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Exhibit 10.23
EMPLOYEE BENEFITS AGREEMENT
BETWEEN
ALLEGHENY TELEDYNE INCORPORATED
AND
TELEDYNE TECHNOLOGIES INCORPORATED
DATED AS OF NOVEMBER 29, 1999
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS...........................................................................1
ARTICLE II GENERAL PRINCIPLES...................................................................6
2.1 ASSUMPTION OF LIABILITIES...............................................................6
2.2 ESTABLISHMENT OF TELEDYNE TECHNOLOGIES PLANS............................................6
2.3 TERMS OF PARTICIPATION BY TELEDYNE TECHNOLOGIES INDIVIDUALS IN TELEDYNE
TECHNOLOGIES PLANS.....................................................................7
ARTICLE III DEFINED BENEFIT PLANS...............................................................8
3.1 ESTABLISHMENT OF TELEDYNE TECHNOLOGIES PENSION PLAN AND TRUST...........................8
3.2 ASSUMPTION OF PENSION PLAN LIABILITIES AND ALLOCATION OF INTERESTS IN THE ATI
MASTER PENSION TRUST...................................................................8
3.3 FREEZING OF PENSION PLAN BENEFITS.......................................................9
3.4 CREDITING SERVICE UNDER ATI'S PENSION PLAN..............................................9
ARTICLE IV DEFINED CONTRIBUTION PLANS...........................................................9
4.1 401(k) PLAN.............................................................................9
4.2 PACIFIC AVIONICS CORPORATION PROFIT SHARING PLAN.......................................11
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.....................................15
5.6 COBRA AND DIRECT PAY...................................................................15
5.7 POST-DISTRIBUTION TRANSITIONAL ARRANGEMENTS............................................15
5.8 APPLICATION OF ARTICLE V TO TELEDYNE TECHNOLOGIES ENTITIES.............................16
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ARTICLE VI EXECUTIVE BENEFITS AND NON-EMPLOYEE DIRECTOR BENEFITS...............................17
6.1 ASSUMPTION OF OBLIGATIONS..............................................................17
6.2 CONSENTS AND NOTIFICATIONS.............................................................17
6.3 ATI 1999 BONUS PLAN....................................................................17
6.4 ATI INCENTIVE PLANS....................................................................18
6.5 ATI NONQUALIFIED DEFERRED COMPENSATION PROGRAMS........................................20
6.6 NON-EMPLOYEE DIRECTOR BENEFITS.........................................................21
6.7 CONFIDENTIALITY AND PROPRIETARY INFORMATION............................................21
ARTICLE VII GENERAL AND ADMINISTRATIVE.........................................................21
7.1 INTERIM SERVICES AGREEMENT.............................................................21
7.2 PAYMENT OF LIABILITIES, PLAN EXPENSES AND RELATED MATTERS..............................21
7.3 SHARING OF PARTICIPANT INFORMATION.....................................................22
7.4 REPORTING AND DISCLOSURE AND COMMUNICATIONS TO PARTICIPANTS............................22
7.5 NON-TERMINATION OF EMPLOYMENT; NO THIRD-PARTY BENEFICIARIES............................23
7.6 BENEFICIARY DESIGNATIONS...............................................................23
7.7 REQUESTS FOR IRS RULINGS AND DOL OPINIONS..............................................23
7.8 FIDUCIARY MATTERS......................................................................23
7.9 COLLECTIVE BARGAINING..................................................................23
7.10 CONSENT OF THIRD PARTIES..............................................................24
7.11 INDEMNIFICATION OF ATI................................................................24
ARTICLE VIII MISCELLANEOUS.....................................................................24
8.1 FOREIGN PLANS..........................................................................24
8.2 EFFECT IF DISTRIBUTION DOES NOT OCCUR..................................................24
8.3 RELATIONSHIP OF PARTIES................................................................24
8.4 AFFILIATES.............................................................................24
8.5 COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER........................................24
8.6 GOVERNING LAW; CONSENT TO JURISDICTION.................................................25
8.7 ASSIGNABILITY..........................................................................26
8.8 THIRD PARTY BENEFICIARIES..............................................................26
8.9 NOTICES................................................................................26
8.10 SEVERABILITY..........................................................................26
8.12 HEADINGS..............................................................................27
8.13 WAIVERS OF DEFAULT....................................................................27
8.15 AMENDMENTS............................................................................27
8.16 INTERPRETATION........................................................................27
8.17 DISPUTES..............................................................................27
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EMPLOYEE BENEFITS AGREEMENT
November 29, 1999
The parties to this Employee Benefits Agreement, dated as of the date
written above, are Allegheny Teledyne Incorporated, a Delaware corporation
("ATI"), and Teledyne Technologies Incorporated, a Delaware corporation
("Teledyne Technologies"). 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 aerospace and
electronics businesses into an independent business entity;
WHEREAS, in furtherance of the foregoing, ATI and Teledyne Technologies
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 Teledyne Technologies, and their
respective Subsidiaries following the Distribution; and
WHEREAS, pursuant to the Separation and Distribution Agreement, ATI and
Teledyne Technologies 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 Teledyne Technologies
or a Teledyne Technologies Entity.
1.4 ATI Executive means an employee or former employee of ATI,
an ATI Entity, Teledyne Technologies or a Teledyne Technologies Entity, who
immediately before the
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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 closing price per share of ATI
Common Stock (regular way) on the NYSE on November 22, 1999.
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 "Teledyne Technologies,"
the term Award (including the term Performance Award or SARP Award) means an
award under the Teledyne Technologies 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 "Teledyne Technologies," Executive Benefit Plans means the executive
benefit plans and programs to be established by Teledyne Technologies 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, Teledyne Technologies, or a Teledyne Technologies 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
"Teledyne Technologies," HCRA Plan means the Health Care Reimbursement Account
Plan to be established by Teledyne Technologies 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 "Teledyne Technologies," Health
and Welfare Plans means the health and welfare plans to be established by
Teledyne Technologies 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 Teledyne
Technologies 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 "Teledyne Technologies," Incentive Plan means the Incentive Plan to
be established by Teledyne Technologies 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 "Teledyne Technologies,"
Non-Employee Director means a member of Teledyne Technologies' Board of
Directors who is not an employee of Teledyne Technologies or a Teledyne
Technologies 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 "Teledyne
Technologies," Non-Employee Director Plans means the plans and programs to be
established by Teledyne Technologies 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 "Teledyne Technologies," Deferral Plan means the
Executive Deferred Compensation Plan to be established by Teledyne Technologies
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 "Teledyne
Technologies," Option means an option to purchase Teledyne Technologies 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.
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 "Teledyne
Technologies," 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
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employees or Non-Employee Directors of ATI or an ATI Entity, or Teledyne
Technologies or a Teledyne Technologies Entity, as applicable.
1.36 Ratio means the amount obtained by dividing the ATI Stock
Value by the Teledyne Technologies 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 Section 414(l) Amount is defined in the last sentence of
Section 3.2(a).
1.41 Separation and Distribution Agreement is defined in the
third paragraph of the preamble of this Agreement.
1.42 Stock Purchase Plan when immediately preceded by "ATI,"
means the Allegheny Teledyne Incorporated Employee Stock Purchase Plan. When
immediately preceded by "Teledyne Technologies," Stock Purchase Plan means the
employee stock purchase plan to be established by Teledyne Technologies pursuant
to Section 2.2.
1.43 Teledyne means Teledyne, Inc., a Delaware corporation, or
its successors or assigns.
1.44 Teledyne 401(k) Plan means the Teledyne, Inc. 401(k)
Plan.
1.45 Teledyne Technologies Entity means any Person that is, at
the relevant time, a Subsidiary of Teledyne Technologies or is otherwise
controlled, directly or indirectly, by Teledyne Technologies.
1.46 Teledyne Technologies 401(k) Plan means, for the period
between the Close of the Distribution Date and April 1, 2000, that portion of
the Teledyne 401(k) Plan amended as described in Section 4.1(a) and, for the
period on and after April 1, 2000, the separate 401(k) plan established by
Teledyne Technologies effective no later than April 1, 2000.
1.47 Teledyne Technologies Individual means any individual
who, Immediately After the Distribution Date, (i) is an active hourly or
salaried employee of one of the Teledyne
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Technologies Entities or (ii) is a former hourly or salaried employee who is in
pay status or deferred vested status under the ATI Pension Plan of one of the
Teledyne Technologies Entities listed in Schedule 1.47.
1.48 Teledyne Technologies Pension Plan means the pension plan
established by Teledyne Technologies pursuant to Article III and Section 2.2.
1.49 Teledyne Technologies Pension Plan Participants means,
collectively, the Teledyne Technologies Individuals who are eligible to
participate and/or receive benefits under the terms of the Teledyne Technologies
Pension Plan.
1.50 Teledyne Technologies Stock Value means the opening price
per share of Teledyne Technologies Common Stock on the NYSE on the day following
the Distribution Date.
ARTICLE II
GENERAL PRINCIPLES
2.1 ASSUMPTION OF LIABILITIES. Except as otherwise expressly provided
in Article III and Article VI, Teledyne Technologies 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 Teledyne Technologies 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 Teledyne Technologies Plans);
(ii) all other Benefit Liabilities to or relating to Teledyne Technologies
Individuals and other employees of Teledyne Technologies or a Teledyne
Technologies Entity, and their dependents and beneficiaries, to the extent
relating to, arising out of or resulting from future, present or former
employment with Teledyne Technologies or a Teledyne Technologies Entity
(including Benefit Liabilities under ATI Plans and Teledyne Technologies Plans);
(iii) all Benefit Liabilities relating to, arising out of or resulting from any
other actual or alleged employment relationship with Teledyne Technologies or a
Teledyne Technologies 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
Teledyne Technologies, a Teledyne Technologies Entity, or a Teledyne
Technologies Plan pursuant to this Agreement. Notwithstanding the generality of
the foregoing, Teledyne Technologies 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 Supplemental Plan.
2.2 ESTABLISHMENT OF TELEDYNE TECHNOLOGIES PLANS. Effective prior
to the Distribution Date, Teledyne Technologies shall adopt, or cause to be
adopted, the
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Teledyne Technologies Pension Plan and its related trust, the amended Teledyne
401(k) Plan for the period between the Distribution Date and April 1, 2000, the
Teledyne Technologies Stock Purchase Plan, the Teledyne Technologies Health and
Welfare Plans, and the Teledyne Technologies Executive Benefit Plans for the
benefit of the Teledyne Technologies Individuals and other current and future
employees of Teledyne Technologies and the Teledyne Technologies Entities;
provided, however, that Teledyne Technologies 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 Section 4.1 regarding the Teledyne Technologies 401(k)
Plan, or as otherwise may be set forth in Schedule 2.2(b), the foregoing
Teledyne Technologies 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, Teledyne Technologies shall adopt, or cause to be adopted,
the Teledyne Technologies Non-Employee Director Plans, for the benefit of
Teledyne Technologies Non-Employee Directors. The Teledyne Technologies
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. Effective no later than April 1, 2000, Teledyne
Technologies shall adopt the Teledyne Technologies 401(k) Plan and its related
trust.
2.3 TERMS OF PARTICIPATION BY TELEDYNE TECHNOLOGIES INDIVIDUALS IN
TELEDYNE TECHNOLOGIES PLANS. The Teledyne Technologies Plans shall be, with
respect to Teledyne Technologies 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 Teledyne Technologies shall agree on
methods and procedures, including amending the respective Plan documents and/or
requesting approvals or consents of Teledyne Technologies Individuals where the
parties deem appropriate, to prevent Teledyne Technologies Individuals from
receiving duplicative benefits from the ATI Plans and the Teledyne Technologies
Plans. With respect to Teledyne Technologies Individuals, each Teledyne
Technologies 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 Teledyne Technologies Plan to the same extent as
if such items occurred under such Teledyne Technologies 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 Teledyne
Technologies Plans (including Foreign Plans) are based upon the understanding of
the parties that each such Teledyne Technologies Plan will assume all Benefit
Liabilities of the corresponding ATI Plan to or relating to Teledyne
Technologies Individuals, as provided for herein. If any such Benefit
Liabilities are not effectively assumed by the appropriate Teledyne Technologies
Plan, then the amount of assets transferred to the trust relating to such
Teledyne Technologies 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 Teledyne Technologies 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 ESTABLISHMENT OF TELEDYNE TECHNOLOGIES PENSION PLAN AND TRUST. The
Teledyne Technologies Pension Plan, established by Teledyne Technologies
pursuant to Section 2.2, (i) shall be a qualified defined benefit pension plan
within the meaning of Code Section 401(a), (ii) shall contain provisions, terms
and conditions substantially similar to the provisions, terms and conditions of
the ATI Pension Plan, (iii) shall provide coverage to and assume the benefit
payment obligations of the ATI Pension Plan with respect to the Teledyne
Technologies Pension Plan Participants, (iv) shall provide a benefit formula
which shall accrue benefits for eligible Teledyne Technologies Individuals at a
rate substantially similar to the rate at which benefits are accrued under the
ATI Pension Plan and (v) shall provide that the Teledyne Technologies Pension
Plan cannot be amended to increase the rate of benefit accrual until January 1,
2001 without the prior written consent of ATI. The trust related to the Teledyne
Technologies Pension Plan, established by Teledyne Technologies pursuant to
Section 2.2, is intended to be exempt from taxation under Code Section 501(a)
and Teledyne Technologies shall take all steps necessary or appropriate to cause
such trust to meet the requirements for tax exemption under Code Section 501(a).
3.2 ASSUMPTION OF PENSION PLAN LIABILITIES AND ALLOCATION OF INTERESTS
IN THE ATI MASTER PENSION TRUST.
(a) CALCULATION OF ASSET ALLOCATION. A nationally-recognized
actuarial firm, selected by ATI in its sole and absolute discretion (the
"Actuary"), shall determine the Section 414(l) Amount effective as of the
Distribution Date. As soon as practicable after the Distribution Date, the
Actuary shall deliver to ATI and Teledyne Technologies a written report, with
the necessary supporting data, setting forth the calculations by the Actuary of
the Section 414(l) Amount and a certification that such amount complies with
Section 414(l) of the Code. The Actuary's determination of the Section 414(l)
Amount shall be final and binding on all parties hereto and for all purposes
hereunder. The costs of the Actuary with respect to the determination of the
Section 414(l) Amount under this Section 3.2(a) shall be borne equally by ATI
and Teledyne Technologies. The "Section 414(l) Amount" means the minimum amount
required to be transferred from the ATI Pension Plan to the Teledyne
Technologies Pension Plan with respect to the Teledyne Technologies Pension Plan
Participants pursuant to Section 208 of ERISA and Section 414(l) of the Code and
the applicable rulings and regulations thereunder using actuarial assumptions
deemed reasonable in the aggregate by the Actuary within the meaning of Treasury
Regulation Section 1.414(l)-1(b)(9) with respect to plan terminations occurring
as of the Distribution Date.
(b) TRANSFER OF ASSETS. As soon as practicable after
determination of the Section 414(l) Amount in accordance with the procedures set
forth in Section 3.2(a) but in no event earlier than two (2) business days after
the Distribution Date or more than sixty (60) days after the Distribution Date,
ATI shall cause to be transferred from the ATI Master Pension Trust to the
Teledyne Technologies Master Pension Trust assets in a form determined by ATI in
its sole
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discretion with a market value then equal to the sum of (i) the Section 414(l)
Amount and (ii) up to $50,000,000, together with interest on such Section 414(l)
Amount for the period from the Distribution Date to the date of transfer at a
rate equal to the rate of interest on 90-day U.S. Treasury bills as of the
Distribution Date, reduced by the amount of any benefit payments due and made to
or on behalf of any of the Teledyne Technologies Individuals from the ATI Master
Pension Trust during such period and not taken into account in determining the
Section 414(l) Amount. As of the date of such transfer of assets, Teledyne
Technologies shall assume all Benefit Liabilities to or relating to Teledyne
Technologies Pension Plan Participants under ATI's Pension Plan and ATI's
Pension Plan shall retain no liability for such benefits.
3.3 FREEZING OF PENSION PLAN BENEFITS. Effective Immediately After the
Distribution Date, the accrued benefits with respect to Teledyne Technologies
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.
3.4 CREDITING SERVICE UNDER ATI'S PENSION PLAN. Teledyne Technologies
Individuals other than Teledyne Technologies Pension Plan Participants 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 with Teledyne
Technologies after the Distribution Date.
ARTICLE IV
DEFINED CONTRIBUTION PLANS
4.1 401(k) PLAN.
(a) ADOPTION BY TELEDYNE TECHNOLOGIES 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 Teledyne Technologies may elect to be a contributing
sponsor and to provide participation to Teledyne Technologies 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 Teledyne Technologies of the Teledyne
Technologies 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)
Teledyne Technologies Individuals shall not be permitted to direct investments
after the Distribution Date in shares of common stock of ATI ("ATI Common
Stock") or in the common stock of any corporation spun off by ATI on the
Distribution Date other than Teledyne Technologies and (B) that each Teledyne
Technologies Individual shall have the right to direct the administrator of the
Teledyne 401(k) Plan to liquidate such Teledyne Technologies Individual's
interest in shares of ATI Common Stock, Teledyne Technologies Common Stock or
the common
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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.
(b) ESTABLISHMENT OF TELEDYNE TECHNOLOGIES 401(k) PLAN AND
TRUST. The Teledyne Technologies 401(k) Plan, established by Teledyne
Technologies no later than April 1, 2000 pursuant to Section 2.2, (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, including provisions with respect to the ATI Common
Stock and the common stock of Teledyne Technologies and any other corporation
spun off by ATI on the Distribution Date, and shall further provide that
Teledyne Technologies Individuals may maintain investments in ATI Common Stock,
Teledyne Technologies Common Stock and/or stock of any previously related
corporation until December 31, 2002 and, if ATI Common Stock and/or common stock
of any previously related corporation other than Teledyne Technologies is held
in accounts of Teledyne Technologies Individuals in the Teledyne 401(k) Plan as
of December 31, 2002, interests of Teledyne Technologies Individuals in such
stock shall be liquidated by the Plan administrator and the proceeds reinvested
in Teledyne Technologies Common Stock, and (iii) shall provide coverage from and
after the earlier of (i) its adoption by Teledyne Technologies or (ii) April 1,
2000 with respect to Teledyne Technologies 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 Teledyne Technologies
401(k) Plan, established by Teledyne Technologies pursuant to Section 2.2, shall
be exempt from taxation under Code Section 501(a).
(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 Teledyne Technologies of
the Teledyne Technologies 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 Teledyne
Technologies Individuals. Teledyne Technologies shall pay to ATI, within thirty
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 Teledyne Technologies Individuals. Teledyne
Technologies 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 Teledyne Technologies of the Teledyne
Technologies 401(k) Plan or (ii) April 1, 2000. Effective as of the earlier of
(i) adoption by Teledyne Technologies of the Teledyne Technologies 401(k) Plan
or (ii) April 1, 2000: (A) the Teledyne Technologies 401(k) Plan shall assume
and be solely responsible for all Benefit Liabilities to or relating to Teledyne
Technologies Individuals under the Teledyne Technologies 401(k) Plan, and (B)
ATI shall cause an amount equal to the aggregate account balances of the
Teledyne Technologies 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 Teledyne Technologies of the Teledyne Technologies 401(k)
Plan or (ii) April 1, 2000 (or such other date as may be agreed by ATI and
Teledyne Technologies) to be transferred to the Teledyne Technologies 401(k)
Plan, and its related trust,
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and Teledyne Technologies 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 Teledyne Technologies Common Stock allocated to
participants' accounts as a result of the Distribution and shares of Water Pik
Technologies, Inc. Common Stock allocated to participants' accounts as a result
of the spin-off of ATI's consumer business; and (B) all promissory notes
reflecting participant loans to Teledyne Technologies Individuals under the
Teledyne 401(k) Plan outstanding as of the time of transfer.
(ii) If any benefit with respect to a Teledyne
Technologies 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 Teledyne
Technologies 401(k) Plan.
4.2 PACIFIC AVIONICS CORPORATION PROFIT SHARING PLAN. Effective
Immediately After the Distribution Date, Teledyne Technologies will assume
sponsorship of and all liabilities and responsibilities for the Pacific Avionics
Corporation Profit Sharing Plan.
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 Teledyne Technologies 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 Teledyne
Technologies Health and Welfare Plans.
(b) Notwithstanding Section 5.1(a), all treatments which have
been pre-certified for or are being provided to a Teledyne Technologies
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 Teledyne Technologies 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 Teledyne Technologies to
participate in the terms and conditions of such ASO Contract from
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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 Teledyne Technologies 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 Teledyne Technologies of, the manner in which Teledyne
Technologies' participation in the terms and conditions of ASO Contracts as set
forth above shall be effectuated. The permissible ways in which Teledyne
Technologies' participation may be effectuated include automatically making
Teledyne Technologies a party to the ASO Contracts or obligating the third party
to enter into a separate ASO Contract with Teledyne Technologies 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 Teledyne Technologies
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. Teledyne
Technologies hereby authorizes ATI to act on its behalf to extend to Teledyne
Technologies the terms and conditions of the ASO Contracts. Teledyne
Technologies shall fully cooperate with ATI in such efforts, and Teledyne
Technologies shall not perform any act, including discussing any alternative
arrangements with any third party, that would prejudice ATI's efforts.
(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 Teledyne Technologies 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 Teledyne Technologies to
participate in the terms and conditions thereof effective Immediately After the
Distribution Date on the same basis as ATI.
(iii) Teledyne Technologies' 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 Teledyne Technologies. Such terms and
conditions shall include the financial and termination provisions, performance
standards and target claims. Teledyne Technologies hereby unconditionally and
irrevocably authorizes ATI to act on its behalf to extend to Teledyne
Technologies the terms and conditions of such Group Insurance Policies. Teledyne
Technologies shall fully cooperate with ATI in such efforts, and Teledyne
Technologies shall not perform any act, including discussing any alternative
arrangements with third parties, that would prejudice ATI's efforts.
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(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 Teledyne Technologies 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
Teledyne Technologies 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 Teledyne Technologies of, the manner in which Teledyne
Technologies' participation in the terms and conditions of all HMO Agreements as
set forth above shall be effectuated. The permissible ways in which Teledyne
Technologies' participation may be effectuated include automatically making
Teledyne Technologies a party to the HMO Agreements or obligating the HMOs to
enter into letter agreements with Teledyne Technologies which are identical to
the HMO Agreements (or such other arrangement as to which ATI and Teledyne
Technologies shall mutually agree). Such terms and conditions shall include the
financial and termination provisions of the HMO Agreements. Teledyne
Technologies hereby authorizes ATI to act on its behalf to extend to Teledyne
Technologies the terms and conditions of the HMO Agreements. Teledyne
Technologies shall fully cooperate with ATI in such efforts, and Teledyne
Technologies 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, Teledyne Technologies shall have the sole discretion to determine
which HMOs to offer to the participants in the Teledyne Technologies Health and
Welfare Plans for 2001 and subsequent years, and all HMO Agreements in which
Teledyne Technologies participates pursuant to this Section 5.2(c) shall provide
Teledyne Technologies 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, Teledyne Technologies shall not
amend any Teledyne Technologies Health and Welfare Plan or Plans, and Teledyne
Technologies 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 Teledyne Technologies Health and
Welfare Plan pursuant to Section 7.1, ATI shall have the right to amend any
applicable Teledyne Technologies Health and Welfare Plan; provided that, in
ATI's reasonable good faith opinion, such amendment will have no material
adverse impact on the Teledyne Technologies Health and Welfare Plan or its
participants or, to the extent a material adverse impact would occur, such
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impact would affect both the applicable Teledyne Technologies 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 Teledyne Technologies in
the same proportion that Teledyne Technologies 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, Teledyne Technologies 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 Teledyne
Technologies and a third-party administrator, (2) a Group Insurance Policy
issued to ATI or Teledyne Technologies, or (3) an HMO Agreement with ATI or
Teledyne Technologies, in each case, the material terms and conditions of which
contracts and policies are extended to Teledyne Technologies or to which
Teledyne Technologies becomes a party pursuant to Section 5.2; (B) the design of
either an ATI Health and Welfare Plan or a Teledyne Technologies Health and
Welfare Plan; or (C) the financing, operation, administration or delivery of
benefits under either an ATI Health and Welfare Plan or a Teledyne Technologies
Health and Welfare Plan.
(ii) During any period in which ATI is providing
Interim Services with respect to any Teledyne Technologies Health and Welfare
Plan pursuant to Section 7.1, ATI shall be permitted to make any Change to such
Teledyne Technologies Plan; provided that, in ATI's reasonable good faith
opinion, such Change would affect both the applicable Teledyne Technologies
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
Teledyne Technologies in the same proportion that Teledyne Technologies 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, Teledyne
Technologies 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 Teledyne Technologies, effective
Immediately After the Distribution Date, responsibility for administering all
claims incurred by Teledyne Technologies Individuals and other employees and
former employees of Teledyne Technologies and the Teledyne Technologies Entities
before the Close of the Distribution Date that are administered by ATI as of the
Close of the Distribution Date. Teledyne Technologies shall administer such
claims in the same manner, and using the same methods and procedures, as ATI
used in administering such claims. Teledyne Technologies shall have sole
discretionary authority to make any necessary determinations with respect to
such claims, including entering into settlements with respect to such claims.
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5.5 POST-RETIREMENT HEALTH AND LIFE INSURANCE BENEFITS. As soon as
practicable after the Distribution Date, Teledyne Technologies shall provide ATI
with a list of all Teledyne Technologies Individuals who are, to the best
knowledge of Teledyne Technologies, 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, Teledyne Technologies shall solely be responsible for
administering compliance with the health care continuation coverage requirements
of COBRA and the Teledyne Technologies Health and Welfare plans, and, with
respect to Teledyne Technologies Individuals, the ATI Health and Welfare Plans.
5.7 POST-DISTRIBUTION TRANSITIONAL ARRANGEMENTS.
(a) CONTINUANCE OF ELECTIONS, CO-PAYMENTS AND MAXIMUM
BENEFITS.
(i) Teledyne Technologies shall cause the Teledyne
Technologies Health and Welfare Plans to recognize and maintain all coverage and
contribution elections made by Teledyne Technologies Individuals under the ATI
Health and Welfare Plans and apply such elections under the Teledyne
Technologies 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 Teledyne Technologies 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 Teledyne
Technologies Health and Welfare Plans.
(ii) Teledyne Technologies shall cause the Teledyne
Technologies Health and Welfare Plans to recognize and give credit for (A) all
amounts applied to deductibles, out-of-pocket maximums, and other applicable
benefit coverage limits with respect to which such expenses have been incurred
by Teledyne Technologies 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 Teledyne Technologies Individuals under the ATI Health and Welfare Plans
for purposes of determining when such persons have reached their lifetime
maximum benefits under the Teledyne Technologies Health and Welfare Plans.
(iii) Teledyne Technologies 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) Teledyne Technologies shall (A) provide coverage
to Teledyne Technologies Individuals under the Teledyne Technologies Group Life
Program without the need to undergo a physical examination or otherwise provide
evidence of insurability, and (B)
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recognize and maintain all irrevocable assignments and accelerated benefit
option elections made by Teledyne Technologies Individuals under the ATI Group
Life Program.
(b) OTHER POST-DISTRIBUTION TRANSITIONAL RULES.
(i) ATI HCRA PLAN. To the extent any Teledyne
Technologies 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 Teledyne Technologies HCRA
Plan the account balances of Teledyne Technologies 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 Teledyne Technologies Individual contributed to the ATI CECRA
Plan during the calendar year that includes the Distribution Date, ATI shall
transfer the account balances of Teledyne Technologies Individuals for such
calendar year in the ATI CECRA Plan to the Teledyne Technologies CECRA Plan.
(iii) POST-RETIREMENT MEDICAL PLAN. For a period
ending on December 31st of the calendar year which is five calendar years after
the Distribution Date, Teledyne Technologies shall comply with all cost
maintenance period requirements and benefit maintenance period requirements
under Code Section 401(h) or 420 that are applicable to post-retirement health
benefits under the Teledyne Technologies 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, Teledyne
Technologies shall obtain ATI's prior written approval before amending any
Teledyne Technologies 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 Teledyne Technologies after the date hereof and
before the Close of the Distribution Date unless Teledyne Technologies and ATI
so agree.
(iv) HEALTH AND WELFARE PLANS SUBROGATION RECOVERY.
After the Close of the Distribution Date, ATI shall pay to Teledyne Technologies
any amounts ATI recovers from time to time through subrogation or otherwise for
claims incurred by or reimbursed to any Teledyne Technologies Individual. If
Teledyne Technologies 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
Teledyne Technologies Individuals), Teledyne Technologies shall pay such amounts
to ATI.
5.8 APPLICATION OF ARTICLE V TO TELEDYNE TECHNOLOGIES ENTITIES. Any
reference in this Article V to "Teledyne Technologies" shall include a reference
to a Teledyne Technologies Entity when and to the extent ATI or Teledyne
Technologies has caused the Teledyne Technologies Entity to (a) become a party
to a vendor contract, group
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insurance contract, or HMO letter agreement associated with a Teledyne
Technologies Health and Welfare Plan, (b) become a self-insured entity for the
purposes of one or more Teledyne Technologies 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 Teledyne
Technologies 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 Teledyne Technologies 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 Teledyne Technologies Entity.
In all such instances in which a reference in this Article V to "Teledyne
Technologies" includes a reference to a Teledyne Technologies Entity, Teledyne
Technologies shall be responsible to ATI for ensuring that the Teledyne
Technologies Entity complies with the applicable terms of this Agreement and the
Teledyne Technologies Individuals allocated to such Teledyne Technologies Entity
shall have the same rights and entitlements to benefits under the applicable
Teledyne Technologies Health and Welfare Plans that the Teledyne Technologies
Individual would have had if he or she had instead been allocated to Teledyne
Technologies. Further, each such Teledyne Technologies 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 Teledyne
Technologies Entity.
ARTICLE VI
EXECUTIVE BENEFITS AND NON-EMPLOYEE DIRECTOR BENEFITS
6.1 ASSUMPTION OF OBLIGATIONS. Except as otherwise expressly provided
in this Article VI, effective Immediately After the Distribution Date, Teledyne
Technologies and the Teledyne Technologies Entities shall assume and be solely
responsible for all Benefit Liabilities to or relating to Teledyne Technologies
Individuals under all ATI Executive Benefit Plans.
6.2 CONSENTS AND NOTIFICATIONS. ATI and Teledyne Technologies shall use
their Reasonable Efforts to obtain, or cause to be obtained, to the extent
necessary, the written consent of each Teledyne Technologies 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 Teledyne Technologies and the
Teledyne Technologies Entities, of sole responsibility for, and the 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 Teledyne Technologies and the Teledyne Technologies Entities
with respect to such Benefit Liabilities.
6.3 ATI 1999 BONUS PLAN. Subject to the provisions of Section
6.4(a)(ii)(B), Teledyne Technologies shall be responsible for determining, with
respect to all Awards that would otherwise be payable under any bonus Plan or
arrangement to Teledyne Technologies Individuals for the 1999 performance year,
(a) the extent to which established performance criteria (as
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interpreted by Teledyne Technologies, in its sole discretion, after taking into
account the effects of the Distribution) have been met and (b) the payment level
for each Teledyne Technologies Individual.
6.4 ATI INCENTIVE PLANS. ATI and Teledyne Technologies 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 Teledyne
Technologies 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 Teledyne
Technologies Incentive Plan.
(a) TELEDYNE TECHNOLOGIES INDIVIDUALS WHO ARE ACTIVE EMPLOYEES
OF TELEDYNE TECHNOLOGIES.
(i) STOCK OPTIONS. Teledyne Technologies shall cause
each ATI Option that is outstanding as of the Close of the Distribution Date and
is held by a Teledyne Technologies Individual to be converted, effective
Immediately After the Distribution Date, to a Teledyne Technologies Option (a
"Converted Option"). Such Converted Option shall provide for the option to
purchase a number of shares of Teledyne Technologies 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 Teledyne
Technologies and its Affiliates.
(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 Teledyne Technologies Individual for the period from
January 1, 1998 through the Distribution Date. Effective Immediately After the
Distribution Date, Teledyne Technologies and the Teledyne Technologies Entities
shall assume and be solely responsible for all Benefit Liabilities to or
relating to Teledyne Technologies Individuals with respect to the administration
and distribution of Performance Awards to such Teledyne Technologies
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 Teledyne Technologies 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
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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
Teledyne Technologies and the Teledyne Technologies Entities to the applicable
Teledyne Technologies Individual as provided under the terms of the Performance
Share Program; provided, however, that any ATI Common Stock allocated or
otherwise awarded to a Teledyne Technologies 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 Teledyne Technologies 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 the product up to
the nearest whole share. Teledyne Technologies shall pay to the holder of such
Performance Award, at the time of such conversion, cash in lieu of any
fractional share based on the Teledyne Technologies Stock Value.
(iii) SARP. As of the Distribution Date, all shares
of ATI Common Stock issued and outstanding held by a Teledyne Technologies
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 Teledyne Technologies Common Stock received by Teledyne Technologies
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 Water Pik Technologies, Inc. Common Stock received
by Teledyne Technologies Individuals in respect of their Purchased Stock and
Designated Stock as a result of the spin-off of Water Pik Technologies, Inc. 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, Teledyne Technologies shall assume all
Benefit Liabilities to or relating to Teledyne Technologies 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 Teledyne Technologies 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 Teledyne
Technologies Common Stock and Water Pik Technologies, Inc. Common Stock issued
in respect of such shares of ATI Common Stock held as collateral. Effective
Immediately After the Distribution Date, pursuant to the terms of the ATI SARP,
all Teledyne Technologies 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 Teledyne Technologies
Individuals under the ATI SARP, a number of shares of Teledyne Technologies
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 Teledyne Technologies Common Stock shall
be subject to the same restrictions as the shares of ATI Common Stock prior to
the conversion.
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(b) TELEDYNE TECHNOLOGIES INDIVIDUALS WHO ARE NOT ACTIVE
EMPLOYEES OF TELEDYNE TECHNOLOGIES. Each outstanding Award that is held by an
individual who, as of the Close of the Distribution Date, would otherwise be a
Teledyne Technologies Individual but is not an active employee of or on leave of
absence from Teledyne Technologies or a Teledyne Technologies 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.
Effective Immediately After the Distribution Date, Teledyne Technologies shall
assume all Benefit Liabilities to or relating to Teledyne Technologies
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 Teledyne Technologies Individuals,
ATI shall cause the transfer, either by assignment or any other reasonable
means, to Teledyne Technologies of Policies on the lives of Teledyne
Technologies Individuals and such other employees or former employees of ATI or
its subsidiaries as ATI may, in its sole and absolute discretion select, or any
portion thereof, having in the aggregate a cash surrender value equal to the
amount of any Benefit Liabilities for Teledyne Technologies Individuals under
the Allegheny Teledyne Incorporated Executive Deferred Compensation Plan.
(b) GUARANTEE OF CERTAIN OBLIGATIONS. ATI shall guarantee to
Teledyne Technologies Individuals who are participants in the Teledyne, Inc.
Pension Equalization Plan payment of the Benefit Liabilities of Teledyne under
such plan to such participants as of the Distribution Date to the extent
Teledyne Technologies is unable to satisfy such Benefit Liabilities.
(c) CORPORATE-OWNED LIFE INSURANCE. ATI and Teledyne
Technologies 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 Teledyne Technologies Individuals to Teledyne Technologies,
effective Immediately After the Distribution Date. If a Corporate-Owned Life
Insurance Policy is so assigned to Teledyne Technologies, Teledyne Technologies
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
Teledyne Technologies shall continue, liquidate and/or administer such
Corporate-Owned Life Insurance Policies on terms and conditions agreed to by ATI
and Teledyne Technologies. ATI and Teledyne Technologies shall share all
information that may be necessary
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to identify the individuals insured by the Corporate-Owned Life Insurance
Policies owned by ATI and/or Teledyne Technologies and to determine when and
whether such individuals are deceased.
6.6 NON-EMPLOYEE DIRECTOR BENEFITS. The parties intend that all
Teledyne Technologies 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. Teledyne
Technologies 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 Teledyne Technologies shall enter into an agreement relating to
the coordination of and payment for interim services to be provided by ATI
regarding the establishment and administration of the Teledyne Technologies
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 Teledyne Technologies 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 Teledyne Technologies 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.
Teledyne Technologies shall pay directly, or reimburse ATI promptly for, all
Benefit Liabilities assumed by it pursuant to this Agreement, including all
compensation payable to Teledyne Technologies Individuals for services rendered
while in the employ of ATI or an ATI Entity before becoming a Teledyne
Technologies 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
Teledyne Technologies Individuals is not yet determined, except as otherwise
specified herein or in another Ancillary Agreement with respect to particular
Benefit Liabilities, Teledyne Technologies shall make such payments or
reimbursements based upon ATI's reasonable estimates of the amounts thereof, and
when such status is determined, Teledyne Technologies shall make additional
reimbursements or payments, or ATI shall reimburse Teledyne Technologies, 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 "Teledyne Technologies 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 Teledyne Technologies
shall share, ATI shall cause each applicable ATI Entity to share, and Teledyne
Technologies shall cause each applicable Teledyne Technologies 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 Teledyne Technologies Plans. ATI
and Teledyne Technologies 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 Teledyne Technologies.
7.4 REPORTING AND DISCLOSURE AND COMMUNICATIONS TO PARTICIPANTS.
Teledyne Technologies shall take, and shall cause each other applicable Teledyne
Technologies Entity to take, all actions necessary or appropriate to facilitate
the distribution of all applicable ATI Plan-related communications and materials
to Teledyne Technologies 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 Teledyne Technologies Plans. Teledyne Technologies shall pay ATI
the cost relating to the copies of all such documents provided to Teledyne
Technologies, except to the extent such costs are charged pursuant to Section
7.1 or pursuant to an Ancillary Agreement. Teledyne Technologies shall assist,
and Teledyne Technologies shall cause each other applicable Teledyne
Technologies 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.
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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 Teledyne Technologies Individual or
other future, present or former employee of ATI, an ATI Entity, Teledyne
Technologies, or a Teledyne Technologies Entity under any ATI Plan or Teledyne
Technologies 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 Teledyne
Technologies Plans, or any individual agreements; and (ii) except as expressly
provided in this Agreement, nothing in this Agreement shall preclude Teledyne
Technologies, at any time after the Close of the Distribution Date, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise
altering in any respect any Teledyne Technologies Plan, any benefit under any
Plan or any trust, insurance policy or funding vehicle related to any Teledyne
Technologies Plan unless such change could or will increase the obligations of
ATI or any ATI Entity under any plan or arrangement.
7.6 BENEFICIARY DESIGNATIONS. All beneficiary designations made by
Teledyne Technologies Individuals for ATI Plans shall be transferred to and be
in full force and effect under the corresponding Teledyne Technologies Plans
until such beneficiary designations are replaced or revoked by the Teledyne
Technologies Individual who made the beneficiary designation.
7.7 REQUESTS FOR IRS RULINGS AND DOL OPINIONS. Teledyne Technologies
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 Teledyne Technologies 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 Teledyne Technologies
Plans relating to the transactions contemplated by this Agreement.
7.8 FIDUCIARY MATTERS. ATI and Teledyne Technologies 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 Teledyne Technologies 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.
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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 Teledyne Technologies shall use their
Reasonable Efforts to implement the applicable provisions of this Agreement to
the full extent practicable. If any provision of this Agreement cannot be
implemented due to the failure of such third party to consent, ATI and Teledyne
Technologies shall negotiate in good faith to implement the provision in a
mutually satisfactory manner.
7.11 INDEMNIFICATION OF ATI. Teledyne Technologies 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 Teledyne Technologies or a
Teledyne Technologies Entity under this Agreement and (ii) any and all changes
or modifications to any rights, privileges or benefits of or relating to any
Teledyne Technologies Individual as provided in or otherwise contemplated by
this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 FOREIGN PLANS. To the extent that Teledyne Technologies 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 Teledyne Technologies 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 Teledyne
Technologies 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 Teledyne Technologies 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
Teledyne Technologies Entity, respectively.
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
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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
Teledyne Technologies represents on behalf of itself and each Teledyne
Technologies 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
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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:
If to ATI, to: Allegheny Teledyne Incorporated
0000 Xxx XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Senior Vice President, General Counsel
and Secretary
If to Teledyne
Technologies, to: Teledyne Technologies Incorporated
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Senior Vice President, General Counsel
and 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
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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 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.
8.12 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.
8.13 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.
8.14 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 import shall all be references to November 29,
1999, regardless of any amendment or restatement hereof.
8.15 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 8.15; 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
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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 (as defined in the
Separation and Distribution Agreement). The Designated Officers shall meet at a
mutually acceptable time and place (but in no event no later than 15 days
following the 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.
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 /s/ Xxxxx X. Xxxxx
-----------------------------------
Title
--------------------------------
TELEDYNE TECHNOLOGIES
INCORPORATED
By /s/ Xxxxxx Xxxxxxxxx
-----------------------------------
Title
--------------------------------
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