EMPLOYEE MATTERS AGREEMENT
BETWEEN
CRANE CO.
AND
HUTTIG BUILDING PRODUCTS, INC.
DATED AS OF _______________, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.........................................................1
1.1 Adverse Change.......................................................1
1.2 Affected Pension Plan Participants...................................1
1.3 Agreement............................................................1
1.4 ASO Contract.........................................................2
1.5 Award................................................................2
1.6 Benefit Liabilities..................................................2
1.7 Close of the Distribution Date.......................................2
1.8 COBRA................................................................2
1.9 Code.................................................................2
1.10 Crane Entity.........................................................2
1.11 Crane Hourly Pension Plan............................................2
1.12 Crane Restricted Stock Plan..........................................3
1.13 Crane Salaried Pension Plan..........................................3
1.14 Crane Savings Plan...................................................3
1.15 Crane Stock Option Plan..............................................3
1.16 Crane Stock Value....................................................3
1.17 Distribution Agreement...............................................3
1.18 ERISA................................................................3
1.19 EVA Plan.............................................................3
1.20 Group Insurance Policies.............................................3
1.21 Group Life Program...................................................3
1.22 Health and Welfare Plans.............................................4
1.23 Huttig Employee Stock Purchase Plan..................................4
1.24 Huttig Entity........................................................4
1.25 Huttig Individual....................................................4
1.26 Huttig Hourly Pension Plan...........................................4
1.27 Huttig Savings & Profit Sharing Plan.................................4
1.28 Huttig Stock Incentive Plan..........................................4
1.29 Huttig Stock Value...................................................4
1.30 Immediately After the Distribution Date..............................5
1.31 IRS 5
1.32 Option...............................................................5
1.33 Plan.................................................................5
1.34 Ratio................................................................5
ARTICLE II GENERAL PRINCIPLES................................................5
2.1 Assumption of Liabilities............................................5
2.2 Establishment of Huttig Plans and Related Trusts.....................6
2.3 Terms of Participation by Huttig Individuals in Huttig Plans.........6
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ARTICLE III DEFINED BENEFIT PLANS............................................6
3.1 Establishment of Huttig Hourly Pension Plan and Trust................6
3.2 Freezing of Pension Plan Benefits....................................7
3.3 Vesting and Crediting Service Under Crane's Pension Plans............7
ARTICLE IV DEFINED CONTRIBUTION PLANS.........................................7
4.1 Savings and Profit Sharing Plan......................................7
4.2 Other Defined Contribution Plans.....................................8
ARTICLE V HEALTH AND WELFARE PLANS...........................................9
5.1 General Provisions...................................................9
5.2 Vendor Contracts.....................................................9
5.3 Procedures for Amendments to Plans, Plan Designs,
Administrative Practices, and Vendor Contracts..................11
5.4 COBRA...............................................................12
5.5 Post-Distribution-Transitional Arrangements.........................12
ARTICLE VI STOCK AND INCENTIVE COMPENSATION BENEFITS AND EXECUTIVE
BENEFITS......................................................................13
6.1 Crane Stock-Based Plans.............................................13
6.2 ▇▇▇▇▇ ▇▇▇ Plan......................................................13
6.3 Employee Stock Purchase Plan........................................14
ARTICLE VII GENERAL AND ADMINISTRATIVE......................................14
7.1 Non-Termination of Employment, No Third-Party Beneficiaries.........14
7.2 Beneficiary Designations............................................14
7.3 Collective Bargaining...............................................14
7.4 Consent of Third Parties............................................14
7.5 Sharing of Participant Information..................................15
ARTICLE VIII MISCELLANEOUS..................................................15
8.1 Effect if Distribution Does Not Occur...............................15
8.2 Relationship of Parties.............................................15
8.3 Affiliates..........................................................15
8.4 Governing Law.......................................................16
8.5 Entire Agreement, Construction......................................16
8.6 Expenses............................................................16
8.7 Notices.............................................................16
8.8 Consent to Jurisdiction.............................................17
8.9 Amendments..........................................................17
8.10 Assignment..........................................................17
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8.11 Captions............................................................18
8.12 Severability........................................................18
8.13 Parties in Interest.................................................18
8.14 Schedules...........................................................18
8.15 Waivers; Remedies...................................................18
8.16 Further Assurances..................................................19
8.17 Counterparts........................................................19
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EMPLOYEE MATTERS AGREEMENT
_________________, 1999
The parties to this Employee Matters Agreement, dated as of the date
written above, are Crane Co., a Delaware corporation ("Crane"), and Huttig
Building Products, Inc., a Delaware corporation and, as of the date hereof, an
indirect wholly-owned subsidiary of Crane ("Huttig"). Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
them in Article I hereof or as assigned to them in the Distribution Agreement
(as defined below).
WHEREAS, the Board of Directors of Crane has determined that it is in
the best interests of Crane and its stockholders to separate Crane and its
subsidiary, Huttig, such that Huttig will be an independent business entity;
WHEREAS, in furtherance of the foregoing, Crane and Huttig have entered
into a Distribution Agreement, dated as of the date hereof (the "Distribution
Agreement"), and certain other agreements that will govern certain matters
relating to the Distribution and the relationship of Crane and Huttig, and their
respective Subsidiaries following the Distribution; and
WHEREAS, pursuant to the Distribution Agreement, Crane and Huttig have
agreed to enter into this agreement allocating between them the assets,
liabilities and responsibilities with respect to certain employee compensation
and benefit plans and programs.
NOW, THEREFORE, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement the following terms shall have the
following meanings:
1.1 Adverse Change is defined in Section 5.3(a).
1.2 Affected Pension Plan Participants is defined in Section 3.1.
1.3 Agreement means this Employee Matters Agreement, including all the
Schedules hereto.
1.4 ASO Contract is defined in Section 5.2(a)(i).
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1.5 Award means an award under the Crane Stock Option Plan, the Crane
Restricted Stock Plan, the EVA Plan or the Huttig Stock Incentive Plan. When
immediately preceded by "Crane," the term Award means an award under the
applicable Plan described in this Section 1.5 as established or maintained by
Crane. When immediately preceded by "Huttig," the term Award means an award
under the applicable Plan established or maintained by Huttig.
1.6 Benefit Liabilities means any Liabilities (as defined in the
Distribution Agreement) relating to any contributions, compensation or other
benefits accrued or payable under any profit sharing, pension, savings, deferred
compensation, fringe benefit, insurance, medical, medical reimbursement, life,
disability, accident, post-retirement health or welfare benefit, stock option,
stock purchase, sick pay, vacation, employment, severance, termination or other
compensation or benefit plan, agreement, contract, policy, trust fund or
arrangement.
1.7 Close of the Distribution Date means 11:59:59 P.M., Eastern Standard
Time or Eastern Daylight Time (whichever shall then be in effect), on the
Distribution Date.
1.8 COBRA means the continuation coverage requirements for "group health
plans" under Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, and as codified in Code Section 4980B and ERISA Sections 601
through 608.
1.9 Code means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. Reference to a specific Code provision also
includes any proposed, temporary, or final regulation in force under that
provision.
1.10 Crane Entity means any entity that is, at the relevant time, an
Affiliate of Crane, except that, for periods beginning Immediately After the
Distribution Date, the term "Crane Entity" shall not include Huttig or a Huttig
Entity.
1.11 Crane Hourly Pension Plan means the Crane Co. Master Pension Plan
for Hourly and Certain Non-Bargaining Employees (Plan C), effective December 31,
1987, as amended further effective January 1, 1994.
1.12 Crane Restricted Stock Plan means the Crane Co. Restricted Stock
Award Plan.
1.13 Crane Salaried Pension Plan means the Crane Co. Pension Plan for
Non-Bargaining Employees, effective December 31, 1987, as amended further
effective January 1, 1994.
1.14 Crane Savings Plan means the Crane Co. Savings and Investment Plan,
effective January 1, 1989, as amended further effective June 1, 1997.
1.15 Crane Stock Option Plan means the Crane Co. Stock Option Plan.
1.16 Crane Stock Value means the average of the daily high and low
per-share prices of the Crane Common Stock as reported on the New York Stock
Exchange - Composite Transactions Tape during each of the ten (10) consecutive
trading days ending on the Distribution Date.
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1.17 Distribution Agreement is defined in the third paragraph of the
preamble of this Agreement.
1.18 ERISA means the Employee Retirement Income Security Act of 1974, as
amended. Reference to a specific provision of ERISA also includes any proposed,
temporary, or final regulation in force under that provision.
1.19 EVA Plan, when immediately preceded by "Crane," means the Crane Co.
Economic Value Added Incentive Compensation Plan for Executive Officers. When
immediately preceded by "Huttig," EVA Plan means the Economic Value Added
Incentive Compensation Plan to be established by Huttig pursuant to Section 2.2.
1.20 Group Insurance Policies is defined in Section 5.2(b)(i).
1.21 Group Life Program, when immediately preceded by "Crane," means the
Crane Co. group life programs, policies and arrangements. When immediately
preceded by "Huttig," Group Life Program means the life insurance programs,
policies and arrangements to be established by Huttig pursuant to Section 2.2
that correspond to the respective Crane Group Life Programs.
1.22 Health and Welfare Plans, when immediately preceded by "Crane,"
means the health and welfare plans listed on Schedule 1.22 established and
maintained by Crane for the benefit of employees and retirees of Crane and
certain Crane Entities, and such other welfare plans or programs as may apply to
such employees and retirees as of the Distribution Date. When immediately
preceded by "Huttig," Health and Welfare Plans means the health and welfare
plans to be established by Huttig pursuant to Section 2.2 that correspond to the
respective Crane Health and Welfare Plans.
1.23 Huttig Employee Stock Purchase Plan means the employee stock
purchase plan to be established by Huttig pursuant to Section 2.2.
1.24 Huttig Entity means any Person that is, at the relevant time, a
Subsidiary of Huttig or is otherwise controlled, directly or indirectly, by
Huttig.
1.25 Huttig Individual means any individual (i) who, Immediately After
the Distribution Date, is either actively employed by or on leave of absence
from Huttig or a Huttig Entity, or (ii) whose last employment within the
Pre-Distribution Group (as defined in the Distribution Agreement) was with
Huttig or a Huttig Entity.
1.26 Huttig Hourly Pension Plan means the defined benefit pension plan
established by Huttig pursuant to Section 2.2 and Article III.
1.27 Huttig Savings & Profit Sharing Plan means the defined contribution
plan established by Huttig pursuant to Section 2.2 and Article IV.
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1.28 Huttig Stock Incentive Plan means the plan or program established
by Huttig pursuant to Section 2.2 consisting of a stock option plan that
corresponds to the Crane Stock Option Plan and a restricted stock award plan
that corresponds to the Crane Restricted Stock Plan.
1.29 Huttig Stock Value means the average of the daily high and low
per-share prices of the Huttig Common Stock during each of the ten (10)
consecutive trading days beginning Immediately After the Distribution Date.
1.30 Immediately After the Distribution Date means 12:00 A.M., Eastern
Standard Time or Eastern Daylight Time (whichever shall then be in effect), on
the day after the Distribution Date.
1.31 IRS means the Internal Revenue Service.
1.32 Option, when immediately preceded by "Crane," means an option to
purchase Crane Common Stock pursuant to the Crane Stock Option Plan. When
immediately preceded by "Huttig," Option means an option to purchase Huttig
Common Stock pursuant to the Huttig Stock Incentive Plan.
1.33 Plan, when immediately preceded by "Crane" or "Huttig," means any
plan, policy, program, payroll practice, on-going arrangement, contract, trust,
insurance policy or other agreement or funding vehicle providing benefits to
employees or former employees of Crane or a Crane Entity, or Huttig or a Huttig
Entity, as applicable.
1.34 Ratio means the amount obtained by dividing the Crane Stock Value
by the Huttig Stock Value.
ARTICLE II
GENERAL PRINCIPLES
2.1 Assumption of Liabilities. Except as otherwise expressly provided in
Article III, Huttig hereby assumes and agrees to pay, perform, fulfill and
discharge, in accordance with their respective terms, all of the following
(regardless of when or where such Benefit Liabilities arose or arise or were or
are incurred): (i) all Benefit Liabilities to or relating to Huttig Individuals,
and their respective dependents and beneficiaries, in each case relating to,
arising out of or resulting from employment by Crane, a Crane Entity, Huttig or
a Huttig Entity before the Distribution Date (including Benefit Liabilities
under Crane Plans and Huttig Plans); (ii) all other Benefit Liabilities to or
relating to Huttig Individuals, and their respective dependents and
beneficiaries, to the extent relating to, arising out of or resulting from
future, present or former employment with Huttig or a Huttig Entity (including
Benefit Liabilities under Crane Plans and Huttig Plans); (iii) all Benefit
Liabilities relating to, arising out of or resulting from any other actual or
alleged employment relationship with Huttig or a Huttig Entity; (iv) all Benefit
Liabilities relating to, arising out of or resulting from the imposition of
withdrawal liability under Subtitle E of Title IV
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of ERISA as a result of a complete or partial withdrawal of any Crane Entity
from a "multiemployer plan" within the meaning of ERISA Section 4021 which
occurs solely as a result of the Distribution; and (v) all other Benefit
Liabilities relating to, arising out of or resulting from obligations,
liabilities and responsibilities expressly assumed or retained by Huttig, a
Huttig Entity, or a Huttig Plan pursuant to this Agreement.
2.2 Establishment of Huttig Plans and Related Trusts. Effective prior to
or Immediately After the Distribution Date, Huttig shall adopt, or cause to be
adopted, the Huttig Hourly Pension Plan and its related trust, the Huttig
Savings and Profit Sharing Plan and its related trust, the Huttig Employee Stock
Purchase Plan, the Huttig Stock Incentive Plan, the ▇▇▇▇▇▇ ▇▇▇ Plan and the
Huttig Health and Welfare Plans for the benefit of the Huttig Individuals and
other current and future employees of Huttig and the Huttig Entities. Subject to
the provisions of Section 4.1 regarding the Huttig Savings and Profit Sharing
Plan, Section 6.2 regarding the ▇▇▇▇▇▇ ▇▇▇ Plan, Section 6.3 regarding the
Huttig Employee Stock Purchase Plan and Section 5.1(b) regarding the Huttig
Health and Welfare Plans, the foregoing Huttig Plans as in effect Immediately
After the Distribution Date shall be substantially identical in all material
respects to the corresponding Crane Plans as in effect as of the Distribution
Date.
2.3 Terms of Participation by Huttig Individuals in Huttig Plans. The
Huttig Plans shall be, with respect to Huttig Individuals, in all respects the
successors in interest to, and shall not provide benefits that duplicate
benefits provided by, the corresponding Crane Plans. Crane and Huttig shall
agree on methods and procedures, including amending the respective Plan
documents and/or requesting approvals or consents of Huttig Individuals where
the parties deem appropriate, to prevent Huttig Individuals from receiving
duplicative benefits from the Crane Plans and the Huttig Plans. With respect to
Huttig Individuals, each Huttig Plan shall provide that all service, all
compensation and all other benefit-affecting determinations that, as of the
Close of the Distribution Date, were recognized under the corresponding Crane
Plan shall, as of Immediately After the Distribution Date, receive full
recognition, credit, and validity and be taken into account under such Huttig
Plan to the same extent as if such items occurred under such Huttig Plan, except
to the extent that duplication of benefits would result.
ARTICLE III
DEFINED BENEFIT PLANS
3.1 Establishment of Huttig Hourly Pension Plan and Trust. The Huttig
Hourly Pension Plan, established by Huttig pursuant to Section 2.2, (i) shall be
a qualified defined benefit pension plan within the meaning of Code Section
401(a), (ii) shall contain provisions, terms and conditions substantially
similar to the provisions, terms and conditions of the Crane Hourly Pension
Plan, and (iii) shall provide coverage from and after the Distribution Date with
respect to Huttig Individuals who, as of the Distribution Date, were
participants under the Crane Hourly Pension Plan. The trust related to the
Huttig Hourly Pension Plan, established by Huttig pursuant to Section 2.2, shall
be exempt from taxation under Code Section 501(a).
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3.2 Freezing of Pension Plan Benefits. Effective Immediately After the
Distribution Date, the accrued benefits with respect to Huttig Individuals who,
as of the Distribution Date, were participants under the Crane Salaried Pension
Plan or the Crane Hourly Pension Plan (collectively, the "Affected Pension Plan
Participants") shall be frozen and the Affected Pension Plan Participants shall
not accrue any additional benefits from and after the Distribution Date under
the Crane Salaried Pension Plan or the Crane Hourly Pension Plan, as the case
may be. The assets and Benefit Liabilities with respect to the Affected Pension
Plan Participants, determined as of the Distribution Date, shall be retained by
the applicable Crane Plan and its related trust and paid therefrom when due
under the terms of the applicable Crane Plan.
3.3 Vesting and Crediting Service Under Crane's Pension Plans.
(a) Vesting and Service Credit of Crane Salaried Pension Plan Benefits.
Effective Immediately After the Distribution Date, notwithstanding anything
contained in the Crane Salaried Pension Plan to the contrary, the Affected
Pension Plan Participants who, as of the Distribution Date, were participants in
the Crane Salaried Pension Plan shall be fully vested in their respective
accrued benefits under the Crane Salaried Pension Plan. Affected Pension Plan
Participants who, as of the Distribution Date, were participants in the Crane
Salaried Pension Plan shall continue to receive service credit for retirement
benefit eligibility purposes under the Crane Plan for service with Huttig after
the Distribution Date.
(b) Crediting Service Under the Crane Hously Pension Plan. Affected
Pension Plan Participants who, as of the Distribution Date, were participants in
the Crane Hourly Pension Plan shall continue to receive service credit for
vesting and retirement benefit eligibility purposes under the Crane Plan for
service with Huttig after the Distribution Date.
ARTICLE IV
DEFINED CONTRIBUTION PLANS
4.1 Savings and Profit Sharing Plan.
(a) Establishment of Savings and Profit Sharing Plan and Trust. The
Huttig Savings and Profit Sharing Plan, established by Huttig pursuant to
Section 2.2, (i) shall be a qualified defined contribution plan within the
meaning of Code Section 401(a), (ii) except as provided under Section 4.1(c),
shall contain provisions, terms and conditions substantially similar to the
provisions, terms and conditions of the Crane Savings Plan, and (iii) shall
provide coverage from and after the Distribution Date with respect to Huttig
Individuals. The trust related to the Huttig Savings and Profit Sharing Plan,
established by Huttig pursuant to Section 2.2, shall be exempt from taxation
under Code Section 501(a).
(b) Assumption of Liabilities and Transfer of Assets.
(i) Effective Immediately After the Distribution Date: (A) the
Huttig Savings and Profit Sharing Plan shall assume and be solely responsible
for all Benefit Liabilities to or
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relating to Huttig Individuals under the Crane Savings Plan, and (B) Crane shall
cause an amount equal to the aggregate account balances of the Huttig
Individuals participating under the Crane Savings Plan, whether such amounts are
vested or unvested under the terms of the Crane Savings Plan, which are held by
the related trust as of the Close of the Distribution Date to be transferred to
the Huttig Savings and Profit Sharing Plan, and its related trust, and Huttig
shall cause such transferred accounts to be accepted by such plan and trust. In
Crane's sole and absolute discretion, the amount so transferred may be in cash
or in kind or a combination thereof; provided, however, that the following shall
be transferred in kind: (A) shares of Crane Common Stock and shares of Huttig
Common Stock allocated to participants' accounts as a result of the
Distribution; and (B) all promissory notes reflecting participant loans to
Huttig Individuals under the Teledyne 401(k) Plan outstanding as of the
Distribution Date.
(ii) If any benefit with respect to a Huttig Individual under the
Crane Savings Plan is subject to a qualified domestic relations order at the
time of transfer, all documentation concerning such qualified domestic relations
order shall be assigned to the Huttig Savings and Profit Sharing Plan.
(c) Retirement Benefit Feature of Savings and Profit Sharing Plan. The
Huttig Savings and Profit Sharing Plan shall contain provisions regarding
special employer contributions that, in the sole discretion of Huttig, are
appropriate retirement benefit provisions with respect to Huttig Individuals.
(d) Vesting. Effective Immediately After the Distribution Date,
participants in the Huttig Savings and Profit Sharing Plan shall be fully vested
in any amounts transferred with respect to such participants from the Crane
Savings Plan and its related trust under Section 4.1(b).
4.2 Other Defined Contribution Plans. Effective Immediately After the
Distribution Date, Huttig shall retain sole responsibility for sponsorship and
administration of the Huttig Sash & Door Company Compensation and Investment
Plan (formerly known as the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 401(k) Plan) (the "▇▇▇▇▇ 401(k)
Plan") and the Huttig Sash & Door Company Tax-Sheltered Investment Plan
(formerly known as the American Pine Products 401(k) Profit Sharing Plan) (the
"Prineville 401(k) Plan"), including all Benefit Liabilities arising under those
plans prior to or after the Distribution Date, and Crane shall have no
responsibility or liability with respect to the ▇▇▇▇▇ 401(k) Plan or the
Prineville 401(k) Plan.
ARTICLE V
HEALTH AND WELFARE PLANS
5.1 General Provisions.
(a) Assumption of Health and Welfare Plan Liabilities. Immediately After
the Distribution Date, all Benefit Liabilities to or relating to Huttig
Individuals under the Crane
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Health and Welfare Plans shall cease to be Benefit Liabilities of the Crane
Health and Welfare Plans and shall be assumed by the corresponding Huttig Health
and Welfare Plans.
(b) Postretirement Medical and Life Insurance Benefits.
(i) Effective Immediately After the Distribution Date, Huttig may,
but shall not be required to, alter or amend the postretirement medical and life
insurance benefits offered, or the manner in which such benefits are offered, to
Huttig Individuals as follows (subject to all terms and conditions of the
applicable Huttig Plan): (A) Huttig shall continue to contribute 50% of the
applicable premium or cost of coverage for postretirement medical benefits for
Huttig Individuals who are currently retired and participating in such coverage
as of the Distribution Date; (B) Huttig shall make no contribution regarding the
premium or other cost of coverage for postretirement life insurance benefits for
Huttig Individuals who are currently retired and participating in such coverage
as of the Distribution Date; (C) Huttig shall make no contribution regarding the
premium or other cost of coverage for postretirement medical or life insurance
benefits for Huttig Individuals who are active employees of Huttig or a Huttig
Entity Immediately After the Distribution Date and who commenced employment with
Huttig or a Huttig Entity prior to 1992; and (C) Huttig shall not offer
postretirement medical or life insurance benefits to Huttig Individuals who are
active employees of Huttig or a Huttig Entity Immediately After the Distribution
Date and who commenced employment with Huttig or a Huttig Entity after 1991.
(ii) Crane agrees and acknowledges that any alteration or amendment
by Huttig of the postretirement medical and life insurance benefits offered
under one or more of the Huttig Health and Welfare Plans as described in Section
5.1(b)(i) shall not be considered or otherwise deemed to be an Adverse Change as
defined under Section 5.3(a). Notwithstanding the foregoing, Huttig acknowledges
that any decision or action with respect to postretirement medical or life
insurance benefits offered under any Huttig Plan after the Distribution Date
shall be in the sole discretion of Huttig and Huttig shall be solely responsible
for such decision or action. Furthermore, Huttig acknowledges that Crane shall
in no way be considered or deemed to have consented to, agreed to or otherwise
to have been involved in, such decision or action of Huttig.
5.2 Vendor Contracts.
(a) Third-Party ASO Contracts.
(i) Crane shall use its reasonable efforts to amend each
administrative services only contract with a third-party administrator that
relates to any of the Crane Health and Welfare Plans (an "ASO Contract") in
existence as of the date of this Agreement to permit Huttig to participate in
the terms and conditions of such ASO Contract from Immediately After the
Distribution Date until the expiration of the financial fee guarantees in effect
under such ASO Contract as of the Close of the Distribution Date. Crane shall
use its reasonable efforts to cause all ASO Contracts into which Crane enters
after the date of this Agreement but before the Close of the Distribution Date
to allow Huttig to participate in the terms and conditions thereof effective
Immediately After the Distribution Date on the same basis as Crane.
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(ii) Crane shall have the right to determine, and shall promptly
notify Huttig of, the manner in which Huttig's participation in the terms and
conditions of ASO Contracts as set forth above shall be effectuated. The
permissible ways in which Huttig's participation may be effectuated include
automatically making Huttig a party to the ASO Contracts or obligating the third
party to enter into a separate ASO Contract with Huttig providing for the same
terms and conditions as are contained in the ASO Contracts to which Crane is a
party. Such terms and conditions shall include the financial and termination
provisions, performance standards, methodology, auditing policies, quality
measures, reporting requirements and target claims. Huttig hereby authorizes
Crane to act on its behalf to extend to Huttig the terms and conditions of the
ASO Contracts. Huttig shall fully cooperate with Crane in such efforts, and
Huttig shall not perform any act, including discussing any alternative
arrangements with any third party, that would prejudice Crane's efforts.
(b) Group Insurance Policies.
(i) This Section 5.2(b) applies to group insurance policies not
subject to allocation or transfer pursuant to the foregoing provisions of this
Article V ("Group Insurance Policies"). (ii)..Crane shall use its reasonable
efforts to amend each Group Insurance Policy in existence as of the date of this
Agreement for the provision or administration of benefits under the Crane Health
and Welfare Plans to permit Huttig to participate in the terms and conditions of
such policy from Immediately After the Distribution Date until the expiration of
the financial fee and rate guarantees in effect under such Group Insurance
Policy as of the Close of the Distribution Date. Crane shall use its reasonable
efforts to cause all Group Insurance Policies into which Crane enters or which
Crane renews after the date of this Agreement but before the Close of the
Distribution Date to allow Huttig to participate in the terms and conditions
thereof effective Immediately After the Distribution Date on the same basis as
Crane.
(iii) Huttig's participation in the terms and conditions of each
such Group Insurance Policy shall be effectuated by obligating the insurance
company that issued such insurance policy to Crane to issue one or more separate
policies to Huttig. Such terms and conditions shall include the financial and
termination provisions, performance standards and target claims. Huttig hereby
unconditionally and irrevocably authorizes Crane to act on its behalf to extend
to Huttig the terms and conditions of such Group Insurance Policies. Huttig
shall fully cooperate with Crane in such efforts, and Huttig shall not perform
any act, including discussing any alternative arrangements with third parties,
that would prejudice Crane's efforts.
(c) Effect of Change in Rates. Crane and Huttig shall use their
reasonable efforts to cause each of the insurance companies, point-of-service
vendors and third-party administrators providing services and benefits under the
Crane Health and Welfare Plans and the Huttig Health and Welfare Plans to
maintain the premium and/or administrative rates based on the aggregate number
of participants in both the Crane Health and Welfare Plans and the Huttig Health
and Welfare Plans through the expiration of the financial fee or rate guarantees
in effect as of the Close of the Distribution Date under the respective ASO
Contracts and Group Insurance Policies.
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To the extent they are not successful in such efforts, Crane and Huttig shall
each bear the revised premium or administrative rates attributable to the
individuals covered by their respective Health and Welfare Plans.
5.3 Procedures for Amendments to Plans, Plan Designs, Administrative
Practices, and Vendor Contracts.
(a) Changes in Vendor Contracts, Group Insurance Policies, Plan Design,
and Administration Practices and Procedures. From Immediately After the
Distribution Date through the expiration of the respective financial fee or rate
guarantees in effect as of the Close of the Distribution Date under the
applicable ASO Contract or Group Insurance Policy, any party must comply with
Section 5.3(b) if that party seeks to materially amend, modify, alter or take
other action which would have a material effect on, any of the following items
that, in the reasonable opinion of the other party, shall have a material
adverse impact on one or more of the other party's Health and Welfare Plans
(each such modification, an "Adverse Change"): (i) the termination date,
administration, or operation of (A) an ASO contract between Crane or Huttig and
a third-party administrator, or (B) a Group Insurance Policy issued to Crane or
Huttig, in each case, the material terms and conditions of which contracts and
policies are extended to Huttig or to which Huttig becomes a party pursuant to
Section 5.2; (ii) the design of either a Crane Health and Welfare Plan or a
Huttig Health and Welfare Plan; or (iii) the financing, operation,
administration or delivery of benefits under either a Crane Health and Welfare
Plan or a Huttig Health and Welfare Plan.
(b) Procedure for Implementing Changes. Unless the other party consents
in writing, neither Crane nor Huttig shall make any Adverse Change unless the
party intending to make the Adverse Change has: (i) given the other party
written notice of the intention to make the Adverse Change, accompanied by a
written description of the Adverse Change, at least 30 days in advance of the
proposed effective date of the Adverse Change; (ii) agreed to bear all of the
costs of implementing the Adverse Change which are incurred by all third-party
administrators, insurance companies and other vendors and passed through to one
or both of the parties; and (iii) certified to the other party, and provided to
the other party the written concurrence of each third-party administrator,
insurance company or other vendor associated with or performing services in
connection with the Health and Welfare Plan affected by the Adverse Change, that
(after taking into account the effect of clause (ii)) the proposed Adverse
Change will have no material adverse impact (financial, administrative or
otherwise) on the corresponding Health and Welfare Plan sponsored by the other
party.
5.4 COBRA. Effective Immediately After the Distribution Date, Huttig
shall solely be responsible for administering compliance with the health care
continuation coverage requirements of COBRA with respect to Huttig Individuals
under the Huttig Health and Welfare Plans.
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5.5 Post-Distribution-Transitional Arrangements.
(a) Continuance of Elections, Co-Payments and Maximum Benefits.
(i) Huttig shall cause the Huttig Health and Welfare Plans to
recognize and maintain all coverage and contribution elections made by Huttig
Individuals under the Crane Health and Welfare Plans and apply such elections
under the Huttig Health and Welfare Plans for the remainder of the period or
periods for which such elections are by their terms applicable. The transfer or
other movement of employment from Crane to Huttig at any time before the Close
of the Distribution Date shall neither constitute nor be treated as a "status
change" under the Crane Health and Welfare Plans or the Huttig Health and
Welfare Plans.
(ii) Huttig shall cause the Huttig Health and Welfare Plans to
recognize and give credit for (A) all amounts applied to deductibles,
out-of-pocket maximums, and other applicable benefit coverage limits with
respect to which such expenses have been incurred by Huttig Individuals under
the Crane Health and Welfare Plans for the remainder of the year in which the
Distribution occurs, and (B) all benefits paid to Huttig Individuals under the
Crane Health and Welfare Plans for purposes of determining when such persons
have reached their lifetime maximum benefits under the Huttig Health and Welfare
Plans.
(iii) Huttig shall use reasonable efforts to (A) provide coverage to
Huttig Individuals under the Huttig Group Life Program without the need to
undergo a physical examination or otherwise provide evidence of insurability,
and (B) recognize and maintain all irrevocable assignments and accelerated
benefit option elections made by Huttig Individuals under the Crane Group Life
Program.
(b) Health and Welfare Plans Subrogation Recovery. After the Close of
the Distribution Date, Crane shall pay to Huttig any amounts Crane recovers from
time to time through subrogation or otherwise for claims incurred by or
reimbursed to any Huttig Individual. If Huttig recovers any amounts through
subrogation or otherwise for claims incurred by or reimbursed to employees and
former employees of Crane or a Crane Entity and their respective beneficiaries
and dependents (other than Huttig Individuals), Huttig shall pay such amounts to
Crane.
ARTICLE VI
STOCK AND INCENTIVE COMPENSATION BENEFITS
AND EXECUTIVE BENEFITS
6.1 Crane Stock-Based Plans.
(a) Stock Options. Huttig shall cause each Crane Option that is
outstanding as of the Close of the Distribution Date and is held by a Huttig
Individual to be converted, effective as soon as practicable after the
Distribution Date, to a Huttig Option (a "Converted Option"). Such Converted
Option shall provide for the option to purchase a number of shares of Huttig
Common
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Stock equal to the number of shares of Crane Common Stock subject to such Crane
Option as of the Close of the Distribution Date, multiplied by the Ratio, and
then rounded to the nearest whole share. The per-share exercise price of such
Converted Option shall equal the per-share exercise price of such Crane Option
as of the Close of the Distribution Date divided by the Ratio. Each such
Converted Option shall otherwise have the same terms and conditions as were
applicable to the corresponding Crane Option as of the Close of the Distribution
Date, except that references to Crane and its affiliates shall be amended to
refer to Huttig and its affiliates.
(b) Restricted Stock. Effective as soon as administratively practicable
after the Distribution Date, Huttig shall cause the Restricted Stock Award held
by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ under the Crane Restricted Stock Plan as of the Distribution
Date, to the extent that vesting of shares granted under that Award is not
dependent upon any performance or market value criteria (i.e. time-based
restrictions), to be converted to a Restricted Stock Award under the Huttig
Stock Incentive Plan by multiplying the number of shares of Crane Restricted
Stock by the Ratio, and then rounding the product to the nearest whole share.
Such Huttig Restricted Stock Award shall have the same terms and conditions as
were applicable to the corresponding Crane Restricted Stock Award. Crane shall
use reasonable efforts to cancel any certificate in ▇▇. ▇▇▇▇▇'▇ name with
respect to restricted shares of Crane Common Stock. To the extent that ▇▇.
▇▇▇▇▇'▇ Restricted Stock Award is not subject to conversion under the prior
provisions of this Section 6.1(b) (i.e. performance-based restrictions), the
parties shall use their reasonable efforts to cause that Restricted Stock Award
held by ▇▇. ▇▇▇▇▇ ▇▇▇▇▇ under the Crane Restricted Stock Plan to be replaced,
effective on or within a reasonable time after the Distribution Date, with an
Award consisting of restricted shares of Huttig Common Stock under the Huttig
Stock Incentive Plan and subject to such terms and conditions as the parties and
▇▇. ▇▇▇▇▇ may agree.
6.2 ▇▇▇▇▇ ▇▇▇ Plan. Effective Immediately After the Distribution Date,
Huttig shall assume all Benefit Liabilities to or relating to Huttig Individuals
under the ▇▇▇▇▇ ▇▇▇ Plan. The ▇▇▇▇▇▇ ▇▇▇ Plan shall reflect appropriate
adjustments, as determined by Huttig in its sole discretion, of the cost of
capital and other factors that shall be applicable to the benefits under the
▇▇▇▇▇▇ ▇▇▇ Plan after the Distribution Date.
6.3 Employee Stock Purchase Plan. The Huttig Employee Stock Purchase
Plan, established pursuant to Section 2.2, shall provide employees of Huttig or
a Huttig Entity after the Distribution Date with an opportunity to purchase
Huttig Common Stock at current market prices.
ARTICLE VII
GENERAL AND ADMINISTRATIVE
7.1 Non-Termination of Employment, No Third-Party Beneficiaries. No
provision of this Agreement or the Distribution Agreement shall be construed to
create any right, or accelerate entitlement, to any compensation or benefit
whatsoever on the part of any Huttig Individual or other future, present or
former employee of Crane, a Crane Entity, Huttig, or a Huttig Entity under any
Crane Plan or Huttig Plan or otherwise. Without limiting the generality of the
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foregoing: (i) the Distribution shall not cause any employee to be deemed to
have incurred a termination of employment which entitles such individual to the
commencement of benefits under any of the Crane Plans, any of the Huttig Plans,
or any individual agreements; and (ii) except as expressly provided in this
Agreement, nothing in this Agreement shall preclude Huttig, at any time after
the Close of the Distribution Date, from amending, merging, modifying,
terminating, eliminating, reducing, or otherwise altering in any respect any
Huttig Plan, any benefit under any Plan or any trust, insurance policy or
funding vehicle related to any Huttig Plan.
7.2 Beneficiary Designations. All beneficiary designations made by
Huttig Individuals for Crane Plans shall be transferred to and be in full force
and effect under the corresponding Huttig Plans until such beneficiary
designations are replaced or revoked by the Huttig Individual who made the
beneficiary designation.
7.3 Collective Bargaining. To the extent any provision of this Agreement
is contrary to the provisions of any collective bargaining agreement to which
Crane or any Affiliate of Crane is a party, the terms of such collective
bargaining agreement shall prevail. Should any provisions of this Agreement be
deemed to relate to a topic determined by an appropriate authority to be a
mandatory subject of collective bargaining, Crane or Huttig may be obligated to
bargain with the union representing affected employees concerning those
subjects.
7.4 Consent of Third Parties. If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor or a union) and
such consent is withheld, Crane and Huttig shall use their reasonable efforts to
implement the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement cannot be implemented due to the
failure of such third party to consent, Crane and Huttig shall negotiate in good
faith to implement the provision in a mutually satisfactory manner. The phrase
"reasonable efforts" as used herein shall not be construed to require the
incurrence of any non-routine or unreasonable expense or liability or the waiver
of any right.
7.5 Sharing of Participant Information. Crane and Huttig shall share,
Crane shall cause each applicable Crane Entity to share, and Huttig shall cause
each applicable Huttig Entity to share, with each other and their respective
agents and vendors (without obtaining releases) all participant information
necessary for the efficient and accurate administration of each of the Crane
Plans and the Huttig Plans. Crane and Huttig and their respective authorized
agents shall, subject to applicable laws on confidentiality, be given reasonable
and timely access to, and may make copies of, all information relating to the
subjects of this Agreement in the custody of the other party, to the extent
necessary for such administration. Until [December 31, 2000], all participant
information shall be provided in a manner and medium that is compatible with the
data processing systems of Crane as in effect on the Close of the Distribution
Date, unless otherwise agreed to by Crane and Huttig.
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ARTICLE VIII
MISCELLANEOUS
8.1 Effect if Distribution Does Not Occur. If the Distribution does not
occur, then all actions and events that are, under this Agreement, to be taken
or occur effective as of the Close of the Distribution Date, Immediately After
the Distribution Date, or otherwise in connection with the Distribution, shall
not be taken or occur except to the extent specifically agreed by Huttig and
Crane.
8.2 Relationship of Parties. Nothing in this Agreement shall be deemed
or construed by the parties or any third party as creating the relationship of
principal and agent, partnership or joint venture between the parties, it being
understood and agreed that no provision contained herein, and no act of the
parties, shall be deemed to create any relationship between the parties other
than the relationship set forth herein.
8.3 Affiliates. Each of Crane and Huttig shall cause to be performed,
and hereby guarantees the performance of, all actions, agreements and
obligations set forth in this Agreement to be performed by a Crane Entity or a
Huttig Entity, respectively.
8.4 Governing Law. To the extent not preempted by applicable federal
law, this Agreement shall be governed by, construed and interpreted in
accordance with the laws of the State of Delaware, irrespective of the choice of
laws principles of the state of Delaware, as to all matters, including matters
of validity, construction, effect, performance and remedies.
8.5 Entire Agreement, Construction. This Agreement and the Ancillary
Agreements, including, without limitation, any annexes, schedules and exhibits
hereto or thereto, and other agreements and documents referred to herein and
therein, will together constitute the entire agreement between the parties with
respect to the subject matter hereof and thereof and will supersede all prior
negotiations, agreements and understandings of the parties of any nature,
whether oral or written, with respect to such subject matter. In the event and
to the extent that there is a conflict between the provisions of this Agreement
and the provisions of the Distribution Agreement, the Transition Services
Agreement or the Tax Allocation Agreement, the provisions of this Agreement
shall control.
8.6 Expenses. Except as expressly set forth in this Agreement, all costs
and expenses incurred through the Close of the Distribution Date with respect to
any employee matters described herein shall be charged to and paid by Crane.
Except as otherwise set forth in this Agreement, all costs and expenses incurred
following the Distribution Date with respect to any employee matters described
herein shall be charged to and paid by the party for whose benefit the expenses
are incurred, with any expenses that cannot be allocated on such basis to be
split equally between the parties.
8.7 Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder will be in writing
and will be delivered by hand or telecopied or sent, postage prepaid, by
registered, certified or express mail or reputable overnight
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courier service and will be deemed given when so delivered by hand or
telecopied, or three business days after being so mailed (one business day in
the case of express mail or overnight courier service). All such notices,
requests, claims, demands and other communications will be addressed as set
forth below, or pursuant to such other instructions as may be designated in
writing by the party to receive such notice:
(a) If to Crane:
Crane Co.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Huttig:
Huttig Building Products, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
8.8 Consent to Jurisdiction. Each of Crane and Huttig irrevocably
submits to the exclusive jurisdiction of (i) the Court of Chancery in and for
the State of Delaware and the Superior Court in and for the State of Delaware
and (ii) the United States District Court for the District of Delaware, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated thereby (and agrees not to commence any action,
suit or proceeding relating thereto except in such courts). Each of Crane and
Huttig further agrees that service of any process, summons, notice or document
hand delivered or sent by U.S. registered mail to such party's respective
address set forth in Section 8.6 will be effective service of process for any
action, suit or proceeding in Delaware with respect to any matters to which it
has submitted to jurisdiction as set forth in the immediately preceding
sentence. Each of Crane and Huttig irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement in (i) the Court of Chancery in and for the State of Delaware
and the Superior Court in and for the State of Delaware or (ii) the United
States District Court for the District of Delaware, and hereby further
irrevocably and
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unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
8.9 Amendments. This Agreement cannot be amended, modified or
supplemented except by a written agreement executed by Crane and Huttig.
8.10 Assignment. Neither party to this Agreement will convey, assign or
otherwise transfer any of its rights or obligations under this Agreement without
the prior written consent of the other party in its sole and absolute
discretion, except that other than as expressly provided herein any party may
(without obtaining any consent) assign any of its rights hereunder to a
successor to all or any part of its business. Any such conveyance, assignment or
transfer requiring the prior written consent of another party which is made
without such consent will be void ab initio. No assignment of this Agreement
will relieve the assigning party of its obligations hereunder.
8.11 Captions. The article, section and paragraph captions herein and
the table of contents hereto are for convenience of reference only, do not
constitute part of this Agreement and will not be deemed to limit or otherwise
affect any of the provisions hereof. Unless otherwise specified, all references
herein to numbered articles or sections are to articles and sections of this
Agreement and all references herein to annexes or schedules are to annexes and
schedules to this Agreement.
8.12 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to Persons or circumstances other
than those as to which it has been held invalid or unenforceable, will remain in
full force and effect and will in no way be affected, impaired or invalidated
thereby. If the economic or legal substance of the matters contemplated hereby
is affected in any manner adverse to any party as a result thereof, the parties
will negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.
8.13 Parties in Interest. This Agreement is binding upon and is for the
benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not made for the benefit of any Person not a party
hereto, and no Person other than the parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement.
8.14 Schedules. All annexes and schedules attached hereto are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein. Capitalized terms used in the schedules hereto but not otherwise defined
therein will have the respective meanings assigned to such terms in this
Agreement.
8.15 Waivers; Remedies. No failure or delay on the part of either Crane
or Huttig in exercising any right, power or privilege hereunder will operate as
a waiver thereof, nor will any waiver on the part of either Crane or Huttig of
any right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor will any single or partial exercise
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of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties may otherwise have at law
or in equity.
8.16 Further Assurances. As and when requested by either party hereto,
the other party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such actions as the requesting party may reasonably request with
respect to the matters described herein.
8.17 Counterparts. This Agreement may be executed in separate
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts will together constitute the same agreement.
IN WITNESS WHEREOF, the parties have caused this Employee Matters
Agreement to be duly executed as of the day and year first above written.
CRANE CO.
By:
-------------------------------------
Title:
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HUTTIG BUILDING PRODUCTS, INC.
By:
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Title:
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