VISTEON SALARIED EMPLOYEE LEASE AGREEMENT RAWSONVILLE/STERLING

 

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                                                                    Exhibit 10.8

 

                    VISTEON SALARIED EMPLOYEE LEASE AGREEMENT

                              RAWSONVILLE/STERLING

 

     AGREEMENT (this "AGREEMENT") dated as of October 1, 2005 between Visteon

Corporation, a Delaware corporation ("VISTEON"), and Ford Motor Company, a

Delaware corporation, ("FORD"). Visteon and Ford are referred to herein

individually as a "PARTY" and collectively as the "PARTIES".

 

                                    WITNESSETH:

 

     WHEREAS, Visteon and Ford have agreed to restructure their business and

commercial relationships, resulting, among other matters, in a Ford-controlled

entity acquiring, through the purchase of Automotive Components Holdings, Inc.

f/k/a/ VFH Holdings, Inc., a Delaware corporation, certain assets and

liabilities related to Visteon's North America business, pursuant to a Visteon

"B" Purchase Agreement dated as of September 12, 2005 which assets will be held

by Automotive Components Holdings, LLC f/k/a/ VFH Holdings, LLC, a Delaware

limited liability company ("ACH") and wholly-owned subsidiary of Automotive

Components Holdings, Inc. f/k/a/ VFH Holdings, Inc.;

 

     WHEREAS, Visteon is engaged in the business of manufacturing and assembling

automotive parts and providing related services at its Rawsonville plant

("RAWSONVILLE PLANT"), Sterling I and II plants and Sterling Test Labs

(collectively "STERLING PLANTS") (each of Rawsonville Plant and Sterling Plants

a "PLANT" and collectively the "PLANTS"), located in Southeast Michigan (the

"BUSINESS");

 

     WHEREAS, pursuant to the Contribution Agreement between Visteon Corporation

and Automotive Components Holdings, Inc. f/k/a/ VFH Holdings, Inc. dated as of

September 12, 2005 (the "CONTRIBUTION AGREEMENT"), Visteon agreed to contribute

the Plants to ACH;

 

     WHEREAS, pursuant to the terms of a Memorandum of Agreement dated as of May

24, 2005 by and between the International Union, United Automobile Aerospace and

Agricultural Implement Workers of America, UAW and its affiliated locals

(collectively, "UAW" or the "UNION"), Ford and Visteon (the "MOA"), the parties

thereto agreed that the Plants would be transferred to Ford provided that a

local competitive operating agreement ("COA") for each Plant is approved by the

UAW prior to the closing date of the restructuring actions. If COA's are not

approved by such closing date, the Plants will remain ACH owned plants. If a COA

is approved at the Sterling Plants but not the Rawsonville Plant, or vice versa,

then only the Plant that approved the COA would be transferred to Ford;

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     WHEREAS, Visteon employs certain salaried employees who are either employed

at the Plants or otherwise principally support the Business ("VISTEON SALARIED

EMPLOYEES"); and

 

     WHEREAS, Ford desires to obtain the services of the Visteon Salaried

Employees to enable it to continue to conduct the Business and Visteon is

willing to provide the services of certain Visteon Salaried Employees to Ford.

 

     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 of (i) the agreement of the Parties to terminate this

Agreement or (ii) December 31, 2005 ("TERM").

 

                                    ARTICLE 2

                    ASSIGNMENT OF VISTEON SALARIED EMPLOYEES

 

     Section 2.01. Employee Census. (a) A preliminary employee census is

attached as Schedule 2.01 ("PRELIMINARY CENSUS"). The Preliminary Census sets

forth a list of the Visteon Salaried Employees to be leased to Ford as of the

Effective Date, together with their base salary, any other targeted or mandatory

cash compensation, and including without limitation, applicable bonus level, job

classification, and Global Identification Number. Within ten days of the date

hereof, Visteon shall update the Preliminary Census with any applicable changes

and deliver the Preliminary Census to Ford. Ford shall have an additional ten

days to approve the revised Preliminary Census. After the revised Preliminary

Census is approved by Ford, 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". Visteon shall update the Employee

Census at least monthly for any employee transaction (i.e., quits, deaths,

transfers, etc.) in accordance with this Agreement and any employees added shall

also be known as Leased Employees.

 

     (b) The period during which Leased Employees are leased to Ford is referred

to as the "LEASE PERIOD". During the Lease Period, Visteon shall make available

to Ford the services of the Leased Employees as requested by Ford. For avoidance

of doubt, no Inactive Visteon Salaried Employee (as hereafter defined)

 

 

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shall be leased to Ford as of the Effective Date. An Inactive Visteon Salaried

Employee shall be any Visteon Salaried Employee who is absent from work and who

is entitled to reinstatement on return to employment, including those on leave

of absence, workers' compensation leave or short- or long-term disability leave,

but excluding those who are on paid absence for jury duty, bereavement,

short-term military service, vacation or holiday. If a Leased Employee becomes

an Inactive Visteon Salaried Employee and is removed from Visteon's active

payroll at anytime during the Lease Period, such Leased Employee shall be

removed from the Employee Census and Ford shall bear no further financial

responsibility with respect to such employee.

 

     Section 2.02. Replacement of Attrition. (a) If Ford requires a replacement

for a Leased Employee who is no longer providing services to Ford, and Ford

determines that Visteon should provide the replacement employee, Ford will

inform Visteon of its requirements together with direction that the vacancy

should be filled by a Visteon new hire, an existing Visteon employee or an

agency employee, in its sole discretion, subject to Section 2.02(d) below. If

Ford directs that the position be filled by a Visteon new hire, Visteon shall

use commercially reasonable efforts to fill the position using Visteon's

standard employment practice, policies and procedures. If Visteon has an

existing Visteon employee who Visteon believes is qualified for the position,

Ford shall consider such qualified employee. Candidates for the position shall

be reviewed with the manager who initiated the employment request to determine

if the candidate is qualified for the position and the employment decision shall

be made in accordance with Visteon's applicable employment policies. If Visteon

hires the candidate and assigns such candidate to Ford, or if an existing

Visteon employee is approved by Ford for lease, Visteon shall modify the

Employee Census to add any such employee to the Employee Census in which case

the employee shall become a Leased Employee.

 

     (b) If Ford determines that Visteon shall provide an agency employee to

fill a position, Visteon shall supply such agency employee to Ford at cost

without markup until the expiration of the Term.

 

     (c) Ford may contract directly with employment agencies or technical

service firms to supply required personnel, in its sole discretion. If Ford

contracts directly with such agencies or firms, it will furnish Visteon a census

similar in content and frequency to the Employee Census furnished to Ford by

Visteon pursuant to Section 1.01. This provision shall not be subject to the

Agency Threshold described below.

 

     (d) Ford shall instruct Visteon to replace a Leased Employee with a Leased

Employee and an agency employee with an agency employee; provided, however, that

Ford may, in its sole discretion, instruct Visteon to replace an agency employee

with a Leased Employee if the percentage of agency employees

 

 

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assigned to the Business is not less than 5.7% of the number of Leased Employees

assigned to the Business as of the month end immediately prior to the date of

such replacement instruction (the "AGENCY THRESHOLD"). If the percentage of

agency employees is below the Agency Threshold, the Parties shall mutually agree

on whether a replacement shall be a Leased Employee or an agency employee.

 

     Section 2.03. Removal of Leased Employee From Lease Without Cause. If Ford

desires to discontinue the lease of any individual Leased Employee or group of

Leased Employees under circumstances that would make the Leased Employee

eligible for benefits under the Visteon Separation Plan ("VSP") and not for

reasons related to "performance issues" or "cause" as described in Section 3.02,

Ford shall use commercially reasonable efforts to give Visteon at least ten

business days notice prior to the end of the calendar month. Upon receipt of

notice, Visteon shall attempt to place the Leased Employee in a comparable

position at Visteon. The Leased Employee will remain under lease until the

earlier of (i) the date such employee is placed at Visteon or (ii) thirty (30)

days following the date of the notice of termination to the employee, provided

the termination shall occur no later than the end of the month following the

month during which the notice of lease discontinuance occurs. Ford shall remain

responsible for the lease fees for such time period. At Ford discretion, it may

retain the services of the Leased Employee at Ford for such time period or may

dismiss such Leased Employee. In any event, the Leased Employee shall not return

to Visteon unless to report to work at a comparable Visteon position.

 

     Section 2.04. Terminations. (a) If a Leased Employee's services are no

longer required pursuant to Section 2.03 above, and Visteon terminates such

employee because no comparable job is available at Visteon, Visteon shall

terminate the Leased Employee under the terms of the VSP as applicable to Leased

Employees and as in effect as of the date hereof. A Leased Employee who declines

a comparable job at Visteon shall not be eligible for benefits under the VSP.

Visteon and Ford shall mutually agree on the definition of "comparable job".

During the Lease Period, Visteon shall make no change in the terms of the VSP

that reduces the schedule of separation benefits, duration of welfare benefit

continuation or continuation of outplacement assistance as applicable to Leased

Employees as of the date hereof. Any waiver and release obtained from a Leased

Employee in connection with the VSP shall include as released parties Ford and

its affiliates, as well as present and former officers, directors, employees and

agents of each of them. Visteon shall not terminate a Leased Employee under the

terms of the VSP if such Leased Employee is being terminated "for cause" or for

failure to achieve acceptable performance under the Visteon Performance

Improvement Program ("PIP"), as described in Section 3.02 (b). Visteon shall be

reimbursed for costs under the VSP only to the extent provided in the

Reimbursement Agreement dated as of even date herewith between Ford and Visteon

and the Escrow Agreement dated as of even date herewith among Ford,

 

 

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Visteon and Deutsche Bank Trust Company Americas. No reimbursement for VSP costs

shall be allowable under Article 4 hereof.

 

     (b) Visteon shall be responsible for complying with any applicable Worker

Adjustment and Retraining Notification ("WARN") Act and any other legal

requirements in connection with a termination of a Leased Employee, provided

that Visteon receives notice from Ford sufficiently in advance to permit such

compliance, including notification requirements. If Visteon does not receive

sufficient notice from Ford, Ford shall be responsible for all costs of

compliance with WARN or any similar law, including cost of any period of

continued employment or pay in lieu of notice.

 

     Section 2.05. Baseline. Leased Employees at the Plants shall be included in

the provisions of Section 2.07 of the Visteon Salaried Employee Lease Agreement

dated as of October 1, 2005 between Visteon and ACH ("SALARIED EMPLOYEE LEASE

AGREEMENT") and not treated as a separate group for purposes of establishing a

baseline.

 

                                     ARTICLE 3

                                EMPLOYER MATTERS

 

     Section 3.01. Employer Definition. Visteon shall be the employer of the

Leased Employees and Ford shall not be considered the employer. Visteon will

instruct Leased Employees while at Ford facilities (i) to conform to Ford

policies and applicable law regarding safety and health, and personal and

professional conduct (including wearing 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 Ford 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

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, including but not limited

to:

 

(i)   the payment of Leased Employees' base salary or other components of pay

      (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 employee benefits applicable to Leased Employees;

 

(iii) the payment of all federal, state, or local taxes withheld or otherwise

     required to be paid with respect thereto; and

 

 

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

 

     Section 3.02. Employer Rights. (a) Visteon shall retain all employer

rights, except as specifically provided below, including the right to terminate

Leased Employees, after notice to Ford. Visteon shall have the right to change

the salary and job classification of the Leased Employees upon reasonable notice

to Ford. Although Visteon shall remain responsible for performance management

and personnel development, Ford and its management shall have the right to

assign work to, and structure work for, Leased Employees. Leased Employees shall

administer Visteon's human resources management policies and practices, such as

performance reviews, compensation planning, discipline, and personnel

development policies, and other Visteon policies, procedures, rules and

regulations applicable to the Leased Employees, and Ford shall permit the Leased

Employees to conduct such activities. Visteon may request Ford to provide

information or documents with respect to the Leased Employees' job performance

and other matters, and Ford shall cooperate with Visteon in providing such

information or documents.

 

     (b) In the event that Ford has a concern regarding a Leased Employee during

the Lease Period, including but not limited to a concern regarding a Leased

Employee's performance or conduct, Ford shall provide written notice of its

concern to Visteon and such notice shall identify specifically the nature of

Ford's concern. Upon receipt of such notice, Visteon shall implement a PIP in

accordance with its policies. If the identified concern is not cured to the

satisfaction of Ford by the end of the PIP, Ford shall have the right to notify

Visteon in writing that the Leased Employee is to be returned to Visteon and

removed from the Employee Census effective at the end of the month immediately

following the end of the PIP. If a Leased Employee commits an offense which

would justify a "for cause" termination under Visteon's personnel policies, as

determined by Visteon, such employee shall be immediately escorted from their

worksite and removed from the Employee Census. Ford's obligation to reimburse

Visteon for any such employee removed from the Employee Census shall terminate

as of the last day the employee worked for Ford.

 

     Section 3.03. Management of Hourly Employees. The Leased Employees who are

engaged in hourly supervision have the authority to exercise day to day

supervision over the Ford hourly employees in accordance with the terms of the

Ford-UAW CBA. In the event that any employment concern arises in connection with

the administration of the Ford-UAW CBA, the Leased Employee shall consult with

Ford and shall resolve the concern consistent with Ford's application of the

Ford-UAW CBA to their general hourly populations.

 

     Section 3.04. Employer Representations. Visteon represents and warrants

that as of the date a Visteon Salaried Employee becomes a Leased Employee, (i)

the Leased Employee shall be paid by Visteon on a salaried basis; (ii) shall not

be

 

 

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subject to any collective bargaining agreement or have elected to be represented

by a collective bargaining representative unless otherwise disclosed in Section

3.07(a)(5) of the Contribution Agreement dated as of September12, 2005 between

Visteon and Automotive Components Holdings, Inc. f/k/a/ VFH Holdings, Inc.; and

(iii) shall be subject to Visteon's annual compensation planning process as set

forth in Visteon's policies and procedures.

 

     Section 3.05. Ford Confidentiality Agreement. A Leased Employee shall be

required to execute the Ford Leased Employee Confidentiality Agreement attached

hereto as Schedule 3.05 ("CONFIDENTIALITY AGREEMENT"). Ford shall not require a

Leased Employee to divulge Visteon's confidential information to Ford except to

the extent that any confidential information was otherwise acquired by Ford in

connection with the transactions. Visteon will use commercially reasonable

efforts to require Leased Employees to comply with the terms of the

Confidentiality Agreement. Visteon shall not use confidential information of

Ford that is provided by a Leased Employee in breach of the Confidentiality

Agreement.

 

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