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Exhibit 10.2
CORPORATE SERVICES AGREEMENT
BETWEEN
UCAR CARBON COMPANY INC.
AND
UCAR GRAPH-TECH INC.
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TABLE OF CONTENTS
PAGE
ARTICLE 1 - GENERAL DESCRIPTION OF SERVICES; AFFILIATES 3
ARTICLE 2 - SERVICES TO BE PROVIDED 5
ARTICLE 3 - PERIOD OF SERVICES: TERM 5
ARTICLE 4 - COMPENSATION; PAYMENT 6
ARTICLE 5 - REPRESENTATIONS 7
ARTICLE 6 - INDEPENDENT CONTRACTOR 7
ARTICLE 7 - TAXES 7
ARTICLE 8 - CLAIMS 9
ARTICLE 9 - INDEMNITY 9
ARTICLE 10 - FORCE XXXXXX 10
ARTICLE 11 - CONFIDENTIALITY 11
ARTICLE 12 - NOTICES 12
ARTICLE 13 - MISCELLANEOUS 13
SCHEDULE 1
Schedule 1.1
Schedule 1.2
SCHEDULE 2
SCHEDULE 3
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CORPORATE SERVICES AGREEMENT
SERVICES AGREEMENT made as of this 1st day of January, 2000 between
UCAR Carbon Company Inc., a Delaware corporation ("UCAR"), and UCAR Graph-Tech
Inc., a Delaware corporation ("Graph-Tech").
WITNESSETH:
WHEREAS, on January 1, 2000 (the "Closing Date"), UCAR transferred the
assets and liabilities of its natural, acid-treated and flexible graphite
businesses to Graph-Tech (the "Transfer") pursuant to a Transfer Agreement
between UCAR and Graph-Tech (the "Transfer Agreement"); and
WHEREAS, it is the intention of the parties that certain services
performed prior to the Transfer by UCAR for Graph-Tech shall continue to be
provided after the Transfer; and
WHEREAS, subject to the terms and conditions set forth herein, each
party to this Agreement desires to have the other party render or cause to be
rendered the services more specifically described hereinafter;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties agree as follows:
ARTICLE 1 - GENERAL DESCRIPTION OF SERVICES; AFFILIATES
1.01 As used herein, the terms "Services" shall mean the services
described in Schedules 1 and 2 attached hereto and listed below which
will be supplied by UCAR or its subsidiaries or affiliates to
Graph-Tech and its domestic subsidiaries and the services described in
Schedule 3 attached hereto which will be supplied by Graph-Tech or its
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subsidiaries to UCAR and its domestic subsidiaries and affiliates.
References herein to subsidiaries of UCAR shall not include Graph-Tech
or its subsidiaries and references herein to affiliates of Graph-Tech
shall not include UCAR International Inc. or its subsidiaries (other
than Graph-Tech and its subsidiaries).
1.02 The purpose of this Agreement is to enable both parties
to continue to operate in the same manner as before the Closing Date.
In general, the type, quality (which includes timeliness, care and
skill) and level of utilization of the Services after the Closing Date
shall be the same as the type, quality and level of utilization of the
comparable services prior to the Closing Date except (i) as otherwise
set forth herein or as reasonably requested by either party and (ii)
that, in no event, shall the quality of the Services supplied hereunder
be less than the quality of comparable services being concurrently
consumed by the supplier. Notwithstanding the foregoing, the parties
recognize that in some cases the policies, practices, procedures and
methods followed in connection with providing such comparable services
prior to the Closing Date will have to be modified in order to provide
the Services after the Closing Date and, subject to Section 1.06, agree
to modify the same on a reasonable and cooperative basis to achieve the
purpose described above.
1.03 The parties recognize that the Services may include
services which, by their nature, are required to be provided by or to
affiliates or subsidiaries of the parties. The parties also recognize
that such affiliates or subsidiaries may enter into other service
agreements with respect to the provision of such Services ("Affiliate
Agreements"). The parties shall (i) to the extent required in order to
provide such Services, cause their affiliates and subsidiaries to
provide such Services as if such affiliates and subsidiaries were the
parties themselves, and (ii) provide or cause their affiliates or
subsidiaries to
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provide such Services to each other's subsidiaries and affiliates, and
each party shall cause its subsidiaries and affiliates to pay for such
Services as if such subsidiaries and affiliates were the parties
themselves. In connection with the provision of such Services, each
party's affiliates and subsidiaries shall be entitled to the benefits
of (i) the limitations on liability set forth herein and (ii) the
limitations on the obligation to provide Services set forth herein as
if such subsidiaries and affiliates were the parties themselves. To the
extent that such subsidiaries and affiliates enter into Affiliate
Agreements with respect to such Services, such Affiliate Agreements
shall supersede this Agreement in respect of such Services.
1.04 Each party shall, in a timely manner, take and cause its
subsidiaries and affiliates to take all such actions as may be
reasonably necessary or desirable in order to enable or assist the
other party and its subsidiaries and affiliates to provide the Services
required to be provided by them, including actions such as providing
necessary information and specific written authorizations and consents.
The party required to provide such Services shall be relieved of its
obligations to do so hereunder to the extent that the other party's
failure to take or cause to be taken any such action renders provision
of such Services unlawful or impracticable.
1.05 No party shall be required to, or to cause its
subsidiaries or affiliates to expand facilities, incur capital expenses
or employ additional personnel in order to provide Services.
1.06 In general, the Services will be provided by each of the
parties and their subsidiaries and affiliates in accordance with their
respective practices, methods, policies and procedures which may be
changed from time to time and at any time so long as such
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changes are not intended to unfairly discriminate against the other
party or its subsidiaries or affiliates. When such changes are made,
the Services affected thereby, as changed, shall immediately be subject
to the provisions of this Agreement and be deemed to be "Services" for
all purposes hereunder, whether or not such changes are evidenced by an
amendment to this Agreement or the Schedules.
ARTICLE 2 - SERVICES TO BE PROVIDED
2.01 Except as otherwise agreed and subject to the terms and
conditions of this Agreement, each party shall provide or cause to be
provided the Services to the other party and its subsidiaries and
affiliates throughout the term of this Agreement.
2.02 The parties may, at any time during the term of this
Agreement, mutually agree to amend the Schedules so as to delete,
include or modify Services.
ARTICLE 3 - PERIOD OF SERVICES: TERM
3.01 The term of this Agreement shall commence on the date
hereof and shall continue through June 30, 2000. This Agreement may be
renewed on an annual basis thereafter pursuant to the following
procedure. Each party receiving Services hereunder ("Receiving Party")
shall submit a written notice to the party performing the Services
("Performing Party") not later than 90 days before the end of the then
current term. The notice shall include a list of the Services it wishes
to continue to receive for the upcoming year. Within 30 days of receipt
of the notice, the Performing Party shall respond with a written list
of the fees associated with the provision of those Services as
calculated pursuant to Section 4.02. The Receiving Party shall have 15
days from the receipt of the fee list to reject any Service for which
it believes the fee to be unreasonable. A Performing Party may
discontinue the provision of any or all Services (i) which are rejected
by the Receiving Party by providing the Receiving Party with 30 days'
advance
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written notice of its intention to do so (which may be given at anytime
after such rejection) or (ii) at any time after June 30, 2000 by
providing the Receiving Party with at least 12 months' advance written
notice of its intention to do so.
3.02 Upon the termination of this Agreement, the parties shall
be released from any and all obligations to perform the Services
hereunder. The parties' respective obligations under Sections 4, 8 and
9 shall survive such termination.
3.03 Notwithstanding the foregoing, if, at any time,
Graph-Tech ceases to be a majority-owned subsidiary of UCAR, Graph-Tech
may discontinue any or all Services without further responsibility for
compensation associated with those Services.
ARTICLE 4 - COMPENSATION; PAYMENT
4.01 Each Receiving Party shall pay or cause to be paid to the
Performing Party or its designee a fee for each Service as set forth in
the applicable Schedule and, to the extent not set forth therein, as
determined in accordance with Section 4.02 (a "Fee").
4.02 The Fee for each Service, with the exception of the Rent
established in Schedule 2, shall be determined in accordance with
UCAR's standard internal accounting practices and procedures for
determining and allocating the cost of such Services prevailing as of
the date hereof. Graph-Tech has determined that, as of the date hereof,
it will use the same practices and procedures. Notwithstanding the
foregoing, if such practices and procedures are changed by either party
after the date hereof, such changed practices shall be used to
determine such Fee only with the prior written consent of the other
party, which consent shall not be unreasonably withheld. Cost is
generally defined as departmental expense (wages and related overhead
directly associated with the department, fringe benefits, rent,
telephone expense, supplies and travel expense which is charged to a
departmental unit, etc.).
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4.03 The Receiving Party shall reimburse the Performing Party
for all actual costs incurred related to the Services. The Performing
Party shall provide with each quarterly invoice an itemization of
reimbursable expenses along with supporting documentation. Reimbursable
expenses shall include those expenses that would not normally be
covered with the applicable Fee and which are solely related to the
provision of the related Services, as further defined in each of the
Schedules.
4.04 The Performing Party shall send invoices for the Fee for
the Services rendered on such intervals as may be determined by the
parties, but not less frequently than quarterly. Payment of each
invoice shall be due net thirty (30) days from the date of such
invoice.
4.05 If, within thirty (30) days following receipt of any
invoice, the Receiving Party notifies the Performing Party in writing
that it questions all or any part of the Fee reflected in such invoice,
(i) the Receiving Party may withhold payment of the amount in question
and (ii) the Performing Party shall provide to the Receiving Party
within thirty (30) days after receipt of such notice a certificate,
signed by the appropriate financial officer or department head of
Performing Party, answering the question in reasonable detail
sufficient to permit the Receiving Party to verify the accuracy of such
Fee together with documentary evidence of the basis for the calculation
of such Fee. Pending receipt of any such certificate and documentary
evidence, the Receiving Party shall pay or cause to be paid the
unquestioned amount of such Fee to the Performing Party or its designee
when due. Within ten (10) days after receipt of such certificate and
documentary evidence, the Receiving Party shall (i) pay or cause to be
paid the balance of such Fee to the Performing Party or its designee or
(ii) give written notice to the Performing Party that the Receiving
Party continues to so question the Fee. Promptly after receipt of such
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notice, the parties shall negotiate in good faith a resolution of such
question. If the parties cannot resolve such question in a mutually
satisfactory manner within thirty (30) days after such notice shall
have been given, the question shall promptly be submitted to the
independent public accountants retained by the parties, whose decision
shall be final and binding on both parties. Such firm will review the
books and records of the parties (and their respective subsidiaries and
affiliates, as the case may require) and make such other investigation
as it shall deem necessary to resolve such question. The costs of
retaining such firm shall be borne by the party against whom the
accountants find.
ARTICLE 5 - REPRESENTATIONS AND RIGHT TO AUDIT
5.01 THERE ARE NO REPRESENTATIONS OR WARRANTIES BY EITHER
PARTY WITH RESPECT TO THE SERVICES EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT. NO REPRESENTATION OR WARRANTY SHALL BE IMPLIED UNDER
THIS AGREEMENT OR AT LAW, INCLUDING, WITHOUT LIMITATION, WARRANTY OF
MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR
WARRANTY OR REPRESENTATION OF NON-INFRINGEMENT OF THE RIGHTS OF OTHERS.
5.02 Notwithstanding the above, the Receiving Party shall have
the right to audit the books and records of the Performing Party during
normal hours and upon reasonable notice. The audit will be limited to
such books, records and other documents which relate to the provision
of the Services and payments received and actual costs incurred in
performance of the Services.
ARTICLE 6 - INDEPENDENT CONTRACTOR
Each party and its subsidiaries and affiliates shall be deemed
to be independent contractors, and not agents, partners or joint
venturers, in connection with the provision of Services.
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ARTICLE 7 - TAXES
In addition to any other amounts payable hereunder, the party
who, or whose subsidiary or affiliate, receives Services shall promptly
reimburse or cause to be reimbursed the provider of the Services for
any taxes, excises, imposts, duties, levies, withholdings or other
similar charges (except any taxes, excises, imposts, duties, levies,
withholdings or charges based on net income) that such provider may be
required to pay on account of the provision of such Services, provided,
however, that the provider shall not be entitled to receive any such
payment in respect thereof to the extent they have been included in the
calculation of the Fee. Any amount payable under this provision shall
be computed so as to hold the provider harmless on an after tax basis.
ARTICLE 8 - CLAIMS
Receipt of any Service hereunder shall constitute an unqualified
acceptance of such Service and a waiver of any and all claims with
respect to such Service, unless the provider of such Service receives
written notice of a claim within sixty (60) days after such receipt. In
the case of delayed provision or non-provision of any Service, any and
all claims with respect to such delayed provision or non-provision
shall be waived unless written notice of such claims is received by the
party required to provide such Service within sixty (60) days after the
date on which such Service was first required to be provided. No claim
resulting from the breach of this Agreement, as to any Services
provided or for delayed provision or non-provision of any Service,
whether based on negligence, strict liability in tort, breach of
warranty or any other basis, shall be greater in amount than the Fee
for that portion of the Service in respect of which such claim is made;
provided, however, that such limitation shall not apply to claims based
on gross negligence, fraud or willful misconduct. In no event will a
party or its subsidiaries or affiliates be liable to the other party or
its subsidiaries or
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affiliates for any special, indirect, incidental or consequential
damages or any lost profits, whether or not caused by or resulting from
such negligence, strict liability, breach of warranty or other basis of
claim.
ARTICLE 9 - INDEMNITY
9.01 Nothing contained herein shall affect the obligations of
the parties under Article 3 of the Transfer Agreement.
9.02 Each Receiving Party hereunder shall, without any further
responsibility or liability of or recourse to the Performing Party, its
subsidiaries or affiliates or their respective directors, shareholders,
officers, employees, agents, consultants, representatives, successors,
transferees or assigns, be solely liable and responsible for, and shall
indemnify them for and hold them harmless from and against any and all
claims, liabilities, obligations, losses, deficiencies, damages, and
fees and expenses of counsel, or judgments of any kind or nature
whatsoever (except for civil or criminal penalties or punitive damages)
arising out of the Services provided to it or its subsidiaries or
affiliates hereunder or the failure to provide or delay in providing
Services, regardless of by whom they are asserted and regardless of
whether or not they are known or unknown, fixed or contingent or
asserted or unasserted, but only to the extent that they arise out of
the Services provided or required to be provided after the date of this
Agreement and only to the extent that they do not arise out of fraud,
gross negligence or willful misconduct. For purposes of this Section
9.02, Graph-Tech and its subsidiaries, on the one hand, and UCAR
International Inc. and its subsidiaries (other than Graph-Tech and its
subsidiaries), on the other hand, shall not be deemed to be affiliates
or parent/subsidiary to each other.
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9.03 The procedures set forth in Article 3 of the Transfer
Agreement shall also apply to any claim for indemnification hereunder.
ARTICLE 10 - FORCE XXXXXX
Neither party shall be liable for its failure to perform
hereunder, and the obligation of such party to perform hereunder shall
be suspended, to the extent that its performance is made impracticable,
delayed or prevented, in whole or in part, due to any occurrence beyond
its reasonable control, including without limitation: acts of God;
inclement weather; floods; accidents; strikes; lockouts; fires; wars;
equipment failures; labor disputes; labor shortages; riots;
demonstrations; sabotage; laws, ordinances, rules, regulations,
standards or decrees of governmental or other authorities, whether
valid or invalid (including, without limitation, import or export
prohibitions or priorities, requisitions, allocations and price
adjustment restrictions); inability to obtain or unavoidable delay in
obtaining necessary power, materials, facilities, services or
equipment; interruption or unavoidable delay in communication or
transportation; or any other occurrence which could have a material
adverse impact on the ability of such party to perform hereunder. If
the obligations of a party are suspended pursuant to the preceding
sentence, such party shall give written notice to that effect to the
other party within then (10) days after suspension shall have commenced
together with a statement setting forth reasonably full particulars
concerning the cause of the suspension and shall use all possible
diligence to remedy the cause of the suspension as quickly as possible.
The requirement that the cause of the suspension be remedied with all
possible diligence shall not require the settlement of strikes,
lockouts or other labor difficulties, the incurrence of capital
expenses or employment of additional personnel.
ARTICLE 11 - CONFIDENTIALITY
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Any and all information and data concerning the respective
business and affairs of the parties and their affiliates and
subsidiaries furnished or created in connection with the provision of
the Services shall be subject to Article 9 of the Transfer Agreement.
ARTICLE 12 - NOTICES
All notices permitted or required to be given hereunder shall
be given by personal delivery, telex, telecopy, reputable overnight
carrier, or registered or certified mail, return receipt requested,
postage prepaid, addressed to the receiving party at its address set
forth below:
When UCAR is the receiving party:
UCAR Carbon Company Inc.
0000 Xxxx Xxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: President
With a copy to: General Counsel
When Graph-Tech is the receiving party:
UCAR Graph-Tech Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: President
Any party may change its address for such purpose by giving written
notice to the other party of such change. Any notice so delivered,
telecopied or telexed shall be deemed to have been duly given upon
receipt and any notice so mailed shall be deemed to have been duly
given four (4) business days after so mailed.
ARTICLE 13 - MISCELLANEOUS
13.01 This Agreement shall be binding upon, and inure to the
benefit of, the parties and their respective successors and permitted
assigns. Nothing contained herein shall be deemed to create any third
party beneficiary rights in any person or entity not a party to this
Agreement, other than subsidiaries and affiliates of the parties as
expressly
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provided herein. No assignment or transfer of this Agreement, or of any
rights or obligations hereunder, may be made by either party without
the prior written consent of the other party except in the instances in
which an assignment of the Transfer Agreement would be permitted
without such consent as provided therein. Any attempted assignment
without the required consent shall be void.
13.02 The headings contained in this Agreement are inserted
for convenience of reference only and shall not otherwise affect the
meaning or interpretation or be deemed to be a substantive part of this
Agreement.
13.04 The failure of either party at any time to enforce or
require performance of any provision contained in this Agreement shall
in no way operate as a waiver or affect the right of such party at a
later time to enforce such provision. No waiver by any party of any
breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instance, shall be deemed to
be or construed as a further or continuing waiver of any such breach,
or waiver of any other breach of any other term or covenant contained
in this Agreement.
13.05 If any provision contained in this Agreement shall be
held to be invalid or unenforceable in any jurisdiction for any reason,
such provision shall be reformed to the maximum extent permitted to
preserve the parties' original intent, failing which, it shall be
severed from this Agreement with the balance of this Agreement
continuing in full force and effect. Such occurrence shall not have the
effect of rendering such provision invalid or unenforceable in any
other jurisdiction or in any other case or circumstance or of rendering
invalid or unenforceable any other provision contained in this
Agreement to the extent that such other provision is not itself
actually in conflict with any applicable law.
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13.06 THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN
ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO
ITS CONFLICTS OF LAWS RULES OR PRINCIPLES.
13.07 This Agreement and all the Schedules attached hereto
constitute the entire understanding of the parties concerning the
subject matter hereof and cancels and supersedes all previous
agreements and understandings, oral or written, between the parties
with respect to the subject matter hereof. No modification of this
Agreement or waiver of any terms or rights hereunder will be binding
upon any party unless signed in writing by an authorized representative
of such party.
13.08 All capitalized terms used herein or in the Schedules
attached hereto which are not otherwise defined herein or therein shall
have the meanings assigned to them in the Transfer Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their duly authorized representatives as of the day and
year first above written.
UCAR Carbon Company Inc. UCAR Graph-Tech Inc.
By: /s/ By: /s/
______________________ ____________________
Name: ____________________ By: ____________________
Title: _____________________ Title: ___________________
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SCHEDULE 1
CORPORATE
SERVICES
SERVICES QUARTERLY
BILLING
PAYROLL $ 7,500
(a)General functions
- Review and control payroll changes
- Processing and balancing of changes
- Process monthly payroll calculations
- Distribution
- Paychecks/EFT statements
- PST's
- Labor distribution
- local deductions (united way, garnishments, credit unions, etc.)
- inquiries and special requests
- internal and external bank reconciliation's
- General Ledger reconciliation's
- Payment of HMO premiums
- Program updates for mandated changes
- Control and creation of the following benefit plan data feeds:
- Savings Plan
- Group Life
- Supplemental Life
- Medical
- Health & dependent care reimbursement
- Pension Earnings Data
- Maintain and operate Salary Planning System
- General EEO reports - quarterly and on demand
- Monthly and Annual Workmen's Compensation
- Transfer moving expense - tax gross-ups
- Accrued vacation calculation
- Payroll statistical reporting
- Special pay/income
- Stock options
- SAR
- Annual Awards
- Special Recognition Awards
- Management Incentive Payments
- Various Component awards and gross-ups
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- Education Refunds
- Vacation Advances
- Personal use of auto
- Non-cash awards (fringe and non-fringe)
- New hire moving expenses
- Temporary Employees - Weekly payroll
- Annuity purchase payment data
- Tax reporting
- Monthly Federal/State withholding
- Quarterly unemployment insurance
- Reconciliation of tax ledgers
- Annual W-2'
- Annual IRS tape for earnings and taxes
- reconciliation of W-2 earnings and taxes withheld
to payroll database
CORPORATE FINANCIAL / AUDIT $ 12,500
- Liaison between affiliates regarding budgets,
forecasts, and actual reporting, etc.
- Collect, monitor, and control financial data submitted
by affiliates to ensure accurate and timely submission
to corporate.
- Ensure that US GAAP is being followed through analysis
of financial data and through visits/contacts with
affiliates, and internal and external auditors.
- Ensure that internal controls are in place an that
internal control documentation is complete and current.
- Ensure that internal and external audit reports are properly
responded to and appropriate corrective actions are taken.
- Provide advice and service regarding accounting, financial
reporting, tax, systems, and internal control matters.
LEGAL $ 86,000
- Provide general consultation to the company for all legal issues
affecting the company.
- Consultation on all intellectual property issues including
drafting and review of patent and trademark applications;
maintenance of intellectual property.
- Services related to corporate governance and corporate secretary
functions necessary for the function of the company and
subsidiaries.
- Management of all outside counsel employed on behalf of the
company and all litigation affecting the company.
- Negotiate and draft contracts on behalf of the company.
ACCOUNTS PAYABLE $ 1,625
- Check printing and mailing, electronic fund transfer payments,
and reconciliation of bank account to general ledger.
FIXED ASSETS - Maintain fixed asset records including system input $ 1,500
for additions, retirements and monthly depreciation calculations.
CREDIT / COLLECTION $ 5,625
- Provide Credit research, and collection advice and assistance as
needed to local credit/ collection personnel.
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CORPORATE TAX
- Prepare and file state and federal taxes income taxes. $ 2,500
- Review all assessment notices to ensure that they conform to values
returned and negotiated.
- Resolve discrepancies with tax assessor and/or tax collector.
- Provide advice and service regarding tax matters.
- Coordinate, monitor and control all state and local tax audits
- Responsible for defense of any tax positions taken, in the event of audit.
INFORMATION SYSTEMS $ 62,500
- Access to UCAR's corporate IT hardware, software and communications which is
maintained by UCAR.
- Including but not limited to AS/400, XX Xxxxxxx software, TReCs
software, CMS software, LAN/WAN communications.
CORPORATE HS&EP $ 1,250
- Provide advice and oversight as needed to local HS&EP personnel in complying with
UCAR's Corporate HS&EP and governmental HS & EP requirements
- Yearly audit of local HS&EP program.
CASH MANAGEMENT/TREASURY/RISK MANAGEMENT $ 12,500
- Maintains banking relationships with banks.
- Manages movement of cash between UCAR and GRAPH-TECH and various bank accounts.
- Maintains insurance programs for GRAPH-TECH in conjunction with
UCAR's insurance programs. Detail on Schedule 1.2
INVESTOR RELATIONS / COMMUNICATIONS $ 12,500
- Maintains relations with financial markets and analysis.
- Use of UCAR's communication department's services as needed for the development of
video's, brochures and other literature.
CORPORATE HUMAN RESOURCES $ 37,500
- Detail on Schedule 1.1
TOTAL $243,500
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SCHEDULE 1.1
Corporate Human Resource Administrative Services
I. Administrative Services shall be performed with regard to the
following Plans:
A. Pension Plans
Qualified Plans:
- UCAR Carbon Retirement Plan
- UCAR Carbon Savings Plan
Non-Qualified Plans:
- UCAR Carbon Supplemental Retirement Income Plan
- UCAR Carbon Enhanced Retirement Income Plan
- UCAR Carbon Equalization Benefit Plan
B. Savings Plans
- UCAR Carbon Savings Plan
C. Medical Plans (including Retiree Medical Plans)
- UCAR Carbon Medical Plan
- UCAR Carbon Retiree Medical Plan
- UCAR Carbon Medicare Supplement Plan
D. Dental Plans
- UCAR Carbon Dental Assistance Plan
E. Life Insurance/Disability Plans
- UCAR Carbon Basic Life Insurance Plan
- UCAR Carbon Long Term Disability Plan
- UCAR Carbon Business Travel Accident Plan
E. Other Plans
- UCAR Carbon Employee Assistance Program
- UCAR Educational Refund Program
- UCAR Carbon Cafeteria Plan
- UCAR Health and Dependent Care Reimbursement Account Plan
- UCAR Student Loan Program
- UCAR bonus plans including the Management Incentive Plan
and Global Incentive Plan (or any substitute plans
adopted by Graph-Tech)
- Financial Counseling Program (so long as it continues in
effect)
F. Corporate Relocation Services
- Corporate Homesale Agreement (Prudential Relocation
Management, Inc.)
- Relocation Consulting Services Agreement
- Prudential Mortgage Services Agreement
II. Administrative Services shall include with regard to:
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A. Benefit Plans:
Design and recommend plans for management and Board approval
as appropriate and administer/monitor all such corporate
benefit plans. This includes the health care plans, pension
plan, savings plan, life insurance and numerous other formal
benefit plans. Administrative services for such corporate
benefit plans will also include retiree services to all
Graph-Tech retirees.
B. Corporate Relocation
Provide services to employees being transferred, new hires and
temporary assignees by providing relocation counseling,
transfer policy information, relocation management contacts
(appraisals, realtors, mortgage lenders, etc.) through
Prudential Relocation Management. Performs invoice audits.
Processes reimbursements for relocation expenses.
C. Benefit Plans Operations
Processes, maintains and forwards to carriers, monthly, all
enrollments, changes and terminations for the following plans:
Basic Group Life, Medical, Dental, Major Medical, Retiree
Medical, Medicare Supplement Plan (MMMSP - age 65 and over)
and Long Term Disability.
o Performs Savings Program processing functions, which include
before-tax and after-tax enrollments.
o Performs Pension Operations services, including calculating
pension benefits, and data maintenance.
o Performs Accounting and Control functions, including record-
keeping, billing and financial analysis of benefit plans.
III. Actual Costs of the Plans
In addition to the quarterly payments for Corporate Human Resource
Administrative Services, Graph-Tech will pay to UCAR an amount equal
to Graph-Tech's share of monthly costs with respect to the Plans. Such
costs shall be determined in accordance with the current standard
practices, policies and procedures of UCAR. Graph-Tech's share of such
costs shall be determined on the same basis on which the share of such
costs is determined for all other business units of UCAR. The present
policies, practices and procedures for determining such costs and the
present basis for allocating such costs among business units of UCAR
are as follows:
A. Pension: costs consist of expenses determined under FAS 87
(actuarial valuations) plus administration cost associated
with the pension plans (including qualified and non-qualified
plans). Pension costs will be allocated to Graph-Tech prorata
based upon total straight time earnings of its employees.
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B. Savings Plan: costs (Company share) consist of expenses
incurred based upon matching contributions from UCAR and
Graph-Tech, respectively, to the Savings Plan plus
administration cost associated with the savings plan. Savings
Plan costs will be allocated to Graph-Tech prorata based on
the same percentage as the actual basic savings deductions of
its employees.
C. Active Medical costs consist of claims, administration costs
associated with the medical plan, adjustments to reserves, and
reductions due to employee contributions. Active medical costs
will be allocated to Graph-Tech prorata at the same percentage
of Graph-Tech participants over total active participants in
the medical plan.
D. Retiree Medical costs consist of expenses determined under FAS
106 (actuarial valuations) and administration costs associated
with the retiree medical plan. Retiree medical costs will be
allocated to Graph-Tech prorata based on headcount.
E. Group Life Insurance costs consist of premiums paid to
insurance providers, administration costs associated with the
insurance plan, and reductions due to employee contributions.
Group life insurance costs will be allocated to Graph-Tech
prorata based on straight time earnings of all basic group
life insurance participants.
F. Dental costs consist of claims and administration costs
associated with the dental plan. Dental costs will be
allocated to Graph-Tech prorata based on total active
headcount.
G. Employee Assistance Plan costs consist of fees to administer
the plan. Employee assistance costs will be allocated to
Graph-Tech prorata based on total active headcount.
H. Long Term Disability costs consist of premiums paid to
insurance providers, administration costs associated with the
insurance plan, and reductions due to employee contributions.
Long Term disability costs will be allocated to Graph-Tech
prorata based on straight time earnings of all long-term
disability participants.
I. Other Medical costs consist of HMO premiums for participants
who are in the various HMOs. HMO costs will be allocated to
Graph-Tech prorata based on active headcount within the HMO.
J. Educational Refund costs consist of cost to send employees to
further their education (fees, books, etc.) Educational refund
costs will not be allocated, but rather Graph-Tech will be
charged the actual costs incurred for its employees.
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SCHEDULE 1.2
INSURANCE SERVICES
UCAR shall use its reasonable efforts to cause Graph-Tech to be covered
under the UCAR insurance policies or comparable substitute policies for
directors and officers, worker's compensation, general liability, fire and other
types of losses which will provide to Graph-Tech substantially the same types of
insurance provided to Graph-Tech immediately prior to the Closing Date, subject
to availability and except to the extent that UCAR determines that doing so
unreasonably increases total cost of coverage and except to the extent that UCAR
determines to discontinue coverage or a line of coverage for itself. In addition
to the Fees, Graph-Tech shall pay the portion of the premiums and other charges
for the insurance attributable to the coverage provided to Graph-Tech which
amounts will be invoiced as provided in the Agreement. The portion of such
premiums and other charges payable by Graph-Tech shall be allocated in good
faith by UCAR and amended to reflect the cost to UCAR of the insurance premiums
and other charges that are properly attributable to Graph-Tech (but without any
allocation of UCAR overhead costs). The insurance provided shall be subject to
such policies of insurance or self-insurance, and such guidelines and procedures
in respect of insurance and self-insurance as UCAR shall determine. In the event
the insurance coverage changes from that in effect immediately prior to the
Closing Date, UCAR agrees:
(a) to the extent that UCAR is aware of a material change
prior to the effective date of the change, to provide
notice to Graph-Tech of the change prior to its
effective date, or
(b) otherwise to provide notice to Graph-Tech upon
becoming aware of the change.
It is expressly agreed by Graph-Tech and UCAR that any self-insurance,
retention or deductible shall be for the account of and be an obligation of
Graph-Tech and that Graph-Tech's obligations in respect of such self-insurance
retention or deductible shall survive the termination of this Agreement.
Experience rated insurance policies will be actualized as soon as practicable
after the end of a policy period; and as applicable, Graph-Tech shall promptly
reimburse UCAR for the amount of any increased cost or UCAR will promptly refund
to Graph-Tech any overcharges. Upon completion of any insurance policy audit
that results in a retroactive increase or decrease in premium, Graph-Tech shall
promptly pay its allocable portion of any increases premium to UCAR or UCAR will
promptly refund the allocable portion of any policy refund to Graph-Tech.
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SCHEDULE 2
PRODUCT AND PROCESS DEVELOPMENT CENTER SERVICES
SERVICES: UCAR shall provide the following Services at its Product and Process
Development Center located at 00000 Xxxx Xxxx, Xxxxx, Xxxx 00000, as more fully
described on the site layout attached hereto and incorporated herein as Exhibit
"A" (the "Site"):
1. Site Services
UCAR shall make the facilities at the Site previously utilized by UCAR
to conduct its natural, acid-treated and flexible graphite product
business (the "Business") available to GRAPH-TECH for use by GRAPH-TECH
in its conduct of the Business, in a manner and to an extent consistent
with past practice. Without limiting the foregoing, GRAPH-TECH shall
have full use of the space identified on Exhibit "A". UCAR may move
GRAPH-TECH from the space identified to equivalent space, fully
suitable for Graph-Tech's use, upon 90 days prior written notice to
GRAPH-TECH.
The Site Services shall include:
o the use of approximately 1,872 sq. ft. of office space, as
designated on the attached Exhibit "A"
o the use of approximately 5,160 sq. ft. of laboratory space, as
designated on the attached Exhibit "A"
o the use of approximately 864 sq. ft. of storage space, as
designated on the attached Exhibit "A"
o the use of all common areas, restrooms, cafeteria,
non-exclusive parking spaces, specialized laboratory
facilities and conference rooms (specialized laboratory
facilities and conference rooms as available or scheduled in
advance)(4,000 sq. ft. allocated for purposes of Rent
calculation)
o all utilities, including electricity, sewer, natural gas,
HVAC, potable and distilled water, compressed air, nitrogen,
argon, oxygen, steam and local telephone
o shipping and receiving
o plant emergency response
o mail distribution
o custodial and janitorial services
o duplicating, fax machines and related office services
o use of the cafeteria (subsidy included in Rent)
o guard and security services
o waste hauling services
o computer services, including local area network (LAN) and
support
o new or used office furniture in good condition and existing
lab equipment
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The Rent for the Site Services shall billed at the following annual
rates:
Office and Lab Space $ 18.25 per square foot of occupied space
Storage Space $ 5.00 per square foot of occupied space
The Quarterly Rent for year 2000 based on the area assigned above shall
be:
January 1, 2000 - June 30, 2002: $ 51,413.50 per quarter
For each year that the Site Services are extended beyond the
original term of the Agreement, the Rent shall be set at the fair
market rent value of like space offering the same services in the area.
To determine fair market rent value, the parties shall employ an
acceptable independent third party appraiser with knowledge of the
area. If either party disagrees with the fair market rent value
established by the first appraiser, that party may employ a second
independent appraiser, at its cost. If the second appraiser's fair
market rent value varies by less than 10% from the first appraiser's
fair market rent value, the average of the two values shall become the
Rent for the extended term. If the second fair market rent value varies
by greater than 10%, the parties shall appoint a third appraiser and
the two closest appraised values shall be averaged to determine the
final Rent. An appraiser may be a broker. The cost of the first and
third appraisers shall be borne equally by the parties.
Because of possible future expansions of GRAPH-TECH's
Business, GRAPH-TECH, from time to time, may request the use of
additional space within the Site. Upon receipt of a request, UCAR shall
use reasonable efforts to satisfy GRAPH-TECH's space requirements
within UCAR's then existing vacant space at the Site. Any additional
space will be billed at the rates set out above.
References in the Agreement to Fees shall include Rent hereunder.
2. Research and Development Services
Research Services shall include the equivalent of one full time
researcher and administrative support for both the UCAR and GRAPH-TECH
research personnel at the Site, in a manner and to an extent consistent
with past practice. Development Services shall include consultation by
the Director of the Technical Center and such personnel necessary for
the continued protection, maintenance and prosecution of patents,
patent applications and other intellectual property/ideas generated at
the Site, in a manner and to an extent consistent with past practice.
For these Services, GRAPH-TECH shall pay a flat fee of $60,500.00 per
quarter.
3. Site Health, Safety and Environmental Services ("HS&EP Services")
UCAR shall provide the same level of HS&EP Services as were previously
provided to the Business at the Site. The HS&EP Services shall include,
among other services, full
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time support of Site HS&EP personnel, the Site chemical inventory
system and the Site hazardous waste disposal services. UCAR shall
provide at the Site the services of a nurse and doctor, which shall be
made available for all GRAPH-TECH personnel. GRAPH-TECH shall pay a fee
in the amount of $10,000.00 per quarter for these Services.
4. Stores Services
UCAR shall provide a company store fully stocked with products and
materials necessary for the operation of the Business at the Site, and
Graph-Tech shall have the right to use such products and materials, at
the same level as prior to the transfer of the Business. GRAPH-TECH
shall pay a fee in the amount of $1,400.00 per quarter for these
Services.
5. Technical Information Services ("TIS Services")
UCAR shall provide the same level of TIS Services as were provided to
the Business and the GRAPH-TECH personnel located at the Site prior to
the transfer of the Business. TIS Services shall include, among other
services, fully updated technical library and related services,
subscriptions and online services. GRAPH-TECH shall pay a fee in the
amount of $7,500.00 per quarter for these Services.
6. Per Use Services
UCAR shall provide the same level of Per Use Services as were provided
to the Business and the GRAPH-TECH personnel located at the Site prior
to the transfer of the Business. Those Per Use Services shall include
and be billed to GRAPH-TECH as follows:
Analytical and Microscopy $ 87.64 per hour
Physical Testing $ 76.72 per hour
Pilot Plant with UCAR Technician $ 90.60 per hour
Pilot Plant with GRAPH-TECH Technician $ 60.24 per hour
High Temperature Cure Furnace $1,560.00 per full load
The Per Use Services shall be provided on a first-come/first serviced
basis. Requests for these Services by GRAPH-TECH shall be given equal
priority among all such requests.
References in this Schedule to the past (as in past practice) or prior
to transfer of the Business shall mean prior to January 1, 2000.
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Schedule 3
SERVICES TO BE PROVIDED BY GRAPH-TECH TO UCAR
Factory "A" Lease Administration
Graph-Tech shall provide for the complete administration of the Lease dated
January 1, 1989, as amended (the "ACC Lease"), between UCAR Carbon Company Inc.
and Advanced Ceramics Corporation ("ACC"). In connection therewith, Graph-Tech
shall diligently manage the space within Factory "A", located at 00000 Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxxx 00000, currently occupied by ACC as more fully defined
within the ACC Lease, including providing for:
1. necessary maintenance of the buildings and grounds
2. collection of rents and costs
3. necessary utilities including electricity, water, gas, telephone, etc.
4. coordinate issues with the City of Lakewood and other government
agencies regarding the site
UCAR shall pay to Graph-Tech a fee in the amount of $18,750 per quarter for
administration and management services. UCAR shall reimburse Graph-Tech for all
costs incurred in providing maintenance, utilities and other expenses to the
leased space (other than (1) those for which Graph-Tech is responsible under the
Lease and other Agreements between it and UCAR and (2) those paid for by ACC).
UCAR authorizes Graph-Tech, to exercise on behalf of UCAR, any and all of UCAR's
rights under the ACC Lease, which may be necessary for Graph-Tech's successful
administration of the ACC Lease. Graph-Tech shall not, however, have authority
to commence or defend any legal proceedings in respect of the ACC Lease.
Graph-Tech shall promptly inform UCAR of any material developments in respect of
the ACC Lease, and shall seek and act in accordance with instructions from UCAR
with respect thereto.
Research and Development
Graph-Tech may, from time to time, provide research, development and other
technical services to UCAR. UCAR shall pay for those services, as rendered, on
an hourly basis. Graph-Tech shall submit an invoice to UCAR with detail as to
the time expended, description of the work and total due on a monthly or
quarterly basis. The following rates shall apply:
Technicians $90.61/hr.
Scientist/Engineer $125.79/hr.
