Visteon Hourly Employee Lease Agreement

VISTEON HOURLY EMPLOYEE LEASE AGREEMENT


This Lease Agreement (the "AGREEMENT") is made effective as of October 1, 2005 (the "EFFECTIVE DATE"), between Visteon Corporation, a Delaware corporation ("VISTEON"), and Automotive Components Holdings, LLC f/k/a/ VFH Holdings, LLC, a Delaware limited liability company ("ACH"). ACH and Visteon are referred to herein individually as a "PARTY" and collectively as the "PARTIES".


RECITALS


WHEREAS, ACH is engaged in the business of manufacturing and assembling automotive parts and providing related services ("BUSINESS");


WHEREAS, ACH is an entity managed by Ford Motor Company, a Delaware corporation ("FORD");


WHEREAS, ACH and Ford will attempt to disposition certain assets of the Business to subsequent buyers;


WHEREAS, Visteon hourly employees are represented by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW and its affiliated locals (collectively, "UAW") and are covered under the terms and conditions of the (i) Master Visteon-UAW Collective Bargaining Agreement dated June 29, 2000 and the Supplemental Agreement dated as of May 4, 2004 and extensions or successor agreements by and between Visteon and the UAW (collectively, "MASTER VISTEON CBA") or (ii) the UAW Local #1216-Visteon Corporation Regional Assembly and Manufacturing LLC, Bellevue Plant, Labor Agreement ("BELLEVUE CBA") such employees hereafter known as ("BELLEVUE HOURLY EMPLOYEES");


WHEREAS, pursuant to the terms of a Memorandum of Agreement dated as of May 24, 2005 by and between the UAW, Ford and Visteon ("MOA") the parties thereto agreed that all Visteon employees represented under the Master Visteon CBA as of the Effective Date would be converted to Ford employees and that after the Effective Date, Visteon would hire any new hourly employees under the terms of the Master Visteon CBA and lease them to ACH ("VISTEON NEW HIRES");


WHEREAS, ACH desires to obtain the services of Visteon New Hires to conduct the Business pursuant to the terms of this Agreement; and


WHEREAS, ACH desires to obtain the services of Bellevue Hourly Employees to conduct the Business pursuant to the terms of this Agreement.
NOW THEREFORE, in consideration of the above premises and the mutual covenants herein contained, and for other good and valuable consideration given by each Party hereto to the other, the sufficiency and receipt of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:


ARTICLE 1
TERM


Section 1.01. Term. The term of this Agreement shall commence on October 1, 2005, such date being referred to hereafter as the "EFFECTIVE DATE" and shall terminate on the earlier to occur of (i) the termination of employment of all of the Leased Employees (as defined below) or (ii) the agreement of the Parties to terminate this Agreement ("TERM").


ARTICLE 2
LEASE OF VISTEON HOURLY EMPLOYEES


Section 2.01. Lease and Employee Census. A preliminary employee census is attached as Schedule 2.01 ("PRELIMINARY CENSUS"). The Preliminary Census sets forth a list of the Bellevue Hourly Employees to be leased to ACH as of the Effective Date, together with their base hourly wage rate, Visteon service date, job classification, location code and Global Identification Number. Within five days of the date hereof, Visteon shall update the Preliminary Census with any applicable changes and deliver the Preliminary Census to ACH. ACH shall have an additional five days to approve the revised Preliminary Census. After the revised Preliminary Census is approved by ACH, it shall be substituted for Schedule 2.01 and shall be known as the "EMPLOYEE Census". Employees who are identified on the Employee Census shall be known as "LEASED EMPLOYEES". In the event that ACH requires additional hourly employees to work in the Business, ACH will inform Visteon of its personnel requirements. Visteon shall hire only that number of employees with the specified skills that ACH requests. Visteon and ACH shall agree on the hiring process to be used. Visteon shall update the Employee Census at least monthly for any Visteon New Hires or Bellevue Hourly Employees and other employee transactions (i.e., quits, death, transfers, etc.) in connection with the invoice procedure specified in Section 4.04. Bellevue Hourly Employees and Visteon New Hires on the Employee Census shall be known for purposes of this Agreement as the "LEASED EMPLOYEES". The period during which Leased Employees are leased to ACH is referred to as the "LEASE PERIOD". ACH agrees to lease from Visteon, and Visteon agrees to lease to ACH, the Leased Employees under the terms of this Agreement.


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Section 2.02. Buyer Leasing. In the event of a sale or transfer of all or any part of the Business to a buyer, Visteon and Ford shall mutually agree on any ultimate disposition of the Leased Employees to a buyer, subject to UAW consent. Visteon shall make any appropriate arrangements concerning HR services as is determined by ACH, Visteon and a buyer for up to twenty-four (24) months under the terms of the Master Services Agreement between the Parties executed as of even date herewith ("MASTER SERVICES AGREEMENT"). Visteon shall provide such HR services to a buyer at the following rates:


TERM PRICE - ---- ----- 9 months post-sale Cost + 5% 10-15 months post-sale Cost + 8% 16 months and beyond post-sale Cost + 12%


Section 2.03. Redundant Employees. ACH shall give Visteon at least ten business days notice (where practical) when ACH desires to discontinue the lease of any individual Leased Employee or group of Leased Employee, in its sole discretion. The requirement for at least ten business days notice will be waived in situations when a Leased Employee commits an offense which would justify a "for cause" termination under Visteon's personnel practices and consistent with the applicable CBA, in which event such employee will be terminated from this Agreement immediately and returned to Visteon. Visteon shall delete any such employee from the Employee Census effective on the last day worked for ACH; provided however, that ACH shall remain responsible for reimbursing Visteon for only those costs Visteon may incur with respect to such employee under the terms of the applicable CBA, including SUB costs, if any. Notwithstanding the above, lease fees for any Leased Employee terminated "for cause" shall cease the day the termination is effective. Visteon shall be responsible for complying with any applicable Worker Adjustment and Retraining Notification ("WARN") Act or other applicable legal requirements in connection with a termination of a Leased Employee, provided that Visteon receives notice from ACH sufficiently in advance to permit such compliance, including notification requirements. If Visteon does not receive sufficient notice from ACH, ACH shall be responsible for all costs of such compliance with WARN or any similar law, including costs of any period of continued employment or pay in lieu of notice.


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ARTICLE 3
EMPLOYER MATTERS


Section 3.01. Employer Definition. Visteon shall be the employer of the Leased Employees and ACH shall not be considered the employer. Visteon will instruct Leased Employees to (i) conform to applicable law and ACH policies while at ACH facilities regarding safety and health, personal and professional conduct (including the wearing of an identification badge or personal protective equipment and adhering to plant regulations and general safety practices or procedures) generally applicable to such facilities, which policies, procedures, rules and regulations ACH will provide as soon as practicable after the date hereof, and as soon as practicable upon any modification, termination or adoption of any such policy, procedure, rule or regulation; and (ii) to otherwise conduct themselves in a lawful and businesslike manner. Leased Employees also shall be subject at all times to ACH's and Visteon's policies and procedures. During the Lease Period, Visteon shall retain responsibility for all payments and benefits due to the Leased Employees in connection with their work relating to the Business and pro-rated for part-time employment, including but not limited to:


(i) the payment of Leased Employees' base hourly wage or other components of pay as required under the applicable CBA (less any applicable withholding or other taxes or any amounts deducted from such wages pursuant to normal payroll practices of Visteon);


(ii) the provision of all other employee benefits under the applicable CBA;


(iii) payment of all federal, state, or local taxes withheld or otherwise required to be paid with respect thereto; and


(iv) the liability for statutory benefits, including workers' compensation, payable to employees.


Section 3.02. Management of Employees. ACH and its management shall have the right to assign to, and to structure work for, the Leased Employees in accordance with the terms of the applicable CBA. Visteon acknowledges that ACH will have no employees, but ACH will carry out its management responsibilities hereunder by retaining appropriate personnel by assignment from Ford, leasing salaried employees from Visteon or retaining agency employees either by itself or through Visteon.


Section 3.03. Information. ACH shall provide Visteon on a weekly basis a summary of the hours of service rendered by each of the Leased Employees during the preceding week. In addition, ACH shall provide Visteon with such information or documents as Visteon may reasonably request with respect to a


4 Leased Employee. ACH will share any such information with Visteon (other than non-job related personal care received by the Leased Employees unless related to a legitimate business interest of Visteon) regardless of any claim of privilege or confidentiality because Visteon is an employer of the Leased Employees.


Section 3.04. Payroll and Related Services. During the Lease Period, Visteon shall provide payroll processing services for the Leased Employees comparable to such services for its employees other than Leased Employees. Upon reasonable request or as needed, Visteon will provide assurances ...