EMPLOYEE BENEFITS AGREEMENT
THIS EMPLOYEE BENEFITS AGREEMENT ("Agreement") is made as of February 12,
2001. The parties ("Parties") to this Agreement are RPC, Inc., a Delaware
corporation ("RPC"), Marine Products Corporation, a Delaware corporation
("Marine"), and Chaparral Boats, Inc., a Georgia corporation ("Chaparral").
RECITALS
WHEREAS, Chaparral is a wholly-owned subsidiary of RPC and a member of
a Controlled Group (as hereinafter defined) that includes RPC;
WHEREAS, RPC has formed Marine as a wholly-owned subsidiary of RPC and
the board of directors of RPC has approved the transfer, as a capital
contribution, of all of the issued and outstanding capital stock of Chaparral to
Marine, followed by the distribution of all of the issued and outstanding shares
of capital stock of Marine to the holders of the issued and outstanding shares
of capital stock of RPC (the "Spinoff");
WHEREAS, immediately subsequent to the Spinoff, Chaparral will employ
substantially all the persons who were employed by Chaparral prior to the
Spinoff;
WHEREAS, the Parties desire to set forth the terms and conditions
pursuant to which Marine and/or Chaparral shall provide various employee
benefits to those Employees (as hereinafter defined) who remain employed by
Chaparral on the Spinoff Date or who become employed by Marine on the Spinoff
Date or who thereafter become employed by Chaparral or Marine.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 GENERAL. As used in this Agreement, capitalized terms defined
immediately after their use shall have the respective meanings thereby provided,
and the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):
Action: any demand, action or cause of action, claim, suit,
arbitration, inquiry, subpoena, discovery request, proceeding or investigation
by or before any court or grand jury, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal related to,
arising out of or resulting from any employee liability.
Affiliate: with respect to any specified person, a person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified person; provided,
that RPC and Marine shall be deemed not to be Affiliates of each other for
purposes of this Agreement.
Code: the Internal Revenue Code of 1986, as it may be amended or
recodified from time to time.
Controlled Group: two or more business entities affiliated within the
meaning of Code Sections 414(b), 414(c), 414(m) and/or 414(o).
Employee Benefit Plans: (i) any severance, disability, cafeteria,
bonus, stock option, stock appreciation, stock purchase, deferred compensation,
or similar types of plans, agreements, policies or arrangements that currently
are established, maintained or contributed to by RPC or Chaparral for the
benefit of any former or present employees or their beneficiaries, dependents or
spouses, and (ii) any employee welfare and employee pension benefit plans (as
such terms are defined in Section 3(1) and 3(2), respectively, of ERISA) which
are applicable to former or present Employees or their beneficiaries, dependents
or spouses, and that currently are established, maintained or contributed to by
RPC or Chaparral.
Employee/Labor Law: any federal, state, local or municipal law
(including common law), statute, ordinance, regulation, order, decree, judgment,
decision, ruling, permit or authorization (each as may be in effect, applicable
and binding, from time to time) relating or applicable to the work place or to
the employer/employee relationship including, without limitation, any of the
foregoing relating or applicable to wage and hour claims, collective bargaining
and labor laws, ERISA-governed employee benefit and welfare plans, federal,
state and local tax withholding and payment rules and regulations, workers'
compensation and similar laws, accrued vacation statutes, and sexual harassment
and anti-discrimination laws.
Employee Liability: any and all debts, charges, liabilities,
warranties and obligations (of any nature or type whatsoever regardless of when
arising), whether accrued, contingent or reflected on a balance sheet including,
without limitation, liability for administrative, civil or criminal penalties or
forfeitures, and attorneys' fees or other costs of defending an Action or a
claim of Employee Liability under any Employee/Labor Law.
Employees: Employees of Marine and/or Chaparral on and after the
Spinoff Date.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
Spinoff Date: The date the Spinoff is effective.
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1.2 OTHER DEFINITIONS. Capitalized terms not specifically defined herein
shall have the meanings ascribed thereto in the Agreement Regarding Distribution
and Plan of Reorganization of even date herewith by and between RPC and Marine.
ARTICLE 2
EMPLOYEES
2.1 CONDITIONS OF EMPLOYMENT. (a) Nothing in this Agreement shall require
either Marine or Chaparral to employ any person who declines employment with
Marine or Chaparral on or after the Spinoff Date; and (b) nothing in this
Agreement shall be interpreted to prohibit or otherwise restrict Marine or
Chaparral from terminating the employment of any Employee, or from changing the
salary or wage range, grade level or location of employment of any Employee, in
accordance with their respective personnel policies and procedures following the
Spinoff Date. Without limiting the generality of Section 5.9 hereof, no Employee
or other person shall have any rights as a third party beneficiary under this
Agreement.
2.2 CERTAIN PAYROLL DEDUCTIONS. Effective as of the Spinoff Date, to the
extent (if any) required by applicable law, Marine and/or Chaparral will assume
RPC's obligation to comply with any garnishment order applicable to any
Employee. Furthermore, if an Employee has any outstanding liability or
obligation to RPC (for example, salary advances) which existed on the Spinoff
Date, which has resulted in a special payroll deduction for such Employee, then,
to the extent permitted under applicable law, Marine and/or Chaparral will
withhold such amounts for RPC's benefit from the Employee's compensation earned
subsequent to the Spinoff Date. RPC will provide the special payroll deduction
information or garnishment information at least fifteen (15) days prior to the
date Marine and/or Chaparral assumes payroll processing responsibility for an
Employee.
ARTICLE 3
EMPLOYEE BENEFIT PLANS
3.1 WELFARE BENEFIT PLANS. RPC and Chaparral each maintain various welfare
benefit plans (as defined by Section 3(1) of ERISA), including Code Section 125
cafeteria plans that allow their respective employees to pay medical premiums on
a pre-tax basis. These plans shall not be combined as a result of the Spinoff;
RPC and Chaparral will each continue to sponsor their own separate welfare
benefit plans, including medical and life insurance benefits, following the
Spinoff Date.
3.2 VACATION, HOLIDAY, SICK LEAVE AND SHORT-TERM DISABILITY POLICIES.
Marine and/or Chaparral shall credit all Employees for any accrued vacation and
sick leave earned but not taken by such Employees in the current year through
the Spinoff Date; and provided, further, that Marine and/or Chaparral shall be
solely responsible for payment of, and shall indemnify, defend, reimburse and
hold RPC and its Affiliates harmless from and against, any accrued vacation,
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sick leave payoff or short-term disability liability to any Employee incurred by
or imposed upon RPC under its current vacation, holiday, sick leave and
short-term disability policies or under any applicable state or local law or
statute. Any such accrued vacation, holiday, earned but not taken sick leave or
short-term disability leave shall be credited in accordance with the vacation,
holiday, sick leave and short-term disability policies adopted or maintained by
Marine or Chaparral effective on and after the Spinoff Date.
3.3 RPC, INC. RETIREMENT INCOME PLAN.
(a) Marine shall adopt the RPC, Inc. Retirement Income Plan and its
related Trust as a "multiple employer" as of the Spinoff Date.
(b) Any administrative work necessary shall be provided by RPC in
exchange for cash in an amount to be determined at a later date.
3.4 RPC 401(K) PLAN.
(a) Marine shall adopt the RPC 401(k) Plan and its related Trust as a
"multiple employer" as of the Spinoff Date.
(b) Any administrative work necessary shall be provided by RPC in
exchange for cash in an amount to be determined at a later date.
3.5 SEVERANCE LIABILITIES. Marine and Chaparral each acknowledge that the
transactions contemplated by the Spinoff will not result in RPC being or
becoming liable for any severance pay to any Employee and Marine shall indemnify
RPC in respect thereof.
3.6 2001 EMPLOYEE STOCK INCENTIVE PLAN. On or before the Spinoff Date,
Marine shall adopt the Marine Products Corporation 2001 Employee Stock Incentive
Plan (the "Marine 2001 Plan"). Following the completion of the Spinoff, Marine
Employees who are not also employees of RPC with outstanding RPC options or
performance restricted stock awards that have not been earned and issued into
escrow immediately prior to the effective date of the Spinoff will receive
options or awards of Marine under the Marine 2001 Plan equivalent in value to
the RPC stock options or awards at such time as follows:
(a) Each Employee of Marine with outstanding RPC options will be granted
replacement options with the exercise price determined by multiplying the
Average Percentage (as defined below) by 1.6667 times the original exercise
price, and the number of shares subject to such replacement grant determined by
dividing the number of shares subject to options currently held by the Average
Percentage and dividing the result by 1.6667. "Average Percentage" shall mean
0.6 times Marine's average closing stock price on the American Stock Exchange
("AMEX"), or if the Marine common stock is not traded on the AMEX, such other
exchange or quotation system on which it is traded, during the 10 consecutive
trading days beginning on the trading day that is 10 trading days after the
effective date of the Spinoff divided by the sum of (i) the daily average of the
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closing stock price of RPC and (ii) 0.6 times the daily average of the closing
stock price of Marine, in each case during the 10 consecutive trading days
beginning on the trading day that is 10 trading days after the effective date of
the Spinoff.
(b) Each Employee of Marine with outstanding RPC performance
restricted stock awards that have not been earned and issued into escrow will be
granted the number of replacement shares of performance restricted stock
determined by dividing the number of shares subject to performance restricted
stock grants by the Average Percentage and dividing the result by 1.6667, and
the average stock price condition for each grant of replacement performance
restricted stock will be determined by multiplying each original average stock
price condition by the Average Percentage and multiplying the result by 1.6667.
(c) Each Employee of Marine with RPC time-lapse restricted stock
awards or performance restricted stock awards that have been issued and are held
in escrow on the Spinoff Date shall receive an equivalent RPC replacement grant
that allows employment by Marine to continue the grant after the Spinoff and 0.6
shares of Marine common stock for each share of RPC common stock subject to the
RPC replacement grant as of the close of business on the Spinoff Date. Any
shares received pursuant to this Section 3.6(c) shall also be held in escrow on
the same terms as the original RPC award.
(d) Notwithstanding the replacement grants of options and awards as
described herein this section, all other provisions and terms of any stock
option agreements and time-lapse or restricted stock agreements previously
entered into by an Employee shall continue to apply on and after the effective
time of the Spinoff with respect to any options or awards previously granted
under RPC's 1994 Employee Stock Incentive Plan, to the extent that, prior to the
effective time of the Spinoff, they have not been exercised or become void under
the terms of such agreements under which such options or awards were granted.
3.7 DUAL EMPLOYEES. Each Employee who continues as a RPC and Marine or
Chaparral Employee ("Dual Employee") immediately after the Spinoff that holds
outstanding RPC options or performance restricted stock awards that have not
been earned and issued into escrow will receive replacement grants for one-third
of such outstanding options and awards under the Marine 2001 Plan equivalent in
value to the options and awards surrendered for cancellation to RPC pursuant to
the terms set forth in a Cancellation Agreement entered into by such Dual
Employee and RPC.
ARTICLE 4
INDEMNIFICATION
4.1 INDEMNIFICATION. In addition to the indemnity obligations set forth in
Section 3.2 hereof, Marine and/or Chaparral agree to indemnify, defend,
reimburse and hold harmless RPC and its Affiliates, and the officers, directors,
employees, agents and representatives of RPC and its Affiliates (each, an "RPC
Indemnified Party"), from and against any and all Actions, assessments, losses,
damages, liabilities, costs and reasonable expenses including, without
limitation, interest, penalties, fines, excise taxes and reasonable attorneys'
fees and expenses, asserted against or imposed upon or incurred by any RPC
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Indemnified Party which result from, arise out of or are related to any failure
by Marine and/or Chaparral to comply with the terms of this Employee Benefits
Agreement. RPC agrees to indemnify, defend reimburse and hold harmless Marine
and its Affiliates, and the officers, directors, employees, agents and
representatives of said companies (each, a "Marine Indemnified Party"), from and
against any and all Actions, assessments, losses, damages, liabilities, costs
and reasonable expenses including, without limitation, interest, penalties,
fines, excise taxes and reasonable attorneys' fees and expenses, asserted
against or imposed upon or incurred by any Marine Indemnified Party which result
from, arise out of or are related to any failure on the part of RPC to comply
with the terms of this Employee Benefits Agreement.
4.2 PROCEDURE FOR INDEMNIFICATION. In the event any action, suit or
proceeding is brought pursuant to this Article 4 or Section 3.2 hereof, the
Parties shall comply with and be subject to the indemnification procedures set
forth in the Distribution Agreement.
ARTICLE 5
MISCELLANEOUS
5.1 BINDING AGREEMENT. This Agreement is binding upon and is for the
benefit of the Parties hereto and their respective successors and permitted
assigns.
5.2 ASSIGNMENT. No Party to this Agreement shall convey, assign or
otherwise transfer any of its rights or obligations under this Agreement without
the express written consent of the other Party hereto in its sole and absolute
discretion. No assignment of this Agreement shall relieve the assigning Party of
its obligations hereunder.
5.3 NOTICES. All notices or other communications required or permitted to
be given hereunder shall be made pursuant to the notice provisions set forth in
the Distribution Agreement.
5.4 NO WAIVER. No delay on the part of any Party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver, nor shall any
waiver on the part of any Party of any right, power or privilege operate as a
waiver of any other right, power or privilege hereunder, nor shall any single or
partial exercise of any right, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the Parties hereto may otherwise have
at law or in equity.
5.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement, and the agreements and
other documents referred to herein, shall constitute the entire agreement
between the Parties with respect to the subject matter hereof and shall
supersede all prior agreements, understandings, statements or representations,
oral or in writing, of the Parties relating thereto. This Agreement may be
modified or amended only by written agreement of the Parties. In addition to the
foregoing, any amendment to this Agreement must, in the case of each of Marine,
RPC, and Chaparral, be approved by one of their respective elected officers,
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with their respective execution of such amendment to evidence conclusively such
approval.
5.6 SHARING OF INFORMATION. RPC and Marine recognize that each of them will
require certain information regarding employees of the other company or its
subsidiaries. Each agrees to provide the information requested by the other in
good faith, and on a reasonably prompt basis. The requesting party shall be
required to pay a reasonable amount for administrative expenses incurred by the
supplying party in preparing the requested information. Such information will
include but not be limited to that which is required for testing benefit plans
for coverage, maximum benefit and contribution limitations, annual reports, and
year-end or other periodic valuations.
5.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.
5.8 GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
laws) as to all matters including, without limitation, matters of validity,
construction, effect, performance and remedies.
5.9 NO THIRD PARTY BENEFICIARIES. This Agreement is solely for the benefit
of the Parties and is not intended to confer upon any other person any rights or
remedies hereunder.
5.10 LEGAL ENFORCEABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
5.11 INTERPRETATION. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the Parties and shall not in any way affect the meaning or interpretation of
this Agreement. The parties have made a good faith effort in this Agreement to
provide for those issues involving employee benefits in the transaction which
can be reasonably foreseen. The parties acknowledge that other such issues may
arise, and they agree to work in good faith to resolve any differences in light
of the general principle that all matters involving RPC benefit plans are the
responsibility of RPC except that Marine and/or Chaparral intend to be
responsible, on an ongoing basis following the Spinoff Date, for the
administration and expense of those Marine/Chaparral benefits which Marine
and/or Chaparral have determined to continue or adopt for the Employees on and
after the Spinoff Date.
5.12 DISPUTES. Any disputes between the parties based upon, related to, or
arising in connection with this Agreement shall be resolved in accordance with
the dispute resolution procedure set forth in Section 12.10 of the Distribution
Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered as of the day and year first above written.
RPC, INC.
By: _____________________________________
Its: ____________________________________
MARINE PRODUCTS CORPORATION
By: _____________________________________
Its: ____________________________________
CHAPARRAL BOATS, INC.
By: _____________________________________
Its: ____________________________________
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