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EXHIBIT 10.4
U.S. EMPLOYEE MATTERS AGREEMENT
This U.S. EMPLOYEE MATTERS AGREEMENT, dated as of December 22, 1998, (the "EM
Agreement"), is agreed to by General Motors Corporation ("GM") and Delphi
Automotive Systems Corporation ("Delphi"), each a "Party", and collectively, the
"Parties".
WHEREAS, Delphi and GM are parties to the Master Separation Agreement (the
"MSA") entered into in connection with the separation of Delphi from GM, dated
as of December 22, 1998.
WHEREAS, the MSA provides that the Parties shall enter into this EM Agreement in
order to specify the rights and obligations of the Parties with respect to
employee matters; and
NOW, THEREFORE the Parties agree as follows with regard to employees employed in
the U.S. and U.S. based employees assigned to another country:
1. DEFINITIONS.
(a) "Delphi Business Unit" shall have the same meaning as "Delphi
Automotive Systems Business" as defined in the Master Separation
Agreement.
(b) "Delphi Employees" shall mean all persons who are active employees
assigned to, and each person who is on any approved leave of absence
from, Delphi, a Delphi Business Unit, or a Delphi or Delphi Business
Unit controlled or associated business. Delphi Employees will be
designated as hourly or salaried.
(c) "Delphi Terminated Employee" shall mean an individual who is not
currently a Delphi Employee but whose last employment in the GM
Controlled Group of Corporations (as defined in Internal Revenue Code
Section 1563) was with Delphi, a Delphi Business Unit or a Delphi
Business Unit controlled or associated business.
(d) "Distribution Date" shall mean the date on which GM completes the
distribution of at least 80 percent of the then outstanding shares of
Delphi.
(e) "GM Employees" shall mean all persons who are active or former
employees of GM who are not a Delphi Employee or Delphi Terminated
Employee. GM Employees will be designated as hourly or salaried.
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(f) "Effective Time" shall mean January 1, 1999.
(g) "Flowback" shall mean the transfer or movement of individuals
(including, without limitation, applicable individuals at divested
units) after the Effective Time between Delphi and GM.
2. EXHIBITS ATTACHED TO EM AGREEMENT.
The Exhibits and Attachments to this Agreement are incorporated by reference.
3. RESPONSIBILITY FOR EMPLOYEES.
(a) For employees who are or become Delphi Employees or Delphi Terminated
Employees as of the Effective Time, Delphi (except as set forth in
Schedule I of the MSA) and/or Delphi benefit plans shall assume all
employment related responsibility, obligation, or liability of GM
regardless of when incurred, except as expressly stated in this
paragraph 3(a).
The only exceptions (in addition to any set forth in Schedule I of the
MSA) to Delphi's responsibility for such individuals are that: (1)
Delphi will have no pension or retiree welfare benefit obligation or
post-retirement workers compensation responsibility for individuals
who have retired under the General Motors Retirement Program for
Salaried Employees or are separated employees eligible for only a
deferred vested benefit under the General Motors Retirement Program
for Salaried Employees as of the Effective Time; and (2) Delphi will
have no pension or retiree welfare benefit obligation or
post-retirement workers compensation responsibility for hourly
employees who retire under the General Motors Hourly Rate Employees
Pension Plan or are separated employees eligible for only a deferred
vested benefit under the General Motors Hourly Rate Employees Pension
Plan on or before October 1, 1999; and GM shall retain such
obligations.
To the extent that Delphi or Delphi benefit plans cannot directly
assume any responsibility, obligation, or liability, and GM or GM
benefit plans thereby directly or indirectly incur costs, obligations,
or liability, Delphi shall reimburse/indemnify GM for any and all such
costs/liability. Such reimbursement shall be made using the actuarial
and other assumptions set forth in Exhibit 1, the Employee Benefit
Financial term sheet, if applicable. If language in Exhibit 1 is not
directly applicable, the Parties will be guided by the methodology and
assumptions of the Exhibit.
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Exhibit 1, the Employee Benefit Financial term sheet, addresses
various cost and "true up" issues related to retirements and Flowback.
(b) On the Distribution Date Delphi will assume the terms of all
applicable national and local collective bargaining agreements.
4. SALARIED EMPLOYEE FLOWBACK.
(a) Any salaried GM Employee who is transferred to Delphi or its
subsidiaries pursuant to mutual agreement of Delphi and GM after the
Effective Time and up until December 31, 2001, shall become a Delphi
Employee as of the date of transfer and be covered under the Delphi
benefit plans and policies upon transfer. Such an employee shall not
be considered a GM Employee from and after the date of his or her
transfer of employment. GM service for such employees will be counted
for the purpose of meeting all waiting periods and benefit and policy
eligibility and computation under Delphi benefit plans and policy. Any
amounts for out-of-pocket limits and benefit maximums paid or incurred
under the GM Benefit Plan by such employees who Flowback during the
plan year in which the Flowback occurred will be counted toward such
employee's out-of-pocket limits and benefit maximums under the Delphi
Plans.
An appropriate transfer of retirement program assets calculated as set
forth in Section 414(l) of the Internal Revenue Code and a cash
transfer as set forth in Exhibit 1 related to OPEB liability will
follow the transfer. Generally such transfers/payments will be
calculated and made on an annual basis. Conversion of applicable stock
options will be as set forth in Exhibit 2, the Executive Task Team
term sheet covering Methodology for Adjusting Stock Options for GM and
Delphi Employees, or if not explicitly covered therein, based upon the
same methodology. Any other applicable incentive compensation will be
treated as set forth in Exhibit 3, the Executive Task Team term sheet
covering Executive Transactions.
(b) Any salaried Delphi Employee who is transferred to GM or its
subsidiaries pursuant to mutual agreement of Delphi and GM after the
Effective Time and up until December 31, 2001, shall become a GM
Employee as of the date of transfer and be covered under the GM
benefit plans and policies upon transfer. Such an employee shall not
be considered a Delphi Employee from and after the date of his or her
transfer of employment. Delphi service for such employees will be
counted for the purpose of meeting all waiting periods and benefit and
policy eligibility and computation under GM benefit plans and policy.
Any amounts for out-of-pocket limits and benefit maximums paid or
incurred under the Delphi Benefit Plan by such employees who Flowback
during the plan year in
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which the Flowback occurred will be counted toward such employee's
out-of-pocket limits and benefit maximums under the GM Plans.
An appropriate transfer of retirement program assets calculated as set
forth in Section 414(l) of the Internal Revenue Code and a cash
transfer as set forth in Exhibit 1 related to OPEB liability will
follow the transfer. Generally such transfers/payments will be
calculated and made on an annual basis. Conversion of applicable stock
options will use the same methodology as set forth in Exhibit 2, the
Executive Task Team term sheet covering Methodology for Adjusting
Stock Options for GM and Delphi Employees. Any other applicable
incentive compensation will be treated as set forth in Exhibit 3, the
Executive Task Team term sheet covering Executive Transactions.
(c) The Benefit Equalization Plan ("BEP"), Supplemental Executive
Retirement Program ("SERP"), and Supplemental Life Benefits Program
("SLBP") will be treated as set forth in Section 10 (f) below.
(d) Prior to January 1, 2002, Delphi will not hire, without the prior
written consent of GM, on a regular, contract or other basis, any
employee who was employed by GM or any of its affiliates on or after
July 1, 1997.
(e) Prior to January 1, 2002, GM will not hire, without the prior written
consent of Delphi, on a regular, contract or other basis, any employee
who was employed by a Delphi unit or Delphi on or after July 1, 1997.
(f) Liabilities and/or costs, including but not limited to workers'
compensation, for claims or injuries suffered at or before the time of
Flowback remain the responsibility of the sending company.
5. HOURLY EMPLOYEE FLOWBACK.
(a) It is anticipated that the Parties will enter into Memoranda of
Understandings (MOUs) with the union representatives of hourly
employees. The parties will abide by the terms of the MOUs. To the
extent the MOUs differ from the terms set forth in this Employee
Matters Agreement the Parties will arrange to "true up" the financial
arrangements to reflect the original capital structure. Such true up
is generally covered in Exhibit 1.
One of the items the MOUs are expected to address is hourly Flowback.
In the event of hourly Flowback, the following financial arrangements
will apply unless otherwise designated by the terms of the applicable
MOU or otherwise agreed by the parties:
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i. Pension.
i.1. Except as otherwise provided in this Agreement,
Delphi's defined benefit pension plan covering hourly
employees (hereinafter referred to as the "Delphi Pension
Plan"), effective as of the Distribution Date, will cover all
eligible hourly Delphi Employees and employees of divested
units as set forth in 8(d) below. The Delphi Pension Plan will
contain terms identical to the GM Hourly-Rate Employees
Pension Plan (hereinafter referred to as the "GM Pension
Plan") except for those provisions required to be changed as a
result of a new Plan sponsor and the provisions addressed in
this Agreement. In the event of hourly Flowback after the
Distribution Date, the intent of the parties is to provide
employees with benefits from the Delphi Pension Plan and the
GM Pension Plan which, apart from any difference that may
result from future bargaining, in aggregate, will equal the
benefits that would have been provided had the Delphi
separation not occurred. In order to address Flowback of
employees from Delphi to GM after the Distribution Date where
the employee has not retired as of October 1, 1999, the Delphi
Pension Plan will provide as set forth in i.2. through i.5.
i.2. Pro-rata share shall mean a percentage based on the
number of years of credited service recognized under the
Delphi Pension Plan divided by the total years of credited
service under the GM Pension Plan acquired after the
Distribution Date and the number of years of credited service
recognized under the Delphi Pension Plan.
i.3. Except as provided in i.4. below, all hourly employees
with unbroken seniority who Flowback from Delphi to GM after
the Distribution Date and are not retired on or before October
1, 1999, shall be entitled to payment from the Delphi Pension
Plan upon retirement from GM. Such payment will be equal to a
pro-rata share of the total benefits that would be payable
under the Delphi Pension Plan, determined as if the employee
were then retiring from Delphi on a voluntary basis taking
into account the credited service under the GM Pension Plan
acquired after the Distribution Date and the credited service
under the Delphi Pension Plan as of the Date of Retirement.
The payment will include a basic benefit (reduced for age
where appropriate) for each year of credited service under the
Delphi Pension Plan, and any applicable supplement in an
amount equal to the difference between the basic benefit and
the pro-rata share of the total benefit calculated above.
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i.4. Unless GM and Delphi agree to a "Mutual Retirement" (as
defined in the GM Pension Plan), or Delphi approves a
disability retirement (such approval shall not be unreasonably
withheld), any employee who is covered under the Delphi
Pension Plan who flows back to GM after the Distribution Date
and who retires from GM but is not otherwise eligible to
retire under the Delphi Pension Plan (taking into account for
eligibility purposes credited service under the GM Pension
Plan acquired after the Distribution Date), shall be eligible
under the Delphi Pension Plan only for unreduced benefits at
age sixty-two (62) and one (1) month at the benefit levels in
effect under the Delphi Pension Plan as of the date of
retirement from GM increased as appropriate until age 62 and
one month as if the Delphi Pension Plan benefits had commenced
as of the date the employee retired from GM, provided,
however, if such an employee grows into eligibility for an 85
point retirement, Delphi's responsibility, subject to any
applicable age reductions, will commence the first of the
month following attainment of Age 60.
i.5. The surviving spouse of an employee who has unbroken
seniority at Delphi at the Distribution Date, is vested under
the Delphi Pension Plan as of such date and dies while
employed by GM, shall be eligible for payment from the Delphi
Pension Plan of a pro-rata death benefit based on Delphi
credited service and the Delphi benefit levels in effect at
the time of death. All other Pension Plan terms shall apply,
including but not limited to those regarding eligibility, and
duration of surviving spouse benefits.
i.6. In order to address Flowback of employees from GM to
Delphi after the Distribution Date where the employee has not
retired as of October 1, 1999, the GM Pension Plan will
provide as set forth in i.7. through i.10.
i.7. Pro-rata share shall mean a percentage based on the
number of years of credited service recognized under the GM
Pension Plan divided by the total years of credited service
under the Delphi Pension Plan acquired after the Distribution
Date and the number of years of credited service recognized
under the GM Pension Plan.
i.8. Except as provided in i.9. below, all hourly employees
with unbroken seniority who Flowback from GM to Delphi after
the Distribution Date and are not retired on or before October
1, 1999, shall be entitled to payment from the GM Pension Plan
upon retirement from Delphi. Such payment will be equal to a
pro-rata share of the total benefits that would be payable
under the GM
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Pension Plan, determined as if the employee were then retiring
from GM on a voluntary basis taking into account the credited
service under the Delphi Pension Plan acquired after the
Distribution Date and the credited service under the GM
Pension Plan as of the Date of Retirement. The payment will
include a basic benefit (reduced for age where appropriate)
for each year of credited service under the GM Pension Plan,
and any applicable supplement in an amount equal to the
difference between the basic benefit and the pro-rata share of
the total benefit calculated above.
i.9. Unless GM and Delphi agree to a "Mutual Retirement" (as
defined in the Delphi Pension Plan), or GM approves a
disability retirement (such approval shall not be unreasonably
withheld), any employee who is covered under the GM Pension
Plan who flows back to Delphi after the Distribution Date and
who retires from Delphi but is not otherwise eligible to
retire under the GM Pension Plan (taking into account for
eligibility purposes credited service under the Delphi Pension
Plan acquired after the Distribution Date), shall be eligible
under the GM Pension Plan only for unreduced benefits at age
sixty-two (62) and one (1) month at the benefit levels in
effect under the GM Pension Plan as of the date of retirement
from Delphi increased as appropriate until age 62 and one
month as if the GM Pension Plan benefits had commenced as of
the date the employee retired from Delphi provided, however,
if such an employee grows into eligibility for an 85 point
retirement, GM's responsibility, subject to any applicable age
reductions, will commence the first of the month following
attainment of age 60.
i.10. The surviving spouse of an employee who has unbroken
seniority at GM at the Distribution Date, is vested under the
GM Pension Plan as of such date and dies while employed by
Delphi, shall be eligible for payment from the GM Pension Plan
of a pro-rata death benefit based on GM credited service and
the GM benefit levels in effect at the time of death. All
other GM Pension Plan terms shall apply, including but not
limited to those regarding eligibility, and duration of
surviving spouse benefits.
ii. OPEB. OPEB costs associated with hourly employee movement
between the companies after the Effective Time will be
addressed as set forth in Exhibit 1.
iii. Savings Plans. Upon Flowback employees may transfer existing
savings plan assets to the new employer's savings plan or keep
them in the sending employer's savings plan.
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iv. SUB/GIS and JOBS. SUB/GIS and JOBS will be treated as set
forth in Exhibit 4, the Labor Relations term sheet. It is not
anticipated that there be a reallocation of the caps upon
Flowback to GM or Delphi.
v. Liabilities and/or costs, including but not limited to
workers' compensation, for claims or injuries suffered at or
before the time of Flowback remain the responsibility of the
sending company.
vi. Legal Services Plans will be treated as set forth in Exhibit
4, the Labor Relations term sheet.
vii. Joint Funds will be treated as set forth in Exhibit 4, the
Labor Relations term sheet. It is not anticipated that there
be a reallocation of the Joint funds upon Flowback to GM or
Delphi.
viii. Relocation costs associated with the Flowback of employees
will be shared as set forth in Exhibit 4, the Labor Relations
term sheet.
(b) With the exception of "Flowbacks", prior to January 1, 2002 Delphi
will not hire, without the prior written consent of GM, on a regular,
contract or other basis, any employee who was employed by GM or any of
its affiliates on or after July 1, 1997. Notwithstanding the above
Delphi may hire on an ad hoc, non-systematic, limited duration basis
such hourly employees in order to meet its short-term operational
needs.
(c) With the exception of "Flowbacks", prior to January 1, 2002 GM will
not hire, without the prior written consent of Delphi, on a regular,
contract or other basis, any employee who was employed by a Delphi
unit or Delphi on or after July 1, 1997. Notwithstanding the above,
GM may hire on an ad hoc, non-systematic, limited duration basis such
hourly employees in order to meet its short term operational needs.
6. SPONSORSHIP OF EMPLOYEE BENEFIT PLANS AND EMPLOYEE ARRANGEMENTS BY DELPHI.
At the Effective Time for salaried employees and the Distribution Date for
hourly employees, Delphi will establish the Employee Benefit Plans and Employee
Arrangements listed in Exhibit 5. Such Employee Benefit Plans and Employee
Arrangements will have terms substantially identical to the corresponding GM
Employee Benefit Plans and Employee Arrangements and provide for service credit
for prior GM service, except as otherwise set forth herein. Delphi will assume
the liabilities with respect to Delphi Employees under such plans except as
provided in Section 3(a), whether incurred before or after the Effective Time.
Except as set forth in Section 12(c)
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nothing in this Agreement shall prohibit Delphi from amending, modifying or
terminating Delphi Employee Benefit Plans and Employee Arrangements.
7. EMPLOYEE SAVINGS PLANS.
(a) Effective at the Effective Time for salaried employees and the
Distribution Date for hourly employees, or as soon thereafter as
practical, to the extent permissible under applicable law the account
balances of Delphi Employees in GM Savings Plans will be transferred
to accounts in the Delphi Savings Plans.
(b) Effective as of the Distribution Date Delphi and GM shall amend each
of their Savings Plans to add Delphi Common Stock (referred to herein
as "Delphi Stock") as an additional investment fund to receive and
hold Delphi Stock. The amendments shall provide that participants in
the GM Savings Plans may not transfer funds into or make additional
voluntary investments in the Delphi Stock investment fund.
8. CREATION OF RETIREMENT PLANS AND TRANSFER OF GM RETIREMENT PLAN ASSETS
AND LIABILITIES.
(a) Effective as of Effective Time for salaried employees and the
Distribution Date for hourly employees, Delphi shall:
(i) Establish a defined benefit Delphi pension plan for the
benefit of the Delphi Employees formerly covered by the GM
Retirement Program for Salaried Employees with terms and
conditions that are substantially identical to those of such
plan, including, but not limited to, credit for past service
with GM and its subsidiaries for eligibility, vesting, early
retirement, and, contingent upon the transfer of assets set
forth in Exhibit 1, benefit accrual and compensation earned
with GM or its subsidiaries (the Delphi Salaried Retirement
Program); and
(ii) Establish a defined benefit Delphi pension plan for the
benefit of the Delphi Employees formerly covered by the GM
Hourly Rate Employees Pension Plan with terms and conditions
that are substantially identical to those of such plan,
including credit for past service with GM and its subsidiaries
for eligibility, vesting, early retirement, and, contingent
upon the transfer of assets set forth in Exhibit 1, benefit
accrual earned with GM or its subsidiaries.
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Both the Delphi Retirement Program for Salaried Employees and the Delphi
Hourly Rate Employee Pension Plan (together, the "Delphi Retirement Plans")
shall comply with Section 411(d)(6) of the Internal Revenue Code of 1986,
as amended from time to time, ("Code") to protect Delphi Employees with
respect to benefits earned and other protected provisions under the GM
Retirement Program for Salaried Employees and the GM Hourly Rate Employee
Pension Plan (together, the "GM Retirement Plans").
(b) GM shall cause a "spin-off" transfer, within the meaning of Section
414(l) of the Code, from the GM Retirement Plans to the Delphi
Retirement Plans, in the manner and at the times specified in Exhibit
1. The computation of the amounts to be transferred shall be performed
separately for each of the GM Retirement Plans.
(c) The Delphi Retirement Plans shall also cover the provision of benefits
for employees of divested units which were formerly Delphi operations
to the extent that the GM Retirement Plans cover the provision of
benefits for such "divested employees" as of the Effective Time,
except as follows. The GM Retirement Program for Salaried Employees
will continue to cover such "divested salaried employees" who have
retired from GM and the buyer as of the Effective Time and the GM
Hourly Rate Employee Pension Plan will continue to cover such
"divested hourly employees" who retire from GM and the buyer as of
October 1, 1999. To the extent the Parties are unable to arrange with
an applicable third party (such as a buyer of a divested unit) for
direct payment of benefits or transfer of obligations, Delphi agrees
to reimburse GM for any such amounts. Such reimbursement shall be made
using the actuarial and other assumptions set forth in Exhibit 1, if
applicable. If language in Exhibit 1, the Employee Benefit Financial
term sheet, is not directly applicable, the Parties will be guided by
the methodology and assumptions of the Exhibit.
(d) The GM Salaried Retirement Program has contracted with certain Life
Insurance Companies to provide insured payments for certain
participants who made contributions to the Retirement Plans for
certain periods. Delphi agrees to enter into separate agreements with
the Life Insurance Companies to provide comparable benefits for those
who become Delphi Employees.
9. GM STOCK INCENTIVE PLAN.
Treatment of applicable stock options will be as set forth in Exhibit 2, the
Executive Task Team term sheet covering Methodology for Adjusting Stock Options
for GM and Delphi Employees, or if not explicitly covered therein, based upon
the same methodology. Any other applicable incentive compensation will be
treated as set forth in Exhibit 3, the Executive Task Team term sheet covering
Executive Transactions.
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10. DELPHI EMPLOYEE BENEFIT PLANS.
(a) Delphi shall pay the liabilities and expenses under the Delphi Benefit
Plans with respect to Delphi Employees. The Delphi Benefit Plans shall
also cover the provision of benefits for employees of divested units
which were formerly Delphi operations to the extent that the GM
Benefit Plans cover the provision of benefits for such "divested
employees" as of the Effective Time, except that the GM Benefit Plans
to the extent applicable will continue to cover such "divested
employees" who have retired from GM on or before the Effective Time or
for hourly employees on or before October 1, 1999. To the extent the
Parties are unable to arrange with an applicable third party (such as
a buyer of a divested unit) for direct payment of benefits or transfer
of obligations, Delphi agrees to reimburse GM for any such amounts.
Such reimbursement shall be made using the actuarial and other
assumptions set forth in Exhibit 1, if applicable. If language in
Exhibit 1, the Employee Benefit Financial term sheet, is not directly
applicable, the Parties will be guided by the methodology and
assumptions of the Exhibit.
(b) GM involvement in assisting in the administration of the Delphi
Benefit Plans shall be as set forth in Exhibit 6, the Employee Matters
Transition Services Agreement and term sheets incorporated therein.
(c) All GM VEBA assets will continue to be applicable only for payment of
benefits/expenses under GM Welfare Benefit Plans. There will be no
transfer of VEBA assets to Delphi or Delphi Welfare Benefit Plans.
(d) Assets in the GM/IUE SUB Trust Fund or any successor trust fund will
be split pro-rata between the GM/IUE SUB Trust Fund or its successor
trust fund and the Delphi/IUE SUB Trust Fund or Delphi/IUE successor
trust fund based on the proportion that Delphi IUE represented
eligible employees bear to GM IUE represented eligible employees plus
Delphi IUE represented eligible employees, as of the Distribution
Date. Any Delphi expenses allocated to the SUB trust or successor
trust will reduce the amount of such trust allocated to Delphi on the
Distribution Date.
(e) Life Insurance Plan reserves will be allocated pro rata between the
applicable Delphi and GM Life Insurance Plans as set forth in the Life
and Disability Benefits term sheet.
(f) With respect to the GM BEP plans, SERP, and SLBP (collectively the
"non-qualified plans") and the separate corresponding unfunded
non-qualified plans, established by Delphi, GM and Delphi agree as
follows:
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(i) To the extent any GM Employee is transferred to Delphi on or
after the Effective Time and up through December 31, 2001, the
liability under the GM unfunded non-qualified plans for such
employee shall be a Delphi liability payable under the
corresponding Delphi plans from and after the date such
employee is employed by Delphi.
(ii) To the extent any Delphi Employee is transferred to or
otherwise employed by GM on or after the Effective Time and up
through December 31, 2001, the liability under the Delphi
unfunded non-qualified plans for such employee shall be a GM
Liability payable under the corresponding GM plans from and
after the date such employee is employed by GM.
(iii) If such a non-qualified plan is funded and an employee
transfers pursuant to Section 4(a) of the Agreement, the
assets associated with the transferring employee will be
transferred. Such transfer will be calculated consistent with
the funding assumptions of the plan.
11. WORKERS' COMPENSATION.
(a) Except as specifically set forth in Section 3(a), 4(f) and 5(a)v.
above, workers' compensation liability for all Delphi Employees and
Delphi Terminated Employees shall be assumed and retained by Delphi or
its subsidiaries at and following the Effective Time, regardless of
the time an individual became a Delphi Employee. To the extent such
liability cannot be directly assumed by Delphi, Delphi shall
reimburse/indemnify GM for any and all such costs/liability GM
directly or indirectly incurs in regard to such individuals. Such
reimbursement shall include reimbursement for retrospective premium
adjustments relating to such individuals.
12. FURTHER AGREEMENTS.
From and after the Effective Time for salaried employees and the Distribution
Date for hourly employees:
(a) Delphi shall, and shall cause its subsidiaries, to honor and provide
for payment of benefits and compensation under all Delphi Employee
Benefit Plans and Delphi Employee Arrangements in accordance with
their terms, as amended from time to time subject to the terms of this
EM Agreement.
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(b) Delphi shall, and shall cause its subsidiaries, to provide credit to
Delphi Employees for service with GM, its successors and its
affiliates for purposes of eligibility, vesting and eligibility to
retire (but not for benefit accruals except as set forth in Section 8
above) under all Employee Benefit Plans. No pre-existing conditions
exclusions will apply under the Delphi medical plans except to the
extent such exclusion is applicable under the plan of GM in effect
immediately prior to the Effective Time for salaried employees and the
Distribution Date for hourly employees. Any amounts for out-of-pocket
limits and benefit maximums paid or incurred under the GM Benefit
Plans by such employees during the plan year will be counted toward
such employee's out-of-pocket limits and benefit maximums under the
Delphi Plans for the same plan year.
(c) Delphi shall, and shall cause its subsidiaries to continue any GM
Employee Benefit Plan and GM Employee Arrangement that is a severance
benefit plan or arrangement, without any adverse changes until
December 31, 1999.
(d) Notwithstanding anything herein to the contrary, to the extent that GM
or Delphi hold a controlling interest in a subsidiary that maintains
pension, savings and/or welfare plans separate and apart from the GM
or Delphi plans, and such subsidiary becomes a subsidiary of Delphi as
a result of the Delphi separation transaction, the plans of such
subsidiary shall become/remain the responsibility of such subsidiary,
and no division or split-up of such plan will occur as a result of the
Delphi separation transaction.
(e) Except as set forth in Section 12(c), nothing in this Agreement shall
prohibit Delphi from amending, modifying or terminating Delphi
Employee Benefit Plans and Employee Arrangements.
13. COOPERATION.
Delphi and GM shall reasonably cooperate with each other in carrying out the
terms of this EM Agreement, and each party shall exchange such information with
the other party, as may be reasonably required by the other party, with respect
thereto.
14. NO THIRD PARTY BENEFICIARIES.
No provision in this EM Agreement or in any Schedule, including any Attachment
thereto, shall confer upon any person, other than the signatories hereto, any
rights or remedies with respect to the employment, compensation, benefits, or
other terms and conditions of employment of any persons, provided that any
rights to be provided under
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the Delphi Employee Benefit Plans or their successors, pursuant to this EM
Agreement and the attached Schedules, shall be enforceable by the participants
thereunder.
15. SEVERABILITY.
In case any one or more of the provisions contained in this EM Agreement or the
Schedules and Attachments hereto shall be held invalid, illegal or unenforceable
in any respect by a court of competent jurisdiction or a qualified arbitrator,
the validity, legality and enforceability of the remaining provisions contained
herein and other applications thereof shall not in any way be diminished.
16. GOVERNING LAW.
To the extent not governed by federal law, this EM Agreement shall be governed
by and construed in accordance with the laws of the State of Michigan,
regardless of the laws that might otherwise govern under principles of conflicts
of laws applicable thereto.
17. PRESS RELEASES.
Except as may be required by law or State or Federal Agencies, no press release
concerning the existence of this EM Agreement shall be made by one Party without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld.
18. ENTIRE AGREEMENT: AMENDMENTS.
The MSA, this EM Agreement and the Exhibits and Attachments to this EM Agreement
constitute the entire agreement among the Parties and supersede all other
pre-existing agreements, with respect to the matters expressly provided for in
this EM Agreement and the Exhibits and Attachments hereto. This Agreement may be
amended or modified only by mutual agreement in writing, signed by an authorized
representative of each Party. Provided, however, that it is anticipated that the
Parties will sign memoranda of understanding with the union representatives of
represented employees affected by the transaction, and to the extent such
memoranda conflict with the terms of the MSA, EM Agreement or Transition
Services Agreement and are signed or approved by both Delphi and GM, the
memoranda shall control subject to the first paragraph of Section 5(a) above.
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19. ORDER OF PRECEDENCE.
The Parties hereto agree that if any terms of this EM Agreement conflict with
the terms in the MSA, the terms of this EM Agreement shall govern with respect
to the resolution of such conflict. Furthermore if the terms of any incorporated
term sheet differ from the terms of this EM Agreement the terms of the term
sheet shall govern.
20. TRANSITION SERVICES
Transition services for employee matters will be governed by the Employee
Matters Transition Services Agreement attached as Exhibit 6 or in the case of
payments related to the Health Care Initiatives term sheet, will be made
pursuant to the payment terms provided in that term sheet.
21. COUNTERPARTS.
This EM Agreement may be executed in counterparts, each of which shall be deemed
an original.
22. NOTICES.
All notices or other communications hereunder or under any Schedule or
Attachment hereto, shall be in writing, signed by the party providing such
notice, and shall be considered properly given or made and shall be deemed to
have been duly given on the date of delivery, when delivered personally or
transmitted and received by telex or telecopies/facsimile transmitter, receipt
acknowledged or confirmed during normal business hours, or in the case of
registered or certified mail, return receipt requested, postage prepaid, on the
date shown on such return receipt. Each party shall promptly notify the other
Party of any change in the name of either individual designated below to receipt
a copy of notices.
Any notices to GM shall be sent as follows:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Global HR and GMU
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Mail Code ▇▇▇-▇▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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Any notices to Delphi shall be sent as follows:
▇▇▇▇ ▇▇▇▇▇
Vice President HRM
Delphi Automotive Systems
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Mail Code ▇▇▇-▇▇▇-▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
23. DESCRIPTIVE HEADINGS.
The section and clause headings of this EM Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this EM Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this EM Agreement as of the
date written above.
GENERAL MOTORS CORPORATION DELPHI AUTOMOTIVE SYSTEMS
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------- ---------------------------------
Vice President
Global Human Resources and Vice President
Title: General Motors University Title: Human Resources Management
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