1
EXHIBIT 10.12
* PLEASE SEE ATTACHMENT 10.12A FOR DETAILS CONCERNING REDACTED PROVISIONS
DS PUMP SUPPLY AGREEMENT
The purpose of the agreement is to modify the current commercial terms
concerning the sale of the Model DS Diesel Fuel Injection Pump by Stanadyne
Automotive Corp. ("Stanadyne") to General Motors Powertrain Group ("GMPTG").
The provisions of the agreement are as follows:
(1) The agreement shall govern the commercial aspects of the supply of
Stanadyne's Model DS electronic fuel injection pump to GMPTG.
(a)GMPTG agrees to purchase from Stanadyne, *** GMPTG's requirement
for electronic fuel injection pumps for the 6.5 liter diesel engine
and its derivatives ***.
(b)GMPTG agrees to purchase from Stanadyne *** GMPTG's requirement for
electronic fuel injection pumps for the 6.5 liter diesel engine and
its derivatives ***.
(c) Stanadyne agrees to supply the Model DS pump to GMPTG for the life
of the GM 6.5 liter diesel engine and its derivatives.
(d) GMPTG agrees to buy, and Stanadyne agrees to sell, the Model DS
pump at the price and ln accordance with the terms defined in this
agreement. Except where specifically noted herein, other terms and
conditions of the ongoing commercial relationship between Stanadyne
and GMPTG will remain unchanged from current established practice.
(2) The current piece price shall change ***, retroactively ***, and
remain firm ***.
2
* PLEASE SEE ATTACHMENT 10.12A FOR DETAILS CONCERNING REDACTED PROVISIONS
DS Pump Supply Agreement
Page 2
(3) Future price adjustment shall be made for the following reasons:
(a) Joint Cost Reductions: A joint GMPTG/Stanadyne team shall be formed
with the goal to identify at least *** in cost reduction savings.
"Joint Cost Reduction" savings are those which require active,
participative involvement of GMPTG personnel such as those requiring
additional GM validation and testing.
- ***;
- ***;
- ***.
* Stanadyne labor and purchased material cost increases ("Economic
Adjustments") will be reviewed annually on a calendar year basis and
these cost increases will be applied to offset Joint Cost Reductions
achieved during the year. Annual Economic Adjustment is the sum of
Economic Adjustments incurred in the course of the year. Annual Joint
Cost Reduction is the sum of Joint Cost Reductions incurred in the
course of the year. The amount of Annual Joint Cost Reduction less
Annual Economic Adjustment is defined as the Net Cost Reduction.
Joint Cost Reductions are implemented as they are included in product
sold to GMPTG based on date of invoice. The Net Cost Reduction for
each year is effective January 1, of the following year for product
sold to GMPTG based on date of invoice. Annual Economic Adjustments
greater than annual Joint Cost Reductions will not increase the
January 1, unit price above the price in effect at the start of the
prior year except for reason of article (3b) or (3c). ***
***.
3
* PLEASE SEE ATTACHMENT 10.12A FOR DETAILS CONCERNING REDACTED PROVISIONS
DS Pump Supply Agreement
Page 3
(b) Capital Equipment Utilization: At the time of this agreement Stanadyne
has reserved for GMPTG use, a capacity to manufacture *** DS Pumps per
day("GMPTG Reserve"). GMPTG shall establish the going forward level of
GMPTG-Reserve by January 15, 1996, for the six month period beginning
January 1, 1996. Subsequently, GMPTG will establish GMPTG-Reserve
requirements on or before June 1, for the six month period beginning
the following July 1, and on or before December 1, for the six month
period beginning the following January 1. This procedure to establish
GMPTG-Reserve will continue to occur twice annually throughout the
term of the contract.
GMPTG shall provide written notice to Stanadyne of the level of
GMPTG-Reserve required for a given period per the above schedule no
later than 15 days following the start of the new period. Should GMPTG
fail to provide said notice to Stanadyne within the allotted time
period, the GMPTG-Reserve for the new period shall remain the same as
the GMPTG-Reserve for the prior period.
If the new period GMPTG-Reserve is less than the prior period
GMPTG-Reserve, then GMPTG shall release Stanadyne from any obligation
to reserve for GMPTG use, the difference between the prior period
GMPTG-Reserve and the new period GMPTG-Reserve.
"Utilization of the GMPTG-Reserve" is defined as the sum of GMPTG
purchases of DS pumps plus pumps sold to service during the subject
six month period (determined by date of invoice), divided by the
number of Stanadyne regular working days in the six month period.
If the Utilization of the GMPTG-Reserve during a period falls below
*** of the GMPTG-Reserve set for the period, GMPTG will choose one of
the following:
(i) ***
(ii) ***
4
* PLEASE SEE ATTACHMENT 10.12A FOR DETAILS CONCERNING REDACTED PROVISIONS
Restoration of capital equipment released from GMPTG Reserve:
Stanadyne will give notice to GMPTG when Stanadyne GMPTG Reserve capital
equipment, which is released according to the provisions of this agreement, is
reassigned by Stanadyne for other purpose or use. In each case of
reassignment,***.
(c) Price increases for GMPTG engineering changes will be negotiated on an
individual basis and shall be independent of and in addition to all
other contractual factors affecting price.
(4) GMPTG and Stanadyne shall renegotiate the current Warranty Agreement with
Stanadyne sharing responsibility for field failures.
GMPTG and Stanadyne hereby agree to the provisions of this agreement, and so
indicate by the signature below of their duly authorized representative:
for: General Motors for: Stanadyne Automotive Corp.
Powertrain Group
/s/ Xxxxxx Eendres /s/ Xxxxxxx X. Xxxxx
------------------ --------------------
Signature Signature
Xxxxxx Eendres Xxxxxxx X. Xxxxx
-------------- ----------------
Printed name Printed Name
Director Purchasing,
GM Powertrain V.P. Engrg. & Marketing, DSD
------------- ----------------------------
Title Title
1/22/96 20 Dec 95
------- ---------
Date Date
c: X. Xxxxx (GMPTG), Xxxxxx, Fuge
5
ATTACHMENT 10.12A
CONFIDENTIAL TREATMENT REQUEST FOR
STANADYNE AUTOMOTIVE CORPORATION
CONFIDENTIAL PROVISIONS OF EXHIBIT 10.12:
THE DS PUMP SUPPLY AGREEMENT
1. Section 1 (a): Percentage of GM's Requirements and Time Period Covered
- (i) The seventh and eighth words of the section following
"Stanadyne," and(ii) the last four words of the section
following "derivatives";
2. Section 1 (b): Percentage of GM's Requirements and Time Period Covered
- (i) The three words directly following "Stanadyne" and (ii) the last
seven words of the section following "derivatives";
3. Section 2: Price and Time Period Covered - (i) The four words that
directly follow the word "change" in the first and only sentence in
the section,(ii) the nine words that directly follow the word
"retroactively" in the first and only sentence in the section,(iii)
the remainder of the sentence following the word "firm" in the first
and only sentence in the section;
4. All omitted provisions in Section 3a contain details of the agreement
for Joint Cost Reduction between the parties.
Section 3a - (i) The four words that follow the word "identify" in the
first sentence,(ii) the three bulleted points that follow the first
paragraph, (iii) the fourth sentence in the third paragraph,(vi) all
of the text in the fourth paragraph;
5. All omitted provisions in Section 3b contain details of the agreement
for Capital Equipment Utilization between the parties.
Section 3b -(i)the word in the first sentence of the first paragraph
following "manufacture", (ii) the word following "below" in the fifth
paragraph,(iii) all of the text in Sections 3b (i) and (ii),(vi) all
of the text in the sixth paragraph, and (vii) all of the remaining
text in the paragraph that follows the word "reassignment" in the
seventh paragraph.
