EXHIBIT 2.2
Westinghouse Electric Corporation
Westinghouse Building
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xx. 00000
February 28, 1996
Northrop Grumman Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxx. 00000
Ladies and Gentlemen:
Reference is made to the Asset Purchase Agreement dated as of January 3, 1996
(the "Asset Purchase Agreement") between WESTINGHOUSE ELECTRIC CORPORATION, a
Pennsylvania corporation ("Seller"), and NORTHROP GRUMMAN CORPORATION, a
Delaware Corporation ("Purchaser"). Seller and Purchaser (collectively, the
"Parties") agree that, due to circumstances not foreseen at the time that the
Asset Purchase Agreement was executed, certain provisions of the Asset Purchase
Agreement require clarification or modification to reflect these unforeseen
circumstances. Capitalized terms used herein without definition shall have the
respective meanings set forth in the Asset Purchase Agreement.
Each of the Undersigned hereby agree that the Asset Purchase Agreement shall be
construed, interpreted and deemed modified as follows:
A. DISABLED EMPLOYEES.
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The Parties desire to clarify their respective responsibilities with respect to
employees of the Division who are on disability leave. Accordingly,
1. The second sentence of Section 4.5(a)(i) of the Asset Purchase Agreement
shall be deemed modified, in its entirety, to read as follows:
"Purchaser shall also honor any legal obligation of Sellers or
Purchaser to re-employ any Division Employee and Center Employee who
is not actively at work on the Closing Date due to leave of absence
(not to include disability leave), military leave or layoff with
recall rights (collectively, "Inactive Employees")."
2. Section 4.5(a)(i) of the Asset Purchase Agreement shall be deemed modified
by adding the following provision at the end thereof, to read as follows:
"Any Division Employee or Center Employee who is on disability leave
on the Closing Date shall first be offered the opportunity to become a
Transferred Employee after the Closing Date, on the day that such
Employee's disability leave terminates if such termination of
disability leave occurs during the period of time the Purchaser must
honor any legal obligation of Sellers or Purchaser to re-employ
Division Employees and Center Employees who are not actively at work
on the Closing Date. If such Employee's disability leave does not
terminate within such time period, such Employee will remain an
Employee of Sellers and not become a Transferred Employee."
3. Section 4.5(d)(iii)(B) of the Asset Purchase Agreement shall be deemed
modified, in its entirety, to read as follows:
"(B) Purchaser shall be responsible for all disability income
benefits payable in respect of periods on or after the Closing
Date for Transferred Employees who become disabled on or after
the Closing Date. Seller shall be responsible for all
disability income benefits until a Division or Center Employee
becomes a Transferred Employee pursuant to Section 4.5(a)(i)."
B. 401(K) PLAN.
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The Parties have determined (i) to have assets transferred from the Westinghouse
Savings Program to Purchaser's 401(k) Plan in kind, rather than as contemplated
by the Asset Purchase Agreement and (ii) to have Transferred Employees' account
balances as of the Closing Date continue to be held under the Westinghouse
Savings Program for a period of time after the Closing Date. Accordingly,
1. The second paragraph of Section 4.5(d)(ii) of the Asset Purchase Agreement
shall be deemed modified, in its entirety, to read as follows:
"Upon receipt by Purchaser of a favorable determination letter to the
effect that Purchaser's 401(k) Plan is qualified under Section 401(a) of
the Code (or an opinion of Purchaser's counsel, reasonably satisfactory to
Seller, to such effect), Sellers shall cause to be transferred from the
Westinghouse Savings Program to Purchaser's 401(k) Plan assets having a
fair market value or (in the case of the Fixed Income Fund, the book value)
equal to the aggregate value of the account balances of the Transferred
Employees in the Westinghouse Savings Program as of the date of transfer,
and shall also transfer all qualified domestic relations orders, within the
meaning of Section 414(p) of the Code. With respect to Division Employees
and Center Employees who are on disability leave as of the date of transfer
described in the preceding sentence, additional transfers from the
Westinghouse Savings Program to the Purchaser's 401(k) Plan shall be made
in accordance with the preceding sentence as soon as practicable following
the respective dates on which such employees become Transferred Employees.
Purchaser's 401(k) Plan shall provide for the receipt of such transfers.
The transfers described in the preceding sentences of this paragraph shall
be in (i) shares and partial shares of common stock of Seller to the extent
of shares in the Westinghouse Common Stock Fund of the Westinghouse Savings
Program applicable to Transferred Employees, (ii) a portion of the
investments in the Fixed Income Fund of the Westinghouse Savings Program
which replicate as closely as possible the yield and market value of that
Fund and in shares and partial shares of each other mutual fund provided
under the Westinghouse Savings Program, in each case to the extent of those
funds
applicable to the Transferred Employees' accounts and (iii) the balance in
notes evidencing loans to Transferred Employees from their account
balances. Purchaser's 401(k) Plan shall maintain a Westinghouse common
stock fund, in accordance with applicable law, for Transferred Employees
who so elect, for a period of not less than five years following the
Closing Date."
2. Section 4.5(d)(ii) shall be deemed further modified to add the following at
the end thereof:
"Individuals who become Transferred Employees on the Closing, and
individuals who become Transferred Employees after Closing and before
December 31, 1996 (for example, because of a return from a disability leave
of absence and subsequent employment by the Purchaser), shall be entitled
to full and continuing access to all of the rights, benefits, features and
services that they had as employees of Seller prior to Closing, with
respect to participation in the Westinghouse Savings Program, but only with
respect to their account balances as of February 29, 1996 (and any earnings
or losses thereon after such date). Such full access shall continue, and
the transfer of account balances provided for in the preceding paragraph
shall occur, no later than December 31, 1996. The access described in this
paragraph shall include, without limitation, the following services and
features, each to be permitted or administered in accordance with the
existing terms of the Westinghouse Savings Program (on the same basis
provided from time to time to other participants in the Westinghouse
Savings Program):
1. In-service withdrawals;
2. Termination distributions, rollovers and trust-to-trust transfers;
3. Loan requests and processing;
4. Loan repayments via payroll deduction, or via manual check for
participants on leave;
5. Dividend reinvestment in Westinghouse Stock Fund;
6. Daily fund transfers among all investment funds;
7. Participant statements as provided in the normal course;
8. Preparation of applicable Form 1099s, and tax withholdings
and deposits;
9. Qualified domestic relations order (QDRO) administration to be
provided at cost;
10. Tax lien administration;
11. Voting and tendering of Westinghouse stock in the Westinghouse
Stock Fund;
12. Investment communications (as provided accompanying the
participant statements);
13. All transactions or services, including any corrective action
taken in the normal course, otherwise provided to active
participants in the Westinghouse Savings Program either through
the Benefits Access Center or the Bankers Trust Service Center
(including the Bankers Trust voice response system), but only
with respect to the account balances as of February 29, 1996 (and
any earnings or losses thereon after such date), of those
participants who become Transferred Employees at or after
Closing;
14. Forfeitures shall accrue to the benefit of Purchaser to the
extent permitted by applicable law."
C. REDUCTIONS-IN-FORCE.
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After the execution of the Asset Purchase Agreement, the Parties concluded
that several unanticipated employee transactions, specifically reductions in
force, should be initiated prior to the Closing Date presently set for March 1,
1996. The Parties also recognized that, although these transactions are being
initiated prior to the Closing Date, the transactions would not be completed
until after the Closing Date due to certain legal restrictions. Because the
reductions in force would straddle the Closing Date and were not contemplated
nor set forth in the Asset Purchase Agreement, the Parties had to agree to the
terms and conditions of the reductions in force before such actions could
commence. The Parties have, in fact, agreed to the terms and conditions of the
reductions in force and wish to reduce such terms and conditions to writing and
deem the Asset Purchase Agreement modified to reflect such agreement. Pursuant
to such agreement between the Parties, two reductions in force have been
announced and initiated. One reduction in force involves the Baltimore location
within the Division; it was announced, and the employees affected were notified,
on January 29, 1996 and involves approximately 200 employees. The other
reduction in force involves the Naval Systems group within the Division; it was
announced, and the employees affected were notified, on February 1, 1996 and
involves approximately 60 employees. Accordingly,
1. Section 4.5 of the Asset Purchase Agreement is hereby deemed modified
by adding a new Subsection 4.5(1) at the end thereof, to read as follows:
"(1) Reductions in Force. Notwithstanding the foregoing provisions of
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this Section 4.5, Seller and Purchaser agree that the
following terms and conditions will govern any reductions in
force which are initiated after the signature date of the
Agreement (January 3, 1996) and before the Closing Date;
(i) The employee benefits which Purchaser will provide to
the affected Division Employees ("RIF Employees") will
be identical to the employee benefits which would have
been provided by Seller had the
termination of employment occurred on the date of the
announcement/notification of the reduction in force;
(ii) Purchaser shall be solely responsible for the cost of
all benefits provided to the RIF Employees;
(iii) The RIF Employees shall be treated as Transferred
Employees for all purposes pursuant to this Section 4.5
even if the Closing Date occurs after March 1, 1996 and
the actual termination of employment occurs before the
Closing Date; and
(iv) To the extent consistent with applicable law, the
414(1) Amount described in Section 4.5(d)(i) above
shall be computed on the basis that the Transferred
Benefits obligation includes all liabilities associated
with the RIF Employees regardless of when they
terminate employment.
* * *
This Letter Agreement is not intended to confer upon any person other than
the Parties and their successors and permitted assigns any rights or remedies
hereunder.
From time to time upon request and without further consideration, each of
the Parties hereto shall, and shall cause their subsidiaries and affiliates to,
execute, deliver and acknowledge any all such further documents and instruments
and do such further acts as any other of the Parties hereto may reasonably
require to evidence or effectuate more effectively the terms of and intent of
the Parties contemplated by this Letter Agreement.
This Letter Agreement, which may be executed in two or more counterparts,
each of which shall be considered one and the same agreement, shall be governed
by, and construed in accordance with, the laws of the State
of New York applicable to contracts made and to be performed entirely in the
State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law.
Please acknowledge your agreement with the foregoing by signing in the
space provided below.
Very truly yours,
WESTINGHOUSE ELECTRIC CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
Acknowledged and agreed to as of the date first above written:
NORTHROP GRUMMAN CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Corporate Vice President
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