USMX-ILA MASTER CONTRACTMEMORANDUM OF SETTLEMENTBETWEENUNITED STATES MARITIME ALLIANCE, LTD.
(For And On Behalf of Management)
AND
INTERNATIONAL LONGSHOREMEN'S ASSOCIATION, AFL-CIO(For And On Behalf of Itself And Each Of Its Affiliated Districts AndLocals Representing Longshoremen, Clerks, Checkers And Maintenance
Employees Working On Ships And Terminals In Ports
On The East And Gulf Coasts Of The United States)

This Memorandum of Settlement ("MOS") entered into on this 25th day of September,
2018 between the UNITED STATES MARITIME ALLIANCE, LTD. ("USMX") for and on
behalf of its members and any stevedores, marine terminal operators, and carriers that hereafter
become members of USMX or that hereafter subscribe to the Master Contract and theINTERNATIONAL LONGSHOREMEN'S ASSOCIATION, AFL-CIO ("ILA") for and on
behalf of its affiliated districts and locals representing longshoremen, clerks, checkers, andmaintenance employees working on ships and terminals in ports on the East and Gulf Coasts of
the United States establishes the terms and conditions of employment for a new Master Contract
covering only container and ro-ro operations at ports on the East and Gulf Coasts of the UnitedStates to replace the existing Master Contract, including all amendments thereto, which went
into effect on October 1, 2012 and will expire on September 30, 2018 (the "2012 MasterContract").
A.

TERM OF AGREEMENT

The term of the new Master Contract (and of all local collective bargaining agreements
covering employees engaged in work involving container and ro-ro operations on the East andGulf Coasts of the United States) shall be for six years from October 1, 2018 through andincluding September 30, 2024.

B.

WAGES

(a)

Effective October 1, 2019, employees who were employed as of
September 30, 2019, and who are receiving a straight-time basic wage

rate of $35.00 per hour as of September 30, 2019, shall receive an
increase of $1.00 per hour in their straight-time basic wage rate.
(b)

Effective October 1, 2021, employees who were employed as of
September 30, 2021, and who are receiving a straight-time basic wage
rate of $36.00 per hour as of September 30, 2021, shall receive an
increase of $1.00 per hour in their straight-time basic wage rate.

(c)

Effective October 1, 2022, employees who were employed as of
September 30, 2022, and who are receiving a straight-time basic wage
rate of $37.00 per hour as of September 30, 2022, shall receive an
increase of $1.00 per hour in their straight-time basic wage rate.

(d)Effective October 1, 2023, employees who were employed as of
September 30, 2023, and who are receiving a straight-time basic wage
rate of $38.00 per hour as of September 30, 2023, shall receive an
increase of $1.00 per hour in their straight-time basic wage rate.

(e)

In the South Atlantic and Gulf ports, one of the above wage dollar
increases may be converted to a fringe benefit hourly contribution at arate that includes not only the $1.00 wage rate but also all payroll taxes
applicable to that $1.00 wage rate based on calculations agreed to by
USMX and ILA.

2

Contract Years

I 0/01 / 1809/30/ 19* Wage Increase of $ 1.00 onl y for Highest Rate

I 0/0 I/ 19 I 0/0 I /20 I 0/0 I /2 I 10/0 1/22
09/30/20 09/30/21 09/30/22 09/30/23*

I 0/01/23
09/30/24***

If the employee has the following Qualified Anniversary
iYears of Service on October I of the Contract Years se,~brth above. the Employee·s straight-time basic wage rattt-or each Contract Year ofthis Master Contract will be:-0$20.00$20.00$20.00$20.00$20.00$20.00I$20.00$20.00$20.00$20.00$20.00$20.002$23.75$24.00$24.00$24.25$24.50$24.75

3$23.75$24.00$24.00$24.25$24.50$24.754$29.40$30.00$30.00$30.60$31.25$3 1.905$29.40$30.00$30.00$30.60$31.25$31.906 o r More

$35.00$36.00$36.00$37.00$38.00$39.00--~C.

-

CONTAI NER ROYALTY DISTRIBUTIONSThe ILA's and USMX's shares of the Container Royalty Nos. I and 3 assessments
collected that are in excess of the amounts needed to satisfy the contractua l obligations set forthin Article XII, Section 3(a) of the 2012 Master Contract shall be calculated as follows:(a)At the end of the 20 18-2019 contract year, the ILA's share shall equal thesum of (a) the first $15 million (hereinafter referred to as "ILA's Initial
Lump-Sum Amount") plus (b) 50% of the remaining excess;(b)

At the end of the 20 19-2020 contract year, the ILA' s share shal l equal thesum of (a) the first $16 mil lion plus (b) 50% of the remaining excess;,.,.)

D.

(c)

At the end of the 2020-2021 contract year, the ILA's share shall equal thesum of (a) the first $17 million plus (b) 50% of the remaining excess;(d)

At the end of the 2021-2022 contract year, the ILA's share shall equal thesum of (a) the first $18 million plus (b) 50% of the remaining excess;(e)

At the end of the 2022-2023 contract year, the ILA' s share shall equal thesum of (a) the first $19 million plus (b) 50% of the remaining excess; and(t)At the end of the 2023-2024 contract year, the ILA's share shall equal thesum of (a) the first $19 million plus (b) 50% of the remaining excess.

(g)

The ILA shall have the right to designate how its share of the excess will
be used, and USMX shall have the right to designate how its share of theexcess will be used. In the event there is no excess in any Contract Year,
ILA's and USMX's shares shall be zero. In the event the excess in any
Contract Year is less that the ILA's Initial Lump-Sum Amount, the shareof the excess to which the ILA will be entitled shall be limited to theamount of the total excess for that Contract Year and the share of theexcess to which USMX will be entitled shall be zero.

MONEY PURCHASE PLAN

The ILA and USMX shall create a coast-wide money purchase plan for qualified
employees who are working hours under the Master Contract in ports that do not have local
money purchase plans. The coast-wide money purchase plan will be centrally managed.
Qualification thresholds and disbursements for the coast-wide plan shall be agreed upon by
USMX and the ILA. Where a local money purchase plan exists, the money purchase plan
contributions prescribed in this Section D will be transferred to the local money purchase plan.
In any port one of the two hourly contributions may be converted into an additional hourly
contribution for local fringe benefit purposes set forth in Article IV of the 2012 Master Contract
provided the conversion is agreed to by all of the ILA locals covered by the Master Contract in aport as well as the labor and management trustees in the port. The money purchase plan
contributions shall be as follows:

E.

(a)

Effective October 1, 2018, qualifying employees shall receive a $1.00 per
hour contribution; and(b)Effective October 1, 2020, qualifying employees shall receive anadditional $1.00 per hour contribution.

MILA FUNDING

Effective October 1, 2018, the Fourth Container Royalty Assessment for the funding ofMILA, which is set forth in Article XIII, Section 2(a) of the 2012 Master Contract, shall be in4the amount of $1.50. There shall be no reduction in MILA benefits during the term of thisAgreement.
F.

CARIBBEAN BASIN INITIATIVE AGREEMENTThe Caribbean Basin Initiative agreement set forth in the 5th Amendment to the 2012
Master Contract shall be extended for the term of this Agreement. After the second year of theAgreement, USMX and the ILA shall review the Caribbean Basin Initiative to determine its
continuing efficacy.

G.

H.

AUTOMATIC CCF PAYMENTS(a)

Effective October 1, 2018, Article XII, Section 4( d)(i) of the 2012 Master
Contract shall be amended to add an additional $2 million annualautomatic payment to the South Atlantic District Escrow Fund (SADEF).

(b)

Effective October 1, 2018, Article XII, Section 4(d)(ii) of the 2012
Master Contract shall be amended to add an additional $2 million annualautomatic payment to the Maritime Association-ILA Funds (West Gulf).

SOUTH ATLANTIC VACATION and HOLIDA y BENEFITS

Hourly vacation and holiday benefits payable to all eligible participants by the South
Atlantic ILA/Employers Vacation & Holiday Fund shall be set at $25.00 per hour.

I.

FLEXIBILITY for VESSEL NON-ARRIVAL(a)Each local port or district must institute a set-back/cancellation policy atwaterfront facilities within two hours of the vessel start time.

(b)

The policy must conform with the following criteria:
There must be no additional start times;
11. There shall be no reduction in manning or equipment;
111. The policy must address punitive set-back times as wellas firm and non-cancellable set-back times;
1v. The policy must address and confirm any local policies; andv. The policy must allow set-backs up to two times.
1.

J.

INDUSTRY RESOURCE COMMITTEE

The parties reaffirm their commitment to the objectives of the Industry Resource
Committee as set forth at Article XIV, Section 7 of the 2012 Master Contract, and the Industry
Resource Committee shall address the following matters:

5K.

(a)

Define what constitutes shipper-controlled containers as opposed tocarrier-controlled containers;(b)

Determine whether security yards violate the batching rule of the Master
Contract;(c)

Develop a verifiable system for auditing jobs created by technology;(d)Consider the implementation of a national Port of Discovery system formonitoring major damage containers; and(e)Consider the impact of the change in the carrier genset model.

DATA COLLECTIONUSMX and the ILA in conjunction with all ports on the East and Gulf Coasts where
employees are receiving benefits provided by the Master Contract shall jointly collect data
related to implementation and administration of the Master Contract and the negotiation offuture agreements.

L.

NEW TECHNOLOGY IMPLEMENTATION AND WORKFORCE PROTECTION

Article XI of the 2012 Master Contract shall be amended in its entirety to read as
follows:(a)Management in partnership with the ILA shall protect the Master
Contract workforce for the term of this Master Contract while improving
efficiency and capacity on the terminals.

(b)

There shall be no fully-automated terminals developed and no fullyautomated equipment used during the term of this Master Contract. The
term "fully-automated" is defined as machinery/equipment devoid ofhuman interaction.

(c)

There shall be no implementation of semi-automated equipment ortechnology/automation until both parties agree to workforce protections
and staffing levels.

(d)

The following guidelines shall be followed for instituting workforce
protections:

6i.
11.

iii.

iv.
v.

Define the types of technology and the effects on capacity andefficiency;
Determine the manning for the new equipment;
Identify the new work created by technology;
Determine the possibility of reassignment within craft subject toapproval by the New Technology Committee; andProvide necessary training.

(e)

In order to protect the workforce, there must be a determination of thenumber of positions affected (head count), rate of pay (Master Contract
wages), and similar Master Contract hours in remaining or new Master
Contract positions.

(f)Procedure:
1.

11.

111.

1v.

v.

Local parties must negotiate implementation within 90 days withassistance of New Technology Committee Co-Chairs if necessary
and in doing so adhere to the spirit of this Agreement as defined insubsection L(a) above.
All local agreements are subject to review and approval by USMX
and the ILA International.
If no local agreement after 90 days, the ILA and USMX
Subcommittee shall resolve open issues within 30 days.
If the Subcommittee cannot agree, then two members each fromthe ILA and USMX Subcommittee shall have another 30 days toresolve the open issues.
If the Four-Member Panel cannot agree, then an Industry Advisor(George Cohen/J. J. Pierson) and the four members shall have 15days to resolve all open issues.

(g)All agreements are final and binding.

(h)All negotiations, resolutions, and agreements are port-specific.

(i)All of the above time periods are subject to extension by mutual
agreement of the parties.

7

M.

CR-5 FUNDING STUDY

During the nine-month period following the execution of this Memorandum ofSettlement, the parties shall undertake a study of the feasibility of implementing alternative
methods of generating additional revenue to provide funding for CR-5.

N.

EXISTING TERMS AND CONDITIONS(a)All the terms and conditions of the 2012 Master Contract, including all
extensions and amendments thereto as well as all decisions anddeterminations of the various USMX-ILA Committees and Boards,including the USMX-ILA Industry Resource Committee, shall remain in
full force and effect during the entire term of this Agreement from
October 1, 2018, to and including September 30, 2024, except as
modified by the terms of this Memorandum of Settlement.

(b)

The parties specifically reaffirm their commitment to the following
provisions in the 2012 Master Contract:
1.
11.

m.
1v.
v.
(c)

Joint Contract Implementation Team -Article XIX, Section 5;
Labor Adjuster System - Article VII, Section 4(b);Study of Port Authority Model - Article VII, Section 7(a);Dedicated Workforce for Stuffing and Stripping - Article VII,Section 9; andCBP Inspections - Article VII, Section 13.

This Memorandum of Settlement upon ratification by the parties settles
all issues between the parties relating to all crafts and shall go into fullforce and effect on October 1, 2018.

IN WITNESS WHEREOF, the parties hereto have executed this Memorandum ofSettlement on the day an Yi ar first above written.
UNITED ST ATES

By:

ALLIANCE, LTD.

----=-------------David F. Adam, Chairman/CEO50132

8INTERNATIONAL LONGSHOREMEN'SASSOCIATION, AFL-CIO