EXHIBIT 10.21
EMPLOYEE BENEFITS AGREEMENT
EMPLOYEE BENEFITS AGREEMENT (the "Agreement") dated as of October
31, 1997 by and between Western Atlas Inc., a Delaware corporation ("Western
Atlas") and UNOVA, Inc., a Delaware corporation ("UNOVA"), which, as of the
date hereof, is a direct, wholly-owned subsidiary of Western Atlas.
WHEREAS, the Board of Directors of Western Atlas has decided to
distribute all of the stock of UNOVA to the shareholders of Western Atlas in
a transaction intended to qualify under Section 355 of the Code (the
"Distribution");
WHEREAS, Western Atlas and UNOVA are entering into a Distribution
and Indemnity Agreement (the "Distribution Agreement") which, among other
things, together with the annexes to the Distribution Agreement, sets forth
the principal corporate transactions required to effect the Distribution and
sets forth other agreements that will govern certain other matters following
the Distribution; and
WHEREAS, in connection with the Distribution, Western Atlas and
UNOVA desire to provide for the allocation of assets and liabilities and
other matters relating to employee benefit plans and compensation
arrangements;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, Western Atlas and UNOVA
agree as follows:
Section 1. DEFINITIONS.
Terms used but not defined in this Agreement shall have the meanings
set forth in the Distribution Agreement. As used in this Agreement the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the term defined):
AFFILIATE: with respect to a Person, any Person controlled by,
controlling or under common control with such Person.
BENEFIT PLAN: any Plan, existing on or prior to the Distribution
Date which was established by any member of the Western Atlas Group or the
UNOVA Group, or any predecessor or Affiliate of any of the foregoing, to
which any member of the Western Atlas Group or the UNOVA Group contributes,
has contributed, is required to contribute or has been required to
contribute, or under which any employee, former employee, director or former
director of any member of the Western Atlas Group or the UNOVA Group or any
beneficiary thereof is covered, is eligible for coverage or has benefits
rights.
CODE: the Internal Revenue Code of 1986, as amended.
CURRENT PLAN YEAR: the plan year during which the Distribution Date
occurs.
DISTRIBUTION DATE: the date on which the Distribution is effected.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
EXISTING RETIREMENT PLANS: the Western Atlas Inc. Retirement Plan,
the Xxxxxx Tool Pension Plan and the Retirement Plan of the von Gal
Operations of Western Atlas Inc.
GROUP: the Western Atlas Group or the UNOVA Group.
LIABILITY: any debt, liability or obligation, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and whether or not the same
would properly be reflected on a balance sheet, and all costs and expenses
related thereto.
NONQUALIFIED PLAN: any Plan that provides retirement benefits and
is not intended to qualify under Section 401(a) of the Code.
PERSON: an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
PLAN: any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock option, stock purchase, stock
ownership, stock appreciation rights, xxxx-
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xxx stock, leave of absence, layoff, vacation, day or dependent care, legal
services, cafeteria, life, health (including medical, dental and vision
care), accident, disability, severance, pay in lieu of notice, separation,
workers' compensation, travel or other employee benefit plan, practice,
policy or arrangement of any kind (including, but not limited to, any
"employee benefit plan" (within the meaning of Section 3(3) of ERISA)).
PRIOR PLAN YEAR: to the extent applicable with respect to any Plan,
any plan year that ended on or prior to the Distribution Date.
QUALIFIED PLAN: a Plan which is an employee benefit pension plan
(within the meaning of Section 3(2) of ERISA) and which is intended to
qualify under Section 401(a) of the Code.
SUBSIDIARY: a corporation more than 50% of the voting power of
whose outstanding voting securities are owned directly or indirectly by
another specified corporation.
UNOVA COMMON STOCK: the Common Stock, par value $.01 per share, of
UNOVA.
UNOVA-ONLY DIRECTOR: any director of UNOVA immediately after the
Distribution Date who was a director of Western Atlas immediately prior to
the Distribution Date, but who ceases to be a director of Western Atlas in
connection with the Distribution.
UNOVA EMPLOYEE: any individual who immediately after the
Distribution Date is an officer or employee of the UNOVA Group.
UNOVA FORMER EMPLOYEE: any terminated employee of Western Atlas who
was, as of such employee's termination of employment, principally employed
(i) in the business which will be conducted by the UNOVA Group, (ii) at the
corporate headquarters of Western Atlas or (iii) in one of the "UNOVA
Discontinued Operations" as such term is defined in Schedule B of the
Distribution Agreement, and any beneficiary or dependent of any such
terminated employee.
UNOVA GROUP: UNOVA and the UNOVA Subsidiaries and Affiliates.
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UNOVA INC. PENSION PLAN: the Western Atlas Inc. Retirement Plan
assumed by UNOVA on or prior to the Distribution Date and renamed the UNOVA
Inc. Pension Plan.
UNOVA OPTION PLAN: the UNOVA 1997 Stock Incentive Plan.
UNOVA PARTICIPANT: any individual, with respect to a particular
Plan maintained by the UNOVA Group or the Western Atlas Group, who (i) is a
UNOVA Employee and who is eligible to participate in such Plan, (ii) at any
time after the Distribution Date is or becomes an officer or employee of any
member of the UNOVA Group and is eligible to participate in such Plan or
(iii) is a beneficiary or dependent of any individual described in clause (i)
or (ii).
UNOVA SUBSIDIARIES: any direct or indirect Subsidiary of UNOVA at
or after the Distribution.
WELFARE PLAN: any Plan, other than a Qualified Plan, which provides
medical, health, disability, accident, life insurance, death, dental or other
welfare benefits, including any post-employment benefits or retiree medical,
life insurance or other such benefits.
WESTERN ATLAS BONUS PLAN: the Western Atlas Inc. 1995 Incentive
Compensation Plan and the Western Atlas Inc. Individual Performance Award
Plan, and any other cash incentive plan in which both UNOVA Employees and
Western Atlas Employees participated.
WESTERN ATLAS EMPLOYEE: any individual who immediately after the
Distribution Date is an officer or employee of a member of the Western Atlas
Group.
WESTERN ATLAS FORMER EMPLOYEE: any terminated employee of Western
Atlas other than a UNOVA Former Employee.
WESTERN ATLAS FSSP: the Western Atlas Financial Security and
Savings Program.
WESTERN ATLAS GROUP: Western Atlas and the Subsidiaries and
Affiliates of Western Atlas, other than UNOVA and the UNOVA Subsidiaries and
Affiliates.
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WESTERN ATLAS INDEMNITEE: each member of the Western Atlas Group
and each of their respective directors, officers, employees and agents (but
only in their capacities as such) and each of the heirs, executors,
successors and assigns of any of the foregoing.
WESTERN ATLAS MISCELLANEOUS PLANS: any Benefit Plan, other than any
Qualified Plan, Nonqualified Plan, Welfare Plan, Western Atlas Bonus Plan or
Western Atlas Stock Option Plan.
WESTERN ATLAS NONQUALIFIED PLANS: the Supplemental Retirement
Agreement between Western Atlas Inc. and Xxxxx X. Xxxxx (dated March 17,
1994), the Western Atlas Inc. Restoration Plan, the Western Atlas Inc.
Supplemental Executive Retirement Plan and the Western Atlas Inc. Deferred
Compensation Plan for Directors.
WESTERN ATLAS OPTION: an option to purchase shares of Western Atlas
Common Stock granted pursuant to a Western Atlas Stock Option Plan or assumed
by Western Atlas under Plans of Norand Corporation.
WESTERN ATLAS PARTICIPANT: any individual who is a participant in
any Benefit Plan and is not a UNOVA Participant or UNOVA Former Employee, and
any beneficiary or dependent of such individual.
WESTERN ATLAS STOCK OPTION PLANS: the Western Atlas Inc. Director
Stock Option Plan and the Western Atlas Inc. 1993 Stock Incentive Plan.
Section 2. OFFERS OF EMPLOYMENT; ASSUMPTION OF EMPLOYMENT, SEVERANCE AND
CONSULTING AGREEMENTS.
(a) On or prior to the Distribution Date, the UNOVA Group shall
offer to employ, to the extent required in this Section 2(a), each employee
employed by the Western Atlas Group who is principally employed by Western
Atlas in connection with the Western Atlas industrial automation systems
businesses which will be conducted by the UNOVA Group following the
Distribution and each Western Atlas corporate headquarters employee, except
as may otherwise be agreed upon by Western Atlas and UNOVA with respect to
any particular Western Atlas corporate headquarters employees. The employees
to be offered employment by the UNOVA Group shall include all active and
inactive employees of such businesses, including all employees laid-off,
disabled or on leave of absence, unless their employment with the Western
Atlas Group has been
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terminated. The UNOVA Group is not obligated to employ any such employees of
the Western Atlas Group who decline employment with the UNOVA Group, and
Western Atlas shall not be obligated to continue the employment of such
employees.
(b) Western Atlas and UNOVA agree that with respect to individuals
who, in connection with the Distribution, cease to be employees of the
Western Atlas Group and become employees of the UNOVA Group, such cessation
shall not be deemed a severance of employment from either Group for purposes
of any Plan or agreement that provides for the payment of severance, salary
continuation or similar benefits or stock repurchase rights and, in
connection with the Distribution, if and to the extent appropriate, Western
Atlas and UNOVA shall use their best efforts (without payment of monetary
compensation) to obtain waivers from individuals against any such assertion.
(c) The UNOVA Group shall assume and be solely responsible for, and
shall indemnify the Western Atlas Group against, all liabilities and
obligations whatsoever in connection with claims made by or on behalf of
UNOVA Employees or UNOVA Former Employees 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, on or after the
Distribution Date.
Section 3. CASH BONUS PLANS.
(a) Western Atlas shall be responsible for the payment of all
Liabilities for benefits due and payable but unpaid as of and through the
Distribution Date under each Western Atlas Bonus Plan with respect to any
Prior Plan Year (other than the Current Plan Year), other than with respect
to benefits due and payable to UNOVA Participants or UNOVA Former Employees.
(b) Except as provided in paragraph (c) below, under each Western
Atlas Bonus Plan, the UNOVA Group shall be responsible for the payment of all
Liabilities for benefits to UNOVA Participants and UNOVA Former Employees due
and payable after the Distribution Date or due and payable but unpaid as of
and through the Distribution Date, including the portions of awards made
prior to the Distribution Date which are not payable prior to the
Distribution Date.
(c) Prior to the Distribution Date, Western Atlas shall determine
1997 annual bonus awards under the Western Atlas
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Bonus Plans for UNOVA Employees who are Western Atlas corporate headquarters
employees. Such awards shall be pro rated based upon the portion of the 1997
bonus year which had expired as of the Distribution Date. Western Atlas
shall pay a portion of the cash bonus prior to the Distribution Date (the
bonus amount that is up to 50% of the employee's base salary earned for 1997
prior to the Distribution Date), and UNOVA shall pay the balance of the bonus
following the Distribution Date in installments pursuant to the terms of the
Western Atlas Bonus Plans.
(d) Following the end of 1997, UNOVA shall determine 1997 annual
bonus awards for UNOVA Employees who were not Western Atlas corporate
headquarters employees, and shall make such payments to such UNOVA Employees.
(e) For purposes of the Western Atlas Bonus Plans, individuals who,
in connection with the Distribution, cease to be employees of Western Atlas
and become UNOVA Employees shall not be deemed to have terminated employment
under such Plans as a result of becoming UNOVA Employees for purposes of
receiving installments of prior year "Final Awards" under the Western Atlas
Bonus Plans. To the extent applicable, for purposes of receiving payments of
installments of prior year "Final Awards" under the Western Atlas Bonus
Plans, UNOVA Employees must at the time such payment is due (i) be in the
active employ of UNOVA or a Subsidiary or Affiliate of UNOVA, (ii) have
terminated employment with UNOVA by reason of death, or "Disability" or
"Retirement" (as defined in the UNOVA Option Plan) or (iii) be on an
"Approved Leave of Absence" (as determined by the UNOVA Compensation
Committee or, prior to the Distribution, by the Western Atlas Compensation
Committee but including, without limitation, a leave of absence for purposes
of service in the Armed Services of the United States).
Section 4. STOCK OPTIONS.
Western Atlas shall take all action necessary to amend (if
necessary), or otherwise provide for adjustments of outstanding awards under,
the Western Atlas Stock Option Plan, so that each outstanding Western Atlas
Option will be adjusted by (i) multiplying the number of shares of Western
Atlas Common Stock subject to the option by the Adjustment Factor and (ii)
dividing the exercise price per share of the option by the Adjustment Factor.
For these purposes, the "Adjustment Factor" is defined as the quotient
obtained by dividing (x) the Average Market Price of
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the Western Atlas Common Stock plus the Average Market Price of the UNOVA
Common Stock by (y) the Average Market Price of the Western Atlas Common
Stock. The "Average Market Price" of Western Atlas Common Stock or UNOVA
Common Stock, as the case may be, is defined to be the average of the high
and low daily prices of such security as reported on the NYSE Composite Tape
(or, if not listed on such exchange, on any other national securities
exchange on which the Western Atlas Common Stock or the UNOVA Common Stock is
listed or on NASDAQ) on the sixth through tenth trading days, inclusive,
following the Distribution Date. Each Western Atlas Option held by a UNOVA
Employee who, in (a) connection with the Distribution, ceases to be a Western
Atlas Employee and becomes a UNOVA Employee, shall be amended to provide that
(i) service with UNOVA shall be deemed continuous service with Western Atlas
for purposes of vesting, exercisability and the duration of such Western
Atlas Option and (ii) to avoid the potential loss of the opportunity to
exercise such Western Atlas Option following a "Change in Control" of UNOVA
(as defined in the UNOVA Option Plan), such Western Atlas Option held by
UNOVA Employees shall immediately vest and become exercisable upon a Change
in Control of UNOVA. Each Western Atlas Option held by a UNOVA-only Director
shall be vested and exercisable in full on the Distribution Date, and each
such Western Atlas Option shall remain exercisable until the later of (A) ten
years following the date of grant of such option by Western Atlas and (B)
three years following the first to occur of the date of retirement or
resignation of the UNOVA-only Director as a director of UNOVA (or the failure
of such UNOVA-only Director to be re-elected as a director of UNOVA), the
UNOVA-only Director's total or permanent disability or his death.
Section 5. QUALIFIED PLANS.
(a) Effective on or prior to the Distribution Date, UNOVA shall
assume sponsorship of the Existing Retirement Plans. The Western Atlas Inc.
Retirement Plan shall be renamed the UNOVA, Inc. Pension Plan. The other two
Existing Retirement Plans will remain as frozen plans with no further benefit
accruals thereunder. The UNOVA, Inc. Pension Plan shall continue to provide
benefits for all individuals who, immediately prior to the Distribution Date,
were participants in the Western Atlas Inc. Retirement Plan. UNOVA agrees
that each such participant shall be, to the extent applicable, entitled, for
all purposes under the UNOVA, Inc. Pension Plan (including, without
limitation, eligibility, vesting and benefit accrual), to be credited
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with the term of service credited to such participant as of the Distribution
Date under the terms of the Western Atlas Inc. Retirement Plan as if such
service had been rendered to UNOVA and had originally been credited to such
participant under the UNOVA, Inc. Pension Plan and shall have the same
accrued benefit under the UNOVA, Inc. Pension Plan immediately following the
Distribution Date as was accrued under the Western Atlas Inc. Retirement Plan
as of the Distribution Date. Western Atlas shall, as soon as practicable
after the Distribution Date, provide UNOVA with such additional information
(in the possession of the Western Atlas Group and not already in the
possession of the UNOVA Group) as may be reasonably requested by UNOVA and
necessary in order for the UNOVA Group to establish and administer
effectively the Existing Retirement Plans assumed by UNOVA.
(b) Effective on or prior to the Distribution Date, UNOVA shall
assume sponsorship of the Western Atlas FSSP and the Western Atlas FSSP shall
be renamed the UNOVA, Inc. Financial Security and Savings Program (the "UNOVA
FSSP"). UNOVA agrees that all service credited under the Western Atlas FSSP
as of the Distribution Date with respect to Western Atlas FSSP participants
shall be credited under the UNOVA FSSP for all Plan purposes, including
eligibility and vesting.
(c) From and after the Distribution Date, the Western Atlas Group
shall cease to have any Liability whatsoever with respect to participants
under the Western Atlas Inc. Retirement Plan or the Western Atlas FSSP, and
UNOVA and the UNOVA, Inc. Pension Plan and the UNOVA FSSP, as the case may
be, shall assume or retain sole responsibility for, and shall indemnify the
Western Atlas Indemnitees with respect to, all Liabilities of either Group
with respect to participants under the UNOVA, Inc. Pension Plan and the UNOVA
FSSP.
Section 6. NONQUALIFIED RETIREMENT PLANS.
Effective as of the Distribution Date, UNOVA shall assume, and shall
indemnify the Western Atlas Indemnitees from and against, all Liabilities
with respect to (i) the Supplemental Retirement Agreement between Western
Atlas Inc. and Xxxxx X. Xxxxx (dated March 17, 1994) and all participants
under the Western Atlas Inc. Restoration Plan, (ii) UNOVA Participants and
UNOVA Former Employees under the Western Atlas Inc. Supplemental Executive
Retirement Plan and (iii) UNOVA-only Directors under the Western Atlas Inc.
Deferred Compensation Plan for Directors.
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UNOVA represents that it has established plans on substantially the same
terms as the Western Atlas Nonqualified Plans pursuant to which each
participant for whom UNOVA has assumed Liabilities will be credited with the
term of service credited to such participant as of the Distribution Date
under the Western Atlas Nonqualified Plans, as if such service had been
rendered to UNOVA.
Section 7. DEFERRED COMPENSATION.
Effective as of the Distribution Date, UNOVA shall assume and
indemnify the Western Atlas Indemnitees from and against all Liabilities with
respect to UNOVA Participants and UNOVA Former Employees in connection with
any deferred compensation plans.
Section 8. WELFARE PLANS.
(a) Effective on or prior to the Distribution Date, UNOVA shall
assume the Western Atlas Inc. Employees Welfare Benefit Trust, and such trust
shall be renamed the UNOVA, Inc. Employees Welfare Benefit Trust (the "UNOVA
Trust"). Effective as of the Distribution Date, UNOVA shall be responsible
for and shall indemnify the Western Atlas Indemnitees from and against all
Liabilities arising under any Welfare Plan with respect to claims by UNOVA
Participants or UNOVA Former Employees for benefits incurred prior to or
after the Distribution Date pursuant to the terms of the applicable Plan.
(b) Effective on or prior to the Distribution Date, UNOVA shall
assume sponsorship of the Welfare Plans maintained by Western Atlas in which
UNOVA Employees participate. In connection with the foregoing, Western Atlas
agrees to provide UNOVA or its designated insurance representative with such
information (in the possession of the Western Atlas Group and not already in
the possession of the UNOVA Group) as may be reasonably requested by UNOVA
and necessary for the UNOVA Group to assume or establish any such Welfare
Plan, and UNOVA agrees to provide Western Atlas or its designated insurance
representative with similar information. Split-dollar insurance policies
noted on Exhibit A as UNOVA policies shall be assumed by UNOVA, and
split-dollar insurance policies noted on Exhibit A as Western Atlas policies
shall remain with Western Atlas.
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Section 9. WESTERN ATLAS MISCELLANEOUS PLANS;
POST-DISTRIBUTION LIABILITIES.
(a) The Western Atlas Group shall be solely responsible for the
payment of all Liabilities whatsoever with respect to any Western Atlas
Participant or Western Atlas Former Employee unpaid as of and through the
Distribution Date under any Western Atlas Miscellaneous Plan and the UNOVA
Group shall assume and be solely responsible for the payment of all
Liabilities with respect to any UNOVA Participant or UNOVA Former Employee
unpaid as of and through the Distribution Date under any Western Atlas
Miscellaneous Plan.
(b) Except as otherwise expressly provided herein, the Western
Atlas Group shall be solely responsible for the payment of all Liabilities
whatsoever arising with respect to any Western Atlas Employee or Western
Atlas Former Employee and attributable to any period subsequent to the
Distribution Date and the UNOVA Group shall be solely responsible for the
payment of all Liabilities whatsoever arising with respect to any UNOVA
Employee or UNOVA Former Employee and attributable to any period subsequent
to the Distribution Date.
Section 10. PRESERVATION OF RIGHTS TO AMEND OR TERMINATE PLANS.
No provisions of this Agreement, including the agreement or
representation of Western Atlas or UNOVA that it, or any member of the
Western Atlas Group or the UNOVA Group, will make or has made 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 Western Atlas or UNOVA or any
member of the Western Atlas Group or the UNOVA Group to amend such Plan or
terminate its participation therein which Western Atlas or UNOVA or any
member of the Western Atlas Group or the UNOVA 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 employee or former employee or
beneficiary of such employee or former employee under a Plan which such
employee or former employee or beneficiary would not otherwise have under the
terms of the Plan itself.
Section 11. REIMBURSEMENT; INDEMNIFICATION.
Each of the parties hereto acknowledges that the Western Atlas
Group, on the
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one hand, and the UNOVA 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.
Accordingly, Western Atlas and UNOVA agree to reimburse each other, 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.
Section 12. TRANSFER OF RESERVES.
To the extent that any Liability assumed by any member of the UNOVA
Group hereunder is secured by a reserve on the books of Western Atlas, such
reserve shall be transferred from Western Atlas to the books of UNOVA as soon
as practicable on or following the Distribution Date.
Section 13. FURTHER TRANSFERS.
Western Atlas and UNOVA recognize that there may be UNOVA Employees
who will, after the Distribution Date, become employed by Western Atlas and
there may be Western Atlas Employees who become employed, after the
Distribution Date, by UNOVA and there may be UNOVA Former Employees or
Western Atlas Former Employees who are hired by Western Atlas or UNOVA,
respectively. If Western Atlas and UNOVA so agree with respect to any such
individuals, the assets and liabilities with respect to such employees which
are associated with the plans and programs described in this Agreement may be
transferred and assumed in a manner consistent with this Agreement and such
employees will be treated as Western Atlas Employees or UNOVA Employees, as
the case may be. Any such transfers or assumptions and treatment of
employees will be considered to be governed by the terms of this Agreement
and shall not require the agreement of Western Atlas and UNOVA if they occur
within 3 months following the Distribution Date.
Section 14. OFFICERS AND EMPLOYEES.
Except as otherwise agreed by the parties hereto, effective as of
the Distribution Date, all officers or employees of the UNOVA Group who are
acting as directors or officers of the Western Atlas Group and are UNOVA
Employees shall resign from such positions with the Western Atlas Group.
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Section 15. OTHER LIABILITIES; GUARANTEE OF OBLIGATIONS.
(a) As of the Distribution Date, UNOVA shall assume and be solely
responsible for all Liabilities whatsoever of the Western Atlas Group with
respect to claims made by the UNOVA Employees or UNOVA Former Employees
relating to any Liability not otherwise expressly provided for in this
Agreement, including earned salary, wages, bonus, incentive or severance
payments or other compensation and accrued sick, holiday, vacation, health,
dental or retirement benefits, regardless of whether such Liability was
incurred before or after the Distribution Date. In the event of any claim
pursuant to which UNOVA may be required to indemnify Western Atlas with
respect to any such Liability, UNOVA shall have all of the rights and
obligations of an "Indemnifying Party" that are provided under Section 4.4 of
the Distribution Agreement and Western Atlas shall have all of the rights and
obligations of an Indemnified Party that are provided under Section 4.4 of
the Distribution Agreement.
(b) As of the Distribution Date, Western Atlas shall assume and be
solely responsible for all Liabilities whatsoever of the UNOVA Group with
respect to claims made by the Western Atlas Employees or Western Atlas Former
Employees relating to any Liability not otherwise expressly provided for in
this Agreement, including earned salary, wages, bonus, incentive or severance
payments or other compensation and accrued sick, holiday, vacation, health,
dental or retirement benefits, regardless of whether such Liability was
incurred before or after the Distribution Date. In the event of any claim
pursuant to which Western Atlas may be required to indemnify UNOVA with
respect to any such Liability, Western Atlas shall have all of the rights and
obligations of an "Indemnifying Party" that are provided under Section 4.4 of
the Distribution Agreement and UNOVA shall have all of the rights and
obligations of an Indemnified Party that are provided under Section 4.4 of
the Distribution Agreement.
(c) Effective immediately after the Distribution, and in connection
with the assumption by UNOVA of obligations with respect to employees of the
UNOVA Subsidiaries, UNOVA shall cause each corporation which will become a
UNOVA Subsidiary, to perform, and guarantees the performance of, each and
every obligation of such UNOVA Subsidiaries with respect to the provisions of
this Agreement.
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Section 16. COMPLIANCE.
Notwithstanding anything to the contrary in this Agreement, to the
extent any actions of the parties contemplated in this Agreement are
determined prior to the Distribution Date to violate law or result in
unintended tax liability for Western Atlas Participants or Western Atlas
Former Employees or UNOVA Participants or UNOVA Former Employees, such action
may be modified to avoid such violation of law or unintended tax liability.
SECTION 17. TERMINATION OF PARTICIPATION.
Except as otherwise expressly provided herein, the participation of
UNOVA Participants in any Benefit Plan sponsored or maintained by Western
Atlas shall cease as of the Distribution Date.
Section 18. COMPLETE AGREEMENT.
This Agreement, together with the Distribution Agreement, and the
Annexes and Schedules thereto, shall constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and shall
supersede all previous negotiations, commitments and writings with respect to
such subject matter.
Section 19. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware (other than the laws regarding choice of
laws and conflicts of laws) as to all matters, including matters of validity,
construction, effect, performance and remedies.
Section 20. 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, telecopy or other standard form of
telecommunications, or by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
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If to Western Atlas:
Western Atlas Inc.
00000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
If to UNOVA:
UNOVA, Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
or to such other address as any party hereto may have furnished to the other
parties by a notice in writing in accordance with this Section 20.
Section 21. AMENDMENT AND MODIFICATION.
This Agreement may be amended, modified or supplemented only by a
written agreement signed by Western Atlas and UNOVA, Inc.
Section 22. 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 the parties hereto and their successors and
permitted assigns, but neither this Agreement nor any of the rights,
interests and obligations hereunder shall be assigned by any party hereto
without the prior written consent of each of the other parties (which consent
shall not be unreasonably withheld). This Agreement is solely for the
benefit of the parties hereto and their Subsidiaries and is not intended to
confer upon any other Persons any rights or remedies hereunder.
Section 23. 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.
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Section 24. INTERPRETATION.
The 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.
Section 25. TERMINATION.
Notwithstanding any provision hereof, this Agreement may be
terminated at any time prior to the Distribution Date. Any termination of
the Distribution Agreement shall result in the termination of this Agreement.
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.
WESTERN ATLAS INC.
By: /s/ Xxxxxxx X. Xxxxx
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UNOVA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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