Employee Benefits Agreement

Exhibit 10.2


EMPLOYEE BENEFITS AGREEMENT


by and between


FMC CORPORATION


and


FMC TECHNOLOGIES, INC.


Dated as of May 30, 2001


TABLE OF CONTENTS
Page
---- ARTICLE I DEFINITIONS................................................................................... 1


1.1 Aetna Annuity...................................................................................... 1 1.2 Agreement ......................................................................................... 1 1.3 ASO Contract ...................................................................................... 1 1.4 Auditing Party .................................................................................... 1 1.5 Award ............................................................................................. 1 1.6 Benefits and Employee Services Organization ....................................................... 2 1.7 Benefits Database.................................................................................. 2 1.8 Change ............................................................................................ 2 1.9 Close of the Distribution Date .................................................................... 2 1.10 COBRA ............................................................................................. 2 1.11 Code .............................................................................................. 2 1.12 Defined Contribution Plan ......................................................................... 2 1.13 Defined Contribution Plan for Bargaining Unit Employees ........................................... 2 1.14 Distribution Date Ratio ........................................................................... 2 1.15 DOL ............................................................................................... 2 1.16 Enrolled Actuary .................................................................................. 2 1.17 ERISA ............................................................................................. 2 1.18 Excluded Liabilities .............................................................................. 2 1.19 Executive Benefit Plans ........................................................................... 3 1.20 Flexible Benefits Plan ............................................................................ 3 1.21 FMLA .............................................................................................. 3 1.22 Foreign Plans ..................................................................................... 3 1.23 Group Insurance Policies .......................................................................... 3 1.24 Group Life Program ................................................................................ 3 1.25 HCFA .............................................................................................. 3 1.26 Health and Welfare Plans .......................................................................... 3 1.27 HMO ............................................................................................... 3 1.28 HMO Agreements .................................................................................... 3 1.29 Immediately after the Distribution Date ........................................................... 4 1.30 Incentive Plan .................................................................................... 4 1.31 Individual Agreement .............................................................................. 4 1.32 Initial Pension Transfer 1.33 IPO Ratio.......................................................................................... 4 1.34 IRS ............................................................................................... 4 1.35 Leave of Absence .................................................................................. 4 1.36 Legally Permissible ............................................................................... 4 1.37 Material Feature .................................................................................. 4 1.38 Medical Plan ...................................................................................... 4 1.39 Non-Employee Director ............................................................................. 4 1.40 Non-Employee Director Plan ........................................................................ 5 1.41 Non-parties ....................................................................................... 5


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1.42 Option ............................................................................................ 5 1.43 Outsource ......................................................................................... 5 1.44 Parent ............................................................................................ 5 1.45 Parent Distribution Date Stock Value............................................................... 5 1.46 Parent Entity...................................................................................... 5 1.47 Parent Executive................................................................................... 5 1.48 Parent IPO Stock Value............................................................................. 5 1.49 Parent Leave of Absence Programs................................................................... 5 1.50 Parent LTD Plan.................................................................................... 5 1.51 Parent Transfer Date Stock Value................................................................... 5 1.52 Parent Transferred Employee........................................................................ 6 1.53 Parent WCP......................................................................................... 6 1.54 Participating Company.............................................................................. 6 1.55 PBGC .............................................................................................. 6 1.56 Pension Interest................................................................................... 6 1.57 Pension Plan....................................................................................... 6 1.58 Plan .............................................................................................. 6 1.59 Prudential Annuity................................................................................. 6 1.60 Puerto Rico Medical and Dental Plan................................................................ 7 1.61 Puerto Rico Pension Plan........................................................................... 7 1.62 Puerto Rico Savings Plan........................................................................... 7 1.63 QDRO .............................................................................................. 7 1.64 QMCSO ............................................................................................. 7 1.65 Rabbi Trusts....................................................................................... 7 1.66 Savings Plan(s).................................................................................... 7 1.67 Separation and Distribution Agreement.............................................................. 7 1.68 Supplemental Pension Plan.......................................................................... 7 1.69 Technologies....................................................................................... 7 1.70 Technologies Administrative Employees.............................................................. 7 1.71 Technologies Distribution Date Stock Value......................................................... 8 1.72 Technologies Entity................................................................................ 8 1.73 Technologies Individual............................................................................ 8 1.74 Technologies IPO Stock Value....................................................................... 8 1.75 Technologies Transfer Date Stock Value............................................................. 8 1.76 Technologies WCP Claims............................................................................ 8 1.77 Transfer Date...................................................................................... 8 1.78 Transfer Date Ratio................................................................................ 8 1.79 Transferred Individual............................................................................. 8 1.80 VEBA .............................................................................................. 9 1.81 VEBA Plans......................................................................................... 9


ARTICLE II. GENERAL PRINCIPLES............................................................................ 9


2.1 Assumption of Liabilities.......................................................................... 9 2.2 Technologies Participation in Parent Plans......................................................... 9 2.3 Establishment of Technologies Plans................................................................ 10


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2.4 Terms of Participation by Transferred Individuals in Technologies
Plans and Technologies Non-Employee Directors in the Technologies
Non-Employee Director Plan......................................................................... 11 2.5 Procedures for Amendments to Plans, Plan Designs, Administrative Practices and Vendor Contracts.... 12 2.6 Best Efforts....................................................................................... 13 2.7 Regulatory Compliance.............................................................................. 13


ARTICLE III. DEFINED BENEFIT PLANS........................................................................ 13


3.1 Assumption of Certain Assets and Certain Liabilities by Technologies Pension Plan.................. 13 3.2 Pension Asset Transfers............................................................................ 14 3.3 Assumption of Parent Puerto Rico Pension Plan...................................................... 14


ARTICLE IV. DEFINED CONTRIBUTION PLANS.................................................................... 14


4.1 Defined Contribution Plans and Defined Contribution Plan for Bargaining
Unit Employees..................................................................................... 14 4.2 Defined Contribution Plan Asset Transfer........................................................... 15 4.3 Assumption of Parent Puerto Rico Savings Plan...................................................... 15


ARTICLE V. HEALTH AND WELFARE PLANS....................................................................... 15


5.1 Assumption of Health and Welfare Plans' Liabilities................................................ 15 5.2 Establishment of Mirror VEBA....................................................................... 16 5.3 VEBA Asset Transfers............................................................................... 16 5.4 Investments of and Distribution from VEBAs......................................................... 16 5.5 Vendor Contracts................................................................................... 16 5.6 Parent Long-Term Disability........................................................................ 18 5.7 Post-Retirement Health and Life Insurance Benefits................................................. 18 5.8 COBRA.............................................................................................. 19 5.9 Leave of Absence Programs.......................................................................... 19 5.10 Parent Workers' Compensation Program............................................................... 20 5.11 Post-Distribution Transitional Arrangements........................................................ 22


ARTICLE VI. EXECUTIVE BENEFITS AND NON-EMPLOYEE DIRECTOR
BENEFITS...................................................................................... 23


6.1 Assumption of Obligations.......................................................................... 23 6.2 Consents, Notifications and Assignments............................................................ 23 6.3 Parent Incentive Plans............................................................................. 24 6.4 Parent Award Deferrals............................................................................. 25 6.5 Non-Employee Director Benefits..................................................................... 25 6.6 Rabbi Trust........................................................................................ 27


ARTICLE VII. OTHER BENEFITS............................................................................... 28


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ARTICLE VIII. GENERAL AND ADMINISTRATIVE................................................................... 28


8.1 Payment of Administrative Costs and Expenses....................................................... 28 8.2 Payment of Liabilities, Plan Expenses and Related Matters.......................................... 29 8.3 Sharing of Participant Information................................................................. 30 8.4 Reporting and Disclosure and Communications to Participants........................................ 30 8.5 Non-Termination of Employment; No Third-Party Beneficiaries........................................ 30 8.6 Plan Audits........................................................................................ 31 8.7 Beneficiary Designations........................................................................... 31 8.8 Requests for IRS Rulings and DOL Opinions.......................................................... 32 8.9 Fiduciary Matters.................................................................................. 32 8.10 Payroll Taxes and Reporting of Compensation........................................................ 32 8.11 Collective Bargaining.............................................................................. 33 8.12 Consent of Third Parties........................................................................... 33


ARTICLE IX. FOREIGN PLANS................................................................................... 33


ARTICLE X. MISCELLANEOUS................................................................................... 34


10.1 Effect If Distribution Does Not Occur.............................................................. 34 10.2 Relationship of Parties............................................................................ 34 10.3 Affiliates......................................................................................... 34 10.4 Incorporation of Separation and Distribution Agreement Provisions.................................. 34 10.5 Governing Law...................................................................................... 35


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EMPLOYEE BENEFITS AGREEMENT


RECITALS


This EMPLOYEE BENEFITS AGREEMENT (this "Agreement"), dated as of May 30,
--------- 2001 is by and between FMC CORPORATION, a Delaware corporation ("Parent"), and
------ FMC TECHNOLOGIES, INC., a Delaware corporation and a wholly owned subsidiary of Parent ("Technologies").
------------


WHEREAS, the Board of Directors of Parent has determined that it is in the best interests of Parent and its stockholders to separate Parent's existing businesses into two independent companies;


WHEREAS, in furtherance of the foregoing, Parent and Technologies have entered into a Separation and Distribution Agreement, dated as of the date hereof (the "Separation and Distribution Agreement") and certain other
------------------------------------- agreements that will govern certain matters relating to the Separation and the Contribution, the IPO, the Distribution and the relationship of Parent, Technologies, and their respective Subsidiaries following the IPO and the Distribution; and


WHEREAS, pursuant to the Separation and Distribution Agreement, Parent and Technologies have agreed to enter into this Agreement allocating assets, liabilities and responsibilities with respect to certain employee and director compensation and benefit plans and programs between them.


NOW, THEREFORE, in consideration of the premises, and of the agreements set forth herein, the parties hereto hereby agree as follows:


ARTICLE I
DEFINITIONS


Any capitalized terms that are used in this Agreement but not defined herein (other than the names of Parent employee benefit plans) shall have the meanings set forth in the Separation and Distribution Agreement, and, as used herein, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


1.1 Aetna Annuity means the non-participating group annuity contract issued by Aetna Life Insurance Company funding a portion of the Parent Pension Plan.


1.2 Agreement means this Employee Benefits Agreement, including all the Schedules and Exhibits hereto.


1.3 ASO Contract is defined in Section 5.5(a)(i).
-----------------


1.4 Auditing Party is defined in Section 8.6(a)(i).
-----------------


1.5 Award means an award under an Incentive Plan.


1.6 Benefits and Employee Services Organization means the Employee Service Center and corporate human resources department, including human resources information systems and relocation, each of which shall be a part of Parent through April 30, 2001 and each of which shall become a part of Technologies effective as of May 1, 2001.


1.7 Benefits Database is defined in Section 5.11(c)(iii).
--------------------


1.8 Change is defined in Section 2.5(b)(i).
-----------------


1.9 Close of the Distribution Date means 11:59:59 P.M. City of Chicago time on the Distribution Date.


1.10 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 Section 4980B of the Code and Sections 601 through 608 of ERISA.


1.11 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.


1.12 Defined Contribution Plan, when immediately preceded by "Parent," means the FMC Corporation Savings and Investment Plan. When immediately preceded by "Technologies," Defined Contribution Plan means the plan to be established by Technologies pursuant to Section 2.3 that corresponds to both the Parent Defined
----------- Contribution Plan and the Parent Defined Contribution Plan for Bargaining Unit Employees.


1.13 Defined Contribution Plan for Bargaining Unit Employees means the FMC Corporation Savings and Investment Plan for Bargaining Unit Employees.


1.14 Distribution Date Ratio means the amount obtained by dividing the Parent Distribution Date Stock Value by the Technologies Distribution Date Stock Value.


1.15 DOL means the United States Department of Labor.


1.16 Enrolled Actuary means Hewitt Associates, 100 Half Day Road, Lincolnshire, Illinois 60069.


1.17 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.


1.18 Excluded Liabilities means any Liabilities to or relating to Parent Transferred Employees and their respective dependents and beneficiaries relating to, arising out of or resulting from employment by Technologies or a Technologies Entity before becoming Parent Transferred Employees or employment by Parent or a Parent Entity (including, without limitation, Liabilities under Parent Plans).


1.19 Executive Benefit Plans, when immediately preceded by "Parent," means the executive benefit and nonqualified plans, programs and arrangements established, maintained, agreed upon or assumed by Parent or a Parent Entity for the benefit of executive employees and former executive employees of Parent or a Parent Entity before the Close of the Distribution Date, as set forth on Schedule A. When immediately preceded by "Technologies," Executive Benefit Plans - ---------- means the plans to be established by Technologies pursuant to Section 2.3 that
----------- correspond to the respective Parent Executive Benefit Plans. Executive Benefit Plans do not include Foreign Plans.


1.20 Flexible Benefits Plan, when immediately preceded by "Parent," means the FMC Flexible Benefits Plan. When immediately preceded by "Technologies," Flexible Benefits Plan means the portion of the plan to be established by Technologies pursuant to Section 2.3 that corresponds to the Parent Flexible
----------- Benefits Plan.


1.21 FMLA means the Family and Medical Leave Act of 1993, as amended.


1.22 Foreign Plans, when immediately preceded by "Parent," means the plans, programs and arrangements established, maintained, agreed upon or assumed by Parent or a Parent Entity primarily for the benefit of individuals substantially all of whom are nonresident aliens of the United States before the Close of Distribution Date, as set forth on Schedule B. When immediately preceded by
---------- "Technologies," Foreign Plans means the plans to be established by Technologies pursuant to Section 2.3 that correspond to the respective Parent Foreign Plans.
-----------


1.23 Group Insurance Policies is defined in Section 5.5(b)(i).
-----------------


1.24 Group Life Program, when immediately preceded by "Parent," means the portion of the FMC Corporation Welfare Benefits Plan that provides group basic life insurance coverage, and the portion of the Parent VEBA, if any, that provides group supplemental life insurance coverage for the benefit of employees and retirees of Parent and certain Parent entities established, maintained, agreed upon or assumed by Parent or a Parent Entity before the Close of the Distribution Date. When immediately preceded by "Technologies," Group Life Program means the plans to be established by Technologies pursuant to Section
------- 2.3 that correspond to the respective Parent Group Life Program. - ---


1.25 HCFA means the Health Care Financing Administration.


1.26 Health and Welfare Plans, when immediately preceded by "Parent," means the health and welfare plans, programs and arrangements established and maintained, agreed upon or assumed by Parent or a Parent Entity for the benefit of employees and retirees of Parent and certain Parent Entities, before the Close of the Distribution Date, as set forth on Schedule C. When immediately
---------- preceded by "Technologies," Health and Welfare Plans means the plans to be established by Technologies pursuant to Section 2.3 that correspond to the
----------- respective Parent Health and Welfare Plans. Health and Welfare Plans do not include Foreign Plans.


1.27 HMO means a health maintenance organization that provides insured benefits under the Parent Medical Plans or the Technologies Medical Plans.


1.28 HMO Agreements is defined in Section 5.5(c)(i).
-----------------


1.29 Immediately after the Distribution Date means 12:00 A.M. City of Chicago time on the day after the Distribution Date.


1.30 Incentive Plan, when immediately preceded by "Parent," means any of the cash and stock-based incentive plans, programs and arrangements established, maintained, agreed upon or assumed by Parent for the benefit of employees of Parent or a Parent Entity before the Close of the Distribution Date, as set forth on Schedule D. When immediately preceded by "Technologies," Incentive Plan
---------- means the Incentive Plan to be established by Technologies pursuant to Section
------- 2.3 that corresponds to the Parent Incentive Plan and the Parent Non-Employee - --- Director Plan. Incentive Plans do not include Foreign Plans.


1.31 Individual Agreement means an individual contract or agreement (whether written or unwritten) entered into between Parent, a Parent Entity, Technologies or a


Technologies Entity and a Parent Executive that establishes the right of such individual to special executive compensation or benefits, including, without limitation, supplemental pension benefit, hiring bonus, loan, guaranteed payment, special allowance, tax equalization or disability benefit.


1.32 Initial Pension Transfer means an amount estimated by the Enrolled Actuary to be equal to eighty-five percent (85%) of the amount described in Section 3.2(a) as of the close of business on April 30, 2001. - --------------


1.33 IPO Ratio means the amount obtained by dividing the Parent IPO Stock Value by the Technologies IPO Stock Value.


1.34 IRS means the Internal Revenue Service.


1.35 Leave of Absence means any authorized leave of absence, including, without limitation, leaves of absence for short-term disability, long-term disability and workers' compensation.


1.36 Legally Permissible is defined in Section 5.10(a)(iv).
-------------------


1.37 Material Feature means any feature of a Plan that could reasonably be expected to be of material importance to the sponsoring employer or the participants and beneficiaries of the Plan, which could include, depending on the type and purpose of the particular Plan, the class or cla ...