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Exhibit 10.6
EMPLOYEE BENEFITS SERVICES AND LIABILITIES AGREEMENT
Following the transfer of the Natural and Flexible Graphite Products
business of UCAR Carbon Company Inc. and its subsidiaries, ("UCAR") to UCAR
Graph-Tech Inc. ("Graph-Tech") pursuant to a Transfer Agreement between UCAR and
Graph-Tech (the "Transfer Agreement"), which transfer was effective as of
January 1, 2000, (the "Closing Date"), UCAR will maintain certain employee
benefits functions on behalf of Graph-Tech and Graph Tech's subsidiaries. This
Agreement sets forth the parties' understanding of that arrangement.
1. As used herein, the term "Services shall mean the services
described in Annex A attached hereto, which services will be
provided by UCAR to Graph-Tech and Graph-Tech's subsidiaries
hereunder with respect to the employee benefit plans listed in
Annex B attached hereto (collectively, the "Plans"). The
Services and the Plans may be added to, terminated or modified
from time to time by UCAR in its discretion.
2. The type, quality and manner of performance of the Services
will be the same as the type, quality and manner of
performance of services provided to Graph-Tech's businesses
prior to the Transfer; provided, however, that the parties
recognize that in some cases the practices, procedures and
methods followed in connection with providing comparable
services prior to the Transfer will have to be modified in
order to provide the Services.
3. Graph-Tech will pay UCAR monthly for the Services in
accordance with Annex C attached hereto.
4. In addition to the monthly payments, 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
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and the present basis for allocating such costs among business
units of UCAR are set forth in Annex D attached hereto. In the
event that, by mutual agreement of the parties, Graph-Tech's
obligation to make payments under this paragraph is
terminated, Graph-Tech shall nonetheless continue to be
obligated to pay UCAR in accordance with paragraph 3.
5. UCAR will compute the payments due in accordance with
paragraph 3 and the payments due in accordance with paragraph
4 and will invoice Graph-Tech monthly. Payment will be due
within thirty (30) days of receipt of the invoices.
6. This agreement shall be deemed to commence as of January 1,
2000 and will continue in force on the terms and conditions
described herein until terminated by mutual agreement of the
parties.
7. Notwithstanding anything to the contrary contained in the
Corporate Services Agreement dated as of January 1, 2000 by
and between the parties hereto (the "Service Agreement"), UCAR
shall continue to provide and Graph-Tech shall continue to
accept and pay for Payroll and Related Services under the
Service Agreement while Services are being provided hereunder.
8. THERE ARE NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE
SERVICES TO BE PROVIDED HEREUNDER AND 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 AS TO THE
SERVICES.
9. UCAR shall act, and shall be deemed to act, as an independent
contractor, and not as an agent, partner or joint venturer, in
connection with the Services.
10. In addition to any other amounts payable hereunder, Graph-Tech
shall promptly reimburse UCAR for any taxes, excises, imposts,
duties, levies, withholdings or other similar charges
(excepting any taxes, excise, imposts, duties, levies,
withholdings or charges based on net income) that may be
required to be paid on account of the Services; provided,
however, that no such reimbursement shall be made to the
extent any of the foregoing have been included in the
calculation of the compensation due
11. Receipt of any Service hereunder shall constitute an
unqualified acceptance of the Service and a waiver of any and
all claims with respect to such Service unless UCAR receives
written notice of such claims within sixty (60) days after
receipt of Service. In the case of failure to provide
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any Service, any and all claims with respect to such Service
shall be waived unless written notice of such claims is
received by UCAR within sixty (60) days after the date on
which such Service was first required to be provided. No claim
resulting from the breach hereunder as to any Service provided
or for failure to provide or delay any Service shall be
greater in amount than the charge for that portion of the
Service in respect of which such claim is made, and in no
event will UCAR or its subsidiaries or affiliates (other than
Graph-Tech and Graph-Tech's subsidiaries) be liable to
Graph-Tech or Graph-Tech's subsidiaries or affiliates for any
special, indirect, incidental or consequential damages or any
lost profits, whether based on negligence, strict liability in
tort or breach of warranty or on any other basis.
12. UCAR shall not be liable for its failure to perform hereunder
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 adjustments
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 UCAR to perform
hereunder. If UCAR fails to perform hereunder as a result of
any occurrence described in the preceding sentence, UCAR shall
(i) give written notice to that effect to Graph-Tech promptly
after an occurrence together with a statement setting forth
reasonably full particulars concerning such occurrence and
(ii) use reasonable efforts to remedy the occurrence as
quickly as possible. The requirement that such occurrence be
so remedied shall not require the settlement of strikes,
lockouts or other labor difficulties. To the extent required
by any such
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occurrence, the performance by UCAR hereunder shall be
suspended during the continuance of any such occurrence (but
for no longer period) and this agreement shall otherwise
remain unaffected. If at any time during the term of this
agreement such occurrence is remedied, UCAR shall promptly
notify Graph-Tech and any such suspension shall end.
13. Each party agrees to refrain and to cause its subsidiaries and
affiliates to refrain from use in any manner, and to use
reasonable efforts to keep confidential and to cause its
subsidiaries and affiliates to use reasonable efforts to keep
confidential, any and all information and data concerning the
business and affairs of the other party or its subsidiaries or
affiliates received as a result of this agreement, except to
the extent that such party can demonstrate that the
information or data (i) is generally available to the public
as evidenced by prior written publication through no act or
failure to act by it or its subsidiaries or affiliates, (ii)
was already known to its or its subsidiaries or affiliates on
a non-confidential basis on the date of receipt as evidence by
written and dated records made by it or its subsidiaries or
affiliates prior to the date hereof, (iii) is independently
developed by Graph-Tech without reference to any information
provided by UCAR, or (iv) is subsequently disclosed to it or
its subsidiaries of affiliates on a non-confidential basis by
a third party not having a confidential relationship with such
other party or its subsidiaries or affiliates with respect to
such information. Notwithstanding the foregoing, each of the
parties and their subsidiaries and affiliates shall be free to
disclose any such information or data to the extent, buy only
to the extent, (i) required by applicable law or by a
government in a duly authorized investigation or (ii)
necessary to establish a position in any litigation or any
arbitration or other proceeding based upon on in connection
with the subject matter of this agreement. Prior to any
disclosure pursuant to the preceding sentence, the disclosing
party shall give reasonable prior notice to the other party of
such intended disclosure and, if requested by such other
party, shall use all reasonable efforts to obtain a protective
order or similar protection for such other party. Neither
Graph-Tech nor any of Graph-Tech's subsidiaries shall be
deemed to be subsidiaries of UCAR for the purposes of this
paragraph.
14. This agreement shall be binding upon, and inure to the benefit
of, the parties and their respective successors and permitted
assigns. Except as otherwise expressly provided herein,
nothing contained herein shall be deemed to create any
third-party beneficiary rights in any individual who or entity
which is not a party to this agreement. Any assignment or
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delegation of this agreement by either party without the prior
written consent of the other party shall be void, except that
no such consent shall be required with respect to an
assignment or delegation made in connection with the sale,
transfer or other disposition of all or substantially all of
the businesses of either party or to an affiliate of the
party. This agreement shall survive the transfer by UCAR or
any or all of its direct or indirect interests in Graph-Tech.
15. 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.
16. This agreement and the Annexes attached hereto constitute the
entire understanding of the parties concerning the Services to
be provided hereunder and cancels and supercedes all previous
agreements and understandings, oral or written, between the
parties with respect to the subject matter hereof. This
agreement constitutes one of the "Service Agreements" referred
to in Article 1.3 of Transfer Agreement. No modification of
this agreement or waiver of any provision hereof or right
hereunder will be binding upon either party unless signed in
writing by an authorized representative of such party.
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If the above correctly reflects your understanding respecting
this matter, please so signify by having your authorized representative
sign below.
UCAR Carbon Company Inc.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
Agreed and Accepted:
UCAR Graph-Tech Inc.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: President
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Annex A: Services
A. Benefit Plans Administration
Design and recommend plans for management and Board approval as
appropriate, and administer/monitor all Corporate Benefit plans. This
includes the Health Care Plans, Pension Plan, Savings Plan, Life
Insurance and numerous other formal benefit plans. Corporate Benefit
Plans will also provide 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.
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Performs Savings Program processing functions, which include:
before-tax and after-tax enrollments.
Performs Pension Operations services, including calculating pension
benefits, and data maintenance.
Performs Accounting and Control functions, including recordkeeping,
billing and financial analysis of benefit plans.
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Annex B: 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
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E. Life Insurance/Disability Plans
- UCAR Carbon Basic Life Insurance Plan
- UCAR Carbon Long Term Disability Plan
- UCAR Carbon Business Travel Accident Plan
F. 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
G. Corporate Relocation Services
- Corporate Homesale Agreement (Prudential Relocation
Management, Inc.)
- Relocation Consulting Services Agreement
- Prudential Mortgage Services Agreement
H. Other Direct Billings
- UCAR Bonus Plan (businesses' portion as directly identified)
- Financial Counseling Program (businesses' portion as directly
identified)
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Annex C: Method of Payment for Services
A. Benefit Plans Operations and Administration
Collection of costs is performed through a series of budget centers. At
the beginning of each year, an allocation schedule is prepared for each
of the individual budget centers which identifies how the actual costs
incurred for that year are to be distributed to each of the various
elements of Employees Plans Expense ("EPE"). Such identification is
done on the basis of estimated time and effort or other logical basis
of estimated costs to be incurred.
Each month, the actual costs incurred in each of the applicable budget
centers are distributed as per the annual schedule and entitled
Departmental Administration. This Departmental Administration is then
incorporated as a part of each element of Employee Plans Expense by
Benefit Plans Accounting, and a proportionate share is allocated to
each of the business units which receive that applicable element of
EPE. The method of charging each business unit for EPE is covered in
Annex D.
B. Corporate Relocation Services
Annually, a series of fixed-rate fees are established which are
estimated to cover the total cost of operating the Corporate Relocation
Department based on the
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number of transferees, new hires and temporary relocations estimated to
be administered in that year. Each transfer authorization/temporary
assignment authorization processed generates a charge to the
business/location to which the employee is being transferred. These
charges, together with any associated actual costs of the Transfer
Assistance Program and its related agreements and income tax gross-up
procedure, are billed monthly as incurred.
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ANNEX D: METHOD OF DETERMINATION AND ALLOCATION OF EMPLOYEE PLANS EXPENSES
The costs of these services will be assigned, allocated and billed based upon
methods/procedures used to xxxx other businesses within UCAR. The objective is
to have each business pay for its fair share of the total Benefit Plans Costs.
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.
Savings plan costs (Company share) consist of expenses incurred based upon
UCAR's matching contribution 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.
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.
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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 active
headcount.
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.
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.
Employee assistance plan consists of fees to administer the plan. Employee
assistance costs will be allocated to Graph-Tech prorata based on total active
headcount.
Long Term disability cost 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.
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
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within the HMO.
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 collected at corporate and charged as a part of the General Services
provided to Graph-Tech.
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