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[CONFORMED COPY]
Exhibit 2.2
EMPLOYEE MATTERS AGREEMENT
by and between
ROCKWELL INTERNATIONAL CORPORATION
and
MERITOR AUTOMOTIVE, INC.
September 30, 1997
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TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS .................................................... 1
Section 1.01 General .............................................. 1
ARTICLE II EMPLOYEES ..................................................... 6
Section 2.01 Employees ............................................ 6
Section 2.02 Employee Benefits Generally .......................... 7
Section 2.03 Collective Bargaining Agreements ..................... 8
ARTICLE III PENSION PLANS ................................................ 9
Section 3.01 U.S. Pension Plan .................................... 9
Section 3.02 U.S. Nonqualified Pension Plans ...................... 11
Section 3.03 U.K. Executive Pension Plan .......................... 12
Section 3.04 U.K. Stand-Alone Pension Scheme ...................... 14
Section 3.05 Canadian Automotive Pension Plans .................... 15
Section 3.06 Canadian Non-Automotive Pension Plans ................ 16
Section 3.07 Australian Stand-Alone Pension Plans ................. 17
Section 3.08 German Stand-Alone Pension Plan ...................... 17
Section 3.09 Gordonsville Retirement Plan ......................... 18
ARTICLE IV SAVINGS PLANS ................................................. 19
Section 4.01 U.S. Savings Plan .................................... 19
Section 4.02 Stand-Alone Savings Plans ............................ 20
Section 4.03 Nonqualified Savings Plans ........................... 21
Section 4.04 Canadian Non-Automotive Savings Plans ................ 22
ARTICLE V STOCK PLANS .................................................... 23
Section 5.01 Stock Plans .......................................... 23
ARTICLE VI OTHER EMPLOYEE PLANS AND MATTERS .............................. 24
Section 6.01 Welfare Plans ........................................ 24
Section 6.02 Long-Term Incentive Plan and Incentive
Compensation Plans ............................. 26
Section 6.03 Deferred Compensation Plans .......................... 27
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Section 6.04 Canadian Automotive Bridging Benefit Plans ........... 28
Section 6.05 Canadian Automotive SUB Plan ......................... 28
Section 6.06 Severance Pay ........................................ 29
Section 6.07 Employment, Consulting and Other Employee
Related Agreements ............................. 30
Section 6.08 Rockwell VEBA ........................................ 30
Section 6.09 Other Liabilities .................................... 31
ARTICLE VII MISCELLANEOUS ................................................ 31
Section 7.01 Indemnification ...................................... 31
Section 7.02 Sharing of Information ............................... 31
Section 7.03 Entire Agreement; Construction ....................... 32
Section 7.04 Survival of Agreements ............................... 32
Section 7.05 Governing Law ........................................ 32
Section 7.06 Notices .............................................. 33
Section 7.07 Amendments ........................................... 33
Section 7.08 Assignment ........................................... 33
Section 7.09 Captions; Currency ................................... 33
Section 7.10 Severability ......................................... 34
Section 7.11 Parties in Interest .................................. 34
Section 7.12 Schedules ............................................ 34
Section 7.13 Termination .......................................... 35
Section 7.14 Change of Name ....................................... 35
Section 7.15 Waivers; Remedies .................................... 35
Section 7.16 Counterparts ......................................... 35
Section 7.17 Performance .......................................... 35
SCHEDULES
Schedule 2.01 - Certain Automotive Employees
Schedule 2.03(a) - Automotive Collective Bargaining
Agreements
Schedule 2.03(b) - Rockwell Collective Bargaining
Agreements
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EMPLOYEE MATTERS AGREEMENT
EMPLOYEE MATTERS AGREEMENT (this "Agreement"), dated as of September
30, 1997, by and between ROCKWELL INTERNATIONAL CORPORATION, a Delaware
corporation ("Rockwell"), and MERITOR AUTOMOTIVE, INC., a Delaware corporation
and, as of the date hereof, a wholly-owned subsidiary of Rockwell
("Automotive").
WHEREAS, the Rockwell Board has determined that it is appropriate
and desirable to distribute all outstanding shares of Automotive Common Stock on
a pro rata basis to the holders of Rockwell Common Stock (the "Distribution");
and
WHEREAS, Rockwell and Automotive are entering into a Distribution
Agreement dated as of the date hereof (the "Distribution Agreement") which,
among other things, sets forth the principal corporate transactions required to
effect the Distribution and certain other agreements that will govern certain
matters relating to the Distribution; and
WHEREAS, in connection with the Distribution, Rockwell and
Automotive have determined that it is appropriate and desirable to provide for
the allocation of certain assets and liabilities and certain other matters
relating to employees, employee benefit plans and compensation arrangements;
NOW, THEREFORE, in consideration of the premises and of the
respective agreements and covenants contained in this Agreement, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. Capitalized terms used in this Agreement but
not defined herein (other than the names of employee benefit plans) shall have
the meanings ascribed to such terms in the Distribution Agreement. As used in
this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Australian Stand-Alone Pension Plans" shall have the meaning
ascribed thereto in Section 3.07.
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"Automotive Canada" shall mean Meritor Automotive Canada Inc., a
Canadian corporation that will be a member of the Automotive Group.
"Automotive Employee" means any individual who will be employed by a
member of the Automotive Group as of the Time of Distribution pursuant to
Section 2.01.
"Automotive Former Employee" means any individual who was, at any
time prior to the Time of Distribution, employed by any member of the
Pre-Distribution Group, who is not as of the Time of Distribution a
Rockwell Employee or an Automotive Employee, and whose most recent active
employment with such member of the Pre-Distribution Group was with the
Automotive Business.
"Automotive Nonqualified Pension Plans" shall have the meaning
ascribed thereto in Section 3.02(a).
"Automotive Nonqualified Savings Plans" shall have the meaning
ascribed thereto in Section 4.03(a).
"Automotive Option" means an option to purchase from Automotive
shares of Automotive Common Stock provided to an Automotive Participant
pursuant to Section 5.01(b).
"Automotive Option Ratio" means the amount obtained by dividing (i)
the Average Price of Automotive Common Stock by (ii) the average of the
daily closing prices per share of Rockwell Common Stock trading on a
"regular way" basis as reported on the New York Stock Exchange ("NYSE")
Composite Transactions reporting system for the five consecutive full NYSE
trading days ending on and including the Distribution Date.
"Automotive Participants" means Automotive Employees, Automotive
Former Employees and their respective beneficiaries.
"Automotive Pension Plan" shall have the meaning ascribed thereto in
Section 3.01(a).
"Automotive Savings Plan" shall have the meaning ascribed thereto in
Section 4.01(a).
"Automotive Welfare Plans" shall have the meaning ascribed thereto
in Section 6.01(a).
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"Average Price of Automotive Common Stock" means the average of the
daily closing prices per share of Automotive Common Stock as reported on
the NYSE Composite Transactions reporting system for the five consecutive
full NYSE trading days ending on and including the Distribution Date (the
"Pre-Distribution Period"), assuming that "when-issued" trading in
Automotive Common Stock occurs during the Pre-Distribution Period in daily
volume of not less than 10,000 shares (and if on any day (an "Automotive
Excluded Day") during the Pre-Distribution Period such trading does not
occur in such volume, then for purposes of this definition trading on each
Automotive Excluded Day shall not be considered and trading on up to five
full NYSE trading days immediately following the Distribution Date shall
be included so that a total of five trading days are included in the
averaging period).
"Canadian Automotive Bridging Benefit Plans" shall have the meaning
ascribed thereto in Section 6.04.
"Canadian Automotive Pension Plans" shall have the meaning ascribed
thereto in Section 3.05.
"Canadian Automotive SUB Plan" shall have the meaning ascribed
thereto in Section 6.05.
"Canadian Non-Automotive Pension Plans" shall have the meaning
ascribed thereto in Section 3.06.
"Canadian Non-Automotive Savings Plans" shall have the meaning
ascribed thereto in Section 4.04.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, or any successor legislation.
"German Stand-Alone Pension Plan" shall have the meaning ascribed
thereto in Section 3.08.
"Gordonsville Retirement Plan" shall have the meaning ascribed
thereto in Section 3.09.
"Incentive Compensation Plan" means the Rockwell International
Corporation Incentive Compensation Plan, including all amendments thereto.
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"LTIP" shall have the meaning ascribed thereto in Section
6.02.
"New Rockwell Canada" shall mean the Canadian entity, which will be
a member of the Rockwell Group, formed to carry on the businesses of
Rockwell and its Subsidiaries (other than the Automotive Business) in
Canada that were carried on prior to the Time of Distribution by
Xxxxx-Xxxxxxx Canada Limited, Rockwell International of Canada Ltd. and
Rockwell International of Canada.
"Pre-1997 Rockwell Option" means an option to purchase from Rockwell
shares of Rockwell Common Stock granted prior to October 1, 1996 pursuant
to one of the Rockwell Stock Plans.
"Rockwell Deferred Compensation Plan" shall have the meaning
ascribed thereto in Section 6.03.
"Rockwell Employee" means any individual who will be employed by a
member of the Rockwell Group as of the Time of Distribution pursuant to
Section 2.01.
"Rockwell Former Employee" means any individual who was, at any time
prior to the Time of Distribution, employed by any member of the
Pre-Distribution Group, who is not as of the Time of Distribution a
Rockwell Employee or an Automotive Employee, and whose most recent active
employment with a member of the Pre-Distribution Group was with a business
other than the Automotive Business.
"Rockwell Nonqualified Pension Plans" shall have the meaning
ascribed thereto in Section 3.02(a).
"Rockwell Nonqualified Savings Plans" shall have the meaning
ascribed thereto in Section 4.03(a).
"Rockwell 1997 Option" means an option to purchase from Rockwell
shares of Rockwell Common Stock granted after September 30, 1996 pursuant
to one of the Rockwell Stock Plans.
"Rockwell Option Ratio" means the amount obtained by dividing (i)
the average of the daily closing prices per share of Rockwell Common Stock
trading on an "ex-distribution when-issued" basis as reported on the NYSE
Composite Transactions reporting system for the Pre-
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Distribution Period, assuming that "ex-distribution when-issued" trading
in Rockwell Common Stock occurs during the Pre-Distribution Period in
daily volume of not less than 10,000 shares (and if on any day (a
"Rockwell Excluded Day") during the Pre-Distribution Period such trading
does not occur in such volume, then for purposes of this clause (i)
trading on each Rockwell Excluded Day shall not be considered and trading
on up to five full NYSE trading days immediately following the
Distribution Date shall be included so that a total of five trading days
are included in the averaging period) by (ii) the average of the daily
closing prices per share of Rockwell Common Stock trading on a "regular
way" basis as reported on the NYSE Composite Transactions reporting system
for the Pre-Distribution Period; provided, that if the committee appointed
by the Board of Directors of Rockwell shall determine on or before the
opening of trading on the NYSE on the first NYSE trading day following the
Distribution Date that, notwithstanding satisfaction of the 10,000 share
per day minimum trading volume requirement, "ex-distribution when-issued"
trading on one or more days during the Pre-Distribution Period does not
fairly represent the value of Rockwell Common Stock, then for purposes of
clause (i) above, each such day so determined shall be treated as a
Rockwell Excluded Day, trading on each Rockwell Excluded Day shall not be
considered and trading on up to five full NYSE trading days (as determined
by such committee) immediately following the Distribution Date shall be
included so that a total of five trading days are included in the
averaging period.
"Rockwell Participants" means Rockwell Employees, Rockwell Former
Employees and their respective beneficiaries.
"Rockwell Pension Plan" means the Rockwell International Corporation
Retirement Plan for Eligible Employees, including all amendments thereto.
"Rockwell Savings Plan" means the Rockwell International Corporation
Savings Plan, including all amendments thereto.
"Rockwell Stock Plans" means, collectively, the Rockwell 1995
Long-Term Incentives Plan and the Rockwell 1988 Long-Term Incentives Plan,
in each case, including all amendments thereto.
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"Rockwell U.K. Executive Plan" means the Rockwell U.K. Executive
Pension Plan, including all amendments thereto.
"Rockwell Welfare Plans" shall have the meaning ascribed thereto in
Section 6.01(a).
"Stand-Alone Savings Plans" shall have the meaning ascribed thereto
in Section 4.02.
"U.K. Stand-Alone Pension Scheme" means the Rockwell Automotive U.K.
Pension Scheme, as amended through the Time of Distribution.
"U.K. Transferring Employees" shall have the meaning ascribed
thereto in Section 3.03(b).
"Welfare Plan" means an employee welfare benefit plan as defined in
Section 3(1) of ERISA, including, without limitation, medical, vision,
dental and other health plans, retiree health plans, life insurance plans,
retiree life insurance plans, accidental death and dismemberment plans,
long-term disability plans and severance pay plans.
ARTICLE II
EMPLOYEES
Section 2.01 Employees.
(a) Each individual (other than those engaged primarily in the
businesses of Rockwell and its Subsidiaries other than the Automotive Business)
who is employed by any member of the Automotive Group immediately prior to the
Time of Distribution (including, without limitation, those who are actively
employed or on lay-off, leave, short-term or long-term disability or other
permitted absence from employment) will continue to be employed by such member
of the Automotive Group as of the Time of Distribution and will be an Automotive
Employee. In addition, each individual who is employed by Rockwell or any of its
Subsidiaries (other than by members of the Automotive Group) immediately prior
to the Time of Distribution and (x) who is engaged primarily in the Automotive
Business or (y) who Rockwell consents to becoming an Automotive Employee, it
being understood that Rockwell has granted such consent in respect of
individuals identified on the attached Schedule 2.01 (including, in the
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case of both clauses (x) and (y), those who are actively employed or on lay-off,
leave, short-term or long-term disability or other permitted absence from
employment) will be employed by a member of the Automotive Group as of the Time
of Distribution and will be an Automotive Employee.
(b) Each individual (other than those engaged primarily in the
Automotive Business and those who Rockwell consents to becoming an Automotive
Employee) who is employed by any member of the Rockwell Group immediately prior
to the Time of Distribution (including, without limitation, those who are
actively employed or on lay-off, leave, short-term or long-term disability or
other permitted absence from employment) will continue to be employed by a
member of the Rockwell Group as of the Time of Distribution and will be a
Rockwell Employee. In addition, each individual who is employed by any member of
the Automotive Group immediately prior to the Time of Distribution and who is
engaged primarily in businesses of Rockwell and its Subsidiaries other than the
Automotive Business (including those who are actively employed or on lay-off,
leave, short-term or long-term disability or other permitted absence from
employment) will be employed by a member of the Rockwell Group as of the Time of
Distribution and will be a Rockwell Employee.
(c) Nothing contained in this Section 2.01 is intended to confer
upon any employee of the Rockwell Group or the Automotive Group any right to
continued employment after the Distribution Date.
Section 2.02 Employee Benefits Generally. For a period of at least
one year after the Time of Distribution, the Automotive Group will provide to
Automotive Participants employee benefits that are substantially similar in all
material respects to the employee benefits provided to such Automotive
Participants by Rockwell and its Subsidiaries (including members of the
Automotive Group) immediately prior to the Time of Distribution.
Section 2.03 Collective Bargaining Agreements.
(a) Effective as of the Time of Distribution, Automotive will, or
will cause one or more Automotive Subsidiaries to, unconditionally assume or
retain (as applicable) all Liabilities (including, without limitation, those
relating to wages, hours or other terms and conditions of employment) relating
to Automotive Participants under each of the collective bargaining agreements of
the Pre-Distribution Group relating to the Automotive Business and
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collateral agreements related thereto, including, without limitation, those
listed on Schedule 2.03(a). From and after the Time of Distribution, none of
Rockwell, the Rockwell Subsidiaries or their Affiliates will have any
Liabilities with respect to Automotive Participants under collective bargaining
agreements relating to the Automotive Business or collateral agreements relating
thereto. Rockwell and Automotive will take, or cause to be taken, all such
action as may be necessary or appropriate to establish, effective as of the Time
of Distribution, Automotive or one or more Automotive Subsidiaries as successors
to Rockwell and the Rockwell Subsidiaries as to all rights, duties and
Liabilities under, or with respect to, such collective bargaining agreements and
collateral agreements.
(b) Effective as of the Time of Distribution, Rockwell will, or will
cause one or more Rockwell Subsidiaries to, unconditionally assume or retain (as
applicable) all Liabilities (including, without limitation, those relating to
wages, hours or other terms and conditions of employment) relating to Rockwell
Participants under each of the collective bargaining agreements of the
Pre-Distribution Group relating to businesses of Rockwell and its Subsidiaries
other than the Automotive Business and collateral agreements related thereto,
including, without limitation, those listed on Schedule 2.03(b). From and after
the Time of Distribution, none of Automotive, the Automotive Subsidiaries or
their Affiliates will have any Liabilities with respect to Rockwell Participants
under collective bargaining agreements relating to businesses of Rockwell and
its Subsidiaries other than the Automotive Business or collateral agreements
relating thereto. Rockwell and Automotive will take, or cause to be taken, all
such action as may be necessary or appropriate to establish, effective as of the
Time of Distribution, Rockwell or one or more Rockwell Subsidiaries as
successors to members of the Automotive Group as to all rights, duties and
Liabilities under, or with respect to, such collective bargaining agreements and
collateral agreements.
(c) Rockwell and Automotive will cooperate in engaging in all
appropriate negotiations, implementing all appropriate communications,
transferring appropriate records and taking all other actions as may be
necessary or appropriate to implement the provisions of this Section 2.03.
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ARTICLE III
PENSION PLANS
Section 3.01 U.S. Pension Plan.
(a) As of the Time of Distribution, Automotive will have
established, and will cover Automotive Employees who participated in the
Rockwell Pension Plan immediately prior to the Time of Distribution under, a
defined benefit pension plan (the "Automotive Pension Plan"), which will be
qualified under Section 401(a) of the Code, and will have established a related
trust which will be exempt from taxation under Section 501(a) of the Code. The
Automotive Pension Plan will be substantially similar in all material respects
to the Rockwell Pension Plan as of the Time of Distribution, and will provide a
benefit formula for Automotive Employees which will be substantially similar in
all material respects to the benefit formula that the Rockwell Pension Plan
provides as of the Time of Distribution. The Automotive Pension Plan will be
maintained in such form for a period of at least one year following the Time of
Distribution. The Automotive Pension Plan will credit each Automotive Employee
for purposes of eligibility to participate, vesting, benefit accruals and all
other plan purposes with all service which had been credited to such Automotive
Employee for such purposes under the Rockwell Pension Plan immediately prior to
the Time of Distribution (excluding any such service which was not counted under
the Rockwell Pension Plan by operation of its "break in service" rules);
provided, however, that service with Rockwell and Automotive will not be
aggregated under the Automotive Pension Plan for any periods following the time
at which the plan participant commences the receipt of benefits under the
Rockwell Pension Plan if the plan participant is not also retired under the
Automotive Pension Plan. Notwithstanding the above, the Automotive Pension Plan
will provide that the benefit of each Automotive Employee under the Automotive
Pension Plan will be reduced by the amount of the benefit to which the
Automotive Employee would be entitled under the Rockwell Pension Plan if the
Automotive Employee commenced receipt of benefits from the Rockwell Pension Plan
at the same time as from the Automotive Pension Plan, based on the Automotive
Employee's service and salary history under the Rockwell Pension Plan at the
Time of Distribution. Rockwell will provide Automotive with prompt notice if an
Automotive Employee commences receipt of benefits under the Rockwell Pension
Plan.
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(b) Effective as of the Time of Distribution, the Automotive
Employees who participated in the Rockwell Pension Plan immediately prior to the
Time of Distribution will cease to accrue service credits for benefit, benefit
eligibility, vesting, and all other purposes under the Rockwell Pension Plan and
will have the right to receive a benefit, if any, under the Rockwell Pension
Plan accrued as of the Time of Distribution in accordance with the terms of the
Rockwell Pension Plan; provided, however, that, effective as of the Time of
Distribution, Automotive Employees who participated in the Rockwell Pension Plan
immediately prior to the Time of Distribution will have a nonforfeitable right
to their benefit, if any, under the Rockwell Pension Plan. None of Automotive or
the Automotive Subsidiaries, the Affiliates thereof, the Automotive Pension Plan
or the trust thereunder will have or acquire any interest in or right to any of
the assets of the Rockwell Pension Plan, and Rockwell will retain full power and
authority with respect to the amendment and termination of the Rockwell Pension
Plan and the investment and disposition of assets held in the Rockwell Pension
Plan to the extent permitted by law. From and after the Time of Distribution,
none of Rockwell or the Rockwell Subsidiaries, the Affiliates thereof, the
Rockwell Pension Plan or the trust thereunder will have any Liabilities with
respect to benefits and entitlements of Automotive Participants under the
Rockwell Pension Plan, except with respect to benefits accrued under the
Rockwell Pension Plan prior to the Time of Distribution.
(c) Automotive and Rockwell will cooperate in making all appropriate
filings required under the Code or ERISA, the regulations thereunder and any
other applicable laws, implementing all appropriate communications with
participants, exchanging and sharing appropriate records and taking such other
actions as may be necessary or appropriate to implement the provisions of this
Section 3.01.
Section 3.02 U.S. Nonqualified Pension Plans.
(a) As of the Time of Distribution, Automotive will establish
nonqualified pension plans (the "Automotive Nonqualified Pension Plans") and
will cover thereunder Automotive Participants who participated immediately prior
to the Time of Distribution in, or retired from Rockwell prior to the Time of
Distribution and are entitled to receive benefits from, the Rockwell
International Corporation Supplemental Retirement Plan for Highly Compensated
Employees or the Rockwell International
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Corporation Excess Benefit Retirement Plan, in each case as amended through the
Time of Distribution (collectively, the "Rockwell Nonqualified Pension Plans").
The Automotive Nonqualified Pension Plans will be substantially similar in all
material respects to the Rockwell Nonqualified Pension Plans as of the Time of
Distribution, and will provide a benefit formula for Automotive Participants
which will be substantially similar in all material respects to the benefit
formula that the Rockwell Nonqualified Pension Plans provide as of the Time of
Distribution. The Automotive Nonqualified Pension Plans will be maintained in
such form for a period of at least one year following the Time of Distribution.
The Automotive Nonqualified Pension Plans will credit each Automotive
Participant for purposes of eligibility to participate, vesting, benefit
accruals and all other plan purposes with all service which had been credited to
such Automotive Participant for such purposes under the Rockwell Nonqualified
Pension Plans immediately prior to the Time of Distribution (excluding any such
service which was not counted under the Rockwell Nonqualified Pension Plans by
operation of their "break in service" rules); provided, however, that service
with Rockwell and Automotive will not be aggregated under the Automotive
Nonqualified Pension Plans for any periods following the time at which the plan
participant commences the receipt of benefits under the Automotive Nonqualified
Pension Plans as a result of retirement under the Rockwell Pension Plan if the
plan participant is not also retired under the Automotive Nonqualified Pension
Plans. The Automotive Nonqualified Pension Plans will provide for benefits based
on Automotive Participants' participation in both the Rockwell Pension Plan and
the Automotive Pension Plan, as applicable.
(b) Effective as of the Time of Distribution, Automotive hereby
assumes and agrees to fully perform, pay and discharge all of Rockwell's and its
Subsidiaries' Liabilities under the Rockwell Nonqualified Pension Plans with
respect to Automotive Participants. From and after the Time of Distribution,
none of Rockwell or the Rockwell Subsidiaries or their Affiliates will have any
Liabilities under the Rockwell Nonqualified Pension Plans with respect to
Automotive Participants. It is the intention of the parties that Automotive will
satisfy its obligations to assume all Liabilities under the Rockwell
Nonqualified Pension Plans with respect to Automotive Participants by granting
to such participants the credit under the Automotive Nonqualified Pension Plans
provided for under paragraph 3.02(a) hereof.
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(c) Rockwell and Automotive will cooperate in making all appropriate
filings required by law, implementing all appropriate communications with
participants, exchanging and sharing appropriate records and taking all other
actions as may be necessary or appropriate to implement the provisions of this
Section 3.02.
Section 3.03 U.K. Executive Pension Plan.
(a) As of the Time of Distribution, Rockwell and Automotive will
have caused a United Kingdom Subsidiary of Rockwell (which will be a member of
the Rockwell Group) to become the principal company of the Rockwell U.K.
Executive Plan. Rockwell and Automotive will cooperate in making all appropriate
filings under applicable law, including without limitation, filing a deed of
substitution, to cause such Rockwell United Kingdom Subsidiary to become the
principal company of the Rockwell U.K. Executive Plan.
(b) Rockwell will offer to those Automotive Employees who
participated in the Rockwell U.K. Executive Plan immediately prior to the Time
of Distribution the option to consent to the transfer, effective as of the Time
of Distribution, of their benefits thereunder from the Rockwell U.K. Executive
Plan to the U.K. Stand-Alone Pension Scheme. Automotive will cause the U.K.
Stand-Alone Pension Scheme to assume and fully perform, pay and discharge all
Liabilities of the Rockwell U.K. Executive Plan in respect of all such
Automotive Employees who consent to such transfer ("U.K. Transferring
Employees"). Automotive will cause the U.K. Stand-Alone Pension Scheme to credit
each U.K. Transferring Employee for purposes of eligibility to participate,
vesting, benefit accruals and all other plan purposes with all service which had
been credited to such U.K. Transferring Employee for such purpose under the
Rockwell U.K. Executive Plan immediately prior to the Time of Distribution. As
soon as practicable after receipt of consents from U.K. Transferring Employees,
Rockwell will cause the Rockwell U.K. Executive Plan to transfer to the U.K.
Stand-Alone Pension Scheme assets equal in value to the cash equivalent value of
the U.K. Transferring Employees' benefit obligations under the Rockwell U.K.
Executive Plan at the Time of Distribution, based on the salary and service of
the U.K. Transferring Employees as of the Time of Distribution. As and when
required, Automotive will contribute to the U.K. Stand-Alone Pension Scheme such
additional contributions as the trustees of the U.K. Stand-Alone Pension Scheme
may require in order to fund the
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benefits of the U.K. Transferring Employees under the U.K. Stand-Alone Pension
Scheme.
(c) Effective as of the Time of Distribution, the Automotive
Employees who participated in the Rockwell U.K. Executive Plan immediately prior
to the Time of Distribution will cease to accrue service credits for benefit,
benefit eligibility, vesting and all other purposes under the Rockwell U.K.
Executive Plan and will have the right to receive a benefit, if any, under the
Rockwell U.K. Executive Plan accrued as of the Time of Distribution in
accordance with the terms of the Rockwell U.K. Executive Plan; provided,
however, that U.K. Transferring Employees will have no right to receive any
benefit from the Rockwell U.K. Executive Plan. None of Automotive or the
Automotive Subsidiaries or their Affiliates will have or acquire any interest in
or right to any of the assets of the Rockwell U.K. Executive Plan, and Rockwell
and the Rockwell Subsidiaries will retain full power and authority with respect
to the amendment and termination of the Rockwell U.K. Executive Plan and the
investment and disposition of assets held in the Rockwell U.K. Executive Plan to
the extent permitted by law. From and after the Time of Distribution, none of
Rockwell or the Rockwell Subsidiaries, the Affiliates thereof or the Rockwell
U.K. Executive Plan will have any Liabilities with respect to benefits and
entitlements of U.K. Transferring Employees under the Rockwell U.K. Executive
Plan or other Automotive Employees (except with respect to such other Automotive
Employees' benefits accrued under the Rockwell U.K. Executive Plan prior to the
Time of Distribution).
(d) Automotive and Rockwell will cooperate in making all appropriate
filings required under applicable law, implementing all appropriate
communications with participants, exchanging and sharing appropriate records and
taking all other actions as may be necessary or appropriate to implement the
provisions of this Section 3.03.
Section 3.04 U.K. Stand-Alone Pension Scheme. Effective as of the
Time of Distribution, Automotive will or will cause an Automotive Subsidiary to
(i) assume and adopt or continue sponsorship of the U.K. Stand-Alone Pension
Scheme, and all assets and Liabilities related thereto, and (ii) fully succeed
to and perform, pay and discharge all of the Pre-Distribution Group's
Liabilities with respect to the U.K. Stand-Alone Pension Scheme, subject to the
Inland Revenue's consent and the governing provisions of the U.K. Stand-Alone
Pension Scheme. The U.K. Stand-Alone Pension
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Scheme will be maintained in a form substantially similar in all material
respects to the form in which it existed immediately prior to the Time of
Distribution for a period of at least one year following the Time of
Distribution. Effective as of the Time of Distribution, Automotive will or will
cause the applicable Automotive Subsidiary to nominate (i) an organization which
is a member of the Investment Management Regulatory Organization as investment
manager of the U.K. Stand-Alone Pension Scheme and (ii) an organization
registered in the United Kingdom as custodian of the assets of the U.K.
Stand-Alone Pension Scheme. Automotive will cause the U.K. Stand-Alone Pension
Scheme to cover, effective as of the Time of Distribution, all Automotive
Employees who participated in the Rockwell U.K. Executive Plan immediately prior
to the Time of Distribution (it being understood that only such Automotive
Employees who are U.K. Transferring Employees will be credited under the U.K.
Stand-Alone Pension Scheme with all service credited to such employees under the
Rockwell U.K. Executive Plan immediately prior to the Time of Distribution).
From and after the Time of Distribution, none of Rockwell or the Rockwell
Subsidiaries or their Affiliates will have any Liabilities with respect to the
U.K. Stand-Alone Pension Scheme. Rockwell and Automotive will take, or cause to
be taken, all such action as may be necessary or appropriate to establish,
effective as of the Time of Distribution, Automotive or the applicable
Automotive Subsidiary as successor to Rockwell and the Rockwell Subsidiaries as
to all rights, assets, duties and Liabilities under, or with respect to, the
U.K. Stand-Alone Pension Scheme. Rockwell and Automotive will cooperate in
making all appropriate filings required by law, implementing all appropriate
communications with participants, transferring appropriate records and taking
all other actions as may be necessary or appropriate to implement the provisions
of this Section 3.04.
Section 3.05 Canadian Automotive Pension Plans. Effective as of the
Time of Distribution, Automotive will cause Automotive Canada to (i) assume and
adopt sponsorship of and all assets and Liabilities of the Pre-Distribution
Group under (A) the Pension Plan for Non-Union Salaried Employees of Rockwell
International of Canada, (B) the Pension Plan for Hourly Employees of Rockwell
International of Canada - C.A.W. Local 1941 (Tilbury, Ontario), (C) the
Non-Contributory Pension Plan for Hourly Employees of Rockwell International of
Canada - C.A.W. Local 00 (Xxxxxxxxxxx, Xxxxxxx), (X) the Retirement Income Plan
for Union Employees of Rockwell International of Canada Ltd. - Plastic Products
Division, (E) the Pension Plan for Hourly
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Employees of Rockwell International of Canada Ltd. - U.S.W.A. Local 3209
(Gananoque, Ontario) and (F) the Pensioners' Pension Plan of Rockwell
International of Canada Ltd., in each case as amended through the Time of
Distribution (the plans referred to in clauses (A) - (F) above are referred to
herein collectively as the "Canadian Automotive Pension Plans"), and the
respective trusts or other funding media related to the Canadian Automotive
Pension Plans, and (ii) fully perform, pay and discharge all of the
Pre-Distribution Group's Liabilities with respect to the Canadian Automotive
Pension Plans and the respective trusts or other funding media related thereto.
The Canadian Automotive Pension Plans will be maintained in forms substantially
similar in all material respects to the forms in which they existed immediately
prior to the Time of Distribution for a period of at least one year following
the Time of Distribution. From and after the Time of Distribution, none of
Rockwell or the Rockwell Subsidiaries or their Affiliates will have any
Liabilities with respect to the Canadian Automotive Pension Plans and the
respective trusts or other funding media related thereto. Rockwell and
Automotive will take, or cause to be taken, all such action as may be necessary
or appropriate to establish, effective as of the Time of Distribution,
Automotive Canada as successor to Rockwell and the Rockwell Subsidiaries as to
all rights, assets, duties and Liabilities under, or with respect to, the
Canadian Automotive Pension Plans. Rockwell and Automotive will cooperate in
making all appropriate filings required by law, implementing all appropriate
communications with participants, transferring appropriate records, notifying
plan trustees and taking all other actions as may be necessary or appropriate to
implement the provisions of this Section 3.05.
Section 3.06 Canadian Non-Automotive Pension Plans. Effective as of
the Time of Distribution, Rockwell will cause New Rockwell Canada to (i) assume
and adopt sponsorship of and all assets and Liabilities of the Pre-Distribution
Group under (A) the Retirement Plan for Employees of the Xxxxx-Xxxxxxx Division
of Rockwell International of Canada, (B) the Pension Plan for Hourly Employees
of Rockwell International of Canada Ltd. - I.M.A.W. Local 92 (Guelph, Ontario),
(C) the Pension Plan for Employees of Rockwell International of Canada Ltd. -
Measurement and Flow Control Division, (D) the Retirement Plan for Production
Employees of Rockwell International of Canada Ltd. - I.B.E.W. Local 1966
(Xxxxxxx Canada Division) and (E) the Retirement Plan for Salaried Employees of
Rockwell International of Canada Ltd. (Xxxxxxx Canada
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Division), in each case as amended through the Time of Distribution (the plans
referred to in clauses (A) - (E) above are referred to herein collectively as
the "Canadian Non-Automotive Pension Plans") and the respective trusts or other
funding media related to the Canadian Non-Automotive Pension Plans, and (ii)
fully perform, pay and discharge all of the Pre-Distribution Group's Liabilities
with respect to the Canadian Non-Automotive Pension Plans and the respective
trusts or other funding media related thereto. From and after the Time of
Distribution, none of Automotive or the Automotive Subsidiaries or their
Affiliates will have any Liabilities with respect to the Canadian Non-Automotive
Pension Plans and the respective trusts or other funding media related thereto.
Rockwell and Automotive will take, or cause to be taken, all such action as may
be necessary or appropriate to establish, effective as of the Time of
Distribution, New Rockwell Canada as successor to Rockwell and the Rockwell
Subsidiaries as to all rights, assets, duties and Liabilities under, or with
respect to, the Canadian Non-Automotive Pension Plans. Rockwell and Automotive
will cooperate in making all appropriate filings required by law, implementing
all appropriate communications with participants, transferring appropriate
records, notifying plan trustees and taking all other actions as may be
necessary or appropriate to implement the provisions of this Section 3.06.
Section 3.07 Australian Stand-Alone Pension Plans. Effective as of
the Time of Distribution, Automotive will or will cause one or more Automotive
Subsidiaries to (i) assume and adopt sponsorship of the Rockwell Standard of
Australia Superannuation Plan and the Rockwell A.B.S. Australia Superannuation
Plan, in each case as amended through the Time of Distribution (collectively,
the "Australian Stand-Alone Pension Plans"), the respective trusts related
thereto and all assets and Liabilities related thereto, and (ii) fully perform,
pay and discharge all of the Pre-Distribution Group's Liabilities with respect
to the Australian Stand-Alone Pension Plans and the respective trusts related
thereto. The Australian Stand-Alone Pension Plans will be maintained in forms
substantially similar in all material respects to the forms in which they
existed immediately prior to the Time of Distribution for a period of at least
one year following the Time of Distribution. From and after the Time of
Distribution, none of Rockwell or the Rockwell Subsidiaries or their Affiliates
will have any Liabilities with respect to the Australian Stand-Alone Pension
Plans and the respective trusts related thereto. Rockwell and Automotive
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will take, or cause to be taken, all such action as may be necessary or
appropriate to establish, effective as of the Time of Distribution, Automotive
and the Automotive Subsidiaries as successors to Rockwell and the Rockwell
Subsidiaries as to all rights, assets, duties and Liabilities under, or with
respect to, the Australian Stand-Alone Pension Plans. Rockwell and Automotive
will cooperate in making all appropriate filings required by law, implementing
all appropriate communications with participants, transferring appropriate
records, replacing the trustees under each Australian Stand-Alone Pension Plan
with trustees designated by Automotive and taking all other actions as may be
necessary or appropriate to implement the provisions of this Section 3.07.
Section 3.08 German Stand-Alone Pension Plan. Effective as of the
Time of Distribution, Automotive will or will cause one or more Automotive
Subsidiaries to (i) assume and adopt sponsorship of the Pension Plan for the
Employees of Xxxxxxxx-Xxxxx GmbH, as amended through the Time of Distribution
(the "German Stand-Alone Pension Plan"), and all Liabilities related thereto,
and (ii) fully perform, pay and discharge all of the Pre-Distribution Group's
Liabilities with respect to the German Stand-Alone Pension Plan. The German
Stand-Alone Pension Plan will be maintained in a form substantially similar in
all material respects to the form in which it existed immediately prior to the
Time of Distribution for a period of at least one year following the Time of
Distribution. From and after the Time of Distribution, none of Rockwell or the
Rockwell Subsidiaries or their Affiliates will have any Liabilities with respect
to the German Stand-Alone Pension Plan. Rockwell and Automotive will take, or
cause to be taken, all such action as may be necessary or appropriate to
establish, effective as of the Time of Distribution, Automotive and the
Automotive Subsidiaries as successors to Rockwell and the Rockwell Subsidiaries
as to all rights, duties and Liabilities under, or with respect to, the German
Stand-Alone Pension Plan. Rockwell and Automotive will cooperate in making all
appropriate filings required by law, implementing all appropriate communications
with participants, transferring appropriate records, replacing any trustees
under the German Stand-Alone Pension Plan with trustees designated by Automotive
and taking all other actions as may be necessary or appropriate to implement the
provisions of this Section 3.08.
Section 3.09 Gordonsville Retirement Plan. Effective as of the Time
of Distribution, Automotive will or
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will cause one or more Automotive Subsidiaries to (i) assume and adopt
sponsorship of the Rockwell International Corporation Retirement Plan for Hourly
Employees, Gordonsville, Tennessee (the "Gordonsville Retirement Plan"), the
respective trust related thereto and all assets and Liabilities related thereto,
and (ii) fully perform, pay and discharge all of the Pre-Distribution Group's
Liabilities with respect to the Gordonsville Retirement Plan and the respective
trust related thereto. The Gordonsville Retirement Plan will be maintained in a
form substantially similar in all material respects to the form in which it
existed immediately prior to the Time of Distribution for a period of at least
one year following the Time of Distribution. From and after the Time of
Distribution, none of Rockwell or the Rockwell Subsidiaries or their Affiliates
will have any Liabilities with respect to the Gordonsville Retirement Plan and
the respective trust related thereto. Rockwell and Automotive will take, or
cause to be taken, all such action as may be necessary or appropriate to
establish, effective as of the Time of Distribution, Automotive and the
Automotive Subsidiaries as successors to Rockwell and the Rockwell Subsidiaries
as to all rights, assets, duties and Liabilities under, or with respect to, the
Gordonsville Retirement Plan. Rockwell and Automotive will cooperate in making
all appropriate filings required by law, implementing all appropriate
communications with participants, transferring appropriate records, replacing
the trustees under the Gordonsville Retirement Plan with trustees designated by
Automotive and taking all other actions as may be necessary or appropriate to
implement the provisions of this Section 3.09.
ARTICLE IV
SAVINGS PLANS
Section 4.01 U.S. Savings Plan.
(a) As of the Time of Distribution, Automotive will have
established, and will cover the Automotive Employees who participated in the
Rockwell Savings Plan immediately prior to the Time of Distribution under, a
defined contribution plan (the "Automotive Savings Plan"), which will be
qualified pursuant to Sections 401(a) and 401(k) of the Code, and will have
established a related trust which shall be exempt from taxation under Section
501(a) of the Code. The Automotive Savings Plan will be substantially similar in
all material respects to
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the Rockwell Savings Plan as of the Time of Distribution, except that Automotive
Common Stock will be substituted for all plan purposes for Rockwell Common Stock
and the other investment vehicles offered by the Automotive Savings Plan will
not be identical to the investment vehicles offered by the Rockwell Savings
Plan. The Automotive Savings Plan will provide the same employer contribution
formula for Automotive Employees as the Rockwell Savings Plan provides as of the
Time of Distribution. The Automotive Savings Plan will be maintained in such
form for a period of at least one year following the Time of Distribution. The
Automotive Savings Plan will credit each Automotive Employee for purposes of
vesting and eligibility with all service which had been credited to such
Automotive Employee for such purposes under the Rockwell Savings Plan
immediately prior to the Time of Distribution (excluding any such service which
was not counted under the Rockwell Savings Plan by operation of its "break in
service" rules).
(b) Effective as of the Time of Distribution, Automotive Employees
who participated in the Rockwell Savings Plan immediately prior to the Time of
Distribution will be treated as terminated, fully vested participants under the
Rockwell Savings Plan, except that they will not be treated as having terminated
employment for purposes of entitlement to distributions or the repayment of
outstanding loans solely as a result of becoming Automotive Employees. Effective
as of the Time of Distribution, Automotive Employees will cease to be eligible
to contribute to, or receive contributions in respect of, their Rockwell Savings
Plan accounts. None of Automotive or the Automotive Subsidiaries, the Affiliates
thereof, the Automotive Savings Plan or the trust thereunder will have or
acquire any interest in or right to any of the assets of the Rockwell Savings
Plan, and Rockwell will retain full power and authority with respect to the
amendment and termination of the Rockwell Savings Plan and the investment and
disposition of assets held in the Rockwell Savings Plan to the extent permitted
by law. From and after the Time of Distribution, none of Rockwell or the
Rockwell Subsidiaries, the Affiliates thereof, the Rockwell Savings Plan or the
trust thereunder will have any Liabilities with respect to benefits and
entitlements of Automotive Employees under the Rockwell Savings Plan, except
with respect to benefits accrued under the Rockwell Savings Plan prior to the
Time of Distribution.
(c) Automotive and Rockwell will cooperate in making all appropriate
filings required under the Code or
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ERISA, the regulations thereunder and any other applicable laws, implementing
all appropriate communications with participants, exchanging and sharing
appropriate records and taking all other actions as may be necessary or
appropriate to implement the provisions of this Section 4.01.
Section 4.02 Stand-Alone Savings Plans. Effective as of the Time of
Distribution, Automotive will or will cause one or more Automotive Subsidiaries
to (i) assume and adopt sponsorship of the Asheville Employees Retirement
Savings Plan Truck Axle Division, the Rockwell International Corporation
Gordonsville, Tennessee Employee Savings Plan, and the York Employees Retirement
Savings Plan Truck Axle Division, in each case as amended through the Time of
Distribution (collectively, the "Stand-Alone Savings Plans"), the respective
trusts related thereto and all assets and Liabilities related thereto, and (ii)
fully perform, pay and discharge all of the Pre-Distribution Group's Liabilities
with respect to the Stand-Alone Savings Plans and the respective trusts related
thereto. The Stand-Alone Savings Plans will be maintained in forms substantially
similar in all material respects to the forms in which they existed immediately
prior to the Time of Distribution for a period of at least one year following
the Time of Distribution. From and after the Time of Distribution, none of
Rockwell or the Rockwell Subsidiaries or their Affiliates will have any
Liabilities with respect to the Stand-Alone Savings Plans and the respective
trusts related thereto. Rockwell and Automotive will take, or cause to be taken,
all such action as may be necessary or appropriate to establish, effective as of
the Time of Distribution, Automotive and the Automotive Subsidiaries as
successors to Rockwell and the Rockwell Subsidiaries as to all rights, assets,
duties and Liabilities under, or with respect to, the Stand-Alone Savings Plans.
Rockwell and Automotive will cooperate in making all appropriate filings
required by law, implementing all appropriate communications with participants,
transferring appropriate records, replacing the trustees under each Stand-Alone
Savings Plan with trustees designated by Automotive and taking all other actions
as may be necessary or appropriate to implement the provisions of this Section
4.02.
Section 4.03 Nonqualified Savings Plans.
(a) Rockwell will retain all Liabilities for and will pay when due
all benefits accrued as of the Time of Distribution by, and attributable to,
Automotive Employees under the Rockwell International Corporation Supplemental
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Savings Plan for Highly Compensated Employees and the Rockwell International
Corporation Excess Benefit Savings Plan, in each case as amended through the
Time of Distribution (collectively, the "Rockwell Nonqualified Savings Plans").
From and after the Time of Distribution, none of Rockwell or the Rockwell
Subsidiaries, the Affiliates thereof or the Rockwell Nonqualified Savings Plans
will have any Liabilities with respect to benefits and entitlements of
Automotive Employees under the Rockwell Nonqualified Savings Plans, except with
respect to benefits accrued (including earnings thereon) under the Rockwell
Nonqualified Savings Plans prior to the Time of Distribution.
(b) As of the Time of Distribution, Automotive will have established
and will cover Automotive Employees who participated in the Rockwell
Nonqualified Savings Plans immediately prior to the Time of Distribution under
nonqualified savings plans (the "Automotive Nonqualified Savings Plans"). The
Automotive Nonqualified Savings Plans will be substantially similar in all
material respects to the Rockwell Nonqualified Savings Plans. The Automotive
Nonqualified Savings Plans will be maintained in such form for a period of at
least one year following the Time of Distribution. The Automotive Nonqualified
Savings Plans will credit each Automotive Employee for purposes of vesting and
eligibility to participate with all service which had been credited to such
Automotive Employee for such purposes under the Rockwell Nonqualified Savings
Plans immediately prior to the Time of Distribution (excluding any such service
which was not counted under the Rockwell Nonqualified Savings Plans by operation
of their "break in service" rules), but shall not grant past service credit to
Automotive Employees for benefit accruals and any other plan purposes.
Section 4.04 Canadian Non-Automotive Savings Plans. Effective as of
the Time of Distribution, Rockwell will cause New Rockwell Canada to (i) assume
and adopt sponsorship of and all assets and Liabilities of the Pre-Distribution
Group under the Rockwell International of Canada - Xxxxx-Xxxxxxx Division
Deferred Profit Sharing Plan, the Rockwell International of Canada -
Xxxxx-Xxxxxxx Division Employees' Retirement Savings Plan and the Xxxxx-Xxxxxxx
Canada Limited Employees' Non-Registered Savings Plan, in each case as amended
through the Time of Distribution (collectively, the "Canadian Non-Automotive
Savings Plans"), and the respective trusts or other funding media related
thereto, and (ii) fully perform, pay and
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discharge all of the Pre-Distribution Group's Liabilities with respect to the
Canadian Non-Automotive Savings Plans and the respective trusts or other funding
media related thereto. From and after the Time of Distribution, none of
Automotive or the Automotive Subsidiaries or their Affiliates will have any
Liabilities with respect to the Canadian Non-Automotive Savings Plans and the
respective trusts or other funding media related thereto. Rockwell and
Automotive will take, or cause to be taken, all such action as may be necessary
or appropriate to establish, effective as of the Time of Distribution, New
Rockwell Canada as successor to the applicable Automotive Subsidiaries as to all
rights, assets, duties and Liabilities under, or with respect to, the Canadian
Non-Automotive Savings Plans. Rockwell and Automotive will cooperate in making
all appropriate filings required by law, implementing all appropriate
communications with participants, transferring appropriate records, notifying
plan trustees and taking all other actions as may be necessary or appropriate to
implement the provisions of this Section 4.04.
ARTICLE V
STOCK PLANS
Section 5.01 Stock Plans.
(a) Rockwell and Automotive will take all action necessary or
appropriate so that each Xxx-0000 Xxxxxxxx Option held by an Automotive Employee
that is outstanding as of the Time of Distribution is adjusted pursuant to the
equitable adjustment provisions of the applicable Rockwell Stock Plan under
which such Xxx-0000 Xxxxxxxx Option was granted (in the case of adjustment of
any such Xxx-0000 Xxxxxxxx Option that is accompanied by a tandem stock
appreciation right, accompanied by a corresponding adjustment to such tandem
stock appreciation right) so that the number of shares subject to the adjusted
Xxx-0000 Xxxxxxxx Option will equal the number of shares subject to such
Xxx-0000 Xxxxxxxx Option immediately prior to the Time of Distribution and prior
to such adjustment, multiplied by the reciprocal of the Rockwell Option Ratio,
and then, if any resultant fractional share of Rockwell Common Stock exists,
rounded down to the nearest whole share. The adjusted Xxx-0000 Xxxxxxxx Option
will have a per-share exercise price equal to the per-share exercise price of
such Xxx-0000 Xxxxxxxx Option immediately prior to the Time of Distribution and
prior to such adjustment, multiplied by the
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Rockwell Option Ratio. Such adjusted Xxx-0000 Xxxxxxxx Option (and, if
applicable, tandem stock appreciation right) will otherwise have the same terms
and conditions as those in effect prior to the adjustment.
(b) Rockwell and Automotive will take all action necessary or
appropriate so that each Rockwell 1997 Option held by an Automotive Employee
that is outstanding as of the Time of Distribution will be and become an
Automotive Option (in the case of any such Rockwell 1997 Option that is
accompanied by a tandem stock appreciation right, with a tandem Automotive stock
appreciation right) pursuant to the equitable adjustment provisions of the
applicable Rockwell Stock Plan under which such Rockwell 1997 Option was
granted. The number of shares of Automotive Common Stock subject to the
Automotive Option will equal the number of shares subject to such Rockwell 1997
Option being replaced immediately prior to the Time of Distribution, multiplied
by the reciprocal of the Automotive Option Ratio, and then, if any resultant
fractional share of Automotive Common Stock exists, rounded down to the nearest
whole share. The Automotive Option shall have a per-share exercise price equal
to the per-share exercise price of such Rockwell 1997 Option being replaced
immediately prior to the Time of Distribution, multiplied by the Automotive
Option Ratio. Such Automotive Option (and, if applicable, tandem stock
appreciation right) will otherwise have the same terms and conditions as the
corresponding Rockwell 1997 Option (and, if applicable, tandem stock
appreciation right) being replaced, except that references to Rockwell will be
changed to refer to Automotive.
ARTICLE VI
OTHER EMPLOYEE PLANS AND MATTERS
Section 6.01 Welfare Plans.
(a) As of the Time of Distribution, Automotive and the Automotive
Subsidiaries will have established or assumed, and will cover Automotive
Participants under, Welfare Plans and other employee welfare benefit and fringe
benefit arrangements (collectively, "Automotive Welfare Plans") that are
substantially similar in all material respects to the Welfare Plans and other
employee welfare benefit and fringe benefit arrangements maintained by Rockwell
and its Subsidiaries (including members of the Automotive Group) immediately
prior to the Time of
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Distribution ("Rockwell Welfare Plans") for the benefit of Automotive
Participants. The Automotive Welfare Plans will be maintained in such form for a
period of at least one year following the Time of Distribution.
(b) The Automotive Welfare Plans will provide for the immediate
participation of those Automotive Participants who participated in the Rockwell
Welfare Plans immediately prior to the Time of Distribution. The Automotive
Welfare Plans will credit each Automotive Participant for all Automotive Welfare
Plan purposes with all service and any other item which had been credited to or
otherwise accumulated for the benefit of such Automotive Participant under the
Rockwell Welfare Benefit Plans immediately prior to the Time of Distribution.
The transition from the Rockwell Welfare Plans to the Automotive Welfare Plans
will not, in and of itself, adversely affect the Automotive Participants.
Without limiting the generality of the foregoing, each Automotive Welfare Plan,
to the extent applicable: (i) will recognize all amounts applied to deductibles,
co-payments, out-of-pocket maximums and lifetime maximum benefits with respect
to Automotive Participants under the corresponding Rockwell Welfare Plan for the
plan year that includes the Time of Distribution and for prior periods (if
applicable); (ii) will recognize all service credited to waiting periods with
respect to Automotive Participants under the corresponding Rockwell Welfare
Plan; (iii) will not impose any limitations on coverage of pre-existing
conditions of Automotive Participants except to the extent such limitations
applied to such Automotive Participants under the corresponding Rockwell Welfare
Plan immediately before such Automotive Welfare Plan became effective; and (iv)
will not impose any other conditions (such as proof of good health, evidence of
insurability or a requirement of a physical examination) upon the participation
by Automotive Participants who were participating in the corresponding Rockwell
Welfare Plan immediately before such Automotive Welfare Plan became effective.
(c) Automotive and the Automotive Subsidiaries will credit each
Automotive Employee with the unused vacation days and personal and sickness days
accrued in accordance with the vacation and personnel policies and labor
agreements of Rockwell and its Subsidiaries (including members of the Automotive
Group) applicable to such employees in effect immediately prior to the Time of
Distribution.
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(d) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Automotive and the Automotive Subsidiaries will
assume or retain, as the case may be, and will be solely responsible for and
will fully perform, pay and discharge, all Liabilities in respect of Automotive
Participants (and claims by or relating to Automotive Participants) with respect
to employee welfare and fringe benefits (including, without limitation, medical,
dental, life, travel, accident, short- and long-term disability,
hospitalization, workers' compensation and other insurance benefits), whether
under the Rockwell Welfare Plans, the Automotive Welfare Plans or otherwise,
whether incurred before, at or after the Time of Distribution and whether any
claim is made with respect thereto before, at or after the Time of Distribution.
Without limiting the generality of the foregoing, from and after the Time of
Distribution, Automotive and the Automotive Subsidiaries (or where appropriate,
the Automotive Welfare Plans) will assume, will be solely responsible for and
will fully perform, pay and discharge all Liabilities in respect of Automotive
Participants with respect to retiree health benefits and retiree life insurance
benefits, whether under the Rockwell Welfare Plans, the Automotive Welfare Plans
or otherwise, whether incurred before, at or after the Time of Distribution and
whether any claim is made with respect thereto before, at or after the Time of
Distribution.
(e) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell and the Rockwell Subsidiaries will assume
or retain, as the case may be, and will be solely responsible for and will fully
perform, pay and discharge, all Liabilities in respect of Rockwell Participants
(and claims by or relating to Rockwell Participants) with respect to employee
welfare and fringe benefits (including, without limitation, medical, dental,
life, travel, accident, short- and long-term disability, hospitalization,
workers' compensation and other insurance benefits), whether under the Rockwell
Welfare Plans or otherwise, whether incurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution. Without limiting the generality of the
foregoing, from and after the Time of Distribution, Rockwell and the Rockwell
Subsidiaries (or where appropriate, the Rockwell Welfare Plans) will assume or
retain, as the case may be, will be solely responsible for and will fully
perform, pay and discharge all Liabilities in respect of Rockwell Participants
with respect to retiree health
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benefits and retiree life insurance benefits, whether under the Rockwell Welfare
Plans or otherwise, whether incurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution.
(f) Automotive and Rockwell will cooperate in making all appropriate
filings required by law, implementing all appropriate communications with
participants, exchanging and sharing appropriate records and taking such other
actions as may be necessary or appropriate to implement the provisions of this
Section 6.01.
Section 6.02 Long-Term Incentive Plan and Incentive Compensation
Plans. Effective as of the Time of Distribution, Automotive hereby assumes and
agrees to fully perform, pay and discharge all Liabilities (including but not
limited to liability for earned but unpaid incentive payments) for, due to or
attributable to Automotive Participants under the Rockwell International
Business Unit Long-Term Incentive Plan (the "LTIP"), the Incentive Compensation
Plan and all other long-term and annual incentive compensation plans of Rockwell
and its Subsidiaries (including members of the Automotive Group) in effect at or
prior to the Time of Distribution. Rockwell and Automotive will cooperate in
taking all actions necessary or appropriate to adjust the performance goals and
other terms and conditions of awards under the LTIP and such other incentive
compensation plans for performance periods that begin before and end after the
Distribution Date as appropriate to reflect the Distribution. From and after the
Time of Distribution, none of Rockwell or the Rockwell Subsidiaries or their
Affiliates will have any Liabilities with respect to benefits of Automotive
Participants under the LTIP, the Incentive Compensation Plan and such other
incentive compensation plans. Rockwell and Automotive will cooperate in making
all appropriate filings required by law, implementing all appropriate
communications with participants, exchanging and sharing appropriate records and
taking all other actions as may be necessary or appropriate to implement the
provisions of this Section 6.02.
Section 6.03 Deferred Compensation Plans. Effective as of the Time
of Distribution, Automotive hereby assumes and agrees to fully perform, pay and
discharge all Liabilities (including but not limited to the obligation to pay
when due all benefits accrued and not paid as of the Time of Distribution) for,
due to or attributable to Automotive Participants under the Rockwell
International
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Corporation Deferred Compensation Plan (the "Rockwell Deferred Compensation
Plan"), as in effect immediately prior to the Time of Distribution. From and
after the Time of Distribution, none of Rockwell or the Rockwell Subsidiaries or
their Affiliates will have any Liabilities with respect to benefits of
Automotive Participants under the Rockwell Deferred Compensation Plan. Rockwell
and Automotive will cooperate in making all appropriate filings required by law,
implementing all appropriate communications with participants, exchanging and
sharing appropriate records and taking all other actions as may be necessary or
appropriate to implement the provisions of this Section 6.03.
Section 6.04 Canadian Automotive Bridging Benefit Plans. Effective
as of the Time of Distribution, Automotive will cause Automotive Canada to (i)
assume and adopt sponsorship of and all Liabilities of the Pre-Distribution
Group under the Bridging Benefit Plan for Hourly Employees of Rockwell
International of Canada - C.A.W. Local 1941 (Tilbury, Ontario) and the Bridging
Benefit Plan for Hourly Employees of Rockwell International of Canada - C.A.W.
Local 61 (Bracebridge, Ontario), in each case as amended through the Time of
Distribution (collectively, the "Canadian Automotive Bridging Benefit Plans"),
and (ii) fully perform, pay and discharge all of the Pre-Distribution Group's
Liabilities with respect to the Canadian Automotive Bridging Benefit Plans. The
Canadian Automotive Bridging Benefit Plans will be maintained in forms
substantially similar in all material respects to the forms in which they
existed immediately prior to the Time of Distribution for a period of at least
one year following the Time of Distribution. From and after the Time of
Distribution, none of Rockwell or the Rockwell Subsidiaries or their Affiliates
will have any Liabilities with respect to the Canadian Automotive Bridging
Benefit Plans. Rockwell and Automotive will take, or cause to be taken, all such
action as may be necessary or appropriate to establish, effective as of the Time
of Distribution, Automotive Canada as successor to Rockwell and the Rockwell
Subsidiaries as to all rights, duties and Liabilities under, or with respect to,
the Canadian Automotive Bridging Benefit Plans. Rockwell and Automotive will
cooperate in making all appropriate filings required by law, implementing all
appropriate communications with participants, transferring appropriate records,
notifying third party administrators and taking all other actions as may be
necessary or appropriate to implement the provisions of this Section 6.04.
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Section 6.05 Canadian Automotive SUB Plan. Effective as of the Time
of Distribution, Automotive will cause Automotive Canada to (i) assume and adopt
sponsorship of and all assets and Liabilities of the Pre-Distribution Group
under the Supplemental Unemployment Benefit Plan for Rockwell International of
Canada Ltd. - C.A.W. Local 1941 (Tilbury, Ontario), as amended through the Time
of Distribution (the "Canadian Automotive SUB Plan"), and the trust related to
the Canadian Automotive SUB Plan, and (ii) fully perform, pay and discharge all
of the Pre-Distribution Group's Liabilities with respect to the Canadian
Automotive Sub Plan and the trust related thereto. The Canadian Automotive SUB
Plan will be maintained in a form substantially similar in all material respects
to the form in which it existed immediately prior to the Time of Distribution
for a period of at least one year following the Time of Distribution. From and
after the Time of Distribution, none of Rockwell or the Rockwell Subsidiaries or
their Affiliates will have any Liabilities with respect to the Canadian
Automotive SUB Plan and the trust related thereto. Rockwell and Automotive will
take, or cause to be taken, all such action as may be necessary or appropriate
to establish, effective as of the Time of Distribution, Automotive Canada as
successor to Rockwell and the Rockwell Subsidiaries as to all rights, assets,
duties and Liabilities under, or with respect to, the Canadian Automotive SUB
Plan. Rockwell and Automotive will cooperate in making all appropriate filings
required by-law, implementing all appropriate communications with participants,
transferring appropriate records, notifying plan trustees and taking all other
actions as may be necessary or appropriate to implement the provisions of this
Section 6.05.
Section 6.06 Severance Pay.
(a) Rockwell and Automotive acknowledge and agree that the
transactions contemplated by the Transaction Agreements will not constitute a
severance of employment of any Automotive Employee or Rockwell Employee prior to
or as a result of the transactions contemplated thereby, and that individuals
who, in connection with the Distribution, become Automotive Employees or
Rockwell Employees pursuant to this Agreement will not be deemed to have
experienced a termination, layoff or severance of employment from Rockwell and
its Subsidiaries (including members of the Automotive Group), in each case for
purposes of any policy, plan, program or agreement of Rockwell or any of its
Subsidiaries (including members of the Automotive Group) that provides
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for the payment of severance, salary continuation or similar benefits.
(b) Automotive and the Automotive Subsidiaries will assume or retain
(as applicable) and be solely responsible for, and will fully perform, pay and
discharge, all Liabilities in connection with claims made by or on behalf of
Automotive Participants in respect of severance pay, salary continuation and
similar obligations relating to the termination or alleged termination (whether
voluntary or involuntary) of any such person's employment, whether such
termination or alleged termination occurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any contract, employment agreement or collective bargaining agreement or
under any Federal, state, local, provincial or foreign law).
(c) Rockwell and the Rockwell Subsidiaries will assume or retain (as
applicable) and be solely responsible for, and will fully perform, pay and
discharge, all Liabilities in connection with claims made by or on behalf of
Rockwell Participants in respect of severance pay, salary continuation and
similar obligations relating to the termination or alleged termination (whether
voluntary or involuntary) of any such person's employment, whether such
termination or alleged termination occurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any contract, employment agreement or collective bargaining agreement or
under any Federal, state, local, provincial or foreign law).
Section 6.07 Employment, Consulting and Other Employee Related
Agreements. Effective as of the Time of Distribution, Automotive will or will
cause one or more Automotive Subsidiaries to assume or retain (as applicable)
all Liabilities relating to Automotive Participants under their respective
employment, consulting, separation, agreements to arbitrate, and other employee
related agreements with any member of the Pre-Distribution Group, as the same
are in effect immediately prior to the Time of Distribution. Effective as of the
Time of Distribution, Rockwell will or will cause one or more Rockwell
Subsidiaries to assume or retain (as applicable) all
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Liabilities relating to Rockwell Participants under their respective employment,
consulting, separation, agreements to arbitrate, and other employee related
agreements with any member of the Pre-Distribution Group, as the same are in
effect immediately prior to the Time of Distribution.
Section 6.08 Rockwell VEBA. As of and after the Time of
Distribution, Rockwell will retain all assets of and related to the Trust for
Employee Welfare Benefit Programs of Rockwell International
Corporation.
Section 6.09 Other Liabilities. From and after the Time of
Distribution, except as specifically set forth in this Agreement, Automotive and
the Automotive Subsidiaries will assume or retain, as the case may be, and be
solely responsible for, and will fully perform, pay and discharge, all
Liabilities in respect of Automotive Participants arising out of or relating to
employment by any member of the Pre-Distribution Group, whether pursuant to
benefit plans or otherwise and whether such Liabilities arose before, at or
after the Time of Distribution or any claim is made with respect thereto before,
at or after the Time of Distribution. From and after the Time of Distribution,
except as specifically set forth in this Agreement, Rockwell and the Rockwell
Subsidiaries will assume or retain, as the case may be, and be solely
responsible for, and will fully perform, pay and discharge all Liabilities in
respect of Rockwell Participants arising out of or relating to employment by any
member of the Pre-Distribution Group, whether pursuant to benefit plans or
otherwise and whether such Liabilities arose before, at or after the Time of
Distribution or any claim is made with respect thereto before, at or after the
Time of Distribution.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Indemnification. All Liabilities retained or assumed by
or allocated to Automotive or any Automotive Subsidiary pursuant to this
Agreement will be deemed to be Automotive Liabilities (as defined in the
Distribution Agreement), and all Liabilities retained or assumed by or allocated
to Rockwell or any Rockwell Subsidiary pursuant to this Agreement will be deemed
to be Liabilities of Rockwell which do not constitute such Automotive
Liabilities, and, in each case, will be subject
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to the indemnification provisions set forth in Article IV of the Distribution
Agreement.
Section 7.02 Sharing of Information. Each of Rockwell and Automotive
will, and will cause each of their respective Subsidiaries to, provide to the
other all such Information in its possession as the other may reasonably request
to enable the requesting party to administer its employee benefit plans and
programs, and to determine the scope of, and fulfill, its obligations under this
Agreement. Such Information will, to the extent reasonably practicable, be
provided in the format and at the times and places requested, but in no event
will the party providing such Information be obligated to incur any direct
expense not reimbursed by the party making such request, nor to make such
Information available outside its normal business hours and premises. The right
of the parties to receive Information hereunder will, without limiting the
generality of the foregoing, extend to any and all reports, and the data
underlying such reports. Any Information shared or exchanged pursuant to this
Agreement will be subject to the same confidentiality requirements set forth in
the Distribution Agreement.
Section 7.03 Entire Agreement; Construction. This Agreement, the
Distribution Agreement and the other Ancillary Agreements, including any
annexes, schedules and exhibits hereto or thereto, and other agreements and
documents referred to herein and therein, will together constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and will supersede all prior negotiations, agreements and understandings
of the parties of any nature, whether oral or written, with respect to such
subject matter. Notwithstanding any other provisions in this Agreement to the
contrary, in the event and to the extent that there will be a conflict between
the provisions of this Agreement and the provisions of the Distribution
Agreement, the provisions of this Agreement will control.
Section 7.04 Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement will remain in full force and effect and survive the
Time of Distribution.
Section 7.05 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made
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and to be performed entirely within such State, without regard to the conflicts
of law principles of such State.
Section 7.06 Notices. All notices, requests, claims, demands and
other communications required or permitted to be given hereunder will be in
writing and will be delivered by hand or telecopied or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
will be deemed given when so delivered by hand or telecopied, or three business
days after being so mailed (one business day in the case of express mail or
overnight courier service). All such notices, requests, claims, demands and
other communications will be addressed as set forth in Section 6.05 of the
Distribution Agreement, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice.
Section 7.07 Amendments. This Agreement cannot be amended, modified
or supplemented except by a written agreement executed by Rockwell and
Automotive.
Section 7.08 Assignment. Neither party to this Agreement will
convey, assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other party in its sole and
absolute discretion, except that any party may (without obtaining any consent)
assign any of its rights hereunder to a successor to all or any part of its
business. Any such conveyance, assignment or transfer requiring the prior
written consent of another party which is made without such consent will be void
ab initio. No assignment of this Agreement will relieve the assigning party of
its obligations hereunder.
Section 7.09 Captions; Currency. The article, section and paragraph
captions herein and the table of contents hereto are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. Unless otherwise
specified, all references herein to numbered articles or sections are to
articles and sections of this Agreement and all references herein to schedules
are to schedules to this Agreement. Unless otherwise specified, all references
contained in this Agreement, in any schedule referred to herein or in any
instrument or document delivered pursuant hereto to dollars will mean United
States Dollars.
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Section 7.10 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 7.11 Parties in Interest. This Agreement is binding upon and
is for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement. Except as expressly stated
herein, no provision of this Agreement will be construed (a) to limit the right
of Rockwell, any Rockwell Subsidiary, Automotive or any Automotive Subsidiary to
amend any plan or terminate any plan; provided, however, that Automotive and the
Automotive Subsidiaries will be obligated to maintain employee benefit plans and
arrangements for a period of at least one year from the Time of Distribution
which are substantially similar in all material respects to those which had been
maintained or provided by the Pre-Distribution Group immediately prior to the
Time of Distribution, or (b) to create any right or entitlement whatsoever in
any employee, former employee or beneficiary including, without limitation, a
right to continued employment or to any benefit under a plan or any other
benefit or compensation.
Section 7.12 Schedules. All schedules attached hereto are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
Section 7.13 Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Time of Distribution by and in
the sole discretion of
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the Rockwell Board without the approval of Automotive or of Rockwell's
shareowners. In the event of such termination, no party will have any liability
of any kind to any other party on account of such termination.
Section 7.14 Change of Name. On or promptly after the Distribution
Date, Automotive will take such actions as may be required to change the names
of all employee benefit plans sponsored or maintained by it or its Affiliates to
eliminate therefrom any reference to "Rockwell", "Rockwell International" or any
derivative thereof.
Section 7.15 Waivers; Remedies. No failure or delay on the part of
either Rockwell or Automotive in exercising any right, power or privilege
hereunder will operate as a waiver thereof, nor will any waiver on the part of
either Rockwell or Automotive of any right, power or privilege hereunder operate
as a waiver of any other right, power or privilege hereunder, nor will any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder. The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies which the parties may otherwise
have at law or in equity.
Section 7.16 Counterparts. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement.
Section 7.17 Performance. Each party will cause to be
performed and hereby guarantees the performance of all
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actions, agreements and obligations set forth herein to be performed by any
Subsidiary or Affiliate of such party.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
hereinabove written.
ROCKWELL INTERNATIONAL
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxxxxx X. Xxxxxx, Xx.
Senior Vice President,
General Counsel and
Secretary
MERITOR AUTOMOTIVE, INC.
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxxx
Senior Vice President,
General Counsel and
Secretary
The schedules and/or exhibits identified in the table of contents to this
agreement are omitted. Registrant will furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange Commission upon
request.
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