EX-10.3: FORM OF EMPLOYEE MATTERS AGREEMENT



 


Exhibit 10.3






EMPLOYEE MATTERS AGREEMENT



Between



TRW INC.



And



TRW AUTOMOTIVE INC.



Dated as of _______, 2002



 







 





TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	 	 	 	 	ARTICLE I DEFINITIONS

	 	 	 	 
	
	
	
	

	Section 1.1	 	General
	 	 	5	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE II EMPLOYMENT
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 2.1	 	Post-Distribution Date Employees
	 	 	11	 
	
	
	
	

	Section 2.2	 	Compensation and Benefits Generally
	 	 	11	 
	
	
	
	

	Section 2.3	 	Collective Bargaining Agreements
	 	 	12	 
	
	
	
	

	Section 2.4	 	Restriction on Hiring
	 	 	13	 
	
	
	
	

	Section 2.5	 	No Right to Continued Employment
	 	 	13	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE III QUALIFIED DEFINED BENEFIT PLANS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 3.1	 	Salaried Pension Plan
	 	 	13	 
	
	
	
	

	Section 3.2	 	Hourly Pension Plans
	 	 	15	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE IV QUALIFIED DEFINED CONTRIBUTION PLANS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 4.1	 	Salaried Savings Plan
	 	 	17	 
	
	
	
	

	Section 4.2	 	Hourly Savings Plan
	 	 	18	 
	
	
	
	

	Section 4.3	 	Joint Venture Savings Plans
	 	 	18	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE V WELFARE BENEFIT PLANS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 5.1	 	Welfare Plans Maintained by TRW Automotive Prior to Distribution
Date
	 	 	18	 
	
	
	
	

	Section 5.2	 	Welfare Plans Maintained by TRW for TRW Automotive Participants Prior
to Distribution Date
	 	 	19	 
	
	
	
	

	Section 5.3	 	Welfare Plans Maintained by TRW for TRW Participants and TRW Automotive
Participants Prior to Benefit Transition Date
	 	 	19	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE VI U.S. NON-QUALIFIED RETIREMENT PLANS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 6.1	 	Non-Qualified Plans Maintained by TRW Automotive Prior to
Distribution Date
	 	 	21	 
	
	
	
	

	Section 6.2	 	Non-Qualified Plans Maintained by TRW Prior to Benefit
Transition Date
	 	 	22	 



2







 




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	
	
	
	

	 	 	 	 	ARTICLE VII NON-U.S. PLANS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 7.1	 	Retention or Assumption of Plans by TRW Automotive
	 	 	24	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE VIII OTHER BENEFITS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 8.1	 	Incentive Compensation Plans
	 	 	24	 
	
	
	
	

	Section 8.2	 	Stock Options and Stock Appreciation Rights
	 	 	25	 
	
	
	
	

	Section 8.3	 	Long-Term Restricted Stock and Restricted Stock Units
	 	 	26	 
	
	
	
	

	Section 8.4	 	Severance Pay
	 	 	27	 
	
	
	
	

	Section 8.5	 	Employment, Consulting and Other Employee-Related Agreements
	 	 	27	 
	
	
	
	

	Section 8.6	 	Other Liabilities
	 	 	28	 
	
	
	
	

	 	 	 
	
	
	
	

	 	 	 	 	ARTICLE IX MISCELLANEOUS
	 	 	 	 
	
	
	
	

	 	 	 
	
	
	
	

	Section 9.1	 	Future Benefit Changes
	 	 	28	 
	
	
	
	

	Section 9.2	 	Indemnification
	 	 	29	 
	
	
	
	

	Section 9.3	 	Sharing of Information
	 	 	29	 
	
	
	
	

	Section 9.4	 	Access to Employees
	 	 	29	 
	
	
	
	

	Section 9.5	 	Entire Agreement
	 	 	29	 
	
	
	
	

	Section 9.6	 	Notices
	 	 	30	 
	
	
	
	

	Section 9.7	 	Amendments and Waivers
	 	 	30	 
	
	
	
	

	Section 9.8	 	Headings
	 	 	31	 
	
	
	
	

	Section 9.9	 	Counterparts
	 	 	31	 
	
	
	
	

	Section 9.10	 	Governing Law
	 	 	31	 
	
	
	
	

	Section 9.11	 	Resolution of Disputes
	 	 	31	 
	
	
	
	

	Section 9.12	 	Waiver of Jury Trial
	 	 	31	 
	
	
	
	

	Section 9.13	 	Assignment
	 	 	31	 
	
	
	
	

	Section 9.14	 	Binding Nature; Third-Party Beneficiaries
	 	 	31	 
	
	
	
	

	Section 9.15	 	Severability
	 	 	31	 
	
	
	
	

	Section 9.16	 	No Right of Setoff
	 	 	32	 
	
	
	
	

	Section 9.17	 	Construction
	 	 	32	 



3







 



List of Schedules




	 	 	 	 	 
	Schedule 2.3(a)	 	
TRW Collective Bargaining Agreements
	 	 
	
	
	
	

	Schedule 2.3(b)	 	
TRW Automotive Collective Bargaining Agreements	 	 
	
	
	
	

	Schedule 3.2(a)(i)	 	
TRW Automotive Hourly Pension Plans	 	 
	
	
	
	

	Schedule 3.2(b)(i)	 	
TRW Hourly Pension Plans	 	 
	
	
	
	

	Schedule 7.1	 	
TRW Automotive Non-U.S. Plans	 	 



4







 



EMPLOYEE MATTERS AGREEMENT



         Employee Matters Agreement (this “Agreement”) dated as of      , 2002,
by and between TRW INC., an Ohio corporation (“TRW”) and TRW AUTOMOTIVE INC., a
Delaware corporation and, as of the date hereof, a wholly-owned subsidiary of
TRW (“TRW Automotive”).



         WHEREAS, the TRW Board has determined that it is appropriate and desirable
to distribute to the holders of common stock of TRW, all outstanding shares of
TRW Automotive common stock held by TRW (the “Distribution”);



         WHEREAS, TRW and TRW Automotive are entering into a Master 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 shall govern certain
matters relating to the Distribution; and



         WHEREAS, in connection with the Distribution, TRW and TRW Automotive 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 agreements;


         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 1.1   General. Capitalized terms used in this Agreement but not
defined herein (other than the names of employee benefit plans) shall 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 any
Section of or Schedule to this Agreement shall have the meanings set forth in
such Section or Schedule and the terms set forth in this Section 1.1 shall have
the following meanings:



         “Active TRW Automotive Employee” means any individual who, immediately
after the Distribution Date, will be employed by a member of the TRW Automotive
Group pursuant to Section 2.1(b). For purposes of Section 4.1(d), in the event
the Distribution Date is later than the Benefit Transition Date, Active TRW
Automotive Employee means any individual who, immediately prior to the Benefit
Transition Date, is employed with the TRW Automotive Business.


5







 


         “Active TRW Employee” means any individual who, immediately after the
Distribution Date, will be employed by a member of the TRW Group pursuant to
Section 2.1(a).


         “Affiliate” shall have the meaning ascribed thereto in the Distribution
Agreement.


         “Agreement” shall have the meaning ascribed thereto in the preamble to the
recitals.


         “Benefit Transition Date” means January 1, 2003.


         “Benefit Transition Period” means, in the event the Distribution Date
occurs before the Benefit Transition Date, the period that begins on the
Distribution Date and ends on the Benefit Transition Date.


         “Company Staff Employee” means any individual who, as of the Distribution
Date, was employed by TRW or any of its Subsidiaries as a member of the Company
Staff function, as designated by TRW.


         “Dispute” shall have the meaning ascribed thereto in Section 9.11.


         “Distribution Agreement” shall have the meaning ascribed thereto in the
recitals.


         “Distribution Date” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “Divested Business” means any corporation, partnership, entity, division,
business unit, business, assets, plants, product line, operations or contract
(including any assets and liabilities comprising the same) that has been sold,
conveyed, assigned, transferred or otherwise disposed of or divested (in whole
or in part) by any member of the Pre-Distribution Group or the operations,
activities or production of which has been discontinued, abandoned, completed
or otherwise terminated (in whole or in part) by any member of the
Pre-Distribution Group.


         “Divested Business Employee” means any Pre-Distribution Group Employee
whose most recent active employment with any member of the Pre-Distribution
Group was with a Divested Business.


         “Divested TRW Automotive Business Employee” means any Divested Business
Employee who is categorized for purposes of TRW’s 2001 FAS 106 valuation as a
member of one of the following Operating Unit Codes: 116 (Massey Ferguson); 262
(Dayton Walther); 263 (Fruehauf Trailer); or 143 (Lucas Closed Operations).


         “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.


6







 


         “Former Corporate Employee” means any Company Staff Employee or Shared
Services Employee who is not, immediately after the Distribution Date, an
Active TRW Employee, Former TRW Employee, Active TRW Automotive Employee,
Former TRW Automotive Employee or Divested Business Employee. Notwithstanding
the above, any such individual employed by a member of the TRW Group or TRW
Automotive Group as of or immediately after the Distribution Date shall be
considered a Former Corporate Employee if such individual has not accepted
permanent employment with a member of the TRW Group or TRW Automotive Group as
of the Distribution Date.


         “Former TRW Automotive Employee” means any Pre-Distribution Group Employee
who is not, immediately after the Distribution Date, an Active TRW Automotive
Employee, an Active TRW Employee or a Divested Business Employee, and whose
most recent active employment with any member of the Pre-Distribution Group was
with the TRW Automotive Business.


         “Former TRW Employee” means any Pre-Distribution Group Employee who is
not, immediately after the Distribution Date, an Active TRW Employee, an Active
TRW Automotive Employee or a Divested Business Employee, and whose most recent
active employment with any member of the Pre-Distribution Group was with the
TRW Business.


         “Global Retirement Plan” means the TRW Global Retirement Plan, including
all amendments thereto through the Distribution Date.


         “Liabilities” shall have the meaning ascribed thereto in the Distribution
Agreement.


         “Operating Unit Codes” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “PBGC” means the Pension Benefit Guaranty Corporation.


         “Pre-Distribution Group” means: (i) each of TRW, the Subsidiaries of TRW
existing immediately prior to the Distribution Date and the former Subsidiaries
of TRW; (ii) each of the predecessors of the foregoing; and (iii) each of the
present and former Subsidiaries and other Affiliates of each of the foregoing,
and their predecessors.


         “Pre-Distribution Group Employee” means any individual who was, at any
time prior to the Distribution Date, employed by TRW or any other member of the
Pre-Distribution Group.


         “Shared Services Employee” means any individual who, as of the
Distribution Date or Benefit Transition Date, as applicable, was employed by
TRW as a member of the Shared Services function, as designated by TRW.


7







 


         “Subsidiary” shall have the meaning ascribed thereto in the Distribution
Agreement.


         “Terminated Stock Participant” means a TRW Automotive Participant or a TRW
Participant who is not an Active TRW Employee or an Active TRW Automotive
Employee and who, immediately before the Distribution Date, held one or more
TRW Options, TRW Stock Appreciation Rights, TRW Long-Term Restricted Stock or
TRW Restricted Stock Units.


         “TRW” shall have the meaning ascribed thereto in the preamble to the
recitals.


         “TRW Actuary” means Towers Perrin.


         “TRW Automotive” shall have the meaning ascribed thereto in the preamble
to the recitals.


         “TRW Automotive Actuary” means an independent actuary selected by TRW
Automotive.


         “TRW Automotive Business” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “TRW Automotive Common Stock” shall have the meaning ascribed thereto in
the Distribution Agreement.


         “TRW Automotive Exchange Ratio” shall mean the quotient (rounded to the
third decimal place) determined by dividing (i) the closing price per share of
TRW Common Stock on the New York Stock Exchange (“NYSE”) Composite Transactions
Reporting System, for the Distribution Date (disregarding the Distribution) by
(ii) the fair market value per share of TRW Automotive Common Stock immediately
after the Distribution (as determined by the NYSE, taking into consideration
the Distribution and other factors).


         “TRW Automotive Group” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “TRW Automotive Hourly Pension Plans” shall have the meaning ascribed
thereto in Section 3.2(a).


         “TRW Automotive Master Trust” shall have the meaning ascribed thereto in
Section 3.1(a).


         “TRW Automotive Mirror Welfare Plans” shall have the meaning ascribed
thereto in Section 5.3(a).


8







 


         “TRW Automotive Option” means an option to purchase from TRW Automotive
shares of TRW Automotive Common Stock.


         “TRW Automotive Participant” means any individual who, immediately after
the Distribution Date, is: (i) an Active TRW Automotive Employee; (ii) a Former
TRW Automotive Employee; or (iii) a beneficiary of any of the foregoing. With
respect to provisions herein that are first operative as of the Benefit
Transition Date, in the event the Distribution Date is later than the Benefit
Transition Date, TRW Automotive Participant means any individual who,
immediately preceding the Benefit Transition Date: (i) is employed with the
TRW Automotive Business; (ii) is not then employed with the TRW Automotive
Business or the TRW Business, but whose most recent active employment was with
the TRW Automotive Business; (iii) is a Shared Services Employee or (iv) is a
beneficiary of any of the foregoing.


         “TRW Automotive SPP” shall have the meaning ascribed thereto in Section
3.1(a).


         “TRW Automotive SPP Transfer Amount” shall mean the amount determined
pursuant to Section 3.1(e).


         “TRW Automotive Subsidiary” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “TRW BEP” means the TRW Benefits Equalization Plan, including all
amendments thereto through the Benefit Transition Date.


         “TRW Business” shall have the meaning ascribed thereto in the Distribution
Agreement.


         “TRW Common Stock” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “TRW DCP” means the TRW Inc. Deferred Compensation Plan, including all
amendments thereto through the Benefit Transition Date.


         “TRW Exchange Ratio” shall mean the quotient (rounded to the third decimal
place) determined by dividing (i) the closing price per share of TRW Common
Stock on the New York Stock Exchange (“NYSE”) Composite Transactions Reporting
System, for the Distribution Date (disregarding the Distribution) by (ii) the
fair market value per share of TRW Common stock immediately after the
Distribution (as determined by the NYSE, taking into consideration the
Distribution and other factors).


         “TRW Group” shall have the meaning ascribed thereto in the Distribution
Agreement.


9







 


         “TRW Hourly Pension Plans” shall have the meaning ascribed thereto in
Section 3.2(b).


         “TRW Incentive Compensation Plans” shall have the meaning ascribed thereto
in Section 8.1(a).


         “TRW Long-Term Restricted Stock” means shares of TRW Common Stock issued
pursuant to the 2000 TRW Long-Term Incentive Plan.


         “TRW Master Trust” means the master trust related to the TRW SPP, TRW
Hourly Pension Plans and TRW Automotive Hourly Pension Plans.


         “TRW Non-Qualified Plans” means, collectively, the TRW BEP, the TRW DCP
and the TRW SRIP.


         “TRW Option” means an option to purchase from TRW shares of TRW Common
Stock.


         “TRW Participant” means any individual who, immediately after the
Distribution Date, is: (i) an Active TRW Employee; (ii) a Former TRW Employee;
(iii) a Former Corporate Employee; (iv) a Divested Business Employee; or (v) a
beneficiary of any of the foregoing. With respect to provisions herein that
are first operative as of the Benefit Transition Date, in the event the
Distribution Date is later than the Benefit Transition Date, TRW Participant
means any individual who, immediately preceding the Benefit Transition Date:
(i) is employed with the TRW Business; (ii) is not then employed with the TRW
Business or the TRW Automotive Business, but whose most recent active
employment was with the TRW Business; (iii) is a Company Staff Employee; or
(iv) is a beneficiary of any of the foregoing.


         “TRW Restricted Stock Unit” means a restricted stock unit related to TRW
Common Stock, issued pursuant to the 2000 TRW Long-Term Incentive Plan.


         “TRW SPP” means the TRW Salaried Pension Plan, including all amendments
thereto through the Benefit Transition Date.


         “TRW SRIP” means the TRW Supplementary Retirement Income Plan, including
all amendments thereto through the Benefit Transition Date.


         “TRW SSP” means the TRW Employee Stock Ownership and Savings Plan,
including all amendments thereto through the Benefit Transition Date.


         “TRW Stock Appreciation Right” means a stock appreciation right related to
TRW Common Stock.


         “TRW Stock Fund” shall have the meaning ascribed thereto in Section
4.1(a).


10







 


         “TRW Subsidiary” shall have the meaning ascribed thereto in the
Distribution Agreement.


         “Welfare Plan” means any employee welfare benefit plan as defined in
Section 3(1) of ERISA and any specified fringe benefit plan as defined in
Section 6039D of the Code, including medical, dental, vision, prescription drug
and other health plans for active and retired employees, life insurance plans
for active and retired employees, accidental death and dismemberment plans,
long term disability plans, flexible benefit plans, dependent care assistance
programs and severance pay plans.


ARTICLE II



EMPLOYMENT



         Section 2.1    Post-Distribution Date Employees


         (a)  Each individual employed by TRW or any of its Subsidiaries immediately
prior to the Distribution Date and who is engaged primarily in the TRW Business
(as reasonably determined by TRW) or is a Company Staff Employee shall be
employed by a member of the TRW Group immediately after the Distribution Date
and shall be an Active TRW Employee. This includes individuals who are
actively employed or on lay-off, leave, short-term or long-term disability or
other permitted absence from employment.


         (b)  Each individual employed by TRW or any of its Subsidiaries immediately
prior to the Distribution Date and who is engaged primarily in the TRW
Automotive Business (as reasonably determined by TRW) or is a Shared Services
Employee shall be employed by a member of the TRW Automotive Group immediately
after the Distribution Date and shall be an Active TRW Automotive Employee.
This includes individuals who are actively employed or on lay-off, leave,
short-term or long-term disability or other permitted absence from employment.



         (c)  Any individual employed by TRW or any of its Subsidiaries immediately
prior to the Distribution Date and who is not considered an Active TRW Employee
under Section 2.1(a) above or an Active TRW Automotive Employee under Section
2.1(b) above shall be employed by a member of the TRW Group immediately after
the Distribution Date, unless otherwise reasonably determined by TRW. This
includes individuals who are actively employed or on lay-off, leave, short-term
or long-term disability or other permitted absence from employment.



         Section 2.2    Compensation and Benefits Generally.



         (a)  Until at least January 1, 2004, the TRW Automotive Group shall pay
each Active TRW Automotive Employee (to the extent the Active TRW Automotive
Employee remains employed with the TRW Automotive Group) at a rate not less
than the base salary rate or hourly rate that was applicable to them
immediately prior to the


11







 




Distribution Date and shall implement any merit, promotional or other
increases that, as of the Distribution Date, were scheduled to go into effect.



         (b)  Except as otherwise provided in this Agreement or agreed to by TRW,
from the Distribution Date until at least January 1, 2004, the TRW Automotive
Group shall provide to TRW Automotive Participants, to the extent they remain
eligible for such benefits, employee benefits that are substantially similar in
all material respects to the employee benefits provided to TRW Automotive
Participants by TRW and its Subsidiaries immediately prior to the Distribution
Date.



         (c)  As of the Distribution Date, TRW Automotive and the TRW Automotive
Subsidiaries shall credit each Active TRW Automotive Employee with the unused
vacation days and personal and sickness days accrued immediately prior to the
Distribution Date in accordance with the vacation and personnel policies and
collective bargaining agreements of TRW and its Subsidiaries applicable to such
employee immediately prior to the Distribution Date.



         Section 2.3    Collective Bargaining Agreements.


         (a)  Effective as of the Distribution Date, TRW shall, or shall cause one
or more TRW Subsidiaries to, unconditionally assume or retain (as applicable)
all Liabilities of TRW or any of its Subsidiaries (including Liabilities
relating to wages, hours or other terms and conditions of employment) relating
to the TRW Participants under each of the collective bargaining agreements of
the Pre-Distribution Group relating to the TRW Business and collateral
agreements related thereto, including those listed on Schedule 2.3(a) through
the expiration or other termination of such agreements. As of the Distribution
Date, TRW shall, or shall cause one or more TRW Subsidiaries to, become the
successor employer under such collective bargaining agreements and assume all
obligations of the employer under such agreements. TRW shall, or shall cause
each TRW Subsidiary that becomes the successor employer under a collective
bargaining agreement to, recognize years of service of the TRW Participants
prior to the Distribution Date for purposes of such collective bargaining
agreement.


         (b)  Effective as of the Distribution Date, TRW Automotive shall, or shall
cause one or more TRW Automotive Subsidiaries to, unconditionally assume or
retain (as applicable) all Liabilities of TRW or any of its Subsidiaries
(including Liabilities relating to wages, hours or other terms and conditions
of employment) relating to the TRW Automotive Participants under each of the
collective bargaining agreements of the Pre-Distribution Group relating to the
TRW Automotive Business and collateral agreements related thereto, including
those listed on Schedule 2.3(b) through the expiration or other termination of
such agreements. TRW Automotive shall, or shall cause one or more TRW
Automotive Subsidiaries to, become the successor employer under such collective
bargaining agreements and assume all obligations of the employer under such
agreements. TRW Automotive shall, or shall cause each TRW Automotive
Subsidiary that becomes the successor employer under a collective bargaining
agreement to,


12







 




recognize years of service of the TRW Automotive Participants prior to the
Distribution Date for purposes of such collective bargaining agreement.



         Section 2.4    Restriction on Hiring. For a period of two (2) years after
the Distribution Date, each of TRW and TRW Automotive agrees that, without the
prior written consent of the other, it shall not, and it shall cause the other
members of its Group not to, solicit the employment of or employ any Active TRW
Automotive Employee or Active TRW Employee, respectively. This shall not,
however, prevent or restrict TRW or TRW Automotive or any other members of
their Groups from making general solicitations of employment (and hiring upon
such general solicitation), including through newspaper or similar
advertisements or third party search firms, provided that such solicitations
are not specifically directed at Active TRW Employees or Active TRW Automotive
Employees.



         Section 2.5    No Right to Continued Employment. Nothing in this Agreement
is intended to confer upon any employee of the TRW Group or the TRW Automotive
Group any right to continued employment after the Distribution Date.



ARTICLE III



QUALIFIED DEFINED BENEFIT PLANS



         Section 3.1    Salaried Pension Plan.



         (a)  Establishment of TRW Automotive Plan. Effective as of the Benefit
Transition Date, TRW Automotive shall establish a new defined benefit pension
plan to provide benefits to eligible TRW Automotive Participants (the “TRW
Automotive SPP”) and a master trust related thereto (the “TRW Automotive Master
Trust”). The TRW Automotive SPP shall be qualified under Section 401(a) of the
Code and shall contain provisions that duplicate the substantive benefit
provisions of the TRW SPP as of the Benefit Transition Date except for a Code
Section 401(h) account. The TRW Automotive SPP shall credit each participant
thereunder for purposes of eligibility to participate, vesting, benefit
accruals (but only following the transfer of the TRW Automotive SPP Transfer
Amount pursuant to Section 3.1(e)(ii)) and all other plan purposes with all
service which had been credited to such participant for such purposes under the
TRW SPP immediately prior to the Benefit Transition Date.


         (b)  Participation in TRW SPP. In the event the Distribution Date occurs
prior to the Benefit Transition Date, TRW and TRW Automotive shall take such
action as is necessary for TRW Automotive to participate in the TRW SPP with
respect to TRW Automotive Participants during the Benefit Transition Period.


         (c)  Retention of TRW Automotive SPP. In the event the Distribution Date
occurs after the Benefit Transition Date, TRW Automotive hereby agrees,
effective as of the Distribution Date, to retain and fully perform, pay and
discharge, and agrees to cause


13







 




the TRW Automotive SPP and TRW Automotive Master Trust to retain and to
fully perform, pay and discharge all accrued benefit and other Liabilities
under or relating to the TRW Automotive SPP including all Liabilities of TRW
Automotive or any of its Subsidiaries, the TRW Automotive SPP and the TRW
Automotive Master Trust under or relating to the TRW Automotive SPP with
respect to all individuals who had an accrued benefit or were otherwise covered
under the TRW Automotive SPP at any time prior to the Distribution Date.


         (d)  Assumption of Pension Plan Liabilities.


         (i)  Effective as of the date of actual transfer of the TRW Automotive SPP
Transfer Amount set forth in Section 3.1(e)(ii), TRW Automotive hereby assumes,
and agrees to fully perform, pay and discharge, and agrees to cause the TRW
Automotive SPP and the TRW Automotive Master Trust to assume, and to fully
perform, pay and discharge, all accrued benefit and other Liabilities of TRW or
any of its Subsidiaries, the TRW SPP and the TRW Master Trust under or relating
to the TRW SPP and the TRW Master Trust with respect to all TRW Automotive
Participants. The Liabilities assumed by TRW Automotive, the TRW Automotive
SPP and the TRW Automotive Master Trust shall be considered to have been
transferred from the TRW SPP and the TRW Master Trust to the TRW Automotive SPP
and the TRW Automotive Master Trust on the date the TRW Automotive SPP Transfer
Amount is transferred to the TRW Automotive Master Trust pursuant to Section
3.1(e) below.


         (ii)  Effective as of the Benefit Transition Date, TRW hereby retains and
agrees to fully perform, pay and discharge, and agrees to cause the TRW SPP and
the TRW Master Trust to retain, and to fully perform, pay and discharge, all
accrued benefit liabilities and other Liabilities of TRW or any of its
Subsidiaries, the TRW SPP and the TRW Master Trust under or relating to the TRW
SPP and the TRW Master Trust other than any such Liabilities with respect to
TRW Automotive Participants.


         (e)  Transfer of Pension Plan Assets.


         (i)  At least 30 days prior to the Benefit Transition Date, TRW shall file
with the IRS notice on IRS Form 5310-A regarding the transfer of assets and
liabilities from the TRW SPP and the TRW Master Trust to the TRW Automotive SPP
and the TRW Automotive Master Trust.


         (ii)  The TRW Actuary shall determine the amount of assets to be
transferred to the TRW Automotive SPP (the “TRW Automotive SPP Transfer
Amount”) in accordance with the requirements of Code Section 411(d) and 414(l)
and Treasury Regulations issued thereunder and actuarial methods and
assumptions established by the PBGC under ERISA Section 4044 and in effect for
plans terminating on the Benefit Transition Date and, with respect to any
actuarial methods and assumptions not required under ERISA Section 4044, the
actuarial assumptions and methods used in the 2002 valuation for the TRW SPP.
The determination of the TRW Automotive SPP Transfer Amount shall be made
without regard to the assets held in the separate Code Section


14







 




401(h) account under the TRW SPP, which assets shall remain a separate
account under the TRW SPP, and shall be reduced by the amount of any benefit
payments made under the TRW SPP with respect to TRW Automotive Participants
during the period commencing on the Benefit Transition Date and ending on the
date of the actual transfer of TRW Automotive SPP Transfer Amount to the TRW
Automotive Master Trust. TRW Automotive may submit the TRW Actuary’s
determination of the TRW Automotive SPP Transfer Amount to the TRW Automotive
Actuary for verification, which shall relate only to the calculation of the TRW
Automotive SPP Transfer Amount on the basis of the assumptions and methods set
forth above. TRW Automotive shall pay the cost of the TRW Automotive Actuary.
The TRW Actuary and the TRW Automotive Actuary shall make a good faith attempt
to reconcile any difference in their calculations. If the TRW Automotive
Actuary’s calculation is within five percent (5%) of the TRW Actuary’s
calculation, the average of the TRW Actuary’s calculation and the TRW
Automotive Actuary’s calculation shall be used. If the difference cannot be
reconciled and exceeds five percent (5%), the TRW Actuary and the TRW
Automotive Actuary shall jointly designate a third independent actuary whose
verification shall be final and binding. TRW Automotive and TRW shall each pay
one-half the costs of such third actuary. The final verification must be
completed not later than ninety (90) days after the Benefit Transition Date.



         (iii)  As soon as practicable after the TRW Automotive SPP Transfer Amount
is determined and verified (if TRW Automotive chooses to have the determination
verified pursuant to (ii) above), TRW shall cause the trustee of the TRW Master
Trust to transfer assets to the TRW Automotive Master Trust in the amount of
the TRW Automotive SPP Transfer Amount, together with interest from the
Distribution Date to the first day of the month immediately preceding the
transfer date, at the TRW Master Trust rate of return during such period, and
thereafter until the asset transfer, interest at the rate of return of the
short term investment fund under the TRW Master Trust. Assets to be
transferred pursuant to this Section 3.1(e) shall consist of a proportionate
interest in the real estate investments under the TRW Master Trust, cash or
cash equivalents and marketable securities.



         Section 3.2    Hourly Pension Plans.



         (a)  Hourly Plans Maintained by TRW Automotive Prior to Distribution Date.



         (i)  Retention of Plans by TRW Automotive. Immediately prior to the
Distribution Date, TRW Automotive or one or more TRW Automotive Subsidiaries
maintain the hourly pension plans listed on Schedule 3.2(a)(i) (the “TRW
Automotive Hourly Pension Plans”). Effective as of the Distribution Date, TRW
Automotive hereby retains and agrees to fully perform, pay and discharge, and
agrees to cause the TRW Automotive Hourly Pension Plans to retain and the TRW
Automotive Master Trust to assume, and to fully perform, pay and discharge all
accrued benefit and other Liabilities under or relating to the TRW Automotive
Hourly Pension Plans including all Liabilities of TRW Automotive or any of its
Subsidiaries, the TRW Automotive Hourly Pension Plans and the TRW Master Trust
under or relating to the TRW Automotive Hourly


15







 




Pension Plans and the TRW Master Trust with respect to all individuals who
had an accrued benefit or were otherwise covered under the TRW Automotive
Hourly Pension Plans at any time prior to the Distribution Date.


         (ii)  Transfer of Assets. As soon as practicable after the first valuation
date under the TRW Master Trust that occurs after the Distribution Date, TRW
shall cause the trustee of the TRW Master Trust to transfer assets to the TRW
Automotive Master Trust in an amount equal to the aggregate of the fair market
value of the units of each of the TRW Automotive Hourly Pension Plans in the
TRW Master Trust as of the valuation date, together with interest from the
valuation date to the first day of the month immediately preceding the transfer
date, at the TRW Master Trust rate of return during such period, and thereafter
until the asset transfer, interest at the rate of return of the short term
investment fund under the TRW Master Trust . Assets to be transferred pursuant
to this Section 3.2 (a) shall consist of a proportionate interest in the real
estate investments under the TRW Master Trust, cash or cash equivalents and
marketable securities.


         (b)  Hourly Plans Maintained by TRW Prior to Distribution Date.


         (i)  Assumption of Plans by TRW Automotive. Immediately prior to the
Distribution Date, TRW or one or more TRW Subsidiaries maintain the hourly
pension plans listed on Schedule 3.2(b)(i)(the “TRW Hourly Pension Plans”).
Effective as of the Distribution Date, TRW Automotive hereby assumes, or shall
cause one or more TRW Automotive Subsidiaries to assume, sponsorship of the TRW
Hourly Pension Plans and TRW Automotive hereby agrees to fully perform, pay and
discharge, and agrees to cause the TRW Hourly Pension Plans to retain and the
TRW Automotive Master Trust to assume, and to fully perform, pay and discharge
all accrued benefit and other Liabilities under or relating to the TRW Hourly
Pension Plans including all Liabilities of TRW or any of its Subsidiaries, the
TRW Hourly Pension Plans and the TRW Master Trust under or relating to the TRW
Hourly Pension Plans and the TRW Master Trust with respect to all individuals
who had an accrued benefit or were otherwise covered under the TRW Hourly
Pension Plans at any time prior to the Distribution Date.


         (ii)  Transfer of Assets. As soon as practicable after the first valuation
date under the TRW Master Trust that occurs after the Distribution Date, TRW
shall cause the trustee of the TRW Master Trust to transfer assets to the TRW
Automotive Master Trust in an amount equal to the aggregate of the fair market
value of the units of each of the TRW Hourly Pension Plans in the TRW Master
Trust as of the valuation date, together with interest from the valuation date
to the first day of the month immediately preceding the transfer date, at the
TRW Master Trust rate of return during such period, and thereafter until the
asset transfer, interest at the rate of return of the short term investment
fund under the TRW Master Trust. Assets to be transferred pursuant to this
Section 3.2 (b) shall consist of a proportionate interest in the real estate
investments under the TRW Master Trust, cash or cash equivalents and marketable
securities.


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ARTICLE IV



QUALIFIED DEFINED CONTRIBUTION PLANS



         Section 4.1    Salaried Savings Plan.



         (a)  Establishment of TRW Automotive Plan. Effective as of the Benefit
Transition Date, TRW Automotive shall establish a new defined contribution plan
and a trust related thereto to cover TRW Automotive Participants (the “TRW
Automotive SSP”). The TRW Automotive SSP shall be qualified under Sections
401(a) and 401(k) of the Code and shall contain provisions that substantially
duplicate the benefit provisions of the TRW SSP as of the Benefit Transition
Date. The TRW Automotive SSP shall have all of the investment options that are
available under the TRW SSP as of the Benefit Transition Date and, effective as
of the Benefit Transition Date (or the Distribution Date, if the Distribution
Date is after the Benefit Transition Date), a TRW Automotive stock fund. The
TRW Automotive SSP shall credit each participant thereunder for purposes of
eligibility to participate, vesting and all other plan purposes with all
service, which had been credited to such participant for such purposes under
the TRW SSP immediately prior to the Benefit Transition Date. The TRW
Automotive SSP shall maintain an investment fund for TRW common stock (the “TRW
Stock Fund”) as a “sell-only” investment fund option and participants with a
balance in the TRW Stock Fund shall be required to transfer, in one or more
transfers, all of such amount out of the TRW Stock Fund and into another
investment fund or funds not later than 12 months after the later of the
Benefit Transition Date or Distribution Date.


         (b)  Participation in TRW SSP. In the event the Distribution Date occurs
prior to the Benefit Transition Date, TRW and TRW Automotive shall take such
action as is necessary for TRW Automotive to participate in the TRW SSP with
respect to TRW Automotive Participants during the Benefit Transition Period;
provided that for TRW Automotive Participants, the TRW Stock Fund option shall
be a “sell-only” option and shall not be available for any new contributions or
transfers from other investment options during the Benefit Transition Period.
During the Benefit Transition Period, matching contributions with respect to
TRW Automotive Participants shall be made in cash only and TRW Automotive
Participants shall not be permitted to purchase interests in the TRW Stock
Fund.


         (c)  Retention of TRW Automotive SSP. In the event the Distribution Date
occurs after the Benefit Transition Date, TRW Automotive hereby agrees,
effective as of the Distribution Date, to retain and fully perform, pay and
discharge all Liabilities under or relating to the TRW Automotive SSP including
all Liabilities of TRW Automotive or any of its Subsidiaries under or relating
to the TRW Automotive SSP with respect to all individuals who had an accrued
benefit or were otherwise covered under the TRW Automotive SSP at any time
prior to the Distribution Date.


         (d)  Vesting and Participation. Effective as of the earlier of the
Distribution Date or the Benefit Transition Date, each Active TRW Automotive
Employee who


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participated in the TRW SSP immediately prior to such date shall become
fully vested in his or her account balance under the TRW SSP or TRW Automotive
SSP, as applicable. Effective as of the Benefit Transition Date, TRW
Automotive Participants shall cease to be eligible to contribute to, or receive
contributions in respect of, their accounts under the TRW SSP.



         (e)  Transfer of Plan Assets. At least 30 days prior to the Benefit
Transition Date, TRW shall file with the IRS notice on IRS Form 5310-A
regarding the transfer of assets and liabilities from the TRW SSP and related
trust to the TRW Automotive SSP and related trust. Effective on the Benefit
Transition Date, or such later date determined by TRW, the account balances of
TRW Automotive Participants shall be transferred in kind to the TRW Automotive
SSP and related trust. Effective as of the date of such transfer, TRW
Automotive hereby assumes, and agrees to fully perform, pay and discharge, and
agrees to cause the TRW Automotive SSP and its related Trust to assume, and to
fully perform, pay and discharge, all accrued benefit and other Liabilities of
TRW or any of its Subsidiaries, the TRW SSP and its related trust under the TRW
SSP and its related trust with respect to all TRW Automotive Participants.



         Section 4.2    Hourly Savings Plan.



         Immediately prior to the Distribution Date, TRW Automotive or one or more
TRW Automotive Subsidiaries maintain the TRW Inc. Savings Plan for Represented
Employees (the “TRW Hourly Savings Plan”). Effective as of the Distribution
Date, TRW Automotive hereby retains and agrees to fully perform, pay and
discharge all Liabilities under or relating to the TRW Hourly Savings Plan
including all Liabilities of TRW Automotive or any of its Subsidiaries under or
relating to the TRW Hourly Savings Plan with respect to all individuals who had
an accrued benefit or were otherwise covered under the TRW Hourly Savings Plan
at any time prior to the Distribution Date.



         Section 4.3    Joint Venture Savings Plans.



         Immediately prior to the Distribution Date, TRW Automotive or one or more
TRW Automotive Subsidiaries maintain the TRW Fuji Valve, Inc. Deferred
Compensation Plan and the TRW Koyo Steering Systems Company (TKS) Deferred
Compensation Plan (collectively, the “Joint Venture Savings Plans”). Effective
as of the Distribution Date, TRW Automotive hereby retains and agrees to fully
perform, pay and discharge its responsibilities with respect to the Joint
Venture Savings Plans.



ARTICLE V



WELFARE BENEFIT PLANS



         Section 5.1    Welfare Plans Maintained by TRW Automotive Prior to
Distribution Date.


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         Immediately prior to the Distribution Date, TRW Automotive or one or more
TRW Automotive Subsidiaries maintain various Welfare Plans (the “TRW Automotive
Retained Welfare Plans”). Effective as of the Distribution Date, TRW
Automotive shall, or shall cause one or more TRW Automotive Subsidiaries to,
retain all Liabilities of TRW Automotive or any of its Subsidiaries under or
with respect to the TRW Automotive Retained Welfare Plans, including all
Liabilities with respect to Divested TRW Automotive Business Employees.



         Section 5.2    Welfare Plans Maintained by TRW for TRW Automotive
Participants Prior to Distribution Date.



         Immediately prior to the Distribution Date, TRW or one or more TRW
Subsidiaries maintain various Welfare Plans that cover exclusively TRW
Automotive Participants (the “TRW Automotive Assumed Welfare Plans”).
Effective as of the Distribution Date, TRW Automotive hereby assumes, or shall
cause one or more TRW Automotive Subsidiaries to assume, sponsorship of the TRW
Automotive Assumed Welfare Plans and TRW Automotive and the TRW Automotive
Subsidiaries hereby agree to assume and be solely responsible for and fully
perform, pay and discharge, all Liabilities of TRW or any of its Subsidiaries
under the TRW Automotive Assumed Welfare Plans, whether incurred, or arising in
connection with incidents occurring, before, on, or after the Distribution Date
and whether any claim is made with respect thereto before, on, or after the
Distribution Date.



         Section 5.3    Welfare Plans Maintained by TRW for TRW Participants and TRW
Automotive Participants Prior to Benefit Transition Date.



         (a)  Establishment of TRW Automotive Mirror Welfare Plans. Immediately
prior to the Benefit Transition Date, TRW and one or more TRW subsidiaries
maintain various Welfare Plans (the “TRW Welfare Plans”) for the benefit of TRW
Participants and TRW Automotive Participants. Effective as of the Benefit
Transition Date, TRW Automotive and the TRW Automotive Subsidiaries shall
establish, and shall cover all TRW Automotive Participants under, Welfare Plans
(collectively, “TRW Automotive Mirror Welfare Plans”) that are substantially
similar to the TRW Welfare Plans that covered TRW Automotive Participants
immediately prior to the Benefit Transition Date.


         (b) Participation in TRW Welfare Plans. In the event the Distribution
Date occurs prior to the Benefit Transition Date, TRW and TRW Automotive shall
take such action as is necessary for TRW Automotive to participate in the TRW
Welfare Plans with respect to TRW Automotive Participants during the Benefit
Transition Period. TRW Automotive shall reimburse TRW for the cost of such
participation with respect to TRW Automotive Participants during the Benefit
Transition Period, including benefit payment costs with respect to self-insured
arrangements (calculated by TRW on a premium basis in accordance with standard
procedures used by TRW prior to the Benefit Transition Date), premiums paid to
carriers and administrative expenses paid to third parties with respect to the
TRW Welfare Plans.


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         (c)  Retention of TRW Automotive Mirror Welfare Plans. In the event the
Distribution Date occurs after the Benefit Transition Date, TRW Automotive
hereby agrees, effective as of the Distribution Date, to retain all Liabilities
of TRW Automotive or any of its Subsidiaries with respect to all participants
who were covered under the TRW Automotive Mirror Welfare Plans prior to the
Distribution Date.


         (d)  Terms of Participation in TRW Automotive Mirror Welfare Plans. The TRW
Automotive Mirror Welfare Plans shall provide for the immediate participation
of those TRW Automotive Participants who participated in the corresponding TRW
Welfare Plans immediately prior to the Benefit Transition Date. Specific
benefit elections that were in effect under the TRW Welfare Plans immediately
prior to the Benefit Transition Date shall continue in effect under the TRW
Automotive Mirror Welfare Plans after the Benefit Transition Date and any
advance benefit elections made by TRW Automotive Participants under the TRW
Welfare Plans with respect to plan years or benefit periods that begin on or
after the Benefit Transition Date shall be given effect under the TRW
Automotive Mirror Welfare Plans as if such elections had been made under the
TRW Automotive Mirror Welfare Plans. Each of the TRW Automotive Mirror Welfare
Plans shall credit each TRW Automotive Participant with all service and any
other item which had been credited to or otherwise accumulated for the benefit
of such participant under the corresponding TRW Welfare Plan immediately prior
to the Benefit Transition Date, to the extent that such service or other item
would have been credited or otherwise accumulated under the corresponding TRW
Welfare Plan, including service credited toward any waiting periods and amounts
credited toward any deductible or co-payment. Without limiting the generality
of the foregoing provision, each TRW Automotive Mirror Welfare Plan, to the
extent applicable: (A) shall recognize all amounts applied to deductibles,
co-payments, out-of-pocket maximums and lifetime maximum benefits under the
corresponding TRW Welfare Plan for any plan year that includes the Benefit
Transition Date and for prior periods (if applicable); (B) shall recognize all
service credited to waiting periods under the corresponding TRW Welfare Plan;
(C) shall waive any limitations on coverage of pre-existing conditions to the
extent such limitations were waived or satisfied under the corresponding TRW
Welfare Plan immediately before the Benefit Transition Date; (D) shall not
impose any other conditions upon participation by TRW Automotive Participants
who were participating in the corresponding TRW Welfare Plans immediately
before the Benefit Transition Date.


         (e)  Liabilities.


         (i) From and after the Benefit Transition Date, except as specifically set
forth herein, TRW Automotive and the TRW Automotive Subsidiaries shall assume
or retain, as applicable, and shall be solely responsible for and shall fully
perform, pay and discharge, all Liabilities of TRW or any of its Subsidiaries
in respect of TRW Automotive Participants (and claims by or relating to such
individuals) with respect to employee welfare and fringe benefits, whether
under the TRW Automotive Mirror Welfare Plans or otherwise, that are incurred
on or after the Benefit Transition Date.


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         (ii)  From and after the Benefit Transition Date, except as specifically
set forth herein, TRW and the TRW Subsidiaries shall assume or retain, as
applicable, and shall be solely responsible for and shall fully perform, pay
and discharge, all Liabilities of TRW or any of its Subsidiaries in respect of
TRW Participants (except for Divested TRW Automotive Business Employees), and
claims by or relating to such individuals, with respect to employee welfare and
fringe benefits, whether under the TRW Welfare Plans or otherwise, whether
incurred, or arising in connection with incidents occurring, before, on, or
after the Benefit Transition Date and whether any claim is made with respect
thereto before, on or after the Benefit Transition Date.


         (iii)  On or before January 1, 2003, TRW shall reasonably determine, in
accordance with the standard procedure historically used by TRW (the “True-Up
Procedure”), a preliminary retrospective cost adjustment with respect to TRW
Automotive Participants under the TRW Welfare Plans for the 2001 plan year (the
“Preliminary 2001 TRW Automotive True-Up”). On or before January 1, 2004, TRW
shall determine, in accordance with the True-Up Procedure, the final
retrospective cost adjustment with respect to TRW Automotive Participants under
the TRW Welfare Plans for the 2001 plan year (the “Final 2001 TRW Automotive
True-Up”). On or before January 1, 2004, TRW shall determine, in accordance
with the True-Up Procedure, a preliminary retrospective cost adjustment with
respect to TRW Automotive Participants under the TRW Welfare Plans for the 2002
plan year (the “Preliminary 2002 TRW Automotive True-Up”). On or before
January 1, 2005, TRW shall determine, in accordance with the True-Up Procedure,
the final retrospective cost adjustment with respect to TRW Automotive
Participants under the TRW Welfare Plans for the 2002 plan year (the “Final
2002 TRW Automotive True-Up”). Documentation supporting the calculations of
each TRW Automotive True-Up shall be provided to TRW Automotive for review. In
the case of any positive TRW Automotive True-Up, TRW shall, within 60 days
after the TRW Automotive True-Up is determined, pay TRW Automotive the amount
of the TRW Automotive True-Up. In the case of any negative TRW Automotive
True-Up, TRW Automotive shall, within 60 days after receipt of notice from TRW,
pay TRW the amount of the TRW Automotive True-Up. In the event that any TRW
Automotive True-Up is payable hereunder prior to the Distribution Date, such
TRW Automotive True-Up shall be settled in accordance with True-Up Procedure.


ARTICLE VI



U.S. NON-QUALIFIED RETIREMENT PLANS



         Section 6.1
   Non-Qualified Plans Maintained by TRW Automotive Prior to
Distribution Date. Immediately prior to the Distribution Date, TRW Automotive
or one or more TRW Automotive Subsidiaries maintain the Varity Automotive Inc.
Supplemental Retirement & Deferred Compensation Plan for Employees and the
Varity Automotive Inc. Non-Qualified Deferred Compensation Plan (collectively,
the “TRW Automotive Non-Qualified Plans”) and rabbi trusts relating thereto
(collectively, the “TRW Automotive Rabbi Trusts”). Effective as of the
Distribution Date, TRW


21







 




Automotive hereby retains and agrees to fully perform, pay and discharge
and agrees to cause the TRW Automotive Non-Qualified Plans and the TRW
Automotive Rabbi Trusts to retain and to fully perform, pay and discharge, all
accrued benefit and other Liabilities under or with respect to the TRW
Automotive Non-Qualified Plans and the TRW Automotive Rabbi Trusts.


         Section 6.2    Non-Qualified Plans Maintained by TRW Prior to Benefit
Transition Date.


         (a)  Establishment of TRW Automotive Mirror Non-Qualified Plans.
Immediately prior to the Benefit Transition Date, TRW maintains the TRW
Non-Qualified Plans. Effective as of the Benefit Transition Date, TRW
Automotive shall establish the following three new non-qualified retirement
plans (collectively, the “TRW Automotive Mirror Non-Qualified Plans”) for the
benefit of eligible TRW Automotive Participants:


         (i)  A non-qualified savings plan (the “TRW Automotive BEP”), the terms of
which shall be substantially similar in all material respects to the TRW BEP.
The TRW Automotive BEP shall have all of the investment options that are
available under the TRW BEP immediately prior to the Distribution Date and,
effective as of the Benefit Transition Date (or the Distribution Date, if the
Distribution Date is after the Benefit Transition Date), a TRW Automotive stock
fund; provided, however, that the TRW Stock Fund option shall be a “sell-only”
option and shall not be available for any new deferrals or transfers from other
investment options. The TRW Automotive BEP shall credit each participant
thereunder with the benefit accruals that had been credited to such participant
under the TRW BEP as of 5:00 P.M. Eastern Time on the day prior to the Benefit
Transition Date and such amounts shall be credited to the same investment
options and in the same proportions as the participant’s accruals were credited
under the TRW BEP. Participants in the TRW Automotive BEP who have amounts
credited to the TRW Stock Fund investment option shall be required to transfer,
in one or more transfers, all such amounts out of the TRW Stock Fund and into
another investment fund or funds not later than 12 months after the later of
the Benefit Transition Date or the Distribution Date.


         (ii)  A non-qualified supplemental pension plan (the “TRW Automotive
SRIP”), the terms of which shall be substantially similar in all material
respects to the TRW SRIP. The TRW Automotive SRIP shall credit each
participant thereunder for all plan purposes with all service which had been
credited to such participant for such purposes under the TRW SRIP immediately
prior to the Benefit Transition Date.


         (iii)  A non-qualified deferred compensation plan (the “TRW Automotive
DCP”), the terms of which shall be substantially similar in all material
respects to the TRW DCP. The TRW Automotive DCP shall have all of the
investment options that are available under the TRW DCP immediately prior to
the Benefit Transition Date and, effective as of the Benefit Transition Date
(or the Distribution Date, if the Distribution Date is after the Benefit
Transition Date), a TRW Automotive stock fund; provided, however, that the TRW
Stock Fund option shall be a “sell-only” option and shall not be


22







 




available for any new deferrals or transfers from other investment
options. The TRW Automotive DCP shall credit each participant thereunder with
the benefit accruals that had been credited to such participant under the TRW
DCP as of 5:00 P.M. Eastern Time on the day prior to the Benefit Transition
Date and such amounts shall be credited to the same investment options and in
the same proportions as the participant’s accruals were credited under the TRW
DCP. The TRW Automotive DCP shall preserve and give effect to the specific
terms of the deferral elections made by participants under the TRW DCP,
including with respect to deferral elections made under the TRW DCP that are
applicable to compensation payable on or after the Benefit Transition Date;
provided that with respect compensation payable on or after the Benefit
Transition Date, no amount deferred under the TRW Automotive DCP shall be
credited to the TRW Stock Fund option. Participants in the TRW Automotive DCP
who have amounts credited to the TRW Stock Fund investment option shall be
required to transfer, in one or more transfers, all such amounts out of the TRW
Stock Fund and into another investment fund or funds not later than 12 months
after the later of the Benefit Transition Date or the Distribution Date.


         (b)  Participation in TRW Non-Qualified Plans. In the event the
Distribution Date occurs prior to the Benefit Transition Date, TRW and TRW
Automotive shall take such action as is necessary for TRW Automotive to
participate in the TRW Non-Qualified Plans with respect to TRW Automotive
Participants during the Benefit Transition Period; provided that for TRW
Automotive Participants, the TRW Stock Fund option shall be a “sell-only”
option and shall not be available for any new deferrals or transfers from other
investment funds during the Benefit Transition Period. TRW Automotive shall
reimburse TRW for the costs of any benefit payments made under the TRW
Non-Qualified Plans with respect to TRW Automotive Participants during the
Benefit Transition Period.


         (c)  Retention of TRW Automotive Mirror Non-Qualified Plans. In the event
the Distribution Date occurs after the Benefit Transition Date, TRW Automotive
hereby agrees, effective as of the Distribution Date, to retain and fully
perform, pay and discharge all accrued benefit and other Liabilities under or
relating to the TRW Automotive Mirror Non-Qualified Plans including all
Liabilities of TRW Automotive or any of its Subsidiaries under or relating to
the TRW Automotive Mirror Non-Qualified Plans with respect to all individuals
who had an accrued benefit or were otherwise covered under the TRW Automotive
Mirror Non-Qualified Plans at any time prior to the Distribution Date.


         (d) Assumption of Non-Qualified Plan Liabilities. Effective as of the
Benefit Transition Date, TRW Automotive hereby assumes, and agrees to fully
perform, pay and discharge, and agrees to cause each of the TRW Automotive
Mirror Non-Qualified Plans to assume, and to fully perform, pay and discharge,
all accrued benefit and other Liabilities of TRW or any of its Subsidiaries and
the respective TRW Non-Qualified Plans under or relating to the TRW
Non-Qualified Plans with respect to all TRW Automotive Participants.


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         (e)  Assumption of Global Retirement Plan and Related Liability.
Immediately prior to the Distribution Date, TRW or one or more TRW Subsidiaries
maintain the Global Retirement Plan. Effective as of the Distribution Date,
TRW Automotive hereby assumes sponsorship of the Global Retirement Plan and
agrees to fully perform, pay and discharge all accrued benefit and other
Liabilities under or relating to the Global Retirement Plan including all
Liabilities of TRW or any of its Subsidiaries and the Global Retirement Plan
under or relating to the Global Retirement Plan with respect to all individuals
who had an accrued benefit or were otherwise covered under the Global
Retirement Plan at any time prior to the Distribution Date.


ARTICLE VII



NON-U.S. PLANS



         Section 7.1    Retention or Assumption of Plans by TRW Automotive.
Immediately prior to the Distribution Date, one or more of TRW and its
Subsidiaries (including TRW Automotive and members of the TRW Automotive Group)
maintain various benefit plans and arrangements for the benefit of non-U.S. TRW
Automotive Participants and Non-U.S. Divested Business Employees (the “TRW
Automotive Non-U.S. Plans”). Schedule 7.1 identifies by Operating Unit Code and
operating unit name those locations that maintain one or more TRW Automotive
Non-U.S. Plans immediately prior to the Distribution Date. Effective as of the
Distribution Date, TRW Automotive hereby retains or assumes, as applicable, and
agrees to fully perform, pay and discharge, and agrees to cause the TRW
Automotive Non-U.S. Plans to retain, and to fully perform, pay and discharge
all accrued benefit and other Liabilities under or relating to the TRW
Automotive Non-U.S. Plans maintained with respect to the Operating Unit Codes
identified on Schedule 7.1, including all Liabilities of TRW Automotive or any
of its Subsidiaries with respect to all individuals who had an accrued benefit
or were otherwise covered under the TRW Automotive Non-U.S. Plans at any time
prior to the Distribution Date.


ARTICLE VIII



OTHER BENEFITS



         Section 8.1    Incentive Compensation Plans


         (a) Effective as of the Distribution Date, TRW shall assume or retain, as
applicable, and shall be solely responsible for and shall fully perform, pay
and discharge, all Liabilities (including liability for earned but unpaid
incentive payments) of TRW or any of its Subsidiaries for, due to and/or
attributable to TRW Participants under the TRW Operational Incentive Plan, the
TRW Strategic Incentive Plan and all other long-term, annual and other
incentive compensation plans and arrangements of TRW and its Subsidiaries
(collectively, the “TRW Incentive Compensation Plans”) in effect at or prior to
the Distribution Date.


24







 


         (b)  Effective as of the Distribution Date, TRW Automotive shall assume or
retain, as applicable, and shall be solely responsible for and shall fully
perform, pay and discharge, all Liabilities (including liability for earned but
unpaid incentive payments) of TRW or any of its Subsidiaries for, due to and/or
attributable to TRW Automotive Participants under the TRW Incentive
Compensation Plans in effect at or prior to the Distribution Date. Effective
as of the Distribution Date, TRW Automotive shall adopt incentive compensation
plans that provide incentive opportunities comparable to the TRW Incentive
Compensation Plans.


         Section 8.2    Stock Options and Stock Appreciation Rights.


         (a)  TRW shall take all action necessary or appropriate so that each TRW
Option and TRW Stock Appreciation Right held by an Active TRW Employee that is
outstanding as of the Distribution Date is adjusted so as to become a TRW
Option to purchase, or TRW Stock Appreciation Right with respect to, the number
of shares of TRW Common Stock determined by multiplying the number of shares of
TRW Common Stock subject to such TRW Option or TRW Stock Appreciation Right
immediately before the Distribution Date by the TRW Exchange Ratio, at a price
per share (rounded to the nearest whole cent) equal to the exercise price per
share of TRW Common Stock pursuant to such TRW Option or TRW Stock Appreciation
Right divided by the TRW Exchange Ratio. Such TRW Option or TRW Stock
Appreciation Right shall otherwise have the same terms and conditions as the
corresponding TRW Option or TRW Stock Appreciation Right being adjusted.


         (b)  TRW Automotive shall take all action necessary or appropriate so that
each TRW Option and TRW Stock Appreciation Right held by an Active TRW
Automotive Employee that is outstanding as of the Distribution Date shall be
and become a TRW Automotive Option to purchase, or TRW Automotive Stock
Appreciation Right with respect to the number of shares of TRW Automotive
Common Stock determined by multiplying the number of shares of TRW Common Stock
subject to such TRW Option or TRW Stock Appreciation Right immediately before
the Distribution Date by the TRW Automotive Exchange Ratio, at a price per
share (rounded to the nearest whole cent) equal to the exercise price per share
of TRW Common Stock pursuant to such TRW Option or TRW Stock Appreciation
Right divided by the TRW Automotive Exchange Ratio. Such TRW Automotive Option
or TRW Automotive Stock Appreciation Right shall otherwise have substantially
the same terms and conditions as the corresponding TRW Option or TRW Stock
Appreciation Right being replaced, except that (a) references to TRW shall be
changed to refer to TRW Automotive, (b) references to the TRW Stock Option Plan
shall be changed to refer to the TRW Automotive Stock Option Plan and, (c) for
purposes of determining when any such TRW Automotive Option shall vest and
expire or when any such TRW Automotive Stock Appreciation Right shall
accumulate and terminate, service with TRW and its Subsidiaries before the
Distribution Date shall be treated as service with TRW Automotive and its
Subsidiaries at and after the Distribution Date. Effective as of the
Distribution Date, TRW Automotive shall adopt a


25







 




stock option plan that is substantially similar in all material respects
to the TRW Stock Option Plan.


         (c)  TRW and TRW Automotive shall take all action necessary so that each
TRW Option and TRW Stock Appreciation Right held by a Terminated Stock
Participant that is outstanding as of the Distribution Date shall be adjusted
to become, respectively, a TRW Option and a TRW Automotive Option and a TRW
Stock Appreciation Right and a TRW Automotive Stock Appreciation Right, each
with respect to the same number of shares as the number of shares of TRW Common
Stock subject to the TRW Option or TRW Stock Appreciation Right immediately
before the Distribution Date and each at a price per share, (rounded to the
nearest whole cent) equal to the exercise price per share of TRW Common Stock
pursuant to such TRW Option or TRW Stock Appreciation Right divided by, as
applicable, the TRW Exchange Ratio and the TRW Automotive Exchange Ratio. Such
TRW Option or TRW Stock Appreciation Right shall otherwise have the same terms
and conditions as the corresponding TRW Option or TRW Stock Appreciation Right
being adjusted. Such TRW Automotive Option or TRW Automotive Stock Appreciation
Right shall otherwise have substantially the same terms and conditions as the
corresponding TRW Option or TRW Stock Appreciation Right being adjusted, except
that (a) references to TRW shall be changed to refer to TRW Automotive and (b)
references to the TRW Stock Option Plan shall be changed to refer to the TRW
Automotive Stock Option Plan.


         Section 8.3    Long-Term Restricted Stock and Restricted Stock Units.


         (a)  TRW shall take all action necessary or appropriate so that (i) each
share of TRW Long-Term Restricted Stock held by an Active TRW Employee that has
not vested as of the Distribution Date and (ii) each TRW Restricted Stock Unit
held by an Active TRW Employee that has not vested as of the Distribution Date
or that has vested, but the receipt of which has been deferred as of the
Distribution Date, is adjusted so as to become the number of shares of TRW
Long-Term Restricted Stock or TRW Restricted Stock Units determined by
multiplying the number of shares of TRW Long-Term Restricted Stock or TRW
Restricted Stock Units that have not vested or the receipt of which has been
deferred immediately before the Distribution Date by the TRW Exchange Ratio.
Such TRW Long-Term Restricted Stock or TRW Restricted Stock Unit shall
otherwise have the same terms and conditions as the corresponding TRW Long-Term
Restricted Stock or TRW Restricted Stock Unit being adjusted.


         (b)  TRW Automotive shall take all action necessary or appropriate so that
each share of TRW Long-Term Restricted Stock held by an Active TRW Automotive
Employee that has not vested as of the Distribution Date and (ii) each TRW
Restricted Stock Unit held by an Active TRW Automotive Employee that has not
vested as of the Distribution Date or that has vested, but the receipt of which
has been deferred as of the Distribution Date, is adjusted so as to become the
number of shares of TRW Automotive Restricted Stock or TRW Automotive
Restricted Stock Units determined by multiplying the number of shares of TRW
Long-Term Restricted Stock or TRW Restricted Stock Units that have not vested
or the receipt of which has been deferred immediately before


26







 




the Distribution Date by the TRW Automotive Exchange Ratio. Such TRW
Automotive Restricted Stock or TRW Automotive Restricted Stock Unit shall
otherwise have substantially the same terms and conditions as the corresponding
TRW Long-Term Restricted Stock or TRW Restricted Stock Unit being replaced,
except that (a) references to TRW shall be changed to refer to TRW Automotive,
(b) references to the 2000 TRW Long-Term Incentive Plan shall be changed to
refer to the TRW Automotive 2002 Long-Term Incentive Plan and, (c) for purposes
of determining when any such TRW Automotive Restricted Stock or TRW Automotive
Restricted Stock Unit shall vest and terminate, service with TRW and its
Subsidiaries before the Distribution Date shall be treated as service with TRW
Automotive and its Subsidiaries at and after the Distribution Date.


         Section 8.4    Severance Pay; Notice Obligations.


         (a)  TRW and TRW Automotive acknowledge and agree that the transactions
contemplated by the Distribution Agreement shall not constitute a severance
from employment of any Active TRW Employee or Active TRW Automotive Employee
prior to or as a result of the transactions contemplated thereby, and that
individuals who, in connection with the Distribution, become Active TRW
Employees or Active TRW Automotive Employees shall not be deemed to have
experienced a termination, layoff or severance of employment from TRW and its
Subsidiaries, in each case for purposes of any policy, plan, program or
agreement of TRW or any of its Subsidiaries that provides for the payment of
severance, salary continuation or similar benefits.


         (b)  TRW and the TRW Subsidiaries shall assume or retain, as applicable,
and be solely responsible for, and shall fully perform, pay and discharge, all
liabilities of TRW or any of its Subsidiaries in connection with claims made by
or on behalf of TRW Participants in respect of severance pay, salary
continuation, notice obligations and similar obligations relating to the
termination or alleged termination of any such person’s employment, whether
such termination or alleged termination occurred before, on or after the
Distribution Date and whether any claim is made with respect thereto before, on
or after the Distribution Date.


         (c)  TRW Automotive and the TRW Automotive Subsidiaries shall assume or
retain, as applicable, and be solely responsible for, and shall fully perform,
pay and discharge, all liabilities of TRW or any of its Subsidiaries in
connection with claims made by or on behalf of TRW Automotive Participants in
respect of severance pay, salary continuation, notice obligations and similar
obligations relating to the termination or alleged termination of any such
person’s employment, whether such termination or alleged termination occurred
before, on or after the Distribution Date and whether any claim is made with
respect thereto before, on or after the Distribution Date.


         Section 8.5    Employment, Consulting and Other Employee-Related Agreements.


         (a)  Effective as of the Distribution Date, TRW and the TRW Subsidiaries
shall assume or retain, as applicable, and be solely responsible for, and fully
perform, pay


27







 




and discharge, all Liabilities of TRW or any of its Subsidiaries relating
to TRW Participants under their employment, consulting, separation, arbitration
and other employee-related agreements with any member of the Pre-Distribution
Group, as the same are in effect immediately prior to the Distribution Date.


         (b)  Effective as of the Distribution Date, TRW Automotive and the TRW
Automotive Subsidiaries shall assume or retain, as applicable, and be solely
responsible for, and fully perform, pay and discharge, all Liabilities of TRW
or any of its Subsidiaries relating to TRW Automotive Participants under their
employment, consulting, separation, arbitration and other employee-related
agreements with any member of the Pre-Distribution Group, as the same are in
effect immediately prior to the Distribution Date.


         Section 8.6    Other Liabilities.


         (a)  From and after the Distribution Date, except as specifically set forth
in this Agreement, TRW and the TRW Subsidiaries shall assume or retain, as
applicable, and be solely responsible for, and shall fully perform, pay and
discharge, all Liabilities of TRW or any of its Subsidiaries arising out of or
relating to the employment of TRW Participants by any member of the
Pre-Distribution Group, whether pursuant to benefit plans, collective
bargaining agreements or otherwise and whether such Liabilities arose before,
on or after the Distribution Date, including all litigation, administrative
charges, workers’ compensation claims, grievances, arbitrations, or alternative
dispute claims.


         (b)  From and after the Distribution Date, except as specifically set forth
in this Agreement, TRW Automotive and the TRW Automotive Subsidiaries shall
assume or retain, as applicable, and be solely responsible for, and shall fully
perform, pay and discharge, all Liabilities of TRW or any of its Subsidiaries
arising out of or relating to the employment of TRW Automotive Participants and
Divested TRW Automotive Business Employees by any member of the
Pre-Distribution Group, whether pursuant to benefit plans, collective
bargaining agreements or otherwise and whether such Liabilities arose before,
on or after the Distribution Date, including all litigation, administrative
charges, workers’ compensation claims, grievances, arbitrations, or alternative
dispute claims.


ARTICLE IX



MISCELLANEOUS



         Section 9.1    Future Benefit Changes. Except as provided in Section
2.2(b), nothing contained herein shall be construed to prohibit TRW or any TRW
Subsidiary or TRW Automotive or any TRW Automotive Subsidiary from amending,
terminating or otherwise modifying the terms of employee benefit plans or
programs applicable to TRW Participants or TRW Automotive Participants,
respectively, except as may otherwise be provided by applicable law.


28







 


         Section 9.2    Indemnification. All Liabilities retained or assumed by TRW
or any TRW Subsidiary pursuant to this Agreement shall be deemed to be TRW
Liabilities and all Liabilities retained or assumed by TRW Automotive or any
TRW Automotive Subsidiary pursuant to this Agreement shall be deemed to be TRW
Automotive Liabilities and, in each case, shall be subject to the
indemnification provisions set forth in Article IV of the Distribution
Agreement.


         Section 9.3    Sharing of Information. TRW and TRW Automotive shall, and
shall 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 shall, to the extent reasonably practicable,
be provided in the format and at the times and places requested, but in no
event shall 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 shall be
subject to the same confidentiality requirements set forth in the Distribution
Agreement.


         Section 9.4    Access to Employees. After the Distribution Date, the TRW
Group shall make available to the TRW Automotive Group, those of its employees
whom the TRW Automotive Group may reasonably need in order to defend or
prosecute any legal or administrative action to which any member of the TRW
Automotive Group is a party and which relates to the conduct of the TRW
Automotive Business prior to the Distribution Date. After the Distribution
Date, the TRW Automotive Group shall make available to the TRW Group, those of
its employees whom the TRW Group may reasonably need in order to defend or
prosecute any legal or administrative action to which any member of the TRW
Group is a party and which relates to the conduct of the TRW Business prior to
the Distribution Date. The party to whom an employee is made available shall
pay or reimburse the other party for all reasonable expenses which may be
incurred by such employee in connection therewith, including, without
limitation, all travel, lodging, and meal expenses, and shall compensate the
other party for the number of whole business days spent by each such employee
in providing such services at the rate of one hundred thirty percent (130%) of
the average daily gross pay per business day (excluding the value of employee
benefits) of such employee during the calendar month in which such services are
performed.


         Section 9.5    Entire Agreement. 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
herein and therein, shall together constitute the entire agreement between the
parties with respect to the subject matter hereof and thereof and shall
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


29







 




agreement and the provisions of the Distribution Agreement, the provisions
of this Agreement shall control.


         Section 9.6    Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given (i) by personal delivery to the appropriate address as set forth
below (or at such other address for the party as shall have been previously
specified in writing to the other party), (ii) by reliable overnight courier
service (with confirmation) to the appropriate address as set forth below (or
at such other address for the party as shall have been previously specified in
writing to the other party), or (iii) by facsimile transmission (with
confirmation) to the appropriate facsimile number set forth below (or at such
other facsimile number for the party as shall have been previously specified in
writing to the other party) with follow-up copy by reliable overnight courier
service the next Business Day:



	 	(a)	 	if to TRW Automotive, to:
	 
	 	 	 	[                                           ]

Attention: [                     ]

Telecopy: [                     ]

	 
	 	 	 	with copies (which shall not constitute notice) to:

	 
	 	 	 	[                                          ]

Attention: [                     ]

Telecopy: [                     ]
	 
	 	 	 	and
	 
	 	(b)	 	if to TRW, to:
	 
	 	 	 	[                                          ]

Attention: Secretary

Telecopy: [                     ]



         All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if received prior to 5
p.m. (New York City time) and such day is a Business Day in the place of
receipt. Otherwise, any such notice, request or communication shall be deemed
not to have been received until the next succeeding Business Day in the place
of receipt.


         Section 9.7    Amendments and Waivers. This Agreement may not be modified or
amended except by an instrument or instruments in writing signed by an
authorized officer of each party. Except as otherwise provided in this
Agreement, any failure of any of the parties to comply with any obligation,
covenant, agreement or condition herein may be waived by the party entitled to
the benefits thereof only by a written instrument signed by an authorized
officer of the party granting such waiver, but such waiver or


30







 




failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.


         Section 9.8    Headings. The table of contents and the article, section,
paragraph and other headings contained in this Agreement are inserted for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.


         Section 9.9    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.


         Section 9.10    Governing Law. THIS AGREEMENT, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OR CHOICE OF LAWS OR ANY OTHER LAW THAT WOULD MAKE THE LAWS OF ANY
OTHER JURISDICTION OTHER THAN THE STATE OF OHIO APPLICABLE HERETO.


         Section 9.11    Resolution of Disputes. All disputes arising out of or
relating to this Agreement or the breach, termination or validity thereof or
the parties’ performance hereunder (“Dispute”) shall be resolved as provided
in the resolution of disputes provisions in the Distribution Agreement.


         Section 9.12    Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.


         Section 9.13    Assignment. This Agreement may not be assigned by either
party without the written consent of the other party. No such assignment shall
relieve either party of any of its rights and obligations hereunder.


         Section 9.14    Binding Nature; Third-Party Beneficiaries. This Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors and permitted assigns. Except for the provisions
of Section 9.2 of this Agreement which are intended for the benefit of, and to
be enforceable by, any of the Indemnified Parties in their respective
capacities as such, nothing in this Agreement, express or implied, is intended
to or shall confer upon any other Person or Persons any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.


         Section 9.15    Severability. This Agreement shall be deemed severable; the
invalidity or unenforceability of any term or provision of this Agreement shall
not affect the validity or enforceability of this Agreement or of any other
term hereof, which shall remain in full force and effect, for so long as the
economic or legal substance of the transactions contemplated by this Agreement
is not affected in any manner materially


31







 




adverse to any party. If it is ever held that any restriction hereunder is too
broad to permit enforcement of such restriction to its fullest extent, each
party agrees that such restriction may be enforced to the maximum extent
permitted by law, and each party hereby consents and agrees that such scope may
be judicially modified accordingly in any proceeding brought to enforce such
restriction.


         Section 9.16    No Right of Setoff. Neither party hereto nor any Affiliate
thereof may deduct from, set off, holdback or otherwise reduce in any manner
whatsoever against any amounts such Persons may owe to the other party hereto
or any of its Affiliates any amounts owed by such other party or its Affiliates
to the first party or its Affiliates.


         Section 9.17    Construction.


         (a)  For the purposes hereof, (i) 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 genders as the context requires, (ii) the words “hereof,”
“herein,” and “herewith” and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole (including the
Schedules hereto and the Exhibits hereto) and not to any particular provision
of this Agreement, and article, section, paragraph, exhibit and schedule
references are to the articles, sections, paragraphs, and exhibits and
schedules of this Agreement unless otherwise specified, (iii) the words
“including” and words of similar import when used in this Agreement shall mean
“including, without limitation,” unless otherwise specified, (iv) the word “or”
shall not be exclusive, (v) TRW Automotive and TRW shall be referred to herein
individually as a “party” and collectively as “parties” (except where the
context otherwise requires) and (vi) the phrases “used primarily in” or “relate
primarily to” are to be determined in relation to the business of TRW and its
Affiliates collectively.


         (b)  The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.


         (c) Any reference to any federal, state, local or non-U.S. statute or law
shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context otherwise requires.


32







 


         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.



	 	 	 	 	 
	 	 	TRW INC.
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	
	
	
	

	 	 	 	 	Title:
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	TRW AUTOMOTIVE INC.
	
	
	
	

	 	 	 	 	 
	
	
	
	

	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	
	
	
	

	 	 	 	 	Title:




33