EXHIBIT 10.10.2
FIRST AMENDATORY AGREEMENT TO THE
EMPLOYEE BENEFITS AGREEMENT
This Amendatory Agreement, dated as of May 31, 1994, between
Union Carbide Corporation ("UCC") and Praxair, Inc. (formerly
Union Carbide Industrial Gases Inc.) ("Praxair") amends the
Employee Benefits Agreement between the same parties dated as of
June 4, 1992 ("Employee Benefits Agreement"). All capitalized
terms in this Agreement, unless otherwise defined herein, shall
have the same meaning as set forth in the Employee Benefits
Agreement.
W I T N E S S E T H:
WHEREAS, UCC and Praxair are parties to the Employee
Benefits Agreement, which was intended, inter alia, to establish
a system of payments and reimbursements between the parties with
respect to employee benefit matters arising out of the spinoff of
Praxair (formerly a wholly owned subsidiary of UCC) to UCC's
shareholders; and
WHEREAS, UCC and Praxair wish to settle the transfer of
assets between their respective defined benefit plans as provided
in Paragraph 1 below; and
WHEREAS, UCC and Praxair desire to revise certain provisions
of the Employee Benefits Agreement for simplification purposes
and have determined that the best way to achieve such
simplification is for each party to give up the right to certain
payments under the Employee Benefits Agreement in amounts which
are intended to be, to the extent possible, economically neutral,
as provided in Paragraphs 2 to 5 below.
NOW, THEREFORE, in consideration of the mutual premises and
covenants contained herein, UCC and Praxair agree as follows:
1. In final satisfaction of all obligations with respect
to the transfer of assets between the parties' qualified defined
benefit plans, Two Million Dollars ($2,000,000.00) shall be
transferred in cash or securities from the trust for Praxair's
Retirement Plan to the trust for UCC's Retirement Plan ten days
after the date of this Agreement.
2. With respect to Paragraph 6 of the Employee Benefits
Agreement:
(a) A book reserve is maintained under UCC's
retire medical plan for claims incurred but unpaid (as
of June 30, 1992). The Praxair portion (29%) of such
reserve is fixed at Three Million Seven Hundred Thousand
Dollars ($3,700,000.00). This amount shall be applied
to Praxair's obligations for retiree medical claims.
Praxair's obligation to reimburse UCC for retiree
medical claims will commence only when such reserve
amount has been exhausted.
(b) There are reserves at Metropolitan Life for
Basic Life Plan claims for deaths before the Spinoff
Date and for employees who were disabled before 1986 and
die before attaining age 65. Settlement of these
claims shall be entirely for UCC's account. Thus, UCC
will be entitled to the positive or negative experience
of such reserves after payment of such claims. Praxair
shall have no responsibility for, or rights in, such
reserves and shall have no liability with respect to
such claims.
(c) The Consumer Products reserve credit
adjustment, and the value of Kemet reimbursements, for
retiree life and medical benefits shall be eliminated
from all calculations under the Employee Benefits
Agreement.
(d) Internal and external administrative costs for
retiree life and medical shall be 7.5% of gross claims
paid.
(e) The value of UCAR reimbursement is eliminated
from all calculations under retiree life and medical
and, in exchange, Praxair's reimbursement obligations is
changed from twenty-nine percent (29%) to twenty-seven
and four one-hundredths percent (27.04%). In keeping
with UCC's past practice for charging businesses for
expenses before the Spinoff Date, if UCAR defaults on
its payment obligation to UCC, and UCC is not otherwise
compensated with respect to such default, Praxair's
obligation will revert to twenty-nine percent (29%)
during the period of any such default. Should
UCC subsequently be reimbursed by UCAR with respect to
such defaulted amount, Praxair will share in such
reimbursement to the extent necessary to restore it to
its 27.04% contribution level.
3. Paragraph 8 of the Employee Benefits Agreement is
expanded to provide that from and after the Spinoff Date, Praxair
will be entitled to twenty-nine percent (29%) of any recovery,
whether by successful claim or settlement, made by the UCC
Retirement Plan arising from events which occurred before the
Spinoff Date, excluding any recovery in the Aqua Culture
investment which was retained in UCC's Retirement Plan after the
Spinoff. The calculation of any such recovery will be net of
expenses, including legal fees, incurred in pursuing such claims.
For purposes of Paragraph 8 of the Employee Benefits
Agreement, the American Typlax settlement is expressly included
in claims against the UCC Retirement Plan for which Praxair has a
contribution obligation.
4. With respect to Paragraph 22 of the Employee Benefits
Agreement:
(a) The administrative cost of UCC's pension
operations is excluded from all calculations of
Praxair's reimbursement obligations.
(b) Praxair's annual reimbursement obligation for
administrative services other than pension operations
shall be the lesser of (i) fourteen and one-half percent
(14.5%) of UCC's cost, or (ii) one-hundred thousand
dollars ($100,000.00).
5. All the above provisions are effective as of the
Spinoff Date, as if included in the Employee Benefits Agreement,
and any contrary or inconsistent provision in the Employee
Benefits Agreement is hereby superceded.
6. In the event of national health care legislation which
would substantially change the rights of the parties under the
Employee Benefits Agreement and this Amendatory Agreement, the
parties agree to re-negotiate the provisions of this Amendatory
Agreement to the extent necessary to achieve an equitable
arrangement which comports with the intent of the Employee
Benefits Agreement and this Amendatory Agreement.
7. All bills rendered and paid to date under the Employee
Benefits Agreement will be adjusted to comport with this
Amendatory Agreement.
8. The parties believe that Exhibit A hereto is an
accurate representation of the financial impact of the terms of
this Amendatory Agreement for the period July 1, 1992 through
December 31, 1993, but reserve the right to subject to contents
of such Exhibit A to the review and audit procedures described in
Paragraph 28 of the Employee Benefits Agreement.
IN WITNESS WHEREOF, the parties have duly executed and
entered into this Agreement, as of the date first above written.
UNION CARBIDE CORPORATION
By:____Robert F.X. Fusaro
Name:__Robert F.X. Fusaro
Title: Attorney-in-Fact__
PRAXAIR, INC.
By:____David H. Chaifetz_
Name:__David H. Chaifetz_
Title:_General Counsel___
UCC will furnish to the Commission supplementally on request
a copy of Exhibit A (financial impact of terms of this Amendatory
Agreement for the period July 1, 1992 through December 31, 1993)
which has been omitted.