AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), dated as of
April 1, 2000, by and among Xxxxxxx Purina Company, a Missouri corporation
("Xxxxxxx") and Energizer Holdings, Inc. ("Energizer"), a Missouri corporation
and wholly owned subsidiary of Xxxxxxx.
WITNESSETH:
WHEREAS, Xxxxxxx'x businesses principally consist of the manufacture,
distribution and sale of pet products and battery and lighting products both
domestically and internationally; and
WHEREAS, the Board of Directors of Xxxxxxx (the "Xxxxxxx Board") has
determined that it is in the best interests of the Xxxxxxx shareholders to
separate Xxxxxxx'x battery and lighting products business from its pet products
business by creating a new independent publicly held battery and lighting
products company, and to distribute the $.01 par value Energizer Stock
("Energizer Stock") to shareholders of its $.10 par value Xxxxxxx Purina Common
Stock ("Xxxxxxx Stock"); and
WHEREAS, in order to effect such separation, the Xxxxxxx Board has
determined that it is necessary and advisable to restructure the worldwide
battery and lighting products business and to transfer to Energizer the direct
stock ownership of those Subsidiaries that are engaged in the operation of the
battery and lighting products business, as well as other assets of Xxxxxxx used
in the battery and lighting products businesses, as more fully set forth below;
and
WHEREAS, in connection with such consolidation, Xxxxxxx caused Eveready
Battery Company, Inc. ("Eveready"), a Delaware corporation and indirectly wholly
owned subsidiary of Xxxxxxx, to form Energizer effective September 23, 1999; and
effected the reincorporation of Eveready Battery International, Inc. ("EBII"), a
wholly owned subsidiary of Eveready, from Delaware to Missouri by causing EBII
to be merged into Energizer, in connection with which Eveready, the sole
shareholder of EBII, surrendered all shares of capital stock in EBII in a
constructive exchange for all of the issued and outstanding shares of capital
stock of Energizer;
WHEREAS, in order to effect such distribution of the ownership of Energizer
to the holders of Xxxxxxx Stock, the Xxxxxxx Board has determined that it is
necessary and desirable to distribute all outstanding shares of Energizer Stock
on a pro rata basis to the holders of Xxxxxxx Stock, such distribution being
hereinafter referred to as the "Distribution"; and
WHEREAS, the mergers and liquidations of certain affected subsidiaries are
intended to qualify as nontaxable under Sections 368(a)(1)(A) and 332 of the
Internal Revenue Code of 1986, as amended (the "Code"), the transfer of assets
is intended to qualify as nontaxable under Code Section 368(a)(1)(D) and 351,
and the distribution of Energizer Stock is intended to qualify as nontaxable
under Code Section 355; and
WHEREAS, the parties hereto have determined that it is necessary and
desirable to set forth the principal corporate transactions required to effect
the Distribution and to set forth other agreements that will govern certain
other matters prior to and following the Distribution;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained and intending to be legally bound thereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.01 General. As used in this Agreement, the following terms shall
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have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
Action: any action, claim, suit, arbitration, inquiry, proceeding or
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investigation by or before any court, governmental or other regulatory or
administrative agency or commission or any arbitration or other tribunal.
Affiliate: with respect to any specified Person, an "affiliate" as defined
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in Rule 405 promulgated pursuant to the Securities Act; provided, however, that
for purposes of this Agreement (i) Affiliates of Energizer shall not be deemed
to include Xxxxxxx or any corporation which will be a subsidiary or affiliate of
Xxxxxxx following the Distribution; and (ii) Affiliates of Xxxxxxx shall not be
deemed to include Affiliates of Energizer.
Aircraft Agreement: as defined in Section 5.04 of this Agreement.
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Ancillary Agreements: the Tax Sharing Agreement, the Bridging Services
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Agreement, the Intellectual Property Agreement and the Aircraft Agreement.
Asset: any and all assets and properties, tangible or intangible,
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including, but not limited to, the following: (i) cash, notes and trade
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receivable accounts (whether current or non-current and including all rights
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with respect thereto); (ii) certificates of deposit, bankers' acceptances,
stock, debentures, evidences of indebtedness, certificates of interest or
participation in profit-sharing agreements, collateral-trust certificates,
preorganization certificates, investment contracts, voting-trust certificates;
(iii) trade secrets and confidential information; statutory, common law and
registered trademarks, trade styles, service marks, service names, trade names,
trade dress, copyrights, moral rights, rights of privacy and publicity, Internet
or other electronic communication addresses (e.g., "xxxxxxxxx.xxx" and
1-800-982-ENRS), business addresses of a proprietary nature (e.g., "Ever Ready
House"), issued and unissued patents, and other property commonly considered
intellectual property, and the goodwill of the business to the extent associated
with any and all of the foregoing.; (iv) rights under leases, contracts,
licenses, permits, and sales and purchase agreements; (v) real estate and
buildings and other improvements thereon and timber and mineral rights of every
kind; (vi) leasehold improvements, fixtures, trade fixtures, machinery,
equipment (including transportation and office equipment), tools, dies and
furniture; (vii) office supplies, production supplies, spare parts, other
miscellaneous supplies and other tangible property of any kind; (viii) raw
materials, work-in-process, finished goods, consigned goods and other
inventories; (ix) prepayments or prepaid expenses; (x) claims, causes of action,
choses in action, rights of recovery and rights of set-off of any kind; (xi) the
right to receive mail and other communications; (xii) lists of advertisers,
records pertaining to advertisers and accounts, lists and records pertaining to
suppliers, customers and agents, and books, ledgers, files and business records
of every kind; (xiii) advertising materials and other recorded, printed or
written materials; (xiv) goodwill as a going concern and other intangible
properties; (xv) personnel records and employee contracts, including any rights
thereunder to restrict an employee from competing in certain respects; and (xvi)
licenses and authorizations issued by any governmental authority.
Battery Business: Xxxxxxx'x direct or indirect ownership of (i) the
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worldwide business of the manufacture, distribution and sale of primary
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alkaline, carbon zinc, miniature, rechargeable and other types of batteries; and
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flashlights and other lighting products; and (ii) all joint ventures involving
or associated with the businesses described in (i) next above.
Bridging Services Agreement: as defined in Section 5.04 of this Agreement.
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Business: the Battery Business or the Xxxxxxx Business.
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Business Day: any day other than a Saturday, a Sunday or a day on which
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banking institutions located in the State of Missouri are obligated by law or
executive order to close.
Cash: cash, marketable securities, compensating balances used to secure
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debt financing, amounts held in margin accounts, and such other items as have
been or would be classified as cash consistent with accounting policies of
Xxxxxxx.
Code: the Internal Revenue Code of 1986, as amended, or any successor
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legislation.
Current Plan Year: the plan year or fiscal year, to the extent applicable
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with respect to any Plan, during which the Distribution Date occurs.
Distribution: as defined in the recitals to this Agreement.
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Distribution Date: April 1, 2000.
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DuPont Agreement: an Agreement and Plan of Merger and Exchange dated as of
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December 2, 1997, by and among E. I. du Pont de Nemours and Company, Xxxxxxx and
certain of their affiliates.
Energizer: as defined in the recitals to this Agreement.
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Energizer Assets: except to the extent provided in, and subject to the
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provisions of, any of the Ancillary Agreements, (i) all of the Assets used or
held by or on behalf of any member of the Energizer Group or the Xxxxxxx Group
immediately prior to the Distribution which are or were used or held for use
exclusively in the Battery Business or a Former Battery Business, and which
neither are nor were used or held for use in the Xxxxxxx Business; including,
but not limited to, the Assets set forth on Schedule 1.01(a) but excluding the
Assets set forth on Schedule 1.01(b); and (ii) any office equipment and
furniture used immediately prior to the Distribution exclusively by Energizer
Employees.
Energizer Board: the Board of Directors of Energizer Holdings, Inc. and
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their duly elected or appointed successors.
Energizer Deferred Compensation Plan: as defined in Section 7.09 of this
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Agreement.
Energizer Employee: any individual who (i) is on the Distribution Date, or
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immediately following the Distribution will be, an employee of any member of the
Energizer Group, (ii) is on the Distribution Date employed by a member of the
Xxxxxxx Group but who, pending transfer of employment to a member of the
Energizer Group, performs duties primarily for the Battery Business other than
pursuant to the Bridging Services Agreement; or (ii) is on leave (including, but
not limited to, leave for sickness or disability) or layoff from active
employment on the Distribution Date but who, immediately prior to commencement
of such leave or layoff, was primarily employed in the Battery Business.
Notwithstanding the foregoing, an Energizer Employee shall not include any
individual who, as of the Distribution Date, is employed by a member of the
Energizer Group but performs duties primarily for a Xxxxxxx Business, pending
subsequent transfer of employment to a member of the Xxxxxxx Group or
termination of employment.
Energizer Obligations: as defined in Article X of this Agreement.
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Energizer Group: Energizer and its Affiliates at the Distribution.
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Energizer Individual: any individual who is an Energizer Employee, a
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Former Energizer Employee, or a beneficiary or alternate payee of an Energizer
Employee or of a Former Energizer Employee.
Energizer Retirement Plan: the Energizer Holdings, Inc. Retirement Plan, a
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defined benefit pension plan.
Energizer Stock: Energizer common stock, par value $.01 per share.
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ERISA: the Employee Retirement Income Security Act of 1974, as amended, or
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any successor legislation.
Exchange Act: the Securities Exchange Act of 1934, as amended, together
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with the rules and regulations promulgated thereunder.
Executive Life Plan: the Xxxxxxx Purina Executive Life Plan.
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Executive SIP: the Xxxxxxx Purina Executive Savings Investment Plan.
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Form 10: as defined in Section 2.06 of this Agreement.
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Former Battery Businesses: all of the following businesses which, as of
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the Distribution Date, were no longer owned and/or conducted, directly or
indirectly, by Xxxxxxx, Energizer or their Subsidiaries, Affiliates or any
predecessors to the foregoing:
(i) former businesses and operations relating to the manufacture, sale and
distribution of battery and lighting products conducted by Xxxxxxx and/or its
Subsidiaries after June 30, 1986, including, but not limited to, the worldwide
rechargeable Original Equipment Manufacturers' battery business;
(ii) former businesses and operations relating to the manufacture, sale and
distribution of battery and lighting products conducted by Union Carbide
Corporation and/or its Subsidiaries and Affiliates through June 30, 1986, to the
extent assets and liabilities related to such businesses and operations were
acquired and assumed by Xxxxxxx and its Subsidiaries and Affiliates effective
June 30, 1986 pursuant to, or arising out of the transactions contemplated by,
the Omnibus Purchase and Sale Agreement by and between Union Carbide Corporation
and Xxxxxxx Purina Company, made April 7, 1986; and
(iii) all former joint ventures involving or associated with the businesses
described in (i) or (ii) above or the Battery Business.
Former Energizer Employee: an individual who was employed by a member of
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the Energizer Group or a Former Battery Business at the time of his or her
termination or retirement on or prior to the Distribution Date and who was not
subsequently, prior to the Distribution Date, employed by a member of the
Xxxxxxx Group or a Former Xxxxxxx Business.
Former Businesses: The Former Xxxxxxx Businesses and the Former Battery
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Businesses.
Former Xxxxxxx Businesses: all of the businesses and operations directly
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or indirectly owned and conducted by Xxxxxxx prior to, but not as of, the
Distribution Date, other than a Former Battery Business; and all former joint
ventures involving or associated with such businesses and operations.
Former Xxxxxxx Employee: an individual who was employed by a member of the
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Xxxxxxx Group or a Former Xxxxxxx Business at the time of his or her termination
or retirement and who was not subsequently, prior to the Distribution Date,
employed by a member of the Energizer Group or a Former Battery Business.
Group: the Xxxxxxx Group or the Energizer Group.
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Indebtedness of the Energizer Group: external obligations of a member or
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members of the Energizer Group in the form of money that is borrowed from third
party banks and/or financial institutions, to the extent that such indebtedness
(i) is incurred in connection with, or arising out of the operations of, the
Battery Business or is assigned to Energizer or a member of its Group as set
forth in Section 2.01(j)(iv); and (ii) is or should be reflected and booked on
the balance sheet statements of the Battery Business in accordance with
accounting policies of Xxxxxxx; and in no event shall intercompany or
intracompany accounts between the Battery Business and the Xxxxxxx Business be
deemed to be Indebtedness of the Energizer Group.
Indemnifiable Loss: with respect to any claim by an Indemnitee for
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indemnification hereunder, any and all losses, liabilities, claims, damages,
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obligations, payments, costs and expenses (including, without limitation, the
costs and expenses of any and all Actions, demands, claims and assessments, and
any and all judgments, settlements and compromises related thereto and
reasonable attorney's fees and expenses in connection therewith) incurred or
suffered by such Indemnitee with respect to such claim except as may arise in
connection with the performance of any of the Ancillary Agreements, which shall,
in each such case, be governed by the terms of such Ancillary Agreement.
Indemnitee: as defined in Section 4.02 of this Agreement.
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Indemnitor: as defined in Section 4.02 of this Agreement.
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Information: as defined in Section 6.02 of this Agreement.
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Information Statement: the information statement sent to holders of
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Xxxxxxx Stock in connection with the Distribution, which sets forth appropriate
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disclosures concerning the Battery Business, Energizer, the Distribution and
other related matters.
IP Agreement: as defined in Section 5.04 of this Agreement.
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IRS: the Internal Revenue Service.
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ISP: the Xxxxxxx Purina 1988, 1996 and 1999 Incentive Stock Plans.
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Liabilities: all claims, debts, liabilities, royalties, license fees,
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losses, costs, expenses, deficiencies, litigation proceedings, taxes, levies,
imposts, duties, deficiencies, assessments, attorneys' fees, charges,
allegations, demands, damages, judgments, guaranties, indemnities, or
obligations, whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown and whether or not the same
would properly be reflected on a balance sheet, including all costs and expenses
relating thereto.
LIBOR: London Interbank Offer Rate.
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Notice of Claim: as defined in Section 4.02 of this Agreement.
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NYSE: the New York Stock Exchange.
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Operating Agreement: An agreement as described in Section 2.04(f) in
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effect during a period of beneficial ownership of the Energizer Assets or the
Xxxxxxx Assets.
Person: an individual, a partnership, a joint venture, a corporation, a
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trust or other entity, an unincorporated organization or a government or any
department or agency thereof.
Plan: any plan, policy, arrangement, contract or agreement providing
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benefits (including salary, bonuses, deferred compensation, incentive
compensation, savings, stock purchases, pensions, profit sharing, welfare
benefits or retirement or other retiree benefits, including retiree medical
benefits) for any group of employees or former employees or individual employee
or former employee, or the beneficiary or beneficiaries of any such employee or
former employee, whether formal or informal or written or unwritten and whether
or not legally binding, and including any means, whether or not legally
required, pursuant to which any benefit is provided by an employer to any
employee or former employee or the beneficiary or beneficiaries of any such
employee or former employee.
Qualified Plan: a Plan which is an employee pension benefit plan (within
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the meaning of Section 3(2) of ERISA) and which constitutes or is intended in
good faith to constitute a qualified plan under Section 401(a) of the Code.
Xxxxxxx: as defined in the recitals to this Agreement.
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Xxxxxxx Assets: except to the extent provided in, and subject to the
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provisions of, any of the Ancillary Agreements, all of the Assets, other than
the Energizer Assets, used or held immediately prior to the Distribution Date by
or on behalf of any member of either Group, including, but not limited to, the
Assets set forth on Schedule 1.01(c).
Xxxxxxx Board: the Board of Directors of Xxxxxxx Purina Company and their
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duly elected or appointed successors.
Xxxxxxx Business: all of the businesses owned, directly or indirectly, by
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Xxxxxxx immediately prior to the Distribution Date, other than the Battery
Business.
Xxxxxxx Chilean Asset Purchase Price: Cash paid, after the Distribution,
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to Energizer or its Affiliates by Xxxxxxx or its Affiliates to effect the
purchase, as set forth in Section 2.01(e), of the Assets and Liabilities of the
Xxxxxxx Business conducted by Eveready de Chile S.A.,
Xxxxxxx Deferred Compensation Plan: the Xxxxxxx Purina Deferred
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Compensation Plan for Key Employees.
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Xxxxxxx Employee: any individual who, as of the day prior to the
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Distribution Date, is an employee of any member of either Group, other than an
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Energizer Employee, including, but not limited to, individuals set forth on
Schedule 1.01(c).
Xxxxxxx Group: Xxxxxxx and its Subsidiaries and Affiliates, other than
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members of the Energizer Group.
Xxxxxxx Individual: any individual who is a Xxxxxxx Employee, a Former
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Xxxxxxx Employee, or a beneficiary or alternate payee of a Xxxxxxx Employee or
of a Former Xxxxxxx Employee.
Xxxxxxx Option: the option defined in Section 7.08(b) of this Agreement.
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Xxxxxxx Retirement Plan: the Xxxxxxx Purina Retirement Plan, a defined
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benefit pension plan.
Xxxxxxx Stock: Xxxxxxx Purina Company common stock, $.10 par value.
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Record Date: the date to be determined by the Board of Directors of
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Xxxxxxx, or the Executive Committee thereof, as the record date for determining
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shareholders of Xxxxxxx Stock entitled to receive the Distribution.
Rights: the rights to be issued by Energizer pursuant to the Energizer
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Rights Agreement.
SEC: the Securities and Exchange Commission.
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Securities Act: the Securities Act of 1933, as amended, together with the
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rules and regulations promulgated thereunder.
Shared Liability: a Liability arising out of, or associated with, the
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ownership of both the Energizer Assets and the Xxxxxxx Assets; or the operation
of the Battery Business or a Former Battery Business, on the one hand, and the
Xxxxxxx Business or a Former Xxxxxxx Business, on the other hand, prior to the
Distribution.
SIP: a Savings Investment Plan.
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Subsidiary: with respect to any specified Person, any corporation or other
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legal entity of which such Person or any of its Subsidiaries controls or owns,
directly or indirectly, 50% or more of the stock or other equity interest
entitled to vote on the election of members to the board of directors or similar
governing body of such corporation or other legal entity.
Tax Sharing Agreement: as defined in Section 5.04 of this Agreement.
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Third-Party Claim: any Action or claim by a third party against or
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otherwise involving an Indemnitee for which indemnification may be sought
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pursuant to Article IV hereof.
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Welfare Plan: any Plan which is not a Qualified Plan and which provides
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medical, health, disability, accident, life insurance, death, dental or other
welfare benefits, including any post-employment benefits or retiree medical
benefits.
1.02 References to Time. All references to times of the day in this
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Agreement shall refer to St. Louis, Missouri time unless otherwise specifically
indicated.
ARTICLE II
CERTAIN RESTRUCTURING TRANSACTIONS
2.01 Restructuring Transactions. Prior to the Distribution Date or, as
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indicated, as soon as practicable thereafter, the following shall have been or
shall be effected:
(a) Reincorporation Merger. Eveready, the sole shareholder of
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Energizer and EBII, shall surrender all of the issued and outstanding shares of
capital stock of EBII in a constructive exchange for all of the issued and
outstanding shares of capital stock of Energizer, pursuant to the General and
Business Corporation Law of Missouri and Delaware General Corporation Law, in
connection with EBII's reincorporation from Delaware to Missouri and merger into
Energizer.
(b) United Kingdom Restructuring. Energizer International, Inc.
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("EII"), a Delaware corporation and wholly owned subsidiary of Xxxxxxx, and
Energizer shall form a new United Kingdom unlimited company ("Newco 1").
Energizer UK Company ("Energizer UK"), a United Kingdom unlimited company, shall
sell all the stock of the following Subsidiaries to Newco 1: Ever Ready Ltd;
Xxxxxxx Energy Systems U.K. Ltd.; Berec Components Ltd; Berec Overseas
Investments Ltd., Energizer (Ireland) Ltd., WER (mvl) 1998 Ltd. and Xxxxxxx
Trust Limited. Newco 1 shall form a new wholly owned subsidiary, Xxxxx 0X, x
Xxxxxx Xxxxxxx limited company, which shall purchase from Energizer UK the
Assets, and assume the Liabilities, of that portion of the Battery Business
directly conducted by Energizer UK. The purchase price shall be determined by
an independent appraisal. The cash proceeds of the sales, together with cash
provided by borrowing from Xxxxxxx, shall be applied by Energizer UK to pay down
existing debt and to wholly redeem EII's partnership interest in Energizer UK
Prior to such redemption, Xxxxxxx shall contribute to Energizer UK cash in
exchange for a 1% interest in the partnership, with the remaining 99% interest
being retained by Tower Holding Company, Inc. ("Tower Holding"), a Delaware
corporation.
(c) Mexican Restructuring. Xxxxxxx Purina Holdings Mexico S.A. de C.V.
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("RP Holdings Mexico"), a Mexican corporation, shall capitalize a portion of the
intercompany debt owed to it by its wholly owned subsidiary, Eveready de Mexico
S.A. de C.V. ("Eveready Mexico"),such that the resulting value of Eveready de
Mexico will equal EII's interest in RPHM. Eveready de Mexico shall borrow from
outside parties an amount necessary to pay off its remaining intercompany debt
to RPHM prior to the Distribution. RP Holdings Mexico shall then distribute all
of the capital stock of Eveready Mexico to EII in complete redemption of EII's
entire stock interest in RP Holdings Mexico.
(d) Brazilian Restructuring. EII shall form a new, wholly owned
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subsidiary, Newco 2, a Brazilian corporation. Xxxxxxx Purina do Brasil
Ltda.("RP do Brasil"), a Brazilian corporation, shall sell to Newco 2 all of the
Assets and Liabilities associated with its ownership and operation of the
Battery Business in Brazil, other than a portion of external debt which RP do
Brasil shall retain. The purchase price shall be equal to the statutory net
book value of such Business as of March 31, 2000, excluding that portion of
external debt which is retained by RP do Brasil. Prior to the Distribution
Date, EII shall distribute to Xxxxxxx in the form of a dividend all of its stock
interest in RP do Brasil. Prior to the Distribution, EII will also assign to
Checkerboard Holding an intercompany note evidencing debt owed from RP do Brasil
to EII.
(e) Argentinean/Chilean Restructuring. Prior to the Distribution Date
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or as soon as practicable thereafter, Checkerboard Holding Company
("Checkerboard Holding"), a Delaware corporation, shall form a new wholly owned
subsidiary, Newco 3, a Chilean corporation. Eveready de Chile S.A. ("Eveready
Chile"), a Chilean corporation, will sell the Assets and Liabilities of the
Xxxxxxx Business conducted by it to Newco 3. The purchase price shall be
determined by an independent appraisal. Prior to the Distribution Date, EII
will transfer to Checkerboard Holding, and Eveready Battery Company will
transfer to Tower Holding, that portion of the stock of Xxxxxxx Purina Argentina
S.A. ("RP Argentina"), an Argentinean corporation, held by each transferor
company reflecting the relative value of their respective interests in the
Xxxxxxx Business conducted by RP Argentina. Prior to the Distribution Date or
as soon as practicable thereafter, in accordance with Argentinean law, RP
Argentina will divide into two Argentinean corporations, one conducting the
Battery Business and the other conducting the Xxxxxxx Business, as follows: (i)
RP Argentina will transfer all of its stock interest in Eveready Chile, and the
Assets and Liabilities of the Battery Business conducted by RP Argentina to
Newco 4, a newly created Argentinean corporation resulting from the division of
RP Argentina, having the same shareholders, with identical share ownership
proportions, as RP Argentina; and (ii) Checkerboard Holding and Tower Holding
will then each exchange their shares of Newco 4 for the shares of RP Argentina
held, respectively, by EII and Eveready. EII and Eveready will then be sole
shareholders of Newco 4, which will conduct the Battery Business in Argentina
and will be the parent company of Eveready Chile; and Checkerboard Holding and
Tower Holding will then be sole shareholders of RP Argentina, which will conduct
the Xxxxxxx Business in Argentina.
(f) Spanish Restructuring. Xxxxxxx Energy Systems Iberica S.A.
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("RESIB"), a Spanish corporation, which indirectly conducts the Battery Business
in Spain through its 91% owned subsidiary Energizer Iberia S.A., also a Spanish
corporation, will sell all of the issued and outstanding stock of its wholly
owned subsidiary Xxxxxxx Purina Europe S.A ("RPE"), which directly conducts the
Xxxxxxx Business, to Checkerboard Holding for an amount determined by an
independent appraisal
(g) Distribution of Energizer Stock to VCS Holding. Following those of
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the transactions described in paragraphs (b) through (f) which have been
completed prior to the Distribution Date, Eveready will distribute all the stock
of Energizer to VCS Holding Company ("VCS"), a Delaware corporation and wholly
owned subsidiary of Xxxxxxx.
(h) Merger of VCS Holding into Xxxxxxx. Xxxxxxx and VCS shall enter
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into an Agreement and Plan of Merger and Complete Liquidation pursuant to which
VCS shall be merged with and into Xxxxxxx pursuant to the General and Business
Corporation Law of Missouri and Delaware General Corporation Law, and in
accordance with the terms and conditions of such merger agreement. Prior to
such merger, VCS shall transfer to Tower Holding, as a contribution to capital,
all shares of capital stock of Interstate Bakeries Corporation held by VCS as
well as all receivables reflecting intercompany loans by VCS to Xxxxxxx.
Following the merger, VCS will cease to exist, and Xxxxxxx shall become the
direct owner of Energizer and all other stock interests and Assets owned by VCS
at the time of the merger, including, but not limited to, notes reflecting
intercompany loans by VCS to Eveready ("the Eveready Notes"). The intercompany
account owed by Xxxxxxx to VCS shall be extinguished incident to the merger of
VCS into Xxxxxxx.
(i) Canadian Restructuring. Xxxxxxx shall contribute a portion of its
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capital stock in Xxxxxxx Purina Canada Inc. ("RP Canada") to Energizer so that
the number of shares of RP Canada stock owned by Energizer, when combined with
the number of shares of RP Canada stock owned by EII, will reflect, on a
combined stock ownership basis, an interest in RP Canada equal to the appraised
value of the Battery Business conducted by RP Canada. EII and Energizer will
form a new Canadian corporation, Newco 5, and will each transfer all of their
stock in RP Canada to Newco 5 in exchange for Newco 5 common stock of
proportionate value. RP Canada will transfer the Assets and Liabilities of the
Battery Business conducted by it to Newco 5 in exchange for all of the issued
and outstanding preferred stock in Newco 5. RP Canada will then issue a note to
Newco 5 in complete redemption of the RP Canada common stock held by Newco 5,
and Newco 5 will issue to RP Canada a note of equal value in redemption of the
Newco 5 preferred stock held by RP Canada. The two notes will then be offset
against one another and each cancelled. Xxxxxxx will thereupon own all of the
stock of RP Canada, which will conduct only the Xxxxxxx Business, and EII and
Energizer will in the aggregate own all of the stock of Newco 5, which will
conduct only the Battery Business.
(j) Other Post-Merger Transfers/Debt Assumption. Following the merger
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described in Section 2.01(h) and the restructuring described in Section 2.01(i),
the following transactions will take place prior to the Distribution Date:
(i) Xxxxxxx will transfer the Eveready Notes to EII.
(ii) Xxxxxxx will transfer to Energizer all of the stock of Eveready; will
cause the transfer to Eveready of all of the stock of EII; and will cause the
transfer to EII of all of the stock of Energizer Japan, Inc., a Delaware
corporation.
(iii) Xxxxxxx will enter into certain credit facility agreements to borrow
funds from third party banks and/or financial institutions and will assign to
Energizer all obligations, including, but not limited to, the repayment
obligation, arising out of or in connection with such credit facility
agreements, other than for certain fees set forth in Section 12.04. The sum of
such debt assumed by Energizer, plus other Indebtedness of the Energizer Group,
is intended to equal total Indebtedness of the Energizer Group, net of Cash, of
US$586.8 million as of the close of business on March 31, 2000.
2.02 Issuance of Stock. Prior to the Distribution Date, the parties
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hereto shall take all steps necessary so that immediately prior to the
Distribution Date, the number of shares of Energizer Stock outstanding and held
by Xxxxxxx shall equal the number of shares necessary to effect the
Distribution. The Distribution shall be effected by distributing, on a pro rata
basis to every holder of Xxxxxxx Stock, one share of Energizer Stock for every
three shares of Xxxxxxx Stock held as of the Record Date.
2.03 Share Purchase Rights Agreement; Articles of Incorporation;
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Bylaws. Prior to the Distribution Date, Energizer shall adopt an Energizer
Rights Agreement in substantially the form filed with the SEC as an exhibit to
the Form 10, and the Board of Directors of Energizer shall authorize a
distribution of one Right to every share of outstanding Energizer Stock, such
distribution to occur prior to the Distribution. Xxxxxxx and Energizer shall
take all action necessary so that, at the Distribution Date, the Articles of
Incorporation and Bylaws of Energizer shall be substantially in the forms filed
with the SEC as exhibits to the Form 10.
2.04 Transfer of Assets; Assumption of Liabilities.
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(a) Prior to the Distribution Date, the parties hereto shall cooperate in
taking all action necessary to convey, assign and transfer to Energizer,
effective no later than the Distribution Date, all of the right, title and
interest in the Energizer Assets held by any member of the Xxxxxxx Group, and to
convey, assign and transfer to Xxxxxxx or its Affiliates all of the right, title
and interest in the Xxxxxxx Assets held by any member of the Energizer Group.
Effective as of the Distribution Date, Energizer and its Affiliates shall become
the beneficial owners of all of the Battery Business Assets, and Xxxxxxx and its
Affiliates shall remain the beneficial owners of all of the Xxxxxxx Assets. The
parties acknowledge that formal actions to effect fully the legal transfers of
such Assets may not be completed by the Distribution Date, but that the entire
beneficial title and interest in and to each Asset shall pass to Energizer or
remain with Xxxxxxx, as the case may be, as of the Distribution Date. The
parties shall take such action as is necessary in their reasonable discretion,
whether before or after the Distribution Date, to complete the transfer of the
Energizer Assets to the Energizer Group and the Xxxxxxx Assets to the Xxxxxxx
Group, as the case may be, and each party shall cooperate fully with the other
in such regard.
Xxxxxxx and Energizer shall cooperate in estimating the appropriate amount of
Cash to be transferred to or from members of the Energizer Group on or before
March 31, 2000 to cause the Energizer Group to hold, as of the close of business
on March 31, 2000, Cash in such an amount that would cause the Indebtedness of
the Energizer Group, at the close of business on such date, to equal US$586.8
million, net of such Cash. The parties shall use reasonable efforts cause the
transfer of Cash to or from Energizer to effect this provision.
(b) As of the Distribution Date, Energizer and Xxxxxxx and, as
appropriate, other members of their respective Groups, shall assume or retain
all of the Liabilities, with respect to Energizer, of the Battery Business and
Former Battery Businesses and, with respect to Xxxxxxx, of the Xxxxxxx Business
and Former Xxxxxxx Businesses, of whatsoever type or nature, arising exclusively
out of or associated exclusively with the ownership of the Assets of such
Businesses or Former Businesses or the operation of such Businesses or Former
Businesses prior to the Distribution, whether such Liabilities become known
prior to or after, or are asserted prior to or after, the Distribution.
Energizer and its Affiliates and Xxxxxxx and its Affiliates shall assume (or
retain, as the case may be) a share of any Shared Liability in proportion, as
applicable, to their respective ownership of the relevant Assets, control of
affected operations or employment of affected individuals. Notwithstanding the
foregoing, effective as of the Distribution Date, Energizer or another member of
the Energizer Group shall assume or retain Liabilities specifically described in
any other provision of this Agreement or any Ancillary Agreement, and
Liabilities described on Schedule 2.04(b)(1) to this Agreement. Xxxxxxx and
members of the Xxxxxxx Group shall, except as qualified hereinabove, assume or
retain the Liabilities specifically described in this Agreement or any Ancillary
Agreement, and the Liabilities specifically described on Schedule 2.04(b)(2) to
this Agreement.
(c) The parties agree and acknowledge that the assumption or retention by
Energizer or other members of the Energizer Group or Xxxxxxx or other members of
the Xxxxxxx Group, as the case may be, of all such Liabilities described herein
is part of a single plan to transfer the Battery Business and the Energizer
Assets to Energizer as of the Distribution Date. With regard to that plan, the
parties further agree that (i) the entire beneficial title and interest in and
to each and all of the Energizer Assets shall, regardless of when legal title to
any such asset is in fact transferred to Energizer or its Subsidiaries, remain
in Xxxxxxx until the Distribution Date at which time all beneficial title and
interest in all of the Energizer Assets will pass to Energizer, and all title
and interest in and to each and all of the Xxxxxxx Assets which is owned by a
member of the Energizer Group prior to the Distribution Date shall, regardless
of when legal title to any such asset is in fact transferred to Xxxxxxx or its
Subsidiaries after the Distribution Date, be beneficially owned by Xxxxxxx; (ii)
the economic burden of the assumption or retention by the members of the
Energizer Group or the Xxxxxxx Group, as the case may be, of each and all of the
Liabilities described herein shall pass to the Energizer Group or the Xxxxxxx
Group, as the case may be, as of the Distribution Date, regardless of when
Energizer or any other member of the Energizer Group or Xxxxxxx or any other
member of the Xxxxxxx Group, as the case may be, in fact assumes or becomes
legally obligated to the obligee of any one or more of such Liabilities; and
(iii) all operations of the Battery Business shall be for the account of Xxxxxxx
through 12:01 a.m. on the Distribution Date and shall be for the account of
Energizer thereafter.
(d) Xxxxxxx and Energizer shall, and shall cause their Affiliates to,
execute prior to, or as soon as practicable following, the Distribution Date,
such additional agreements and arrangements as may be necessary or appropriate
(i) to effect the restructuring transactions set forth in Section 2.01; (ii) to
transfer to the appropriate member of the Energizer Group or Xxxxxxx Group such
local product registrations, franchises, licenses, and any other governmental
authorizations or other rights owned or held by Xxxxxxx, Energizer or their
respective Groups that are necessary to the conduct of their Businesses in such
jurisdiction; (iii) to make all such further assignments and do all such other
acts as are necessary or desirable to carry out the intent of the parties that
each of the Businesses, as a going concern, be fully vested in the appropriate
party as of the Distribution Date and operated for its benefit and burden as of
12:01 a.m.; and (iv) to provide for, and negotiate in good faith, such other
agreements and arrangements relating to the foregoing as the parties deem
appropriate, including, but not limited to, any such agreements or arrangements
relating to the treatment of employees, benefit plans, intellectual property and
taxes.
(e) If any Energizer Asset or Xxxxxxx Asset is not owned, respectively,
by a member of the Energizer Group or Xxxxxxx Group or leased from a third party
or governmental entity by a member of the appropriate Group, as of the
Distribution Date, Xxxxxxx and Energizer shall use their reasonable best efforts
to transfer, assign and deliver such assets or leases to the appropriate member
of the other Group as soon as practicable thereafter.
Prior to such transfer or assignment, Xxxxxxx or Energizer, as the case may be,
shall use its reasonable best efforts to give the benefits of ownership of such
Assets to the appropriate member of the other Group. The entire economic
beneficial interest in and to, and the risk of loss with respect to, such Assets
shall, regardless of when legal title thereto shall be transferred to the
appropriate member of the Energizer or Xxxxxxx Group, pass to those entities as
of the Distribution. Xxxxxxx and Energizer shall, or shall cause their
Affiliates to, hold such Assets for the benefit and risk of the other and shall
cooperate with the other in any lawful and reasonable arrangements designed to
provide the benefits of ownership of the Assets to it, including, but not
limited to, properly recording evidence of such beneficial ownership and risk of
loss with appropriate governmental entities as required by applicable law.
In the event that the legal interest in such Assets or any claim, right or
benefit arising thereunder or resulting therefrom, is not capable of being sold,
assigned, transferred or conveyed hereunder as a result of the failure to
receive any consents or approvals required for such transfer, then the legal
interest in such Assets shall not be sold, assigned, transferred or conveyed
unless and until approval, consent or waiver thereof is obtained. Xxxxxxx and
Energizer shall, or shall cause their Affiliates, at their expense, to use
reasonable best efforts to cooperate in obtaining such consents or approvals as
may be necessary to complete such transfers and to obtain satisfaction of
conditions to transfer as soon as practicable.
Nothing in this Agreement shall be construed as an attempt to assign to a member
of the Energizer Group or the Xxxxxxx Group any legal interest in such Assets
which, as a matter of law or by the terms of any legally binding contract,
engagement or commitment to which the legal owner is subject, is not assignable
without the consent of any other Person, unless such consent shall have been
given.
(f) After the Distribution Date, Xxxxxxx and Energizer shall cause such
Assets (including the capital stock of any Affiliates) which are beneficially
owned by the other party to be managed at the direction of the beneficial owner
pursuant to one or more Operating Agreements, substantially in the form attached
to this Agreement as Exhibit 2.04(f), until such Assets are actually legally
transferred and conveyed. Without limiting the foregoing, all revenues,
earnings and cash flows associated with the Assets following the Distribution
Date shall be for the account of the beneficial owner but shall be retained by
the respective legal owner until the transfers are legally effected. Following
the Distribution Date, neither Xxxxxxx nor Energizer shall be required to lend,
advance, contribute or use any of its own funds in connection with the
operations of such Assets except to the extent contemplated by the Operating
Agreements.
(g) Xxxxxxx and Energizer shall cooperate after the Distribution Date
in determining the actual Indebtedness of the Energizer Group and Cash held by
members of the Energizer Group as of the close of business on March 31, 2000 in
order to determine if a further transfer of Cash is required between the
parties. A preliminary determination of the actual Cash and Indebtedness of the
Energizer Group shall be made no later than 60 days after the Distribution Date
in order to make a preliminary adjustment of Cash from Xxxxxxx to Energizer or
vice versa (or, if the parties mutually agree, from any member of one Group to
any member of the other Group), as the findings warrant.
In addition, the parties shall determine the value of checks, written by
Energizer or its Affiliates on their U.S. bank accounts, which are outstanding
and have not cleared as of March 31, 2000. If the aggregate value of such
outstanding checks was less than $10 million, then the target Indebtedness of
Energizer, net of Cash, shall remain $586.8 million. If the aggregate value of
such checks was greater than $10 million, then the target Indebtedness of
Energizer, net of Cash, shall be reduced dollar for dollar by an amount equal to
the value of such outstanding checks in excess of $10 million.
If it is determined that actual Indebtedness of the Energizer Group, net of
Cash, exceeded US$586.8 million (adjusted, if applicable, pursuant to the
preceding paragraph) as of the close of business on Xxxxx 00, 0000, Xxxxxxx
shall pay an amount equal to such excess to Energizer in US dollars.
Conversely, if it is determined that actual Indebtedness of the Energizer Group,
net of Cash, fell short of US$586.8 million (adjusted, if applicable, pursuant
to the preceding paragraph) as of the close of business on March 31, 2000,
Energizer shall pay an amount equal to such shortfall to Xxxxxxx in US dollars.
Alternatively, the parties may, by mutual consent, cause such amounts to be paid
by any member of one Group to any member of the other Group in local currency.
Any Cash paid to Xxxxxxx by Energizer pursuant to this Section 2.04(g) shall be
used to repay third party debt of Xxxxxxx.
Xxxxxxx shall have the opportunity to review, to its satisfaction, the books and
records of Energizer and its Affiliates, bank records, loan documentation and
other relevant materials in order to enable Xxxxxxx to verify any amounts to be
transferred, and Energizer shall cooperate in Xxxxxxx'x review.
Payment of such preliminary adjustment shall be made within fifteen (15)
Business Days of such determination. In addition, such amounts shall be
increased by an amount equal to interest accrued on such unpaid excess (or
shortfall, as applicable) at LIBOR plus 50 basis points for the period from the
Distribution Date until the date such preliminary adjustment is paid to the
party to which it is owed.
No later than July 31, 2000, upon final review of the books and records of
Energizer and its Affiliates to verify the calculations of Indebtedness of the
Energizer Group and Cash holdings, Xxxxxxx and Energizer shall make, if
necessary, a second and final adjustment with respect to this matter. The final
adjustment payment shall be increased by an amount equal to simple interest
accrued on such adjustment at 7% per annum for the period from the date of the
initial adjustment payment until the date such final payment is made.
(h) Xxxxxxx shall pay to Energizer in US dollars, at the time of
payment of the Xxxxxxx Chilean Asset Purchase Price to a member of the Energizer
Group, an additional lump sum equal to interest on such purchase price,
denominated in US dollars at the time of payment to Energizer, accrued at the
simple interest rate of 7% per annum, for the period beginning on the
Distribution Date to the date such purchase price is paid to the Energizer
Affiliate.
(i) Calculations of equivalent values of US and foreign currencies
shall, for purposes of this Agreement, be based on foreign exchange rates for
the relevant date or dates as reflected in accordance with accounting practices
historically employed by Xxxxxxx.
2.05 Conduct of Business Pending the Distribution Date. Prior to the
---------------------------------------------------
Distribution Date, the Battery Business shall be operated for the sole benefit
of Xxxxxxx.
2.06 Registration and Listing. Prior to the Distribution Date:
--------------------------
(a) Xxxxxxx and Energizer shall prepare, and Energizer shall file with the
SEC, a Registration Statement on Form 10 pursuant to Section 12(b) of the
Exchange Act with respect to the Energizer Stock and associated Rights. Xxxxxxx
and Energizer shall use reasonable efforts to cause the Form 10 to become
effective under the Exchange Act, and, following such effectiveness, Xxxxxxx
shall mail the Information Statement to the holders of record of Xxxxxxx Stock
as of the close of business on the Record Date.
(b) The parties hereto shall take all such actions as may be necessary or
appropriate under state securities and Blue Sky laws in connection with the
Distribution.
(c) Xxxxxxx and Energizer shall prepare, and Energizer shall file and seek
to make effective, an application for the listing of the Energizer Stock and
associated Rights on the NYSE.
ARTICLE III
THE DISTRIBUTION
3.01 Record Date and Distribution Date. Subject to the satisfaction of
---------------------------------
the conditions set forth in Section 12.01, the Xxxxxxx Board shall establish the
Record Date and the Distribution Date and any appropriate procedures in
connection with the Distribution. The determination of record holders of
Xxxxxxx Stock on the Record Date shall be as of 12:01 a.m. on the Distribution
Date, and the Distribution shall also be effective as of 12:01 a.m. on the
Distribution Date.
3.02 Distribution. Xxxxxxx shall distribute all of the outstanding
------------
shares of Energizer Stock to holders of record of Xxxxxxx Stock on the Record
Date on the basis of one share of Energizer Stock for each three shares of
Xxxxxxx Stock outstanding as of 12:01 a.m. on the Record Date, subject to the
treatment of fractional shares set forth in Section 3.03. All shares of
Energizer Stock issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
3.03 Payment in Lieu of Fractional Shares. No fractional shares of
----------------------------------------
Energizer Stock shall be issued in the Distribution. In lieu thereof, a
distribution agent will aggregate fractional shares into whole shares and sell
them in the open market at then prevailing prices on behalf of holders who
otherwise would be entitled to receive fractional share interests, and such
distribution agent shall remit to each holder of Xxxxxxx Stock who would
otherwise be entitled to receive such fractional shares a cash payment equal to
such holder's pro rata share of the total gross sale proceeds (after making
appropriate deductions of the amount required to satisfy legal requirements).
Xxxxxxx shall bear the cost of commissions incurred in connection with such
sales.
ARTICLE IV
INDEMNIFICATION
4.01 Indemnification.
---------------
(a) From and after the Distribution Date, Xxxxxxx agrees to indemnify and
hold harmless Energizer against and in respect of any and all Liabilities
assumed or retained by Xxxxxxx pursuant to Section 2.04(b) of this Agreement
and/or related to, arising from, or associated with:
(i) any breach or violation of any covenant made in this Agreement or
any Ancillary Agreement by Xxxxxxx or any of its Subsidiaries;
(ii) any Third-Party Claim relating to the actions of the Xxxxxxx Board
in authorizing the Distribution;
(iii) the ownership, use or possession of the Xxxxxxx Assets or the
operation of the Xxxxxxx Business or Former Xxxxxxx Businesses, whether relating
to or arising out of occurrences prior to or after the Distribution, except to
the extent liability therefor is specifically assumed or retained by Energizer
or another member of the Energizer Group pursuant to Section 2.04(b) of this
Agreement; and all operations conducted by Xxxxxxx, its successors and their
Affiliates following the Distribution.
(iv) with respect to the operation or administration of Plans by
Xxxxxxx Employees, Former Xxxxxxx Employees or agents of Xxxxxxx or the Xxxxxxx
Business, Xxxxxxx'x failure to comply with the provisions of a Plan or
applicable laws and regulations prior to or after the Distribution;
(v) any violations of the Code, or of federal or state securities laws,
in connection with the Distribution, the Information Statement and Form 10 or
any filings made with governmental agencies with respect thereto, except to the
extent that such violations, or allegations of violations, result from or are
related to the disclosure to Xxxxxxx'x corporate staff of information, or
failure to disclose information, by officers, directors, employees, agents,
consultants or representatives of the Battery Business.
Any indemnification provided for under this Section shall, to the extent legally
permissible, also be deemed to extend to other members of the Energizer Group,
Affiliates, Energizer Employees, directors, Plan fiduciaries, shareholders,
agents, consultants, representatives, successors, transferees and assigns of
Energizer or members of the Energizer Group.
(b) From and after the Distribution Date, Energizer agrees to indemnify
and hold harmless Xxxxxxx against and in respect of all Liabilities assumed or
retained by Energizer or another member of the Energizer Group pursuant to
Section 2.04(b) of this Agreement and/or related to, arising from, or associated
with:
(i) any breach or violation of any covenant made in this Agreement or
any Ancillary Agreement by Energizer or any of its Subsidiaries or Affiliates;
(ii) the ownership, use or possession of the Energizer Assets or the
operation of the Battery Business or Former Battery Businesses, whether relating
to or arising out of occurrences prior to or after the Distribution, except to
the extent liability therefor is specifically assumed or retained by Xxxxxxx or
another member of the Xxxxxxx Group pursuant to Section 2.04(b) of this
Agreement; and all operations conducted by Energizer, its successors and their
Affiliates following the Distribution.
(iii) with respect to the operation or administration of Plans by
Energizer Employees, Former Energizer Employees or agents of Energizer or the
Battery Business, Energizer's failure to comply with the provisions of a Plan or
applicable laws and regulations prior to or after the Distribution; and
(iv) any violation or allegations of violations of federal or state
securities laws in connection with the Distribution, the Information Statement
and Form 10 or any filings made with governmental agencies with respect thereto,
to the extent that such violations, or allegations of violations, result from or
are related to, the disclosure to Xxxxxxx'x corporate staff of information, or
failure to disclose information, by officers, directors, employees, agents,
consultants or representatives of the Battery Business; and
(v) any and all obligations of Xxxxxxx related to, or arising in
connection with, the borrowing of funds and assignment of such debt to
Energizer, as set forth in Section 2.01(j)(iii).
Any indemnification provided for under this Section shall, to the extent legally
permissible, also be deemed to extend to other members of the Xxxxxxx Group,
Affiliates, Xxxxxxx Employees, directors, Plan fiduciaries, shareholders,
agents, consultants, representatives, successors, transferees and assigns of
Xxxxxxx or members of the Xxxxxxx Group.
Notwithstanding the foregoing, a party shall have no right to indemnification
under this Article IV until the cumulative aggregate dollar amount of all
Liabilities to which this Article applies equals or exceeds US$250,000 with
respect to such party. Liabilities of any amount shall be included in the
computation of the cumulative aggregate dollar amount of Liabilities, but
neither party shall be entitled to indemnification for any single Liability of
less than US$25,000.
4.02 Actions and Claims Other Than Third-Party Claims; Notice and
------------------------------------------------------------------
Payment. Upon obtaining knowledge of any Action, Liability or claim, other than
--
Third-Party Claims, which any Person entitled to indemnification (the
"Indemnitee") believes may give rise to any Indemnifiable Loss, the Indemnitee
shall promptly notify the party liable for such indemnification (the
"Indemnitor") in writing of such Action or claim (such written notice being
hereinafter referred to as a "Notice of Claim"); provided, however, that failure
of an Indemnitee timely to give a Notice of Claim to the Indemnitor shall not
release the Indemnitor from its indemnity obligations set forth in this Article
IV except to the extent that such failure increases the amount of
indemnification which the Indemnitor is obligated to pay hereunder, in which
event the amount of indemnification which the Indemnitee shall be entitled to
receive shall be reduced to an amount which the Indemnitee would have been
entitled to receive had such Notice of Claim been timely given. A Notice of
Claim shall specify in reasonable detail the nature and estimated amount of any
such Action, Liability or claim giving rise to a right of indemnification. The
Indemnitor shall have ninety (90) Business Days after receipt of a Notice of
Claim to notify the Indemnitee whether or not it disputes its liability to the
Indemnitee with respect to such Action, Liability or claim or the amount
thereof, and setting forth the basis for such objection. If the Indemnitor
fails to respond to the Indemnitee within such ninety (90) Business Day period,
the Indemnitor shall be deemed to have acknowledged its responsibility for such
Indemnifiable Loss. If such Indemnifiable Loss is not contested, the Indemnitor
shall pay and discharge any such Indemnifiable Loss within one hundred twenty
(120) Business Days after its receipt of a Notice of Claim.
4.03 Insurance and Third-Party Obligations. Any indemnification
----------------------------------------
otherwise payable pursuant to Section 4.01 shall be reduced by the amount of any
insurance or other amounts (net of deductibles and allocated paid loss
retro-premiums) that would be payable by any third party to the Indemnitee or on
the Indemnitee's behalf in the absence of this Agreement. It is expressly
agreed that no insurer or any other third party shall be (i) entitled to a
benefit it would not be entitled to receive in the absence of the foregoing
indemnification provisions, (ii) relieved of the responsibility to pay any
claims for which it is obligated, or (iii) entitled to any subrogation rights
with respect to any obligation hereunder.
4.04 Third-Party Claims; Notice, Defense and Payment. Promptly
----------------------------------------------------
following the earlier of (i) receipt of notice of the commencement of a
Third-Party Claim or (ii) receipt of information from a third party alleging the
existence of a Third-Party Claim, any Indemnitee who believes that it is or may
be entitled to indemnification by any Indemnitor under Section 4.01 with respect
to such Third-Party Claim shall deliver a Notice of Claim to the Indemnitor.
Failure of an Indemnitee timely to give a Notice of Claim to the Indemnitor
shall not release the Indemnitor from its indemnity obligations set forth in
this Section 4.04 except to the extent that such failure adversely affects the
ability of the Indemnitor to defend such Action, Liabilities or claim or
increases the amount of indemnification which the Indemnitor is obligated to pay
hereunder, in which event the amount of indemnification which the Indemnitee
shall be entitled to receive shall be reduced to an amount which the Indemnitee
would have been entitled to receive had such Notice of Claim been timely given.
Indemnitee shall not settle or compromise any Third-Party Claim in an amount in
excess of US$25,000 prior to giving a Notice of Claim to Indemnitor at least
twenty (20) Business Days in advance of such settlement. In addition, if an
Indemnitee settles or compromises any Third-Party Claims prior to giving such
Notice of Claim to an Indemnitor, the Indemnitor shall be released from its
indemnity obligations to the extent that the Indemnitor can sustain the burden
of proving that such settlement or compromise was not made in good faith and was
not commercially reasonable. Within ninety (90) days after receipt of such
Notice of Claim (or sooner if the nature of such Third-Party Claim so requires),
the Indemnitor may (A) by giving written notice thereof to the Indemnitee,
acknowledge liability for, and at its option elect to assume, the defense of
such Third-Party Claim at its sole cost and expense or (B) object to the claim
of indemnification set forth in the Notice of Claim delivered by the Indemnitee;
provided that if the Indemnitor does not within the same ninety (90) day period
give the Indemnitee written notice either objecting to such claim and setting
forth the grounds therefor or electing to assume the defense, the Indemnitor
shall be deemed to have acknowledged its responsibility to accept the defense
and its ultimate liability, if any, for such Third-Party Claim. Any contest of
a Third-Party Claim as to which the Indemnitor has elected to assume the defense
shall be conducted by attorneys employed by the Indemnitor and reasonably
satisfactory to the Indemnitee; provided that the Indemnitee shall have the
right to participate in such proceedings and to be represented by attorneys of
its own choosing at the Indemnitee's sole cost and expense. If the Indemnitor
assumes the defense of a Third-Party Claim, the Indemnitor may settle or
compromise the Third-Party Claim without the prior written consent of
Indemnitee; provided that the Indemnitor may not agree to any such settlement
pursuant to which any such remedy or relief, other than monetary damages for
which the Indemnitor shall be responsible hereunder, shall be applied to or
against the Indemnitee, without the prior written consent of the Indemnitee,
which consent shall not be unreasonably withheld. If the Indemnitor does not
assume the defense of a Third-Party Claim for which it has acknowledged
liability for indemnification under Section 4.01, the Indemnitee may require the
Indemnitor to reimburse it on a current basis for its reasonable expenses of
investigation, reasonable attorney's fees and reasonable out-of-pocket expenses
incurred in defending against such Third-Party Claim and the Indemnitor shall be
bound by the result obtained with respect thereto by the Indemnitee, provided
that the Indemnitor shall not be liable for any settlement effected without its
consent, which consent shall not be unreasonably withheld. The Indemnitor shall
pay to the Indemnitee in cash the amount for which the Indemnitee is entitled to
be indemnified (if any) within thirty (30) days after the final resolution of
such Third-Party Claim (whether by settlement, a final nonappealable judgment of
a court of competent jurisdiction or otherwise) or, in the case of any
Third-Party Claim as to which the Indemnitor has not acknowledged liability,
within thirty (30) days after such Indemnitor's objection has been resolved by
settlement, compromise or arbitration pursuant to the provisions of Article XI
of this Agreement.
4.05 Remedies Cumulative; Survival of Indemnities. The remedies
------------------------------------------------
provided in this Article IV shall be cumulative and shall not preclude assertion
by any Indemnitee of any other rights or the seeking of any and all other
remedies against any Indemnitor. The obligations of each of the Xxxxxxx Group
and the Energizer Group under this Article IV shall survive the sale or other
transfer by it of any assets or businesses or the assignment by it of any
Liabilities, with respect to any claim of the other for any Indemnifiable Losses
related to such assets, businesses or Liabilities.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
5.01 Non-Competition.
---------------
Neither Energizer, nor any of its Affiliates, nor any of their successors
or successive successors shall, directly or indirectly, in any manner
whatsoever, engage in any activities which are prohibited, limited or proscribed
in any manner to Xxxxxxx or any of its Affiliates under the terms of either (i)
Section 6.10 of the DuPont Agreement, or (ii) Section 5.01 of the Agreement and
Plan of Reorganization dated as of April 1, 1998, by and between Xxxxxxx and
Agribrands International, Inc., both of which Agreements are hereby acknowledged
to be binding upon Energizer.
If any provision of this Section 5.01 is held by a court or governmental
authority of competent jurisdiction to be unenforceable as written, then such
provision shall be deemed automatically amended so that it is enforceable to the
maximum extent permissible under the laws and public policy of such jurisdiction
or authority. The provisions of this Section 5.01 are severable, and this
Section 5.01 shall be interpreted and enforced as if all completely invalid or
unenforceable provisions were not contained in this Section 5.01, and partially
valid or enforceable provisions shall be valid or enforceable to the extent they
are valid or enforceable.
5.02 Further Assurances. Each party hereto shall cooperate with the
-------------------
other parties, and execute and deliver, or use its best efforts to cause to be
executed and delivered, all instruments, including instruments of conveyance,
assignment and transfer, and to make all filings with, and to obtain all
consents, approvals or authorizations of, any governmental or regulatory
authority or any other Person under any permit, license, agreement, indenture or
other instrument, and take all such other actions as such party may reasonably
be requested to take by any other party hereto from time to time, consistent
with the terms of this Agreement, in order to effectuate the provisions and
purposes of this Agreement and the transfers of Assets and Liabilities and the
other transactions contemplated hereby or in any of the Ancillary Agreements.
If any such transfer of Assets or Liabilities is not consummated prior to or on
the Distribution Date, then the party hereto retaining such Asset or Liability
shall thereafter hold such Asset in trust for the use and benefit of the party
entitled thereto (at the expense of the party entitled thereto), or shall retain
such Liability for the account of the party by whom such Liability is to be
assumed pursuant hereto, as the case may be, and shall take such other action as
may be reasonably requested by the party to whom such Asset is to be
transferred, or by whom such Liability is to be assumed, as the case may be, in
order to place such party, insofar as reasonably possible, in the same position
as if such Asset or Liability had been transferred as contemplated hereby. If
and when any such Asset or Liability becomes transferable, such transfer shall
be effected forthwith. The parties hereto agree that, as of the Distribution
Date, each party hereto shall be deemed to have acquired complete and sole
beneficial ownership of all of the Energizer Assets, or Xxxxxxx Assets, as the
case may be, together with all rights, powers and privileges incident thereto,
and shall be deemed to have assumed in accordance with the terms of this
Agreement all of the Liabilities, and all duties, obligations and
responsibilities incident thereto, that such party is entitled to acquire or
required to assume pursuant to the terms of this Agreement.
5.03 Energizer Board. Prior to the Distribution Date, Energizer shall
----------------
take such actions as are necessary so that its Board of Directors is comprised
of those individuals named as directors in the Form 10.
5.04 Contractual Arrangements.
-------------------------
(a) Effective as of the Distribution Date, Xxxxxxx and Energizer shall
enter into a tax sharing agreement, substantially in the form attached to this
Agreement as Exhibit A ("Tax Sharing Agreement").
(b) Effective as of the Distribution Date, Xxxxxxx and Energizer shall
enter into a bridging services agreement, substantially in the form attached to
this Agreement as Exhibit B ("Bridging Services Agreement").
(c) Effective as of the Distribution Date, Xxxxxxx and Energizer shall
enter into an intellectual property agreement, substantially in the form
attached to this Agreement as Exhibit C ("IP Agreement").
(d) Effective as of the Distribution Date, Xxxxxxx and Energizer shall
enter into an Aircraft Agreement, substantially in the form attached to this
Agreement as Exhibit D.
5.05 Cash Management and Intercompany Accounts.
----------------------------------------------
(a) Through and including 12:01 a.m. local time on the Distribution
Date, Xxxxxxx and Energizer shall continue to employ cash management and other
business practices with respect to the Battery Business that are consistent with
those practices historically employed.
(b) Except as otherwise provided on Schedule 5.05(b)(1), all bank
accounts used exclusively in the Battery Business, and the balances therein
existing as of 12:01 a.m. local time on the Distribution Date, shall be
transferred to, or retained by, Energizer or its Subsidiaries or Affiliates
effective as of the Distribution Date. All bank accounts used exclusively in
the Xxxxxxx Business, and the balances therein existing as of 12:01 a.m. local
time on the Distribution Date, shall be transferred to, or retained by, Xxxxxxx
or its Subsidiaries or Affiliates effective as of the Distribution Date. Other
bank accounts, and the balances therein existing as of 12:01 a.m. local time on
the Distribution Date, shall be handled as set forth on Schedule 5.05(b)(2).
Each party shall promptly pay to the other any amounts collected by it following
the Distribution through any of its accounts, to the extent any of such amounts
collected relate exclusively to the Business of the other party.
(c) All intercompany services provided by the Xxxxxxx Group to the
Energizer Group, and vice versa, shall terminate as of the Distribution Date
unless otherwise provided in the Bridging Agreement or any other Ancillary
Agreement. Effective as of the close of business on March 31, 2000, all
intercompany receivables or payables and loans then existing between any member
of one Group and any member of the other Group shall be settled or forgiven as
set forth on Schedule 5.05(c), except that, unless otherwise provided on
Schedule 5.05(c), trade receivables or payables arising out of intercompany
sales of inventories or other tangible goods shall be settled in the normal
course of business.
ARTICLE VI
ACCESS TO INFORMATION
6.01 Provision of Corporate Records. Subject to the terms of the
---------------------------------
Ancillary Agreements, prior to, or as promptly as practicable after, the
Distribution Date, Xxxxxxx shall deliver to Energizer, and Energizer shall
deliver to Xxxxxxx, all corporate books and records pertaining to the other
party's Business that each has in its possessionThe parties shall also make
available for copying or, to the extent not detrimental, in the reasonable
opinion of the party in possession of the materials, to such party's interests,
originals of all books, records and data reasonably related to the Assets, the
Battery Business, and the Liabilities assumed or retained by the party
requesting such materials, including, but not limited to, all books, records and
data relating to the purchase of materials, supplies and services, financial
results, sale of products, records of the applicable Energizer or Xxxxxxx
Individuals, commercial data, catalogues, brochures, training and other manuals,
sales literature, advertising and other sales and promotional materials,
maintenance records and drawings, all active agreements, active litigation files
and government filings. To the extent that originals of such books, records and
data are provided to Energizer by Xxxxxxx or vice versa, the party to which the
originals are given shall provide to the other party copies thereof as
reasonably requested in writing.
Each party shall provide such copies of all books, records and data only to the
extent that such action is not prohibited by the terms of any agreements
pertaining to such information or is not prohibited by law. From and after the
Distribution Date, all books, records and copies so delivered shall be the
property of the party to which they were given. Notwithstanding the above,
neither party shall be required to make copies, other than pursuant to Section
6.02 of this Agreement, of any books, records and data which are more than seven
years old or which relate to events occurring more than seven (7) years prior to
the Distribution Date.
6.02 Access to Information. From and after the Distribution Date,
-----------------------
Xxxxxxx and Energizer shall afford, to the other and to the other's agents,
employees, accountants, counsel and other designated representatives, reasonable
access and duplicating rights during normal business hours to all records,
books, contracts, instruments, computer data and other data and information
("Information") within such party's possession relating to such other party's
businesses, assets or liabilities, insofar as such access is reasonably required
by such other party. Without limiting the foregoing, such Information may be
requested under this Section 6.02 for audit, accounting, claims, litigation and
tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations.
6.03 Retention of Records. Except as otherwise required by law or
----------------------
agreed in writing, or as otherwise provided in the Tax Sharing Agreement,
Xxxxxxx and Energizer shall retain, for a period of at least seven (7) years
following the Distribution Date, all significant Information in such party's
possession or under its control relating to the Business, Assets or Liabilities
of the other party and, after the expiration of such seven-year period, prior to
destroying or disposing of any of such Information, (i) the party proposing to
dispose of or destroy any such Information shall provide no less than 30 days'
prior written notice to the other party, specifying the Information proposed to
be destroyed or disposed of, and (ii) if, prior to the scheduled date for such
destruction or disposal, the other party requests in writing that any of the
Information proposed to be destroyed or disposed of be delivered to such other
party, the party proposing to dispose of or destroy such Information promptly
shall arrange for the delivery of the requested Information to a location
specified by, and at the expense of, the requesting party.
6.04 Confidentiality. From and after the Distribution Date, each Group
---------------
shall hold, in strict confidence, all Information obtained from the other Group
prior to the Distribution Date or furnished to it pursuant to this Agreement or
any other agreement referred to herein which relates to or concerns the business
conducted by such other Group, and such Information shall not be used by it to
the detriment of the other Group, or disclosed by it or its agents, officers,
employees or directors without the prior written consent of such other Group
unless and to the extent that:
(a) disclosure is compelled by judicial or administrative process or, in
the opinion of such Group's counsel, by other requirements of law; or
(b) such Group can show that such Information was
(i) available to such Group on a nonconfidential basis prior to its disclosure
by the other Group,
(ii) in the public domain through no fault of such Group,
(iii) lawfully acquired by such Group from other sources after the time that it
was furnished to such Group pursuant to this Agreement or any other agreement
referred to herein, or
(iv) independently developed by such Group.
Notwithstanding the foregoing, each Group shall be deemed to have satisfied its
obligations of confidentiality under this Section 6.04 with respect to any
Information concerning or supplied by the other Group if it exercises
substantially the same care with regard to such Information as it takes to
preserve confidentiality for its own similar Information.
6.05 Reimbursement. Each member of any Group providing Information
-------------
pursuant to Sections 6.02 or 6.03 to any member of the other Group shall be
entitled to receive from the recipient, upon presentation of an invoice
therefor, payment in U. S. dollars of all out-of-pocket costs and expenses as
may reasonably be incurred in providing such Information.
ARTICLE VII
EMPLOYEE MATTERS
7.01 Employee Liabilities; Continuation of Employment.
-----------------------------------------------------
After the Distribution, except as otherwise specifically provided for in
this Agreement and Plan of Reorganization, the Energizer Group shall be
responsible for all employment and benefit liabilities related to the Energizer
Individuals, and the Xxxxxxx Group shall be responsible for all employment and
benefit liabilities related to the Xxxxxxx Individuals, whether arising before,
coincident with or after the Distribution. Xxxxxxx and Energizer shall cause
each member of their respective Groups to cooperate with the members of the
other's Group to effect, as soon as practicable in a cost-effective manner, the
transfer of employment, where applicable, of Energizer Employees and Xxxxxxx
Employees to the appropriate Affiliate of either Group.
7.02 Xxxxxxx Purina Retirement Plan.
---------------------------------
(a) Effective as of the Distribution Date, Xxxxxxx shall cause all of
the Energizer Employees who are participants in the Xxxxxxx Retirement Plan to
cease to accrue benefits under such Plan, and Energizer shall establish an
Energizer Retirement Plan and trust intended to qualify under Sections 401(a)
and 501(a) of the Code, respectively. All liabilities for benefits accrued for
Energizer Individuals shall be transferred to the Energizer Retirement Plan, and
such Plan shall give the Energizer Employees credit, for purposes of
eligibility, vesting and benefit accrual, for service on or prior to the
Distribution Date, to the extent such service was recognized under the Xxxxxxx
Retirement Plan. As soon as practicable after the Distribution Date, Xxxxxxx
shall cause the trustee of the Xxxxxxx Retirement Plan to transfer, in one or
more installments, to the trustee of the Energizer Retirement Plan, in
accordance with 7.02(c) and (d) below, an amount in cash and other investment
assets held in the trust equal to the following, adjusted as applicable pursuant
to Section 7.02(d) below (the "Transfer Amount"):
(i) the Projected Benefit Obligation ("PBO"), as defined in Financial Accounting
Standards 87, attributable to pension benefits (other than PensionPlus Match
Accounts) accrued as of the Distribution Date with respect to the Energizer
Individuals under the Xxxxxxx Retirement Plan; plus
(ii) amounts credited to the PensionPlus Match Accounts for Energizer
Individuals as of the Distribution Date; plus
(iii) a pro rata share of the assets, with a market value determined as of March
31, 2000, of the Xxxxxxx Retirement Plan in excess of the assets required to
fund the PBO and PensionPlus Match Accounts for all participants and
beneficiaries in the Xxxxxxx Retirement Plan (the "Surplus Assets"), such share
of the Surplus Assets to be apportioned and transferred to the Energizer
Retirement Plan in the same proportion as the PBO liabilities for Energizer
Individuals, determined as of March 31, 2000, bear to the PBO liabilities for
all participants in the Xxxxxxx Retirement Plan as of March 31, 2000; plus
(iv) interest with respect to each installment of the Transfer Amount based on
the investment rate of return of the assets of the Xxxxxxx Retirement Plan from
the Distribution Date to the actual transfer date, net of investment fees and
expenses;
less (v) the amount of benefits paid by the Xxxxxxx Retirement Plan to Energizer
Individuals between the Distribution Date and the date Plan assets are
transferred.
Calculations of PBO shall be made in accordance with terms of the Xxxxxxx
Retirement Plan, established administrative procedures and the assumptions used
by Xxxxxxx as of September 30, 1999 under FAS 87 and as set forth in Schedule B
to the 1999 Form 5500 for the Xxxxxxx Retirement Plan. In no event will the
Transfer Amount, as calculated pursuant to this Section 7.02(a) and, if
applicable, adjusted pursuant to Section 7.02(d), be less than the present
value, determined in accordance with Section 401(a)(17) of the Code, of benefits
of the Energizer Individuals accrued as of the Distribution Date, as determined
based on the actuarial assumptions of the Xxxxxxx Retirement Plan and in
compliance with Section 414(l) of the Code.
(b) No changes in the status of any Energizer Individual between the
Distribution Date and the date or dates funds are actually transferred pursuant
to this Section 7.02 shall affect the Transfer Amount to be calculated
hereunder.
(c) An initial portion of the Transfer Amount (the "Initial Transfer
Amount") shall be transferred to the trustee of the Energizer Retirement Plan no
later than ten business days after the expiration of the thirty-day waiting
period required by section 6058(b) of the Code. The transfer shall be
conditioned upon completion of the following items:
(i) Xxxxxxx'x receipt of an opinion of Energizer's counsel, reasonably
acceptable to Xxxxxxx, stating that the Energizer Retirement Plan is intended to
qualify under Section 401(a) of the Code and that the trust established under
such Plan is intended to be exempt from taxation under Section 501(a) of the
Code;
(ii) each party's filing with the Internal Revenue Service the notice required
by Section 6058(b) of the Code.
(d) Notwithstanding the foregoing Section 7.02(a), if an apportionment
of pension assets, including pension surplus, is not made with respect to the
Xxxxxxx Canadian Pension Plan and/or the Energizer/Xxxxxxx UK Pension Plan in a
manner similar to that described with respect to the Xxxxxxx Retirement Plan,
then the Transfer Amount shall be increased or decreased, as applicable, in an
amount equal to the value of such excess or shortfall in allocation of surplus
assets in those Plans effective as of the date the parties mutually agree on the
amount of such excess or shortfall. The equivalent value of US and applicable
Canadian or United Kingdom currencies shall be determined in accordance with
Section 2.04(i).
(e) The parties shall cooperate in transferring the final installment
or installments of the Transfer Amount as soon as practicable. The final
installment of the Transfer Amount shall be made when it has been determined to
the reasonable satisfaction of both parties.
(f) Upon completion of the transfers of such assets and liabilities,
the Xxxxxxx Retirement Plan and the Xxxxxxx Group shall have no further
liability therefor with respect to the Energizer Individuals.
7.03 Certain International Pension Plans.
--------------------------------------
(a) Canadian Pension Plans. Effective as of the Distribution Date, the
Energizer Individuals participating in the registered pension plan sponsored by
Xxxxxxx Purina Canada Inc. (the "Xxxxxxx Canadian Pension Plan") shall cease to
accrue benefits under such Plan, and all liabilities for benefits accrued by
such Individuals as of such Distribution Date shall be transferred to a new
pension plan (the "Energizer Canadian Pension Plan") established by Newco
Canada, an Affiliate of Energizer, the terms of which will be substantially the
same as those of the Xxxxxxx Canadian Pension Plan in respect of the Energizer
Individuals. The Energizer Canadian Pension Plan shall give the Energizer
Employees credit, for purposes of eligibility, vesting and benefit accrual, for
service on or prior to the Distribution Date, to the extent such service was
recognized under the Xxxxxxx Canadian Pension Plan.
Xxxxxxx shall, as soon as practicable after the Distribution Date, cause Xxxxxxx
Purina Canada Inc. to transfer from the Xxxxxxx Canadian Pension Plan to the
Energizer Canadian Pension Plan an amount (the " Canadian Transfer Amount")
equal to the following:
(i) the present value of defined benefits accrued by the Energizer Individuals
under the Xxxxxxx Canadian Pension Plan as of March 31, 2000 and determined as
the greater of the going concern or solvency liabilities in accordance with Plan
documents, Plan interpretations specified therein and actuarial assumptions used
in the last filed actuarial report adjusted as necessary to comply with
legislation and regulatory authorities ("Canadian Energizer Defined Benefit
Liabilities"); plus
(ii) a pro rata share, valued as of March 31, 2000, of the difference between
the Xxxxxxx Canadian Pension Plan defined benefit assets and the "Total Canadian
Defined Benefit Plan Liabilities", (defined as the present value of defined
benefits accrued under the Xxxxxxx Canadian Pension Plan by all members as of
the Distribution and determined on the same basis as the Canadian Energizer
Defined Benefit Liabilities, which is the greater of going concern or solvency
liabilities in accordance with Plan documents, Plan interpretations specified
therein and actuarial assumptions used in the last filed actuarial report
adjusted as necessary to comply with legislation and regulatory authorities);
such share to be determined by applying the ratio of the Canadian Energizer
Defined Benefit Liabilities to the Total Canadian Defined Benefit Liabilities;;
plus
(iii) interest on the Canadian Transfer Amount based on the investment rate of
return of the assets of the Xxxxxxx Canadian Pension Plan from the Distribution
Date to the actual transfer date, net of investment fees and expenses;
less (iv) the amount of benefits paid by the Xxxxxxx Canadian Pension Plan to
Energizer Individuals between the Distribution Date and the date the Canadian
Transfer Amount is transferred.
Such transfer shall be conditioned upon receipt of, and subject to, all
requisite governmental and other approvals and consents and if a different
Canadian Transfer Amount is required by applicable regulatory authorities, an
adjustment to the Canadian Transfer Amount will be made. Upon completion of the
transfer of such assets and liabilities, the Xxxxxxx Canadian Pension Plan and
the Xxxxxxx Group shall have no further liability for pension benefits for the
Energizer Individuals.
(b) United Kingdom Pension Plans. Effective as of March 31, 2000, the
------------------------------
Xxxxxxx Individuals participating in the pension plan offered by Xxxxxxx Trust
Limited (the "Energizer/Xxxxxxx UK Pension Plan") shall cease to accrue benefits
under such Plan, and all liabilities for benefits accrued by such Individuals as
of such date shall be transferred to a new pension plan (the "New Xxxxxxx UK
Pension Plan") established by Newco Trust Limited, an Affiliate of Xxxxxxx, the
terms of which are substantially the same as those currently enjoyed by such
Individuals under the Energizer/Xxxxxxx UK Pension Plan. The New Xxxxxxx UK
Pension Plan shall give the Xxxxxxx Employees credit, for purposes of
eligibility, vesting and benefit accrual, for service on or prior to the
Distribution Date, to the extent such service was recognized under the
Energizer/Xxxxxxx UK Pension Plan.
Newco Trust Limited shall seek a transfer from the Energizer/Xxxxxxx UK Pension
Plan to the New Xxxxxxx UK Pension Plan, as soon as practicable after the
Distribution Date, of an amount (the "UK Transfer Amount") equal to the
following:
(i) the projected benefit obligation ("PBO") of benefits accrued by the Xxxxxxx
Individuals as of March 31, 2000 (determined on the greater of an ongoing
concern or solvency basis in accordance with Plan documents, Plan
interpretations specified therein and actuarial assumptions as agreed with the
Scheme actuary, adjusted as necessary to comply with legislation and regulatory
authorities), plus
(ii) a pro rata share of the assets, with a market value determined as of March
31, 2000, of the Energizer/Xxxxxxx UK Pension Plan that are in excess of the
assets required to fund the PBO for all participants and beneficiaries in the
Energizer/Xxxxxxx UK Pension Plan (the "UK Surplus Assets"), such share of the
UK Surplus Assets to be apportioned and transferred to the New Xxxxxxx UK
Pension Plan in the same proportion as the PBO for Xxxxxxx Individuals,
determined as March 31, 2000 bears to the PBO for all participants in the
Energizer/Xxxxxxx UK Retirement Plan as of March 31, 2000; plus
(iii) interest on the UK Transfer Amount based on the investment rate of return
of the assets of the Energizer/Xxxxxxx UK Pension Plan from the Distribution
Date to the actual transfer date, net of investment fees and expenses;
less (iv) the amount of benefits paid by the Energizer/Xxxxxxx UK Pension Plan
to Xxxxxxx Individuals between the Distribution Date and the date the UK
Transfer Amount is transferred.
Such transfer shall be conditioned upon receipt of, and subject to, all
requisite trustee, governmental and other approvals and consents and, if a
different UK Transfer Amount is required by applicable regulatory authorities,
an adjustment to the UK Transfer Amount will be made. Upon completion of the
transfer of such assets and liabilities, the Eveready/Xxxxxxx UK Pension Plan
and the Energizer Group shall have no further liability for pension benefits for
the Xxxxxxx Individuals.
(c) Other Foreign Funded Retirement Plans. With respect to other
foreign funded retirement Plans in which the sole participants are either
Energizer Individuals or Xxxxxxx Individuals, Energizer and Xxxxxxx shall
cooperate in taking such actions as are necessary or desirable to ensure that
each such Plan in which assets funding pension benefits for such Energizer or
Xxxxxxx Individuals are held is transferred to, or retained by, a member of the
Energizer Group or Xxxxxxx Group, as appropriate, and that the members of the
other Group shall have no liability related to such pension Plan.
7.04 Savings Investment Plan.
-------------------------
(a) Effective as of the Distribution Date, Energizer and its Affiliates
shall cease to be co-sponsors of the Xxxxxxx Purina Company Savings Investment
Plan ("Xxxxxxx SIP"). Energizer shall take, or cause to be taken, all necessary
and appropriate actions to establish, effective as of the Distribution Date, and
administer a defined contribution Plan which will be a Qualified Plan and which
will also be subject to Section 401(k) of the Code ("Energizer SIP"), and to
provide benefits thereunder for all Energizer Individuals who, immediately prior
to the Distribution Date, were participants in the Xxxxxxx SIP. Energizer
agrees that each such Energizer Individual shall be, to the extent applicable,
entitled, for all purposes under the Energizer SIP, to be credited with the term
of service and any account balance credited to such Energizer Individual as of
the Distribution Date under the terms of the Xxxxxxx SIP as if such service had
been rendered to the Energizer Group and as if such account balance had
originally been credited to such Energizer Individual under the Energizer SIP.
Xxxxxxx agrees to provide Energizer, as soon as practicable after the
Distribution Date (with the cooperation of Energizer to the extent that relevant
information is in the possession of the Energizer Group), with a list of the
Energizer Individuals who were, to the best knowledge of Xxxxxxx, participants
in the Xxxxxxx SIP immediately prior to the Distribution Date, together with a
listing, if requested by Energizer, of each such Energizer Individual's term of
service for eligibility and vesting purposes under such Plan and a listing of
each such Energizer Individual's account balance thereunder. Xxxxxxx shall, as
soon as practicable after the Distribution Date, provide Energizer with such
additional information (in the possession of the Xxxxxxx Group and not already
in the possession of the Energizer Group) as may be reasonably requested by
Energizer and necessary in order for Energizer to establish and administer
effectively the Energizer SIP.
The Energizer SIP receiving transfers of accounts from the Xxxxxxx SIP shall
contain an "Energizer Stock Fund", and Energizer Individuals for whom a portion
of the account balances are to be transferred to the Energizer SIP from the
Xxxxxxx SIP in the form of Energizer Stock, as described below, shall be
permitted to elect to retain their investment of that portion of their account
in the Energizer Stock Fund.
(b) Xxxxxxx shall, as soon as practicable following the Distribution
Date, direct the trustee of the Xxxxxxx Purina Company Savings Investment Trust
to transfer to the trustee of the Energizer SIP an amount (in cash, securities
and notes evidencing participant loans) equal to the account balances credited
to the Energizer Individuals as of the date of transfer. Such transfer shall be
adjusted, if and to the extent necessary, to comply with Section 414(l) of the
Code and the regulations promulgated thereunder. Shares of Energizer Stock
distributed with respect to shares of Xxxxxxx Stock held in the Xxxxxxx SIP as
of the Distribution, to the extent allocated to accounts of Energizer
Individuals, shall be transferred to respective participant accounts in the
Energizer Stock Fund of the Energizer SIP.
(c) In connection with the transfers described in Section 7.04(b),
Xxxxxxx and Energizer shall cooperate in making any and all appropriate filings
required under the Code or ERISA, and the regulations thereunder, and any
applicable securities laws and take all such action as may be necessary and
appropriate to cause such transfers to take place as soon as practicable after
the Distribution Date; provided, however, that each such transfer shall not take
place until as soon as practicable after the earlier of (i) the receipt of a
favorable IRS determination letter with respect to the qualification of the
Energizer SIP under Section 401(a) of the Code or (ii) the receipt by Xxxxxxx of
an opinion of counsel retained by Energizer and reasonably satisfactory in form
and substance to Xxxxxxx to the effect that the Plan is intended to qualify
under Section 401(a) of the Code and that the trust established thereunder is
intended to be exempt from federal income tax under Section 501(a) of the Code.
Xxxxxxx and Energizer agree to provide to such counsel such information in the
possession of the Xxxxxxx Group and the Energizer Group, respectively, as may be
reasonably requested by such counsel in connection with the issuance of such
opinion.
(d) Except as specifically set forth in this Section 7.04, upon
completion of the transfers of assets and liabilities from the Xxxxxxx SIP to
the Energizer SIP, the Xxxxxxx SIP and the Xxxxxxx Group shall have no further
liability therefor with respect to the Energizer Individuals.
7.05 U.S. Welfare Plans
--------------------
(a) Except as otherwise specifically provided herein, Energizer shall
take, or cause to be taken, all actions necessary and appropriate on behalf of
itself and the Energizer Group to adopt such Welfare Plans ("Energizer Welfare
Plans") as necessary to provide, effective as of the Distribution Date, welfare
benefits to the Energizer Individuals substantially similar to those offered to
them prior to the Distribution Date. In connection with the foregoing, Xxxxxxx
agrees to provide Energizer or its designated representative with such
information (in the possession of the Xxxxxxx Group and not already in the
possession of the Energizer Group) as may be reasonably requested by Energizer
and necessary for the Energizer Group to establish any such Welfare Plan.
(b) Except as otherwise noted in this Section 7.05, Energizer shall
cause the Energizer Welfare Plans to assume, or cause one or more members of the
Energizer Group to assume, and be solely responsible for, all welfare benefit
claims paid to Energizer Individuals on or after 12:01 a.m. on the Distribution
Date. The Xxxxxxx Welfare Plans shall retain liability for welfare benefit
claims paid to Energizer Individuals under the Xxxxxxx Welfare Plans before
12:01 a.m. on the Distribution Date.
As of 12:01 a.m. on the Distribution Date, Energizer shall cease to be a
sponsoring employer of the Welfare Plans sponsored by Xxxxxxx. Energizer
Individuals will cease participating in Welfare Plans maintained by any member
of the Xxxxxxx Group, except to the extent they elect continued coverage under
Xxxxxxx'x health benefit plans pursuant to the Consolidated Omnibus Budget
Reconciliation Act or they elect to continue coverage under the Partnership Life
Plan as a terminated employee.
(c) Subject to paragraph (b) above, Energizer and the Energizer Group
shall retain all liabilities for retiree medical and retiree life insurance
benefits with respect to Energizer Individuals, and no Energizer Individuals
shall be entitled to retiree medical and life insurance benefits from Welfare
Plans sponsored by Xxxxxxx and the Xxxxxxx Group after the Distribution Date.
For purposes of this Section 7.05, the distribution of ownership of the
Energizer Group to shareholders of Xxxxxxx Stock shall not be deemed a
termination of employment of Energizer Employees. As of the Distribution Date,
Energizer shall adopt an Energizer Executive Health Plan and an Energizer
Executive Life Plan, and Xxxxxxx shall transfer to Energizer, and Energizer
shall assume, all liabilities for retiree benefits for Energizer Individuals who
are eligible for retiree health and life coverage under such Plans. Claims for
retiree health and life benefits paid prior to the Distribution Date with
respect to Energizer Individuals shall be treated in the manner set forth in
paragraph (b) above.
(d) Xxxxxxx and Energizer shall cooperate in causing the transfer, as
soon as practicable after the Distribution Date, of certain plan assets from the
Xxxxxxx Group Life Plan and the Purina Long Term Disability Plan to the
Energizer Group Life Plan and the Energizer Long Term Disability Plan,
respectively. Xxxxxxx shall cause each Xxxxxxx Plan to transfer to the
corresponding Energizer Plan a pro rata share of the Xxxxxxx Plan assets, with a
market value determined as of March 31, 2000, such share of assets to be
calculated in the same proportion as the present value of liabilities relating
to Energizer Individuals under each Plan bears to the present value of
liabilities relating to all Energizer and Xxxxxxx Individuals under each such
Plan.
7.06 International Welfare Plans
-----------------------------
Xxxxxxx and Energizer shall each retain all liabilities related to
international welfare plans in which only Xxxxxxx Individuals or Energizer
Individuals, respectively, are enrolled. With respect to welfare plans in which
both Xxxxxxx Individuals and Energizer Individuals are participants, Xxxxxxx and
Energizer shall cause each member of their respective Groups to cooperate with
members of the other Group to establish additional separate welfare plans as
soon as practicable after the Distribution Date in order to enroll the Energizer
Individuals and Xxxxxxx Individuals in separate plans. During the period after
the Distribution that an Energizer Individual continues to participate in a
welfare plan sponsored by a member of the Xxxxxxx Group, or vice versa, the
sponsor (or sponsor's plan, as appropriate) shall be reimbursed for the costs of
providing such coverage in excess of premiums paid by the covered Energizer or
Xxxxxxx Individual. Xxxxxxx and Energizer, or their respective Welfare Plans as
applicable, shall share proportionately in any refunds of contributions or
stabilization reserves payable on account of experience prior to the
Distribution.
7.07 Internationalist Retirement Plan.
----------------------------------
As of the Distribution Date, Energizer shall assume, and be solely
responsible for, all benefits accrued with respect to Energizer Individuals
based on participation by Energizer Employees and Former Energizer Employees in
the unfunded Internationalist Retirement Plan. No Xxxxxxx Individuals are
participants in such Plan as of the Distribution Date, and Xxxxxxx shall have
no liability for payment of benefits under such Plan after the Distribution.
Energizer agrees to cause benefits accrued with respect to the Energizer
Individuals to be paid in a manner and amount consistent with the terms of the
Internationalist Retirement Plan.
7.08 Stock Options and Restricted Stock; Stock Purchase Plan.
--------------------------------------------------------------
(a) The stock options held by Energizer Individuals as of the
Distribution Date shall be administered in accordance with the terms of such
agreements and the ISP under which they were granted. For purposes of
restricted stock awards and stock options granted under the ISPs, the
Distribution shall be deemed to constitute an involuntary termination, other
than for cause, of employment of Energizer Employees.
(b) Effective immediately after the Distribution Date, the number of
shares of Xxxxxxx Stock subject to, and the exercise price of, each
non-qualified option to acquire Xxxxxxx Stock granted pursuant to the terms of
an ISP ("Xxxxxxx Option") which immediately prior to the Record Date is
outstanding and not exercised shall be adjusted by the Human Resources Committee
of the Xxxxxxx Board in order to reflect the difference in the fair market value
of the Xxxxxxx Stock attributable to the Distribution, in accordance with the
requirements of Section 424 of the Code and the regulations promulgated
thereunder, based upon (i) the average of the closing prices on the NYSE
Composite Index for the Xxxxxxx Stock, trading regular way with due bills for
the Energizer Stock, for the [10] trading day period prior to the Distribution
Date and (ii) the average of the closing prices on the NYSE Composite Index for
the Xxxxxxx Stock, trading regular way, for the [10] trading day period
following the Distribution Date.
(c) Xxxxxxx and Energizer agree that Xxxxxxx, as sole shareholder of
the outstanding capital stock of Energizer, will approve the adoption by the
Board of Energizer, prior to the Distribution, of a Plan to be administered by
the Nominating and Compensation Committee of the Energizer Board, under which
the Committee shall have authority to grant stock options, restricted stock
awards and other awards payable in Energizer Stock, to directors of Energizer
and eligible Energizer Employees, including executive officers.
(d) Effective as of the Distribution Date, Energizer Employees shall
cease to be eligible to participate in the Xxxxxxx Purina Company Stock Purchase
Plan. All benefit obligations arising under the Plan prior to such date shall
be paid in accordance with the terms of the Plan.
7.09 Unfunded Executive Deferred Compensation and Retirement Plans.
-----------------------------------------------------------------
(a) Xxxxxxx shall retain liability for all unpaid benefits, obligations
and liabilities with respect to benefits for Energizer Individuals arising from
deferrals of compensation by Energizer Employees and Former Energizer Employees
under the Fixed Benefit Option of the Xxxxxxx Purina Company Deferred
Compensation Plan for Key Employees ("Xxxxxxx Deferred Compensation Plan").
(b) As of the Distribution Date, Energizer will establish a Deferred
Compensation Plan, which shall be a non-qualified unfunded deferred compensation
plan ("Energizer Deferred Compensation Plan"). Effective as of the
Distribution, Xxxxxxx shall amend the Xxxxxxx Deferred Compensation Plan to
permit the transfer to the Energizer Deferred Compensation Plan of that portion
of the Xxxxxxx Deferred Compensation Plan liabilities accrued as of March 31,
2000 with respect to Energizer Individuals under all investment Options of such
Plan other than the Fixed Benefit Option (including the Company Matching
Accruals based on deferrals under the Equity Option), and Energizer shall cause
the Energizer Deferred Compensation Plan to accept such liabilities. In
connection therewith, Xxxxxxx shall assign to Energizer all its right, title and
obligations under the deferred compensation agreements associated with such
accrued benefits.
(c) As of the Distribution Date, Energizer will establish an Executive
Savings Investment Plan, which shall be a non-qualified unfunded deferred
compensation plan ("Energizer Executive SIP"). Xxxxxxx shall amend the Xxxxxxx
Purina Executive SIP ("Xxxxxxx Executive SIP") to cause the transfer to the
Energizer Executive SIP of that portion of the liabilities of the Xxxxxxx
Executive SIP relating to the benefits accrued as of March 31, 2000 by the
Energizer Individuals, and Energizer shall cause the Energizer Executive SIP to
accept such liabilities.
(d) As of the Distribution Date, Energizer will establish a Supplemental
Retirement Plan, which shall be a non-qualified unfunded supplemental retirement
plan ("Energizer SERP"). Xxxxxxx shall amend the Xxxxxxx Purina Supplemental
Retirement Plan ("Xxxxxxx SERP") to cause the transfer to the Energizer SERP of
that portion of the liabilities of the Xxxxxxx SERP relating to the benefits
accrued as of March 31, 2000 by the Energizer Individuals, and Energizer shall
cause the Energizer SERP to accept such liabilities. Accrued liabilities under
the Xxxxxxx SERP shall be deemed to include, but not be limited to, liabilities
arising out of Supplemental Retirement Awards given to Energizer Employees and
Former Energizer Employees.
(e) After the Distribution Date, Energizer shall be solely responsible
for the payment of all liabilities and obligations for benefits with respect to
Energizer Individuals under the Energizer Deferred Compensation Plan, the
Energizer Executive SIP and the Energizer SERP, which shall include all
liabilities and obligations transferred pursuant to 7.09(b), (c) and (d) above,
and Xxxxxxx shall have no liability with respect thereto.
7.10 Partnership Life Insurance Plan. Energizer Employees or Former
-------------------------------
Energizer Employees who, immediately prior to the Distribution Date, were
participants in or otherwise entitled to benefits under the Partnership Life
Insurance Plan, will, as of the Distribution Date, be treated as terminated
employees for purposes of such Partnership Life Insurance Plan, and will be
afforded all rights and benefits to which all terminated employees are entitled
under the terms of such Plan. Xxxxxxx will retain ownership of any individual
life insurance contracts then insuring the life of any Energizer Employee or
Former Energizer Employee in accordance with the terms of the Partnership Life
Insurance Plan.
7.11 Vacation Pay/Paid Time Off. Energizer and the Energizer Group
-----------------------------
will assume (or, as applicable, retain) all liability for unpaid vacation pay
and other paid time off accrued by Energizer Employees and Former Energizer
Employees prior to the Distribution Date. On and after the Distribution Date,
Xxxxxxx and the Xxxxxxx Group will have no liability for vacation pay or other
paid time off for Energizer Employees and Former Energizer Employees. Xxxxxxx
and the Xxxxxxx Group will retain (or, as applicable, assume) all liability for
unpaid vacation pay and other paid time off accrued by Xxxxxxx Employees and
Former Xxxxxxx Employees prior to the Distribution Date. After the Distribution
Date, Energizer and the Energizer Group will have no liability for vacation pay
or other paid time off for Xxxxxxx Employees and Former Xxxxxxx Employees.
7.12 U. S. Severance Pay.
----------------------
(a) Xxxxxxx and Energizer agree that, with respect to individuals who,
in connection with the Distribution, cease to be employees of the Xxxxxxx Group
and become employees of the Energizer Group, such cessation shall not be deemed
a severance of employment from either Group for purposes of any Plan that
provides for the payment of severance, salary continuation or similar benefits
and shall, in connection with the Distribution, if and to the extent
appropriate, obtain waivers from individuals against any such assertion.
(b) The Xxxxxxx Group shall assume and be solely responsible for all
liabilities and obligations whatsoever in connection with claims made by or on
behalf of Xxxxxxx Individuals and the Energizer Group shall assume and be solely
responsible for all liabilities and obligations whatsoever in connection with
claims made by or on behalf of Energizer Individuals in respect of severance
pay, salary continuation and similar obligations relating to the termination or
alleged termination of any such person's employment either before, to the extent
unpaid, or on or after the Distribution Date. On or prior to the Distribution
Date, Energizer shall amend its Plans relating to severance and other
termination benefits to incorporate the terms of the special severance payment
schedule in effect in Xxxxxxx'x Xxxxxxxxx Pay Plan with respect to employees of
the Corporate Division of Xxxxxxx who transfer to Energizer and who are
involuntarily terminated without cause by Energizer on or prior to September 30,
2000.
7.13 International Severance Pay.
-----------------------------
(a) Xxxxxxx and Energizer agree that, with respect to individuals who,
in connection with the Distribution, cease to be employees of the Xxxxxxx Group
and become employees of the Energizer Group or vice versa, such cessation shall
not be deemed a severance of employment from either Group except to the extent
so required by the terms of any benefit plan, labor agreement, applicable law or
governmental regulation that provides for the payment of severance pay, salary
continuation, termination indemnity or similar benefits. The parties agree, if
and to the extent appropriate, to obtain waivers from individuals against any
such assertion.
(b) To the extent severance pay, salary continuation or termination
indemnity is payable with respect to an Energizer Individual or Xxxxxxx
Individual, the respective Group shall assume and be solely responsible for all
liabilities and obligations whatsoever in connection with claims for such
benefits made by or on behalf of such Individuals relating to the termination or
alleged termination of any such person's employment either before, to the extent
unpaid, or on or after the Distribution Date.
In the event that the individual to whom the benefits are due was an employee of
both the Battery Business and the Xxxxxxx Business, then the termination
expenses shall be shared pro rata on the basis of service with each Group.
7.14 Bonus Plans. Energizer and its Affiliates shall be responsible
------------
for all liabilities with respect to Energizer Employees arising under bonus
plans, programs or policies applicable to such Employees, including liabilities
related to service prior to the Distribution Date. Notwithstanding the
foregoing, Xxxxxxx shall retain liability for amounts payable to Energizer
Employees who are participants in the 1998 Leveraged Incentive Plan.
7.15 Other Balance Sheet Adjustments. To the extent not otherwise
----------------------------------
provided in this Agreement, Xxxxxxx and Energizer shall take such action as is
necessary to effect an adjustment to the books of the members of the Xxxxxxx
Group and the Energizer Group so that, as of the Distribution Date, the prepaid
expense balances and accrued employee liabilities with respect to any employee
liability or obligation assumed or retained as of the Distribution Date by the
Xxxxxxx Group or the Energizer Group are appropriately reflected on the
consolidated balance sheets as of the Distribution Date of Xxxxxxx and
Energizer, respectively.
7.16 Preservation of Rights to Amend or Terminate Plans. Subject to
-----------------------------------------------------
the provisions of this Article VII, no provision of this Agreement, including
the agreement of Xxxxxxx or Energizer that it, or any member of the Xxxxxxx
Group or the Energizer Group, will make a contribution or payment to or under
any Plan herein referred to for any period, shall be construed as a limitation
on the right of Xxxxxxx or Energizer or any member of the Xxxxxxx Group or the
Energizer Group to amend such Plan or terminate its participation therein which
Xxxxxxx or Energizer or any member of the Xxxxxxx Group or the Energizer Group
would otherwise have under the terms of such Plan or otherwise, and no provision
of this Agreement shall be construed to create a right in any Xxxxxxx Individual
or Energizer Individual under a Plan which such Individual would not otherwise
have under the terms of the Plan itself.
7.17 Reimbursement; Indemnification. Each of the parties hereto
-------------------------------
acknowledges that the Xxxxxxx Group, on the one hand, and the Energizer Group,
on the other hand, may incur costs and expenses (including contributions to
Plans and the payment of insurance premiums) arising from or related to any of
the Plans which are, as set forth in this Agreement, the responsibility of the
other party hereto. Xxxxxxx and Energizer agree that they, or the appropriate
members of their respective Groups, shall reimburse the appropriate members of
the other's Group, as soon as practicable but in any event within 30 days of
receipt from the other party of appropriate verification, for all such costs and
expenses.
7.18 Further Transfers. For a period of six months following the
------------------
Distribution Date, no member of either Group shall, directly or indirectly,
without the prior written consent of a corporate officer of the other Group,
solicit or attempt to solicit any employee or officer of such other Group for
the purpose of obtaining his or her services for hire, or otherwise causing such
employee to leave employment with such other Group, and no member of either
Group, without the prior written consent of a corporate officer of the other
Group, will, for such period of six months, hire such employee or officer;
provided, however, if the employment of any officer or employee of one Group is
terminated by that Group at any time following the Distribution, a member of the
other Group may employ such person without the consent of the other Group.
7.19 Other Liabilities. Subject to the provisions of Article Four, as
------------------
of the Distribution Date, Energizer and Xxxxxxx shall each assume and be solely
responsible for all Liabilities whatsoever of the other's Group with respect to
claims made by, in the case of Energizer, Energizer Individuals and, in the case
of Xxxxxxx, Xxxxxxx Individuals, relating to any Liability not otherwise
expressly provided for in this Agreement, including, but not limited to, earned
salaries, wages, severance payments, bonus accruals or other compensation,
regardless of whether such Liability was incurred before or after the
Distribution Date.
7.20 Compliance. Notwithstanding anything to the contrary in this
----------
Article VII, to the extent any actions of the parties contemplated in this
Article are determined prior to the Distribution to violate law or result in
unintended tax liability for Xxxxxxx Individuals or Energizer Individuals, such
action may be modified to avoid such violation of law or unintended tax
liability.
7.21 Agreement of Parties. Notwithstanding anything herein to the
----------------------
contrary, the agreements contained in this Article VII shall be binding only as
between the parties to this Agreement, no Xxxxxxx Individual or Energizer
Individual or other Person shall have any right with respect to any such
agreement, and no Person other than the parties to this Agreement shall have any
rights to enforce any provision hereof.
ARTICLE VIII
POST-DISTRIBUTION OBLIGATIONS
8.01 Energizer's Post-Distribution Obligations.
-------------------------------------------
(a) Energizer shall, and shall cause each member of the Energizer Group
to, comply with each representation and statement made, or to be made, to the
IRS in connection with any ruling obtained, or to be obtained, by Xxxxxxx from
the IRS with respect to any transaction contemplated by this Agreement. Neither
Energizer nor any member of the Energizer Group shall, for a period, following
the Distribution Date, of thirty months with respect to transactions described
in subparagraphs (b)(i), (iii), (iv), (v) and (vi) below; and of twenty-four
months with respect to the transaction described in subparagraph (b)(ii) below,
, engage in any of the following transactions, unless, in the sole discretion of
Xxxxxxx, either
(i) an opinion in form and substance satisfactory to Xxxxxxx is obtained from
counsel to Energizer, the selection of which counsel is agreed to by Xxxxxxx; or
(ii) a supplemental ruling is obtained from the IRS;
in either case to the effect that such transactions would not adversely affect
the tax consequences of the transactions described in Articles II and III of
this Agreement to Xxxxxxx or any member of the Xxxxxxx Group; Energizer or any
member of the Energizer Group; or the Xxxxxxx shareholders.
(b) The transactions subject to this provision are:
(i) making a material disposition (including transfers from one member of the
Energizer Group to another member of the Energizer Group), by means of a sale or
exchange of assets or capital stock, a distribution to shareholders, or
otherwise, of any of its assets (other than the transactions contemplated by
this Agreement) except in the ordinary course of business;
(ii) repurchasing any Energizer Stock, unless such repurchase satisfies the
requirements of Section 4.05(1)(b) of Revenue Procedure 96-30 or any successor
Revenue Procedure;
(iii) issuing capital stock of Energizer (or a successor to Energizer), whether
incident to a stock offering, an acquisition transaction or otherwise, or
participating in a transaction in which shareholders of Energizer (or a
successor to Energizer) exchange or otherwise dispose of their stock in
Energizer (or a successor to Energizer), if the aggregate amount of shares
issued or disposed of in any such transactions represents a "fifty percent (50%)
or greater interest" in the total issued and outstanding stock of Energizer (or
a successor to Energizer) within the meaning of Section 355(d)(4) of the Code;
provided that Energizer further agrees to notify Xxxxxxx in advance of any such
transactions that would result in the issuance or disposition of an aggregate
amount of shares representing a ten percent (10%) or greater interest in the
total issued and outstanding stock of Energizer;
(iv) liquidating or merging with any other corporation (including a member of
the Energizer Group);
(v) ceasing to engage in the active conduct of a trade or business within the
meaning of Section 355(b)(2) of the Code; or
(vi) any other transaction, action or event, as set forth on Schedule
8.01(b)(vi), which is, in any material respect, inconsistent with any of the
representations or statements made to the IRS in connection with the request for
any ruling obtained, or to be obtained, with respect to any transaction
contemplated by this Agreement.
Energizer hereby represents that neither Energizer nor any member of the
Energizer Group has any present intention to undertake any of the transactions
set forth above, except as set forth in the ruling request submitted to the IRS
with respect to the Distribution.
8.02 Xxxxxxx'x Post-Distribution Obligations. Xxxxxxx shall, and shall
----------------------------------------
cause each member of the Xxxxxxx Group to, refrain from taking any action which
would adversely impact any ruling obtained, or to be obtained, by Xxxxxxx from
the IRS with respect to any transaction contemplated by this Agreement.
8.03 Indemnification of Shareholders. In the event that Xxxxxxx or
---------------------------------
Energizer breaches or violates any covenant made in this Article VIII, the
breaching party shall indemnify and hold harmless (i) all shareholders of
Xxxxxxx as of the Record Date, and (ii) if the breaching party is Energizer,
Xxxxxxx, against and in respect of any and all costs, expenses, deficiencies,
litigation, proceedings, taxes, levies, assessments, attorneys' fees, damages or
judgments of any kind or nature whatsoever, related to, arising from, or
associated with such breach or violation.
ARTICLE IX
NO REPRESENTATIONS OR WARRANTIES; EXCEPTIONS
Energizer understands and agrees that, except as set forth in Article VIII,
no member of the Xxxxxxx Group is, in this Agreement or in any Ancillary
Agreement or other agreement or document, implicitly or explicitly representing
or warranting to Energizer in any way as to the Energizer Assets, the Battery
Business or the Liabilities of the Energizer Group or as to any consents or
approvals required in connection with the consummation of the transactions
contemplated by this Agreement, it being agreed and understood that the
Energizer Group shall take all of the Energizer Assets "as is, where is" and
that, except as provided in Section 2.04, the Energizer Group shall bear the
economic and legal risk that conveyances of the Energizer Assets shall prove to
be insufficient or that the title of any member of the Energizer Group to any
Energizer Assets shall be other than good and marketable and free from
encumbrances.
ARTICLE X
GUARANTEES AND SURETY BONDS OF XXXXXXX
Energizer agrees that, as soon as practicable following the Distribution
Date, it will substitute surety bonds obtained by it for each of the surety
bonds of any member of the Xxxxxxx Group, if any, relating to any Energizer
Asset, the Battery Business or any Liability assumed by Energizer or its
Subsidiaries of Affiliates hereunder. Energizer agrees that it shall enter
indemnification agreements in its name with each provider of a surety bond
obtained with respect to the Energizer Assets, the Battery Business or any
Liability assumed by Energizer. Except as set forth on Schedule 10, Energizer
shall use its best efforts to obtain the complete release and discharge of any
member of the Xxxxxxx Group from all obligations (including any obligations upon
any renewal or extension) related to the Energizer Assets, the Battery Business
or any Liability assumed by Energizer on which any member of the Xxxxxxx Group
is directly or contingently obligated as a guarantor or assignor or otherwise
contingently liable (including, without limitation, any letter of credit) (the "
Energizer Obligations").
In the event that Energizer is unable to obtain any such release, Energizer
agrees that
(a) it shall not extend the term or otherwise modify any such Energizer
Obligation in a manner which would expand Xxxxxxx'x financial exposure under
such Energizer Obligation,
(b) it shall use its best efforts to substitute itself or another member of
the Energizer Group as primary guarantor of such Energizer Obligations, and
(c) Energizer or any member of the Energizer Group shall not assign any such
Energizer Obligation or directly or indirectly transfer, sell or assign any
assets securing such Energizer Obligation or comprising all or any substantial
portion of a project, the financing of which gave rise to such Energizer
Obligation, including, but not limited to, the transfer, sale or assignment of
the capital stock of any Affiliate holding title to such assets, unless Xxxxxxx
or the appropriate member of the Xxxxxxx Group, as the case may be, is released
and discharged of all liabilities with respect to such Energizer Obligation.
Without limiting any other obligation of indemnification under this Agreement or
any agreement described herein, Energizer shall defend, indemnify and hold
harmless each member of the Xxxxxxx Group and their respective Affiliates,
Subsidiaries, directors, officers and employees against any and all Liabilities
whatsoever incurred or suffered by any of them as a result of any Energizer
Obligation.
ARTICLE XI
NEGOTIATION
If any question shall arise in regard to (i) the interpretation of any
provision of this Agreement or, except to the extent provided otherwise therein,
any Ancillary Agreement, or (ii) the rights or obligations of either Group
hereunder or thereunder, each Group shall designate a senior executive within
its organization who shall, within thirty days after such question arises, meet
with the designated executive of the other Group to negotiate and attempt to
resolve such question in good faith. Such senior executives may, if they so
desire, consult outside advisors for assistance in arriving at such a
resolution. In the event that a resolution is not achieved within sixty days
following such initial meeting, then the parties may seek other legal means of
resolving such question, including but not limited to mediation or binding or
non-binding arbitration.
ARTICLE XII
MISCELLANEOUS
12.01 Conditions to the Distribution.
---------------------------------
(a) The obligation of Xxxxxxx to make the Distribution is subject to
the satisfaction of each of the following conditions:
(i) The transactions contemplated by Article II shall have been
consummated in all material respects;
(ii) Xxxxxxx shall have received rulings from the IRS, in form and
substance satisfactory to Xxxxxxx'x tax counsel and independent auditors, that
the contributions, transfers, assumptions, mergers and Distribution described in
Articles II and III of this Agreement will not be subject to federal income
taxation at the corporate or shareholder level;
(iii) The Energizer Stock and associated Rights shall have been approved
for listing on the NYSE, subject to official notice of issuance;
(iv) The Form 10 shall have been filed with the SEC and shall have become
effective, and no stop order with respect thereto shall be in effect;
(v) All authorizations, consents, approvals and clearances of all federal,
state, local and foreign governmental agencies required to permit the valid
consummation by the parties hereto of the transactions contemplated by this
Agreement shall have been obtained; and no such authorization, consent, approval
or clearance shall contain any conditions which would have a material adverse
effect on (A) the Xxxxxxx Business or the Battery Business, (B) the Assets,
results of operations or financial condition of the Xxxxxxx Group or the
Energizer Group, in each case taken as a whole, or (C) the ability of Xxxxxxx or
Energizer to perform its obligations under this Agreement; and all statutory
requirements for such valid consummation shall have been fulfilled;
(vi) Xxxxxxx shall have provided the NYSE with the prior written notice of
the Record Date required by Rule 10b-17 of the Exchange Act and the rules and
regulations of the NYSE;
(vii) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a government,
regulatory or administrative agency or commission, and no statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, shall be in effect preventing the payment of the Distribution;
(viii) The Distribution shall be payable in accordance with applicable
law;
(ix) All necessary consents, waivers or amendments to each bank credit
agreement, debt security or other financing facility to which any member of the
Xxxxxxx Group or the Energizer Group is a party or by which any such member is
bound shall have been obtained, or each such agreement, security or facility
shall have been refinanced, in each case on terms satisfactory to Xxxxxxx and
Energizer and to the extent necessary to permit the Distribution to be
consummated without any material breach of the terms of such agreement, security
or facility; and
(x) One or more members of the Energizer Group shall have been
substituted, as of the Distribution Date in respect of all Xxxxxxx Group debt
obligations assumed by Energizer or another member of the Energizer Group
pursuant to this Agreement.
(b) Any determination made by the Xxxxxxx Board in good faith
concerning the satisfaction or waiver of any or all of the conditions set forth
in Section 12.01(a) shall be conclusive.
12.02 Survival of Agreements. All covenants and agreements of the
------------------------
parties hereto contained in this Agreement shall survive the Distribution Date.
12.03 Entire Agreement. This Agreement, the Exhibits and Schedules
-----------------
hereto and the Ancillary Agreements shall constitute the entire agreement
between the parties hereto with respect to the subject matter hereof superseding
all previous negotiations, commitments and writings with respect to such subject
matter. To the extent that the provisions of this Agreement are inconsistent
with the provisions of any Ancillary Agreement, the provisions of such Ancillary
Agreement shall prevail.
12.04 Expenses of the Distribution. Except as otherwise provided in
-------------------------------
this Agreement and the other agreements referred to herein, after the
Distribution, Xxxxxxx shall pay the costs and expenses (including attorneys'
and accountants' fees, legal costs and expenses) that were necessarily incurred
to effect the Distribution. For purposes of this Section 12.04, costs and
expenses incurred in connection with the establishment of the Energizer SIP and
the registration of Energizer Stock to be offered under the Energizer SIP shall
be deemed expenses necessary to effect the Distribution, but other costs and
expenses related to the design, establishment, administration, qualification and
registration of employee benefit Plans for Energizer and its Affiliates shall
not be deemed to be expenses necessary to effect the Distribution.
Notwithstanding the foregoing, after the Distribution Date, Xxxxxxx shall remain
obligated to pay all reasonable fees and expenses (including attorneys' and
accountants' fees, legal costs, underwriting fees and expenses) related to
Energizer's establishment of a $450 million credit facility.
12.05 GOVERNING LAW; JURISDICTION AND VENUE. THIS AGREEMENT IS MADE
----------------------------------------
AND ENTERED INTO IN, AND SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF, THE STATE OF MISSOURI, UNITED STATES OF AMERICA,
WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES, AS TO ALL MATTERS, INCLUDING
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES UNDER THIS
AGREEMENT. ALL MATTERS RELATING TO THIS AGREEMENT SHALL, SUBJECT TO THE
PROVISIONS OF ARTICLE XI OF THIS AGREEMENT, BE ADJUDICATED EXCLUSIVELY IN THE
COURTS OF THE STATE OF MISSOURI LOCATED IN ST. LOUIS, MISSOURI, OR WITHIN THE
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI; AND EACH
PARTY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS FOR
ALL SUCH MATTERS.
12.06 Notices. All notices, requests, claims, demands and other
-------
communications hereunder (collectively, "Notices") shall be in writing and shall
be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by cable, telegram, telex, facsimile or other standard form of
telecommunications, or by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to a member of the Xxxxxxx Group:
Xxxxxxx Purina Company
Xxxxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
If to a member of the Energizer Group:
Energizer Holdings, Inc.
000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
or to such other address as either Group may have furnished to the other Group
by a notice in writing in accordance with this Section 12.06.
12.07 Amendment and Modification; Non-Waiver. This Agreement may be
-----------------------------------------
amended, modified or supplemented, or rights, powers or options hereunder waived
or impaired, only by a written agreement signed by a corporate officer of
Xxxxxxx and Energizer and attested by their respective corporate secretaries.
Neither party shall be deemed to have waived or impaired any right, power or
option created or reserved by this Agreement (including without limitation, each
party's right to demand compliance with every term herein, or to declare any
breach a default and exercise its rights in accordance with the terms hereof) by
virtue of:
(a) any custom or practice of the parties at variance with the terms
hereof;
(b) any failure, refusal or neglect to exercise any right hereunder, or
to insist upon compliance with any term;
(c) any waiver, forbearance, delay, failure or omission to exercise any
right or option, whether of the same, similar or different natures, under this
Agreement or in any other circumstances; or
(d) the acceptance by either party of any payment or other
consideration from the other following any breach of this Agreement.
The rights and remedies set forth in this Agreement are in addition to any other
rights or remedies which may be granted by law.
12.8 Successors and Assigns; No Third-Party Beneficiaries. This Agreement
---- ------------------------------------------------------
and all of the provisions hereof shall be binding upon and inure to the benefit
of each Group and their respective successors and permitted assigns, but neither
this Agreement nor any of the rights, interests and obligations hereunder
shall be assigned by either Group without the prior written consent of the other
Group (which consent shall not be unreasonably withheld). Except for the
provisions of Sections 4.02 and 4.03 relating to Indemnities, which are also for
the benefit of the Indemnitees, this Agreement is solely for the benefit of each
Group and is not intended to confer upon any other Person any rights or remedies
hereunder.
12.09 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.10 Interpretation.
--------------
(a) The Article and Section headings contained in this Agreement are
solely for the purpose of reference, are not part of the agreement of the
parties hereto and shall not in any way affect the meaning or interpretation of
this Agreement.
(b) The parties hereto intend that, for federal income tax purposes,
the contributions, transfers, assumptions, Distribution and Merger contemplated
hereby shall qualify for non-recognition treatment under Sections 332, 336, 337,
355, 357(a), 361, 368(a)(1)(D) and 1032 of the Code.
12.11 Legal Enforceability. Any provision of this Agreement or any of
---------------------
the Ancillary Agreements which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. Each party acknowledges that money damages would be an inadequate
remedy for any breach of the provisions of this Agreement or any of the
Ancillary Agreements and agrees that the obligations of the parties hereunder
and thereunder shall be specifically enforceable.
12.12 References; Construction. References to any "Article",
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"Exhibit", "Schedule" or "Section", without more, are to Articles, Exhibits,
Schedules and Sections to or of this Agreement. Unless otherwise expressly
stated, clauses beginning with the term "including" set forth examples only and
in no way limit the generality of the matters thus exemplified.
12.13 Termination. Notwithstanding any provision hereof, this
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Agreement may be terminated and the Distribution abandoned at any time prior to
the Distribution Date by and in the sole discretion of the Xxxxxxx Board without
the approval of any other party hereto or of Xxxxxxx'x shareholders. In the
event of such termination, no party hereto shall have any Liability to any
Person by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ENERGIZER HOLDINGS, INC. XXXXXXX PURINA COMPANY
By: By:
