EXHIBIT 10.13
EMPLOYEE BENEFITS AGREEMENT
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AGREEMENT, dated as of January 1, 1997, by and between PRAXAIR, INC.,
a Delaware corporation (hereinafter referred to as "Praxair") and CHICAGO BRIDGE
& IRON COMPANY, a Delaware corporation (hereinafter referred to as "Bridge").
(Bridge and all its subsidiaries are hereinafter referred to as the "Bridge
Group.")
W I T N E S S E T H:
WHEREAS, as a result of an Agreement and Plan of Merger among Praxair,
PX Acquisition Corporation and CBI Industries, Inc., a Delaware corporation,
("CBI Industries"), dated as of December 22, 1995, Praxair acquired all of the
common stock of CBI Industries, and Bridge became an indirect subsidiary of
Praxair; and
WHEREAS, upon the filing of a Certificate of Ownership and Merger with
the Secretary of State of Delaware on December 19, 1996, CBI Industries was
merged with and into Praxair; and
WHEREAS, Praxair intends to sell some or all of its interest in
Bridge, and, in anticipation of such sale, Praxair and Bridge desire to define
their respective rights and obligations with respect to certain employee benefit
plans and liabilities;
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein and other good, valuable and sufficient consideration, the
receipt of which is hereby acknowledged, the parties, intending to be legally
bound, hereby agree as follows:
1. (a) Effective as of the January 1, 1997 (hereinafter the
"Effective Date"), Praxair will assume sponsorship of the CBI Pension Plan, and
have sole responsibility for making required contributions to such Plan. Bridge
shall, and shall cause its United States subsidiaries to, continue to
participate in the CBI Pension Plan. Neither Bridge nor any of its United
States subsidiaries may cease such participation without Praxair's express
written approval. Bridge will pay to Praxair, with respect to the benefits
under the CBI Pension Plan, the principal sum of seventeen million two hundred
seventy thousand dollars ($17,270,000.00), plus interest accrued from the
Effective Date at the rate of seven and one-half percent (7 1/2%) per annum.
Subject to Paragraph 9(a) of this Agreement, such payments shall constitute
Bridge's total and sole obligation with respect to CBI Pension Plan and its
related trust for all present and future benefits accrued under the CBI Pension
Plan for any participant and all costs and expenses related thereto. The
principal shall be paid in twelve annual payments commencing on December 1, 1997
and continuing on each December 1st until and including December 1, 2008. Each
such payment shall consist of a principal repayment of one million four hundred
thirty-nine thousand one hundred sixty-six dollars and sixty-six cents
($1,439,166.66), plus all interest accrued to the date of such payment.
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(b) Praxair shall have sole authority to administer and amend the CBI
Pension Plan, and to manage the assets thereof; provided, however, that (unless
such amendment is required by law) no amendment shall be made which affects the
benefits of Bridge Group employees without the consent of Bridge, which consent
shall not unreasonably be withheld. Bridge shall not be, and shall not be
deemed to be, either the plan administrator, a contributing sponsor or a named
fiduciary for any purpose under the CBI Pension Plan.
2. (a) Praxair will retain sole responsibility for retiree life and
medical benefits for individuals who retired with an immediate entitlement to
such benefits from CBI Industries or its affiliates prior to the Effective Date
("Retiree Benefits"). Bridge will pay to Praxair, with respect to the Retiree
Benefits, the principal sum of twenty-one million four hundred thousand dollars
($21,400,000.00), plus interest accrued from the Effective Date at the rate of
seven and one-half percent (7 1/2%) per annum. Subject to Paragraph 9(a) of
this Agreement, the sum of such payments, plus the payment of the amounts set
forth in Schedule 2(b) hereto, shall constitute Bridge's total and sole
obligation with regard to the Retiree Benefits for all present and future
benefits accrued under the Retiree Benefits for any participant and all costs
and expenses related thereto. The principal shall be paid in twelve annual
payments, commencing on December 1, 1997 and continuing on each December 1st
until and including December 1, 2008. Each such payment shall consist of a
principal repayment of one million seven hundred eighty-three thousand three
hundred thirty three dollars and thirty-three cents ($1,783,333.33), plus all
interest accrued to the date of such payment.
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(b) During calendar year 1997, Bridge shall provide administrative
services with respect to the Retiree Benefits. Effective 1998, and continuing
thereafter, Praxair shall have responsibility for providing such services.
Bridge's compensation for providing such services for 1997, and Praxair's
compensation for providing such services for 1998, shall be deemed for purposes
of this Agreement to be equal, and neither party shall owe the other with
respect to the provision of such services during those two years. Commencing in
1999, Bridge shall pay Praxair for its share of such services. Although such
services will be provided by Praxair for a protracted period of time, the
parties have agreed that Bridge shall pay Praxair for its share of such services
for the entire time they are provided by Praxair, but that such payments shall
be paid to Praxair by Bridge over a period extending from December 1, 1999 to
December 1, 2009, inclusive, as set forth in Schedule 2(b) hereto. Bridge may
make prepayments of such amounts only as agreed to by the parties from time to
time. Except to the extent it acts a fiduciary during 1997, Bridge shall not
be, and shall not be deemed to be, either the plan administrator or a named
fiduciary for any purpose under the Retiree Benefits.
(c) The parties acknowledge that the payments to Praxair under
Paragraph 2(a) have been calculated on the assumption that benefits under the
Retiree Benefits will not be reduced by amendment in the future. In the event
Praxair amends the Retiree Benefits to reduce the benefits available thereunder,
such payments to be made to Praxair by Bridge will be recalculated commensurate
with such benefit reduction.
(d) During calendar year 1997, Bridge shall maintain certain required
medical, life insurance, and long-term disability benefits for which Praxair has
financial
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responsibility for (i) eligible former employees of CBI Industries and
affiliates who terminated employment prior to the Effective Date, (ii) retirees
entitled to Retiree Benefits, and (iii) employees of MQS Inspection, Inc. and
Cooperheat, Inc. (collectively, "Non-Bridge Participants"). Bridge shall pay
from its general assets, all claims, insurance premiums, and third party
provider fees ("Welfare Benefits Payments") for such Non-Bridge Participants.
Praxair shall reimburse Bridge for such Welfare Benefits Payments on a monthly
basis. For purposes of such reimbursement, Welfare Benefits Payments will also
include all claims, insurance premiums, and third party provider fees paid with
respect to CBI Industries welfare benefits plans on behalf of then active
employees of CBI Industries and affiliates, but only to the extent that such
claims or payments are incurred in, or paid with respect to, periods prior to
the Effective Date.
3. Praxair shall retain all liabilities which exist as of the
Effective Date under the CBI Industries, Inc. Supplemental Survivors' Benefit,
Executive Life Insurance and Benefit Restoration Trust (the "Rabbi Trust"), and
no assets of the Rabbi Trust shall be transferred to the Bridge Group, except
where otherwise agreed through individual arrangements entered into by specific
participants. Active Bridge Group employees will accrue no further benefits
under any plans covered by the Rabbi Trust on or after the Effective Date, and
neither the Rabbi Trust nor Praxair shall be obligated to make any premium
payments for any active Bridge Group employees under any Executive Life
Insurance policies on or after the date that Bridge ceases to be part of the
Praxair controlled group.
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4. Bridge shall be solely responsible and liable for the amount of
any and all variable compensation for Bridge Group employees.
5. Bridge shall be solely liable for, and shall indemnify Praxair and
its subsidiaries which are not part of the Bridge Group, from and against any
liability for, any termination payments made to, or claims for termination
payments made by, any employee or former employee of Bridge or any of its direct
or indirect subsidiaries (excluding MQS Inspection, Inc., Cooperheat, Inc. and
Ershigs, Inc.) and any other entities in which they or any of them hold or
heretofore held a direct or indirect interest (collectively referred to
hereinafter as the "Bridge Companies"), regardless of when such payments are
made or when such claim is presented, and regardless of when such termination
occurred.
6. Bridge shall be solely responsible for any liability in connection
with multiemployer plan withdrawal where such liability arose from a complete or
partial withdrawal at any time from such a plan by any of the Bridge Companies,
as defined in Paragraph 5.
7. The Bridge Group shall not participate in any Praxair benefit
plans and programs as of the Effective Date other than the CBI Pension Plan.
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8. Except where otherwise stated, nothing in this Agreement shall be
construed or interpreted to restrict Praxair's or Bridge's individual right or
authority to amend or terminate any benefit plans, policies or programs,
maintained by such party, effective as of a date following the Effective Date.
9. (a) Notwithstanding any other provision of this Agreement, if any
amount payable hereunder to Praxair is not paid when due, then from and after
such due date interest shall accrue on the overdue amount until paid at the
greater of (i) the rate of seven and one-half percent (7 1/2%) per annum, and
(ii) a fluctuating interest rate equal to two percent (2%) plus the prime, base
or comparable rate of interest announced by Citibank N. A. (or its successor) in
New York City from time to time (but in no event greater than the highest
applicable non-usurious rate permitted under the laws of the State of New York).
(b) Bridge may at any time and from time to time prepay its
obligations under Paragraphs 1(a) and 2(a) of this Agreement in full or in part,
provided that any partial prepayment shall be in the amount of at least one
million dollars ($1,000,000.00) and shall be accompanied by a statement from
Bridge designating which obligation(s) under this Agreement are being prepaid.
Prepayments shall be applied first against accrued and unpaid interest with
respect to the obligation being prepaid, and then against installments of such
obligation in the inverse order in which such installments become due.
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10. Other than the failure to pay monies when due hereunder, neither
Praxair nor Bridge shall 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 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 similar or dissimilar
occurrence which would have a material adverse impact on the ability of Praxair
or Bridge to perform hereunder. If a party fails to perform hereunder as a
result of any occurrence described in the preceding sentence, such affected
party shall (i) give written notice to that effect to the other party promptly
after such occurrence together with a statement setting forth reasonably full
particulars concerning such occurrence and (ii) use reasonable efforts to remedy
such 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 occurrence, the
performance by the affected party 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, the affected party shall promptly notify the other
party and any such suspension shall end.
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11. Each party agrees to refrain and to cause its subsidiaries and
affiliates to refrain from using 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 relating to any
employees or 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 or (ii)
is subsequently disclosed to it or its subsidiaries or 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, but 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 proceedings based upon or
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. In applying this
Paragraph 11, members of the Bridge Group shall not be considered to be
subsidiaries or affiliates of Praxair.
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12. Bridge shall hold harmless, indemnify and defend Praxair from and
against any and all costs, expenses, claims, damages, lawsuits, attorneys' and
accountants' fees, losses, deficiencies, assessments, administrative orders,
fines, penalties, actions, proceedings, judgments, liabilities and obligations
of any kind or description (a "Claim" or "Claims") asserted against, incurred or
required to be paid by Praxair (regardless of when asserted or by whom),
associated with or arising under any employee benefit plan or policy
established, adopted or maintained by Bridge on or after the Effective Date.
Praxair shall hold harmless, indemnify and defend Bridge from and
against any and all Claims, asserted against, incurred or required to be paid by
Bridge (regardless of when asserted or by whom), associated with or arising
under any employee benefit plan or policy maintained by Praxair and not
expressly assumed by Bridge pursuant to this Agreement.
13. Each party shall furnish, or shall cause to be furnished, to the
other party all plan participant and employee data or information in its
possession which is necessary for such other party to maintain and implement any
employee benefit plan or arrangement covered by this Agreement, or to comply
with the provisions of this Agreement, and which is not otherwise readily
available to such other party.
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14. 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 individual who or entity which is not a party to this Agreement. Any
assignment or delegation of this Agreement by either party without the prior
written consent of the other party, which shall not unreasonably be withheld,
shall be void. Notwithstanding the foregoing, no consent shall be required for
Praxair to assign its right to receive payments hereunder. No assignment of an
obligation hereunder shall act to release the assigning party as primary obligor
therefor.
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 New York, without reference to its conflicts of laws rules or
principles.
16. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and supersedes as of the
Effective Date all previous agreements and understandings, oral or written,
between the parties to the extent such previous agreements address such subject
matter. 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. This Agreement will continue in force
on the terms and conditions described herein until terminated or amended by
mutual agreement of the parties.
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17. Notwithstanding anything in this Agreement to the contrary, all
actions contemplated by this Agreement with respect to employee benefit plans
which are to be consummated pursuant to this Agreement shall be subject to such
notices to, and/or approvals by, the Internal Revenue Service ("IRS"), Pension
Benefit Guaranty Corporation (or other governmental agency or entity) as are
required or deemed appropriate by the plan's sponsor. Praxair and Bridge each
agrees to use its best efforts to cause all such notices and/or approvals to be
filed or obtained, as the case may be.
18. The provisions of this Agreement are severable. The invalidity,
in whole or in part, of any provision of this Agreement shall not affect the
validity or enforceability of any other of its provisions. If one or more
provisions hereof shall be declared invalid or unenforceable, the remaining
provisions shall remain in full force and effect and shall be construed in the
broadest possible manner to effectuate the purposes hereof. The parties further
agree to replace such void or unenforceable provisions of this Agreement with
valid and enforceable provisions which will achieve, to the extent possible, the
economic, business and other purposes of the void or unenforceable provisions.
19. From and after the Effective Date, each of Praxair and Bridge
shall cause to be performed, and hereby guarantees the performance and payment
of, all actions, agreements, obligations and liabilities set forth herein to be
performed or paid by its
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subsidiaries. For purposes of this Paragraph 19, no Bridge Group member shall be
considered to be a subsidiary of Praxair.
20. No failure or delay on the part of Praxair or Bridge in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure by Praxair or Bridge therefrom shall in any event
be effective unless the same shall be in writing, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given.
21. For the convenience of the parties, any number of counterparts of
this Agreement may be executed by the parties hereto, and each such executed
counterpart shall be deemed to be an original instrument.
22. All communications, notices, and disclosures required or
permitted by this Agreement shall be in writing and shall be deemed to have been
given at the earlier of (i) the date actually delivered to an officer of the
other party or (ii) when postmarked in the case of a notice, etc., deposited in
the United States mail, first class postage prepaid, and
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addressed as follows (unless and until either party notifies the other in
accordance with this
Paragraph 22, of a change in address):
If to Praxair, Inc.:
00 Xxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Vice President, Human Resources
If to Chicago Bridge & Iron Company:
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: General Counsel
IN WITNESS WHEREOF, the parties have duly executed and entered into
this Agreement, as of the date first above written.
PRAXAIR, INC.
By: /s/ Xxxxxx F.X. Xxxxxx
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Name: Xxxxxx F.X. Xxxxxx
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Title: Attorney-in-Fact
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CHICAGO BRIDGE & IRON COMPANY
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
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Title: Vice President
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SCHEDULE 2(b)
Payment Due Date Payment Amount
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December 1, 1999 $109,358.00
December 1, 2000 $109,358.00
December 1, 2001 $109,358.00
December 1, 2002 $109,358.00
December 1, 2003 $109,358.00
December 1, 2004 $109,358.00
December 1, 2005 $109,358.00
December 1, 2006 $109,358.00
December 1, 2007 $109,358.00
December 1, 2008 $109,358.00
December 1, 2009 $109,358.00
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