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EXHIBIT 10.18
HOURLY EMPLOYEE CONVERSION AGREEMENT
This Agreement
relating to certain employment and labor matters and
employee benefit plans ("Hourly Employee Conversion Agreement")
dated effective
as of December 22, 2003 is made and entered into by and among
Visteon
Corporation, a Delaware corporation ("Visteon") and Ford Motor
Company, a
Delaware corporation ("Ford").
RECITALS
1. Visteon employs directly
approximately 584 U.S. hourly
employees ("Visteon Employees") who are engaged in the business of
manufacturing
and assembling automotive parts and services ("Visteon
Business").
2. The Visteon Employees are
represented by the International
Union, United Automobile Aerospace and Agricultural Implement
Workers of
America, UAW and its affiliated Locals 228, 400, 600, 723, 737,
845, 849, 892,
898, 1111, 1216, and 1895 (collectively, "UAW" or the "Union") and
are covered
under the terms and conditions of the Visteon-UAW Collective
Bargaining
Agreement dated June 29, 2000, and any extensions or successor
agreements and
various local agreements by and between Visteon and the UAW
("Visteon CBA").
3. Pursuant to the terms of a
Memorandum of Understanding dated
as of September 15, 2003 by and between the UAW, Ford and Visteon,
the Parties
thereto agreed that all Visteon Employees hired during the term of
the 1999-2003
UAW-Ford Collective Bargaining Agreement would be deemed to be
"Ford Employees"
and would be covered in all respects by successive UAW-Ford
National Agreements
so long as they remain Ford Employees and during their
retirement.
4. Accordingly, the Parties
desire that Visteon transfer to Ford
the Visteon Employees as of the Transition Date as hereafter
defined and the
Transferred Employees shall become immediately subject to the terms
and
conditions of the collective bargaining agreement effective as of
September 15,
2003 by and between Ford and the UAW ("Ford CBA").
5. Pursuant to the terms of the
Amended and Restated Hourly
Employee Assignment Agreement dated as of April 1, 2000 by and
between Visteon
and Ford, and as such agreement may be further amended ("Assignment
Agreement"),
the Visteon Employees will be assigned to work in the Visteon
Business unless
otherwise deployed by Ford. If assigned to Visteon, Transferred
Employees will
be considered "Ford Assigned Employees" as defined in the
Assignment Agreement
or as defined in any amendments, whether now or in the future, to
such
Agreement.
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AGREEMENT
NOW, THEREFORE, in
consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged,
the Parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise
defined herein, the capitalized terms used herein
shall have the following meanings:
1.01 "EMPLOYEE CENSUS" shall mean the
employee census described in
Section 2.01.
1.02 "GOVERNANCE COUNCIL" shall mean the
governance council
established pursuant to Section 6 of the Relationship
Agreement between Ford and Visteon to be dated subsequent to
the date of this Agreement, or if not executed, the Governance
Council shall mean those
persons with decision-making
authority regarding the dispute.
1.03 "INSURANCE CONVERSION DATE" shall mean
January 1, 2004, at
12:01 a.m.
1.04 "TRANSFERRED EMPLOYEES" SHALL MEAN
(i) Active Visteon Employees as
defined in Section
1.06(i) who are transferred to Ford pursuant to the
terms hereof and who are at work on the day
immediately
prior to the Transition Date including
those on contractual paid time off (i.e., Jury Duty
Pay, Bereavement Pay, Short Term Military Pay,
Vacation Pay and Paid Holiday);
(ii) Inactive Visteon Employees as defined
in Section
1.06(ii) who are transferred pursuant to the terms
hereof, whether or not they return to active
employment;
(iii) Visteon Employees who have a break in
seniority but
who are subsequently restored to seniority, with or
without filing a grievance, shall be included as a
Transferred Employee on the date such seniority is
restored, and the Insurance Conversion Date shall be
the first of the month following the date seniority
is
restored; and
1.05 "TRANSITION DATE" shall mean December
22, 2003, or such other
time as provided
under the terms of this Agreement with respect to an
individual
employee.
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1.06 "VISTEON EMPLOYEES" SHALL MEAN
(i) U.S. persons represented by the
Union, who have
seniority status under the Visteon CBA as of the day
immediately prior to the Transition Date, who are
full-time employees, and who are actively at work at
Visteon on the day immediately prior to the
Transition Date including those on contractual paid
time off with reinstatement rights (i.e., Jury Duty
Pay, Bereavement Pay, Short Term Military Pay,
Vacation, Paid Holiday), and those on reduced or
alternate
work schedules ("Active Visteon
Employees"); and
(ii) U.S. persons represented by the Union
on full time
status who are not at work at Visteon the day
immediately prior to the Transition Date but who have
retained seniority status under the Visteon CBA and
who, under the terms of the Visteon CBA, are entitled
to
reinstatement on return to employment, including
those on leave of absence, layoff status, workers'
compensation leave or long term disability leave
("Inactive Visteon Employees"). For avoidance of
doubt, Inactive Visteon Employees shall not include
Visteon employees without reinstatement rights such
as former Visteon employees who have terminated
service by quit, death or probationary layoff.
ARTICLE II
EMPLOYMENT RESPONSIBILITY
2.01 EMPLOYEE CENSUS.
An employee census
is attached as Schedule 2.01 ("Employee Census").
The Employee Census sets forth:
(i) a list of all Active Visteon
Employees by name and social
security number;
(ii) a list of all Inactive Visteon
Employees by name and social
security number;
(iii) the job classification of each Visteon
Active or Inactive
Employee;
(iv) the Visteon Service Date of each
Visteon Active or Inactive
Employee;
(v) the wage rate applicable to each
Visteon Active or Inactive
Employee; and
(vi) the reason for any absence of any
Visteon Inactive Employee
and the date any leave expires.
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Visteon shall
revise the Employee Census as of the Transition Date to
reflect any applicable changes. The revised Employee Census shall
be delivered
to Ford within ten days of the Transition Date.
2.02 EMPLOYMENT TRANSFER AND TERMS OF
EMPLOYMENT.
Visteon shall
transfer the employment of Visteon Employees to Ford
effective as of the Transition Date and such employees shall become
Transferred
Employees effective on the Transition Date. On such date, the
Transferred
Employees shall be subject to the terms and conditions of the Ford
CBA.
2.03 SENIORITY.
Ford shall
recognize Visteon seniority under the Visteon CBA earned as
of the Transition Date as if such seniority were seniority under
the Ford CBA.
Ford shall recognize Visteon service for all purposes under the
Ford- UAW
benefit plans as if such service were Ford service, assuming Ford
receives
appropriate benefit asset transfers from Visteon as described in
Article III.
2.04 TRANSPARENCY.
Except as
otherwise provided in this Agreement, for all purposes under
the Ford CBA, Ford shall recognize the Transferred Employee's
employment history
at Visteon, including, but not limited to attendance, discipline,
vacation
records and all other types of employment records or transactions
with respect
to a Transferred Employee, as if the Transferred Employee had been
covered
under the Ford CBA since the date of hire at Visteon.
2.05 GRIEVANCES.
All unresolved
grievances pertaining to Visteon Employees as of the
Transition Date shall be processed to conclusion under the terms of
the Visteon
CBA. Ford and Visteon shall consult with each other concerning
cases that may
establish precedents with respect to the interpretation of each
other's
collective bargaining agreements. A former Visteon employee who
filed a
grievance over a discharge prior to the Transition Date and who is
ultimately
reinstated to work pursuant to the Visteon grievance procedure
after the
Transition Date shall be reinstated as a Transferred Employee. The
Insurance
Conversion Date for such an employee shall be the first day of the
month
following the reinstatement date. While the grievance is pending,
Visteon shall
retain full responsibility for such former Visteon employee for all
purposes to
the extent provided in the Visteon CBA.
2.06 JOINT PROGRAMS.
Any local training
fund balances accrued under the Visteon CBA as of
the Transition Date shall continue to be used for the employees of
the plant,
regardless of whether they are Transferred Employees, employees of
Ford assigned
to Visteon under the Assignment Agreement or employees hired by
Visteon after
the Transition Date (to
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the extent permitted under any applicable CBA), as agreed by the
UAW-Ford NEDTEC
Joint Governing Body.
2.07 EMPLOYMENT AND MEDICAL RECORDS.
(a) EMPLOYMENT RECORDS. Visteon shall
transfer to Ford
any employment records of any kind related to the
Transferred Employees as soon as practicable after
the Transition Date. To the extent that any state
law
requires employee consent to such transfer, the
Parties shall use their respective best efforts to
obtain employee consent to such transfer. Employee
records shall remain in the physical custody of the
appropriate Visteon hourly labor supervisors at the
plants where the Visteon Employees are assigned to
work as of the Transition Date. In the event a
Transferred Employee is reassigned to a non-Visteon
location, Visteon shall cause the employment records
to be transferred to the receiving location as soon
as practicable following the reassignment.
(b) MEDICAL RECORDS. For purposes of
this Section (b), a
"medical record" shall include, but is not limited
to,
reports, histories and physicals, progress notes,
and other patient information (e.g., x-rays and
x-ray readings, medical surveillance examinations,
laboratory reports, operative reports, consultations,
etc.). The medical record may be maintained in hard
copy and/or on computerized systems.
Visteon confirms that all Visteon Employees received
a post-offer preplacement health assessment prior to
hire at Visteon and that the assessment, the
equivalent of a Ford post-offer preplacement screen,
included
the following: Medical history, height,
weight, blood pressure, pulse, full visual acuity,
urine testing for sugar and albumin, urine drug
testing and physical examination. Ford shall not
require a post-offer pre-placement screen for a
Transferred Employee.
Visteon shall conduct exit health assessments for all
Transferred
Employees enrolled in a medical
surveillance program prior to the Transferred
Employee leaving the Visteon facility to return to a
Ford facility. Transferred Employees whose most
recent assessments were conducted more than six
months before the date of return to the Ford facility
shall be given an exit health assessment for the
medical surveillance program(s) that they were
enrolled in.
For the period that the Transferred Employee
continues to work at the Visteon facility, the
medical record will be retained at the Visteon
location but Ford shall have access to such record as
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reasonably required. If the Transferred Employee
transfers from a Visteon location to a Ford location
after the Transition Date, the Visteon location will
retain the original medical record. Visteon will copy
the entire medical record that is hard copy and send
to Ford within thirty (30) days of the transfer. Ford
will incur any reasonable costs associated with the
copying and mailing of the medical record. In
addition, upon request of the Ford location, Visteon
will provide Ford with a copy of the computerized
record if available. Ford
will incur any reasonable
costs associated with the copying and mailing of the
computerized medical record.
ARTICLE III
EMPLOYEE
BENEFIT PLANS
3.01 DEFINED BENEFIT PENSION PLANS.
(a) FORD-UAW RETIREMENT PLAN.
The Ford-UAW Retirement Plan shall provide retirement
benefits for credited service on or after the
Transition Date for Transferred Employees subject to
the following:
(i) For purposes of determining
vesting and
eligibility
for benefits, service credited
under the Visteon-UAW Retirement Plan shall
be recognized under the Ford-UAW Retirement
Plan; and
(ii) Subject to receipt of the asset
transfer
described below, the Ford-UAW Retirement
Plan shall pay a benefit related to service
with
Visteon prior to the Transition Date.
After the Transition Date, Transferred Employees
shall participate in the Ford-UAW Retirement Plan and
shall accrue the same benefits for service as those
other Ford hourly employees represented by the UAW
who participate in the Ford-UAW Retirement Plan.
(b) LIABILITY AND ASSET TRANSFERS
FROM THE VISTEON-UAW
RETIREMENT PLAN TO THE FORD-UAW RETIREMENT PLAN.
(i) Visteon and Ford shall take such
steps that
are necessary to transfer to the Ford-UAW
Retirement Plan any credited service and
benefits accrued under the Visteon-UAW
Retirement Plan with respect to a
Transferred
Employee to the date immediately
prior to the Transition Date to the extent
permitted by law provided the Ford-UAW
Retirement Plan and the Visteon-UAW
Retirement Plan each respectively retain
their tax-qualified status after the
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transfer and
the Ford-UAW Retirement Plan is
not required to be amended to provide for
any additional benefit rights or features
not currently contained in the Ford-UAW
Retirement Plan, except as specifically
provided in this Section. Visteon shall
amend the Visteon-UAW Retirement Plan to
vest Transferred Employees in 100% of their
benefits accrued under the Visteon-UAW
Retirement Plan prior to the transfer of
liabilities
and assets to the Ford-UAW
Retirement Plan as described in this
subparagraph (b). Ford shall amend the
Ford-UAW Retirement Plan, subject to Union
approval, to provide that credited service
under the Visteon-UAW Retirement Plan with
respect to a Transferred Employee shall be
treated for all purposes as Ford-UAW
Retirement Plan credited service. Future
service shall be accrued under the Ford-UAW
Retirement
Plan. A Transferred Employee
shall not be treated as having a separation
from employment for purposes of the
Visteon-UAW Retirement Plan or the Ford-UAW
Retirement Plan and shall not be entitled to
an immediate distribution of plan benefits
solely because of the employment transfer.
(ii) As soon as practicable after the
latest of
(A) the date on which the PBO Value is
determined and verified pursuant to (iii)
below,
(B) the expiration of thirty days
following the filing, if required, of Form
5310 with the IRS and PBGC in respect of the
Ford-UAW
Retirement Plan and the Visteon-UAW
Retirement Plan ("Asset Transfer Date"),
Visteon shall cause the trustee of the
Visteon-UAW Retirement Plan to transfer
assets to the Ford-UAW Retirement Plan in an
amount equal to the PBO Value as determined
in (iii) below. The assets shall consist of
cash or cash equivalents, or marketable
securities, and shall include interest from
the Transition Date until the Asset Transfer
Date
at the 90 day Treasury Bill rate on a
bond equivalent yield in effect on the last
business day of the month immediately
preceding the Payment Date, as quoted
in the
Wall Street Journal.
(iii) As of a date mutually agreed by Visteon
and
Ford ("Valuation Date"), in respect of each
Transferred Employee then a participant in
the Visteon-UAW Retirement Plan, the Visteon
Actuary shall measure the projected benefit
obligation,
as defined in SFAS No. 87, of
the liabilities related to the Transferred
Employees as of the Transition Date
("Transferred Employee PBO Value" or
"PBO
Value") in accordance with the principles
stated below:
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(A)
The present value of liabilities
will be determined under SFAS No.
87 as the projected benefit
obligation, using the actuarial
assumptions and methods that are
published in the most recent
actuarial valuation for accounting
purposes adjusted to reflect
current condition (e.g. accelerated
vesting) not reflected in the most
recent
valuation for the
Visteon-UAW Retirement Plan
prepared by Towers Perrin; and
(B) A discount rate as of the
Transition Date equal to the annual
effective yield equivalent to the
nominal semi-annual yield published
by
Moody's Investors Service at
www.Moodys.com for its AA
Corporate Bond Index, rounded to
the
nearest 1/4%, provided such
rate is a reasonable proxy for the
Ford SFAS 87 discount rate for the
Ford-UAW Retirement Plan in effect
as of the Valuation Date. If such
rate is not a reasonable proxy as
determined solely by Ford, then the
Visteon Actuary and the Ford
Actuary shall determine an
acceptable discount rate no later
