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General Motors / Delphi Automotive Systems - U.s. Employee Matters Agreement
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. 2
(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
be...
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