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Exhibit 2.2
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EMPLOYEE MATTERS AGREEMENT
by and among
ROCKWELL INTERNATIONAL CORPORATION,
ROCKWELL COLLINS, INC.
and
ROCKWELL SCIENTIFIC COMPANY LLC
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June 29, 2001
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS...................................................................1
Section 1.01 General.......................................................................1
ARTICLE II EMPLOYEES....................................................................10
Section 2.01 Employees....................................................................10
Section 2.02 Employee Benefits Generally..................................................11
Section 2.03 Collective Bargaining Agreements.............................................12
ARTICLE III PENSION PLANS................................................................12
Section 3.01 U.S. Pension Plan............................................................12
Section 3.02 Stand-Alone Pension Plan.....................................................25
Section 3.03 U.S. Non-Qualified Pension Plan..............................................26
Section 3.04 Rockwell Collins (U.K.) Limited Pension Scheme...............................28
Section 3.05 Rockwell U.K. Pension Scheme.................................................31
Section 3.06 Canadian Pension Plan........................................................34
ARTICLE IV SAVINGS PLANS................................................................35
Section 4.01 U.S. Salaried Savings Plan...................................................35
Section 4.02 U.S. Hourly Represented Savings Plan.........................................36
Section 4.03 U.S. Hourly Non-Represented Savings Plan.....................................37
Section 4.04 Non-Qualified Savings Plans..................................................38
Section 4.05 Canadian Savings Plans.......................................................39
ARTICLE V STOCK PLANS..................................................................42
Section 5.01 Stock Plans..................................................................42
ARTICLE VI OTHER EMPLOYEE PLANS AND MATTERS.............................................43
Section 6.01 Welfare Plans................................................................43
Section 6.02 Incentive Compensation Plans.................................................47
Section 6.03 Deferred Compensation Plan...................................................48
Section 6.04 Severance Pay................................................................49
Section 6.05 Employment, Consulting and Other Employee Related Agreements.................51
Section 6.06 Other Liabilities............................................................51
Section 6.07 Funding of Master Rabbi Trusts...............................................52
ARTICLE VII MISCELLANEOUS................................................................53
Section 7.01 Indemnification..............................................................53
Section 7.02 Cooperation..................................................................53
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Section 7.03 Sharing of Information.......................................................53
Section 7.04 Entire Agreement; Construction...............................................53
Section 7.05 Survival of Agreements.......................................................54
Section 7.06 Governing Law................................................................54
Section 7.07 Notices......................................................................54
Section 7.08 Amendments...................................................................54
Section 7.09 Assignment...................................................................54
Section 7.10 Captions; Currency...........................................................55
Section 7.11 Severability.................................................................55
Section 7.12 Parties in Interest..........................................................55
Section 7.13 Schedules....................................................................56
Section 7.14 Termination..................................................................56
Section 7.15 Waivers; Remedies............................................................56
Section 7.16 Counterparts.................................................................56
Section 7.17 Performance..................................................................56
Section 7.18 Interpretation...............................................................56
SCHEDULES
Schedule 1.01 - Certain Definitions
Schedule 1.02 - Certain Rockwell Split Optionees
Schedule 2.01(a) - Certain Rockwell Automation Employees
Schedule 2.01(b) - Certain Rockwell Collins Employees
Schedule 2.01(c) - Certain Rockwell Science Center Employees
Schedule 2.01(d) - Certain Former Rockwell Corporate Employees
Schedule 3.04(b)(i) - U.K. Actuary's Schedule
Schedule 5.01(a) - Rockwell Option Adjustment - Rockwell Automation Optionees
Schedule 5.01(b) - Rockwell Option Adjustment - Rockwell Collins Optionees
Schedule 5.01(c)(i) - Rockwell Split Options - Rockwell Options
Schedule 5.01(c)(ii) - Rockwell Split Options - Rockwell Collins Options
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EMPLOYEE MATTERS AGREEMENT
EMPLOYEE MATTERS AGREEMENT (this "Agreement") dated as of June 29, 2001
by and among (i) ROCKWELL INTERNATIONAL CORPORATION, a Delaware corporation
("Rockwell"), (ii) ROCKWELL COLLINS, INC., a Delaware corporation and, as of the
date hereof, a wholly-owned subsidiary of Rockwell ("Rockwell Collins"), and
(iii) ROCKWELL SCIENTIFIC COMPANY LLC, a Delaware limited liability company and,
as of the date hereof, a wholly-owned subsidiary of Rockwell ("Rockwell Science
Center").
WHEREAS, the Rockwell Board has determined that it is appropriate and
desirable to distribute all outstanding shares of Rockwell Collins Common Stock
on a pro rata basis to the holders of Rockwell Common Stock (the
"Distribution"); and
WHEREAS, Rockwell, Rockwell Collins and Rockwell Science Center are
entering into a Distribution Agreement dated as of the date hereof (the
"Distribution Agreement") which, among other things, sets forth the principal
corporate transactions required to effect the Distribution and certain other
agreements that will govern certain matters relating to the Distribution; and
WHEREAS, in connection with the Distribution, Rockwell, Rockwell
Collins and Rockwell Science Center have determined that it is appropriate and
desirable to provide for the allocation of certain assets and liabilities and
certain other matters relating to employees, employee benefit plans and
compensation arrangements;
NOW, THEREFORE, in consideration of the premises and of the respective
agreements and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01 General. Capitalized terms used in this Agreement but not
defined herein (other than the names of employee benefit plans) will have the
meanings ascribed to such terms in the Distribution Agreement. As used in this
Agreement (or in any Schedule to this Agreement), the terms defined in Schedule
1.01 will have the meanings set forth in such Schedule 1.01, the terms defined
in Section 3.01(e) will have the meanings set forth in such Section 3.01(e) and
the following terms will have the following meanings (in each case, such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
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"ACTIVE ROCKWELL AUTOMATION EMPLOYEE" means any individual
who, immediately after the Time of Distribution, will be employed by a
member of the Rockwell Automation Group pursuant to Section 2.01(a)
(other than any such individual who was an employee of the corporate
office of Rockwell prior to the Distribution and who has not accepted
permanent employment with a member of the Rockwell Automation Group as
of the Time of Distribution).
"ACTIVE ROCKWELL COLLINS CANADIAN EMPLOYEE" means any Active
Rockwell Collins Employee who was employed by a Canadian subsidiary of
Rockwell or any of its Subsidiaries (including members of the Rockwell
Collins Group and members of the Rockwell Science Center Group)
immediately prior to the Time of Distribution.
"ACTIVE ROCKWELL COLLINS EMPLOYEE" means any individual who,
immediately after the Time of Distribution, will be (a) employed by a
member of the Rockwell Collins Group pursuant to Section 2.01(b) or (b)
a Holdover Employee.
"ACTIVE ROCKWELL SCIENCE CENTER EMPLOYEE" means any individual
who, immediately after the Time of Distribution, will be employed by a
member of the Rockwell Science Center Group pursuant to Section
2.01(c).
"AGREEMENT" will have the meaning ascribed thereto in the
preamble.
"CANADIAN HOLDOVER TERM" means the Holdover Term (as defined
in the Transition Agreement) during which an Affiliate of Rockwell will
continue to employ Active Rockwell Collins Canadian Employees pursuant
to Section 12 of the Transition Agreement.
"DISCRETIONARY PRACTICE" will have the meaning ascribed
thereto in Section 3.04(a)(v).
"DISTRIBUTION" will have the meaning ascribed thereto in the
recitals.
"DISTRIBUTION AGREEMENT" will have the meaning ascribed
thereto in the recitals.
"DIVESTED BUSINESS EMPLOYEE" means any Pre-Distribution Group
Employee who is not, immediately after the Time of Distribution, an
Active Rockwell Automation Employee, a Former Rockwell Automation
Employee, an Active Rockwell Collins Employee, a Former Rockwell
Collins Employee, an Active Rockwell Science Center Employee, a Former
Rockwell Science Center Employee or a Former Rockwell Corporate
Employee, and whose most recent active employment with Rockwell or any
other member of the Pre-Distribution Group (during a time that such
member of the Pre-Distribution
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Group was an affiliate of Rockwell or its predecessors) was with an
Unrelated Former Business, whether or not such individual remains
employed by such Unrelated Former Business as of the Time of
Distribution. "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, or any successor legislation.
"FORMER ROCKWELL AUTOMATION EMPLOYEE" means any
Pre-Distribution Group Employee who is not, immediately after the Time
of Distribution, an Active Rockwell Automation Employee, an Active
Rockwell Collins Employee or an Active Rockwell Science Center
Employee, and whose most recent active employment with Rockwell or any
other member of the Pre-Distribution Group (during a time that such
member of the Pre-Distribution Group was an affiliate of Rockwell or
its predecessors) was with the Rockwell Automation Business.
"FORMER ROCKWELL COLLINS EMPLOYEE" means any Pre-Distribution
Group Employee who is not, immediately after the Time of Distribution,
an Active Rockwell Collins Employee, an Active Rockwell Automation
Employee or an Active Rockwell Science Center Employee, and whose most
recent active employment with Rockwell or any other member of the
Pre-Distribution Group (during a time that such member of the
Pre-Distribution Group was an affiliate of Rockwell or its
predecessors) was with the Rockwell Collins Business.
"FORMER ROCKWELL CORPORATE EMPLOYEE" means any
Pre-Distribution Group Employee who is not, immediately after the Time
of Distribution, an Active Rockwell Automation Employee, a Former
Rockwell Automation Employee, an Active Rockwell Collins Employee, a
Former Rockwell Collins Employee, an Active Rockwell Science Center
Employee or a Former Rockwell Science Center Employee, and whose most
recent active employment with Rockwell or any other member of the
Pre-Distribution Group (during a time that such member of the
Pre-Distribution Group was an affiliate of Rockwell or its
predecessors) was with the corporate office of Rockwell or its
predecessors (including Rockwell's and its predecessor's corporate
offices located in Pittsburgh, Pennsylvania, El Segundo, California,
Seal Beach, California, Costa Mesa, California or Milwaukee,
Wisconsin). Any individual who was an employee of the corporate office
of Rockwell prior to the Distribution who is employed by a member of
the Rockwell Automation Group as of or immediately after the Time of
Distribution will nevertheless be considered a Former Rockwell
Corporate Employee if such individual has not accepted permanent
employment with a member of the Rockwell Automation Group as of the
Time of Distribution. Notwithstanding anything to the contrary
contained herein, those individuals
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identified on the attached Schedule 2.01(d) will be considered Former
Rockwell Corporate Employees.
"FORMER ROCKWELL SCIENCE CENTER EMPLOYEE" means any
Pre-Distribution Group Employee who is not, immediately after the Time
of Distribution, an Active Rockwell Science Center Employee, an Active
Rockwell Automation Employee or an Active Rockwell Collins Employee,
and whose most recent active employment with Rockwell or any other
member of the Pre-Distribution Group (during a time that such member of
the Pre-Distribution Group was an affiliate of Rockwell or its
predecessors) was with the Rockwell Science Center Business.
"GUARANTEED MINIMUM PENSION" has the meaning given to it in
section 8(2) of the U.K. Pension Schemes Act 1993.
"HOLDOVER EMPLOYEES" will have the meaning ascribed thereto in
the Transition Agreement.
"INCENTIVE COMPENSATION PLAN" means the Rockwell International
Corporation Incentive Compensation Plan.
"LTIP" will have the meaning ascribed thereto in Section
6.02(a).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PRE-DISTRIBUTION GROUP EMPLOYEE" means any individual who
was, at any time prior to the Time of Distribution, employed by
Rockwell or any other member of the Pre-Distribution Group (during a
time that such member of the Pre-Distribution Group was an affiliate of
Rockwell or its predecessors).
"REC (U.K.)" means Rockwell Electronic Commerce Limited.
"RIL (U.K.)" means Rockwell International Limited.
"RIL/REC (U.K.) EMPLOYEES" means those active employees of
Rockwell International Limited or Rockwell Electronic Commerce Limited
who are active members of the Rockwell Collins (U.K.) Scheme as of the
Time of Distribution.
"ROCKWELL" will have the meaning ascribed thereto in the
preamble.
"ROCKWELL AUTOMATION DEFERRED COMPENSATION PLAN" will have the
meaning ascribed thereto in Section 6.03(a)(i).
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"ROCKWELL AUTOMATION MASTER RABBI TRUST" means the master
rabbi trust related to the Rockwell Automation Deferred Compensation
Plan, the Rockwell Automation Non-Qualified Pension Plan and the
Rockwell Automation Non-Qualified Savings Plan.
"ROCKWELL AUTOMATION NON-QUALIFIED PENSION PLAN" will have the
meaning ascribed thereto in Section 3.03(a)(i).
"ROCKWELL AUTOMATION NON-QUALIFIED SAVINGS PLAN" will have the
meaning ascribed thereto in Section 4.04(a)(i).
"ROCKWELL AUTOMATION OPTIONEE" means any Person who
immediately after the Time of Distribution is an Active Rockwell
Automation Employee, other than (a) those who were employees of the
corporate office of Rockwell prior to the Time of Distribution and
become employees of the Rockwell Automation Business (or remain
employees of the Rockwell corporate office) in connection with the
Distribution and (b) those who are set forth on Schedule 1.02.
"ROCKWELL AUTOMATION PARTICIPANT" means any individual who,
immediately after the Time of Distribution, is (a) an Active Rockwell
Automation Employee, (b) a Former Rockwell Automation Employee or (c) a
beneficiary of either of the foregoing.
"ROCKWELL CANADIAN DEFERRED PROFIT SHARING PLAN" means the
Rockwell Automation Canada Inc. Employees' Savings Plan.
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"ROCKWELL CANADIAN EMPLOYEES PROFIT SHARING PLAN" means the
Employees Profit Sharing Plan of Rockwell Automation Canada Inc.
"ROCKWELL CANADIAN PENSION PLAN" means the pension plan for
employees of Rockwell Automation of Canada Inc.
"ROCKWELL CANADIAN SAVINGS PLAN" means the Rockwell Automation
Canada Inc. Employees' Retirement Savings Plan.
"ROCKWELL CIF" will have the meaning ascribed thereto in
Section 3.05(b)(ii).
"ROCKWELL COLLINS" will have the meaning ascribed thereto in
the preamble.
"ROCKWELL COLLINS CANADIAN DEFERRED PROFIT SHARING PLAN" will
have the meaning ascribed thereto in Section 4.05(b)(i).
"ROCKWELL COLLINS CANADIAN EMPLOYEES PROFIT SHARING PLAN" will
have the meaning ascribed thereto in Section 4.05(c)(i).
"ROCKWELL COLLINS CANADIAN PENSION PLAN" will have the meaning
ascribed thereto in Section 3.06(a).
"ROCKWELL COLLINS CANADIAN SAVINGS PLAN" will have the meaning
ascribed thereto in Section 4.05(a)(i).
"ROCKWELL COLLINS HOURLY NON-REPRESENTED SAVINGS PLAN" will
have the meaning ascribed thereto in Section 4.03(a).
"ROCKWELL COLLINS HOURLY REPRESENTED SAVINGS PLAN" will have
the meaning ascribed thereto in Section 4.02(a).
"ROCKWELL COLLINS OPTION" means an option to purchase from
Rockwell Collins shares of Rockwell Collins Common Stock provided to a
holder of a Rockwell Option pursuant to Section 5.01.
"ROCKWELL COLLINS OPTIONEE" means any Person who immediately
after the Time of Distribution is an Active Rockwell Collins Employee,
other than (a) those
who were employees of the corporate office of Rockwell prior to the
Time of Distribution and become employees of the Rockwell Collins
Business in connection with the Distribution and (b) those who are set
forth on Schedule 1.02.
"ROCKWELL COLLINS PARTICIPANT" means any individual who,
immediately after the Time of Distribution, is (a) an Active Rockwell
Collins Employee, (b) a Former Rockwell Collins Employee, (c) a
Divested Business Employee, (d) a Former Rockwell Corporate Employee or
(e) a beneficiary of any of the foregoing.
"ROCKWELL COLLINS SALARIED SAVINGS PLAN" will have the meaning
ascribed thereto in Section 4.01(a).
"ROCKWELL COLLINS (U.K.)" means Rockwell Collins (U.K.)
Limited.
"ROCKWELL COLLINS (U.K.) EMPLOYEES" means those active
employees of Rockwell Collins (U.K.) who are active members of the
Rockwell U.K. Plan at the Time of Distribution.
"ROCKWELL COLLINS (U.K.) SCHEME" means the Rockwell Collins
(U.K.) Limited Pension Scheme.
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"ROCKWELL COLLINS (U.K.) SCHEME DEBT CERTIFICATE" will have
the meaning ascribed thereto in Section 3.04(c)(i).
"ROCKWELL COLLINS (U.K.) SCHEME DEFICIENCY DEBT" means any
liability of RIL (U.K.) or REC (U.K.) under section 75 of the U.K.
Pensions Act 1995 referable to the cessation of its participation in
the Rockwell Collins (U.K.) Scheme under the terms of this Agreement.
"ROCKWELL COLLINS (U.K.) SCHEME PAYMENT DATE" means (a) the
latest of (i) September 21, 2001 and (ii) seven days after the Inland
Revenue has given its approval to the transfer contemplated in Section
3.04(b)(ii) or (b) such other date as Rockwell and Rockwell Collins
shall agree to in writing.
"ROCKWELL COLLINS (U.K.) SCHEME TRANSFER PAYMENT" means the
amount in respect of the Transferring RIL/REC (U.K.) Employees
calculated in accordance with Section 3.04(b)(i).
"ROCKWELL COLLINS WELFARE PARTICIPANTS" means all individuals
who were covered under Rockwell Welfare Plans prior to the Time of
Distribution (other than Rockwell Automation Participants and Rockwell
Science Center Participants), including all Rockwell Collins
Participants.
"ROCKWELL COLLINS WELFARE PLANS" will have the meaning
ascribed thereto in Section 6.01(a).
"ROCKWELL DEFERRED COMPENSATION PLAN" means the Rockwell
International Corporation Deferred Compensation Plan, the name of which
has been or will be changed to the "Rockwell Collins Deferred
Compensation Plan" pursuant to Section 6.03(a)(ii).
"ROCKWELL GROUP TRUST" means the group trust related to the
Rockwell Pension Plan, the name of which has been or will be changed to
the "Rockwell Collins Master Trust" pursuant to Section 3.01(a)(ii).
"ROCKWELL HOURLY NON-REPRESENTED SAVINGS PLAN" means the
Rockwell International Corporation Non-Represented Hourly Retirement
Savings Plan.
"ROCKWELL HOURLY REPRESENTED SAVINGS PLAN" means the Rockwell
International Corporation Retirement Savings Plan for Certain
Employees.
"ROCKWELL MASTER RABBI TRUST" means the master rabbi trust
related to the Rockwell Deferred Compensation Plan, the Rockwell
Non-Qualified Pension Plan and the Rockwell Non-Qualified Savings Plan,
the name of which has been or will be changed to the "Rockwell Collins
Master Rabbi Trust - Deferred
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Compensation, Non-Qualified Savings and Non-Qualified Pension Plans"
pursuant to Section 3.03(a)(ii).
"ROCKWELL NON-QUALIFIED PENSION PLAN" means the Rockwell
International Corporation Non-Qualified Retirement Plan, the name of
which has been or will be changed to the "Rockwell Collins
Non-Qualified Pension Plan" pursuant to Section 3.03(a)(ii).
"ROCKWELL NON-QUALIFIED SAVINGS PLAN" means the Rockwell
International Corporation Non-Qualified Retirement Savings Plan, the
name of which has been or will be changed to the "Rockwell Collins
Non-Qualified Savings Plan" pursuant to Section 4.04(a)(ii).
"ROCKWELL OPTION" means an option to purchase from Rockwell
shares of Rockwell Common Stock granted pursuant to one of the Rockwell
Stock Plans.
"ROCKWELL PENSION PLAN" means the Rockwell Retirement Plan,
the name of which has been or will be changed to the "Rockwell Collins
Retirement Plan" pursuant to Section 3.01(a)(ii).
"ROCKWELL SALARIED SAVINGS PLAN" means the Rockwell
International Corporation Salaried Retirement Savings Plan.
"ROCKWELL SCIENCE CENTER" will have the meaning ascribed
thereto in the preamble.
"ROCKWELL SCIENCE CENTER DEFERRED COMPENSATION PLAN" will have
the meaning ascribed thereto in Section 6.03(a)(i).
"ROCKWELL SCIENCE CENTER MASTER RABBI TRUST" means the master
rabbi trust related to the Rockwell Science Center Deferred
Compensation Plan, the Rockwell Science Center Non-Qualified Pension
Plan and the Rockwell Science Center Non-Qualified Savings Plan.
"ROCKWELL SCIENCE CENTER NON-QUALIFIED PENSION PLAN" will have
the meaning ascribed thereto in Section 3.03(a)(i).
"ROCKWELL SCIENCE CENTER NON-QUALIFIED SAVINGS PLAN" will have
the meaning ascribed thereto in Section 4.04(a)(i).
"ROCKWELL SCIENCE CENTER PARTICIPANT" means any individual
who, immediately after the Time of Distribution, is (a) an Active
Rockwell Science Center Employee, (b) a Former Rockwell Science Center
Employee or (c) a beneficiary of either of the foregoing.
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"ROCKWELL SCIENCE CENTER SALARIED SAVINGS PLAN" will have the
meaning ascribed thereto in Section 4.01(a).
"ROCKWELL SCIENCE CENTER WELFARE PLANS" will have the meaning
ascribed thereto in Section 6.01(a).
"ROCKWELL SPLIT OPTION" means any Rockwell Option outstanding
as of the Time of Distribution held by a Rockwell Split Optionee.
"ROCKWELL SPLIT OPTIONEE" means any individual who holds
Rockwell Options at the Time of Distribution who is not a Rockwell
Automation Optionee or a Rockwell Collins Optionee (and shall include
those individuals set forth on Schedule 1.02).
"ROCKWELL STOCK PLANS" means, collectively, the Rockwell 2000
Long-Term Incentives Plan, the Rockwell 1995 Long-Term Incentives Plan,
the Rockwell 1988 Long-Term Incentives Plan and the Rockwell Directors
Stock Plan.
"ROCKWELL U.K. PLAN" means the Rockwell U.K. Pension Scheme
(formerly known as the Rockwell U.K. Executive Pension Plan).
"ROCKWELL U.K. PLAN DEBT CERTIFICATE" will have the meaning
ascribed thereto in Section 3.05(c)(i).
"ROCKWELL U.K. PLAN DEFICIENCY DEBT" means any liability of
Rockwell Collins (U.K.) under section 75 of the U.K. Pensions Act 1995
referable to the cessation of its participation in the Rockwell U.K.
Plan under the terms of this Agreement.
"ROCKWELL U.K. PLAN PAYMENT DATE" means (a) the latest of (i)
September 21, 2001 and (ii) seven days after the Inland Revenue has
given its approval to the transfer
contemplated in Section 3.05(b)(ii) or (b) such other date as Rockwell
and Rockwell Collins shall agree to in writing.
"ROCKWELL U.K. PLAN TRANSFER PAYMENT" means the amount in
respect of Transferring Rockwell Collins (U.K.) Employees calculated in
accordance with Section 3.05(b)(i).
"ROCKWELL WELFARE PLANS" means the Welfare Plans and other
employee welfare benefit and fringe benefit arrangements maintained by
Rockwell and its Subsidiaries (including members of the Rockwell
Collins Group and members of the Rockwell Science Center Group) prior
to the Time of Distribution.
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"STAND-ALONE PENSION PLAN" will have the meaning ascribed
thereto in Section 3.02.
"TRANSFERRING RIL/REC (U.K.) EMPLOYEES" means those RIL/REC
(U.K.) Employees who request a transfer of assets in accordance with
invitations provided pursuant to Section 3.04(a)(iii).
"TRANSFERRING ROCKWELL COLLINS (U.K.) EMPLOYEES" means those
Rockwell Collins (U.K.) Employees who request a transfer of assets in
accordance with invitations provided pursuant to Section 3.05(a)(iii).
"U.K. ACTUARY" means Towers Perrin.
"WELFARE PLAN" means any employee welfare benefit plan as
defined in Section 3(1) of ERISA, including medical, vision, dental and
other health plans, retiree health plans, life insurance plans, retiree
life insurance plans, accidental death and dismemberment plans,
long-term disability plans and severance pay plans.
ARTICLE II
EMPLOYEES
Section 2.01 Employees.
(a) Each individual employed by Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) immediately prior to the Distribution and (x) who is
engaged primarily in the Rockwell Automation Business or (y) who Rockwell
consents to becoming an Active Rockwell Automation Employee, it being understood
that Rockwell has granted such consent in respect of individuals identified on
the attached Schedule 2.01(a) (including, in the case of both clauses (x) and
(y), those who are actively employed or on lay-off, leave, short-term or
long-term disability or other permitted absence from employment) will be
employed by a member of the Rockwell Automation Group immediately after the Time
of Distribution and will be an Active Rockwell Automation Employee.
Notwithstanding the foregoing, the parties acknowledge and agree that any such
individual employed by a member of the Rockwell Automation Group immediately
after the Time of Distribution who is not identified on Schedule 2.01(a), who
was an employee of the corporate office of Rockwell prior to the Distribution
and who has not accepted permanent employment with a member of the Rockwell
Automation Group as of the Time of Distribution will be considered a Former
Rockwell Corporate Employee (and not an Active Rockwell Automation Employee).
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(b) Each individual employed by Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) immediately prior to the Distribution and (x) who is
engaged primarily in the Rockwell Collins Business or (y) who Rockwell consents
to becoming an Active Rockwell Collins Employee, it being understood that
Rockwell has granted such consent in respect of individuals identified on the
attached Schedule 2.01(b) (including, in the case of both clauses (x) and (y),
those who are actively employed or on lay-off, leave, short-term or long-term
disability or other permitted absence from employment) will be employed by a
member of the Rockwell Collins Group immediately after the Time of Distribution
and will be an Active Rockwell Collins Employee, except that Holdover Employees
will continue to be employed by Affiliates of Rockwell for a transitional period
after the Distribution Date pursuant to Section 12 of the Transition Agreement.
Rockwell and Rockwell Collins acknowledge and agree that Holdover Employees will
nevertheless be considered Active Rockwell Collins Employees hereunder from and
after the Time of Distribution.
(c) Each individual employed by Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) immediately prior to the Distribution and (x) who is
engaged primarily in the Rockwell Science Center Business or (y) who Rockwell
consents to becoming an Active Rockwell Science Center Employee, it being
understood that Rockwell has granted such consent in respect of individuals
identified on the attached Schedule 2.01(c) (including, in the case of both
clauses (x) and (y), those who are actively employed or on lay-off, leave,
short-term or long-term disability or other permitted absence from employment)
will be employed by a member of the Rockwell Science Center Group immediately
after the Time of Distribution and will be an Active Rockwell Science Center
Employee.
(d) Nothing contained in this Section 2.01 is intended to confer upon
any employee of the Rockwell Automation Group, the Rockwell Collins Group or the
Rockwell Science Center Group any right to continued employment after the
Distribution Date.
Section 2.02 Employee Benefits Generally. Until at least January 1,
2003, (a) the Rockwell Collins Group will provide to Rockwell Collins
Participants employee benefits that are substantially comparable in the
aggregate to the employee benefits provided to Rockwell Collins Participants by
Rockwell and its Subsidiaries (including members of the Rockwell Collins Group
and members of the Rockwell Science Center Group) immediately prior to the Time
of Distribution and (b) the Rockwell Science Center will provide to Rockwell
Science Center Participants employee benefits that are substantially comparable
in the aggregate to the employee benefits provided to Rockwell Science Center
Participants by Rockwell and its Subsidiaries (including members of the Rockwell
Science Center Group) immediately prior to the
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Time of Distribution. Notwithstanding the foregoing, the parties acknowledge and
agree that the failure of the Rockwell Collins Group to provide a defined
benefit pension plan to its employees in Canada will not be deemed to violate
the terms of this Section 2.02.
Section 2.03 Collective Bargaining Agreements.
(a) Effective as of the Time of Distribution, Rockwell will, or will
cause one or more Rockwell Subsidiaries to, unconditionally assume or retain (as
applicable) all Liabilities of Rockwell or any of its Subsidiaries (including
members of the Rockwell Collins Group and members of the Rockwell Science Center
Group) (including Liabilities relating to wages, hours or other terms and
conditions of employment) relating to Rockwell Automation Participants under
each of the collective bargaining agreements of the Pre-Distribution Group
relating to the Rockwell Automation Business and collateral agreements related
thereto.
(b) Effective as of the Time of Distribution, Rockwell Collins will, or
will cause one or more Rockwell Collins Subsidiaries to, unconditionally assume
or retain (as applicable) all Liabilities of Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) (including Liabilities relating to wages, hours or other
terms and conditions of employment) relating to Rockwell Collins Participants
under each of the collective bargaining agreements of the Pre-Distribution Group
relating to the Rockwell Collins Business or any Unrelated Former Business and
collateral agreements related thereto.
ARTICLE III
PENSION PLANS
Section 3.01 U.S. Pension Plan.
(a) Establishment and Sponsorship of Pension Plans and Trusts.
(i) Prior to the Time of Distribution, Rockwell will have established
(A) a new defined benefit pension plan which will be qualified under Section
401(a) of the Code (the "Rockwell Automation Pension Plan"), the purpose of
which will be to provide benefits to eligible Rockwell Automation Participants,
and a group trust related thereto which will be exempt from taxation under
Section 501(a) of the Code (the "Rockwell Automation Group Trust") and (B) a new
defined benefit pension plan which will be qualified under Section 401(a) of the
Code (the "Rockwell Science Center Pension Plan"), the purpose of which will be
to provide benefits to eligible Rockwell Science Center Participants, and a
group trust related thereto which will be exempt from taxation under Section
501(a) of the Code (the "Rockwell Science Center Group Trust"). The Rockwell
Automation Pension Plan and the Rockwell Science Center Pension Plan
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each will credit each participant thereunder for purposes of eligibility to
participate, vesting, benefit accruals and all other plan purposes with all
service which had been credited to such participant for such purposes under the
Rockwell Pension Plan immediately prior to the Time of Distribution (excluding
any such service which was not counted under the Rockwell Pension Plan by
operation of its "break in service" rules).
(ii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes sponsorship of the Rockwell Pension Plan and the Rockwell Group Trust,
and (if not already completed) will promptly change the name of the Rockwell
Pension Plan to the "Rockwell Collins Retirement Plan" and change the name of
the Rockwell Group Trust to the "Rockwell Collins Master Trust". Effective as of
the Time of Distribution, Rockwell hereby retains sponsorship of the Rockwell
Automation Pension Plan and the Rockwell Automation Group Trust. Effective as of
the Time of Distribution, Rockwell Science Center hereby assumes sponsorship of
the Rockwell Science Center Pension Plan and the Rockwell Science Center Group
Trust.
(b) Assumption of Pension Plan Liabilities.
(i) Effective as of the Time of Distribution, Rockwell hereby assumes,
and agrees to fully perform, pay and discharge, and agrees to cause the Rockwell
Automation Pension Plan and the Rockwell Automation Group Trust to assume, and
to fully perform, pay and discharge, all accrued benefit and other Liabilities
of Rockwell or any of its Subsidiaries (including members of the Rockwell
Collins Group and members of the Rockwell Science Center Group), the Rockwell
Pension Plan and the Rockwell Group Trust under and relating to the Rockwell
Pension Plan and the Rockwell Group Trust with respect to Rockwell Automation
Participants who were covered under the Rockwell Pension Plan prior to the Time
of Distribution. The Liabilities assumed by Rockwell, the Rockwell Automation
Pension Plan and the Rockwell Automation Group Trust pursuant to the preceding
sentence will be considered to have been transferred from the Rockwell Pension
Plan and the Rockwell Group Trust to the Rockwell Automation Pension Plan and
the Rockwell Automation Group Trust on the Distribution Date.
(ii) Effective as of the Time of Distribution, Rockwell Science Center
hereby assumes, and agrees to fully perform, pay and discharge, and agrees to
cause the Rockwell Science Center Pension Plan and the Rockwell Science Center
Group Trust to assume, and to fully perform, pay and discharge, all accrued
benefit and other Liabilities of Rockwell or any of its Subsidiaries (including
members of the Rockwell Collins Group and members of the Rockwell Science Center
Group), the Rockwell Pension Plan and the Rockwell Group Trust under and
relating to the Rockwell Pension Plan and the Rockwell Group Trust with respect
to Rockwell Science Center Participants who were covered under the Rockwell
Pension Plan prior to the Time of Distribution. The Liabilities assumed by
Rockwell Science Center, the Rockwell Science Center Pension Plan and the
Rockwell Science Center Group Trust pursuant to the preceding sentence will be
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considered to have been transferred from the Rockwell Pension Plan and the
Rockwell Group Trust to the Rockwell Science Center Pension Plan and the
Rockwell Science Center Group Trust on the Distribution Date.
(iii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes or retains, as applicable, and agrees to fully perform, pay and
discharge, and agrees to cause the Rockwell Pension Plan and the Rockwell Group
Trust to retain, and to fully perform, pay and discharge, all accrued benefit
and other Liabilities of Rockwell or any of its Subsidiaries (including members
of the Rockwell Collins Group and members of the Rockwell Science Center Group),
the Rockwell Pension Plan and the Rockwell Group Trust under and relating to the
Rockwell Pension Plan and the Rockwell Group Trust with respect to all
participants who were covered under the Rockwell Pension Plan prior to the Time
of Distribution (other than Rockwell Automation Participants and Rockwell
Science Center Participants), including all Rockwell Collins Participants.
(c) Transfers of Pension Plan Assets.
(i) At least 30 days prior to the Time of Distribution, Rockwell will
have filed with the IRS a proper notice on IRS Forms 5310-A regarding (A) the
transfer of assets and liabilities from the Rockwell Pension Plan and the
Rockwell Group Trust to the Rockwell Automation Pension Plan and the Rockwell
Automation Group Trust and (B) the transfer of assets and liabilities from the
Rockwell Pension Plan and the Rockwell Group Trust to the Rockwell Science
Center Pension Plan and the Rockwell Science Center Group Trust.
(ii) Prior to the Time of Distribution, the PBGC and IRS waiting
periods applicable to the transfers of assets and liabilities from the Rockwell
Pension Plan and the Rockwell Group Trust to the Rockwell Automation Pension
Plan and the Rockwell Automation Group Trust contemplated by this Section 3.01
will have expired or terminated. On or prior to the Distribution Date, assets
(the form of which have been agreed upon by Rockwell and Rockwell Collins)
having a value equal to an amount determined by Rockwell will have been
transferred from the Rockwell Group Trust to the Rockwell Automation Group
Trust.
(iii) Prior to the Time of Distribution, the PBGC and IRS waiting
periods applicable to the transfers of assets and liabilities from the Rockwell
Pension Plan and the Rockwell Group Trust to the Rockwell Science Center Pension
Plan and the Rockwell Science Center Group Trust contemplated by this Section
3.01 will have expired or terminated. On or prior to the Distribution Date,
assets (the form of which have been agreed upon by Rockwell, Rockwell Collins
and Rockwell Science Center) having a value equal to an amount determined by
Rockwell will have been transferred from the Rockwell Group Trust to the
Rockwell Science Center Group Trust.
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(iv) For purposes of determining the Allocated Rockwell Automation
Pension Asset Amount and the Allocated Rockwell Science Center Pension Asset
Amount the Actual Aggregate Pension Asset Amount will be allocated among (x) the
Rockwell Pension Plan and the Rockwell Group Trust, (y) the Rockwell Automation
Pension Plan and the Rockwell Automation Group Trust and (z) the Rockwell
Science Center Pension Plan and the Rockwell Science Center Group Trust as
follows:
(A) If the Actual Aggregate Pension Asset Amount is less than
the aggregate Distribution Date ABO for all of the Pension Plans (taken
together), then the Actual Aggregate Pension Asset Amount will be
allocated among
(x) the Rockwell Pension Plan and the Rockwell Group Trust, (y) the
Rockwell Automation Pension Plan and the Rockwell Automation Group
Trust and (z) the Rockwell Science Center Pension Plan and the Rockwell
Science Center Group Trust in accordance with Section 4044 of ERISA and
the regulations thereunder, using a discount rate of 7.5% and actuarial
assumptions (other than such discount rate) specified in the January
2001 Pension Plan Actuarial Valuation; or
(B) If the Actual Aggregate Pension Asset Amount is equal to
or greater than the aggregate Distribution Date ABO for all of the
Pension Plans (taken together), then the Actual Aggregate Pension Asset
Amount will be allocated among (x) the Rockwell Pension Plan and the
Rockwell Group Trust, (y) the Rockwell Automation Pension Plan and the
Rockwell Automation Group Trust and (z) the Rockwell Science Center
Pension Plan and the Rockwell Science Center Group Trust, in accordance
with the following priorities:
(1) First, each Pension Plan (and the related Trust)
will have allocated to it that portion of the Actual Aggregate
Pension Asset Amount equal to (I) in the case of the Rockwell
Automation Pension Plan, the Distribution Date ABO for
Rockwell Automation Participants, (II) in the case of the
Rockwell Science Center Pension Plan, the Distribution Date
ABO for Rockwell Science Center Participants, and (III) in the
case of the Rockwell Pension Plan, the Distribution Date ABO
for all participants covered under the Rockwell Pension Plan
(other than Rockwell Automation Participants and Rockwell
Science Center Participants), including Rockwell Collins
Participants;
(2) Second, the Rockwell Science Center Pension Plan
(and the Rockwell Science Center Group Trust) will have
allocated to it that portion, if any, of any Step 2 Excess
Amount
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that is required to be allocated to it in order to
comply with Government Cost Accounting Standard (CAS)
413-50(c)(5)(ii) (as may be reflected in any applicable
agreement with the U.S. government);
(3) Third, if either of the Rockwell Pension Plan or
the Rockwell Automation Pension Plan has a Step 3 ERISA 4044
Funded Percentage of less than 100%, then whichever of the
Rockwell Pension Plan and the Rockwell Automation Pension Plan
has the lower Step 3 ERISA 4044 Funded Percentage (and the
related Trust) will have allocated to it any Step 3 Excess
Amount until the ERISA 4044 Funded Percentage of such Pension
Plan is equal (after giving effect to the allocation under
this Section 3.01(c)(iv)(B)(3)) to the lesser of (I) the ERISA
4044 Funded Percentage of whichever of the Rockwell Pension
Plan and the Rockwell Automation Pension Plan had the higher
Step 3 ERISA 4044 Funded Percentage or (II) 100%;
(4) Fourth, if the ERISA 4044 Funded Percentage of
each of the Rockwell Pension Plan and the Rockwell Automation
Pension Plan (after giving effect to the allocation under
Section 3.01(c)(iv)(B)(3)) is less than 100%, then the
Rockwell Pension Plan and the Rockwell Automation Pension Plan
each will have allocated to it, on a pro rata basis (based on
the ratio of each such Pension Plan's Step 4 ERISA 4044
Shortfall Amount to the aggregate Step 4 ERISA 4044 Shortfall
Amount of such two Pension Plans), any Step 4 Excess Amount
until the ERISA 4044 Funded Percentage of each such Pension
Plan is equal to 100% (after giving effect to the allocation
under this Section 3.01(c)(iv)(B)(4));
(5) Fifth, the Rockwell Pension Plan (and the
Rockwell Group Trust) will have allocated to it that portion,
if any, of any Step 5 Excess Amount that is required to be
allocated to it in order to comply with Government Cost
Accounting Standard (CAS) 413-50(c)(5)(ii) (as may be
reflected in any applicable agreement with the U.S.
government);
(6) Sixth, the Pension Plan with the lowest Step 6
ABO Funded Percentage (and the related Trust) will have
allocated to it any Step 6 Excess Amount until the ABO Funded
Percentage of such Pension Plan is equal (after giving effect
to the allocation under this Section 3.01(c)(iv)(B)(6)) to the
ABO
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Funded Percentage of the Pension Plan with the next lowest
Step 6 ABO Funded Percentage;
(7) Seventh, the two Pension Plans with the lowest
Step 7 ABO Funded Percentage each will have allocated to it,
on a pro rata basis (based on the ratio of each such Pension
Plan's ABO Percentage to the aggregate ABO Percentage of such
two Pension Plans), any Step 7 Excess Amount until the ABO
Funded Percentage of each such Pension Plan is equal (after
giving effect to the allocation under this Section
3.01(c)(iv)(B)(7)) to the ABO Funded Percentage of the Pension
Plan with the highest Step 7 ABO Funded Percentage; and
(8) Eighth, each Pension Plan will have allocated to
it such Pension Plan's pro rata share (based on such Pension
Plan's ABO Percentage) of any Step 8 Excess Amount.
(v) Within 150 days following the Distribution Date, Rockwell and
Rockwell Collins will cause the Actuary to prepare and deliver to Rockwell,
Rockwell Collins and Rockwell Science Center an actuarial valuation (the
"Post-Distribution Actuarial Valuation") which will:
(A) certify the Distribution Date ABO for Rockwell Automation
Participants, the Distribution Date ABO for Rockwell Science Center
Participants and the Distribution Date ABO for all other participants
in the Rockwell Pension Plan, including Rockwell Collins Participants;
(B) certify the ABO Percentage for the Rockwell Automation
Pension Plan, the ABO Percentage for the Rockwell Science Center
Pension Plan and the ABO Percentage for the Rockwell Pension Plan;
(C) set forth the Actual Aggregate Pension Asset Amount, the
Actual Rockwell Automation Pension Asset Amount and the Actual Rockwell
Science Center Pension Asset Amount;
(D) certify the portion of the Actual Aggregate Pension Asset
Amount required to be allocated to the Rockwell Pension Plan, the
Allocated Rockwell Automation Pension Asset Amount and the Allocated
Rockwell Science Center Pension Asset Amount and the calculation of
each thereof in accordance with Section 3.01(c)(iv);
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(E) certify the portion of the Actual Aggregate Pension Asset
Amount required to be allocated to each of the Rockwell Pension Plan,
the Rockwell Automation Pension Plan and the Rockwell Science Center
Pension Plan under CAS 413-50(c)(5)(ii); and
(F) certify the portion of the Actual Aggregate Pension Asset
Amount required to be allocated to each of the Rockwell Pension Plan,
the Rockwell Automation Pension Plan and the Rockwell Science Center
Pension Plan under Section 4044 of ERISA and the regulations thereunder
(using the actuarial assumptions set forth therein, including the
interest rate specified by the PBGC for pension plans terminating at
the Time of Distribution).
The date on which the Actuary delivers the Post-Distribution Actuarial Valuation
to Rockwell, Rockwell Collins and Rockwell Science Center is referred to herein
as the "Delivery Date".
(vi) Either Rockwell or Rockwell Collins may dispute any of the
calculations referred to in clauses (iii)(A)-(F) above certified or set forth in
the Post-Distribution Actuarial Valuation by delivering written notice thereof
(a "Dispute Notice") to the Actuary and the other parties to this Agreement on
or before the 30th day following the Delivery Date (the "Dispute Notice Deadline
Date"). If Rockwell or Rockwell Collins delivers a Dispute Notice as provided
for above, then, following delivery of a Dispute Notice, Rockwell, Rockwell
Collins and the Actuary will work together in good faith and on a reasonable
basis to resolve any matters specified in the Dispute Notice, and Rockwell and
Rockwell Collins will use their reasonable best efforts to cause the Actuary to
deliver to Rockwell, Rockwell Collins and Rockwell Science Center a restated
Post-Distribution Actuarial Valuation reflecting any required adjustments agreed
to by Rockwell and Rockwell Collins resulting from the resolution of such
matters within 60 days following delivery of a Dispute Notice.
(vii) (A) If the Allocated Rockwell Automation Pension Asset Amount set
forth in the Final Post-Distribution Actuarial Valuation is greater than the
Actual Rockwell Automation Pension Asset Amount set forth in the Final
Post-Distribution Actuarial Valuation, then assets having a fair market value
equal to the excess thereof will be transferred from the Rockwell Pension Plan
and the Rockwell Group Trust to the Rockwell Automation Pension Plan and the
Rockwell Automation Group Trust on the Transfer Date. If the Actual Rockwell
Automation Pension Asset Amount set forth in the Final Post-Distribution
Actuarial Valuation is greater than the Allocated Rockwell Automation Pension
Asset Amount set forth in the Final Post-Distribution Actuarial Valuation, then
assets having a fair market value equal to the excess thereof will be
transferred from the Rockwell Automation Pension Plan and the
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Rockwell Automation Group Trust to the Rockwell Pension Plan and the Rockwell
Group Trust on the Transfer Date.
(B) If the Allocated Rockwell Science Center Pension Asset
Amount set forth in the Final Post-Distribution Actuarial Valuation is
greater than the Actual Rockwell Science Center Pension Asset Amount
set forth in the Final Post-Distribution Actuarial Valuation, then
assets having a fair market value equal to the excess thereof will be
transferred from the Rockwell Pension Plan and the Rockwell Group Trust
to the Rockwell Science Center Pension Plan and the Rockwell Science
Center Group Trust on the Transfer Date. If the Actual Rockwell Science
Center Pension Asset Amount set forth in the Final Post-Distribution
Actuarial Valuation is greater than the Allocated Rockwell Science
Center Pension Asset Amount set forth in the Final Post-Distribution
Actuarial Valuation, then assets having a fair market value equal to
the excess thereof will be transferred from the Rockwell Science Center
Pension Plan and the Rockwell Science Center Group Trust to the
Rockwell Pension Plan and the Rockwell Group Trust on the Transfer
Date.
(C) Any amount to be transferred pursuant to this Section
3.01(c)(vii) will bear interest from the Time of Distribution to the
date of payment (calculated based on actual days elapsed in a 365-day
year) at a rate of 9% per annum and assets having a fair market value
equal to such interest amount will be transferred on the date of
payment by the applicable Pension Plans and Trusts required to make any
transfer pursuant to this Section 3.01(c)(vii).
(D) The assets to be transferred from the Rockwell Group
Trust, from the Rockwell Automation Group Trust and/or from the
Rockwell Science Center Group Trust pursuant to this Section
3.01(c)(vii) will consist solely of cash and marketable securities.
(viii) In the event that, after the allocation and transfer of assets
among the Pension Plans (and the related Trusts) in accordance with Section
3.01(c)(vii), any Pension Plan (and the related Trust) does not hold on the
Transfer Date an amount of assets required to be held by such Pension Plan in
order to comply with both (A) CAS 413-50(c)(5) (as may be reflected in any
applicable agreement with the U.S. government) and (B) Section 414(l) of the
Code and the regulations thereunder (using the actuarial assumptions set forth
therein, including the interest rate specified by the PBGC for pension plans
terminating at the Time of Distribution), the sponsor of such Pension Plan will
be responsible for (A) making (and agrees to make promptly, but in no event
later than January 31, 2002) any contribution of assets required to be made to
such Pension Plan in order for such Pension Plan to so comply with both CAS
413-50(c)(5) (as
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reflected in any applicable agreement with the U.S. government) and Section
414(l) of the Code and the regulations thereunder (using the actuarial
assumptions set forth therein, including the interest rate specified by the PBGC
for pension plans terminating at the Time of Distribution) and (B) all
Liabilities in connection therewith. Any amount required to be contributed to a
Pension Plan pursuant to this Section 3.01(c)(viii) will bear interest from the
Time of Distribution to the date of contribution (calculated based on actual
days elapsed in a 365-day year) at a rate of 9% per annum and assets having a
fair market value equal to such interest amount will also be contributed to such
Pension Plan on the date of contribution by the sponsor of such Pension Plan.
(ix) All costs and expenses of the Actuary in connection with the
matters contemplated by this Section 3.01 will be shared equally by Rockwell and
Rockwell Collins.
(d) Compliance with Applicable Laws. The parties acknowledge that the
transfers of assets and liabilities from the Rockwell Pension Plan and the
Rockwell Group Trust to the Rockwell Automation Pension Plan and Rockwell
Automation Group Trust and to the Rockwell Science Center Pension Plan and the
Rockwell Science Center Group Trust contemplated hereby will comply with Section
414(l) of the Code and the Treasury Regulations thereunder.
(e) Definitions. For purposes of this Section 3.01, the following terms
will have the respective meanings set forth below:
"ABO FUNDED PERCENTAGE" means, with respect to each Pension
Plan, a fraction, (A) the numerator of which is the fair market value
of the applicable assets allocated to such Pension Plan pursuant to
Section 3.01(c)(iv), and (B) the denominator of which is (x) in the
case of the Rockwell Automation Pension Plan, the Distribution Date ABO
for Rockwell Automation Participants, (y) in the case of the Rockwell
Science Center Pension Plan, the Distribution Date ABO for Rockwell
Science Center Participants, and (z) in the case of the Rockwell
Pension Plan, the Distribution Date ABO for all participants covered
under the Rockwell Pension Plan (other than Rockwell Automation
Participants and Rockwell Science Center Participants), including
Rockwell Collins Participants.
"ABO PERCENTAGE" means, with respect to each Pension Plan, a
fraction, (A) the numerator of which is (x) in the case of the Rockwell
Automation Pension Plan, the Distribution Date ABO for Rockwell
Automation Participants, (y) in the case of the Rockwell Science Center
Pension Plan, the Distribution Date ABO for Rockwell Science Center
Participants, and (z) in the case of the Rockwell Pension Plan, the
Distribution Date ABO for all participants covered under the Rockwell
Pension Plan (other than Rockwell Automation
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Participants and Rockwell Science Center Participants), including
Rockwell Collins Participants, and (B) the denominator of which is the
Distribution Date ABO for all participants covered under all the
Pension Plans (including Rockwell Automation Participants, Rockwell
Science Center Participants and Rockwell Collins Participants).
"ACTUAL AGGREGATE PENSION ASSET AMOUNT" means the fair market
value of the aggregate assets of the Rockwell Pension Plan and the
Rockwell Group Trust, the Rockwell Automation Pension Plan and the
Rockwell Automation Group Trust and the Rockwell Science Center Pension
Plan and the Rockwell Science Center Group Trust as of the Time of
Distribution.
"ACTUAL ROCKWELL AUTOMATION PENSION ASSET AMOUNT" means the
fair market value of the assets of the Rockwell Automation Pension Plan
and the Rockwell Automation Group Trust as of the Time of Distribution.
"ACTUAL ROCKWELL SCIENCE CENTER PENSION ASSET AMOUNT" means
the fair market value of the assets of the Rockwell Science Center
Pension Plan and the Rockwell Science Center Group Trust as of the Time
of Distribution.
"ACTUARY" means Watson Wyatt Worldwide.
"ALLOCATED ROCKWELL AUTOMATION PENSION ASSET AMOUNT" means the
portion of the Actual Aggregate Pension Asset Amount allocated to the
Rockwell Automation Pension Plan and the Rockwell Automation Group
Trust under Section 3.01(c)(iv).
"ALLOCATED ROCKWELL SCIENCE CENTER PENSION ASSET AMOUNT" means
the portion of the Actual Aggregate Pension Asset Amount allocated to
the Rockwell Science Center Pension Plan and the Rockwell Science
Center Group Trust under Section 3.01(c)(iv).
"DELIVERY DATE" has the meaning ascribed thereto in Section
3.01(c)(v).
"DISPUTE NOTICE" has the meaning ascribed thereto in Section
3.01(c)(vi).
"DISPUTE NOTICE DEADLINE DATE" has the meaning ascribed
thereto in Section 3.01(c)(vi).
"DISTRIBUTION DATE ABO" means, with respect to any group of
participants covered under the Rockwell Pension Plan, the Rockwell
Automation Pension Plan and/or the Rockwell Science Center Pension Plan
immediately prior
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to the Time of Distribution (including Rockwell Automation
Participants, Rockwell Science Center Participants and Rockwell Collins
Participants), the aggregate accumulated benefit obligation for such
participants under the Rockwell Pension Plan, the Rockwell Automation
Pension Plan and the Rockwell Science Center Pension Plan as of the
Time of Distribution, as determined in accordance with FAS 87 utilizing
a discount rate of 7.5% and actuarial assumptions (other than such
discount rate) specified in the January 2001 Pension Plan Actuarial
Valuation. The determination of the Distribution Date ABO will be based
on an actuarial valuation using participant data as of January 1, 2001,
with the results of such valuation adjusted to the Time of Distribution
using standard actuarial techniques. Other than reflecting any changes
in the assignment of participants among the Pension Plans from January
1, 2001 through the Distribution Date, no changes occurring after
January 1, 2001 will be taken into account in determining the
Distribution Date ABO.
"ERISA 4044 FUNDED PERCENTAGE" means, with respect to each
Pension Plan, a fraction, (A) the numerator of which is the fair market
value of the applicable assets allocated to such Pension Plan pursuant
to Section 3.01(c)(iv), and (B) the denominator of which is the portion
of the Actual Aggregate Pension Asset Amount required to be allocated
to such Pension Plan under Section 4044 of ERISA and the regulations
thereunder (using the actuarial assumptions set forth therein,
including the interest rate specified by the PBGC for pension plans
terminating at the Time of Distribution).
"FAS 87" means Statement of Financial Accounting Standards No.
87.
"FINAL POST-DISTRIBUTION ACTUARIAL VALUATION" is defined as
follows:
(A) if a Dispute Notice is not delivered by Rockwell or
Rockwell Collins on or prior to the Dispute Notice Deadline Date, then
the Final Post-Distribution Actuarial Valuation means the
Post-Distribution Actuarial Valuation delivered by the Actuary to
Rockwell, Rockwell Collins and Rockwell Science Center on the Delivery
Date; or
(B) if a Dispute Notice is delivered by Rockwell or Rockwell
Collins on or prior to the Dispute Notice Deadline Date, then the Final
Post-Distribution Actuarial Valuation means the Post-Distribution
Actuarial Valuation agreed to (and restated by the Actuary, if
necessary) by Rockwell and Rockwell Collins pursuant to Section
3.01(c)(vi).
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"JANUARY 2001 PENSION PLAN ACTUARIAL VALUATION" means the
actuarial valuation for the Rockwell Pension Plan prepared by the
Actuary dated May 31, 2001.
"PENSION PLAN" means the Rockwell Pension Plan, the Rockwell
Automation Pension Plan and the Rockwell Science Center Pension Plan.
"POST-DISTRIBUTION ACTUARIAL VALUATION" has the meaning
ascribed thereto in Section 3.01(c)(v).
"ROCKWELL AUTOMATION GROUP TRUST" has the meaning ascribed
thereto in Section 3.01(a)(i).
"ROCKWELL AUTOMATION PENSION PLAN" has the meaning ascribed
thereto in Section 3.01(a)(i).
"ROCKWELL GROUP TRUST" has the meaning ascribed thereto in
Section 1.01.
"ROCKWELL PENSION PLAN" has the meaning ascribed thereto in
Section 1.01.
"ROCKWELL SCIENCE CENTER GROUP TRUST" has the meaning ascribed
thereto in Section 3.01(a)(i).
"ROCKWELL SCIENCE CENTER PENSION PLAN" has the meaning
ascribed thereto in Section 3.01(a)(i).
"STEP 2 EXCESS AMOUNT" means that amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Section
3.01(c)(iv)(B)(1).
"STEP 3 ERISA 4044 FUNDED PERCENTAGE" means, with respect to
each Pension Plan, a fraction, (A) the numerator of which is the fair
market value of the assets allocated to such Pension Plan (and the
related Trust) under Sections 3.01(c)(iv)(B)(1) and (2), and (B) the
denominator of which is the portion of the Actual Aggregate Pension
Asset Amount required to be allocated to such Pension Plan under
Section 4044 of ERISA and the regulations thereunder (using the
actuarial assumptions set forth therein, including the interest rate
specified by the PBGC for pension plans terminating at the Time of
Distribution).
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"STEP 3 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Assets Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B) (1) and (2).
"STEP 4 ERISA 4044 SHORTFALL AMOUNT" means, with respect to
each Plan, the remainder of (A) the portion of the Actual Aggregate
Pension Asset Amount required to be allocated to such Pension Plan
under Section 4044 of ERISA and the regulations thereunder (using the
actuarial assumptions set forth therein, including the interest rate
specified by the PBGC for pension plans terminating at the Time of
Distribution), less (B) the fair market value of the assets allocated
to such Pension Plan (and the related Trust) under Sections
3.01(c)(iv)(B)(1), (2) and (3).
"STEP 4 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B)(1), (2) and (3).
"STEP 5 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B)(1), (2), (3) and (4).
"STEP 6 ABO FUNDED PERCENTAGE" means, with respect to each
Pension Plan, a fraction, (A) the numerator of which is the fair market
value of the assets allocated to such Pension Plan (and the related
Trust) under Sections 3.01(c)(iv)(B)(1), (2), (3), (4) and (5), and (B)
the denominator of which is (x) in the case of the Rockwell Automation
Pension Plan, the Distribution Date ABO for Rockwell Automation
Participants, (y) in the case of the Rockwell Science Center Pension
Plan, the Distribution Date ABO for Rockwell Science Center
Participants, and (z) in the case of the Rockwell Pension Plan, the
Distribution Date ABO for all participants covered under the Rockwell
Pension Plan (other than Rockwell Automation Participants and Rockwell
Science Center Participants), including Rockwell Collins Participants.
"STEP 6 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B)(1), (2), (3), (4) and (5).
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"STEP 7 ABO FUNDED PERCENTAGE" means, with respect to each
Pension Plan, a fraction, (A) the numerator of which is the fair market
value of the assets allocated to such Pension Plan (and the related
Trust) under Sections 3.01(c)(iv)(B)(1), (2), (3), (4), (5) and (6),
and (B) the denominator of which is (x) in the case of the Rockwell
Automation Pension Plan, the Distribution Date ABO for Rockwell
Automation Participants, (y) in the case of the Rockwell Science Center
Pension Plan, the Distribution Date ABO for Rockwell Science Center
Participants, and (z) in the case of the Rockwell Pension Plan, the
Distribution Date ABO for all participants covered under the Rockwell
Pension Plan (other than Rockwell Automation Participants and Rockwell
Science Center Participants), including Rockwell Collins Participants.
"STEP 7 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B)(1), (2), (3), (4), (5) and (6).
"STEP 8 EXCESS AMOUNT" means the amount, if any, by which the
Actual Aggregate Pension Asset Amount exceeds the aggregate portions of
the Actual Aggregate Pension Asset Amount required to be allocated to
all the Pension Plans (and their related Trusts) under Sections
3.01(c)(iv)(B)(1), (2), (3), (4), (5), (6) and (7).
"TRANSFER DATE" means:
(A) if a Dispute Notice is not delivered by Rockwell
or Rockwell Collins on or prior to the Dispute Notice Deadline
Date, the third business day after the Dispute Notice Deadline
Date; or
(B) if a Dispute Notice is delivered by Rockwell or
Rockwell Collins on or prior to the Dispute Notice Deadline
Date, the third business day following (i) the date that
Rockwell and Rockwell Collins agree in writing that the
Post-Distribution Actuarial Valuation delivered on the
Delivery Date is final or (ii) the date the Actuary delivers
to Rockwell, Rockwell Collins and Rockwell Science Center a
restated Post-Distribution Actuarial Valuation properly
reflecting any required adjustments agreed to by Rockwell and
Rockwell Collins.
"TRUST" means the Rockwell Group Trust, the Rockwell
Automation Group Trust or the Rockwell Science Center Group Trust.
Section 3.02 Stand-Alone Pension Plan. Effective as of the Time of
Distribution, Rockwell Collins will or will cause one or more Rockwell Collins
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Subsidiaries to assume and adopt or retain, as applicable, sponsorship of the
Kaiser Aerospace Retirement Plan, as amended through the Time of Distribution
(the "Stand-Alone Pension Plan"), the trust related thereto and all assets and
Liabilities related thereto. Effective as of the Time of Distribution, Rockwell
Collins hereby assumes or retains, as applicable, and agrees to fully perform,
pay and discharge, and agrees to cause the Stand-Alone Pension Plan and the
trust related thereto to assume or retain, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group), the Stand-Alone Pension Plan and the trust
related thereto under and relating to the Stand-Alone Pension Plan and the trust
related thereto with respect to all participants who were covered under the
Stand-Alone Pension Plan prior to the Time of Distribution.
Section 3.03 U.S. Non-Qualified Pension Plan.
(a) Establishment and Sponsorship of Non-Qualified Pension Plans and
Rabbi Trusts.
(i) Prior to the Time of Distribution, Rockwell will have established
(A) a new non-qualified supplemental pension plan (the "Rockwell Automation
Non-Qualified Pension Plan"), the purpose of which will be to provide benefits
to Rockwell Automation Participants, and the Rockwell Automation Master Rabbi
Trust, (B) a new non-qualified supplemental pension plan (the "Rockwell Science
Center Non-Qualified Pension Plan"), the purpose of which will be to provide
benefits to Rockwell Science Center Participants, and the Rockwell Science
Center Master Rabbi Trust and (C) the Rockwell Master Rabbi Trust. The Rockwell
Automation Non-Qualified Pension Plan and the Rockwell Science Center
Non-Qualified Pension Plan each will be substantially similar in all material
respects to the Rockwell Non-Qualified Pension Plan, and will provide a benefit
formula which will be substantially similar in all material respects to the
benefit formula that the Rockwell Non-Qualified Pension Plan provided
immediately prior to the Time of Distribution. The Rockwell Automation
Non-Qualified Pension Plan and the Rockwell Science Center Non-Qualified Pension
Plan each will credit each participant thereunder for purposes of eligibility to
participate, vesting, benefit accruals and all other plan purposes with all
service which had been credited to such participant for such purposes under the
Rockwell Non-Qualified Pension Plan immediately prior to the Time of
Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes sponsorship of the Rockwell Non-Qualified Pension Plan and the Rockwell
Master Rabbi Trust (and hereby assumes all Liabilities under the Rockwell Master
Rabbi Trust) and (if not already completed) will promptly change the name of the
Rockwell Non-Qualified Pension Plan to the "Rockwell Collins Non-Qualified
Pension Plan" and change the name of the Rockwell Master Rabbi Trust to the
"Rockwell Collins Master
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Rabbi Trust - Deferred Compensation, Non-Qualified Savings and Non-Qualified
Pension Plans". Effective as of the Time of Distribution, Rockwell hereby
retains sponsorship of the Rockwell Automation Non-Qualified Pension Plan and
the Rockwell Automation Master Rabbi Trust (and hereby retains all Liabilities
under the Rockwell Automation Master Rabbi Trust). Effective as of the Time of
Distribution, Rockwell Science Center hereby assumes sponsorship of the Rockwell
Science Center Non-Qualified Pension Plan and the Rockwell Science Center Master
Rabbi Trust (and hereby assumes all Liabilities under the Rockwell Science
Center Master Rabbi Trust).
(b) Assumption of Non-Qualified Pension Plan Liabilities.
(i) Effective as of the Time of Distribution, Rockwell hereby assumes,
and agrees to fully perform, pay and discharge, and agrees to cause the Rockwell
Automation Non-Qualified Pension Plan to assume, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Non-Qualified Pension Plan
under and relating to the Rockwell Non-Qualified Pension Plan with respect to
Rockwell Automation Participants who were covered under the Rockwell
Non-Qualified Pension Plan prior to the Time of Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Science Center
hereby assumes, and agrees to fully perform, pay and discharge, and agrees to
cause the Rockwell Science Center Non-Qualified Pension Plan to assume, and to
fully perform, pay and discharge, all accrued benefit and other Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) and of the Rockwell
Non-Qualified Pension Plan under and relating to the Rockwell Non-Qualified
Pension Plan with respect to Rockwell Science Center Participants who were
covered under the Rockwell Non-Qualified Pension Plan prior to the Time of
Distribution.
(iii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes, and agrees to fully perform, pay and discharge, and agrees to cause the
Rockwell Non-Qualified Pension Plan to retain, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Non-Qualified Pension Plan
under and relating to the Rockwell Non-Qualified Pension Plan with respect to
all participants who were covered under the Rockwell Non-Qualified Pension Plan
prior to the Time of Distribution (other than Rockwell Automation Participants
and Rockwell Science Center Participants), including all Rockwell Collins
Participants.
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Section 3.04 Rockwell Collins (U.K.) Limited Pension Scheme.
(a) RIL/REC (U.K.) Employees.
(i) Effective as of the Time of Distribution, Rockwell and Rockwell
Collins shall cause RIL (U.K.) and REC (U.K.) to cease to participate in the
Rockwell Collins (U.K.) Scheme in respect of the RIL/REC (U.K.) Employees. As
soon as reasonably possible after the Time of Distribution, Rockwell and
Rockwell Collins shall cause an appropriate deed of disadherence to be executed
by RIL (U.K.), REC (U.K.), Rockwell Collins (U.K.) (as the "Principal Employer"
of the Rockwell Collins (U.K.) Scheme) (as that term is defined in the governing
documentation of the Rockwell Collins (U.K.) Scheme)) and the trustees of the
Rockwell Collins (U.K.) Scheme confirming such cessation of participation.
(ii) Effective as of the Time of Distribution, Rockwell Collins shall
cause Rockwell Collins (U.K.) to remain as the Rockwell Collins (U.K.) Scheme's
Principal Employer.
(iii) Prior to the Time of Distribution, Rockwell shall cause each
RIL/REC (U.K.) Employee to be invited to become an active member of the Rockwell
U.K. Plan with effect from the Time of Distribution. The invitations shall be in
writing and shall include:
(A) an offer to join the Rockwell U.K. Plan for future service
on terms which are materially identical (as to the form of benefit
provision including death benefit provision) to the terms of benefit
provision in respect of each RIL/REC (U.K.) Employee under the Rockwell
Collins (U.K.) Scheme at the Time of Distribution;
(B) the option for each RIL/REC (U.K.) Employee to request by
July 31, 2001 a transfer of assets in respect of his or her past
service rights under the Rockwell Collins (U.K.) Scheme to the Rockwell
U.K. Plan;
(C) a statement that if the RIL/REC (U.K.) Employee does not
request such a transfer of assets from the Rockwell Collins (U.K.)
Scheme to the Rockwell U.K. Plan, his or her deferred benefits earned
in respect of pensionable service in the Rockwell Collins (U.K.) Scheme
will remain within the Rockwell Collins (U.K.) Scheme and will be
calculated on the basis of his or her Pensionable Service to, and his
or her Final Pensionable Earnings at, the Time of Distribution. For the
purposes of this Section 3.04(a)(iii)(C), the terms "Pensionable
Service" and "Final Pensionable Earnings" shall be defined in
accordance with the trust deed and rules of the Rockwell Collins (U.K.)
Scheme dated May 9, 2001; and
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(D) a statement that if the RIL/REC (U.K.) Employee does
request such a transfer of assets from the Rockwell Collins (U.K.)
Scheme to the Rockwell U.K. Plan, he or she will be provided with
benefits under the Rockwell U.K. Plan which are materially identical to
those provided in respect of such RIL/REC (U.K.) Employee in the
Rockwell Collins (U.K.) Scheme, and that the periods of pensionable
service pre- and post- the Time of Distribution shall be treated as
continuous.
(iv) As soon as practicable following the Time of Distribution,
Rockwell shall cause the governing documentation of the Rockwell U.K. Plan to be
amended to reflect the provisions of Sections 3.04(a)(iii)(A) and (D) above.
(v) Rockwell and Rockwell Collins acknowledge that there is currently a
discretionary practice in the Rockwell Collins (U.K.) Scheme of increasing
annually all pensions in payment which were accrued in respect of pensionable
service prior to April 6, 1997 (the "Discretionary Practice"). Under the
Discretionary Practice, such element of pension is increased annually in April
by the lesser of 5% and the increase in the Retail Prices Index over the
previous calendar year (with the statutory increase to the Guaranteed Minimum
Pension being offset against this increase). For as long as the Discretionary
Practice is continued, Rockwell Collins shall cause Rockwell Collins (U.K.) to
continue to provide for the Discretionary Practice in respect of members of the
Rockwell Collins (U.K.) Scheme who are former employees of RIL (U.K.) or REC
(U.K.) and will meet any funding requirements for these purposes in accordance
with the provisions of Rule 12.25 (Special benefits) of the trust deed and rules
of the Rockwell Collins (U.K.) Scheme dated May 9, 2001.
(b) Transfer Payment in Respect of RIL/REC (U.K.) Employees.
(i) On or prior to September 14, 2001, Rockwell Collins shall cause the
U.K. Actuary to complete and deliver to Rockwell and Rockwell Collins the
calculation of the Rockwell Collins (U.K.) Scheme Transfer Payment in respect of
the Transferring RIL/REC (U.K.) Employees in accordance with the U.K. Actuary's
Schedule set forth in Schedule 3.04(b)(i).
(ii) On the Rockwell Collins (U.K.) Scheme Payment Date, Rockwell
Collins shall cause the Rockwell Collins (U.K.) Scheme to transfer to the
Rockwell U.K. Plan a representative spread of assets held under the trusts of
the Rockwell Collins (U.K.) Scheme the mid-market value of which on the business
day preceding the Rockwell Collins (U.K.) Scheme Payment Date is equal to the
Rockwell Collins (U.K.) Scheme Transfer Payment, unless Rockwell and Rockwell
Collins shall agree in writing that the Rockwell Collins (U.K.) Scheme Transfer
Payment shall be transferred in some other manner.
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(iii) To the extent that the Rockwell Collins (U.K.) Scheme does not
pay the Rockwell Collins (U.K.) Scheme Transfer Payment in accordance with
Section 3.04(b)(ii) on the Rockwell Collins (U.K.) Scheme Payment Date for any
reason, Rockwell Collins shall cause Rockwell Collins (U.K.) to pay RIL (U.K.)
within 14 days after the Rockwell Collins (U.K.) Scheme Payment Date the amount
of the difference, less the rate of corporation tax applicable to Rockwell
Collins (U.K.) in the United Kingdom.
(iv) Rockwell shall cause the Rockwell U.K. Plan to accept liability
for each Transferring RIL/REC (U.K.) Employee's accrued rights to a Guaranteed
Minimum Pension, and rights under Section 9(2B) of the U.K. Pension Schemes Act
1993.
(v) Rockwell Collins shall cause (subject to the consent of the
trustees of the Rockwell Collins (U.K.) Scheme) the assets representing
Transferring RIL/REC (U.K.) Employees' voluntary contributions to be transferred
to the Rockwell U.K. Plan. Rockwell shall cause the proportion of the amount so
transferred which is attributable to each Transferring RIL/REC (U.K.) Employee
to be credited to the relevant employee's additional voluntary contribution
account in the Rockwell U.K. Plan and the Rockwell U.K. Plan to provide benefits
for the employees concerned equal in value to the assets transferred.
(c) Rockwell Collins (U.K.) Scheme Deficiency Debt.
(i) As soon as practicable following the Time of Distribution, Rockwell
Collins shall cause Rockwell Collins (U.K.) to instruct the U.K. Actuary to
carry out an actuarial valuation of the Rockwell Collins (U.K.) Scheme as of the
Time of Distribution and to provide a certificate certified by the U.K. Actuary
(the "Rockwell Collins (U.K.) Scheme Debt Certificate") setting out any Rockwell
Collins (U.K.) Scheme Deficiency Debt calculated as of the Time of Distribution.
(ii) Rockwell shall cause RIL (U.K.) and REC (U.K.) to satisfy any
Rockwell Collins (U.K.) Scheme Deficiency Debt within 20 business days after
receipt of the Rockwell Collins (U.K.) Scheme Debt Certificate.
(iii) In the event that, following the actuarial valuation described in
Section 3.04(c)(i), no Rockwell Collins (U.K.) Scheme Deficiency Debt is
identified and no Rockwell Collins (U.K.) Scheme Debt Certificate is required,
Rockwell Collins shall use all reasonable endeavours to procure that the
trustees of the Rockwell Collins (U.K.) Scheme shall resolve that no debt would
be treated as becoming due from RIL (U.K.) or REC (U.K.) under section 75 of the
U.K. Pensions Act 1995.
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Section 3.05 Rockwell U.K. Pension Scheme
(a) Rockwell Collins (U.K.) Employees.
(i) Effective as of the Time of Distribution, Rockwell and Rockwell
Collins shall cause Rockwell Collins (U.K.) to cease to participate in the
Rockwell U.K. Plan in respect of Rockwell Collins (U.K.) Employees. As soon as
reasonably possible after the Time of Distribution, Rockwell and Rockwell
Collins shall cause an appropriate deed of disadherence to be executed by RIL
(U.K.) (as the "Principal Employer" of the Rockwell U.K. Plan (as that term is
defined in the governing documentation of the Rockwell U.K. Plan)), Rockwell
Collins (U.K.) and the trustees of the Rockwell U.K. Plan confirming such
cessation of participation.
(ii) Effective as of the Time of Distribution, Rockwell shall cause RIL
(U.K.) to remain as the Rockwell U.K. Plan's Principal Employer.
(iii) Prior to the Time of Distribution, Rockwell Collins shall cause
each Rockwell Collins (U.K.) Employee to be invited to become an active member
of the Rockwell Collins (U.K.) Scheme with effect from the Time of Distribution.
The invitations shall be in writing and shall include:
(A) an offer to join the Rockwell Collins (U.K.) Scheme for
future service on terms which are materially identical (as to the form
of benefit provision including death benefit provision) to the terms of
benefit provision in respect of each Rockwell Collins (U.K.) Employee
under the Rockwell U.K. Plan at the Time of Distribution;
(B) the option for each Rockwell Collins (U.K.) Employee to
request by July 31, 2001 a transfer of assets in respect of his or her
past service rights under the Rockwell U.K. Plan to the Rockwell
Collins (U.K.) Scheme;
(C) a statement that if the Rockwell Collins (U.K.) Employee
does not request such a transfer of assets from the Rockwell U.K. Plan
to the Rockwell Collins (U.K.) Scheme, his or her deferred benefits
earned in respect of pensionable service in the Rockwell U.K. Plan will
remain within the Rockwell U.K. Plan and will be calculated on the
basis of his or her Pensionable Service to, and his or her Final
Pensionable Earnings at, the Time of Distribution. For the purposes of
this Section 3.05(a)(iii)(C), "Pensionable Service" and "Final
Pensionable Earnings" shall be defined in accordance with the governing
documentation of the Rockwell U.K. Plan; and
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(D) a statement that if the Rockwell Collins (U.K.) Employee
does request such a transfer of assets from the Rockwell U.K. Plan to
the Rockwell Collins (U.K.) Scheme, he or she will be provided with
benefits under the Rockwell Collins (U.K.) Scheme which are materially
identical to those provided in respect of such Rockwell Collins (U.K.)
Employee in the Rockwell U.K. Plan, and that the periods of pensionable
service pre- and post-the Time of Distribution shall be treated as
continuous.
(iv) As soon as practicable following the Time of Distribution,
Rockwell Collins shall cause appropriate resolutions to be passed in relation to
the Rockwell Collins (U.K.) Scheme to reflect the provisions of Sections
3.05(a)(iii)(A) and (D) above.
(b) Transfer payment in respect of the Rockwell Collins (U.K.)
Employees.
(i) On or prior to September 14, 2001, Rockwell shall cause the U.K.
Actuary to complete and deliver to Rockwell and Rockwell Collins the calculation
of the Rockwell U.K. Plan Transfer Payment in respect of the Transferring
Rockwell Collins (U.K.) Employees in accordance with the U.K. Actuary's Schedule
set forth in Schedule 3.04(b)(i).
(ii) On the Rockwell U.K. Plan Payment Date, Rockwell shall cause the
Rockwell U.K. Plan to transfer to the Rockwell Collins (U.K.) Scheme a
representative spread of assets held under the Rockwell International Common
Investment Fund (the "Rockwell CIF") the mid-market value of which on the
business day preceding the Rockwell U.K. Plan Payment Date is equal to the
Rockwell U.K. Plan Transfer Payment, unless Rockwell and Rockwell Collins shall
agree in writing that the Rockwell U.K. Plan Transfer Payment shall be
transferred in some other manner.
(iii) To the extent that the Rockwell U.K. Plan does not pay the
Rockwell U.K. Plan Transfer Payment in accordance with Section 3.05(b)(ii) on
the Rockwell U.K. Plan Payment Date for any reason, Rockwell shall cause RIL
(U.K.) to pay Rockwell Collins (U.K.) within 14 days after the Rockwell U.K.
Plan Payment Date the amount of the difference, less the rate of corporation tax
applicable to RIL (U.K.) in the United Kingdom.
(iv) Rockwell Collins shall cause the Rockwell Collins (U.K.) Scheme to
accept liability for each Transferring Rockwell Collins (U.K.) Employee's
accrued rights to a Guaranteed Minimum Pension, and rights under Section 9(2B)
of the U.K. Pension Schemes Act 1993.
(v) Rockwell shall cause (subject to the consent of the trustees of the
Rockwell U.K. Plan) the assets representing Transferring Rockwell Collins (U.K.)
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Employees' voluntary contributions to be transferred to the Rockwell Collins
(U.K.) Scheme. Rockwell Collins shall cause the proportion of the amount so
transferred which is attributable to each Transferring Rockwell Collins (U.K.)
Employee to be credited to the relevant employee's additional voluntary
contribution account in the Rockwell Collins (U.K.) Scheme and the Rockwell
Collins (U.K.) Scheme to provide benefits for the employees concerned equal in
value to the assets transferred.
(c) Rockwell U.K. Plan Deficiency Debt
(i) As soon as practicable following the Time of Distribution, Rockwell
shall cause RIL (U.K.) to instruct the U.K. Actuary to carry out an actuarial
valuation of the Rockwell U.K. Plan as of the Time of Distribution and to
provide a certificate certified by the U.K. Actuary (the "Rockwell U.K. Plan
Debt Certificate") setting out any Rockwell U.K. Plan Deficiency Debt
calculated as of the Time of Distribution.
(ii) Rockwell Collins shall cause Rockwell Collins (U.K.) to satisfy
any Rockwell U.K. Plan Deficiency Debt within 20 business days after receipt of
the Rockwell U.K. Plan Debt Certificate.
(iii) In the event that following the actuarial valuation described in
Section 3.05(c)(i), no Rockwell U.K. Plan Deficiency Debt is identified and no
Debt Certificate is required, Rockwell shall use all reasonable endeavours to
procure that the trustees of the Rockwell U.K. Plan shall resolve that no debt
would be treated as becoming due from Rockwell Collins (U.K.) under section 75
of the U.K. Pensions Act 1995.
(d) The Rockwell International Common Investment Fund.
(i) Rockwell Collins and Rockwell shall cause the cessation of
participation of the Rockwell Collins (U.K.) Scheme in the Rockwell CIF with
effect from the Time of Distribution.
(ii) Within two weeks after the Time of Distribution, Rockwell Collins
and Rockwell shall cause the trustee of the Rockwell CIF to ascertain the
relevant portion of the Rockwell CIF which is equal in value to the interest of
the Rockwell Collins (U.K.) Scheme in accordance with the provisions of the
Rockwell CIF Deed dated March 2, 1995. Rockwell Collins and Rockwell shall cause
the trustee of the Rockwell CIF to transfer the amount so ascertained to the
trustees of the Rockwell Collins (U.K.) Scheme or as the trustees of the
Rockwell Collins (U.K.) Scheme may direct within one month after the Time of
Distribution. Such transfer may be made in cash or in such other form (or partly
in one form and partly in the other) as shall be agreed between Rockwell
Collins, Rockwell and the trustee of the Rockwell CIF.
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Section 3.06 Canadian Pension Plan.
(a) Establishment and Sponsorship of Rockwell Collins Canadian Pension
Plan. As of the end of the Canadian Holdover Term, a member of the Rockwell
Collins Group will have established, and will cover the Active Rockwell Collins
Canadian Employees who participated in the Rockwell Canadian Pension Plan under,
a defined contribution registered pension plan (the "Rockwell Collins Canadian
Pension Plan"). The Rockwell Collins Canadian Pension Plan will credit each
participating Active Rockwell Collins Canadian Employee for purposes of
eligibility, vesting and locking-in with all membership and service which had
been credited to such employee for such purposes under the Rockwell Canadian
Pension Plan immediately prior to the end of the Canadian Holdover Term. The
Rockwell Collins Canadian Pension Plan will not require participant
contributions. After the end of the Canadian Holdover Term, each Active Rockwell
Collins Canadian Employee who participated in the Rockwell Canadian Pension Plan
prior to the end of the Canadian Holdover Term will be permitted to transfer his
or her commuted value in the Rockwell Canadian Pension Plan (as determined
pursuant to the terms of the Rockwell Canadian Pension Plan) from the Rockwell
Canadian Pension Plan to the Rockwell Collins Canadian Pension Plan, the
Rockwell Collins Canadian Savings Plan or any other vehicle as may be provided
by law, in accordance with the terms of the respective plans and applicable law.
(b) Retention of Rockwell Canadian Pension Plan Liabilities. Effective
as of the end of the Canadian Holdover Term, Rockwell hereby retains and agrees
to fully perform, pay and discharge, and agrees to cause the Rockwell Canadian
Pension Plan and any trust related thereto to retain, and to fully perform, pay
and discharge, all accrued benefit and other Liabilities of Rockwell or any of
its Subsidiaries (including members of the Rockwell Collins Group), the Rockwell
Canadian Pension Plan and any trust related thereto under the Rockwell Canadian
Pension Plan accrued through the end of the Canadian Holdover Term with respect
to Active Rockwell Collins Canadian Employees who were covered under the
Rockwell Canadian Pension Plan prior to the end of the Canadian Holdover Term,
except to the extent any Active Rockwell Collins Canadian Employee elects to
transfer his or her commuted value from the Rockwell Canadian Pension Plan as
permitted pursuant to Section 3.06(a), the terms of the Rockwell Canadian
Pension Plan or applicable law. None of Rockwell Collins, the Rockwell Collins
Subsidiaries, Affiliates of any of the foregoing or the Rockwell Collins
Canadian Pension Plan will have or acquire any interest in or right to any of
the assets of the Rockwell Canadian Pension Plan, and Rockwell will retain full
power and authority with respect to the amendment and termination of the
Rockwell Canadian Pension Plan and the investment and disposition of assets held
in the Rockwell Canadian Pension Plan to the extent permitted by law.
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ARTICLE IV
SAVINGS PLANS
Section 4.01 U.S. Salaried Savings Plan.
(a) As of the Time of Distribution, Rockwell Collins will have
established, and will cover the Active Rockwell Collins Employees who
participated in the Rockwell Salaried Savings Plan prior to the Time of
Distribution under, a defined contribution plan (the "Rockwell Collins Salaried
Savings Plan"), which will be qualified under Sections 401(a) and 401(k) of the
Code, and will have established a related trust which will be exempt from
taxation under Section 501(a) of the Code. As of the Time of Distribution,
Rockwell Science Center will have established, and will cover the Active
Rockwell Science Center Employees who participated in the Rockwell Salaried
Savings Plan prior to the Time of Distribution under, a defined contribution
plan (the "Rockwell Science Center Salaried Savings Plan"), which will be
qualified under Sections 401(a) and 401(k) of the Code, and will have
established a related trust which will be exempt from taxation under Section
501(a) of the Code. Each of the Rockwell Collins Salaried Savings Plan and the
Rockwell Science Center Salaried Savings Plan will credit each participating
Active Rockwell Collins Employee or Active Rockwell Science Center Employee, as
the case may be, for purposes of vesting and eligibility with all service which
had been credited to such employee for such purposes under the Rockwell Salaried
Savings Plan immediately prior to the Time of Distribution (excluding
any such service which was not counted under the Rockwell Salaried Savings Plan
by operation of its "break in service" rules).
(b) After the Time of Distribution, each Active Rockwell Collins
Employee who participated in the Rockwell Salaried Savings Plan prior to the
Time of Distribution will be permitted to transfer his or her account balances
from the Rockwell Salaried Savings Plan to the Rockwell Collins Salaried Savings
Plan in accordance with the terms of the respective plans and applicable law.
After the Time of Distribution, each Active Rockwell Science Center Employee who
participated in the Rockwell Salaried Savings Plan prior to the Time of
Distribution will be permitted to transfer his or her account balances from the
Rockwell Salaried Savings Plan to the Rockwell Science Center Salaried Savings
Plan in accordance with the terms of the respective plans and applicable law.
(c) Effective as of the Time of Distribution, each Active Rockwell
Collins Employee and each Active Rockwell Science Center Employee who
participated in the Rockwell Salaried Savings Plan immediately prior to the Time
of Distribution will become fully vested in his or her account balances under
the Rockwell Salaried Savings Plan. Effective as of the Time of Distribution,
each Active Rockwell Collins Employee and each Active Rockwell Science Center
Employee will cease to be eligible to
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contribute to, or receive contributions in respect of, his or her Rockwell
Salaried Savings Plan accounts. None of Rockwell Collins, the Rockwell Collins
Subsidiaries, Rockwell Science Center, the Rockwell Science Center Subsidiaries,
Affiliates of any of the foregoing, the Rockwell Collins Salaried Savings Plan
or the trust thereunder or the Rockwell Science Center Salaried Savings Plan or
the trust thereunder will have or acquire any interest in or right to any of the
assets of the Rockwell Salaried Savings Plan, and Rockwell will retain full
power and authority with respect to the amendment and termination of the
Rockwell Salaried Savings Plan and the investment and disposition of assets held
in the Rockwell Salaried Savings Plan to the extent permitted by law.
Section 4.02 U.S. Hourly Represented Savings Plan.
(a) As of the Time of Distribution, Rockwell Collins will have
established, and will cover the Active Rockwell Collins Employees who
participated in the Rockwell Hourly Represented Savings Plan prior to the Time
of Distribution under, a defined contribution plan (the "Rockwell Collins Hourly
Represented Savings Plan"), which will be qualified under Sections 401(a) and
401(k) of the Code, and will have established a related trust which will be
exempt from taxation under Section 501(a) of the Code. The Rockwell Collins
Hourly Represented Savings Plan will credit each participating Active Rockwell
Collins Employee for purposes of vesting and eligibility with all service which
had been credited to such employee for such purposes under the Rockwell Hourly
Represented Savings Plan immediately prior to the Time of Distribution
(excluding any such service which was not counted under the Rockwell Hourly
Represented Savings Plan by operation of its "break in service" rules).
(b) After the Time of Distribution, each Active Rockwell Collins
Employee who participated in the Rockwell Hourly Represented Savings Plan prior
to the Time of Distribution will be permitted to transfer his or her account
balances from the Rockwell Hourly Represented Savings Plan to the Rockwell
Collins Hourly Represented Savings Plan in accordance with the terms of the
respective plans and applicable law.
(c) Effective as of the Time of Distribution, each Active Rockwell
Collins Employee who participated in the Rockwell Hourly Represented Savings
Plan immediately prior to the Time of Distribution will become fully vested in
his or her account balances under the Rockwell Hourly Represented Savings Plan.
Effective as of the Time of Distribution, each Active Rockwell Collins Employee
will cease to be eligible to contribute to, or receive contributions in respect
of, his or her Rockwell Hourly Represented Savings Plan accounts. None of
Rockwell Collins, the Rockwell Collins Subsidiaries, Affiliates of any of the
foregoing or the Rockwell Collins Hourly Represented Savings Plan or the trust
thereunder will have or acquire any interest in or right to any of the assets of
the Rockwell Hourly Represented Savings Plan, and Rockwell will retain full
power and authority with respect to the amendment and termination of the
Rockwell Hourly Represented Savings Plan and the investment and
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disposition of assets held in the Rockwell Hourly Represented Savings Plan to
the extent permitted by law.
Section 4.03 U.S. Hourly Non-Represented Savings Plan.
(a) As of the Time of Distribution, Rockwell Collins will have
established, and will cover the Active Rockwell Collins Employees who
participated in the Rockwell Hourly Non-Represented Savings Plan prior to the
Time of Distribution under, a defined contribution plan (the "Rockwell Collins
Hourly Non-Represented Savings Plan"), which will be qualified under Sections
401(a) and 401(k) of the Code, and will have established a related trust which
will be exempt from taxation under Section 501(a) of the Code. The Rockwell
Collins Hourly Non-Represented Savings Plan will credit each participating
Active Rockwell Collins Employee for purposes of vesting and eligibility with
all service which had been credited to such employee for such purposes under the
Rockwell Hourly Non-Represented Savings Plan immediately prior to the Time of
Distribution (excluding any such service which was not counted under the
Rockwell Hourly Non-Represented Savings Plan by operation of its "break in
service" rules).
(b) After the Time of Distribution, each Active Rockwell Collins
Employee who participated in the Rockwell Hourly Non-Represented Savings Plan
prior to the Time of Distribution will be permitted to transfer his or her
account balances from the Rockwell Hourly Non-Represented Savings Plan to the
Rockwell Collins Hourly Non-Represented Savings Plan in accordance with the
terms of the respective plans and applicable law.
(c) Effective as of the Time of Distribution, each Active Rockwell
Collins Employee who participated in the Rockwell Hourly Non-Represented Savings
Plan immediately prior to the Time of Distribution will become fully vested in
his or her account balances under the Rockwell Hourly Non-Represented Savings
Plan. Effective as of the Time of Distribution, each Active Rockwell Collins
Employee will cease to be eligible to contribute to, or receive contributions in
respect of, his or her Rockwell Hourly Non-Represented Savings Plan accounts.
None of Rockwell Collins, the Rockwell Collins Subsidiaries, Affiliates of any
of the foregoing or the Rockwell Collins Hourly Non-Represented Savings Plan or
the trust thereunder will have or acquire any interest in or right to any of the
assets of the Rockwell Hourly Non-Represented Savings Plan, and Rockwell will
retain full power and authority with respect to the amendment and termination of
the Rockwell Hourly Non-Represented Savings Plan and the investment and
disposition of assets held in the Rockwell Hourly Non-Represented Savings Plan
to the extent permitted by law.
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Section 4.04 Non-Qualified Savings Plans.
(a) Establishment and Sponsorship of Non-Qualified Savings Plans.
(i) Prior to the Time of Distribution, Rockwell will have established
(A) a new non-qualified supplemental savings plan (the "Rockwell Automation
Non-Qualified Savings Plan"), the purpose of which will be to provide benefits
to Rockwell Automation Participants and (B) a new non-qualified supplemental
savings plan (the "Rockwell Science Center Non-Qualified Savings Plan"), the
purpose of which will be to provide benefits to Rockwell Science Center
Participants. The Rockwell Automation Non-Qualified Savings Plan and the
Rockwell Science Center Non-Qualified Savings Plan each will be substantially
similar in all material respects to the Rockwell Non-Qualified Savings Plan and
will provide a benefit formula which will be substantially similar in all
material respects to the benefit formula that the Rockwell Non-Qualified Savings
Plan provided immediately prior to the Time of Distribution. The Rockwell
Automation Non-Qualified Savings Plan and the Rockwell Science Center
Non-Qualified Savings Plan each will credit each participant thereunder for
purposes of eligibility to participate, vesting, benefit accruals and all other
plan purposes with all service which had been credited to such participant for
such purposes under the Rockwell Non-Qualified Savings Plan immediately prior to
the Time of Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes sponsorship of the Rockwell Non-Qualified Savings Plan, and (if not
already completed) will promptly change the name of the Rockwell Non-Qualified
Savings Plan to the "Rockwell Collins Non-Qualified Savings Plan". Effective as
of the Time of Distribution, Rockwell hereby retains sponsorship of the Rockwell
Automation Non-Qualified Savings Plan. Effective as of the Time of Distribution,
Rockwell Science Center hereby assumes sponsorship of the Rockwell Science
Center Non-Qualified Savings Plan.
(b) Assumption of Non-Qualified Savings Plan Liabilities.
(i) Effective as of the Time of Distribution, Rockwell hereby assumes,
and agrees to fully perform, pay and discharge, and agrees to cause the Rockwell
Automation Non-Qualified Pension Plan to assume, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Non-Qualified Savings Plan
under and relating to the Rockwell Non-Qualified Savings Plan with respect to
Rockwell Automation Participants who were covered under the Rockwell
Non-Qualified Savings Plan prior to the Time of Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Science Center
hereby assumes, and agrees to fully perform, pay and discharge, and agrees to
cause the
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Rockwell Science Center Non-Qualified Savings Plan to assume, and to
fully perform, pay and discharge, all accrued benefit and other Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) and of the Rockwell
Non-Qualified Savings Plan under and relating to the Rockwell Non-Qualified
Savings Plan with respect to Rockwell Science Center Participants who were
covered under the Rockwell Non-Qualified Savings Plan prior to the Time of
Distribution.
(iii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes, and agrees to fully perform, pay and discharge, and agrees to cause the
Rockwell Non-Qualified Savings Plan to retain, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Non-Qualified Savings Plan
under and relating to the Rockwell Non-Qualified Savings Plan with respect to
all participants who were covered under the Rockwell Non-Qualified Savings Plan
prior to the Time of Distribution (other than Rockwell Automation Participants
and Rockwell Science Center Participants), including all Rockwell Collins
Participants.
Section 4.05 Canadian Savings Plans.
(a) Rockwell Collins Canadian Savings Plan.
(i) As of the end of the Canadian Holdover Term, a member of the
Rockwell Collins Group will have established, and will cover the Active Rockwell
Collins Canadian Employees who participated in the Rockwell Canadian Savings
Plan prior to the end of the Canadian Holdover Term under, a group registered
retirement savings plan (the "Rockwell Collins Canadian Savings Plan"). The
terms of the Rockwell Collins Canadian Savings Plan will be substantially
similar to the terms of the Rockwell Canadian Savings Plan. The Rockwell Collins
Canadian Savings Plan will credit each participating Active Rockwell Collins
Canadian Employee for purpose of eligibility with all service which had been
credited to such employee for such purpose under the Rockwell Canadian Savings
Plan immediately prior to the end of the Canadian Holdover Term.
(ii) After the end of the Canadian Holdover Term, each Active Rockwell
Collins Canadian Employee who participated in the Rockwell Canadian Savings Plan
will be permitted to transfer his or her account balances from the Rockwell
Canadian Savings Plan to the Rockwell Collins Canadian Savings Plan, the
Rockwell Collins Canadian Pension Plan or any other vehicle as may be provided
by law, in accordance with the terms of the respective plans and applicable law.
(iii) Effective as of the end of the Canadian Holdover Term, each
Active Rockwell Collins Canadian Employee will cease to be eligible to
contribute to his
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or her Rockwell Canadian Savings Plan accounts. None of Rockwell Collins, the
Rockwell Collins Subsidiaries, Affiliates of any of the foregoing or the
Rockwell Collins Canadian Savings Plan will have or acquire any interest in or
right to any of the assets of the Rockwell Canadian Savings Plan, and Rockwell
will retain full power and authority with respect to the amendment and
termination of the Rockwell Canadian Savings Plan and the investment and
disposition of assets held in the Rockwell Canadian Savings Plan to the extent
permitted by law.
(b) Rockwell Collins Canadian Deferred Profit Sharing Plan.
(i) As of the end of the Canadian Holdover Term, a member of the
Rockwell Collins Group will have established, and will cover the Active Rockwell
Collins Canadian Employees who participated in the Rockwell Canadian Deferred
Profit Sharing Plan prior to the end of the Canadian Holdover Term under, a
deferred profit sharing plan (the "Rockwell Collins Canadian Deferred Profit
Sharing Plan"). The terms of the Rockwell Collins Canadian Deferred Profit
Sharing Plan will be substantially similar to the terms of the Rockwell Canadian
Deferred Profit Sharing Plan. The Rockwell Collins Canadian Deferred Profit
Sharing Plan will credit each participating Active Rockwell Collins Canadian
Employee for purposes of vesting and eligibility with all service which had been
credited to such employee for such purposes under the Rockwell Canadian Deferred
Profit Sharing Plan immediately prior to the end of the Canadian Holdover Term.
Prior to or as soon as possible after the end of the Canadian Holdover Term,
Rockwell will cause the Rockwell Canadian Deferred Profit Sharing Plan to be
amended to provide for the immediate vesting as of the end of the Canadian
Holdover Term of all account balances of the Active Rockwell Collins Canadian
Employees under the Rockwell Canadian Deferred Profit Sharing Plan.
(ii) After the end of the Canadian Holdover Term, each Active Rockwell
Collins Canadian Employee who participated in the Rockwell Canadian Deferred
Profit Sharing Plan will be permitted to transfer his or her account balances
from the Rockwell Canadian Deferred Profit Sharing Plan to the Rockwell Collins
Canadian Deferred Profit Sharing Plan, the Rockwell Collins Canadian Pension
Plan or any other vehicle as may be provided by law, in accordance with the
terms of the respective plans and applicable law. After the end of the Canadian
Holdover Term, within the time required by law or the terms of the Rockwell
Canadian Deferred Profit Sharing Plan, each Active Rockwell Collins Canadian
Employee who participated in the Rockwell Canadian Deferred Profit Sharing Plan
will be paid such individual's account balances in the Rockwell Canadian
Deferred Profit Sharing Plan in a lump sum (in accordance with the terms of the
Rockwell Canadian Deferred Profit Sharing Plan and applicable law) unless he or
she transfers his or her account balances from the Rockwell Canadian Deferred
Profit Sharing Plan to the Rockwell Collins Canadian Deferred Profit Sharing
Plan, the Rockwell Collins Canadian Pension Plan or any other vehicle as may
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be provided by law, in accordance with the terms of the respective plans and
applicable law.
(iii) Effective as of the end of the Canadian Holdover Term, each
Active Rockwell Collins Canadian Employee will cease to be eligible to receive
contributions in respect of his or her Rockwell Canadian Deferred Profit Sharing
Plan accounts. None of Rockwell Collins, the Rockwell Collins Subsidiaries,
Affiliates of any of the foregoing or the Rockwell Collins Canadian Deferred
Profit Sharing Plan will have or acquire any interest in or right to any of the
assets of the Rockwell Canadian Deferred Profit Sharing Plan, and Rockwell will
retain full power and authority with respect to the amendment and termination of
the Rockwell Canadian Deferred Profit Sharing Plan and the investment and
disposition of assets held in the Rockwell Canadian Deferred Profit Sharing Plan
to the extent permitted by law.
(c) Rockwell Collins Canadian Employees Profit Sharing Plan.
(i) As of the end of the Canadian Holdover Term, a member of the
Rockwell Collins Group will have established, and will cover the Active Rockwell
Collins Canadian Employees who participated in the Rockwell Canadian Employees
Profit Sharing Plan prior to the end of the Canadian Holdover Term under, an
employees profit sharing plan (the "Rockwell Collins Canadian Employees Profit
Sharing Plan"). The terms of the Rockwell Collins Canadian Employees Profit
Sharing Plan will be substantially similar to the terms of the Rockwell Canadian
Employees Profit Sharing Plan. The Rockwell Collins Canadian Employees Profit
Sharing Plan will credit each participating Active Rockwell Collins Canadian
Employee for purposes of vesting and eligibility with all service which had been
credited to such employee for such purposes under the Rockwell Canadian
Employees Profit Sharing Plan immediately prior to the end of the Canadian
Holdover Term. Prior to or as soon as possible after the end of the Canadian
Holdover Term, Rockwell will cause the Rockwell Canadian Employees Profit
Sharing Plan to be amended to provide for the immediate vesting as of the end of
the Canadian Holdover Term of all account balances of the Active Rockwell
Collins Canadian Employees under the Rockwell Canadian Employees Profit Sharing
Plan.
(ii) After the end of the Canadian Holdover Term, within the time
required by law or the terms of the Rockwell Canadian Employees Profit Sharing
Plan, each Active Rockwell Collins Canadian Employee who participated in the
Rockwell Canadian Employees Profit Sharing Plan will be paid such individual's
account balances in a lump sum in accordance with the terms of the Rockwell
Canadian Employees Profit Sharing Plan and applicable law.
(iii) Effective as of the end of the Canadian Holdover Term, each
Active Rockwell Collins Canadian Employee will cease to be eligible to
contribute to, or receive contributions in respect of, his of her Rockwell
Canadian Employees Profit
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Sharing Plan accounts. None of Rockwell Collins, the Rockwell Collins
Subsidiaries, Affiliates of any of the foregoing or the Rockwell Collins
Canadian Employees Profit Sharing Plan will have or acquire any interest in or
right to any of the assets of the Rockwell Canadian Employees Profit Sharing
Plan, and Rockwell will retain full power and authority with respect to the
amendment and termination of the Rockwell Canadian Employees Profit Sharing Plan
and the investment and disposition of assets held in the Rockwell Canadian
Employees Profit Sharing Plan to the extent permitted by law.
ARTICLE V
STOCK PLANS
Section 5.01 Stock Plans.
(a) Rockwell will take all action necessary or appropriate so that each
Rockwell Option held by a Rockwell Automation Optionee that is outstanding as of
the Time of Distribution is adjusted pursuant to the equitable adjustment
provisions of the applicable Rockwell Stock Plan under which such Rockwell
Option was granted. The number of shares of Rockwell Common Stock subject to
such option and the per-share exercise price of such option will be determined
as set forth on Schedule 5.01(a). Such adjusted Rockwell Option will otherwise
have the same terms and conditions as those in effect prior to the adjustment.
(b) Rockwell and Rockwell Collins will take all action necessary or
appropriate so that each Rockwell Option held by a Rockwell Collins Optionee
that is outstanding as of the Time of Distribution will be and become a Rockwell
Collins Option pursuant to the equitable adjustment provisions of the applicable
Rockwell Stock Plan under which such Rockwell Option was granted. The number of
shares of Rockwell Collins Common Stock subject to the Rockwell Collins Option
and the per-share exercise price of such Rockwell Collins Option will be
determined as set forth on Schedule 5.01(b). Such Rockwell Collins Option will
otherwise have substantially the same terms and conditions as the corresponding
Rockwell Option being replaced, except that references to Rockwell will be
changed to refer to Rockwell Collins and references to any of the Rockwell Stock
Plans will be changed to refer to Rockwell Collins' applicable stock option
plan.
(c) Rockwell and Rockwell Collins will take all action necessary or
appropriate so that each Rockwell Split Option will be adjusted pursuant to the
equitable adjustment and other provisions of the applicable Rockwell Stock Plan
under which such Rockwell Split Option was granted. The number of shares of
Rockwell Common Stock subject to such Rockwell Split Option and the per-share
exercise price of such Rockwell Split Option will be determined as set forth on
Schedule 5.01(c)(i). Such adjusted Rockwell Split Option will otherwise have the
same terms and conditions as those in
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effect immediately prior to the adjustment. In addition, each Rockwell Split
Optionee holding a Rockwell Split Option as of the Time of Distribution will
receive a Rockwell Collins Option pursuant to the equitable adjustment and other
provisions of the applicable Rockwell Stock Plan under which such Rockwell Split
Option was granted. The number of shares of Rockwell Collins Common Stock
subject to such Rockwell Collins Option and the per-share exercise price of such
Rockwell Collins Option will be determined as set forth on Schedule 5.01(c)(ii).
Such Rockwell Collins Option will otherwise have substantially the same terms
and conditions as the corresponding Rockwell Split Option being adjusted, except
that references to Rockwell will be changed to refer to Rockwell Collins and
references to any of the Rockwell Stock Plans will be changed to refer to
Rockwell Collins' applicable stock option plan.
ARTICLE VI
OTHER EMPLOYEE PLANS AND MATTERS
Section 6.01 Welfare Plans.
(a) As of the Time of Distribution, Rockwell Collins and the Rockwell
Collins Subsidiaries will have established or assumed, and will cover all
Rockwell Collins Welfare Participants under, Welfare Plans and other employee
welfare benefit and fringe benefit arrangements (collectively, "Rockwell Collins
Welfare Plans") that are comparable in the aggregate to the Rockwell Welfare
Plans that covered Rockwell Collins Welfare Participants immediately prior to
the Time of Distribution. As of the Time of Distribution, Rockwell Science
Center and the Rockwell Science Center Subsidiaries will have established or
assumed, and will cover Rockwell Science Center Participants under, Welfare
Plans and other employee welfare benefit and fringe benefit arrangements
(collectively, "Rockwell Science Center Welfare Plans") that are comparable in
the aggregate to the Rockwell Welfare Plans that covered Rockwell Science Center
Participants immediately prior to the Time of Distribution.
(b) (i) The Rockwell Collins Welfare Plans will provide for the
immediate participation of those Rockwell Collins Welfare Participants who
participated in the corresponding Rockwell Welfare Plans immediately prior to
the Time of Distribution. Each of the Rockwell Collins Welfare Plans will credit
each Rockwell Collins Welfare Participant for all Rockwell Collins Welfare Plan
purposes with all service and any other item which had been credited to or
otherwise accumulated for the benefit of such participant under the
corresponding Rockwell Welfare Benefit Plans immediately prior to the Time of
Distribution, including service credited toward any waiting periods and amounts
credited toward any medical or health insurance deductible or co-payment.
Without limiting the generality of the foregoing, each Rockwell Collins Welfare
Plan, to the extent applicable: (A) will recognize all amounts applied to
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deductibles, co-payments, out-of-pocket maximums and lifetime maximum benefits
with respect to Rockwell Collins Welfare Participants under the corresponding
Rockwell Welfare Plan for the plan year that includes the Time of Distribution
and for prior periods (if applicable); (B) will recognize all service credited
to waiting periods with respect to Rockwell Collins Welfare Participants under
the corresponding Rockwell Welfare Plan; (C) will not impose any limitations on
coverage of pre-existing conditions of Rockwell Collins Welfare Participants,
except to the extent such limitations applied to such participants under the
corresponding Rockwell Welfare Plan immediately before such Rockwell Collins
Welfare Plan became effective; and (D) will not impose any other conditions
(such as proof of good health, evidence of insurability or a requirement of a
physical examination) upon the participation by Rockwell Collins Welfare
Participants who were participating in the corresponding Rockwell Welfare Plan
immediately before such Rockwell Collins Welfare Plan became effective.
(ii) The Rockwell Science Center Welfare Plans will provide for the
immediate participation of those Rockwell Science Center Participants who
participated in the corresponding Rockwell Welfare Plans immediately prior to
the Time of Distribution. Each of the Rockwell Science Center Welfare Plans will
credit each Rockwell Science Center Participant for all Rockwell Science Center
Welfare Plan purposes with all service and any other item which had been
credited to or otherwise accumulated for the benefit of such participant under
the corresponding Rockwell Welfare Benefit Plans immediately prior to the Time
of Distribution, including service credited toward any waiting periods and
amounts credited toward any medical or health insurance deductible or
co-payment. Without limiting the generality of the foregoing, each Rockwell
Science Center Welfare Plan, to the extent applicable: (A) will recognize all
amounts applied to deductibles, co-payments, out-of-pocket maximums and lifetime
maximum benefits with respect to Rockwell Science Center Participants under the
corresponding Rockwell Welfare Plan for the plan year that includes the Time of
Distribution and for prior periods (if applicable); (B) will recognize all
service credited to waiting periods with respect to Rockwell Science Center
Participants under the corresponding Rockwell Welfare Plan; (C) will not impose
any limitations on coverage of pre-existing conditions of Rockwell Science
Center Participants, except to the extent such limitations applied to such
participants under the corresponding Rockwell Welfare Plan immediately before
such Rockwell Science Center Welfare Plan became effective; and (D) will not
impose any other conditions (such as proof of good health, evidence of
insurability or a requirement of a physical examination) upon the participation
by Rockwell Science Center Participants who were participating in the
corresponding Rockwell Welfare Plan immediately before such Rockwell Science
Center Welfare Plan became effective.
(c) (i) As of the Time of Distribution, Rockwell Collins and the
Rockwell Collins Subsidiaries will credit each Active Rockwell Collins Employee
with the unused vacation days and personal and sickness days accrued immediately
prior to
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the Distribution in accordance with the vacation and personnel policies
and labor agreements of Rockwell and its Subsidiaries (including members of the
Rockwell Collins Group and members of the Rockwell Science Center Group)
applicable to such employee in effect immediately prior to the Time of
Distribution.
(ii) As of the Time of Distribution, Rockwell Science Center and the
Rockwell Science Center Subsidiaries will credit each Active Rockwell Science
Center Employee with the unused vacation days and personal and sickness days
accrued immediately prior to the Distribution in accordance with the vacation
and personnel policies of Rockwell and its Subsidiaries (including members of
the Rockwell Collins Group and members of the Rockwell Science Center Group)
applicable to such employee in effect immediately prior to the Time of
Distribution.
(d) (i) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell Collins and the Rockwell Collins
Subsidiaries hereby assume or retain, as the case may be, and will be solely
responsible for and will fully perform, pay and discharge, all Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) in respect of Rockwell
Collins Welfare Participants (and claims by or relating to Rockwell Collins
Welfare Participants) with respect to employee welfare and fringe benefits
(including medical, dental, life, travel, accident, short- and long-term
disability, hospitalization, workers' compensation and other insurance
benefits), whether under the Rockwell Welfare Plans, the Rockwell Collins
Welfare Plans or otherwise, whether incurred, or arising in connection with
incidents occurring, before, at or after the Time of Distribution and whether
any claim is made with respect thereto before, at or after the Time of
Distribution. Without limiting the generality of the foregoing, from and after
the Time of Distribution, Rockwell Collins and the Rockwell Collins Subsidiaries
(or where appropriate, the Rockwell Collins Welfare Plans) hereby assume, and
will be solely responsible for and will fully perform, pay and discharge, all
Liabilities of Rockwell or any of its Subsidiaries (including members of the
Rockwell Collins Group and members of the Rockwell Science Center Group) in
respect of Rockwell Collins Welfare Participants (and claims by or relating to
Rockwell Collins Welfare Participants) with respect to retiree health and
welfare benefits and retiree life insurance benefits, whether under the Rockwell
Welfare Plans, the Rockwell Collins Welfare Plans or otherwise, whether
incurred, or arising in connection with incidents occurring, before, at or after
the Time of Distribution and whether any claim is made with respect thereto
before, at or after the Time of Distribution.
(ii) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell Science Center and the Rockwell Science
Center Subsidiaries hereby assume or retain, as the case may be, and will be
solely responsible for and will fully perform, pay and discharge, all
Liabilities of Rockwell or any of its Subsidiaries (including members of the
Rockwell Collins Group and members of the
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Rockwell Science Center Group) in respect of Rockwell Science Center
Participants (and claims by or relating to Rockwell Science Center Participants)
with respect to employee welfare and fringe benefits (including medical, dental,
life, travel, accident, short- and long-term disability, hospitalization,
workers' compensation and other insurance benefits), whether under the Rockwell
Welfare Plans, the Rockwell Science Center Welfare Plans or otherwise, whether
incurred, or arising in connection with incidents occurring, before, at or after
the Time of Distribution and whether any claim is made with respect thereto
before, at or after the Time of Distribution. Without limiting the generality of
the foregoing, from and after the Time of Distribution, Rockwell Science Center
and the Rockwell Science Center Subsidiaries (or where appropriate, the Rockwell
Science Center Welfare Plans) hereby assume, and will be solely responsible for
and will fully perform, pay and discharge, all Liabilities of Rockwell or any of
its Subsidiaries (including members of the Rockwell Collins Group and members of
the Rockwell Science Center Group) in respect of Rockwell Science Center
Participants (and claims by or relating to Rockwell Science Center Participants)
with respect to retiree health and welfare benefits and retiree life insurance
benefits, whether under the Rockwell Welfare Plans, the Rockwell Science Center
Welfare Plans or otherwise, whether incurred, or arising in connection with
incidents occurring, before, at or after the Time of Distribution and whether
any claim is made with respect thereto before, at or after the Time of
Distribution.
(iii) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell and the Rockwell Subsidiaries hereby
assume or retain, as the case may be, and will be solely responsible for and
will fully perform, pay and discharge, all Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) in respect of Rockwell Automation Participants
(and claims by or relating to Rockwell Automation Participants) with respect to
employee welfare and fringe benefits (including medical, dental, life, travel,
accident, short- and long-term disability, hospitalization, workers'
compensation and other insurance benefits), whether under the Rockwell Welfare
Plans or otherwise, whether incurred, or arising in connection with incidents
occurring, before, at or after the Time of Distribution and whether any claim is
made with respect thereto before, at or after the Time of Distribution. Without
limiting the generality of the foregoing, from and after the Time of
Distribution, Rockwell and the Rockwell Subsidiaries (or where appropriate, the
Rockwell Welfare Plans) hereby assume or retain, as the case may be, and will be
solely responsible for and will fully perform, pay and discharge, all
Liabilities of Rockwell or any of its Subsidiaries (including members of the
Rockwell Collins Group and members of the Rockwell Science Center Group) in
respect of Rockwell Automation Participants (and claims by or relating to
Rockwell Automation Participants) with respect to retiree health and welfare
benefits and retiree life insurance benefits, whether under the Rockwell Welfare
Plans or otherwise, whether incurred, or arising in connection with incidents
occurring, before, at
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or after the Time of Distribution and whether any claim is made with respect
thereto before, at or after the Time of Distribution.
Section 6.02 Incentive Compensation Plans.
(a) Effective as of the Time of Distribution, Rockwell hereby assumes
or retains, as the case may be, and will be solely responsible for and will
fully perform, pay and discharge, all Liabilities (including liability for
earned but unpaid incentive payments) of Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) for, due to and/or attributable to Rockwell Automation
Participants under the Rockwell International Business Unit Long-Term Incentive
Plan (the "LTIP"), the Incentive Compensation Plan and all other long-term,
annual and other incentive compensation plans and arrangements of Rockwell and
its Subsidiaries (including members of the Rockwell Collins Group and members of
the Rockwell Science Center Group) in effect at or prior to the Time of
Distribution.
(b) Effective as of the Time of Distribution, Rockwell Science Center
hereby assumes or retains, as the case may be, and will be solely responsible
for and will fully perform, pay and discharge, all Liabilities (including
liability for earned but unpaid incentive payments) of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) for, due to and/or attributable to Rockwell
Science Center Participants under the LTIP, the Incentive Compensation Plan and
all other long-term, annual and other incentive compensation plans and
arrangements of Rockwell and its Subsidiaries (including members of the Rockwell
Collins Group and members of the Rockwell Science Center Group) in effect at or
prior to the Time of Distribution.
(c) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes or retains, as the case may be, and will be solely responsible for and
will fully perform, pay and discharge, all Liabilities (including liability for
earned but unpaid incentive payments) of Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) for, due to and/or attributable to Pre-Distribution Group
Employees (other than Rockwell Automation Participants and Rockwell Science
Center Participants), including all Rockwell Collins Participants, under the
LTIP, the Incentive Compensation Plan and all other long-term, annual and other
incentive compensation plans and arrangements of Rockwell and its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) in effect at or prior to the Time of Distribution.
Notwithstanding the fact that, pursuant to this Section 6.02(c), Rockwell
Collins is responsible for the payment of amounts due to Former Rockwell
Corporate Employees under the incentive compensation plans and arrangements
described in the preceding sentence, Rockwell will determine in its sole
discretion the amount of such
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payments payable to Former Rockwell Corporate Employees in respect of the fiscal
year ending September 30, 2001, provided that such amount shall not exceed the
amount of such payments made to Former Rockwell Corporate Employees in respect
of the fiscal year ended September 30, 2000.
Section 6.03 Deferred Compensation Plan.
(a) Establishment and Sponsorship of Deferred Compensation Plans.
(i) Prior to the Time of Distribution, Rockwell will have established
(A) a new deferred compensation plan (the "Rockwell Automation Deferred
Compensation Plan"), the purpose of which will be to provide benefits to
Rockwell Automation Participants and (B) a new deferred compensation plan (the
"Rockwell Science Center Deferred Compensation Plan"), the purpose of which will
be to provide benefits to Rockwell Science Center Participants. The Rockwell
Automation Deferred Compensation Plan and the Rockwell Science Center Deferred
Compensation Plan each will be substantially similar in all material respects to
the Rockwell Deferred Compensation Plan, and will provide a benefit formula
which will be substantially similar in all material respects to the benefit
formula that the Rockwell Deferred Compensation Plan provided immediately prior
to the Time of Distribution. The Rockwell Automation Deferred Compensation Plan
and the Rockwell Science Center Deferred Compensation Plan each will credit each
participant thereunder for purposes of eligibility to participate, vesting,
benefit accruals and all other plan purposes with all service which had been
credited to such participant for such purposes under the Rockwell Deferred
Compensation Plan immediately prior to the Time of Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes sponsorship of the Rockwell Deferred Compensation Plan, and (if not
already completed) will promptly change the name of the Rockwell Deferred
Compensation Plan to the "Rockwell Collins Deferred Compensation Plan".
Effective as of the Time of Distribution, Rockwell hereby retains sponsorship of
the Rockwell Automation Deferred Compensation Plan. Effective as of the Time of
Distribution, Rockwell Science Center hereby assumes sponsorship of the Rockwell
Science Center Deferred Compensation Plan.
(b) Assumption of Deferred Compensation Plan Liabilities.
(i) Effective as of the Time of Distribution, Rockwell hereby assumes,
and agrees to fully perform, pay and discharge, and agrees to cause the Rockwell
Automation Deferred Compensation Plan to assume, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Deferred Compensation Plan
under and relating to the Rockwell Deferred Compensation Plan with respect to
Rockwell
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Automation Participants who were covered under the Rockwell Deferred
Compensation Plan prior to the Time of Distribution.
(ii) Effective as of the Time of Distribution, Rockwell Science Center
hereby assumes, and agrees to fully perform, pay and discharge, and agrees to
cause the Rockwell Science Center Deferred Compensation Plan to assume, and to
fully perform, pay and discharge, all accrued benefit and other Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) and of the Rockwell
Deferred Compensation Plan under and relating to the Rockwell Deferred
Compensation Plan with respect to Rockwell Science Center Participants who were
covered under the Rockwell Deferred Compensation Plan prior to the Time of
Distribution.
(iii) Effective as of the Time of Distribution, Rockwell Collins hereby
assumes, and agrees to fully perform, pay and discharge, and agrees to cause the
Rockwell Deferred Compensation Plan to retain, and to fully perform, pay and
discharge, all accrued benefit and other Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) and of the Rockwell Deferred Compensation Plan
under and relating to the Rockwell Deferred Compensation Plan with respect to
all participants who were covered under the Rockwell Deferred Compensation Plan
prior to the Time of Distribution (other than Rockwell Automation Participants
and Rockwell Science Center Participants), including all Rockwell Collins
Participants.
Section 6.04 Severance Pay.
(a) Rockwell, Rockwell Collins and Rockwell Science Center acknowledge
and agree that the transactions contemplated by the Transaction Agreements will
not constitute a severance of employment of any Active Rockwell Automation
Employee, Active Rockwell Collins Employee or Active Rockwell Science Center
Employee prior to or as a result of the transactions contemplated thereby, and
that individuals who, in connection with the Distribution, become Active
Rockwell Automation Employees, Active Rockwell Collins Employees or Active
Rockwell Science Center Employees pursuant to this Agreement will not be deemed
to have experienced a termination, layoff or severance of employment from
Rockwell and its Subsidiaries (including members of the Rockwell Collins Group
and members of the Rockwell Science Center Group), in each case for purposes of
any policy, plan, program or agreement of Rockwell or any of its Subsidiaries
(including members of the Rockwell Collins Group and members of the Rockwell
Science Center Group) that provides for the payment of severance, salary
continuation or similar benefits.
(b) (i) Rockwell and the Rockwell Subsidiaries hereby assume or retain
(as applicable), and will be solely responsible for, and will fully perform, pay
and
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discharge, all Liabilities of Rockwell or any of its Subsidiaries (including
members of the Rockwell Collins Group and members of the Rockwell Science Center
Group) in connection with claims made by or on behalf of Rockwell Automation
Participants in respect of severance pay, salary continuation and similar
obligations relating to the termination or alleged termination (whether
voluntary or involuntary) of any such person's employment, whether such
termination or alleged termination occurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any contract, employment agreement or collective bargaining agreement or
under any Federal, state, local, provincial or foreign law).
(ii) Rockwell Science Center and the Rockwell Science Center
Subsidiaries hereby assume or retain (as applicable), and will be solely
responsible for, and will fully perform, pay and discharge, all Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) in connection with
claims made by or on behalf of Rockwell Science Center Participants in respect
of severance pay, salary continuation and similar obligations relating to the
termination or alleged termination (whether voluntary or involuntary) of any
such person's employment, whether such termination or alleged termination
occurred before, at or after the Time of Distribution and whether any claim is
made with respect thereto before, at or after the Time of Distribution (whether
or not such claim is based on any severance policy, agreement, arrangement or
program which may exist or arise under any contract, employment agreement or
collective bargaining agreement or under any Federal, state, local, provincial
or foreign law).
(iii) Rockwell Collins and the Rockwell Collins Subsidiaries hereby
assume or retain (as applicable), and will be solely responsible for, and will
fully perform, pay and discharge, all Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) in connection with claims made by or on behalf of
all Pre-Distribution Group Employees (other than Rockwell Automation
Participants and Rockwell Science Center Participants), including all Rockwell
Collins Participants, in respect of severance pay, salary continuation and
similar obligations relating to the termination or alleged termination (whether
voluntary or involuntary) of any such person's employment, whether such
termination or alleged termination occurred before, at or after the Time of
Distribution and whether any claim is made with respect thereto before, at or
after the Time of Distribution (whether or not such claim is based on any
severance policy, agreement, arrangement or program which may exist or arise
under any contract, employment agreement or collective bargaining agreement or
under any Federal, state, local, provincial or foreign law).
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Section 6.05 Employment, Consulting and Other Employee Related
Agreements.
(a) Effective as of the Time of Distribution, Rockwell and the Rockwell
Subsidiaries hereby assume or retain (as applicable), and will be solely
responsible for, and will fully perform, pay and discharge, all Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) relating to Rockwell
Automation Participants under their respective employment, consulting,
separation, agreements to arbitrate, and other employee related agreements with
any member of the Pre-Distribution Group, as the same are in effect immediately
prior to the Time of Distribution.
(b) Effective as of the Time of Distribution, Rockwell Science Center
and the Rockwell Science Center Subsidiaries hereby assume or retain (as
applicable), and will be solely responsible for, and will fully perform, pay and
discharge, all Liabilities of Rockwell or any of its Subsidiaries (including
members of the Rockwell Collins Group and members of the Rockwell Science Center
Group) relating to Rockwell Science Center Participants under their respective
employment, consulting, separation, agreements to arbitrate, and other employee
related agreements with any member of the Pre-Distribution Group, as the same
are in effect immediately prior to the Time of Distribution.
(c) Effective as of the Time of Distribution, Rockwell Collins and the
Rockwell Collins Subsidiaries hereby assume or retain (as applicable), and will
be solely responsible for, and will fully perform, pay and discharge, all
Liabilities of Rockwell or any of its Subsidiaries (including members of the
Rockwell Collins Group and members of the Rockwell Science Center Group)
relating to all Pre-Distribution Group Employees (other than Rockwell Automation
Participants and Rockwell Science Center Participants), including all Rockwell
Collins Participants, under their respective employment, consulting, separation,
agreements to arbitrate, and other employee related agreements with any member
of the Pre-Distribution Group, as the same are in effect immediately prior to
the Time of Distribution (other than any such Liabilities described in
paragraphs (d)(ii) and (d)(iii)(A) of the definition of Rockwell Automation
Liabilities in the Distribution Agreement).
Section 6.06 Other Liabilities.
(a) (i) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell and the Rockwell Subsidiaries hereby
assume or retain, as the case may be, and will be solely responsible for, and
will fully perform, pay and discharge, all Liabilities of Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) arising out of or relating to the employment of
Rockwell Automation Participants by any
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member of the Pre-Distribution Group, whether pursuant to benefit plans or
otherwise and whether such Liabilities arose before, at or after the Time of
Distribution or any claim is made with respect thereto before, at or after the
Time of Distribution.
(ii) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell Science Center and the Rockwell Science
Center Subsidiaries hereby assume or retain, as the case may be, and will be
solely responsible for, and will fully perform, pay and discharge, all
Liabilities of Rockwell or any of its Subsidiaries (including members of the
Rockwell Collins Group and members of the Rockwell Science Center Group) arising
out of or relating to the employment of Rockwell Science Center Participants by
any member of the Pre-Distribution Group, whether pursuant to benefit plans or
otherwise and whether such Liabilities arose before, at or after the Time of
Distribution or any claim is made with respect thereto before, at or after the
Time of Distribution.
(iii) From and after the Time of Distribution, except as specifically
set forth in this Agreement, Rockwell Collins and the Rockwell Collins
Subsidiaries hereby assume or retain, as the case may be, and will be solely
responsible for, and will fully perform, pay and discharge, all Liabilities of
Rockwell or any of its Subsidiaries (including members of the Rockwell Collins
Group and members of the Rockwell Science Center Group) arising out of or
relating to the employment of Pre-Distribution Group Employees (other than
Rockwell Automation Participants and Rockwell Science Participants), including
all Rockwell Collins Participants, by any member of the Pre-Distribution Group,
whether pursuant to benefit plans or otherwise and whether such Liabilities
arose before, at or after the Time of Distribution or any claim is made with
respect thereto before, at or after the Time of Distribution (other than any
such Liabilities described in paragraphs (d)(ii) and (d)(iii)(A) of the
definition of Rockwell Automation Liabilities in the Distribution Agreement).
Section 6.07 Funding of Master Rabbi Trusts. Prior to the Time of
Distribution, each of the Rockwell Master Rabbi Trust, the Rockwell Automation
Master Rabbi Trust and the Rockwell Science Center Master Rabbi Trust will have
been funded by Rockwell in an amount (if any) determined by the Rockwell Board
(which amounts would be in respect of a portion of the compensation deferred on
behalf of Rockwell Collins Participants, Rockwell Automation Participants and
Rockwell Science Center Participants, respectively, under the Rockwell Deferred
Compensation Plan, and earnings deemed credited thereon, from and after June 1,
2000). After the Time of Distribution, (i) Rockwell Collins will make all
contributions required to be made after the Time of Distribution to the Rockwell
Master Rabbi Trust pursuant to the terms thereof, (ii) Rockwell will make all
contributions required to be made after the Time of Distribution to the Rockwell
Automation Master Rabbi Trust pursuant to the terms thereof and (iii) Rockwell
Science Center will make all contributions required to be made after the Time
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of Distribution to the Rockwell Science Center Master Rabbi Trust pursuant to
the terms thereof.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Indemnification. All Liabilities retained or assumed by or
allocated to Rockwell Collins or any Rockwell Collins Subsidiary pursuant to
this Agreement will be deemed to be Rockwell Collins Liabilities (as defined in
the Distribution Agreement), all Liabilities retained or assumed by or allocated
to Rockwell Science Center or any Rockwell Science Center Subsidiary pursuant to
this Agreement will be deemed to be Rockwell Science Center Liabilities (as
defined in the Distribution Agreement) and all Liabilities retained or assumed
by or allocated to Rockwell or any Rockwell Subsidiary pursuant to this
Agreement will be deemed to be Rockwell Automation Liabilities (as defined in
the Distribution Agreement), and, in each case, will be subject to the
indemnification provisions set forth in Article IV of the Distribution
Agreement.
Section 7.02 Cooperation. Rockwell, Rockwell Collins and Rockwell
Science Center will cooperate in taking all such action as may be necessary or
appropriate to implement the provisions of this Agreement, including making all
appropriate filings as may be required under ERISA or the Code, the regulations
thereunder and any other applicable laws, exchanging and sharing all appropriate
records, amending plan, trust, record keeping and other related documents and
implementing all appropriate communications with participants.
Section 7.03 Sharing of Information. Each of Rockwell, Rockwell Collins
and Rockwell Science Center will, and will cause each of their respective
Subsidiaries to, provide to the other all such Information in its possession as
the other may reasonably request to enable the requesting party to administer
its employee benefit plans and programs, and to determine the scope of, and
fulfill, its obligations under this Agreement. Such Information will, to the
extent reasonably practicable, be provided in the format and at the times and
places requested, but in no event will the party providing such Information be
obligated to incur any out-of-pocket expense not reimbursed by the party making
such request, nor to make such Information available outside its normal business
hours and premises. Any Information shared or exchanged pursuant to this
Agreement will be subject to the same confidentiality requirements set forth in
the Distribution Agreement.
Section 7.04 Entire Agreement; Construction. This Agreement, the
Distribution Agreement and the other Ancillary Agreements, including any
annexes, schedules and exhibits hereto or thereto, and other agreements and
documents referred to
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herein and therein, will together constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and will supersede
all prior negotiations, agreements and understandings of the parties of any
nature, whether oral or written, with respect to such subject matter.
Notwithstanding any other provisions in this Agreement to the contrary, in the
event and to the extent that there is a conflict between the provisions of this
Agreement and the provisions of the Distribution Agreement, the provisions of
this Agreement will control.
Section 7.05 Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement will remain in full force and effect and survive the Time of
Distribution.
Section 7.06 Governing Law. This Agreement will be governed by and
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State, except that (i)
the provisions of Sections 3.04 and 3.05 (and the definitions hereof and other
provisions of this Article VII to the extent relating to such sections) will be
governed by and construed in accordance with the laws of the United Kingdom and
(ii) the provisions of Sections 3.06 and 4.05 (and the definitions hereof and
other provisions of this Article VII to the extent relating to such sections)
will be governed by and construed in accordance with the laws of Canada.
Section 7.07 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand or telecopied, e-mailed or sent, postage prepaid,
by registered, certified or express mail or reputable overnight courier service
and will be deemed given when so delivered by hand or telecopied, when e-mail
confirmation is received if delivered by e-mail, or three business days after
being so mailed (one business day in the case of express mail or overnight
courier service). All such notices, requests, claims, demands and other
communications will be addressed as set forth in Section 6.05 of the
Distribution Agreement, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice.
Section 7.08 Amendments. This Agreement cannot be amended, modified or
supplemented except by a written agreement executed by each party affected
thereby.
Section 7.09 Assignment. No party to this Agreement will convey, assign
or otherwise transfer any of its rights or obligations under this Agreement
without the prior written consent of the other parties in their sole and
absolute discretion, except that any party may (without obtaining any consent)
assign any of its rights hereunder to a successor to all or any part of its
business. Any such conveyance, assignment or transfer requiring the prior
written consent of the other parties which is made without such
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consent will be void ab initio. No assignment of this Agreement will relieve any
assigning party of its obligations hereunder.
Section 7.10 Captions; Currency. The article, section and paragraph
captions herein and the table of contents hereto are for convenience of
reference only, do not constitute part of this Agreement and will not be deemed
to limit or otherwise affect any of the provisions hereof. Unless otherwise
specified, all references herein to numbered articles or sections are to
articles and sections of this Agreement and all references herein to schedules
are to schedules to this Agreement. Unless otherwise specified, all references
contained in this Agreement, in any schedule referred to herein or in any
instrument or document delivered pursuant hereto to dollars or "$" will mean
United States Dollars.
Section 7.11 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
party as a result thereof, the parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the parties.
Section 7.12 Parties in Interest. This Agreement is binding upon and is
for the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a party hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement. No provision of this Agreement
will be construed (a) to limit the right of Rockwell, any Rockwell Subsidiary,
Rockwell Collins, any Rockwell Collins Subsidiary, Rockwell Science Center or
any Rockwell Science Center Subsidiary to amend or terminate any of their plans;
provided, however, that Rockwell Collins, the Rockwell Collins Subsidiaries,
Rockwell Science Center and the Rockwell Science Center Subsidiaries will be
obligated to maintain employee benefit plans and arrangements until at least
January 1, 2003 which are substantially similar in all material respects to
those which had been maintained or provided by Rockwell or any of its
Subsidiaries (including members of the Rockwell Collins Group and members of the
Rockwell Science Center Group) immediately prior to the Time of Distribution, or
(b) to create any right or entitlement whatsoever in any employee, former
employee or beneficiary including, without limitation, a right to continued
employment or to any benefit under a plan or any other benefit or compensation.
For purposes of Sections 3.04 and 3.05, a person who is not a party to this
Agreement has no rights under the Contracts (Rights of Third Parties)
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Act 1999 to enforce any term of this Agreement, provided that the foregoing does
not affect any right or remedy of a third party which exists or is available
apart from that Act.
Section 7.13 Schedules. All schedules attached hereto are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
Section 7.14 Termination. This Agreement may be terminated and the
Distribution abandoned at any time prior to the Time of Distribution by and in
the sole discretion of the Rockwell Board without the approval of Rockwell
Collins, Rockwell Science Center or Rockwell's shareowners. In the event of such
termination, no party will have any liability of any kind to any other party on
account of such termination.
Section 7.15 Waivers; Remedies. No failure or delay on the part of
Rockwell, Rockwell Collins or Rockwell Science Center in exercising any right,
power or privilege hereunder will operate as a waiver thereof, nor will any
waiver on the part of Rockwell, Rockwell Collins or Rockwell Science Center of
any right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor will any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. The
rights and remedies herein provided are cumulative and are not exclusive of any
rights or remedies which the parties may otherwise have at law or in equity.
Section 7.16 Counterparts. This Agreement may be executed in separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement.
Section 7.17 Performance. Each party will cause to be performed and
hereby guarantees the performance of all actions, agreements and obligations set
forth herein to be performed by any Subsidiary or Affiliate of such party.
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Section 7.18 Interpretation. Any reference herein to any Federal,
state, local, provincial or foreign law shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise. For the purposes of this Agreement, (a) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other gender as the context requires, (b) the terms
"hereof", "herein", and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement, (c) the word "including" and words
of similar import when used in this Agreement shall mean "including, without
limitation" and (d) all references to any plan shall be deemed to include any
amendments thereto.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties as of the date first hereinabove
written.
ROCKWELL INTERNATIONAL CORPORATION
By: /s/ William J. Calise, Jr.
Name: William J. Calise, Jr.
Title: Senior Vice President,
General Counsel and Secretary
ROCKWELL COLLINS, INC.
By: /s/ Lawrence A. Erickson
Name: Lawrence A. Erickson
Title: Senior Vice President and
Chief Financial Officer
ROCKWELL SCIENTIFIC COMPANY LLC
By: /s/ Wayne A. Davey
Name: Wayne A. Davey
Title: Vice President and
Chief Financial Officer
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