VISTEON SALARIED EMPLOYEE TRANSITION AGREEMENT

 

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                                                                   Exhibit 10.10

 

                 VISTEON SALARIED EMPLOYEE TRANSITION AGREEMENT

 

     This Agreement relating to certain employment matters and employee benefit

plans (this "AGREEMENT" ) dated effective as of October 1, 2005 (the "EFFECTIVE

DATE") is made and entered into by and 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 in, among other matters, 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 American 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;

 

     WHEREAS, Visteon employs certain salaried employees who are either employed

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

EMPLOYEES"); and

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     WHEREAS, in the event any of the Plants are transferred from ACH to Ford,

the Parties desire that the Visteon Salaried Employees associated with the

Plants be transferred to Ford effective on the Employment Date (as hereafter

defined).

 

     NOW, THEREFORE, in consideration of the premises and mutual promises herein

made, and for other good and valuable consideration, the receipt and sufficiency

of which are hereby acknowledged, the Parties agree as follows:

 

                                    ARTICLE 1

                                   DEFINITIONS

 

     Section 1.01. Definitions. Unless otherwise defined herein, the capitalized

terms used herein shall have the following meanings:

 

     "EMPLOYEE ROSTER" shall mean for each of the Plants a list of the Visteon

Employees as of May 24, 2005 who either (i) are engaged in the Business and are

assigned to the Plants; or (ii) principally support the Business as of May 24,

2005, together with such other information as Ford may reasonably require, as

set forth in Exhibit 1.01 attached hereto.

 

     "TRANSFERRED EMPLOYEES" shall mean:

 

     (i) Active Visteon Employees who are transferred pursuant to the terms

hereof and who either (A) are engaged in the Business and who are actively at

work at the Plants the day immediately prior to the Transition Date including

those on contractual paid time off (i.e., jury duty, bereavement, short term

military service, vacation and holiday); or (B) principally support the

Business, regardless of location, as verified by Ford prior to the Transition

Date;

 

     (ii) Inactive Visteon Employees who make an Effective Return to Work (as

hereafter defined) after the Transition Date. For this purpose, "EFFECTIVE

RETURN TO WORK" shall mean the period of time (i.e., one month) that an employee

must be back to work at Visteon before being eligible to file a new claim for

any condition as determined under the Visteon Salaried Disability Plan; and

 

     (iii) Former Active Visteon Employees who as of the Transition Date are

Visteon employees and are assigned by Visteon to work in parts of Visteon's

business other than the Business, on the date of such return, subject to Ford

approval.

 

     "TRANSITION DATE" shall mean January 1, 2006.

 

     "VISTEON EMPLOYEES" shall mean:

 

     (i) U.S. persons who are enrolled on the Visteon salaried payroll who are

full-time employees, and who either are (A) engaged in the Business and

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actively at work at the Plants on the day immediately prior to the Transition

Date, including those on contractual paid time off with reinstatement rights

(i.e., paid absence for jury duty, bereavement, short term military service,

vacation or holiday), and those on reduced or alternate work schedules ("ACTIVE

VISTEON EMPLOYEES"); or (B) who are principally engaged in the support of the

Business;

 

     (ii) U.S. persons who are enrolled on the Visteon salaried payroll who are

full-time employees who are not at work at the Plants the day immediately prior

to the Transition Date and who are entitled to reinstatement on return to

employment, including those on leave of absence, layoff status, workers'

compensation leave, short term disability 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,

voluntary or involuntary separation; and

 

     (iii) U.S. persons who are enrolled on the Visteon salaried payroll who are

full-time employees who work for businesses of Visteon other than the Business

but who were former Active Visteon Employees with a right to return home to the

Plants at the conclusion of the present assignment to the other businesses

("FORMER ACTIVE VISTEON EMPLOYEES").

 

                                    ARTICLE 2

                            EMPLOYMENT RESPONSIBILITY

 

     Section 2.01. Employee Census. A preliminary employee census is attached as

Schedule 2.01 ("PRELIMINARY EMPLOYEE CENSUS"). The Preliminary Employee Census

sets forth:

 

          (i) a list of all Active Visteon Employees by Plant, name and global

     identification number;

 

          (ii) a list of all Inactive Visteon Employees by Plant, name and

     global identification number;

 

          (iii) a list of all Former Active Visteon Employees by Plant, name and

     global identification number;

 

          (iv) the job classification of each Active, Inactive or Former Active

     Visteon Employee;

 

          (v) the Visteon Service Date of each Active, Inactive or Former Active

     Visteon Employee;

 

          (vi) the monthly base salary applicable to each Active, Inactive or

     Former Active Visteon Employee;

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          (vii) the reason for any absence of any Visteon Inactive Employee and

     the date any leave expires; and

 

          (viii) the assignment of any Former Active Visteon Employee and the

     date such employee is expected to return from the non-Business assignment.

 

     Within ten (10) days of the date hereof, Ford shall compare the Preliminary

Employee Census with the Employee Roster and to the extent of any discrepancies,

Visteon shall explain to Ford the basis for such discrepancies. Ford shall have

the unilateral right to reject any Visteon Employee listed on the Preliminary

Employee Census if such employee was not listed on the Employee Roster and the

discrepancy, in the sole judgment of Ford, is not reasonably explained. Visteon

shall revise the Preliminary Employee Census accordingly as of the Transition

Date to reflect any applicable changes after consultation with Ford. The revised

Employee Census shall be delivered to Ford within ten (10) days of the

Transition Date. Ford shall have an additional ten days (10) to approve the

revised Employee Census. After the revised Employee Census is approved by Ford,

it shall be the Final Employee Census. Visteon shall provide Ford, in a manner

mutually agreed upon, with the social security numbers for each Active and

Inactive Visteon Employee included in the Final Employee Census and both parties

shall use their commercially reasonable best efforts to keep such social

security numbers confidential.

 

     Section 2.02. Employment Transfer. Visteon shall transfer the employment of

the Active Visteon Employees effective as of the Transition Date and such

employees shall become Transferred Employees effective on the Transition Date.

If an Inactive Visteon Employee makes an Effective Return to Work, Visteon shall

transfer the employment of such employee to Ford effective on the date the

Inactive Visteon Employee makes the Effective Return to Work ("REINSTATEMENT

DATE"), and such employee shall become a Transferred Employee on the

Reinstatement Date. For the period commencing with the Inactive Visteon

Employee's return to work and the Effective Return to Work, the Inactive Visteon

Employee will remain on Visteon's salaried employment rolls and shall be leased

to Ford under the terms of the Visteon Salaried Employee Lease Agreement

(Rawsonville/Sterling) described in Section 2.07 hereof. Within thirty (30) days

prior to the date a Former Active Visteon Employee is scheduled to return to a

Plant from a non-Business assignment, Visteon and Ford shall meet to discuss the

circumstances with respect to such employee and Ford, at its option, may

authorize the transfer of the Former Active Visteon Employee to Ford effective

as of the date such employee is scheduled to return (the "RETURN DATE"). Such an

employee shall become a Transferred Employee on the Return Date. If Ford elects

not to authorize the transfer of the Former Active Visteon Employee, Visteon

shall be responsible for such employee in all respects. The Transition Date, the

Reinstatement Date, or the Return Date, as applicable, shall be known hereafter

as the "EMPLOYMENT DATE."

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     Section 2.03. Service Date. The service date of the Transferred Employees

shall be the Employment Date, except as otherwise provided for in this

Agreement. For purposes of fulfilling a Ford requirement of time on position for

transfers or promotions, Ford shall credit the time at Visteon or at Ford prior

to July 1, 2000, towards any such time requirements.

 

     Section 2.04. 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 Employment 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. Visteon shall cooperate in any

requests by Ford to scan such records into Ford's central data base.

 

     (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

is the equivalent of a Ford post-offer preplacement screen. Ford shall not

require a post-offer pre-placement screen for a Transferred Employee. After the

Employment Date, all medical records with respect to the Transferred Employees

will either remain at the applicable Plant Medical Office or if maintained at a

different Visteon location, shall be transferred to the applicable Plant Medical

Office, and in either case shall be owned by Ford.

 

     Section 2.05. Vacation. Transferred Employees shall be grandfathered into

their Visteon vacation eligibility and Ford shall recognize such vacation

eligibility for purposes of the Ford vacation schedule. Visteon service shall be

counted towards any service related schedule for Ford vacation eligibility.

 

     Section 2.06. Salary. A Transferred Employee will be assigned to the

appropriate Ford salary grade or leadership level, as determined by Ford.

Individual base salaries will not be reduced.

 

     Section 2.07. Salaried Lease Arrangements. Between the Effective Date and

the Transition Date, Visteon agrees to lease to Ford the Active Visteon Salaried

Employees pursuant to the terms of the Visteon Salaried Employee Lease Agreement

(Rawsonville/Sterling) dated as of even date herewith between Ford and Visteon

("LEASE AGREEMENT"). In the event an Inactive Visteon Employee makes an

Effective Return to Work prior to the Transition Date, Visteon shall lease such

employee to Ford pursuant to the Lease Agreement until the Transition Date.

After the Transition Date, Visteon shall lease to Ford pursuant to the Lease

Agreement those Inactive Visteon Employees who have returned to work but not

made an Effective Return to Work for the period prior to their transfer to Ford.

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                                    ARTICLE 3

                              EMPLOYEE BENEFIT PLANS

 

     Section 3.01. Primary Pension Plans.

 

     (a) Ford Retirement Plan. The Ford Retirement Plan ("FRP") shall provide

retirement benefits on or after the Employment Date for all Transferred

Employees. Vesting and eligibility for benefits under the FRP shall be

determined by using the Transferred Employee's Visteon service date; provided,

however, that the Ford original hire date will be used for those employees who

had service prior to July 1, 2000.

 

     (b) Transferred Employees with Grow-In Rights Under the Ford General

Retirement Plan. Pursuant to the Amended and Restated Employee Transition

Agreement between Ford and Visteon dated as of April 1, 2000 and restated as of

December 19, 2003, and as amended by Amendment Number One to Amended and

Restated Employee Transition Agreement dated effective as of December 19, 2003,

and as further amended by Amendment Number Two to Amended and Restated Employee

Transition Agreement dated as of even date herewith ("EMPLOYEE TRANSITION

AGREEMENT"), certain Ford employees who were transferred to Visteon from Ford

who as of July 1, 2000 had a combination of age and credited service under the

Ford General Retirement Plan ("GRP") that equals or exceeds sixty points and

could have become eligible for normal or regular early retirement under the GRP

within the period after July 1, 2000 equal to the employee's credited service

under the GRP as of July 1, 2000 ("GROUP II EMPLOYEE"), were given rights to

grow into a GRP normal or regular early retirement benefit, special early

retirement benefit or disability benefit, but only to the extent provided under

the Employee Transition Agreement. The GRP benefit for grow-in eligible

Transferred Employees will be administered as follows:

 

          (i) Years of credited service under the GRP prior to July 1, 2000

     shall be used to determine the amount of the GRP benefit. The benefit rates

     shall be those in effect at the time of retirement.

 

          (ii) The sum of the years of credited service under the GRP prior to

     July 1, 2000, plus years of service at Visteon (or any predecessor

     company), plus years of service under the FRP after the Transition Date,

     shall be used solely for the purposes of fulfilling the minimum years of

     credited service required as a condition of eligibility for GRP benefits,

     but not for the purposes of calculating the benefit amount.

 

          (iii) Solely for purposes of determining the contributory benefit

     under the GRP, Final Average Monthly Salary under the GRP shall mean the

     highest average monthly salary paid to a Transferred Employee by Ford or

     Visteon as of the five consecutive December 31 dates that occur during the

     120 consecutive months ending with the last month employed by Ford.

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          (iv) To the extent GRP benefits are related to completion of a

     specified period of credited service (e.g. Early Retirement Supplement),

     and the Transferred Employee meets the eligibility conditions, the amount

     of the benefit payable under the GRP shall be determined as follows: The

     Early Retirement Supplement in effect at retirement shall be multiplied by

     a fraction, the numerator of which shall be the years of credited service

     under the GRP (not to exceed thirty years) and the denominator of which

     shall be thirty years. For example, a Transferred Employee with ten years

     of GRP credited service prior to July 1, 2000 and 25 years of service with

     Visteon and Ford after July 1, 2000 for total combined service of 35 years

     shall be eligible for 10/30 of a GRP Early Retirement Supplement payable to

     age 62 and one month.

 

          (v) If a Transferred Employee does not have thirty years of

     eligibility service to qualify for an Early Retirement Supplement but

     otherwise achieves retirement eligibility, the amount of the GRP Temporary

     or Interim Supplement shall be determined by multiplying the rate in effect

     at retirement for the Temporary or Interim Supplement by the years of

     credited service under the GRP payable to age 62 and one month.

 

     (c) Transferred Employees with Retirement Eligibility Under the GRP.

Pursuant to the Employee Transition Agreement, certain Ford employees who were

transferred to Visteon were eligible to retire under the normal retirement,

regular early retirement, special early retirement or disability benefit

provisions of the GRP and had not commenced benefits as of the Employment Date.

The GRP benefits for such retirement eligible Transferred Employees will be

administered as follows:

 

          (i) Years of credited service under the GRP prior to July 1, 2000

     shall be used to determine the amount of the GRP benefit. The benefit rates

     shall be those in effect at the time of retirement.

 

          (ii) The sum of the years of credited service under the GRP prior to

     July 1, 2000, plus years of service at Visteon (or any predecessor

     company), plus years of service under the FRP after the Transition Date,

     shall be used solely for the purposes of fulfilling the minimum years of

     credited service required as a condition of eligibility for GRP benefits,

     but not for the purposes of calculating the benefit amount.

 

          (iii) Solely for purposes of determining the contributory benefit

     under the GRP, Final Average Monthly Salary un