on the
Distribution Date.
1.12 COBRA means the continuation coverage requirements for "group
health plans" under Title X of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, and as codified in Code Section 4980B and ERISA
Sections 601 through 608.
1.13 Code means the Internal Revenue Code of 1986, as amended.
Reference to a specific Code provision also includes any proposed, temporary, or
final regulation in force under that provision.
1.14 Corporate-Owned Life Insurance Policies means the life insurance
policies owned by ATI insuring the lives of certain ATI Executives and certain
other highly compensated employees of ATI or an ATI Entity.
1.15 DOL means the United States Department of Labor.
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1.16 ERISA means the Employee Retirement Income Security Act of 1974,
as amended. Reference to a specific provision of ERISA also includes any
proposed, temporary, or final regulation in force under that provision.
1.17 Executive Benefit Plans, when immediately preceded by "ATI," means
the executive benefit plans, programs, and arrangements established, maintained,
agreed upon, or assumed by ATI or an ATI Entity for the benefit of employees and
former employees of ATI or an ATI Entity before the Close of the Distribution
Date as listed in Schedule 1.17. When immediately preceded by "Water Pik,"
Executive Benefit Plans means the executive benefit plans and programs to be
established by Water Pik pursuant to Section 2.2 that correspond to the
respective ATI Executive Benefit Plans.
1.18 Foreign Plan means a Plan maintained by ATI, an ATI Entity, Water
Pik, or a Water Pik Entity for the benefit of employees outside the U.S.
1.19 Group Insurance Policies is defined in Section 5.2(b)(i).
1.20 HCRA Plan, when immediately preceded by "ATI," means the ATI
Health Care Reimbursement Account Plan. When immediately preceded by "Water
Pik," HCRA Plan means the Health Care Reimbursement Account Plan to be
established by Water Pik pursuant to Section 2.2.
1.21 Health and Welfare Plans, when immediately preceded by "ATI,"
means the health and welfare plans listed on Schedule 1.21 established and
maintained by ATI for the benefit of employees and retirees of ATI and certain
ATI Entities, and such other welfare plans or programs as may apply to such
employees and retirees of ATI or an ATI Entity before the Close of the
Distribution Date. When immediately preceded by "Water Pik," Health and Welfare
Plans means the health and welfare plans to be established by Water Pik pursuant
to Section 2.2 that correspond to the respective ATI Health and Welfare Plans.
1.22 HMO means a health maintenance organization that provides benefits
under one or more of the ATI Health and Welfare Plans or the Water Pik Health
and Welfare Plans.
1.23 HMO Agreements is defined in Section 5.2(c)(i).
1.24 Immediately After the Distribution Date means 5:01 P.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the Distribution Date.
1.25 Incentive Plan, when immediately preceded by "ATI," means any of
the Allegheny Teledyne Incorporated 1996 Incentive Plan, any predecessor
Incentive Plan thereto and any other stock-based incentive plans assumed by ATI
by reason of merger, combination, acquisition or otherwise. When immediately
preceded by "Water Pik," Incentive Plan means the Incentive Plan to be
established by Water Pik pursuant to Section 2.2.
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1.26 IRS means the Internal Revenue Service.
1.27 Material Feature means any feature of a Plan that could reasonably
be expected to be of material importance to the sponsoring employer or the
participants and beneficiaries of the Plan, which could include, depending on
the type and purpose of the particular Plan, the class or classes of employees
eligible to participate in such Plan, the nature, type, form, source, and level
of benefits provided by the employer under such Plan and the amount or level of
contributions, if any, required to be made by participants (or their dependents
or beneficiaries) to or under such Plan.
1.28 Non-Employee Director, when immediately preceded by "ATI," means a
member of ATI's Board of Directors who is not an employee of ATI or an ATI
Entity. When immediately preceded by "Water Pik," Non-Employee Director means a
member of Water Pik's Board of Directors who is not an employee of ATI, an ATI
Entity, Water Pik or a Water Pik Entity.
1.29 Non-Employee Director Plans, when immediately preceded by "ATI,"
means the Allegheny Teledyne Incorporated 1996 Non-Employee Director Stock
Compensation Plan and the Allegheny Teledyne Incorporated Fee Continuation Plan
for Non-Employee Directors. When immediately preceded by "Water Pik,"
Non-Employee Director Plans means the plans and programs to be established by
Water Pik pursuant to Section 2.2 that correspond to the ATI Non-Employee
Director Plans.
1.30 Nonqualified Deferred Compensation Programs, when immediately
preceded by "ATI," means the Allegheny Teledyne Incorporated Executive Deferred
Compensation Plan, the Allegheny Teledyne Incorporated Supplemental Pension Plan
and the Teledyne, Inc. Pension Equalization Plan. When immediately preceded by
"Water Pik," Deferral Plan means the Executive Deferred Compensation Plan to be
established by Water Pik pursuant to Section 2.2.
1.31 Option, when immediately preceded by "ATI," means an option to
purchase ATI Common Stock and, when immediately preceded by "Water Pik," Option
means an option to purchase Water Pik Common Stock, in each case pursuant to an
Incentive Plan.
1.32 PBGC means the Pension Benefit Guaranty Corporation.
1.33 Performance Award means any Award granted pursuant to the terms of
the Performance Share Program.
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1.34 Performance Share Program means the Allegheny Teledyne
Incorporated Performance Share Program adopted pursuant to Administrative Rules
under the ATI Incentive Plan.
1.35 Plan, when immediately preceded by "ATI" or "Water Pik," means any
plan, policy, program, payroll practice, on-going arrangement, contract, trust,
insurance policy or other agreement or funding vehicle providing benefits to
employees, former employees or Non-Employee Directors of ATI or an ATI Entity,
or Water Pik or a Water Pik Entity, as applicable.
1.36 Ratio means the amount obtained by dividing the ATI Stock Value by
the Water Pik Stock Value.
1.37 Reasonable Efforts means such acts or actions that, in the
reasonable good faith opinion of the party taking such acts or actions, are
calculated to achieve, or otherwise further, the applicable provisions to which
the term applies; provided, however, to the extent any costs, fees or other
expenditures (the "Expenses") occur as a result of a party's use of Reasonable
Efforts and such expenses are not expressly allocated under the terms of this
Agreement or any Ancillary Agreement, such Expenses shall be borne by the party
for whose benefit such Expenses are incurred and such party shall indemnify and
hold harmless the other party with respect to such Expenses.
1.38 SARP, when immediately preceded by "ATI," means the Allegheny
Teledyne Incorporated Stock Acquisition and Retention Program.
1.39 SARP Award means any Award granted pursuant to the terms of the
SARP.
1.40 Separation and Distribution Agreement is defined in the third
paragraph of the preamble of this Agreement.
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1.41 Stock Purchase Plan, when immediately preceded by "ATI," means the
Allegheny Teledyne Incorporated Employee Stock Purchase Plan. When immediately
preceded by "Water Pik," Stock Purchase Plan means the employee stock purchase
plan to be established by Water Pik pursuant to Section 2.2.
1.42 Teledyne means Teledyne, Inc., a Delaware corporation, or its
successors and assigns.
1.43 Teledyne 401(k) Plan means the Teledyne, Inc. 401(k) Plan.
1.44 Water Pik Entity means any Person that is, at the relevant time,
a Subsidiary of Water Pik or is otherwise controlled, directly or indirectly,
by Water Pik.
1.45 Water Pik 401(k) Plan means the 401(k) plan established by Water
Pik effective no later than April 1, 2000 pursuant to Section 2.2.
1.46 Water Pik Individual means any individual who, Immediately After
the Distribution Date, is an active hourly or salaried employee of Water Pik or
a Water Pik Entity.
1.47 Water Pik Stock Value means the average of the daily high and low
per-share trading prices of the Water Pik Common Stock during each of the
twenty trading days Immediately After the Distribution Date.
ARTICLE II
GENERAL PRINCIPLES
2.1 ASSUMPTION OF LIABILITIES. Except as otherwise expressly provided
in Section 3.1 or Article VI, Water Pik hereby assumes and agrees to pay,
perform, fulfill and discharge, in accordance with their respective terms, all
of the following (regardless of when or where such Benefit Liabilities arose or
arise or were or are incurred): (i) all Benefit Liabilities to or relating to
Water Pik Individuals, and their respective dependents and beneficiaries, in
each case relating to, arising out of or resulting from employment by ATI or an
ATI Entity before the Distribution Date (including Benefit Liabilities under ATI
Plans and Water Pik Plans); (ii) all other Benefit Liabilities to or relating to
Water Pik Individuals and other employees of Water Pik or a Water Pik Entity,
and their dependents and beneficiaries, to the extent relating to, arising out
of or resulting from future, present or former employment with Water Pik or a
Water Pik Entity (including Benefit Liabilities under ATI Plans and Water Pik
Plans); (iii) all Benefit Liabilities relating to, arising out of or resulting
from any other actual or alleged employment relationship with Water Pik or a
Water Pik Entity; (iv) all Benefit Liabilities relating to, arising out of or
resulting from the imposition of withdrawal liability under Subtitle E of Title
IV of ERISA as a result of a complete or partial withdrawal of any ATI Entity
from a "multiemployer plan" within the meaning of ERISA Section 4021 which
occurs solely as a result of the Separation or the Distribution; and (v) all
other Benefit Liabilities relating to, arising out of or resulting from
obligations, liabilities and responsibilities expressly assumed or retained by
Water Pik, a Water Pik Entity, or a Water Pik Plan pursuant to this Agreement.
Notwithstanding the generality of the foregoing, Water Pik does not assume or
agree to pay, perform, fulfill or discharge any Benefit Liabilities relating to,
arising out of or resulting from the Teledyne Savings and Retirement Supplement
Plan.
2.2 ESTABLISHMENT OF WATER PIK PLANS. Effective prior to or within a
reasonable time after the Distribution Date, Water Pik shall adopt, or cause to
be adopted, the amended Teledyne 401(k) Plan for the period between the
Distribution Date and April 1, 2000, the Water Pik Stock Purchase Plan, the
Water Pik Health and Welfare Plans, and the Water Pik Executive Benefit Plans
for the benefit of the Water Pik Individuals and other current and future
employees of Water Pik and the Water Pik Entities; provided, however, that Water
Pik may, in its sole discretion, elect not to adopt or establish the Plan or
Plans listed in Schedule 2.2(a). Subject to the provisions of
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Section 4.1 regarding the Water Pik 401(k) Plan, or as otherwise may be set
forth in Schedule 2.2(b), the foregoing Water Pik Plans shall be substantially
identical in all Material Features to the corresponding ATI Plans as in effect
as of the Close of the Distribution Date. Effective prior to or within a
reasonable time after the Distribution Date, Water Pik shall adopt, or cause to
be adopted, the Water Pik Non-Employee Director Plans, for the benefit of Water
Pik Non-Employee Directors. The Water Pik Non-Employee Director Plans shall be
substantially similar in all Material Features to the corresponding ATI
Non-Employee Director Plans as in effect on the Distribution Date. No later than
April 1, 2000, Water Pik shall adopt the Water Pik 401(k) Plan and its related
trust, which Water Pik 401(k) Plan shall provide for employer contributions,
independent of employee contributions and expressed as a rate of participant
compensation, determined appropriate by Water Pik in its sole discretion in
light of Water Pik's choice not to sponsor a defined benefit plan.
2.3 TERMS OF PARTICIPATION BY WATER PIK INDIVIDUALS IN WATER PIK PLANS.
The Water Pik Plans shall be, with respect to Water Pik Individuals, in all
respects the successors in interest to, and shall not provide benefits that
duplicate benefits provided by, the corresponding ATI Plans. ATI and Water Pik
shall agree on methods and procedures, including amending the respective Plan
documents and/or requesting approvals or consents of Water Pik Individuals where
the parties deem appropriate, to prevent Water Pik Individuals from receiving
duplicative benefits from the ATI Plans and the Water Pik Plans. With respect to
Water Pik Individuals, each Water Pik Plan shall provide that all service, all
compensation and all other benefit-affecting determinations that, as of the
Close of the Distribution Date, were recognized under the corresponding ATI Plan
shall, as of Immediately After the Distribution Date, receive full recognition,
credit, and validity and be taken into account under such Water Pik Plan to the
same extent as if such items occurred under such Water Pik Plan, except to the
extent that duplication of benefits would result. The provisions of this
Agreement for the transfer of assets from certain trusts relating to ATI Plans
(including Foreign Plans) to the corresponding trusts relating to Water Pik
Plans (including Foreign Plans) are based upon the understanding of the parties
that each such Water Pik Plan will assume all Benefit Liabilities of the
corresponding ATI Plan to or relating to Water Pik Individuals, as provided for
herein. If any such Benefit Liabilities are not effectively assumed by the
appropriate Water Pik Plan, then the amount of assets transferred to the trust
relating to such Water Pik Plan from the trust relating to the corresponding ATI
Plan shall be recomputed as set forth below, but taking into account the
retention of such Benefit Liabilities by such ATI Plan, and assets shall be
transferred by the trust relating to such Water Pik Plan to the trust relating
to such ATI Plan so as to place each such trust in the position it would have
been in, had the initial asset transfer been made in accordance with such
recomputed amount of assets.
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ARTICLE III
DEFINED BENEFIT PLANS
3.1 FREEZING OF PENSION PLAN BENEFITS. Effective upon the applicable of
the dates under Section 3.2, the accrued benefits with respect to Water Pik
Individuals who, as of the Distribution Date, were participants under the ATI
Pension Plan shall be frozen and such Individuals shall not accrue any
additional benefits from and after the Distribution Date under the ATI Pension
Plan. The assets and Benefit Liabilities with respect to such Individuals,
determined as of the Distribution Date, shall be retained by the ATI Pension
Plan and its related trust and paid therefrom when due under the terms of the
ATI Pension Plan.
3.2 CREDITING SERVICE UNDER ATI'S PENSION PLAN.
(a) VESTING. Water Pik Individuals who, as of the Distribution Date,
were participants in the ATI Pension Plan will continue to receive service
credit for vesting and retirement benefit eligibility purposes under the ATI
Pension Plan for service actually rendered to Water Pik during the period
commencing on the Distribution Date and ending April 1, 2000.
(b) BENEFIT ACCRUAL. Water Pik Individuals who, as of the Distribution
Date, were participants in the ATI Pension Plan will continue to receive service
credit for benefit accrual purposes under the ATI Pension Plan for service
actually rendered to Water Pik during the period commencing on the Distribution
Date and ending April 2, 2000. Benefits accrued with respect to service credited
pursuant to this Section 3.2 shall be paid by the ATI Pension Plan at the same
times and under the same terms and conditions as applicable to benefits accrued
under the ATI Pension Plan.
(c) DISTRIBUTION OF BENEFITS FROM ATI PENSION PLAN TO WATER PIK
INDIVIDUALS. For purposes of the ATI Pension Plan, the date which is the earlier
of the applicable of (i) a Water Pik's Individual's actual separation from
service with Water Pik or (ii) April 1, 2000 shall be for each Water Pik
Individual a separation from service with the employer and Water Pik Individuals
who are eligible to commence receipt of benefits under the ATI Pension Plan may,
in their respective discretion, apply at any time after the applicable date
described above to commence benefits to the extent then payable and subject to
the terms and conditions of the ATI Pension Plan. The Distribution Date does
not, however, constitute and shall not be treated under the ATI Pension Plan as
a sale or otherwise as an event permitting Water Pik Individuals to elect to
receive a lump sum form of distribution under the ATI Pension Plan.
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ARTICLE IV
DEFINED CONTRIBUTION PLANS
4.1 401(k) PLAN.
(a) ADOPTION BY WATER PIK OF TELEDYNE 401(k) PLAN AMENDED TO BE A
MULTIPLE EMPLOYER PLAN. On or before the Distribution Date, the Teledyne 401(k)
Plan will be amended by Teledyne to be and become a multiple employer plan under
which Water Pik may elect to be a contributing sponsor and to provide
participation to Water Pik Individuals under the terms and conditions set forth
in the Teledyne 401(k) Plan for a period ending on the earlier of (i) adoption
by Water Pik of the Water Pik 401(k) Plan or (ii) April 1, 2000. The right to
amend the Teledyne 401(k) Plan in any respect shall be exclusively within the
power of Teledyne at all relevant times. As amended, the Teledyne 401(k) Plan
shall provide that (A) Water Pik Individuals shall not be permitted to direct
investments after the Distribution Date in ATI Common Stock or in the common
stock of Water Pik or any other corporation spun off by ATI, (B) that each Water
Pik Individual shall have the right to direct the administrator of the Teledyne
401(k) Plan to liquidate the interests of Water Pik Individuals in the common
stock of ATI ("ATI Common Stock"), Water Pik Common Stock or the common stock of
any other previously related corporation and direct the method of reinvestment
of the proceeds of such sale from among the options then available under the
Teledyne 401(k) Plan and (C) if ATI Common Stock and/or common stock of any
previously related corporation other than Water Pik is held in accounts of Water
Pik Individuals in the Teledyne 401(k) Plan as of April 1, 2000, the interests
of Water Pik Individuals shall be liquidated by the Plan administrator and the
proceeds reinvested in Water Pik Common Stock.
(b) ESTABLISHMENT OF WATER PIK 401(k) PLAN AND TRUST. The Water Pik
401(k) Plan, established by Water Pik pursuant to Section 2.2 no later than
April 1, 2000, (i) shall be a qualified defined contribution plan within the
meaning of Code Section 401(a), (ii) except as provided under Section 4.1(c),
shall contain provisions, terms and conditions substantially similar to the
provisions, terms and conditions of the Teledyne 401(k) Plan, and (iii) shall
provide coverage from and after the earlier of (i) its adoption by Water Pik or
(ii) April 1, 2000 with respect to Water Pik Individuals who, as of the later of
the dates above, were participants in the Teledyne 401(k) Plan as amended as
described in Section 4.1(a). The trust related to the Water Pik 401(k) Plan,
established by Water Pik pursuant to Section 2.2, shall be exempt from taxation
under Code Section 501(a).
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(c) ASSUMPTION OF LIABILITIES AND TRANSFER OF ASSETS.
(i) Effective Immediately After the Distribution Date and
until the earlier of (i) the date of adoption by Water Pik of the Water Pik
401(k) Plan or (ii) April 1, 2000, ATI shall administer or cause the
administration of the assets and Benefit Liabilities of the Teledyne 401(k) Plan
with respect to both Teledyne employees and Water Pik Individuals. Water Pik
shall pay to ATI, within thirty (30) days of presentment of an invoice therefor,
an amount equal to the actual cost incurred by ATI for administration of the
assets and Benefit Liabilities in the Teledyne 401(k) Plan relating to Water Pik
Individuals. Water Pik Individuals shall continue to accrue service credit under
the Teledyne 401(k) Plan for vesting and benefit eligibility purposes until the
earlier of (i) the date of adoption by Water Pik of the Water Pik 401(k) Plan or
(ii) April 1, 2000. Effective as of the earlier of (i) the adoption by Water Pik
of the Water Pik 401(k) Plan or (ii) April 1, 2000: (A) the Water Pik 401(k)
Plan shall assume and be solely responsible for all Benefit Liabilities to or
relating to Water Pik Individuals under the Water Pik 401(k) Plan, and (B) ATI
shall cause an amount equal to the aggregate account balances of the Water Pik
Individuals participating under the Teledyne 401(k) Plan, whether such amounts
are vested or unvested under the terms of the Teledyne 401(k) Plan, which are
held by the related trust as of the applicable of (i) the date of adoption by
Water Pik of the Water Pik 401(k) Plan or (ii) April 1, 2000 to be transferred
to the Water Pik 401(k) Plan, and its related trust, and Water Pik shall cause
such transferred accounts to be accepted by such plan and trust. In ATI's sole
and absolute discretion, the amount so transferred may be in cash or in kind or
a combination thereof; provided, however, that the following shall be
transferred in kind: (A) shares of ATI Common Stock, shares of Water Pik Common
Stock allocated to participants' accounts as a result of the Distribution and
shares of Teledyne Technologies Incorporated Common Stock allocated to
participants' accounts as a result of the spin-off of ATI's aerospace and
electronics businesses; and (B) all promissory notes reflecting participant
loans to Water Pik Individuals under the Teledyne 401(k) Plan outstanding as of
the Distribution Date.
(ii) If any benefit with respect to a Water Pik Individual
under the Teledyne 401(k) Plan is subject to a qualified domestic relations
order at the time of transfer, all documentation concerning such qualified
domestic relations order shall be assigned to the Water Pik 401(k) Plan.
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ARTICLE V
HEALTH AND WELFARE PLANS
5.1 ASSUMPTION OF HEALTH AND WELFARE PLAN LIABILITIES.
(a) Immediately After the Distribution Date, all Benefit Liabilities to
or relating to Water Pik Individuals under the ATI Health and Welfare Plans
shall cease to be Benefit Liabilities of the ATI Health and Welfare Plans and
shall be assumed by the corresponding Water Pik Health and Welfare Plans.
(b) Notwithstanding Section 5.1(a), all treatments which have been
pre-certified for or are being provided to a Water Pik Individual as of the
Close of the Distribution Date shall be provided without interruption under the
appropriate ATI Health and Welfare Plan until such treatment is concluded or
discontinued pursuant to applicable plan rules and limitations, but Water Pik
shall continue to be responsible for all Benefit Liabilities relating to,
arising out of or resulting from such ongoing treatments as of the Close of the
Distribution Date.
5.2 VENDOR CONTRACTS.
(a) THIRD-PARTY ASO CONTRACTS.
(i) ATI shall use its Reasonable Efforts to amend each
administrative services only contract with a third-party administrator that
relates to any of the ATI Health and Welfare Plans (an "ASO Contract") in
existence as of the date of this Agreement to permit Water Pik to participate in
the terms and conditions of such ASO Contract from Immediately After the
Distribution Date until December 31, 2000. ATI shall use its Reasonable Efforts
to cause all ASO Contracts into which ATI enters after the date of this
Agreement but before the Close of the Distribution Date to allow Water Pik to
participate in the terms and conditions thereof effective Immediately After the
Distribution Date on the same basis as ATI.
(ii) ATI shall have the right to determine, and shall promptly
notify Water Pik of, the manner in which Water Pik's participation in the terms
and conditions of ASO Contracts as set forth above shall be effectuated. The
permissible ways in which Water Pik's participation may be effectuated include
automatically making Water Pik a party to the ASO Contracts or obligating the
third party to enter into a separate ASO Contract with Water Pik providing for
the same terms and conditions as are contained in the ASO Contracts to which ATI
is a party (or such other arrangement as to which ATI and Water Pik shall
mutually agree). Such terms and conditions shall include the financial and
termination provisions, performance standards, methodology, auditing policies,
quality measures, reporting requirements and target claims. Water Pik hereby
authorizes ATI to act on its behalf to extend to Water Pik the terms and
conditions of the ASO Contracts. Water Pik shall fully cooperate with ATI in
such efforts, and Water Pik shall not perform any act, including discussing any
alternative arrangements with any third party, that would prejudice ATI's
efforts.
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(b) GROUP INSURANCE POLICIES.
(i) This Section 5.2(b) applies to group insurance policies
not subject to allocation or transfer pursuant to the foregoing provisions of
this Article V ("Group Insurance Policies").
(ii) ATI shall use its Reasonable Efforts to amend each Group
Insurance Policy in existence as of the date of this Agreement for the provision
or administration of benefits under the ATI Health and Welfare Plans to permit
Water Pik to participate in the terms and conditions of such policy from
Immediately After the Distribution Date until December 31, 2000. ATI shall use
its Reasonable Efforts to cause all Group Insurance Policies into which ATI
enters or which ATI renews after the date of this Agreement but before the Close
of the Distribution Date to allow Water Pik to participate in the terms and
conditions thereof effective Immediately After the Distribution Date on the same
basis as ATI.
(iii) Water Pik's participation in the terms and conditions of
each such Group Insurance Policy shall be effectuated by obligating the
insurance company that issued such insurance policy to ATI to issue one or more
separate policies to Water Pik. Such terms and conditions shall include the
financial and termination provisions, performance standards and target claims.
Water Pik hereby unconditionally and irrevocably authorizes ATI to act on its
behalf to extend to Water Pik the terms and conditions of such Group Insurance
Policies. Water Pik shall fully cooperate with ATI in such efforts, and Water
Pik shall not perform any act, including discussing any alternative arrangements
with third parties, that would prejudice ATI's efforts.
(c) HMO AGREEMENTS.
(i) Before the Distribution Date, ATI shall use its Reasonable
Efforts to amend all letter agreements with HMOs that provide medical services
under the ATI Medical Plans for 1999 ("HMO Agreements") in existence as of the
date of this Agreement to permit Water Pik to participate in the terms and
conditions of such HMO Agreements, in each case, from Immediately After the
Distribution Date until December 31, 2000. ATI shall use its Reasonable Efforts
to cause all HMO Agreements into which ATI enters after the date of this
Agreement but before the Close of the Distribution Date to allow Water Pik to
participate in the terms and conditions of such HMO Agreements from Immediately
After the Distribution Date until December 31, 2000 on the same basis as ATI.
(ii) ATI shall have the right to determine, and shall promptly
notify Water Pik of, the manner in which Water Pik's participation in the terms
and conditions of all HMO Agreements as set forth above shall be effectuated.
The permissible ways in which Water Pik's participation may be effectuated
include automatically making Water Pik a party to the HMO Agreements or
obligating the HMOs to enter into letter agreements with Water Pik which are
identical to the HMO Agreements (or such other arrangements as to which ATI and
Water Pik shall mutually agree). Such terms and conditions shall include the
financial and termination provisions of the HMO Agreements. Water Pik hereby
authorizes ATI to act on its behalf to extend to Water Pik the terms and
conditions of the HMO Agreements. Water Pik shall fully cooperate with ATI in
such efforts, and
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Water Pik shall not perform any act, including discussing any alternative
arrangements with any third-party, that would prejudice ATI's efforts.
(iii) Notwithstanding anything in this Article V to the
contrary, Water Pik shall have the sole discretion to determine which HMOs to
offer to the participants in the Water Pik Health and Welfare Plans for 2001 and
subsequent years, and all HMO Agreements in which Water Pik participates
pursuant to this Section 5.2(c) shall provide Water Pik with the right to
discontinue its participation effective January 1, 2001.
5.3 PROCEDURES FOR AMENDMENTS TO PLANS, PLAN DESIGNS, ADMINISTRATIVE
PRACTICES, AND VENDOR CONTRACTS.
(a) AMENDMENTS TO PLAN DOCUMENTS. From Immediately After the
Distribution Date through December 31, 2000, Water Pik shall not amend any Water
Pik Health and Welfare Plan or Plans, and Water Pik shall have no rights or
privileges with respect to such Plans other than those rights and privileges
contained in any policy, contract or other written arrangement governing such
Plans. During any period in which ATI is providing Interim Services with respect
to any Water Pik Health and Welfare Plan pursuant to Section 7.1, ATI shall have
the right to amend any applicable Water Pik Health and Welfare Plan; provided
that, in ATI's reasonable good faith opinion, such amendment will have no
material adverse impact on the Water Pik Health and Welfare Plan or its
participants or, to the extent a material adverse impact would occur, such
impact would affect both the applicable Water Pik Health and Welfare Plan and
any corresponding ATI Health and Welfare Plan and any costs incurred as a result
of such amendment shall be borne by ATI and Water Pik in the same proportion
that Water Pik and ATI employees, respectively, participate.
(b) CHANGES IN VENDOR CONTRACTS, GROUP INSURANCE POLICIES, PLAN DESIGN,
AND ADMINISTRATION PRACTICES AND PROCEDURES.
(i) From Immediately After the Distribution Date until
December 31, 2000, Water Pik shall not materially modify, or take other action
which would have a material effect on, any of the following items (each such
modification, a "Change"): (A) the termination date, administration, or
operation of (1) an ASO contract between ATI or Water Pik and a third-party
administrator, (2) a Group Insurance Policy issued to ATI or Water Pik, or (3)
an HMO Agreement with ATI or Water Pik, in each case, the material terms and
conditions of which contracts and policies are extended to Water Pik or to which
Water Pik becomes a party pursuant to Section 5.2; (B) the design of either an
ATI Health and Welfare Plan or a Water Pik Health and Welfare Plan; or (C) the
financing, operation, administration or delivery of benefits under either an ATI
Health and Welfare Plan or a Water Pik Health and Welfare Plan.
(ii) During any period in which ATI is providing Interim
Services with respect to any Water Pik Health and Welfare Plan pursuant to
Section 7.1, ATI shall be permitted to make any Change to such Water Pik Plan;
provided that, in ATI's reasonable good faith opinion, such Change would affect
both the applicable Water Pik Health and Welfare Plan and any corresponding ATI
Health and Welfare Plan and any costs incurred as a result of such amendment
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shall be borne proportionally by ATI and Water Pik in the same proportion that
Water Pik and ATI employees, respectively, participate.
(c) EMPLOYEE CONTRIBUTIONS. Except as otherwise expressly provided in
Sections 5.3(a) and 5.3(b), as of January 1, 2001, Water Pik shall have the
right, in its sole and absolute discretion and without compliance with Sections
5.3(a) and 5.3(b), to increase or decrease the amount of employee contributions
under their respective Health and Welfare Plans.
5.4 ATI SICKNESS AND ACCIDENT, LONG TERM DISABILITY AND PENSION
DISABILITY BENEFITS. ATI shall transfer to Water Pik, effective Immediately
After the Distribution Date, responsibility for administering all claims
incurred by Water Pik Individuals and other employees and former employees of
Water Pik and the Water Pik Entities before the Close of the Distribution Date
that are administered by ATI as of the Close of the Distribution Date. Water Pik
shall administer such claims in the same manner, and using the same methods and
procedures, as ATI used in administering such claims. Water Pik shall have sole
discretionary authority to make any necessary determinations with respect to
such claims, including entering into settlements with respect to such claims.
5.5 POST-RETIREMENT HEALTH AND LIFE INSURANCE BENEFITS. As soon as
practicable after the Distribution Date, Water Pik shall provide ATI with a list
of all Water Pik Individuals who are, to the best knowledge of Water Pik,
eligible to receive retiree medical or dental coverage under the ATI Health and
Welfare Plans from and after the Distribution Date and/or post-retirement life
insurance coverage under the ATI Group Life Program, and the type of retiree
medical or dental coverage and the level of life insurance coverage for which
they are eligible, as applicable.
5.6 COBRA AND DIRECT PAY. Effective Immediately After the Distribution
Date, Water Pik shall solely be responsible for administering compliance with
the health care continuation coverage requirements of COBRA and the Water Pik
Health and Welfare plans, and, with respect to Water Pik Individuals, the ATI
Health and Welfare Plans.
5.7 POST-DISTRIBUTION TRANSITIONAL ARRANGEMENTS.
(a) CONTINUANCE OF ELECTIONS, CO-PAYMENTS AND MAXIMUM BENEFITS.
(i) Water Pik shall cause the Water Pik Health and Welfare
Plans to recognize and maintain all coverage and contribution elections made by
Water Pik Individuals under the ATI Health and Welfare Plans and apply such
elections under the Water Pik Health and Welfare Plans for the remainder of the
period or periods for which such elections are by their terms applicable. The
transfer or other movement of employment from ATI to Water Pik at any time
before the Close of the Distribution Date shall neither constitute nor be
treated as a "status change" under the ATI Health and Welfare Plans or the Water
Pik Health and Welfare Plans.
(ii) Water Pik shall cause the Water Pik Health and Welfare
Plans to recognize and give credit for (A) all amounts applied to deductibles,
out-of-pocket maximums, and other
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applicable benefit coverage limits with respect to which such expenses have been
incurred by Water Pik Individuals under the ATI Health and Welfare Plans for the
remainder of the year in which the Distribution occurs, and (B) all benefits
paid to Water Pik Individuals under the ATI Health and Welfare Plans for
purposes of determining when such persons have reached their lifetime maximum
benefits under the Water Pik Health and Welfare Plans.
(iii) Water Pik shall recognize and maintain through
December 31, 1999 all eligible populations covered by the ATI Health and Welfare
Plans (as defined in the applicable ATI Health and Welfare Plan documents),
including Class I and Class II dependents, term and temporary employees,
alternate benefit plan employees, and all categories of part-time employees
(which are fully and non-fully eligible for company contributions).
(iv) Water Pik shall (A) provide coverage to Water Pik
Individuals under the Water Pik Group Life Program without the need to undergo a
physical examination or otherwise provide evidence of insurability, and (B)
recognize and maintain all irrevocable assignments and accelerated benefit
option elections made by Water Pik Individuals under the ATI Group Life Program.
(b) OTHER POST-DISTRIBUTION TRANSITIONAL RULES.
(i) ATI HCRA PLAN. To the extent any Water Pik Individual
contributed to an account under the ATI HCRA Plan during the calendar year that
includes the Distribution Date, effective as of the Close of the Distribution
Date, ATI shall transfer to the Water Pik HCRA Plan the account balances of
Water Pik Individuals for such calendar year under the ATI HCRA Plan, regardless
of whether the account balance is positive or negative.
(ii) ATI CHILD/ELDER CARE REIMBURSEMENT ACCOUNT PLAN. To the
extent any Water Pik Individual contributed to the ATI CECRA Plan during the
calendar year that includes the Distribution Date, ATI shall transfer the
account balances of Water Pik Individuals for such calendar year in the ATI
CECRA Plan to the Water Pik CECRA Plan.
(iii) POST-RETIREMENT MEDICAL PLAN. For the period ending on
December 31st of the calendar year which is five calendar years after the
Distribution Date, Water Pik shall comply with all cost maintenance period
requirements and benefit maintenance period requirements under Code Sections
401(h) or 420 that are applicable to post-retirement health benefits under the
Water Pik Health Plans for any pension asset transfers pursuant to Code Section
420 by or on behalf of ATI for qualified current retiree health liabilities (as
defined under Code Section 420). With respect to any pension asset transfers
pursuant to Code Section 420, Water Pik shall obtain ATI's prior written
approval before amending any Water Pik Health Plan with respect to the provision
of post-retirement health benefits during the cost maintenance or benefit
maintenance periods to which the ATI Health Plans are subject pursuant to Code
Section 420 and no such amendment shall be effective in any respect until ATI's
prior written approval is obtained. No pension asset transfer pursuant to Code
Section 420 shall be made by Water Pik after the date hereof and before the
Close of the Distribution Date unless Water Pik and ATI so agree.
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(iv) HEALTH AND WELFARE PLANS SUBROGATION RECOVERY. After the Close
of the Distribution Date, ATI shall pay to Water Pik any amounts ATI recovers
from time to time through subrogation or otherwise for claims incurred by or
reimbursed to any Water Pik Individual. If Water Pik recovers any amounts
through subrogation or otherwise for claims incurred by or reimbursed to
employees and former employees of ATI or an ATI Entity and their respective
beneficiaries and dependents (other than Water Pik Individuals), Water Pik shall
pay such amounts to ATI.
5.8 APPLICATION OF ARTICLE V TO Water Pik ENTITIES. Any reference in
this Article V to "Water Pik" shall include a reference to a Water Pik Entity
when and to the extent ATI or Water Pik has caused the Water Pik Entity to (a)
become a party to a vendor contract, group insurance contract, or HMO letter
agreement associated with a Water Pik Health and Welfare Plan, (b) become a
self-insured entity for the purposes of one or more Water Pik Health and Welfare
Plans, (c) assume all or a portion of the liabilities or administrative
responsibilities for benefits which arose before the Close of the Distribution
Date under an ATI Health and Welfare Plan and which were expressly assumed
by Water Pik pursuant to the terms of this Agreement, or (d) take any other
action, extend any coverage, assume any other liability or fulfill any other
responsibility that Water Pik would otherwise be required to take under the
terms of this Article V, unless it is clear from the context that the particular
reference is not intended to include a Water Pik Entity. In all such instances
in which a reference in this Article V to "Water Pik" includes a reference to a
Water Pik Entity, Water Pik shall be responsible to ATI for ensuring that the
Water Pik Entity complies with the applicable terms of this Agreement and the
Water Pik Individuals allocated to such Water Pik Entity shall have the same
rights and entitlements to benefits under the applicable Water Pik Health and
Welfare Plans that the Water Pik Individual would have had if he or she had
instead been allocated to Water Pik. Further, each such Water Pik Entity, unless
otherwise expressly provided under the terms of this Agreement or any Ancillary
Agreement, shall defend, indemnify and hold harmless ATI for any costs incurred
by ATI pursuant to the provisions of Article V on behalf of or related to such
Water Pik Entity.
ARTICLE VI
EXECUTIVE BENEFITS AND NON-EMPLOYEE DIRECTOR BENEFITS
6.1 ASSUMPTION OF OBLIGATIONS. Except (i) for Benefit Liabilities
arising under the Teledyne Pension Equalization Plan and (ii) as otherwise
expressly provided in this Article VI, effective Immediately After the
Distribution Date, Water Pik and the Water Pik Entities shall assume and be
solely responsible for all Benefit Liabilities to or relating to Water Pik
Individuals under all ATI Executive Benefit Plans.
6.2 CONSENTS AND NOTIFICATIONS. ATI and Water Pik shall use their
Reasonable Efforts to obtain, or cause to be obtained, to the extent necessary,
the written consent of each Water Pik Individual who is a party to a separate
agreement between the Individual and ATI and/or a participant in any ATI
Executive Benefit Plan, to the treatment of such individual agreement and/or
Executive Benefit Plan, as applicable, in accordance with this Article VI,
including the assumption by Water Pik and the Water Pik Entities, of sole
responsibility for, and the
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release of ATI and the ATI Entities from, all Benefit Liabilities thereunder;
provided, that no failure to seek or to obtain any such consent shall have any
effect upon the obligations of Water Pik and the Water Pik Entities with respect
to such Benefit Liabilities.
6.3 ATI 1999 BONUS PLAN. Subject to the provisions of
Section 6.4(a)(ii)(B), Water Pik shall be responsible for determining, with
respect to all Awards that would otherwise be payable under any bonus Plan or
arrangement to Water Pik Individuals for the 1999 performance year, (a) the
extent to which established performance criteria (as interpreted by Water Pik,
in its sole discretion, after taking into account the effects of the
Distribution) have been met and (b) the payment level for each Water Pik
Individual.
6.4 ATI INCENTIVE PLANS. ATI and Water Pik shall use their Reasonable
Efforts to take all actions necessary or appropriate so that each outstanding
Award granted under any ATI Incentive Plan held by any Water Pik Individual
shall be determined, converted or replaced, as the case may be, as set forth
in this Section 6.4 with an Award under the Water Pik Incentive Plan.
(a) WATER PIK INDIVIDUALS WHO ARE ACTIVE EMPLOYEES OF WATER PIK.
(i) STOCK OPTIONS. Water Pik shall cause each ATI Option that
is outstanding as of the Close of the Distribution Date and is held by a Water
Pik Individual to be converted, effective Immediately After the Distribution
Date, to a Water Pik Option (a "Converted Option"). Such Converted Option shall
provide for the option to purchase a number of shares of Water Pik Common Stock
equal to the number of shares of ATI Common Stock subject to such ATI Option as
of the Close of the Distribution Date, multiplied by the Ratio, and then rounded
up to the nearest whole share. The per-share exercise price of such Converted
Option shall equal the per-share exercise price of such ATI Option as of the
Close of the Distribution Date divided by the Ratio. Each such Converted Option
shall otherwise have the same terms and conditions as were applicable to the
corresponding ATI Option as of the Close of the Distribution Date, except that
references to ATI and its Affiliates shall be amended to refer to Water Pik and
its Affiliates.
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(ii) PERFORMANCE AWARDS.
(A) The current performance period under the ATI Performance
Share Program is the three-year period commencing on January 1, 1998. Either
prior to or within a reasonable time after the Distribution Date, in accordance
with the provisions of Section 6.4(a)(ii)(B), the applicable ATI Performance
Award under the ATI Performance Share Program shall be determined by ATI with
respect to each Water Pik Individual for the period from January 1, 1998 through
the Distribution Date. Effective Immediately After the Distribution Date,
Water Pik and the Water Pik Entities shall assume and be solely responsible for
all Benefit Liabilities to or relating to Water Pik Individuals with respect
to the administration and distribution of Performance Awards to such Water Pik
Individuals.
(B) Notwithstanding the provisions of Section 6.3, the ATI
Personnel and Compensation Committee or the Stock Incentive Award Subcommittee,
as the case may be, shall determine, in its sole and absolute discretion, with
respect to each Water Pik Individual, the extent to which, as of the
Distribution Date, such Individual has achieved target performance levels
established under the ATI Performance Share Program and the appropriate
Performance Award for such Individual based upon such performance. The
Performance Award so determined shall be pro-rated by multiplying the
Performance Award determined under the preceding sentence by a fraction, the
numerator of which shall be equal to the number of months from and including
January 1, 1998 to the month in which the Distribution Date occurs and the
denominator of which shall be 36. The Performance Award as determined hereunder
shall be distributed by Water Pik and the Water Pik Entities to the applicable
Water Pik Individual as provided under the terms of the Performance Share
Program; provided, however, that any ATI Common Stock allocated or otherwise
awarded to a Water Pik Individual as part of a Performance Award under the
provisions of this Section 6.4(a)(ii) shall, prior to any distribution to such
Individual and, in any event, no later than Immediately After the Distribution
Date, be converted into Water Pik Common Stock by multiplying the number of
shares of ATI Common Stock subject to such Performance Award by an appropriate
ratio, as determined by ATI's Board of Directors or an applicable Committee
thereof and then rounding up the product to the nearest whole share.
(iii) SARP. As of the Distribution Date, all shares of ATI
Common Stock issued and outstanding held by a Water Pik Individual under the ATI
SARP as Designated Stock or Purchased Stock (as those terms are defined in the
ATI SARP) shall continue to be so held, and the shares of Water Pik Common Stock
received by Water Pik Individuals in respect of their Purchased Stock and
Designated Stock pursuant to the distribution terms of Article III of the
Separation and Distribution Agreement and the shares of Teledyne Technologies
Incorporated Common Stock received by Water Pik Individuals in respect of their
Purchased Stock and Designated Stock as a result of the spin-off of Teledyne
Technologies Incorporated by ATI to ATI's stockholders shall also be considered
Designated Stock or Purchased Stock, as the case may be, subject to the terms of
the ATI SARP. Effective Immediately After the Distribution Date, Water Pik shall
assume all Benefit Liabilities to or relating to Water Pik Individuals under the
ATI SARP relating to the Restricted Stock (as that term is defined in the ATI
SARP), but ATI shall retain all promissory notes payable by participants into
the ATI SARP, including Water Pik Individuals, to the order of ATI, and the
collateral with respect to such notes shall include all shares of ATI Common
Stock that were pledged as collateral for purposes of the ATI SARP immediately
prior to the Distribution Date as well as the shares of Water Pik Common Stock
and Teledyne Technologies Incorporated Common Stock issued in respect of such
shares of ATI Common
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Stock held as collateral. Effective Immediately After the Distribution Date,
pursuant to the terms of the ATI SARP, all Water Pik Individuals holding awards
of Restricted Stock under the ATI SARP as of the Distribution Date shall
receive, without any further action on their part and in substitution for all
shares of Restricted Stock held immediately prior to the Distribution Date by
such Water Pik Individuals under the ATI SARP a number of shares of Water Pik
Common Stock determined by multiplying the number of shares of ATI Common Stock
that are held immediately prior to the Distribution Date, as Restricted Stock
under the ATI SARP by an appropriate ratio, as determined by ATI's Board of
Directors or an applicable Committee thereof then rounding the product up to the
nearest whole share, and such shares of Water Pik Common Stock shall be subject
to the same restrictions as the shares of ATI Common Stock prior to the
conversion.
(b) WATER PIK INDIVIDUALS WHO ARE NOT ACTIVE EMPLOYEES OF WATER PIK.
Each outstanding Award that is held by an individual who, as of the Close of
the Distribution Date, would otherwise be a Water Pik Individual but is not an
active employee of or on leave of absence from Water Pik or a Water Pik Entity
shall remain outstanding Immediately After the Distribution Date in accordance
with its terms as applicable as of the Close of the Distribution Date, subject
to such adjustments as may be applicable to outstanding Awards held by
individuals who remain active employees of or on leave of absence from ATI or an
ATI Entity after the Distribution Date.
6.5 ATI NONQUALIFIED DEFERRED COMPENSATION PROGRAMS.
(a) ASSUMPTION OF LIABILITIES AND TRANSFER OF ASSETS. Subject to the
provisions of Section 6.1, effective Immediately After the Distribution Date,
Water Pik shall assume all Benefit Liabilities to or relating to Water Pik
Individuals under the ATI Nonqualified Deferred Compensation Programs. Effective
Immediately After the Distribution Date, to the extent ATI has acquired
Corporate-Owned Life Insurance Policies as a source of payment of liabilities
which are or may be payable under the Allegheny Teledyne Incorporated Executive
Deferred Compensation Plan with respect to Water Pik Individuals, ATI shall,
in ATI's sole discretion, (i) transfer an amount in cash equal to the cash
surrender value of such policies or (ii) cause the transfer, either by
assignment or any other reasonable means, to Water Pik of Corporate-Owned Life
Insurance Policies on the lives of such Water Pik Individuals and such other
employees or former employees of ATI or its subsidiaries as ATI may, in its sole
discretion select, or any portion thereof, having in the aggregate a cash
surrender value equal to the amount of any Benefit Liabilities for Water Pik
Individuals under the Allegheny Teledyne Incorporated Executive Deferred
Compensation Plan.
(b) CORPORATE-OWNED LIFE INSURANCE. ATI and Water Pik shall take all
actions necessary to replicate the manner in which ATI has heretofore held
Corporate-Owned Life Insurance Policies, and executing or accepting delivery of
any assignments reasonably requested by either party or any insurance company
insuring one or more lives under the Corporate-Owned Life Insurance Policies, as
may be necessary or appropriate in order to assign those Policies insuring Water
Pik Individuals to Water Pik, effective Immediately After the Distribution Date.
If a Corporate-Owned Life Insurance Policy is so assigned to Water Pik, Water
Pik shall assume and be solely responsible for all Benefit Liabilities, and
shall be entitled to all benefits, thereunder, effective as of the earlier of
(i) the Close of the Distribution Date and (ii) the date of such assignment. ATI
and Water Pik shall continue, liquidate and/or administer such Corporate-Owned
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Life Insurance Policies on terms and conditions agreed to by ATI and Water Pik.
ATI and Water Pik shall share all information that may be necessary to identify
the individuals insured by the Corporate-Owned Life Insurance Policies owned by
ATI and/or Water Pik and to determine when and whether such individuals are
deceased.
6.6 NON-EMPLOYEE DIRECTOR BENEFITS. The parties intend that all
Water Pik Non-Employee Directors who were ATI Non-Employee Directors prior to
the Distribution Date may continue to serve as ATI Non-Employee Directors. In
furtherance of such intention, ATI shall retain all Benefit Liabilities with
respect to the services of its Non-Employee Directors under the ATI Non-Employee
Director Plans accrued as of the Distribution Date. Water Pik assumes no Benefit
Liabilities under the ATI Non-Employee Director Plans.
6.7 CONFIDENTIALITY AND PROPRIETARY INFORMATION. No provision of this
Agreement shall be deemed to release any individual for a violation of any
agreement or policy pertaining to confidential or proprietary information of ATI
or any of its Affiliates, or otherwise relieve any individual of his or her
obligations under any such agreement or policy.
ARTICLE VII
GENERAL AND ADMINISTRATIVE
7.1 INTERIM SERVICES AGREEMENT. Effective on or before the Distribution
Date, ATI and Water Pik shall enter into an agreement relating to the
coordination of and payment for transition services to be provided by ATI
regarding the establishment and administration of the Water Pik Plans (the
"Interim Services Agreement"). The provisions of the Interim Services Agreement
shall be incorporated by reference in this Agreement and shall become a part of
this Agreement.
7.2 PAYMENT OF LIABILITIES, PLAN EXPENSES AND RELATED MATTERS.
(a) ACTUARIAL AND ACCOUNTING METHODOLOGIES AND ASSUMPTIONS. For
purposes of this Agreement, unless specifically indicated otherwise: (i) all
actuarial methodologies and assumptions used for a particular Plan shall (except
to the extent otherwise determined by ATI and Water Pik to be reasonable or
necessary) be substantially the same as those used in the actuarial valuation of
that Plan used to determine minimum funding requirements under ERISA Section 302
and Code Section 412(c) for 1999, or, if such Plan is not subject to such
minimum funding requirements, the assumptions used to prepare ATI's audited
financial statements for 1999, as the case may be; and (ii) the value of plan
assets shall be the value established by ATI for purposes of audited financial
statements of the relevant plan or trust for the period ending on the date as of
which the valuation is to be made. Except as otherwise contemplated by this
Agreement or as required by law, all determinations as to the amount or
valuation of any assets of or relating to any ATI Plan (whether or not such
assets are being transferred to a Water Pik Plan) shall be made by ATI in its
sole and absolute discretion and such determination shall be final and binding
on all parties.
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(b) PAYMENT OF LIABILITIES; DETERMINATION OF EMPLOYEE STATUS. Water Pik
shall pay directly, or reimburse ATI promptly for, all Benefit Liabilities
assumed by it pursuant to this Agreement, including all compensation payable to
Water Pik Individuals for services rendered while in the employ of ATI or an ATI
Entity before becoming a Water Pik Individual (to the extent not charged for
pursuant to Section 7.1 or another Ancillary Agreement). To the extent the
amount of such Benefit Liabilities is not yet determinable because the status of
individuals as Water Pik Individuals is not yet determined, except as otherwise
specified herein or in another Ancillary Agreement with respect to particular
Benefit Liabilities, Water Pik shall make such payments or reimbursements based
upon ATI's reasonable estimates of the amounts thereof, and when such status is
determined, Water Pik shall make additional reimbursements or payments, or ATI
shall reimburse Water Pik, to the extent necessary to reflect the actual amount
of such Benefit Liabilities. In determining the number of individuals in any
particular group of employees described in this Agreement (such as "Water Pik
Individuals"), no individual shall be counted twice. Determinations of what
entity employs or employed a particular individual shall be made by reference to
the applicable legal entity and/or other appropriate accounting code, to the
extent possible.
7.3 SHARING OF PARTICIPANT INFORMATION. ATI and Water Pik shall share,
ATI shall cause each applicable ATI Entity to share, and Water Pik shall cause
each applicable Water Pik Entity to share, with each other and their respective
agents and vendors (without obtaining releases) all participant information
necessary for the efficient and accurate administration of each of the ATI Plans
and the Water Pik Plans. ATI and Water Pik and their respective authorized
agents shall, subject to applicable laws on confidentiality, be given reasonable
and timely access to, and may make copies of, all information relating to the
subjects of this Agreement in the custody of the other party, to the extent
necessary for such administration. Until December 31, 2000, all participant
information shall be provided in a manner and medium that is compatible with the
data processing systems of ATI as in effect on the Close of the Distribution
Date, unless otherwise agreed to by ATI and Water Pik.
7.4 REPORTING AND DISCLOSURE AND COMMUNICATIONS TO PARTICIPANTS. Water
Pik shall take, and shall cause each other applicable Water Pik Entity to take,
all actions necessary or appropriate to facilitate the distribution of all
applicable ATI Plan-related communications and materials to Water Pik
Individuals and their beneficiaries, including summary plan descriptions and
related summaries of material modification, summary annual reports, investment
information, prospectuses, notices and enrollment material related to the Water
Pik Plans. Water Pik shall pay ATI the cost relating to the copies of all such
documents provided to Water Pik, except to the extent such costs are charged
pursuant to Section 7.1 or pursuant to an Ancillary Agreement. Water Pik shall
assist, and Water Pik shall cause each other applicable Water Pik Entity to
assist, ATI in complying with all reporting and disclosure requirements of
ERISA, including the preparation of Form 5500 annual reports for the ATI Plans,
where applicable.
7.5 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES. No
provision of this Agreement or the Separation and Distribution Agreement shall
be construed to create any right, or accelerate entitlement, to any compensation
or benefit whatsoever on the part of any Water Pik Individual or other future,
present or former
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employee of ATI, an ATI Entity, Water Pik, or a Water Pik Entity under any ATI
Plan or Water Pik Plan or otherwise. Without limiting the generality of the
foregoing: (i) the Distribution shall not cause any employee to be deemed to
have incurred a termination of employment which entitles such individual to the
commencement of benefits under any of the ATI Plans, any of the Water Pik Plans,
or any individual agreements; and (ii) except as expressly provided in this
Agreement, nothing in this Agreement shall preclude Water Pik, at any time after
the Close of the Distribution Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Water Pik Plan, any benefit under any Plan or any trust, insurance policy or
funding vehicle related to any Water Pik Plan unless such change could or will
increase the obligations of ATI or any ATI Entity under any Plan or agreement.
7.6 BENEFICIARY DESIGNATIONS. All beneficiary designations made by
Water Pik Individuals for ATI Plans shall be transferred to and be in full force
and effect under the corresponding Water Pik Plans until such beneficiary
designations are replaced or revoked by the Water Pik Individual who made the
beneficiary designation.
7.7 REQUESTS FOR IRS RULINGS AND DOL OPINIONS. Water Pik shall
cooperate fully with ATI on any issue relating to the transactions contemplated
by this Agreement for which ATI elects to seek a determination letter or private
letter ruling from the IRS or an advisory opinion from the DOL. ATI shall
cooperate fully with Water Pik with respect to any request for a determination
letter or private letter ruling from the IRS or advisory opinion from the DOL
with respect to any of the Water Pik Plans relating to the transactions
contemplated by this Agreement.
7.8 FIDUCIARY MATTERS. ATI and Water Pik each acknowledges that actions
required to be taken pursuant to this Agreement may be subject to fiduciary
duties or standards of conduct under ERISA or other applicable law, and no party
shall be deemed to be in violation of this Agreement if it fails to comply with
any provisions hereof based upon its good faith determination that to do so
would violate such a fiduciary duty or standard.
7.9 COLLECTIVE BARGAINING. To the extent any provision of this
Agreement is contrary to the provisions of any collective bargaining agreement
to which ATI or any Affiliate of ATI is a party, the terms of such collective
bargaining agreement shall prevail. Should any provisions of this Agreement be
deemed to relate to a topic determined by an appropriate authority to be a
mandatory subject of collective bargaining, ATI or Water Pik may be obligated to
bargain with the union representing affected employees concerning those
subjects. Neither party will agree to a modification of any collective
bargaining agreement without the consent of the other.
7.10 CONSENT OF THIRD PARTIES. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor or a union) and
such consent is withheld, ATI and Water Pik shall use their Reasonable Efforts
to implement the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement
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cannot be implemented due to the failure of such third party to consent, ATI and
Water Pik shall negotiate in good faith to implement the provision in a mutually
satisfactory manner.
7.11 INDEMNIFICATION OF ATI. Water Pik shall indemnify, defend and
hold harmless ATI, each ATI Entity and each of their respective directors,
officers and employees, and each of the heirs, executors, successors and
assigns of any of the foregoing (collectively, the "ATI Indemnitees") from and
against (i) any and all Benefit Liabilities of the ATI Indemnitees to the
extent any such Benefit Liabilities are assumed by Water Pik or a Water Pik
Entity under this Agreement and (ii) any and all changes or modifications to
any rights, privileges or benefits of or relating to any Water Pik Individual
as provided in or otherwise contemplated by this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 FOREIGN PLANS. To the extent that Water Pik has or assumes any
responsibility for sponsorship, maintenance or administration of any Foreign
Plan, ATI shall have no responsibility or liability with respect to such Plan
and Water Pik shall indemnify and hold harmless ATI from any liability under
such Plan.
8.2 EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the Distribution does not
occur, then all actions and events that are, under this Agreement, to be taken
or occur effective as of the Close of the Distribution Date, Immediately After
the Distribution Date, or otherwise in connection with the Distribution, shall
not be taken or occur except to the extent specifically agreed by Water Pik and
ATI.
8.3 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.
8.4 AFFILIATES. Each of ATI and Water Pik shall cause to be performed,
and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by an ATI Entity or a
Water Pik Entity, respectively.
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8.5 COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER.
(a) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party.
(b) This Agreement, and the Exhibits, Schedules and Appendices hereto
and thereto contain the entire agreement between the parties with respect to
the subject matter hereof, supersede all previous agreements, negotiations,
discussions, writings, understandings, commitments and conversations with
respect to such subject matter and there are no agreements or understandings
between the parties other than those set forth or referred to herein or therein.
(c) ATI represents on behalf of itself and each ATI Entity, and Water
Pik represents on behalf of itself and each Water Pik Entity, as follows:
(i) each such Person has the requisite corporate or other
power and authority and has taken all corporate or other action necessary in
order to execute, deliver and perform each of this Agreement and to consummate
the transactions contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by
it and constitutes a valid and binding agreement of it enforceable in
accordance with the terms thereof.
(d) Each party hereto acknowledges that it and each other party hereto
may be executing this Agreement by facsimile, stamp or mechanical signature.
Each party hereto expressly adopts and confirms each such facsimile, stamp or
mechanical signature made in its respective name as if it were a manual
signature, agrees that it will not assert that any such signature is not
adequate to bind such party to the same extent as if it were signed manually
and agrees that at the reasonable request of any other party hereto at any time
it will as promptly as reasonably practicable cause this Agreement to be
manually executed (any such execution to be as of the date of the initial date
thereof).
8.6 GOVERNING LAW; CONSENT TO JURISDICTION.
(a) This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the Commonwealth of Pennsylvania as to all
matters, including matters of validity, construction, effect, enforceability,
performance and remedies, irrespective of the choice of laws principles of the
Commonwealth of Pennsylvania.
(b) Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of (i) the Court of Common Pleas of Allegheny County, Pennsylvania
and (ii) the United States District Court for the Western District of
Pennsylvania, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby (and agrees not to
commence any action, suit or proceeding relating thereto except in such
courts). Each of the parties hereto further agrees that service of any process,
summons, notice or document hand delivered or sent by U.S. registered mail to
such party's respective address set forth in Section 8.9 will be effective
service of process for any action, suit or proceeding in Pennsylvania with
respect to any matters to which it has submitted to jurisdiction as set forth
in the immediately preceding sentence. Each of the parties hereto irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Court of Common Pleas of Allegheny County,
Pennsylvania or (ii) the United States District Court for the Western District
of Pennsylvania, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
8.7 ASSIGNABILITY. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that no party hereto may assign its respective rights or
delegate its respective obligations under this Agreement without the express
prior written consent of the other party hereto.
8.8 THIRD PARTY BENEFICIARIES. Except as otherwise expressly provided
herein, (a) the provisions of this Agreement are solely for the benefit of the
parties and are not intended to confer upon any Person except the parties any
rights or remedies hereunder, (b) there are no third party beneficiaries of
this Agreement, and (c) this Agreement shall not provide any third person with
any remedy, claim, liability, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement. No party shall be
required to deliver any notice under this Agreement to any other party with
respect to any matter in which such other party has no right, remedy or claim.
8.9 NOTICES. All notices or other communications under this Agreement
shall be in writing and shall be deemed to be duly given when (a) delivered in
person or (b) deposited in the United States mail or private express mail,
postage prepaid, addressed as follows:
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If to ATI, to: Allegheny Teledyne Incorporated
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Senior Vice President, General Counsel
& Secretary
If to Water Pik, to: Water Pik Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Senior Vice President, General Counsel
& Secretary
Any party may, by notice to the other party, change the address to which such
notices are to be given.
8.10 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 thereof, 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 or thereby, as the
case may be, 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.
8.11 FORCE MAJEURE. No party shall be deemed in default of this
Agreement to the extent that any delay or failure in the performance of its
obligations under this Agreement results from any cause beyond its reasonable
control and without its fault or negligence, such as acts of God, acts of civil
or military authority, embargoes, epidemics, war riots, insurrections, fires,
explosions, earthquakes, floods, unusually severe weather conditions, labor
problems or unavailability of parts, or, in the case of computer systems, Year
2000 problems or any failure in electrical or air conditioning equipment. In the
event of any such excused delay, the time for performance shall be extended for
a period equal to the time lost by reason of the delay.
8.12 HEADINGS. The article, section and paragraph headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
8.13 WAIVERS OF DEFAULT. Waiver by any party of any default by the
other party of any provision of this Agreement shall not be deemed a waiver by
the waiving party of any subsequent or other default, nor shall it prejudice
the rights of the other party.
8.14 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
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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.
8.15 AMENDMENTS. No provisions of this Agreement shall be deemed
waived, amended, supplemented or modified by any party, unless such waiver,
amendment, supplement or modification is in writing and signed by the
authorized representative of the party against whom it is sought to enforce
such waiver, amendment, supplement or modification.
8.16 INTERPRETATION. Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include the
other genders as the context requires. The terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the Schedules,
Exhibits and Appendices hereto) and not to any particular provision of this
Agreement. Article, Section, Exhibit, Schedule and Appendix references are to
the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement
unless otherwise specified. The word "including" and words of similar import
when used in this Agreement shall mean "including, without limitation," unless
the context otherwise requires or unless otherwise specified. The word "or"
shall not be exclusive. Unless expressly stated to the contrary in this
Agreement, all references to "the date hereof," "the date of this Agreement,"
"hereby" and "hereupon" and words of similar input shall all be references to
_______________, 1999, regardless of any amendment or restatement hereof.
8.17 DISPUTES.
(a) Resolution of any and all disputes arising from or in connection
with this Agreement, whether based on contract, tort, statute or otherwise,
including, but not limited to, disputes in connection with claims by third
parties (collectively, "Disputes"), shall be subject to the provisions of this
Section 8.17; provided, however, that nothing contained herein shall preclude
any party from seeking or obtaining (i) injunctive relief or (ii) equitable or
other judicial relief to enforce the provisions hereof or to preserve the
status quo pending resolution of Disputes hereunder.
(b) Any party may give the other parties written notice of any Dispute
not resolved in the normal course of business. The parties shall attempt in good
faith to resolve any Dispute promptly by negotiation between executives of the
parties who have authority to settle the controversy. Within 15 days after
delivery of the notice, the foregoing executives of both parties shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary for a period not to exceed five days, to attempt to resolve the
Dispute. All reasonable requests for information made by one party to the other
will be honored. If the parties do not resolve the Dispute within such 20 day
period (the "Initial Mediation Period"), the parties shall attempt in good faith
to resolve the Dispute by negotiation between or among the Designated Officers.
The Designated Officers shall meet at a mutually acceptable time and place (but
in no event no later than 15 days following the
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expiration of the Initial Mediation Period) and thereafter as often as they
reasonably deem necessary for a period not to exceed 15 days, to attempt to
resolve the Dispute.
(c) If the Dispute has not been resolved by negotiation within 50 days
of the first party's notice, or if the parties failed to meet within 15 days of
the first party's notice, or if the Designated Officers failed to meet within
35 days of the first party's notice, any party may commence any litigation or
other procedure allowed by law.
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IN WITNESS WHEREOF, the parties have caused this Employee Benefits
Agreement to be duly executed as of the day and year first above written.
ALLEGHENY TELEDYNE INCORPORATED
By:____________________________
Title:_________________________
WATER PIK TECHNOLOGIES, INC.
By:____________________________
Title:_________________________
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