UNITED STATES
|
Delaware
(State or Other Jurisdiction of Incorporation) |
1-12383
(Commission File Number) |
25-1797617
(IRS Employer Identification No.) |
1201 South Second Street
(414) 382-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |
INFORMATION TO BE INCLUDED IN THE REPORT |
Item 1.01. | Entry into a Material Definitive Agreement. |
On November 6, 2006, we entered into a definitive agreement (the Agreement) to sell our Dodge(R) mechanical and Reliance Electric(TM) motors and motor repair services businesses to Baldor Electric Company (Baldor) for $1.8 billion. The purchase price will be comprised of $1.75 billion in cash and $50 million in Baldor common stock. The purchase price is subject to adjustment based on the working capital of the businesses being sold as provided in the Agreement. The Agreement includes representations, warranties and covenants from both parties customary in transactions of this type. The transaction is expected to be completed in the second quarter of our fiscal 2007 and is subject to customary closing conditions and necessary regulatory approvals. A copy of the Agreement is filed herewith as Exhibit 99 and is incorporated herein by reference. |
Item 9.01. | Financial Statements and Exhibits. |
(d) |
Exhibits
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99 | Purchase Agreement, dated as of November 6, 2006, by and among Rockwell Automation, Inc., Rockwell Automation of Ohio, Inc., Rockwell Automation Canada Control Systems, Grupo Industrias Reliance S.A. de C.V., Rockwell International GmbH and Baldor Electric Company |
ROCKWELL AUTOMATION, INC.
(Registrant) |
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By | /s/ Douglas M. Hagerman | |
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Douglas M. Hagerman
Senior Vice President, General Counsel and Secretary |
Date: November 9, 2006 (Page 3 of 4 Pages) EXHIBIT INDEX |
Exhibit
Number |
Description | |
99 |
Purchase Agreement, dated as of November 6, 2006, by and among Rockwell Automation, Inc., Rockwell Automation of Ohio, Inc., Rockwell Automation Canada Control Systems, Grupo Industrias Reliance S.A. de C.V., Rockwell International GmbH and Baldor Electric Company |
(Page 4 of 4 Pages) |
Exhibit 99 PURCHASE AGREEMENT by and among ROCKWELL AUTOMATION, INC., ROCKWELL AUTOMATION OF OHIO, INC., ROCKWELL AUTOMATION CANADA CONTROL SYSTEMS, GRUPO INDUSTRIAS RELIANCE S.A. de C.V., ROCKWELL INTERNATIONAL GMBH and BALDOR ELECTRIC COMPANY |
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Dated as of November 6, 2006 |
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TABLE OF CONTENTS |
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ARTICLE I DEFINITIONS | 2 | |
ARTICLE II SALE AND PURCHASE OF THE SHARES | 2 | |
SECTION 2.1 | Sale and Purchase of the Shares | 2 |
ARTICLE III PURCHASE PRICE | 3 | |
SECTION 3.1 | Purchase Price | 3 |
SECTION 3.2 | Closing Statement | 3 |
SECTION 3.3 | Post-Closing Adjustment | 7 |
ARTICLE IV CLOSING | 7 | |
SECTION 4.1 | Closing | 7 |
SECTION 4.2 | Closing Deliveries of Seller | 8 |
SECTION 4.3 | Closing Deliveries of Buyer | 9 |
SECTION 4.4 | Transfer Taxes | 9 |
SECTION 4.5 | China Closing | 10 |
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER | 13 | |
SECTION 5.1 | Corporate Organization | 13 |
SECTION 5.2 | Corporate Authorization | 13 |
SECTION 5.3 | No Violation or Conflict | 13 |
SECTION 5.4 | Government Authorizations | 14 |
SECTION 5.5 | Outstanding Capital Stock of Acquired Companies; Ownership of Shares | 14 |
SECTION 5.6 | Equity Interests | 15 |
SECTION 5.7 | Financial Statements | 15 |
SECTION 5.8 | Liabilities | 16 |
SECTION 5.9 | Real Property | 16 |
SECTION 5.10 | Personal Property | 17 |
SECTION 5.11 | Contracts | 17 |
SECTION 5.12 | Compliance With Laws | 18 |
SECTION 5.13 | Permits | 18 |
SECTION 5.14 | Taxes | 18 |
SECTION 5.15 | Litigation | 21 |
SECTION 5.16 | Intellectual Property | 21 |
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SECTION 5.17 | Conduct of Business Since June 30, 2006 | 22 |
SECTION 5.18 | Insurance | 23 |
SECTION 5.19 | Employees | 23 |
SECTION 5.20 | Sufficiency of Assets | 24 |
SECTION 5.21 | Environmental Matters | 24 |
SECTION 5.22 | No Brokers | 24 |
SECTION 5.23 | Acquisition of Buyer Shares for Investment | 24 |
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER | 25 | |
SECTION 6.1 | Corporate Organization | 25 |
SECTION 6.2 | Corporate Authorization | 25 |
SECTION 6.3 | No Violation or Conflict | 25 |
SECTION 6.4 | Government Authorizations | 25 |
SECTION 6.5 | Litigation | 25 |
SECTION 6.6 | Information | 26 |
SECTION 6.7 | Acquisition of Shares for Investment | 26 |
SECTION 6.8 | Sufficient Funds | 26 |
SECTION 6.9 | No Brokers | 26 |
SECTION 6.10 | Buyer Shares | 26 |
SECTION 6.11 | SEC Filings | 27 |
ARTICLE VII INVESTIGATION BY BUYER; CONFIDENTIALITY | 27 | |
ARTICLE VIII COVENANTS | 27 | |
SECTION 8.1 | Conduct of Business Prior to the Effective Time | 27 |
SECTION 8.2 | Exclusive Dealing | 28 |
SECTION 8.3 | HSR Act Compliance; Foreign Governmental Approvals | 28 |
SECTION 8.4 | Commercially Reasonable Efforts | 29 |
SECTION 8.5 | Further Assurances | 30 |
SECTION 8.6 | Use of Names, Trademarks, Etc | 31 |
SECTION 8.7 | Obligations Relating to the Business | 35 |
SECTION 8.8 | Cash Management | 36 |
SECTION 8.9 | Insurance | 37 |
SECTION 8.10 | Intellectual Property | 39 |
SECTION 8.11 | Transfer of Retained Assets | 41 |
SECTION 8.12 | Covenant Not to Compete | 41 |
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SECTION 8.13 | Public Announcements | 43 |
SECTION 8.14 | Post-Closing Access; Preservation of Records | 43 |
SECTION 8.15 | Confidentiality | 44 |
SECTION 8.16 | Elimination of Intercompany Accounts | 45 |
SECTION 8.17 | Termination of Intercompany Arrangements | 45 |
SECTION 8.18 | Purchase Agreements and Software Licenses; Seller Services | 46 |
SECTION 8.19 | Directors' and Officers' Indemnification and Insurance | 46 |
SECTION 8.20 | Financing | 47 |
SECTION 8.21 | Financial Information | 48 |
ARTICLE IX EMPLOYEE MATTERS | 49 | |
SECTION 9.1 | Continuation of Employment | 49 |
SECTION 9.2 | Pension and Savings Plans | 50 |
SECTION 9.3 | COBRA | 55 |
SECTION 9.4 | Flexible Benefit Plans | 55 |
SECTION 9.5 | Non-Qualified Pension, Non-Qualified Savings and Deferred Compensation Plans | 55 |
SECTION 9.6 | Retention Bonus Arrangements | 56 |
SECTION 9.7 | Employment, Consulting and Other Employee Related Agreements | 56 |
SECTION 9.8 | Welfare Plans | 56 |
SECTION 9.9 | Retiree Medical and Life Insurance Benefits | 57 |
SECTION 9.10 | Cooperation | 58 |
ARTICLE X CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER | 59 | |
SECTION 10.1 | Representations and Warranties | 59 |
SECTION 10.2 | Covenants and Agreements | 59 |
SECTION 10.3 | No Adverse Order | 59 |
SECTION 10.4 | HSR Act | 59 |
SECTION 10.5 | China Approval | 60 |
SECTION 10.6 | Foreign Governmental Approvals | 60 |
SECTION 10.7 | Material Adverse Effect | 60 |
ARTICLE XI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER | 60 | |
SECTION 11.1 | Representations and Warranties | 60 |
SECTION 11.2 | Covenants and Agreements | 61 |
SECTION 11.3 | No Adverse Order | 61 |
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SECTION 11.4 | HSR Act | 61 |
SECTION 11.5 | China Approval | 61 |
SECTION 11.6 | Foreign Governmental Approvals | 61 |
ARTICLE XII INDEMNIFICATION | 61 | |
SECTION 12.1 | Indemnification by Seller | 61 |
SECTION 12.2 | Indemnification by Buyer | 62 |
SECTION 12.3 | Additional Seller Indemnification | 63 |
SECTION 12.4 | Indemnification Procedures | 65 |
SECTION 12.5 | Certain Limitations | 67 |
SECTION 12.6 | Termination of Indemnification Obligations | 69 |
SECTION 12.7 | Dollar Limitations | 70 |
SECTION 12.8 | Exclusive Remedy | 71 |
ARTICLE XIII TAX MATTERS | 72 | |
SECTION 13.1 | Preparation and Filing of Tax Returns | 72 |
SECTION 13.2 | Payment of Taxes | 72 |
SECTION 13.3 | Tax Sharing Agreements | 72 |
SECTION 13.4 | Carryforwards and Carrybacks | 73 |
SECTION 13.5 | Refunds | 73 |
SECTION 13.6 | Tax Cooperation | 74 |
SECTION 13.7 | Allocation of Purchase Price | 74 |
SECTION 13.8 | Tax Indemnification | 75 |
SECTION 13.9 | Timing Adjustments | 76 |
SECTION 13.10 | Tax Contests | 76 |
SECTION 13.11 | Section 338(g) Election | 77 |
ARTICLE XIV TERMINATION; EFFECT OF TERMINATION | 77 | |
SECTION 14.1 | Termination | 77 |
SECTION 14.2 | Effect of Termination | 78 |
ARTICLE XV MISCELLANEOUS | 78 | |
SECTION 15.1 | Parties in Interest | 78 |
SECTION 15.2 | Assignment | 79 |
SECTION 15.3 | Notices | 79 |
SECTION 15.4 | Waiver; Remedies | 80 |
iv |
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SECTION 15.5 | Schedules | 80 |
SECTION 15.6 | Captions, Currency | 81 |
SECTION 15.7 | Construction; Interpretation | 81 |
SECTION 15.8 | No Representations or Warranties | 81 |
SECTION 15.9 | Severability | 82 |
SECTION 15.10 | Dispute Resolution | 82 |
SECTION 15.11 | Consent to Jurisdiction | 83 |
SECTION 15.12 | Expenses | 83 |
SECTION 15.13 | Entire Agreement | 84 |
SECTION 15.14 | Amendment | 84 |
SECTION 15.15 | Counterparts | 84 |
SECTION 15.16 | Governing Law | 84 |
SECTION 15.17 | Specific Performance | 84 |
v EXHIBITS |
Exhibit A
Exhibit B Exhibit C Exhibit D Exhibit E |
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Form of Allen-Bradley Motors Supply Agreement
Form of Drives Supply Agreement Form of Reliance Motors Supply Agreement Outline of Terms for Transition Agreement Form of Registration Rights Agreement |
SCHEDULES |
Schedule 1 | | Definitions |
Schedule 3.2(b) | | Closing Statement Accounting Policies |
Schedule 4.2(i) | | Non-Resigning Directors and Officers |
Schedule 5.3 | | Seller Violations and Conflicts |
Schedule 5.4 | | Governmental Authorizations Required by Seller |
Schedule 5.5(a) | | Shares of Acquired Companies |
Schedule 5.6 | | Equity Interests |
Schedule 5.7 | | Financial Statements |
Schedule 5.8 | | Certain Liabilities |
Schedule 5.9(a)(i) | | Owned Real Property |
Schedule 5.9(a)(ii) | | Leased Real Property |
Schedule 5.11(a) | | Material Contracts |
Schedule 5.11(b) | | Material Contract Defaults |
Schedule 5.12 | | Compliance With Laws |
Schedule 5.14 | | Taxes |
Schedule 5.15 | | Acquired Company Litigation |
Schedule 5.16(a) | | Intellectual Property |
Schedule 5.16(b) | | Intellectual Property Licenses |
Schedule 5.16(c) | | Intellectual Property Matters |
Schedule 5.17 | | Conduct of Business Since June 30, 2006 |
Schedule 5.18 | | Insurance |
Schedule 5.19(a) | | Collective Bargaining Agreements |
Schedule 5.19(b) | | Labor Matters |
Schedule 5.19(c) | | Employee Benefit Plans |
Schedule 5.19(d) | | Multiemployer Plans |
Schedule 5.21 | | Environmental Matters |
Schedule 6.3 | | Buyer Violations and Conflicts |
Schedule 6.4 | | Governmental Authorizations Required by Buyer |
Schedule 6.5 | | Buyer Litigation |
Schedule 8.1(a) | | Conduct of Business Prior to the Effective Time |
Schedule 8.7(a) | | Financial Instruments |
Schedule 8.7(b) | | Seller Guaranties |
Schedule 8.17(b) | | Non-Terminated Intercompany Arrangements |
Schedule 9.1 | | Non-Acquired Company Business Employees |
Schedule A-1 | | Retention Bonus Arrangements |
(i) GAAP (as in effect on June 30, 2006) accounting methods, policies, practices, procedures, classifications, judgments, estimation methodologies and accounting standards (including asset and liability valuations, cut-off procedures, revenue recognition, accounting for long-term contracts and materiality standards) will be utilized in the preparation of the Closing Statement for any accounting methods, policies, practices, procedures, classifications, judgments, estimation methodologies or accounting standards that were not utilized in the preparation of the June 30 Balance Sheet; |
(ii) the Closing Statement will not include any amounts for assets or liabilities being retained by Seller or any of its Affiliates (other than the Acquired Companies) immediately after the Effective Time or for liabilities to the extent that Seller or any of its Affiliates (other than the Acquired Companies) has paid such amounts on or after the Closing Date or has an obligation of payment, reimbursement or indemnification in respect thereof, including amounts for (A) Retained Assets, (B) Asbestos Liabilities, (C) Closing Date Indebtedness, (D) Retention Bonus Arrangements, (E) any pension plan Liabilities retained by Seller or any of its Affiliates (other than the Acquired Companies) immediately after the Effective Time, (F) any retirement medical plan Liabilities retained by Seller or any of its Affiliates (other than the Acquired Companies) immediately after the Effective Time, (G) any Liabilities related to FPE, or (H) any intercompany accounts settled or eliminated pursuant to Section 8.16; |
(iii) no amounts in respect of (A) liabilities related to environmental matters related to the Former Facilities located at 5780 Carrier Drive, Orlando, Florida and 315 Ravenel Street, St. Stephen, South Carolina, (B) Income Taxes or (C) deferred Taxes shall be included in the Closing Statement; |
(iv) accounts payable in the Closing Statement shall not include any amounts related to (A) capital expenditures for property, plant or equipment or (B) any matters or items referred to in clauses (ii) or (iii) above; |
(v) for the purpose of calculating the U.S. dollars equivalent of any asset or liability to be included in the Closing Statement which is denominated in a currency other than U.S. dollars, the applicable exchange rate published in The Wall Street Journal , Eastern Edition, on the business day preceding the Closing Date shall be used; and |
(vi) the Closing Statement will not reflect any adjustments which result from management decisions made by Buyer or any of its Affiliates (including the Acquired Companies) on or subsequent to the Closing Date which change the operations or the manner in which the Business is conducted (including the |
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discontinuation of any product line or the cessation of any activities at any facility or similar events). |
(i) the sale, assignment, conveyance, transfer and delivery by Seller to Buyer, and the purchase and acquisition by Buyer from Seller, of the REC China Equity pursuant to Section 2.1(e) shall not occur at the Closing; |
(ii) at the Closing, Seller shall not be required to deliver, or cause to be delivered, to Buyer any of the closing deliveries set forth in Sections 4.2(c), 4.2(f) and 4.2(i) that relate to the purchase and sale of the REC China Equity; |
(iii) the full amount of the Purchase Price payable at the Closing by Buyer to Seller pursuant to Section 3.1 shall be so paid (without adjustment) at the Closing; |
(iv) the provisions of Sections 3.2, 3.3 and 8.8 shall be applicable and performed by the parties (without adjustment) pursuant to the terms thereof as if the REC China Equity had been sold to Buyer at the Closing; and |
(v) the closing of the purchase and sale of the REC China Equity (the China Closing ) will take place (A) at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, New York 10112, at 10:00 a.m. (New York time) on the third business day following the obtaining of the China Approval or (B) at such other place, date and time as Seller and Buyer may agree. The date of the China Closing is referred to herein as the China Closing Date . The China Closing will be deemed to be effective at 5:00 p.m., Greenville, South Carolina time, on the China Closing Date (the China Effective Time ). |
(b) At the China Closing: |
(i) effective as of the China Effective Time, Seller will sell, assign, convey, transfer and deliver to Buyer, and Buyer will purchase and acquire from Seller, the REC China Equity; and |
(ii) Seller will deliver or cause to be delivered to Buyer the closing deliveries set forth in Sections 4.2(c), 4.2(f) and 4.2(i) that relate to the purchase and sale of the REC China Equity. |
(d) (i) Within (30) days after the end of each full calendar month and each partial calendar month occurring during the China Transition Period, Seller will prepare and deliver to Buyer an account (a China Monthly Account ) showing for such month or partial month: |
(A) | all cash receipts received by REC China or on behalf of REC China by Seller or any of its Affiliates relating to the operation of the Business by REC China, including the amounts of such cash receipts deposited in bank accounts of REC China and the amounts of such cash receipts deposited in bank accounts of Seller or any of its Affiliates (other than REC China) (the amounts of such cash receipts deposited in bank accounts of Seller or any of its Affiliates (other than REC China) are referred to as China Monthly Receipts ); and |
(B) | all cash payments made by REC China or on behalf of REC China by Seller or any of its Affiliates (other than those made with amounts advanced by Buyer to Seller pursuant to Section 4.5(c)) relating to the operation of the Business by REC China, including the amounts of cash payments made from bank accounts of REC China and the amounts of such payments made from bank accounts of Seller or any of its Affiliates (other than REC China) (the amounts of such cash payments made from bank accounts of Seller or any of its Affiliates (other than REC China) and the amounts contributed by Seller or any of its Affiliates (other than REC China) to bank accounts of REC China in order to make such payments are referred to as China Monthly Payments ). |
(ii) Each China Monthly Account shall show the difference between China Monthly Receipts and China Monthly Payments set forth thereon, and shall be accompanied by (i) reasonable supporting documentation related to China Monthly Receipts and China Monthly Payments set forth on such China Monthly Account and (ii) (A) payment to Buyer (by wire transfer of immediately available U.S. dollars to the Buyer Bank Account) of the difference between China Monthly Receipts and China Monthly Payments set forth thereon if China Monthly Receipts are greater than China Monthly Payments on such China Monthly Account, or (B) an invoice to Buyer for the difference between China Monthly Payments and China Monthly Receipts set forth thereon if China Monthly Payments are greater than China Monthly Receipts on such China Monthly Account; provided that Seller may reduce any |
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payments required to be made by Seller pursuant to clause (A) above by outstanding amounts owed to Seller in respect of prior months of the China Transition Period. |
(iii) Buyer may raise with Seller any comments or objections that Buyer has with respect to any China Monthly Receipts or China Monthly Payments in a written notice delivered to Seller within 15 days after Buyers receipt of such China Monthly Account. Buyer hereby waives the right to assert any comments or objections with respect to any China Monthly Account that are not asserted in a written notice delivered to Seller within 15 days after Buyers receipt of such China Monthly Account. Any written comments or objections with respect to any China Monthly Receipts or China Monthly Payments timely asserted by Buyer to Seller in writing shall be discussed promptly by Seller and Buyer. If such discussions result in the matter which is the subject of such comments or objections being resolved, then an appropriate amendment shall be made to such China Monthly Account and Buyer and Seller shall account to each other accordingly. If such discussions do not result in a resolution, then the matter in dispute shall be resolved in accordance with Section 15.10. |
(iv) The parties acknowledge and agree that (i) China Monthly Receipts and China Monthly Payments on any China Monthly Account may include receipts or payments in respect of a prior month of the China Transition Period that were not included in a China Monthly Account previously sent by Seller and (ii) Seller may send Buyer payments of China Monthly Receipts and invoices for China Monthly Payments after sending the China Monthly Account for the last month of the China Transition Period for any China Monthly Receipts or China Monthly Payments in respect of the China Transition Period that Seller becomes aware of and that were not included in any China Monthly Account previously sent by Seller. |
(v) Amounts set forth on each China Monthly Account that were received or paid in any currency other than U.S. dollars shall be converted to U.S. dollars based on the applicable exchange rate published in The Wall Street Journal , Eastern Edition, on the business day preceding the day such China Monthly Account is sent by Seller. Each invoice rendered pursuant to this Section 4.5(d) shall be payable in U.S. dollars. |
(vi) Buyer shall pay to Seller (by wire transfer of immediately available U.S. dollars to the Rockwell Ohio Bank Account), within fifteen (15) days of Buyers receipt of the invoice, all amounts invoiced under this Section 4.5(d) which Buyer has not objected to in good faith under Section 4.5(d)(iii). |
(i) loan agreements, credit agreements, security agreements, promissory notes, mortgages, indentures and other Contracts which provide for the borrowing of moneys by or extensions of credit to any of the Acquired Companies or the guaranty by any of the Acquired Companies of obligations in respect of the borrowings of moneys by or extensions of credit to any other Person, in any case involving in excess of $250,000 of indebtedness or committed credit; |
(ii) employment Contracts (other than collective bargaining agreements) which expressly provide for the payment of base salary to any employee of any of the Acquired Companies of more than $150,000 annually, except those that may be cancelled by any of the Acquired Companies without material penalty upon not more than 180 days notice; |
(iii) customer agreements (other than open bids and proposals) which expressly provide for future payments (other than contingent payments) to any of the Acquired Companies of more than $500,000, except those that may be cancelled by any of the Acquired Companies without material penalty upon not more than 180 days notice; and |
(iv) leases (other than leases relating to real property), product supply and purchase agreements and other Contracts (other than (A) those of a type described in clauses (i) through (iii) above, without giving effect to the minimum dollar or term thresholds set forth therein, and (B) open bids and proposals) which expressly provide for future payments (other than warranty and other contingent payments) to or from any of the Acquired Companies of more than $500,000, except those that may be cancelled by any of the Acquired Companies without material penalty upon not more than 180 days notice. |
(i) there are no material written claims or demands which have been received by any of the Acquired Companies within the past twelve months, or any Actions which are pending on the date hereof or were threatened in writing within the past twelve months against any of the Acquired Companies, which (A) challenge the validity and enforceability of, or the ownership interests of any of the Acquired Companies in, any of the Patents and Trademarks set forth on Schedule 5.16(a) or (B) allege that any product or service of any of the Acquired Companies infringes the intellectual property rights of others and which, in any case set forth in clauses (A) or (B), would, if successfully asserted, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; |
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(ii) to the Knowledge of the Acquired Companies, no product or service of any of the Acquired Companies infringes the intellectual property rights of others in a manner that would, if proven, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and |
(iii) to the Knowledge of the Acquired Companies, one or more of the Acquired Companies own or have a right to use all of the Acquired Company Intellectual Property free of any restrictions (other than restrictions set forth in license agreements) that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect. |
(d) Each of the Acquired Companies has taken reasonable steps to protect its right, title and interest in and to the Patents and Trademarks owned by such Acquired Company that are set forth on Schedule 5.16(a). (e) Notwithstanding the generality of any other representations and warranties contained in this Agreement, except for the representations and warranties in Sections 5.11(b) and 5.20, this Section 5.16 will be deemed to contain the only representations and warranties in this Agreement with respect to intellectual property matters. SECTION 5.17 Conduct of Business Since June 30, 2006 . (a) Except as set forth on Schedule 5.17 and as contemplated by this Agreement, (i) from June 30, 2006 to the date hereof, the Business has been conducted by the Acquired Companies in the Ordinary Course of Business and (ii) since June 30, 2006, there has not been any change in the business, financial condition or operations of the Acquired Companies, taken as a whole, which, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect. (b) Except as set forth on Schedule 5.17 or as contemplated by this Agreement, from June 30, 2006 to the date hereof there has not been: |
(i) any general increase in the rate or terms of any compensation, bonuses, pension or other employee benefit plans payable to or for the benefit of employees of any of the Acquired Companies, other than (A) pursuant to collective bargaining agreements or other labor agreements or (B) in the Ordinary Course of Business; |
(ii) sold or transferred any material assets of any of the Acquired Companies, other than inventories and other assets in the Ordinary Course of Business; |
(iii) incurred or guaranteed by any of the Acquired Companies any indebtedness for borrowed money, other than in the Ordinary Course of Business; |
(iv) any material amendment of the charter documents or by-laws of any of the Acquired Companies; |
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(v) paid or declared any dividend or other distribution in respect of any of the capital stock of any of the Acquired Companies (other than in Cash or of assets of any of the Acquired Companies constituting Retained Assets); |
(vi) issued or sold or authorized for issuance or sale any shares of capital stock of any of the Acquired Companies, or any securities convertible into shares of any class of such capital stock, or granted any option, warrant or other right relating thereto; |
(vii) any material change in the accounting methods, practices or principles of any of the Acquired Companies (other than as required by GAAP); or |
(viii) any Contract (other than this Agreement or any arrangement provided for in or contemplated by this Agreement) entered into by any of the Acquired Companies to take any of the types of action described in clauses (i) through (vii) of this Section 5.17(b). |
(i) All stationery, invoices, purchase orders and other similar documents of a transactional nature, business cards, outside forms such as packing lists, labels, and cartons, forms for internal use only and product literature constituting assets of the Acquired Companies as of the Effective Time may be used for a period of ninety days following the Effective Time or until the supply is exhausted, whichever is the first to occur. |
(ii) All vehicles constituting assets of the Acquired Companies as of the Effective Time may continue to be used without remarking (except as to legally required permit numbers, license numbers, etc.) for a period not to exceed (A) ninety days following the Effective Time or (B) the date of disposition of the vehicle, whichever is the first to occur. |
(iii) Within thirty days following the Effective Time, Buyer will cause the Acquired Companies to remove from display at all owned and leased facilities constituting assets of the Acquired Companies all displays (other than signage) which |
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contain the names, trademarks or trade names Rockwell or Rockwell Automation or any corporate symbol or logo related thereto and Buyer will cause the Acquired Companies to remove, or will cause the removal of, all signage of any kind containing any such name, trademark, trade name, corporate symbol or logo at all such facilities no later than ninety days following the Effective Time. |
(iv) Products of the Acquired Companies in finished goods inventory and work in process (to the extent the same bear any of the names, trademarks or trade names Rockwell or Rockwell Automation or any corporate symbol or logo related thereto at the Effective Time) may be disposed of without remarking in the Ordinary Course of Business. |
(c) (i) Apart from the rights granted under Section 8.6(b), none of Buyer or any of its Affiliates (including the Acquired Companies) shall have any right, title or interest in, or to the use of, any of the Retained Names, either alone or in combination with any other word, name, symbol, device, trademarks, or any combination thereof. Anything contained herein to the contrary notwithstanding, except as expressly permitted by Section 8.6(b), in no event will Buyer or any of its Affiliates (including the Acquired Companies) utilize any of the Retained Names as a component of a company or trade name. Buyer will not, and will cause each of its Affiliates (including the Acquired Companies) not to, challenge or contest the validity of any of the Retained Names, the registration thereof or the ownership thereof by Seller. Buyer will not, and will cause each of its Affiliates (including the Acquired Companies) not to, apply anywhere at any time for any registration as owner or exclusive licensee of any of the Retained Names. If, notwithstanding the foregoing, Buyer or any of its Affiliates (including the Acquired Companies) develops, adopts or acquires, directly or indirectly, any right, title or interest in, or to the use of, any of the Retained Names in any jurisdiction, or any goodwill incident thereto, Buyer will, upon the request of Seller, and for a nominal consideration of one dollar, assign or cause to be assigned to Seller or any designee of Seller, all right, title and interest in, and to the use of, such Retained Names in any and all jurisdictions, together with any goodwill incident thereto. |
(ii) If the laws of any country require that any mark subject to Section 8.6(b) or the right of any of the Acquired Companies to use any mark as permitted by Section 8.6(b) be registered in order to fully protect Seller, then Buyer and Seller will cooperate in constituting such Acquired Company as a registered user (or its equivalent) in each of the countries in which such registration is necessary. Any expenses for registering such mark or constituting an Acquired Company as a registered user in any country shall be borne by Buyer. Any registration of an Acquired Company as a registered user of any mark hereunder shall be expunged on termination of the period of permitted use under this Agreement or upon a breach or threatened breach by Buyer or any of its Affiliates (including the Acquired Companies) of the terms of this Section 8.6 and Buyer will, upon request of Seller, take or cause to be taken all necessary steps to cause such registration to be so expunged upon such termination or breach or threatened breach. |
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(iii) Seller will have the right to terminate the license granted in Section 8.6(b) in the event of a material breach of this Section 8.6(c) by Buyer or any of its Affiliates (including the Acquired Companies) that has not been cured within thirty days after written notice thereof by Seller to Buyer. |
(iv) Buyer hereby constitutes and appoints Seller the true and lawful attorney of Buyer and its Affiliates (including the Acquired Companies) to act as their attorney-in-fact to execute any documents and to take all necessary steps to cause Buyer and its Affiliates to perform any of their obligations set forth in this Section 8.6(c). |
(d) As soon as reasonably practicable after the Effective Time or, if applicable, the China Effective Time (but in no event later than thirty days after the Effective Time or, if applicable, the China Effective Time), Buyer will change the name of REC China (by amending its charter documents) to eliminate therefrom the name Rockwell Automation. (e) From and after the Effective Time, except as provided in the License Agreement or as permitted in Section 8.6(f), none of Seller or its Affiliates will use or have any rights to any of the REC Names. From and after the Effective Time, none of Seller or its Affiliates will hold itself out as having any affiliation with the Acquired Companies. (f) Buyer hereby grants, on behalf of the Acquired Companies, to Seller and its Affiliates a non-exclusive, non-transferable license to utilize, without obligation to pay royalties to Buyer or the Acquired Companies, the REC Names in connection with stationery, supplies, labels, catalogs, vehicles, signs and products of Seller and its Affiliates described in sections (i) through (iv) of this Section 8.6(f), subject to the terms and conditions of this Section 8.6(f) and Section 8.6(g), in each case, solely in connection with the operation of the businesses of Seller and its Affiliates (other than the Business) and in the same manner and to the same extent as the REC Names were used by Seller and its Affiliates (other than the Acquired Companies) immediately prior to the Effective Time; provided that such license shall cease immediately upon expiration of the periods identified below. All goodwill arising from such use shall inure to the Acquired Companies. Seller agrees that the nature and quality of all goods and services rendered by Seller and its Affiliates in connection with the REC Names shall be advertised, offered and provided in a manner consistent with the quality control standards previously used by Seller and its Affiliates, and that Seller and its Affiliates will use the REC Names in compliance with all applicable laws and regulations. |
(i) All stationery, invoices, purchase orders and other similar documents of a transactional nature, business cards, outside forms such as packing lists, labels, and cartons, forms for internal use only and product literature constituting assets of Seller or any of its Affiliates (other than the Acquired Companies) as of the Effective Time may be used for a period of ninety days following the Effective Time or until the supply is exhausted, whichever is the first to occur. |
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(ii) All vehicles constituting assets of Seller or any of its Affiliates (other than the Acquired Companies) as of the Effective Time may continue to be used without remarking (except as to legally required permit numbers, license numbers, etc.) for a period not to exceed (A) ninety days following the Effective Time or (B) the date of disposition of the vehicle, whichever is the first to occur. |
(iii) Within thirty days following the Effective Time, Seller will, and will cause its Affiliates to, remove from display at all owned and leased facilities constituting assets of Seller or any of its Affiliates (other than the Acquired Companies) all displays (other than signage) which contain the REC Names and Seller will, and will cause its Affiliates to, remove, or will cause the removal of, all signage of any kind containing any REC Names at all such facilities no later than ninety days following the Effective Time. |
(iv) Products of Seller or any of its Affiliates in finished goods inventory and work in process (to the extent the same bear any of the REC Names at the Effective Time) may be disposed of without remarking in the Ordinary Course of Business. |
(g) (i) Apart from the rights granted under Section 8.6(f) and as provided in the License Agreement, none of Seller or any of its Affiliates shall have any right, title or interest in, or to the use of, any of the REC Names, either alone or in combination with any other word, name, symbol, device, trademarks, or any combination thereof. Anything contained herein to the contrary notwithstanding, except as expressly permitted by Section 8.6(f) and as provided in the License Agreement, in no event will Seller or any of its Affiliates utilize any of the REC Names as a component of a company or trade name. Except in connection with the License Agreement, Seller will not, and will cause each of its Affiliates not to, challenge or contest the validity of any of the REC Names, the registration thereof or the ownership thereof by the Acquired Companies. Except in connection with the License Agreement, Seller will not, and will cause each of its Affiliates not to, apply anywhere at any time for any registration as owner or exclusive licensee of any of the REC Names. If, notwithstanding the foregoing, Seller or any of its Affiliates develops, adopts or acquires, directly or indirectly, any right, title or interest in, or to the use of, any of the REC Names in any jurisdiction (other than pursuant to the License Agreement), or any goodwill incident thereto, Seller will, upon the request of Buyer, and for a nominal consideration of one dollar, assign or cause to be assigned to Buyer or any designee of Buyer, all right, title and interest in, and to the use of, such REC Names in any and all jurisdictions, together with any goodwill incident thereto. |
(ii) If the laws of any country require that any mark subject to Section 8.6(f) or the right of any of Seller or any of its Affiliates to use any mark as permitted by Section 8.6(f) be registered in order to fully protect the Acquired Companies, then Buyer and Seller will cooperate in constituting Seller or its applicable Affiliates as a registered user (or its equivalent) in each of the countries in which such registration is necessary. Any expenses for registering such mark or |
34 |
constituting Seller or any of its Affiliates as a registered user in any country shall be borne by Seller. Any registration of Seller or any of its Affiliates as a registered user of any mark hereunder shall be expunged on termination of the period of permitted use under this Agreement or upon a breach or threatened breach by Seller or any of its Affiliates of the terms of this Section 8.6 and Seller will, upon request of Buyer, take or cause to be taken all necessary steps to cause such registration to be so expunged upon such termination or breach or threatened breach. |
(iii) Buyer will have the right to terminate the license granted in Section 8.6(f) in the event of a material breach of this Section 8.6(g) by Seller or any of its Affiliates that has not been cured within thirty days after written notice thereof by Buyer to Seller. |
(iv) Seller hereby constitutes and appoints Buyer the true and lawful attorney of Seller and its Affiliates to act as their attorney-in-fact to execute any documents and to take all necessary steps to cause Seller and its Affiliates to perform any of their obligations set forth in this Section 8.6(g). |
(i) Within three business days after Sellers request, Buyer will reimburse Seller (by wire transfer of immediately available U.S. dollars to the Rockwell Ohio Bank Account) for all amounts funded by Seller or any Affiliate of Seller in respect of checks relating to the Acquired Companies that are presented for payment after the Effective Time in payroll accounts of Seller or any of its Affiliates (other than the Acquired Companies). Seller will not be required to issue any checks or to make any electronic fund transfers relating to the Acquired Companies on any disbursement or payroll accounts of Seller or any of its Affiliates after the Effective Time. |
(ii) Seller will fund all amounts in respect of checks relating to the Acquired Companies that are outstanding as of the Effective Time and presented for payment after the Effective Time in disbursement (but not payroll) accounts of Seller or any of its Affiliates (other than the Acquired Companies). |
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(iii) Buyer will, or will cause the Acquired Companies to, fund all amounts in respect of checks that are presented for payment after the Effective Time in all accounts of the Acquired Companies. |
(c) Seller will, and will cause its Affiliates to, promptly pay to Buyer (by wire transfer of immediately available funds to the Buyer Bank Account) the amount of any customer payments in respect of accounts receivable owed to any of the Acquired Companies received by Seller or any of its Affiliates after the Effective Time, whether received in lock boxes, via wire transfer or otherwise. (d) Buyer will, and will cause its Affiliates (including the Acquired Companies) to, promptly pay to Seller (by wire transfer of immediately available funds to the Rockwell Ohio Bank Account) the amount of any customer payments in respect of accounts receivable owed to Seller or any of its Affiliates (other than those owed to any of the Acquired Companies) received by Buyer or any of its Affiliates (including the Acquired Companies) after the Effective Time, whether received in lock boxes, via wire transfer or otherwise. SECTION 8.9 Insurance . (a) Seller Policies . |
(i) Coverage Under Seller Policies . Coverage of the Acquired Companies under the Seller Policies shall cease as of the Effective Time. From and after the Effective Time, Buyer will be responsible for obtaining and maintaining all insurance coverages with respect to the Acquired Companies. |
(ii) Rights Under Seller Policies . From and after the Effective Time, none of Buyer or its Affiliates (including the Acquired Companies) will have any rights with respect to any Seller Policies, except as follows: |
(A) | the Acquired Companies will have the right to assert claims (and Seller will use commercially reasonable efforts to assist the Acquired Companies in asserting claims) under Seller Occurrence Basis Policies for any loss, liability or damage of the Acquired Companies arising out of insured incidents occurring from the date coverage thereunder first commenced until the Effective Time to the extent that the terms and conditions of any such Seller Occurrence Basis Policies and agreements relating thereto so allow; and |
(B) | the Acquired Companies will have the right to continue to prosecute claims (and Seller will use commercially reasonable efforts to assist the Acquired Companies in connection therewith) for any loss, liability or damage of the Acquired Companies properly asserted with the insurance carrier prior to the Effective Time under Seller Claims Made Policies arising out of insured incidents occurring from the date coverage thereunder first commenced until the Effective Time to the extent |
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that the terms and conditions of any such Seller Claims Made Policies and agreements relating thereto so allow; |
provided that in the case of each of clauses (A) and (B) above, (1) all of Sellers and its Affiliates reasonable costs and expenses incurred in connection with the foregoing are promptly paid by Buyer, (2) Seller and its Affiliates may, at any time, without liability or obligation to Buyer or any of its Affiliates (including the Acquired Companies), amend, commute, terminate, buy-out, extinguish liability under or otherwise modify any Seller Occurrence Basis Policies or Seller Claims Made Policies (and such claims will be subject to any such amendments, commutations, terminations, buy-outs, extinguishments and modifications), (3) such claims will be subject to (and recovery thereon will be reduced by the amount of) any applicable deductibles, retentions, self-insurance provisions or any payment or reimbursement obligations of Seller or any of its Affiliates in respect thereof and (4) such claims will be subject to exhaustion of aggregate limits. None of Seller or its Affiliates will bear any Liability for the failure of an insurance carrier to pay any claim under any Seller Occurrence Basis Policy or Seller Claims Made Policy. |
(b) Rights Under Acquired Company Policies . From and after the Effective Time, none of Seller or any of its Affiliates will have any rights with respect to any Acquired Company Policies, except as follows: |
(i) Seller and its Affiliates will have the right to assert claims (and Buyer will use commercially reasonable efforts to assist Seller and its Affiliates in asserting claims) under Acquired Company Occurrence Basis Policies for any loss, liability or damage of Seller or any of its Affiliates (other than the Acquired Companies) arising out of insured incidents occurring from the date coverage thereunder first commenced until the Effective Time to the extent that the terms and conditions of any such Acquired Company Occurrence Basis Policies and agreements relating thereto so allow; and |
(ii) Seller and its Affiliates will have the right to continue to prosecute claims (and Buyer will use commercially reasonable efforts to assist Seller and its Affiliates in connection therewith) for any loss, liability or damage of Seller or any of its Affiliates (other than the Acquired Companies) properly asserted with the insurance carrier prior to the Effective Time under Acquired Company Claims Made Policies arising out of insured incidents occurring from the date coverage thereunder first commenced until the Effective Time to the extent that the terms and conditions of any such Acquired Company Claims Made Policies and agreements relating thereto so allow; |
(i) If any insurance company (including Vermont Reserve) or claims administrator makes any payment (including payments in respect of deductibles and self-insured amounts) in respect of any Seller Policies, Acquired Company Policies or claims services or administration agreements with respect to any claims relating to the Acquired Companies or the Business for which Seller or any of its Affiliates (other than the Acquired Companies) has any obligation of payment or reimbursement after the Effective Time, Buyer will, or will cause the Acquired Companies to, within ten days after Sellers request, pay such amounts or reimburse Seller and its Affiliates for the payment of such amounts. |
(ii) The parties understand and agree that, effective as of the Effective Time (i) Seller and any third party administrator retained by Seller or any of its Affiliates will no longer administer, and will no longer be responsible for administering, any product liability, workers compensation or other self-insured and deductible claims that are made after the Effective Time and that constitute liabilities of the Acquired Companies and (ii) Buyer shall, or shall arrange for its own third party administrator to, administer all such claims. |
(i) no owner of 5% or less of the outstanding stock or other equity interest of any Person shall be deemed to engage solely by reason thereof in any of its businesses; |
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(ii) during the Non-Compete Period, Seller or any of its Subsidiaries may buy and resell REC Products so long as such REC Products are sold by Seller or its Subsidiaries together with, and such sale of REC Products is ancillary to the sale by Seller or its Subsidiaries of, products of Seller or its Subsidiaries that do not constitute REC Products (and Seller and its Subsidiaries may support such REC Products, including by providing repairs and spares in respect thereof); |
(iii) during the Non-Compete Period, Seller or any of its Subsidiaries may buy and resell any motors (or parts related thereto) sold by any of the Acquired Companies or their Affiliates (whether Seller or its Subsidiaries purchase such products from the Acquired Companies or their Affiliates or otherwise); |
(iv) upon (A) expiration or termination of the Allen-Bradley Motors Supply Agreement or (B) a breach of the Allen-Bradley Motors Supply Agreement by REC that has not been cured within thirty days after written notice thereof by Seller to REC, during the Non-Compete Period, Seller or any of its Subsidiaries may buy and resell, as part of Sellers Allen-Bradley-branded motor programs, motors of the type that were purchased under the Allen-Bradley Motors Supply Agreement (and parts related thereto); |
(v) during the Non-Compete Period, Seller or any of its Subsidiaries may buy and resell, outside of the United States and Canada, motors (and parts related thereto), so long as such motors are marketed in conjunction with products of Seller or its Subsidiaries that do not constitute REC Products; and |
(vi) during the Non-Compete Period, Seller or any of its Subsidiaries may acquire control of any business deriving less than 50% of its revenues from REC Products so long as it shall use commercially reasonable efforts to divest such operations as promptly as practicable and in any event not later than two years following such acquisition (it being understood that such obligation with respect to any such divestiture shall expire at the end of the Non-Compete Period for any such acquisition made within the two-year period preceding the end of the Non-Compete Period). |
(i) this Agreement and the Ancillary Agreements (and each other agreement, instrument or document expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any party hereto or any of their respective Affiliates); |
(ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 8.17(b); |
(iii) any agreements, arrangements, commitments or understandings to which any Person other than the parties hereto and their respective Affiliates is a party; and |
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(iv) any other agreements, arrangements, commitments or understandings that this Agreement or any of the Ancillary Agreements expressly contemplates will survive the Effective Time. |
(i) Effective as of the Closing Date, each Continued Employee who participated in the Rockwell Automation Pension Plan (the Rockwell U.S. Pension Plan ) will cease to accrue benefits under the Rockwell U.S. Pension Plan and will have a fully nonforfeitable right to such Continued Employees benefit payable at normal retirement age under the Rockwell U.S. Pension Plan accrued as of the Closing Date; provided , however , that no provision in this Agreement shall be construed to provide any Continued Employee credit for purposes of determining eligibility for an early retirement or disability pension under the Rockwell U.S. Pension Plan. The consummation of the transactions contemplated by this Agreement shall constitute termination of employment of Continued Employees for purposes of entitlement to distribution from the Rockwell U.S. Pension Plan. None of Buyer or its Affiliates (including the Acquired Companies), any retirement plan of Buyer or any trust thereunder will have or acquire any interest in or right with respect to any of the assets of, nor be liable to make any contribution to, the Rockwell U.S. Pension Plan or any trust related thereto, and Seller will retain full power and authority with respect to the amendment and termination of the Rockwell U.S. Pension Plan and the investment and disposition of assets held in the Rockwell U.S. Pension Plan and in any trust related thereto. From and after the Closing Date, none of Seller or its Affiliates, the Rockwell U.S. Pension Plan or any trust thereunder will have any Liabilities with respect to benefits and entitlements of Continued Employees under the Rockwell U.S. Pension Plan, except with respect to benefits accrued and vested under the Rockwell U.S. Pension Plan as of the Closing Date. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell U.S. Pension Plan. |
(b) U.S. Savings Plans . |
(i) As soon as administratively feasible (but in no event later than 30 days) after the Closing Date, Buyer will establish, and will extend coverage to the Continued Employees who participated in the Rockwell U.S. Savings Plans immediately prior to the Closing Date under, one or more new or existing defined contribution plans (each, a Buyers U.S. Savings Plan ) that is qualified pursuant to Sections 401(a) and 401(k) of the Code and has a related trust which is exempt from taxation under Section 501(a) of the Code. Buyers U.S. Savings Plans will comply with all applicable terms of any collective bargaining agreements covering Continued Employees. Effective as of the Closing Date, each Continued Employee who was a participant in a Rockwell U.S. Savings Plan immediately prior to the Closing Date will be credited under Buyers U.S. Savings Plans for purposes of eligibility to participate and vesting with all service recognized for such purposes under the applicable Rockwell U.S. Savings Plan immediately prior to the Closing Date. |
(ii) Effective as of the Closing Date, each Continued Employee who participates in a Rockwell U.S. Savings Plan immediately prior to the Closing Date will become fully vested in his or her unvested account balances under the Rockwell U.S. Savings Plans. After the Effective Time, each Continued Employee who participates in a Rockwell U.S. Savings Plan immediately prior to the Closing Date will be permitted to receive a distribution of such Continued Employees account balances under the applicable Rockwell U.S. Savings Plan in accordance with the terms of the applicable Rockwell U.S. Savings Plan and applicable Laws. The consummation of the transactions contemplated by this Agreement shall constitute the termination of employment of Continued Employees for purposes of entitlement to distribution from the Rockwell U.S. Savings Plan. Buyer will cause Buyers U.S. Savings Plans to permit the rollover of account balances (including any participant loan account balances related thereto) from the Rockwell U.S. Savings Plans in the form of cash or loans to Buyers U.S. Savings Plans for the account balances of those Continued Employees who choose such rollover; provided that the administrator of Buyers U.S. Savings Plans receives (i) a copy of a favorable determination letter on the qualified status of the distributing plan, or such other evidence of qualified status reasonably satisfactory to the administrator; and (ii) promissory notes, amortization schedules, and any other information reasonably necessary to accept and administer loan rollovers. Effective as of the end of the last payroll period immediately preceding the Closing Date, each Continued Employee will cease to be eligible to |
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contribute to, or receive contributions in respect of, his or her accounts under the Rockwell U.S. Savings Plans. None of Buyer or any Affiliate of Buyer (including the Acquired Companies) or Buyers U.S. Savings Plans or any trust thereunder will have or acquire any interest in or right to any of the assets of or relating to the Rockwell U.S. Savings Plans and Seller will retain full power and authority with respect to the amendment and termination of the Rockwell U.S. Savings Plans and the investment and disposition of assets held in the Rockwell U.S. Savings Plans. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell U.S. Savings Plans. |
(c) U.K. Pension Scheme . Effective as of the Closing Date, each Continued Employee who participated in the Rockwell Automation Pension Scheme (the Rockwell U.K. Pension Plan ) will cease to accrue benefits under the Rockwell U.K. Pension Plan. None of Buyer or its Affiliates (including the Acquired Companies), any retirement plan of Buyer or any trust thereunder will have or acquire any interest in or right with respect to any of the assets of the Rockwell U.K. Pension Plan or any trust related thereto, and Seller and its Affiliates will retain full power and authority with respect to the amendment and termination of the Rockwell U.K. Pension Plan and the investment and disposition of assets held in the Rockwell U.K. Pension Plan and in any trust related thereto. From and after the Closing Date, none of Seller or its Affiliates, the Rockwell U.K. Pension Plan or any trust thereunder will have any Liabilities with respect to benefits and entitlements of Continued Employees under the Rockwell U.K. Pension Plan, except with respect to benefits accrued and vested under the Rockwell U.K. Pension Plan as of the Closing Date, which will be retained by the Rockwell U.K. Pension Plan. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell U.K. Pension Plan. (d) Canadian Pension Plan . |
(i) Effective as of the Closing Date, each Continued Employee who participated in the Pension Plan for Employees of Rockwell Automation Canada Inc. (the Rockwell Canadian Salaried Pension Plan ) will cease to accrue benefits under the Rockwell Canadian Salaried Pension Plan and will have a fully nonforfeitable right to such Continued Employees benefit payable at normal retirement age under the Rockwell Canadian Salaried Pension Plan accrued as of the Closing Date; provided , however , that no provision in this Agreement shall be construed to provide any Continued Employee credit for purposes of determining eligibility for an early retirement or disability pension under the Rockwell Canadian Salaried Pension Plan, except as required by applicable law or as Seller or any of its Affiliates may otherwise determine in its sole discretion. None of the Buyer or its Affiliates (including the Acquired Companies), any retirement plan of Buyer (or any trust or other funding medium thereunder) will have or acquire any interest in or right with respect to any of the assets of the Rockwell Canadian Salaried Pension Plan (or any trust or other funding medium thereunder), and Seller and its Affiliates will retain full |
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power and authority with respect to the amendment and termination of the Rockwell Canadian Salaried Pension Plan and the investment and disposition of assets held in the Rockwell Canadian Salaried Pension Plan (and any trust or other funding medium thereunder). From and after the Closing Date, none of the Seller or its Affiliates, the Rockwell Canadian Salaried Pension Plan (or any trust or other funding medium thereunder) will have any Liabilities with respect to the benefits and entitlements of Continued Employees under the Rockwell Canadian Salaried Pension Plan, except with respect to benefits accrued and vested under the Rockwell Canadian Salaried Pension Plan as of the Closing Date, which will be retained by the Rockwell Canadian Salaried Pension Plan. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell Canadian Salaried Pension Plan. |
(ii) Effective as of the Closing Date, Buyer will establish or amend, or will cause the establishment or amendment of, and as soon as practicable (but in no event later than 120 days) following the Closing Date will file for registration with the Canadian Revenue Agency, a pension plan that meets all requirements of a registered pension plan (the Buyers Canadian Pension Plan), which will provide coverage to Continued Employees who participated in the Rockwell Canadian Salaried Pension Plan immediately prior to the Closing Date. Buyer acknowledges that, as required by applicable Law, the Buyers Canadian Pension Plan will recognize membership of the Continued Employees who participated in the Rockwell Canadian Salaried Pension Plan for the purposes of eligibility for membership in, vesting and locking-in under the Buyers Canadian Pension Plan. |
(e) Canadian Savings Plan . |
(i) As soon as administratively feasible (but in no event later than 30 days) after the Closing Date, Buyer will establish, and will extend coverage to the Continued Employees who participated in the Rockwell Automation Canada Inc. Employees Retirement Savings Plan (the Rockwell Canadian Savings Plan ) immediately prior to the Closing Date under, a new or existing group registered retirement savings plan (the Buyers Canadian Savings Plan ). Effective as of the Closing Date, each Continued Employee who was a participant in the Rockwell Canadian Savings Plan immediately prior to the Closing Date will be credited under the Buyers Canadian Savings Plan for purposes of eligibility to participate (and vesting if applicable) with all service recognized for such purposes under the Rockwell Canadian Savings Plan immediately prior to the Closing Date. |
(ii) After the Effective Time, each Continued Employee who participated in the Rockwell Canadian Savings Plan immediately prior to the Closing Date will be permitted to receive a distribution of such Continued Employees account balances under the Rockwell Canadian Savings Plan in accordance with the terms of the Rockwell Canadian Savings Plan and applicable Law. The consummation of the transactions contemplated by this Agreement shall constitute the termination of |
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employment of Continued Employees for purposes of entitlement to distribution from the Rockwell Canadian Savings Plan. Buyer will cause Buyers Canadian Savings Plan to permit the rollover of account balances from the Rockwell Canadian Savings Plan to the Buyers Canadian Savings Plan for the account balances of those Continued Employees who choose such rollover. Effective as of the Closing Date, each Continued Employee will cease to be eligible to contribute to, or receive contributions in respect of, his or her accounts under the Rockwell Canadian Savings Plan. None of Buyer or any Affiliate of Buyer (including the Acquired Companies) or Buyers Canadian Savings Plan (or any trust or other funding medium thereunder) will have or acquire any interest in or right to any of the assets of or relating to the Rockwell Canadian Savings Plan and Seller 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. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell Canadian Savings Plans. |
(f) Canadian Deferred Profit Sharing Plan . |
(i) As soon as administratively feasible (but in no event later than 30 days) after the Closing Date, Buyer will establish, and will extend coverage to the Continued Employees who participated in the Rockwell Automation Canada Inc. Employees Savings Plan (the Rockwell Canadian Deferred Profit Sharing Plan ) immediately prior to the Closing Date under, a new or existing deferred profit sharing plan (the Buyers Canadian Deferred Profit Sharing Plan ). Effective as of the Closing Date, each Continued Employee who was a participant in the Rockwell Canadian Deferred Profit Sharing Plan immediately prior to the Closing Date will be credited under the Buyers Canadian Deferred Profit Sharing Plan for purposes of eligibility to participate (and vesting if applicable) with all service recognized for such purposes under the Rockwell Canadian Deferred Profit Sharing Plan immediately prior to the Closing Date. |
(ii) After the Effective Time, each Continued Employee who participated in the Rockwell Canadian Deferred Profit Sharing Plan immediately prior to the Closing Date will be permitted to receive a distribution of such Continued Employees account balances under the Rockwell Canadian Deferred Profit Sharing Plan in accordance with the terms of the Rockwell Canadian Deferred Profit Sharing Plan and applicable Law. Buyer will cause Buyers Canadian Deferred Profit Sharing Plan to permit the rollover of account balances from the Rockwell Canadian Deferred Profit Sharing Plan to the Buyers Canadian Deferred Profit Sharing Plan for the account balances of those Continued Employees who choose such rollover in the form of cash. Effective as of the Closing Date, each Continued Employee will cease to be eligible to contribute to, or receive contributions in respect of, his or her accounts under the Rockwell Canadian Deferred Profit Sharing Plan. None of Buyer or any Affiliate of Buyer (including the Acquired Companies) or Buyers Canadian Deferred Profit Sharing Plan (or any trust or other funding medium thereunder) will |
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have or acquire any interest in or right to any of the assets of or relating to the Rockwell Canadian Deferred Profit Sharing Plan and Seller 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. Notwithstanding anything contained herein to the contrary, no provision of this Agreement shall be construed to provide any Continued Employee with credit for service with Buyer or its Affiliates (including the Acquired Companies) after the Closing Date for any purpose under the Rockwell Canadian Deferred Profit Sharing Plans. |
(i) Income Taxes of each of the Acquired Companies for the portion of any Straddle Period ending on the Closing Date (the Pre-Closing Tax Period ) will be computed as if such taxable period ended as of the close of business on the Closing Date, and, in the case of any Income Taxes of any of the Acquired Companies |
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attributable to the ownership by any of the Acquired Companies of any equity interest in any partnership or other flowthrough entity (other than the Acquired Companies), as if a taxable period of such partnership or other flowthrough entity ended as of the close of business on the Closing Date; and |
(ii) Income Taxes of each of the Acquired Companies for which a Consolidated Tax Return is filed will be computed in accordance with the principles of Treasury Regulation Section 1.1502-76 as if separate returns had been filed for each of the Acquired Companies for such Pre-Closing Tax Period and all prior taxable periods. |
If to Seller or any RA Sub Seller : |
Rockwell
Automation, Inc.
1201 South Second Street Milwaukee, Wisconsin 53204 |
Attention |
Douglas M. Hagerman, Esq.
Senior Vice President, General Counsel and Secretary |
|
Telecopy
:
E-Mail : |
(414) 382-8421
dmhagerman@ra.rockwell.com |
with a copy to: |
Chadbourne
& Parke LLP
30 Rockefeller Plaza New York, New York 10112 |
Attention : | Peter R. Kolyer, Esq. | |
Telecopy
:
E-Mail : |
(212) 541-5369
pkolyer@chadbourne.com |
79 |
If to Buyer : |
Baldor Electric Company
5711 R.S. Boreham, Jr. Fort Smith, Arkansas 72901 |
Attention : |
Ron Tucker
President, Chief Financial Officer and Secretary |
|
Telecopy
:
E-Mail : |
(479) 648-5752
RTucker@baldor.com |
with a copy to: |
Thompson Coburn LLP
One U.S. Bank Plaza St. Louis, Missouri 63101 |
Attention : | Thomas E. Proost, Esq. | |
Telecopy
:
E-Mail : |
(314) 552-7000
tproost@thompsoncoburn.com |
ROCKWELL AUTOMATION, INC.
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By | /s/ Rondi Rohr-Dralle | ||
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Name:
Title: |
Rondi Rohr-Dralle
Vice President Corporate Development |
ROCKWELL AUTOMATION OF OHIO, INC.
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By | /s/ Steven A. Eisenbrown | ||
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Name:
Title: |
Steven A. Eisenbrown
President |
ROCKWELL AUTOMATION CANADA
CONTROL SYSTEMS |
|||
By | /s/ Charles Cipolla | ||
|
|||
Name:
Title: |
Charles Cipolla
President |
GRUPO INDUSTRIAS RELIANCE S.A. de C.V.
|
|||
By | /s/ Douglas M. Hagerman | ||
|
|||
Name:
Title: |
Douglas M. Hagerman
Authorized Representative |
ROCKWELL INTERNATIONAL GMBH
|
|||
By | /s/ Timothy C. Oliver | ||
|
|||
Name:
Title: |
Timothy C. Oliver
Director |
85 [Signature Page Continued] |
BALDOR ELECTRIC COMPANY
|
|||
By | /s/ John A. McFarland | ||
|
|||
Name:
Title: |
John A. McFarland
Chairman and Chief Executive Officer |
Each of the Acquired Companies hereby acknowledges and agrees to the license set forth in Section 8.10(b). |
RELIANCE ELECTRIC COMPANY
|
|||
By | /s/ Joseph D. Swann | ||
|
|||
Name:
Title: |
Joseph D. Swann
President |
REC HOLDING, INC.
|
|||
By | /s/ Douglas M. Hagerman | ||
|
|||
Name:
Title: |
Douglas M. Hagerman
Vice President |
RELIANCE ELECTRIC TECHNOLOGIES, LLC
|
|||
By | /s/ Joseph D. Swann | ||
|
|||
Name:
Title: |
Joseph D. Swann
President |
RELIANCE ELECTRIC COMPANY
CANADA, ULC |
|||
By | /s/ Charles Cipolla | ||
|
|||
Name:
Title: |
Charles Cipolla
President |
DODGE DE MEXICO S.A. de C.V.
|
|||
By | /s/ Douglas M. Hagerman | ||
|
|||
Name:
Title: |
Douglas M. Hagerman
Authorized Representative |
RELIANCE ELECTRIC COMPANY
EUROPE GMBH |
|||
By | /s/ Peter Buydens | ||
|
|||
Name:
Title: |
Peter Buydens
Managing Director |
[Signature Page Continued] |
ROCKWELL AUTOMATION POWER
SYSTEMS (SHANGHAI) COMPANY LIMITED |
|||
By | /s/ Joseph D. Swann | ||
|
|||
Name:
Title: |
Joseph D. Swann
Chairman of the Board and Legal Representative |
(i) the public announcement of this Agreement; |
(ii) the transactions contemplated by this Agreement or any actions taken pursuant to or in accordance with this Agreement; |
(iii) changes in, or events or conditions affecting, any industry or market in which any of the Acquired Companies operates (which changes, events or conditions do not disproportionately affect the Acquired Companies in any material respect); |
(iv) changes in, or events or conditions affecting, the United States or global economy or capital or financial markets generally; |
8 |
(v) changes in applicable Law or the interpretations thereof by any Governmental Entity; |
(vi) changes in GAAP; or |
(vii) changes in general political conditions, including any acts of war or terrorist activities; or |