EXHIBIT 2.3
================================================================================
EMPLOYEE MATTERS AGREEMENT
by and among
CONEXANT SYSTEMS, INC.,
WASHINGTON SUB, INC.
and
ALPHA INDUSTRIES, INC.
================================================================================
June 25, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS.................................................................... 4
Section 1.01 General........................................................................ 4
ARTICLE II EMPLOYEES...................................................................... 8
Section 2.01 Employees...................................................................... 8
ARTICLE III SAVINGS PLANS.................................................................. 10
Section 3.01 Retirement Savings Plan........................................................ 10
Section 3.02 Hourly Employees' Savings Plan................................................. 10
Section 3.03 Non-Qualified Retirement Savings Plan.......................................... 10
ARTICLE IV PENSION PLANS.................................................................. 11
[INTENTIONALLY OMITTED]........................................................ 11
ARTICLE V STOCK PLANS.................................................................... 11
Section 5.01 Stock Plans.................................................................... 11
ARTICLE VI OTHER EMPLOYEE PLANS AND MATTERS............................................... 12
Section 6.01 Welfare Plans.................................................................. 12
Section 6.02 Incentive Compensation Plans................................................... 15
Section 6.03 Deferred Compensation Plan..................................................... 15
Section 6.04 Severance Pay.................................................................. 16
Section 6.05 Employment, Consulting and Other Employee Related Agreements................... 16
Section 6.06 Employee Stock Purchase Plans.................................................. 17
Section 6.07 VERP........................................................................... 17
Section 6.08 Performance Share Plan......................................................... 19
Section 6.09 Other Liabilities.............................................................. 19
ARTICLE VII MISCELLANEOUS.................................................................. 20
Section 7.01 Indemnification................................................................ 20
Section 7.02 Sharing of Information......................................................... 20
Section 7.03 Entire Agreement; Construction................................................. 20
Section 7.04 Survival of Agreements......................................................... 21
Section 7.05 Governing Law.................................................................. 21
Section 7.06 Notices........................................................................ 21
Section 7.07 Amendments..................................................................... 21
Section 7.08 Assignment..................................................................... 21
Section 7.09 Captions; Currency............................................................. 22
Section 7.10 Severability................................................................... 22
Section 7.11 Parties in Interest............................................................ 22
Section 7.12 Schedules...................................................................... 22
Section 7.13 Change of Name................................................................. 22
Section 7.14 Waivers; Remedies.............................................................. 23
i
Page
----
Section 7.15 Counterparts................................................................... 23
Section 7.16 Performance.................................................................... 23
Section 7.17 Dispute Resolution............................................................. 23
Section 7.18 Cooperation.................................................................... 23
Section 7.19 Interpretation................................................................. 24
ii
EMPLOYEE MATTERS AGREEMENT
EMPLOYEE MATTERS AGREEMENT (this "Agreement") dated as of June 25, 2002
by and among CONEXANT SYSTEMS, INC., a Delaware corporation ("Conexant"),
WASHINGTON SUB, INC., a Delaware corporation and a wholly-owned subsidiary of
Conexant ("Washington"), and ALPHA INDUSTRIES, INC., a Delaware corporation
("Alpha").
WHEREAS, Conexant, Washington and Alpha have entered into an Agreement
and Plan of Reorganization dated as of December 16, 2001, as amended as of April
12, 2002 (the "Merger Agreement"), providing for, among other things, the merger
of Washington with and into Alpha, with Alpha being the surviving corporation;
WHEREAS, Conexant and Washington also have entered into a Contribution
and Distribution Agreement dated as of December 16, 2001, as amended (the
"Distribution Agreement"), pursuant to which (a) all the Washington Assets (as
defined in the Distribution Agreement) will be contributed to Washington and/or
to one or more of the Washington Subsidiaries (as defined in the Distribution
Agreement) and all of the Washington Liabilities (as defined in the Distribution
Agreement) will be assumed by Washington and/or by one or more of the Washington
Subsidiaries, all as provided in the Distribution Agreement (the "Contribution")
and (b) issued and outstanding shares of Common Stock, par value $.01 per share,
of Washington ("Washington Common Stock") will be distributed on a pro rata
basis to Conexant's stockholders as provided in the Distribution Agreement (the
"Distribution");
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the obligations of the parties to the Merger Agreement
to consummate the Merger (as defined in the Merger Agreement);
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the obligations of the parties to the Distribution
Agreement to consummate the Distribution; and
WHEREAS, in connection with the Contribution and the Distribution,
Conexant and Washington have determined that it is appropriate and desirable to
provide for the allocation of certain assets and liabilities and certain other
matters relating to employees, employee benefit plans and compensation
arrangements;
NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. Capitalized terms used in this Agreement (or in
any Schedule to this Agreement) but not defined herein (other than the names of
employee benefit plans) will have the meanings ascribed to such terms in the
Distribution Agreement. As used in this Agreement (or in any Schedule to this
Agreement), the terms defined in Schedule 1.01 have the meanings set forth in
Schedule 1.01 and the following terms have the following meanings (in each case,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"ACTIVE CONEXANT EMPLOYEE" means any individual who,
immediately after the Time of Distribution, will be employed by a
member of the Conexant Group pursuant to Section 2.01(b).
"ACTIVE WASHINGTON EMPLOYEE" means any individual who,
immediately after the Time of Distribution, will be employed by a
member of the Washington Group pursuant to Section 2.01(a).
"AGREEMENT" has the meaning set forth in the preamble.
"ALPHA" has the meaning set forth in the preamble.
"CODE" means the Internal Revenue Code of 1986, as amended, or
any successor legislation.
"CONEXANT" has the meaning set forth in the preamble.
"CONEXANT DEFERRED COMPENSATION PLAN" means the Conexant
Systems, Inc. Deferred Compensation Plan, including all amendments
thereto through the Distribution Date.
"CONEXANT DEFERRED COMPENSATION PLAN RABBI TRUST" means the
Conexant Systems, Inc. master rabbi trust relating to the Conexant
Deferred Compensation Plan, including all amendments thereto through
the Distribution Date.
"CONEXANT 1999 ESPP" means the Conexant Systems, Inc. 1999
Employee Stock Purchase Plan, including all amendments thereto through
the Distribution Date, under which no Offering Periods (as defined in
the plan) are currently outstanding.
"CONEXANT 2001 ESPP" means the Conexant Systems, Inc. 2001
Employee Stock Purchase Plan, including all amendments thereto through
the Distribution Date.
"CONEXANT HOURLY SAVINGS PLAN" means the Conexant Systems,
Inc. Hourly Employees' Savings Plan, including all amendments thereto
through the Distribution Date.
4
"CONEXANT NON-QUALIFIED ESPP" means the Conexant Systems, Inc.
Non-Qualified Employee Stock Purchase Plan, including all amendments
thereto through the Distribution Date.
"CONEXANT NON-QUALIFIED SAVINGS PLAN" means the Conexant
Systems, Inc. Non-Qualified Retirement Savings Plan, including all
amendments thereto through the Distribution Date.
"CONEXANT OPTION" means an option to purchase from Conexant
shares of Conexant Common Stock granted pursuant to or governed by one
of the Conexant Stock Plans which is outstanding immediately prior to
the Time of Distribution.
"CONEXANT PARTICIPANT" means any individual who, immediately
after the Time of Distribution, is (a) an Active Conexant Employee, (b)
a Former Conexant Employee or (c) a beneficiary of either of the
foregoing.
"CONEXANT PERFORMANCE SHARE PLAN" means the Conexant Systems,
Inc. 2001 Performance Share Plan, including all amendments thereto
through the Distribution Date.
"CONEXANT SAVINGS PLAN" means the Conexant Systems, Inc.
Retirement Savings Plan, including all amendments thereto through the
Distribution Date.
"CONEXANT SPLIT OPTION" means each Conexant Option (other than
the Mindspeed March 30 Options).
"CONEXANT STOCK PLANS" means each of the following plans:
(i) Conexant Systems, Inc. 1998 Stock Option
Plan;
(ii) Conexant Systems, Inc. 1999 Long-Term
Incentives Plan;
(iii) Conexant Systems, Inc. 2000 Non-Qualified
Stock Plan;
(iv) Conexant Systems, Inc. Directors Stock Plan;
(v) Istari Design, Inc. 1997 Stock Option Plan;
(vi) Microcosm Communications Limited Stock
Option Plan;
(vii) Maker Communications, Inc. 1999 Stock
Incentive Plan;
(viii) Maker Communications, Inc. 1996 Stock Option
Plan;
(ix) Applied Telecom, Inc. 2000 Non-Qualified
Stock Option Plan;
(x) Philsar Semiconductor Inc. Stock Option
Plan;
5
(xi) Sierra Imaging, Inc. 1996 Stock Option Plan;
(xii) HotRail, Inc. 1997 Equity Incentive Plan;
(xiii) HotRail, Inc. 2000 Equity Plan;
(xiv) NetPlane Systems, Inc. Stock Option Plan;
(xv) Novanet Semiconductor Ltd. Employee Shares
Option Plan; and
(xvi) HyperXS Communications, Inc. 2000 Stock
Option Plan;
in each case, including all amendments thereto through the Distribution Date.
"CONEXANT VERP" means the Conexant Systems, Inc. Voluntary
Early Retirement Program, including all amendments thereto through the
Distribution Date.
"CONEXANT VERP TRUST" means the Conexant Systems, Inc. trust
relating to the Conexant VERP, including all amendments thereto through
the Distribution Date.
"CONEXANT WELFARE PLANS" has the meaning set forth in Section
6.01(a).
"CONTRIBUTION" has the meaning set forth in the recitals.
"DISTRIBUTION" has the meaning set forth in the recitals.
"DISTRIBUTION AGREEMENT" has the meaning set forth in the
recitals.
"EFFECTIVE TIME" has the meaning set forth in the Merger
Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor legislation.
"FORMER CONEXANT EMPLOYEE" means any Pre-Distribution Group
Employee who is not, immediately after the Time of Distribution, an
Active Conexant Employee or an Active Washington Employee, and whose
most recent active employment with Conexant or any other member of the
Pre-Distribution Group (but with respect to each such member who has
ceased to be an Affiliate of Conexant or its predecessors, prior to the
time that such member of the Pre-Distribution Group ceased to be an
Affiliate of Conexant or its predecessors) was with the Conexant
Business.
"FORMER WASHINGTON EMPLOYEE" means any Pre-Distribution Group
Employee who is not, immediately after the Time of Distribution, an
Active Washington Employee or an Active Conexant Employee, and whose
most recent active employment with Conexant or any other member of the
Pre-Distribution Group (but with respect to each such member who has
ceased to be an Affiliate of Conexant or its predecessors, prior to the
time that such member of the Pre-Distribution Group
6
ceased to be an Affiliate of Conexant or its predecessors) was with the
Washington Business or, to the extent such Pre-Distribution Group
Employee's function was primarily related to the Washington Business,
the corporate office of Conexant.
"INCENTIVE COMPENSATION PLANS" means each of the following
plans:
(i) Peak Performance Plan, Conexant's Annual
Incentive Plan;
(ii) Peak Performance Plan - Marketing,
Conexant's Annual Incentive Plan; and
(iii) Conexant Systems, Inc. FY02 Sales
Compensation Plan.
"MERGER AGREEMENT" has the meaning set forth in the recitals.
"MINDSPEED MARCH 30 OPTIONS" means those Conexant Options
granted to employees of Conexant's Mindspeed Technologies business on
March 30, 2001 and those Conexant Options held by persons in certain
foreign locations (none of whom is an Active Washington Employee), as
determined by the Compensation and Management Development Committee of
the Board of Directors of Conexant and set forth on Schedule 1.01(b).
"PRE-DISTRIBUTION GROUP" has the meaning set forth in the
Distribution Agreement.
"PRE-DISTRIBUTION GROUP EMPLOYEE" means any individual who
was, at any time prior to the Time of Distribution, employed by
Conexant or any other member of the Pre-Distribution Group (but with
respect to each such member who has ceased to be an Affiliate of
Conexant or its predecessors, prior to the time that such member of the
Pre-Distribution Group ceased to be an Affiliate of Conexant or its
predecessors).
"RETURNING WASHINGTON EMPLOYEE" has the meaning set forth in
Section 2.01(c).
"WASHINGTON" has the meaning set forth in the preamble.
"WASHINGTON COMMON STOCK" has the meaning set forth in the
recitals.
"WASHINGTON ESPP" has the meaning set forth in Section
6.06(a).
"WASHINGTON NON-QUALIFIED ESPP" has the meaning set forth in
Section 6.06(a).
"WASHINGTON OPTION" means an option to purchase from
Washington shares of Washington Common Stock provided to a holder of a
Conexant Split Option pursuant to Section 5.01(a).
7
"WASHINGTON PARTICIPANT" means any individual who, immediately
after the Time of Distribution, is (a) an Active Washington Employee,
(b) a Former Washington Employee or (c) a beneficiary of either of the
foregoing.
"WASHINGTON SAVINGS PLAN" has the meaning set forth in Section
3.01(a).
"WASHINGTON STOCK PLANS" has the meaning set forth in Section
5.01(b).
"WASHINGTON VERP" has the meaning set forth in Section
6.07(a).
"WASHINGTON VERP TRUST" has the meaning set forth in Section
6.07(a).
"WASHINGTON WELFARE PLANS" has the meaning set forth in
Section 6.01(a).
"WELFARE PLAN" means an employee welfare benefit plan as
defined in Section 3(1) of ERISA, including medical, vision, dental and
other health plans, retiree health plans, life insurance plans, retiree
life insurance plans, accidental death and dismemberment plans,
long-term disability plans and severance pay plans.
"WIRELESS EMPLOYEE" has the meaning set forth in Section
2.01(c).
ARTICLE II
EMPLOYEES
Section 2.01 Employees. (a) Each individual who is employed by Conexant
or any of its Subsidiaries (including members of the Washington Group and
members of the Conexant Group) immediately prior to the Time of Distribution and
who is identified on the attached Schedule 2.01 (including those individuals
identified on Schedule 2.01 who are actively employed or on lay-off, leave,
short-term or long-term disability or other permitted absence from employment)
will be or will continue to be employed by a member of the Washington Group
immediately after the Time of Distribution and will be an Active Washington
Employee.
(b) Each individual (other than those identified on Schedule 2.01) who
is employed by Conexant or any of its Subsidiaries (including members of the
Washington Group and members of the Conexant Group) immediately prior to the
Time of Distribution (including those who are actively employed or on lay-off,
leave, short-term or long-term disability or other permitted absence from
employment) will be or will continue to be employed by a member of the Conexant
Group immediately after the Time of Distribution and will be an Active Conexant
Employee.
(c) Notwithstanding the foregoing, in the event that on or prior to
December 31, 2003, any Active Washington Employee returns directly from
employment with Alpha or any of its Subsidiaries to employment with Conexant or
any of its Subsidiaries (a "Returning Washington Employee") or any Active
Conexant Employee leaves employment
8
with Conexant or any of its Subsidiaries and is employed directly by Alpha or
any of its Subsidiaries (a "Wireless Employee"), in each case, with the prior
written consent of either (x) both the Chief Executive Officer of Conexant and
the Chief Executive Officer of Alpha or (y) both the Senior Vice President,
Human Resources of Conexant and the Vice President, Human Resources of Alpha,
then:
(i) Conexant shall credit such Returning Washington Employee
(A) under welfare benefit plans of Conexant and its Subsidiaries with
all service and other items which have been credited or accumulated for
the benefit of such Returning Washington Employee under the
corresponding welfare benefit plans of Alpha or its Subsidiaries and
(B) with all service with Alpha and its Subsidiaries for purposes of
eligibility and vesting (but not for benefit accrual or contributions)
under any savings plan, retirement plan, stock option plan, incentive
compensation plan, deferred compensation plan, performance share plan,
employee stock purchase plan or other similar plan of Conexant and its
Subsidiaries, and such Returning Washington Employee will be considered
to have been in continuous service with Conexant and its Subsidiaries
during the combined period of employment with both Conexant and its
Subsidiaries and Alpha and its Subsidiaries and will not be considered
to have terminated employment with Conexant and its Subsidiaries as a
result of the Distribution and the Merger; and
(ii) Alpha shall credit such Wireless Employee (A) under
welfare benefit plans of Alpha and its Subsidiaries with all service
and other items which have been credited or accumulated for the benefit
of such Wireless Employee under any welfare benefit plans of Conexant
or its Subsidiaries and (B) with all service with Conexant and its
Subsidiaries for purposes of eligibility and vesting (but not for
benefit accrual or contributions) under any savings plan, retirement
plan, stock option plan, incentive compensation plan, deferred
compensation plan, performance share plan, employee stock purchase plan
or other similar plan of Alpha and its Subsidiaries, as if such
Wireless Employee had become an Active Washington Employee as of the
Time of Distribution pursuant to the terms of this Agreement.
(d) Effective as of the Time of Distribution, (i) for
immigration purposes Washington will be the successor-in-interest to any and all
pending or approved visa petitions (whether with the U.S. Immigration and
Naturalization Service or U.S. Department of Labor), including pending or
completed Labor Condition Applications, made by Conexant and its Subsidiaries
with respect to Active Washington Employees, and Washington will adopt and
accept all representations made by Conexant in any of these petitions and
applications, (ii) Washington will adopt any Labor Condition Application
included in the "Public Access Folders" for Active Washington Employees who have
H-1B visas, and (iii) Washington will adopt any existing I-9 certifications of
Conexant and its Subsidiaries with respect to Active Washington Employees.
(e) Nothing contained in this Section 2.01 is intended to
confer upon any employee of the Conexant Group or the Washington Group any right
to continued employment after the Time of Distribution.
9
ARTICLE III
SAVINGS PLANS
Section 3.01 Retirement Savings Plan. (a) As of the Effective Time,
Washington or Alpha will have established, and will cover Active Washington
Employees who were eligible to participate in the Conexant Savings Plan prior to
the Time of Distribution under, a new or existing defined contribution plan (the
"Washington Savings Plan"), which will be qualified pursuant to Sections 401(a)
and 401(k) of the Code, and will have established a related trust which will be
exempt from taxation under Section 501(a) of the Code. The Washington Savings
Plan will credit each participating Active Washington Employee thereunder for
purposes of eligibility and vesting with all service which had been credited to
such employee for such purposes under the Conexant Savings Plan immediately
prior to the Time of Distribution.
(b) After the Time of Distribution, each Active Washington Employee who
participated in the Conexant Savings Plan prior to the Time of Distribution will
be permitted to rollover his or her account balances from the Conexant Savings
Plan to the Washington Savings Plan in accordance with the terms of the
respective plans and applicable law; provided, however, that to the extent that
any Active Washington Employee has any outstanding loans related to his or her
account balances in the Conexant Savings Plan, such Active Washington Employee
will not be permitted to rollover his or her account balances to the Washington
Savings Plan until such loan has been repaid in full to the Conexant Savings
Plan.
(c) Effective as of the Time of Distribution, Active Washington
Employees will cease to be eligible to contribute to, or receive contributions
in respect of, their Conexant Savings Plan accounts. None of Washington, any
other member of the Washington Group, Affiliates of the foregoing, the
Washington Savings Plan or the trust thereunder will have or acquire any
interest in or right to any of the assets of the Conexant Savings Plan, and
Conexant will retain full power and authority with respect to the amendment and
termination of the Conexant Savings Plan and the investment and disposition of
assets held in the Conexant Savings Plan to the extent permitted by law.
Section 3.02 Hourly Employees' Savings Plan. As of the Time of
Distribution, Conexant will retain sponsorship of the Conexant Hourly Savings
Plan. No Active Washington Employees or Former Washington Employees are eligible
to participate in the Conexant Hourly Savings Plan. Accordingly, none of
Washington or any member of the Washington Group will have or retain any
interest in or right to any of the assets of the Conexant Hourly Savings Plan or
will have any Liabilities with respect to such plan, and Conexant will have full
power and authority with respect to the Conexant Hourly Savings Plan.
Section 3.03 Non-Qualified Retirement Savings Plan. As of the Time of
Distribution, Conexant will retain sponsorship of the Conexant Non-Qualified
Retirement Savings Plan. Effective as of the Effective Time, each Washington
Participant set forth on
10
Schedule 3.03 who was eligible to participate in the Conexant Non-Qualified
Savings Plan prior to the Time of Distribution will be treated as having
terminated employment with Conexant and the Conexant Subsidiaries for purposes
of determining his or her eligibility to participate in the Conexant
Non-Qualified Savings Plan and will be paid his or her vested account balance
pursuant to the terms of the plan. Accordingly, none of Washington or any member
of the Washington Group will have or retain any interest in or right to any of
the assets of the Conexant Non-Qualified Savings Plan or, except as set forth in
the immediately following sentence, will have any Liabilities with respect to
such plan, and Conexant will have full power and authority with respect to the
Conexant Non-Qualified Savings Plan. Notwithstanding anything to the contrary in
this Section 3.03, within three Business Days (as defined in the Merger
Agreement) after the Time of Distribution, Washington shall pay to Conexant an
amount equal to the vested account balances paid or to be paid to such
Washington Participants by Conexant pursuant to the terms of the Conexant
Non-Qualified Savings Plan and this Section 3.03.
ARTICLE IV
PENSION PLANS
[INTENTIONALLY OMITTED]
ARTICLE V
STOCK PLANS
Section 5.01 Stock Plans. (a) Conexant and Washington will take all
action necessary or appropriate so that each Conexant Split Option that is
outstanding immediately prior to the Time of Distribution is adjusted pursuant
to the equitable adjustment and other provisions of the applicable Conexant
Stock Plan under which such Conexant Split Option was granted in the manner
described in this Section 5.01. The number of shares of Conexant Common Stock
subject to such adjusted Conexant Split Option and the per-share exercise price
of such adjusted Conexant Split Option will be determined as set forth on
Schedule 5.01(a)(i). Each such adjusted Conexant Split Option will otherwise
have the same terms and conditions as those in effect immediately prior to the
adjustment. In addition, each person holding a Conexant Split Option that is
outstanding immediately prior to the Time of Distribution will receive a
Washington Option pursuant to the equitable adjustment and other provisions of
the applicable Conexant Stock Plan under which such Conexant Split Option was
granted. The number of shares of Washington Common Stock subject to such
Washington Option and the per-share exercise price of such Washington Option
will be determined as set forth on Schedule 5.01(a)(ii). Each such Washington
Option will otherwise have substantially the same terms and conditions as the
corresponding Conexant Split Option being adjusted, except that references to
Conexant will be changed to refer to Washington and references to any of the
Conexant Stock Plans will be changed to refer to Washington's applicable stock
option plan.
11
(b) Prior to the Time of Distribution, Washington will have established
one or more stock option plans (the "Washington Stock Plans") the purposes of
which are to provide a means for Washington to perform its obligations with
respect to Washington Options derived from the Conexant Split Options and which
will be substantially similar in all material respects to the corresponding
Conexant Stock Plan governing the Conexant Split Option from which the
Washington Option was derived and will provide that solely for purposes of
vesting and treatment of the Washington Options upon termination of employment,
retirement, death or disability under the Washington Stock Plan, continued
employment of the holder of any Washington Option who is not an Active
Washington Employee with such holder's current employer (or an Affiliate
thereof) shall be treated as continued employment with Washington. From and
after the Time of Distribution, Washington will retain sponsorship of and will
be solely responsible for the Washington Stock Plans.
(c) The Conexant Stock Plans will provide that solely for purposes of
vesting and treatment of the Conexant Split Options upon termination of
employment, retirement, death or disability under the Conexant Stock Plans,
continued employment of any Active Washington Employee who holds a Conexant
Split Option with Washington or Alpha (or an Affiliate thereof) shall be treated
as continued employment with Conexant. From and after the Time of Distribution,
Conexant will retain sponsorship of and will be solely responsible for the
Conexant Stock Plans.
(d) Conexant and Washington will take all action necessary or
appropriate so that each Mindspeed March 30 Option that is outstanding
immediately prior to the Time of Distribution is adjusted pursuant to the
equitable adjustment and other provisions of the applicable Conexant Stock Plan
under which such Mindspeed March 30 Option was granted in the manner described
in this Section 5.01(d). The number of shares of Conexant Common Stock subject
to such adjusted Mindspeed March 30 Option and the per-share exercise price of
such adjusted Mindspeed March 30 Option will be determined as set forth on
Schedule 5.01(d). Each such adjusted Mindspeed March 30 Option will otherwise
have the same terms and conditions as those in effect immediately prior to the
adjustment.
ARTICLE VI
OTHER EMPLOYEE PLANS AND MATTERS
Section 6.01 Welfare Plans. (a) Effective as of the Effective Time,
Washington or Alpha will have established, and will cover Washington
Participants under, new or existing Welfare Plans and other employee welfare
benefit and fringe benefit arrangements (collectively, "Washington Welfare
Plans") that are comparable in the aggregate to the Welfare Plans and other
employee welfare benefit and fringe benefit arrangements maintained by Conexant
and its Subsidiaries (including members of the Washington Group) prior to the
Time of Distribution in which Washington Participants were eligible to
participate immediately prior to the Time of Distribution ("Conexant Welfare
Plans"), with such changes or amendments thereto as Washington may deem
appropriate.
12
(b) The Washington Welfare Plans will provide for the immediate
participation of those Washington Participants who participated in the
corresponding Conexant Welfare Plans immediately prior to the Time of
Distribution. Each of the Washington Welfare Plans will credit each Washington
Participant thereunder for all Washington Welfare Plan purposes with all service
and any other item which had been credited to or otherwise accumulated for the
benefit of such Washington Participant under the corresponding Conexant Welfare
Plans immediately prior to the Time of Distribution, including service credited
toward any waiting periods and amounts credited toward any medical or health
insurance deductible or co-payment (except to the extent that such crediting
would result in the duplication of benefits). Without limiting the generality of
the foregoing, each Washington Welfare Plan, to the extent applicable: (i) will
recognize all amounts applied to deductibles, co-payments, out-of-pocket
maximums and lifetime maximum benefits with respect to Washington Participants
under the corresponding Conexant Welfare Plan for the plan year that includes
the Time of Distribution and for prior periods (if applicable); (ii) will
recognize all service credited to waiting periods with respect to Washington
Participants under the corresponding Conexant Welfare Plan; (iii) will not
impose any limitations on coverage of pre-existing conditions of Washington
Participants, except to the extent such limitations applied to such Washington
Participants under the corresponding Conexant Welfare Plan immediately prior to
the Time of Distribution; and (iv) will not impose any other conditions (such as
proof of good health, evidence of insurability or a requirement of a physical
examination) upon the participation by Washington Participants who were
participating in the corresponding Conexant Welfare Plan immediately prior to
the Time of Distribution.
(c) Effective as of the Effective Time, Washington or Alpha will have
established, and will cover Active Washington Employees under, policies relating
to vacation days and personal and sick days that are comparable in the aggregate
to the policies relating to vacation days and personal and sick days maintained
by Conexant immediately prior to the Time of Distribution. Effective as of the
Time of Distribution, Washington and the Washington Subsidiaries will credit
each Active Washington Employee with the unused vacation days and personal and
sickness days accrued by such employee through the Time of Distribution in
accordance with the vacation and personnel policies and agreements of Conexant
and its Subsidiaries (including members of the Washington Group) applicable to
such employee in effect immediately prior to the Time of Distribution.
(d) (i) From and after the Time of Distribution, Washington and the
Washington Subsidiaries hereby assume or retain, as applicable, and will be
solely responsible for and will fully perform, pay and discharge, all
Liabilities of Conexant or any of its Subsidiaries (including members of the
Washington Group) in respect of Washington Participants (and claims by or
relating to Washington Participants) with respect to employee welfare and fringe
benefits (including medical, dental, vision, life, travel, accident, short- and
long-term disability, hospitalization, workers' compensation and other insurance
benefits), whether under the Conexant Welfare Plans, the Washington Welfare
Plans or otherwise, whether incurred, or arising in connection with incidents
occurring, before, at or after the Time of Distribution and whether any claim is
made with respect thereto before, at or after the Time of Distribution.
Notwithstanding the preceding sentence, Washington and the
13
Washington Subsidiaries will not be liable for amounts actually paid under
insured Conexant Welfare Plans with respect to which Conexant and its
Subsidiaries have no obligation to reimburse for claims made with respect to
incidents occurring before the Time of Distribution covered thereby.
(ii) Within 30 days after the Time of Distribution, Washington or Alpha
will obtain run-off workers' compensation insurance coverage in respect of
claims by or relating to Washington Participants for periods prior to the Time
of Distribution, with such coverage and terms as shall be sufficient to satisfy
the requirements of the California Department of Industrial Relations, Division
of Workers' Compensation (the "Division") for the prompt release to Conexant of
the portion of Conexant's total deposit (the "Reserve Amount") as a self-insured
employer with the Division attributable to Washington Participants. Within 20
Business Days after a written request by Conexant, Washington shall pay to
Conexant an amount equal to any amounts paid from the Reserve Amount in respect
of workers' compensation claims by or relating to Washington Participants made
during the period beginning at the Time of Distribution and ending on the date
the portion of the Reserve Amount attributable to Washington Participants has
been released to Conexant.
(iii) Without limiting the generality of the foregoing and except as
provided in Section 6.07, from and after the Time of Distribution, Washington
and the Washington Subsidiaries (or where appropriate, the Washington Welfare
Plans) hereby assume or retain, as applicable, and will be solely responsible
for and will fully perform, pay and discharge, all Liabilities of Conexant or
any of its Subsidiaries (including members of the Washington Group) in respect
of Washington Participants (and claims by or relating to Washington
Participants) with respect to retiree health and welfare benefits and retiree
life insurance benefits, whether under the Conexant Welfare Plans, the
Washington Welfare Plans or otherwise, whether incurred, or arising in
connection with incidents occurring, before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution.
(e) (i) From and after the Time of Distribution, Conexant and the
Conexant Subsidiaries hereby assume or retain, as applicable, and will be solely
responsible for and will fully perform, pay and discharge, all Liabilities of
Conexant or any of its Subsidiaries (including members of the Washington Group)
in respect of Conexant Participants (and claims by or relating to Conexant
Participants) with respect to employee welfare and fringe benefits (including
medical, dental, vision, life, travel, accident, short- and long-term
disability, hospitalization, workers' compensation and other insurance
benefits), whether under the Conexant Welfare Plans or otherwise, whether
incurred, or arising in connection with incidents occurring, before, at or after
the Time of Distribution and whether any claim is made with respect thereto
before, at or after the Time of Distribution.
(ii) Without limiting the generality of the foregoing, from and after
the Time of Distribution, Conexant and the Conexant Subsidiaries (or where
appropriate, the Conexant Welfare Plans) hereby assume or retain, as applicable,
and will be solely responsible for and will fully perform, pay and discharge,
all Liabilities of Conexant or any of its Subsidiaries (including members of the
Washington Group) in respect of Conexant Participants (and
14
claims by or relating to Conexant Participants) with respect to retiree health
and welfare benefits and retiree life insurance benefits, whether under the
Conexant Welfare Plans or otherwise, whether incurred, or arising in connection
with incidents occurring, before, at or after the Time of Distribution and
whether any claim is made with respect thereto before, at or after the Time of
Distribution.
Section 6.02 Incentive Compensation Plans. (a) Except as set forth in
Section 6.08, effective as of the Time of Distribution, Washington hereby
assumes or retains, as applicable, and will be solely responsible for and will
fully perform, pay and discharge, all Liabilities (including liability for
earned but unpaid incentive payments) of Conexant or any of its Subsidiaries
(including members of the Washington Group) for, due to and/or attributable to
Washington Participants under the Incentive Compensation Plans and all other
long-term, annual and other incentive compensation plans of Conexant and its
Subsidiaries (including members of the Washington Group) in effect at or prior
to the Time of Distribution.
(b) Effective as of the Time of Distribution, Conexant hereby assumes
or retains, as applicable, and will be solely responsible for and will fully
perform, pay and discharge, all Liabilities (including liability for earned but
unpaid incentive payments) of Conexant or any of its Subsidiaries (including
members of the Washington Group) for, due to and/or attributable to
Pre-Distribution Group Employees under the Incentive Compensation Plans and all
other long-term, annual and other incentive compensation plans of Conexant and
its Subsidiaries (including members of the Washington Group) in effect at or
prior to the Time of Distribution, other than those assumed by Washington
pursuant to Section 6.02(a).
(c) Conexant and Washington will cooperate in taking all actions
necessary or appropriate to adjust the performance goals and other applicable
terms and conditions of awards under the Incentive Compensation Plans and such
other incentive compensation plans and arrangements for performance periods that
begin before and end after the Time of Distribution as appropriate to reflect
the Distribution. Without limiting the generality of the foregoing, for purposes
of any Conexant restricted stock awards held by any Active Washington Employee,
continued employment of such employee with Washington or Alpha (or an Affiliate
thereof) following the Time of Distribution shall be treated as continued
employment with Conexant.
(d) Notwithstanding anything to the contrary in Sections 6.02(a)
through (c), nothing in this Section 6.02 will prevent either Conexant or
Washington from amending or terminating in accordance with the terms thereof any
existing, or implementing any future, incentive compensation plans and
arrangements on such terms as Conexant or Washington may determine in their sole
discretion after the Time of Distribution.
Section 6.03 Deferred Compensation Plan. As of the Time of
Distribution, Conexant will retain sponsorship of the Conexant Deferred
Compensation Plan and the related Conexant Deferred Compensation Plan Rabbi
Trust. No Active Washington Employees or Former Washington Employees participate
in the Conexant Deferred Compensation Plan. Accordingly, none of Washington or
any member of the Washington
15
Group will have or retain any interest in or right to any of the assets of the
Conexant Deferred Compensation Plan or the Conexant Deferred Compensation Plan
Rabbi Trust or will have any Liabilities with respect to such plan or trust, and
Conexant will have full power and authority with respect to the Conexant
Deferred Compensation Plan and the Conexant Deferred Compensation Plan Rabbi
Trust.
Section 6.04 Severance Pay. (a) Conexant, Washington and Alpha
acknowledge and agree that the transactions contemplated by the Transaction
Agreements will not constitute a severance of employment of any employee of
Conexant or any of its Subsidiaries (including members of the Washington Group)
prior to or as a result of the transactions contemplated thereby, and that
individuals who, in connection with the Distribution, become Active Conexant
Employees or Active Washington Employees pursuant to this Agreement will not be
deemed to have experienced a termination, layoff or severance of employment from
Conexant and its Subsidiaries (including members of the Washington Group), in
each case for purposes of any policy, plan, program or agreement of Conexant or
any of its Subsidiaries (including any member of the Washington Group) that
provides for the payment of severance, salary continuation or similar benefits.
(b) Washington and the Washington Subsidiaries hereby assume or retain,
as applicable, and will be solely responsible for and will fully perform, pay
and discharge, all Liabilities of Conexant or any of its Subsidiaries (including
members of the Washington Group) in connection with claims made by or on behalf
of Washington Participants in respect of severance pay, salary continuation and
similar obligations relating to the termination or alleged termination (whether
voluntary or involuntary) of any such person's employment, whether such
termination or alleged termination occurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any employment, collective bargaining or other agreement or under any
Federal, state, local, provincial or foreign law).
(c) Conexant and the Conexant Subsidiaries hereby assume or retain, as
applicable, and will be solely responsible for and will fully perform, pay and
discharge, all Liabilities of Conexant or any of its Subsidiaries (including
members of the Washington Group) in connection with claims made by or on behalf
of Pre-Distribution Group Employees in respect of severance pay, salary
continuation and similar obligations relating to the termination or alleged
termination (whether voluntary or involuntary) of any such person's employment,
whether such termination or alleged termination occurred before, at or after the
Time of Distribution and whether any claim is made with respect thereto before,
at or after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any employment, collective bargaining or other agreement or under any
Federal, state, local, provincial or foreign law), other than those expressly
assumed by Washington pursuant to Section 6.04(b).
Section 6.05 Employment, Consulting and Other Employee Related
Agreements. (a) Effective as of the Time of Distribution, Washington and the
Washington Subsidiaries hereby assume or retain, as applicable, and will be
solely responsible for and will
16
fully perform, pay and discharge, all Liabilities of Conexant or any of its
Subsidiaries (including members of the Washington Group) relating to all
Washington Participants under their respective employment, consulting,
separation, arbitration and other employee related agreements with any member of
the Pre-Distribution Group, as the same are in effect immediately prior to the
Time of Distribution.
(b) Effective as of the Time of Distribution, Conexant and the Conexant
Subsidiaries hereby assume or retain, as applicable, and will be solely
responsible for and will fully perform, pay and discharge, all Liabilities of
Conexant or any of its Subsidiaries (including members of the Washington Group)
relating to all Pre-Distribution Group Employees under their respective
employment, consulting, separation, arbitration and other employee related
agreements with any member of the Pre-Distribution Group, as the same are in
effect immediately prior to the Time of Distribution, other than those expressly
assumed by Washington pursuant to Section 6.05(a).
Section 6.06 Employee Stock Purchase Plans. (a) Effective as of the
Effective Time, Alpha will have established, and will cover eligible Active
Washington Employees under, (i) an employee stock purchase plan which is
comparable to the Conexant 2001 ESPP (the "Washington ESPP") and (ii) a
non-qualified employee stock purchase plan which is comparable in all material
respects to the Conexant Non-Qualified ESPP (the "Washington Non-Qualified
ESPP"). Each of the Washington ESPP and the Washington Non-Qualified ESPP will
credit each participating Active Washington Employee thereunder for purposes of
eligibility and vesting with all service which had been credited to such
employee for such purposes under the Conexant 2001 ESPP and the Conexant
Non-Qualified ESPP, respectively, immediately prior to the Time of Distribution.
(b) Nothing contained in this Agreement shall require Conexant,
Washington or Alpha to continue to maintain any employee stock purchase plan,
program, or arrangement following the Time of Distribution.
(c) As of the Time of Distribution, Conexant will retain sponsorship of
the Conexant 2001 ESPP, the Conexant Non-Qualified ESPP and the Conexant 1999
ESPP. Effective as of the Effective Time, each Active Washington Employee will
be treated as having terminated employment with Conexant and the Conexant
Subsidiaries for purposes of determining his or her eligibility to participate
in the Conexant 2001 ESPP, the Conexant Non-Qualified ESPP and the Conexant 1999
ESPP. Accordingly, none of Washington or any member of the Washington Group will
have or retain any interest in or right to any of the assets of the Conexant
2001 ESPP, the Conexant Non-Qualified ESPP and the Conexant 1999 ESPP or will
have any Liabilities with respect to such plans, and Conexant will have full
power and authority with respect to the Conexant 2001 ESPP, the Conexant
Non-Qualified ESPP and the Conexant 1999 ESPP.
Section 6.07 VERP. (a) Effective as of the Effective Time, Washington or Alpha
will have established a new voluntary early retirement program (the "Washington
VERP"), the purpose of which will be to provide benefits to Washington
Participants who participate in the Conexant VERP immediately prior to the Time
of Distribution, and a trust
17
related thereto (the "Washington VERP Trust"). The Washington VERP will be
substantially similar in all material respects to the Conexant VERP. The
Washington VERP will credit each Washington Participant thereunder for purposes
of eligibility to participate and benefit accruals and all other plan purposes
with all service which has been credited to such participant for such purposes
under the Conexant VERP immediately prior to the Time of Distribution (except to
the extent that such crediting would result in the duplication of benefits).
(b) Effective as of the Time of Distribution, Washington and the
Washington Subsidiaries hereby assume and agree to fully perform, pay and
discharge, and agree to cause the Washington VERP and the Washington VERP Trust
to assume, and to fully perform, pay and discharge, all accrued benefit and
other Liabilities of Conexant or any of its Subsidiaries (including members of
the Washington Group) and of the Conexant VERP and the Conexant VERP Trust under
and relating to the Conexant VERP and the Conexant VERP Trust with respect to
Washington Participants who were covered under the Conexant VERP prior to the
Time of Distribution.
(c) Effective as of the Time of Distribution, Conexant and the Conexant
Subsidiaries hereby retain and agree to fully perform, pay and discharge, and
agree to cause the Conexant VERP and the Conexant VERP Trust to retain, and to
fully perform, pay and discharge, all accrued benefit and other Liabilities of
Conexant or any of its Subsidiaries (including members of the Washington Group)
and of the Conexant VERP and the Conexant VERP Trust under and relating to the
Conexant VERP and the Conexant VERP Trust, other than those expressly assumed by
Washington pursuant to Section 6.07(b).
(d) On or prior to the Time of Distribution, Conexant will cause the
Conexant VERP Trust to transfer to the Washington VERP Trust, for the benefit of
Washington Participants who participated in the Conexant VERP prior to the Time
of Distribution, a proportionate share of the assets of the Conexant VERP Trust,
the amount of which will be equal to the product of: (i) the aggregate value of
all of the assets of the Conexant VERP Trust as of the date of transfer
multiplied by (ii) the quotient of (A) the actuarial present value of
accumulated plan benefits under the Conexant VERP for all Washington
Participants participating in the Conexant VERP as of the date of transfer
divided by (B) the actuarial present value of accumulated plan benefits under
the Conexant VERP for all participants participating in the Conexant VERP as of
the date of transfer. For purposes of determining such actuarial present value
of accumulated plan benefits under the Conexant VERP, the following actuarial
assumptions will be used: (x) life expectancy of participants shall be
determined using the 1985 Male and Female Group Annuity Maturity Table, (y) the
average retirement age shall be age 56.3 and (z) the average annual investment
return shall be 4.00%. The assets to be transferred from the Conexant VERP Trust
to the Washington VERP Trust, as calculated as set forth above, will be reduced
by the amount of any benefit payment to any Washington Participant under the
Conexant VERP after the Time of Distribution (or the Washington VERP will
otherwise promptly reimburse the Conexant VERP for any such benefit payment to a
Washington Participant) and a proportional share of investment and
administrative expenses. The amount of assets to be transferred from the
Conexant VERP Trust to the Washington VERP Trust pursuant to this Section
6.07(d) will be calculated by
18
Conexant's actuary. The transfer of assets from the Conexant VERP Trust to the
Washington VERP Trust will be made in cash, mutual fund account balances or
other property, as determined by Conexant.
(e) Notwithstanding anything to the contrary in this Section 6.07, in
the case of retiree medical and life insurance benefits provided to participants
in the Conexant VERP on account of a retiree medical and life insurance benefit
program sponsored by a predecessor of Conexant, Washington hereby agrees to
assume responsibility for administering and providing such benefits to
Washington Participants after the Time of Distribution and will establish not
later than August 31, 2002 a new retiree medical and life insurance program
substantially similar in all material respects to the Conexant retiree medical
and life insurance program to provide benefits to Washington Participants who
participate in the Conexant retiree medical and life insurance program
immediately prior to the Time of Distribution; provided, however, that during a
transition period ending not later than August 31, 2002, Conexant will continue
to administer and provide such benefits to Washington Participants on behalf of
Washington at Washington's expense; provided, further, that Washington will
reimburse Conexant for all all-out-pocket fees, costs and expenses of
administering and providing such benefits to Washington Participants incurred by
Conexant during the transition period, including, but not limited to (i) Sageo
administration fees, including any implementation costs not billed directly to
Washington in connection with setting up the new Washington retiree medical and
life insurance benefit program, (ii) ASO, stop loss and any related fees payable
to BlueShield of California for self-insured claims administration for the
Catastrophic, PPO and Indemnity Plans in which Washington Participants are
currently enrolled under the Conexant retiree medical and life insurance
program, (iii) claims incurred under any of the Catastrophic, PPO and Indemnity
Plans, as well as payment of runout claims, with respect to Washington
Participants, (iv) HMO and Medicare Risk premiums payable to HealthNet HMO with
respect to Washington Participants, (v) life insurance premiums payable to Xxxx
Xxxxxxx Life with respect to Washington Participants and (vi) other fees and
expenses incurred to segregate Washington Participant fees and claims.
Section 6.08 Performance Share Plan. As of the Time of Distribution,
Conexant will retain sponsorship of the Conexant Performance Share Plan.
Effective as of the Effective Time, each Active Washington Employee will be
treated as having terminated employment with Conexant and the Conexant
Subsidiaries for purposes of determining his or her eligibility to participate
in the Conexant Performance Share Plan and will have no rights to any payment
under such plan from and after the Time of Distribution, other than any rights
to any payments for awards previously vested and earned pursuant to the terms of
the plan. None of Washington or any member of the Washington Group will have or
retain any interest in or right to any of the assets of the Conexant Performance
Share Plan or will have any Liabilities with respect to such plan, and Conexant
will have full power and authority with respect to the Conexant Performance
Share Plan.
Section 6.09 Other Liabilities. (a) From and after the Time of
Distribution, except as specifically set forth in this Agreement, Washington and
the Washington Subsidiaries hereby assume or retain, as applicable, and will be
solely responsible for and will
19
fully perform, pay and discharge, all Liabilities of Conexant or any of its
Subsidiaries (including members of the Washington Group) arising out of or
relating to the employment of Washington Participants by any member of the
Pre-Distribution Group, whether pursuant to benefit plans or otherwise and
whether such Liabilities arose before, at or after the Time of Distribution or
any claim is made with respect thereto before, at or after the Time of
Distribution; provided, however, that nothing in this Agreement shall be
construed as obligating Washington, the Washington Subsidiaries or Alpha to
assume any obligation with respect to any defined benefit pension plan, other
than the Washington VERP.
(b) From and after the Time of Distribution, except as specifically set
forth in this Agreement, Conexant and the Conexant Subsidiaries hereby assume or
retain, as applicable, and will be solely responsible for and will fully
perform, pay and discharge, all Liabilities of Conexant or any of its
Subsidiaries (including members of the Washington Group) arising out of or
relating to the employment of Pre-Distribution Group Employees by any member of
the Pre-Distribution Group, whether pursuant to benefit plans or otherwise and
whether such Liabilities arose before, at or after the Time of Distribution or
any claim is made with respect thereto before, at or after the Time of
Distribution, other than those expressly assumed by Washington pursuant to
Section 6.09(a).
ARTICLE VII
MISCELLANEOUS
Section 7.01 Indemnification. All Liabilities retained or assumed by or
allocated to Washington, any Washington Subsidiary or Alpha pursuant to this
Agreement will be deemed to be Washington Liabilities (as defined in the
Distribution Agreement), and all Liabilities retained or assumed by or allocated
to Conexant or any Conexant Subsidiary pursuant to this Agreement will be deemed
to be Conexant Liabilities (as defined in the Distribution Agreement), and, in
each case, will be subject to the indemnification provisions set forth in
Article IV of the Distribution Agreement.
Section 7.02 Sharing of Information. Each of Conexant, Washington and
Alpha will, and will cause each of their respective Subsidiaries to, provide to
the other parties all such Information in its possession as the other parties
may reasonably request to enable the requesting party to administer its employee
benefit plans and programs, and to determine the scope of, and fulfill, its
obligations under this Agreement. Such Information will, to the extent
reasonably practicable, be provided in the format and at the times and places
requested, but in no event will the party providing such Information be
obligated to incur any out-of-pocket expense not reimbursed by the party making
such request, nor to make such Information available outside its normal business
hours and premises. Any Information shared or exchanged pursuant to this
Agreement will be subject to the confidentiality requirements set forth in the
Distribution Agreement.
Section 7.03 Entire Agreement; Construction. This Agreement, the
Distribution Agreement and the other Ancillary Agreements, including any
schedules and
20
exhibits hereto or thereto, and other agreements and documents referred to
herein and therein, will together constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and will supersede
all prior negotiations, agreements and understandings of the parties of any
nature, whether oral or written, with respect to such subject matter.
Notwithstanding any other provisions in the Transaction Agreements to the
contrary, in the event and to the extent that there is a conflict between the
provisions of this Agreement and the provisions of the Distribution Agreement,
the provisions of this Agreement will control.
Section 7.04 Survival of Agreements. Except as otherwise contemplated
by the Transaction Agreements, all covenants and agreements of the parties
contained in this Agreement will remain in full force and effect and survive the
Time of Distribution.
Section 7.05 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of Delaware
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
Section 7.06 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand, telecopied, e-mailed or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
will be deemed given when so delivered by hand or telecopied, when e-mail
confirmation is received if delivered by e-mail, or three business days after
being so mailed (one business day in the case of express mail or overnight
courier service). All such notices, requests, claims, demands and other
communications will be addressed as set forth in Section 7.04 of the
Distribution Agreement (provided that such notices, requests, claims, demands
and other communications to Alpha shall be addressed to Alpha at the same notice
address set forth for Washington in Section 7.04 of the Distribution Agreement),
or pursuant to such other instructions as may be designated in writing by the
party to receive such notice.
Section 7.07 Amendments. This Agreement cannot be amended, modified or
supplemented except by a written agreement executed by each party affected
thereby.
Section 7.08 Assignment. No party to this Agreement will convey, assign
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties in their sole and
absolute discretion. Notwithstanding the foregoing, any party may (without
obtaining any consent) assign, delegate or sublicense all or any portion of its
rights and obligations hereunder to (i) the surviving entity resulting from a
merger or consolidation involving such party, (ii) the acquiring entity in a
sale or other disposition of all or substantially all of the assets of such
party as a whole or of any line of business or division of such party, or (iii)
any other Person that is created as a result of a spin-off from, or similar
reorganization transaction of, such party or any line of business or division of
such party. In the event of an assignment pursuant to (ii) or (iii) above, the
nonassigning party shall, at the assigning party's request, use good faith
commercially reasonable efforts to enter into separate agreements with each of
the resulting entities and take
21
such further actions as may be reasonably required to assure that the rights and
obligations under this Agreement are preserved, in the aggregate, and divided
equitably between such resulting entities. Any conveyance, assignment or
transfer requiring the prior written consent of another party pursuant to this
Section 7.08 which is made without such consent will be void ab initio. No
assignment of this Agreement will relieve the assigning party of its obligations
hereunder.
Section 7.09 Captions; Currency. The article, section and paragraph
captions herein and the table of contents hereto are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. Unless otherwise
specified, all references herein to numbered articles or sections are to
articles and sections of this Agreement and all references herein to schedules
are to schedules to this Agreement. Unless otherwise specified, all references
contained in this Agreement, in any schedule referred to herein or in any
instrument or document delivered pursuant hereto to dollars or $ will mean
United States Dollars.
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 other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 7.11 Parties in Interest. This Agreement is binding upon and is
for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement. No provision of this Agreement
will be construed (a) to limit the right of Conexant, any Conexant Subsidiary,
Washington, any Washington Subsidiary or Alpha to amend or terminate any of
their plans or (b) to create any right or entitlement whatsoever in any
employee, former employee or beneficiary including a right to continued
employment or to any benefit under a plan or any other benefit or compensation.
Section 7.12 Schedules. All schedules attached hereto are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
Section 7.13 Change of Name. On or promptly after the Distribution
Date, Washington will take such actions as may be required to change the names
of all employee benefit plans sponsored or maintained by Washington, any
Washington Subsidiary or Alpha
22
to eliminate therefrom any reference to "Conexant", "Conexant Systems",
"Conexant Systems, Inc." or any derivative thereof.
Section 7.14 Waivers; Remedies. No failure or delay on the part of
Conexant, Washington or Alpha in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any waiver on the part of
Conexant, Washington or Alpha of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder, nor will any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which the parties may otherwise
have at law or in equity.
Section 7.15 Counterparts. This Agreement may be executed in separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement.
Section 7.16 Performance. Conexant will cause to be performed and
hereby guarantees the performance of all actions, agreements and obligations set
forth herein to be performed by any Conexant Subsidiary. Washington will cause
to be performed and hereby guarantees the performance of all actions, agreements
and obligations set forth herein to be performed by any Washington Subsidiary.
Alpha will cause to be performed and hereby guarantees the performance of all
actions, agreements and obligations set forth herein to be performed by any
Subsidiary or Affiliate of Alpha. In addition, Alpha and Conexant acknowledge
that from and after the Effective Time (as defined in the Merger Agreement),
Alpha will succeed to all rights, obligations and Liabilities of Washington
under this Agreement.
Section 7.17 Dispute Resolution. Any dispute, claim or controversy
arising out of or relating to any provision of this Agreement or the breach,
performance or validity thereof will be resolved in accordance with the
procedures set forth in Section 7.05 of the Distribution Agreement.
Section 7.18 Cooperation. Conexant, Washington and Alpha will cooperate
in taking all such action as may be necessary or appropriate to implement the
provisions of this Agreement, including making all appropriate filings as may be
required under ERISA or the Code, the regulations thereunder and any other
applicable laws, exchanging and sharing all appropriate records, amending plan,
trust, record keeping and other related documents and implementing all
appropriate communications with participants.
23
Section 7.19 Interpretation. Any reference to any Federal, state,
local, provincial or foreign law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. For
the purposes of this Agreement, (i) words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other gender as the context requires, (ii) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, (iii) the word "including" and words of
similar import when used in this Agreement shall mean "including, without
limitation" and (iv) all references to any plan shall be deemed to include any
amendments thereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
24
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties as of the date first hereinabove
written.
CONEXANT SYSTEMS, INC.
By: /s/ XXXXXX X. X'XXXXXX
--------------------------------------
Name: Xxxxxx X. X'Xxxxxx
Title: Senior Vice President, General
Counsel and Secretary
WASHINGTON SUB, INC.
By: /s/ XXXXXX X. X'XXXXXX
--------------------------------------
Name: Xxxxxx X. X'Xxxxxx
Title: Vice President and Secretary
ALPHA INDUSTRIES, INC.
By: /s/ XXXX X. XXXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President, Chief Financial
Officer, Treasurer & Secretary
25
