EXHIBIT 10.5
ARTICLES OF AGREEMENT
BETWEEN
STERLING CHEMICALS, INC.
ITS SUCCESSORS AND ASSIGNS
AND
TEXAS CITY, TEXAS
METAL TRADES COUNCIL, AFL-CIO
TEXAS CITY, TEXAS
May 1, 2007
to
May 1, 2012

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CONTENTS

             
ARTICLE 7
  SUPERVISORS DOING HOURLY WORK     20  
ARTICLE 8
  WORK CLASSIFICATIONS     20  
ARTICLE 9
  STAFFING OF NEW UNITS     20  
ARTICLE 10
  STEWARDS     21  
ARTICLE 11
  CONTRACT WORK     21  
ARTICLE 12
  PAY DAY     22  
ARTICLE 13
  PHYSICAL EXAMINATIONS     22  
ARTICLE 14
  DISCRIMINATION     23  
ARTICLE 15
  UNION REPRESENTATIVES     23  
ARTICLE 16
  JURY SERVICE     23  
ARTICLE 17
  ELECTION DAY REGULATIONS     24  
ARTICLE 18
  REPLACEMENT OF CLOTHING     25  
ARTICLE 19
  LAYOFF NOTICE — SEPARATION ALLOWANCE     25  
ARTICLE 20
  LEAVE OF ABSENCE     27  
ARTICLE 21
  SANITATION AND SAFETY     28  
ARTICLE 22
  BULLETIN BOARDS     29  
ARTICLE 23
  COMPANY RULES     29  
ARTICLE 24
  PRODUCTIVITY STATEMENT     30  
ARTICLE 25
  FUNERAL LEAVE     31  
ARTICLE 26
  STRIKES AND LOCKOUTS     32  
ARTICLE 27
  GRIEVANCE PROCEDURE AND
DISCIPLINE RECORDS     32  
ARTICLE 28
  ARBITRATION PROCEDURE     35  
ARTICLE 29
  ABROGATION OF CONTRACT ARTICLES     35  
ARTICLE 30
  OCCUPATIONAL & NON-OCCUPATIONAL
ACCIDENT AND SICKNESS PLAN     36  
ARTICLE 31
  WORK ASSIGNMENTS     39  
ARTICLE 32
  CONTRACT PERIOD     39  
 
           
EXHIBIT A
  12 HOUR SHIFT AGREEMENT     42  
EXHIBIT B
  WAGE RATES     59  
EXHIBIT C
  EMPLOYEE BENEFITS     61  
 
           
NO JURISDICTION
SUPPORTING INFORMATION
        64  

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ALPHABETICAL INDEX

                  PARAGRAPH    
Signatory Unions
  1    
Basic Principles
  2    
Union Recognition
  3    
Scope of Agreement
  4    
 
    ARTICLE 29  
ABROGATION OF CONTRACT ARTICLES
  69    
 
    ARTICLE 28  
ARBITRATION PROCEDURE
       
Appealed Grievance Time Length
  68 b)    
Arbitration Expenses
  68 c)    
Arbitrator Authority
  68 d)    
Length of Time to Arbitrate
  68 a)    
Time Limit Failure
  68 e)    
 
    ARTICLE 22  
BULLETIN BOARDS
  62 a)    
 
    ARTICLE 23  
COMPANY RULES
  63 a)    
 
    ARTICLE 32  
CONTRACT PERIOD
  80 a) thru d)    
 
    ARTICLE 11  
CONTRACT WORK
       
Utilizing Independent Contractors
  42 a)    
 
    ARTICLE 14  
DISCRIMINATION
       
Charges of Discrimination
  45 b)    
 
    ARTICLE 17  
ELECTION DAY REGULATIONS
       
Election Judge
  52 b)    
Employees Time off to Vote
  52 a)    
 
    ARTICLE 25  
FUNERAL LEAVE
       
Funeral Leave
  65 a) & b)    
Funeral Leave while on Vacation
  65 c)    
Pallbearer
  65 g)    
Proof of Relationship
  65 f)    
 
    ARTICLE 27  
GRIEVANCE PROCEDURE AND DISCIPLINE RECORDS
       
Discharge Grievance Process
  67 c) thru e)    
Grievance Lapse Time
  67 a) 1)    
Grievance Time Limit Exceptions
  67 f)    
Length of Time to Answer Grievance
  67 a) 6)    
Letters of Reprimand
  67 g) & h)    
PUC Meeting Membership
  67 b)    
Sick Pay Benefit Grievance
  67 a) 5)    
Step 1 - Grievance Procedure
  67 a) 2)    
Step 2 - Grievance Procedure
  67 a) 3)    
Step 3 - Grievance Procedure
  67 a) 4)    
 
    ARTICLE 3  
HOURS OF WORK
       
Changes to Materials Handling Schedule
  13 h)    
Dentist/Doctor Appt. 3 Hrs Unpaid
  13 f)    
Hours of Work — Maintenance
  12 a) thru c)    
Hours of Work — Groups 1, 2, & 4
  11 a) thru b)    
Normal Workweek
  13 d)    
Schedule Less than 40 Hours Inadvertently
  13 e)

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ALPHABETICAL INDEX

                  PARAGRAPH    
Shift Work Scheduling (when deemed necessary)
  13 a) & d)    
“Shift Work” – Definition of
  13 g)    
 
    ARTICLE 16  
JURY SERVICE
       
Afternoon Court Appearance
  49 a) & 51 a)    
Morning Court Appearance
  48 a)    
Proof of Service
  50 a)    
 
    ARTICLE 19  
LAYOFF NOTICE — SEPARATION ALLOWANCE
       
Eligibility for Separation Allowance
  57 a) & b)    
Labor Dispute Lay Off
  54 c)    
Lay Off Notice
  54 a) thru b)    
Lay Off Separation Allowance
  55 a)    
Method of Payment of Separation Allowance
  56 a) thru d)    
 
    ARTICLE 20  
LEAVE OF ABSENCE
       
Leave of Absence for Personal Reasons
  58 a)    
Leave of Absence for Union Conventions
  58 b)    
Leave of Absence to Accept Employment with the Union
  58 c)    
Leave of Absence For Newborn Child
  58 d)    
Public Office Appointment
  58 e)    
 
    ARTICLE 1  
MANAGEMENT RIGHTS
  5    
 
    ARTICLE 30  
OCCUPATIONAL & NON-OCCUPATIONAL ACCIDENT AND SICKNESS PLAN
       
Benefit Amount
  73 b)    
Benefit Payment
  73 a)    
Benefits Based on Normal Workweek
  72 a)    
Benefits during Vacation
  78 a) & b)    
Benefits during Work Stoppage
  77 a)    
Benefits while on Probation
  73 c)    
Duration of Benefits
  71 a) thru c)    
Exclusion from Benefit
  73 a) thru b)    
Late Report of Occupational Disability
  74 c)    
Plant Service Credit
  70 b)    
Proof of Disability
  74 a)    
Reporting Absences
  74 b)    
Sick Pay
  70 a)    
Withholding Benefit Payment
  76 a)    
 
    ARTICLE 4  
OVERTIME AND PREMIUM TIME REGULATIONS
       
Bypassing (Scheduling Overtime)
  22 a) thru c)    
Call-outs
  15 a)    
Holiday — (No Work No Pay)
  16 d) 4)    
Holiday Pay
  16 a) thru d)    
Holidays
  16 a)    
Maintenance Overtime
  23 a) thru f)    
Overtime Equalization
  18 a)    
Overtime Meals
  19 a) thru c)    
Overtime Premium
  14 a) thru d)    
Shift Differential
  20 a)    
Transportation Due To Overtime
  21 a)

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ALPHABETICAL INDEX

                  PARAGRAPH ARTICLE 12  
PAY DAY
       
Pay Day
  43 a)    
Pay Errors Less or More than 8 Hours
  43 d)    
Paychecks Direct Deposit
  43 b)    
 
    ARTICLE 13  
PHYSICAL EXAMINATIONS
       
Employees Physically Unfit to Perform in Assigned Classification
  44 c)    
New Hire Physicals
  44 a)    
Periodic Examinations of Employees
  44 b)    
X-rays
  44 e)    
 
    ARTICLE 24  
PRODUCTIVITY STATEMENT
  64 a) thru d)    
 
    ARTICLE 18  
REPLACEMENT OF CLOTHING
       
Clothes Damaged
  53 a)    
 
    ARTICLE 21  
SANITATION AND SAFETY
       
Clip-On Glasses
  60 f)    
Colored Safety Glasses — Operating Engineers
  60 f)    
Commercial or Chauffeur’s License — Operating Engineers
  59 a)    
Eye Exam Payment
  60 b)    
Non-Prescription Safety Sunglasses
  60 c)    
Postponing Job for Safety Reasons
  59 b)    
Prescription Glasses for Welders
  60 e)    
Prescription Safety Glasses
  60 a)    
Safety Shoes
  61 a)    
 
    ARTICLE 6  
SENIORITY
       
Bidding — Bidding Rules
  33 c)    
Bidding- No Qualified Bidders
  33 f)    
Bidding- Selection of Job Posting Bidders
  33 b)    
Grievances — Seniority
  37 a)    
Job Bidding
  33 a)    
Job Posting
  33 a) 1)    
Layoffs
  35 a) thru e)    
Rehiring
  36 a) thru b)    
Seniority — Four Types
  25 b)    
Seniority — Promotions
  32 a) & b)    
Seniority (Military Service)
  28 d)    
Seniority (Probationary Period)
  26 a) & 28 a)    
Seniority (Promoted to Supervision —Permanent or Temporary)
  28 b) & c)    
Seniority Consolidation of Departments
  31 a)    
Seniority Definition of Group. Dept., & Maintenance
  25 c)    
Seniority Draw
  26 c)    
Seniority for Straight Day Employment
  26 b)    
Seniority is Equal
  26 d)    
Seniority List
  27 a)    
Seniority Lost
  29 a)    
Seniority Unbroken
  30 a)

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ALPHABETICAL INDEX

                  PARAGRAPH    
Transfers — General Mechanic
  34 c)    
Transfers — Operating Unit Reduced Operation or Shut Down
  34 b)    
Transfers of Surplus Group 1 employees
  34 a)    
 
    ARTICLE 9  
STAFFING OF NEW UNITS
  40    
 
    ARTICLE 10  
STEWARDS
       
Department Designation
  41 a)    
Steward (Benefits)
  41 e)    
Steward (Disciplinary Action)
  41 d)    
 
    ARTICLE 26  
STRIKES AND LOCKOUTS
  66 a) thru e)    
 
    ARTICLE 7  
SUPERVISORS DOING HOURLY WORK
  38 a) & b)    
 
    ARTICLE 15  
UNION REPRESENTATIVES
  46 a)    
 
    ARTICLE 2  
UNION SECURITY
       
Dues Check Off
  6 a)    
Dues Check Off Cancellation
  7 a) & 8 a)    
 
  thru c)    
Dues Payment to Signatory Unions
  9 a) & b)    
 
    ARTICLE 5  
VACATION
       
Bank Days — Vacation
  24 k)    
Choice Designation — Vacation
  24 j)    
Credit Accumulation
  24 b)    
Hold Over — Vacation
  24 o) thru q)    
Military Service — Vacation
  24 r)    
Seniority/Preference — Vacation
  24 i)    
Sick Leave — Vacation
  24 s)    
Vacation (Dismissal or Voluntary Separation)
  24 t)    
Vacation (Resigns Without Notice Or Discharged for Cause)
  24 u)    
Vacation Accrual Year Cutoff
  24 z)    
Vacation Back-to-Back
  24 y)    
Vacation Falls on Holiday
  24 v) thur w)    
Vacation Pay — Computed
  24 g)    
Vacation Period
  24 h)    
Vacation Splits
  24 l)    
Vacation Transfers Between Groups or Crafts
  24 x)    
Vacations 5, 10, 20 & 30
  24 c) thru f)    
Vacations less than 5 years & probationary period)
  24 a)    
 
    ARTICLE 31  
WORK ASSIGNMENTS
  79 a) thru b)    
 
    ARTICLE 8  
WORK CLASSIFICATIONS
  39 a)

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ALPHABETICAL INDEX

                      PAGE NO.
EXHIBIT A
  12 HOUR SHIFT AGREEMENT   43 thru 58
 
       Day Jobs     44  
 
       Extra Operators     44  
 
       Wages     44  
 
       Employee Benefit Plans, SIP, Pension, Life Insurance and Disability    
45  
 
       Overtime   45 thru 47
 
       Mandatory Overtime Procedure     47  
 
       Charging of Overtime     47  
 
       Hours of Work     47  
 
       Overtime and Holidays   48 thru 49
 
       Holiday and Holiday Pay     48  
 
       Shift Differential     49  
 
       Vacation   50 & 51
 
       Seniority     51  
 
       Jury Service     51  
 
       Funeral Leave     51  
 
       Occupational & Non-Occupational Accident and Sickness Plan     52  
 
       Wage Adjustment   52 thru 57
 
       Interpretation of Attachment E     58  
 
           
EXHIBIT B
  WAGE RATES     59  
 
           
EXHIBIT C
  EMPLOYEE BENEFITS   61-63
 
           
 
  NO JURISDICTION SUPPORTING INFORMATION     64  

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ARTICLES OF AGREEMENT
between
STERLING CHEMICALS, INC.
ITS SUCCESSORS AND ASSIGNS
and
THE TEXAS CITY, TEXAS METAL
TRADES COUNCIL, AFL-CIO
of TEXAS CITY, TEXAS

1   This agreement is made between Sterling Chemicals, Inc., its successors and
assigns, authorized to do business in Texas, hereinafter referred to as the
COMPANY, and the Texas City, Texas Metal Trades Council, AFL-CIO, of Galveston
County, Texas, hereinafter referred to as the UNION. It is agreed by the
following unions signatory to this Agreement that said Council is their
authorized representative for the purpose of negotiating and administering this
Agreement and for the purpose of modifying, amending, or waiving any of the
provisions of this Agreement:

Electrical Workers Local No. 527
Operating Engineers No. 564
International Association of Machinists No. 6
BASIC PRINCIPLES

2   The COMPANY and the UNION have a common and sympathetic interest in the
progress of industry. Therefore, a working system and harmonious relations are
necessary to improve the relationship between the COMPANY and the UNION, and the
Public. Progress in industry demands a mutuality of confidence between the
COMPANY and the UNION. All will benefit by a continuous peace and by adjusting
any differences by rational, common sense methods. The purpose of this Agreement
is to establish harmonious relations for the advancement of the mutual interest
of the parties in continuing and improving the manufacture and production of
products at said Texas City plant. The COMPANY and UNION agree that they will
not discriminate in any manner against any employee because of race, color,
religion, age, sex, national origin, disability or veteran status. It is the
understanding of the parties to this agreement that any reference in said
agreement to the masculine gender is understood to also include those employees
of the feminine gender. Now, therefore, in consideration of the mutual promises
and agreements herein contained, the parties hereto agree as follows:

RECOGNITION

3   The COMPANY hereby recognizes the Texas City, Texas Metal Trades Council as
the exclusive bargaining agency for all production and maintenance employees,
but excluding supervisory, technical, clerical, plant protection employees with
respect to rates of pay, wages, hours of work, and other conditions of
employment. Supervisory employees, in the Production and Maintenance
Departments, are those who are above the classification listed in Exhibit B, a
part of this contract.

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SCOPE OF AGREEMENT

4   This Agreement constitutes the sole and entire Agreement between the
parties. It supersedes all prior Agreements, oral or written, and expresses all
obligations of or restrictions imposed on the respective parties during its
term. The waiver of any breach, term, or condition herein by Sterling shall not
constitute a precedent for future waiver of any breach, term, or condition.

ARTICLE 1
MANAGEMENT RIGHTS

5 a) Except as expressly modified by a specific provision of this Agreement, all
the authority, rights, and powers which the COMPANY had prior to the signing of
this Agreement are retained by the COMPANY and remain exclusively and without
limitation the rights of management. Only express modifications contained in
specific provisions of this Agreement constitute limitations upon such
authority, rights, and powers.

  b)   The Union recognizes that the Employer has the right, on its own
initiative, to perform any function of management at any time, so long as it
does not violate any express provision of this Agreement.     c)   The following
acts are functions of management:

  1)   Those acts which are not within the area of collective bargaining as
required by the National Labor Relations Act;     2)   Those acts which are
usually exercised by other employers; and     3)   Those acts which management
should exercise in order to properly manage the business.

ARTICLE 2
UNION SECURITY

6   Section 1

  a)   The COMPANY agrees to deduct a single monthly union dues amount for each
signatory union except for IBEW dues which will be deducted at one of two
monthly rates (2 tier deductions). Deductions will be made from the pay of each
employee that authorizes the deduction on official forms agreed to by the
COMPANY and the UNION. Deductions will be taken from the employee’s first
paycheck each month after the Payroll Department receives the original signed
form from the employee. Once started, the single signatory union monthly dues
deduction amount may be changed one time per year upon notification from the
UNION without written consent of the employee.     b)   The COMPANY agrees to
notify the UNION of all newly employed personnel

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      covered by this Agreement. Such notice shall be in writing and shall state
the name of the employee, their classification and their date of hire.

7   Section 2

  a)   Check-off authorizations now in effect shall become irrevocable in
accordance with the terms of Section 3 of this article unless written notice of
revocation from the employee is received by the COMPANY within the fifteen
(15) day period prior to the expiration date of this Agreement. A notice of this
provision will be posted by the COMPANY and the UNION.

8   Section 3

  a)   Check-off authorizations shall be irrevocable for the period of one
(1) year, or until the termination of the Agreement, whichever occurs sooner. It
is further agreed that this authorization shall be automatically renewed, and
shall be irrevocable for successive periods of one (1) year each unless written
notice by registered mail of revocation from the employee is received by the
COMPANY not more than twenty (20) days nor less than ten (10) days prior to the
expiration of each period of one (1) year.     b)   Employees withdrawing from a
signatory union may cancel their dues deduction authorization at any time by
serving notice by letter to the COMPANY canceling such authorization along with
letters of approval from the UNION and the signatory union to which the dues and
initiation fees were to be forwarded.     c)   Employees who, as a result of a
change in job assignment, transfer from one signatory union to another signatory
union, may cancel any prior dues deduction authorization by submitting to the
COMPANY a new dues deduction authorization. Such new authorization must be
transmitted through the signatory union or its designated representative.

9   Section 4

  a)   Money deducted from paychecks as authorized herein for employees
bargained for by the UNION will be forwarded to each signatory union. The UNION
will furnish the COMPANY a list of signatory unions, their mailing address and
the regular monthly union dues of each union. These checks will be forwarded no
later than the 20th day of the month in which the money is deducted, along with
a summary sheet in duplicate showing the name of each employee from whose
paycheck dues were deducted and the amount deducted.     b)   In the event a
signatory union ceases to be affiliated with UNION for any reason, and UNION
officially notifies COMPANY of same, the authorization of employees for
deductions of dues and initiation fees for such Union whose affiliation with
UNION has         ceased, shall be immediately and automatically revoked and any
monies deducted from checks of said employees and held by the COMPANY will be
refunded to the employee from whose check the deduction was made.

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10   Section 5

  a)   In the event applicable laws governing union security are liberalized to
the extent that they allow a Maintenance of Membership clause, the COMPANY
agrees to meet with the UNION at that time and agree on the terms of a
Maintenance of Membership clause.

ARTICLE 3
HOURS OF WORK

11   Section 1 — All Employees in Seniority Groups 1, 2 and 4

  a)   The period of time from 6:30 a.m. to 6:30 a.m. the following day shall
constitute a payroll day for all employees in the seniority groups above. The
period of time composed of seven (7) consecutive payroll days, extending from
6:30 a.m. Monday to 6:30 a.m. the following Monday, shall constitute a regular
work week at this plant for all employees in the seniority groups above.     b)
  The hours of work shall be as follows:

  1)   Day Workers — Eight (8) consecutive hours of work per day, exclusive of a
thirty (30) minute lunch period, shall constitute a day’s work. Hours of work
shall be from 6:30 a.m. to 3:00 p.m. Employees will begin their unpaid thirty
(30) minute lunch period during a one and a half (1.5) hour window beginning
four (4) hours after the start of the shift. If the lunch break starts after the
window for work related reasons, the employee will be paid the appropriate
overtime rate for the lunch period.     2)   Eight Hour Shift Workers — Eight
(8) consecutive hours of work per day shall constitute a day’s work. Five
(5) eight (8) hour shifts in any one workweek shall constitute a week’s work.
Shifts shall normally be from 6:30 a.m. to 2:30 p.m., 2:30 p.m. to 10:30 p.m.,
and 10:30 p.m. to 6:30 a.m. Shift workers will be permitted sufficient time to
eat during their shift without loss of pay for such period.     3)   12-Hour
Shift Workers - Terms of the 12-Hour Shift Agreement are included in Exhibit A
of this Agreement.

12   Section 2 — All Employees in the Maintenance Crafts Seniority

  a)   The period of time from 7:00 a.m. to 7:00 a.m. the following day shall
constitute a payroll day for all employees in the seniority groups above.     b)
  The period of time composed of seven (7) consecutive payroll days, extending
from 7:00 a.m. Monday to 7:00 a.m. the following Monday, shall constitute a
regular work week at this plant for all employees in the seniority groups above.

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  c)   The hours of work shall be as follows:

  1)   Day Workers – All employees in the Maintenance Crafts Seniority – Eight
(8) consecutive hours of work per day, exclusive of a thirty (30) minute lunch
period, shall constitute a day’s work. Hours of work shall be from 7:00 a.m. to
3:30 p.m. Employees will begin their unpaid thirty (30) minute lunch period
during a one and a half (1.5) hour window beginning four (4) hours after the
start of the shift. If the lunch break starts after the window for work related
reasons, the employee will be paid the appropriate overtime rate for the lunch
period.     2)   Shift Workers — Maintenance employees assigned to shifts will
be permitted sufficient time to eat during their shift work without loss of pay
for such period.

13   Section 3

  a)   Employees may be scheduled as shift workers if and when required in the
operation of the plant, and when so working, shall be governed by the above
conditions relating to a shift worker.     b)   Straight day Maintenance
employees temporarily assigned to shift work, when being reassigned to straight
days, will normally be reassigned at the beginning of the work week.     c)  
Special shift schedules and start/stop times to support non-routine operations,
shutdowns, turnarounds and emergency situations will be determined by management
after consultation with the UNION. Also after consultation with the UNION,
Management may implement modified overtime regulations for such special
schedules to allow for greater than 8 hours of straight time per day not subject
to the OT provisions of Article 4, Section 1.) a). Under such special schedules,
employees will be paid the applicable overtime rate for all hours worked after
40 straight time hours in a week, as well as all eligible hours worked in a week
outside of the pre-determined special schedule, in accordance with other
contractual overtime provisions. For example: Employees put on a special
schedule of 4-10’s, Monday through Thursday, could receive overtime rates only
outside of the four pre-scheduled 10-hour blocks.     d)   The normal workweek
shall consist of forty (40) hours of work and the normal workday of eight
(8) hours of work providing work is available.     e)   In the event an employee
is inadvertently scheduled for less than the normal workweek, the employee will
be allowed to make up the difference after reporting the discrepancy to
supervision. The employee will be allowed to make up such difference only to the
point where their earnings equal the straight time earnings for a normal
workweek.     f)   An employee may be excused without pay for a period up to
three (3) hours at the beginning or end of the day shift, Monday through Friday
(except holidays falling

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      Monday through Friday) for the purpose of a doctor or dentist appointment.
Such excuse will be granted if it is scheduled with enough advance notice so
that proper relief can be scheduled and the absence does not impair plant
operations.

  g)   The term “shift work” shall mean any schedule that has built into it a
regular, repeating pattern of variance in the scheduled days of rest, the core
hours of work, or both.     h)   Hours and days of work for Materials Handling
(Group 4) may be modified at Management’s discretion based on business needs
after consultation with the UNION. This may include changes to the days worked
in a week and/or the number of hours scheduled per day/shift, however, no
employee will be scheduled for fewer than an average of 40 hours per week.
Management will attempt to minimize disruptions to employees’ lives due to such
warranted changes in start and stop times.

ARTICLE 4
OVERTIME AND PREMIUM TIME REGULATIONS

14   Section 1

  a)   Except as modified by Article 3, section 3, c), an employee shall be paid
at the rate of one and one-half (1-1/2) times his regular rate for all hours
worked by him in excess of eight (8) in any one (1) day consisting of the
twenty-four (24) hour period beginning when an employee begins to work or report
for work in accordance with instructions, which ever is earlier.     b)   An
employee shall be paid at the rate of one and one-half (1-1/2) times his regular
rate for all hours worked by him in excess of forty (40) in any workweek.     c)
  Time and one-half (1-1/2) shall be paid for the first 8-hour period worked
following a change of schedule unless the employee is given at least thirty-six
(36) hours notice in advance of the beginning of his newly assigned hours. For
the purpose of computing weekly overtime, hours for which premium pay is payable
under the provisions of this paragraph will not be counted in the total hours
worked by an employee in a given workweek.     d)   When an employee works a
minimum of 8 hours on all their scheduled days of rest within a payroll week,
they will be paid for all hours worked on the last day of rest at the rate of
two (2) times their base rate of pay.

15   Section 2 — Call-outs

  a)   An Employee called-out for work with less than 4 hours notice outside
their regular schedule shall be paid one and one half (1-1/2) times their
straight time rate for the actual time worked, or five hours at their straight
time rate, whichever is greater.     b)   The COMPANY shall have the right to
institute an on-call system for calling out and contacting employees.

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16   Section 3 — Holidays

  a)   Two and one-half times will be paid for work performed on the following
holidays: New Year’s Day, President’s Birthday, Good Friday, Easter Sunday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Friday after
Thanksgiving Day, Christmas Eve and Christmas Day.     b)   For day workers: If
any of these holidays fall on a Sunday, the Monday immediately following shall
be recognized as the holiday. If holidays fall on Saturday, they will be
observed on the preceding Friday. The exception shall be Christmas Eve, which
shall be observed on the last working day before Christmas.     c)   For shift
workers: All holidays listed above will be recognized on the calendar day on
which it falls. For the purpose of determining pay for an employee who works on
a day observed as a holiday which falls on one of the employee’s scheduled days
of rest, “regular scheduled hours of work” for that day shall mean the same
hours the employee was assigned to work on the last regularly scheduled day of
work immediately prior to the holiday. Payment will be made according to (d) 1
below.     d)   Employees will be paid for the holidays listed above not worked
an amount equivalent to eight (8) times the employee’s straight-time hourly
rate, subject to the following conditions:

  1)   Such pay shall be computed on the basis of payroll day and not calendar
day.     2)   To be eligible for such pay, an employee must report for work on
their last regular scheduled working day immediately preceding the holiday and
their first regular scheduled working day immediately following this holiday.  
  3)   For purposes of determining eligibility for holiday pay only under this
section, employees absent either the day before, the day after, or both days,
because of vacation, death in the immediate family, occupational injury or
illness while under a doctor’s care, jury duty or excused absence will be
considered as having worked on such day or days and will be entitled to holiday
pay provided they have complied with the other requirements of Article 4,
Section 3. Immediate family will be interpreted to mean those members of the
family covered under Article 25 — Funeral Leave.     4)   An employee who is
instructed to work on a holiday but fails to report will receive no pay for the
holiday.     5)   Payment for holidays not worked shall not apply to employees
on approved leave of absence, off because of sickness or occupational injury
(unless under a doctor’s care), or layoff.

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17   Section 4

  a)   In the event any hours worked fall within two or more classifications
listed above, only one application can be made.

18   Section 5

  a)   Employees shall not be laid off during regular working hours to deprive
them of any time, which they have gained by working overtime. At one (1) week
intervals, the COMPANY will make every reasonable effort to post overtime
equalization lists in each zone or departments and to distribute such overtime
work as equally as practicable.

19   Section 6 — Overtime Meals

  a)   If an employee works more than two hours immediately following his
scheduled working period, he shall be provided a meal. The employee will be
afforded an opportunity on COMPANY time to eat meals so supplied at the time he
is entitled to same, or as soon thereafter as the condition of the work permits.
    b)   Any employee called out (with less than four (4) hours’ notice), will
be supplied with a suitable meal at the COMPANY’S expense after four (4) hours
of work. If the employee continues working on overtime, outside his regular or
scheduled shift, he will be furnished a meal every four (4) hours. If the
employee works into his scheduled shift, one additional mid-shift meal will be
furnished from the COMPANY’S frozen food supply if the employee was/is otherwise
unable to provide his own lunch due to the call-out.     c)   Employees
scheduled on overtime, other than provided in (a) or (b) above, will provide
their own meals.

20   Section 7 — Shift Differential

  a)   Shift differential shall be added to the wage rate of the employees
required to work during the shift indicated in the following schedule for each
hour worked during such periods:

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  1)   Eight Hour Shift Workers:

Days No differential
Evenings 50¢ differential
Graveyards $1.00 differential

  2)   Day Workers

Days No differential
Evenings 50¢ differential
Graveyards $1.00 differential

  3)   For shifts longer than 8 hours in duration:

Days No differential
Nights $1.00 differential

21   Section 8 — Transportation

  a)   The COMPANY will provide rides home for employees who are without
transportation and are held over on overtime past their regular scheduled shift.
The COMPANY further agrees that employees not held over but left without a ride
home due to their driver being held over will be provided a ride with the
understanding that only one ride to one destination will be provided. Should
evidence of abuse or fraud arise, the COMPANY reserves the right to discontinue
the practice of providing rides to those passengers not held over.

22   Section 9 — Bypassing

  a)   When an employee has worked sixteen (16) continuous hours and up to or
within the employee’s regular shift, the employee will be allowed to go home and
will be paid at the straight-time for the remaining hours of the employee’s
regular shift, or the employee may be bypassed for overtime if it will require
that he be sent home with pay for his regularly scheduled shift. This decision
will be made by supervision.     b)   The COMPANY agrees that in scheduling
overtime, no employee shall be bypassed in the assignment of overtime to work
solely to avoid payment of double-time, except as referenced above.     c)   The
“rain-out” clause in the contractor’s contract or straight-time work on
Saturday, Sunday, or holidays as may be provided under the contractor’s
contract, will not be used to avoid Sterling employee’s overtime.

23   Section 10 – Maintenance Overtime

      a.) Maintenance overtime will normally be scheduled and assigned from
within the zone group.

      b.) If unable to fill the overtime need, volunteer employees from other
zones may be offered the overtime. If unable to fill the overtime need,
employees may be conscripted from the zone first, and then from the rest of the
plant.

      c.) For job continuity, jobs started by contractor personnel may, at the
COMPANY’S discretion, be worked to completion by the contractor. Also for job
continuity

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      purposes, Management may, at its discretion, decide to hold over the
Sterling craftsmen who started a job, in order to complete it on overtime.    
d.)    The COMPANY shall have the right to institute an on-call system for
contacting employees for overtime.     e.)    Shutdown/Turnarounds — The COMPANY
reserves the right to contract shutdown/turnaround work. Employees from the
affected zone group may volunteer or be conscripted to work parts of the
shutdown.     f.)    Management shall have the right to set start and end times
for shutdown/startup related work.

ARTICLE 5
VACATION

24   a) Upon being hired, new employees are credited with the following amount
of vacation to be used for the remainder of that calendar year:

      Date Hired   First Calendar Year Vacation
January 2 – March 31
          72 hours
April 1 – June 30
          48 hours
July 1 – September 30
          24 hours
October 1 – December 31
  0

New employees who leave the company for any reason during their first calendar
year are not paid for the above first year vacation. Employees with less than
5 years of service will then be credited with eighty (80) hours of vacation on
January 1 of their first full calendar year and each year thereafter at a
credited rate of six and two-thirds (6 2/3) hours per full month of service for
a maximum of eighty (80).

  b)   Vacation credits accumulated after January 1st of the current year shall
not be taken until January 1st of the following year. Vacation must be taken in
full shift increments.     c)   Each employee who completes five (5) or more
years of continuous service will be granted one-hundred twenty (120) hours of
vacation per year. Such vacation may be taken at any time during the vacation
year in which the employee reaches the fifth (5th) year of continuous service.
After receiving a first vacation of one-hundred twenty (120) hours, the employee
will accrue ten (10) hours vacation per month of service or a maximum of
one-hundred twenty (120) hours per year.     d)   Each employee who completes
ten (10) or more years of continuous service will be granted one-hundred sixty
(160) hours of vacation per year. Such vacation may be taken at any time during
the vacation year in which the employee reaches the tenth (10th) year of
continuous service. After receiving a first vacation of one hundred sixty
(160) hours, the employee will accrue thirteen and one-third (13-1/3) hours of
vacation per month of service or a maximum of one hundred sixty (160) hours per
year.

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e)   Each employee who completes twenty (20) or more years of continuous service
will be granted two-hundred (200) hours of vacation per year. Such vacation may
be taken at any time during the vacation year in which the employee reaches the
twentieth (20th) year of continuous service. After receiving a first vacation of
two-hundred (200) hours, the employee will accrue sixteen and two-thirds
(16-2/3) hours of vacation per month of service or a maximum of two-hundred
(200) hours per year.   f)   Each employee who completes thirty (30) or more
years of continuous service will be granted two-hundred forty (240) hours of
vacation per year. Such vacation may be taken at any time during the vacation
year in which the employee reaches the thirtieth (30th) year of continuous
service. After receiving a first vacation of two-hundred forty (240) hours, the
employee will accrue twenty (20) hours of vacation per month of service or a
maximum of two-hundred forty (240) hours per year.   g)   The vacation pay for
employees entitled to vacation is computed on the basis of rate of pay per hour
at the time of vacation at straight-time.   h)   Vacation period shall be from
January 1 through December 31 each year.   i)   The employee with the greatest
bargaining unit seniority within the group or craft, wherever possible, shall be
allowed preference as to time of vacation within each department and within each
maintenance zone. When an employee elects to split their vacation, then they
shall be allowed seniority preference only on one (1) portion of the split
vacation until all employees have exercised their seniority preference.   j)  
Prior to January 1st, employees shall designate their choices of dates for their
vacations and a vacation schedule for the year will be made up in accordance
with other provisions of this article.   k)   An employee may place up to eighty
(80) hours (ten days) of their vacation in a vacation bank prior to January 1
with such days to be taken at any time during the vacation year on a first-come
basis in an individual operating unit, in a maintenance craft within a zone, or
in any other department. Five (5) bank days may be taken with one (1) hour’s
notice. Twenty-two (22) hours’ notice for the other five (5) bank days will be
required except in cases of emergencies. All normal requests for bank days must
be made to the employee’s supervisor. Emergency requests will be subject to
approval by the department head or designee. Bank days will be granted only
when, in the judgment of the COMPANY, such days do not conflict or impair plant
operations. Bank days will be taken in any combination of whole days without
restriction by vacation splits. All bank days must be taken during the vacation
year and shall not be cumulative. When, in the opinion of the COMPANY, it
appears that vacation bank days are accumulating in a group, department or craft
and will create a problem near the end of the vacation year, employees will be
requested to schedule their remaining bank days in order not to conflict with or
impair plant operations.

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l)   Vacation may be split into as many periods as the employee has weeks of
vacation. In calculating vacation splits, the bank days will constitute one
split. Employees with ten (10) or more years of service will be eligible for one
(1) additional split. Vacation schedules established by January 1st will not be
altered after this date to give preference to the senior employee. Employees
shall be permitted to begin or end their vacations on a regularly scheduled day
off.   m)   Vacations shall be given employees on such dates or as near as may
be practicable when, in the judgment of the COMPANY, such dates do not conflict
with or impair plant operations.   n)   Vacation during any vacation period must
be taken during the vacation period and shall not be cumulative. Requests for
exceptions to this requirement will be considered by management on a case by
case basis.   o)   For the purpose of taking extended vacation, employees with
five (5) or more years of service will be permitted, one (1) time during the
life of this contract to elect to hold over forty (40) hours of vacation from
one (1) vacation period and take it during the next vacation period in
conjunction with the full vacation due that vacation period. Employees desiring
to exercise this option will so advise the COMPANY during the
vacation-scheduling period in the year in which they desire to hold over the
forty (40) hours.   p)   Employees with ten (10) to nineteen (19) years of
service have the option to hold over forty (40) hours of vacation from one
(l) vacation period and take it during the next vacation period. Employees
desiring to exercise this option must notify the COMPANY by November 1st prior
to the end of the vacation year in which it was originally expected to be taken.
This request does not increase the number of bank days.   q)   An employee who
is “Combo 80” (minimum age 55 with 80 points) or who has at least 20 years of
COMPANY service, may carry over from one vacation period to the next up to
eighty (80) hours of vacation in forty (40) hour increments. A maximum of two
hundred forty (240) hours may be carried over in this manner.   r)   Any
employee leaving the service of the COMPANY entering State or Federal military
service shall so notify the COMPANY, and shall be paid the vacation credits
earned up to the time of induction. Such employee shall not be taken off the
payroll until actually inducted in military service, State or Federal.   s)   In
calculating time for vacation credits, no vacation will accrue after the sixth
month of sick leave or otherwise while not actively at work.   t)   An employee
who is laid off or retires from the COMPANY, or an employee with at least
fifteen (15) years of service who voluntarily resigns from the COMPANY with two
weeks notice, will receive pay for vacation earned during the previous year but
not taken and pay for vacation credits accumulated toward the next vacation year
as prorated through the last full month of their employment.

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  u)   An employee with less than fifteen (15) years of service who resigns or
is discharged from the COMPANY will receive only pay for vacation earned during
the previous year but not taken.     v)   When a holiday is observed on an
employee’s scheduled vacation day, they will have the option of an extra day
vacation or an extra eight (8) hours’ pay at their regular straight-time rate.  
  w)   When a day of vacation falls on a holiday and the employee elects to take
an extra day of vacation, they may elect to take it the last working day
immediately prior to their scheduled vacation.     x)   When an employee
transfers from one craft or group to another, the employee will carry with them
their vacation as scheduled for that year. The transfer of this vacation
schedule will not interfere with the rights of any other employee to their
vacation as previously scheduled.     y)   Back-to-back vacations from one
vacation year to the next will be allowed under the following conditions:

  1)   The period of vacation must be for six or more weeks.     2)   The
employees who desire to schedule vacation in a continuous period beginning in
one vacation year and ending in another vacation year must schedule such
vacation prior to January 1 of the first vacation year.     3)   If, on the
basis of seniority, they will be allowed to schedule their vacation immediately
prior to the end of the vacation year, then they shall be granted vacation
preference for the continuous portion of the vacation, which ends the next
vacation year.

  z)   For employees hired before January 1, 1996, vacation year allotment will
be based on years of service accrued by March 31 following the end of the
vacation year. For all other employees, vacation year allotment will be based on
years of service accrued by December 31 of the vacation year.

ARTICLE 6
SENIORITY

25   Section 1 — Definitions

  a)   By the term “seniority” is meant the status of the employee’s length of
service as such.     b)   Four types of seniority shall be recognized:

  1)   Group Seniority. This shall consist of the seniority accumulated by an
employee

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      working in any of the groups listed below.     2)   Department Seniority.
For matters directly affecting any of the departments in Group 1, employees in
their respective operating departments shall be listed on the Seniority List by
order of Group 1 seniority within their respective department.     3)  
Maintenance Craft Seniority. This shall consist of the seniority accumulated by
an employee in the particular maintenance craft in which the employee is
working.     4)   Bargaining Unit Seniority. This shall consist of seniority
accumulated by an employee in any of the groups or crafts listed below.

  c)   For purposes of paragraph (b) above, group, department, and maintenance
craft seniority shall cover the following:

  1)   Group Seniority

  i)   Group 1 - All hourly employees in the following operating departments and
any others which may be added and which are designated as operating departments
by the COMPANY: Styrene, Acetic/Plasticizers, and Utilities.     ii)   Group 2 -
All hourly employees of the Laboratory.     iii)   Group 4 - All hourly
employees of the Materials Handling Department.

  2)   Department Seniority

  i)   For matters directly affecting departments in Group 1, employees in the
various operating departments shall be listed on department seniority lists by
Group 1 seniority within their respective departments. Any reference to
departmental seniority in other sections of the contract will refer to the Group
1 seniority of employees within the department.

  3)   Maintenance Craft Seniority

  i)   All hourly employees in each of the maintenance crafts. The maintenance
crafts shall include, but shall not be limited to the following titles:

Instrument/Electrical
Machinists

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26   Section 2 — Commencement

  a)   All new employees shall be required to work a trial or probationary
period of one-hundred eighty (180) calendar days continuous service before the
seniority rules outlined herein shall apply to them, and after such period, the
new employee’s seniority shall be retroactive to the date they were employed.  
  b)   Straight-day employment shall be determined on the basis of senior
qualified. New employees will be required to go on shift within not more than
ninety (90) days after employment.     c)   When employees are hired into a
group or craft on the same date, their order on the seniority lists shall be
determined by “lot”.     d)   In a situation where departmental seniority is
equal, the group seniority shall govern, and when group or craft seniority are
equal, seniority on the first day worked in the bargaining unit shall govern.

27   Section 3 — Seniority Lists

  a)   The COMPANY agrees to compile and furnish the UNION a seniority list
quarterly, showing the seniority of each employee in bargaining unit, and the
COMPANY further agrees that it will add names and the seniority status of all
employees to said list after they have completed their probationary period and
are considered regular employees.

28   Section 4 — When Seniority Does Not Apply or Is Not Affected

  a)   Seniority privileges shall not apply to probationary employees.     b)  
The Seniority of an employee shall not be affected when they are promoted to a
supervisory classification unless they remain in that capacity for a period in
excess of one hundred thirty-five (135) calendar days after which time they
shall lose their seniority as a member of the bargaining unit.     c)   The
seniority of an employee shall not be affected when they are promoted
temporarily to a supervisory classification unless they remain in that capacity
for a period in excess of one-hundred and eighty (180) working days in a
calendar year, after which time they shall lose their seniority as a member of
the bargaining unit.     d)   Employees, other than temporary employees, who are
called into active military service with any branch of the U. S. government,
shall not lose their seniority rights or their status with the COMPANY. Such
employees, however, shall file an application with the COMPANY for
reinstatement, within ninety (90) days after they have received an Honorable
Discharge from such service and if their physical and mental condition is
satisfactory, such employee shall be reinstated to their former position or one
to which their seniority entitles them, unless the COMPANY’S circumstances have
so changed as to make it impossible or unreasonable to do so.

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29   Section 5 — When Group, Department, Craft and Bargaining Unit Seniority is
Lost

  a)   An employee under the following circumstances shall lose all seniority:

  1)   When the COMPANY discharges them.     2)   When they quit the service of
the COMPANY of their own volition.     3)   When they are laid off for a period
exceeding eighteen (18) months without being recalled.     4)   When an employee
overstays their leave of absence without notifying the COMPANY and receiving an
extension of time.

30   Section 6 — When Group, Department, Craft, and Bargaining Unit Seniority is
Not Broken

  a)   Seniority of the employee shall not be broken because of: (1) layoffs
(except as provided in Section 5 a) 3) of this article); (2) authorized leaves
of absence; (3) absences on account of occupational or non-occupational sick
leave not exceeding a period of twelve (12) months; (4) any cessation of work at
the COMPANY’S plant which is beyond the control of the employee not exceeding a
period of eighteen (18) months.

31   Section 7 — Consolidation of Departments

  a)   When two or more departments are consolidated, the employees of these
departments may claim seniority in the consolidated department, it being
understood, however, that no employee may claim a classification in the
consolidated department higher than the one occupied in the department in which
the employee was previously employed.

32   Section 8 — Promotions

  a)   When a new vacancy or new job occurs in a department or craft, such
vacancy or new job shall be filled from employees within that department or
craft. When skill and ability are approximately equal, then the senior qualified
employee shall fill the vacancy. If departmental seniority is equal, group
seniority shall govern.     b)   It is understood and agreed, however, that
where skill and ability are questioned, a senior employee may request the
opportunity to fill such vacancy or new job, in which event, the COMPANY agrees
to consult with the UNION concerning the matter. If it is determined that the
request has merit, the employee will be given a trial period of thirty
(30) working days to prove to the satisfaction of the COMPANY their skill and
ability in such position.

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33   Section 9 — Job Bidding Procedure

  a)   When a permanent vacancy must be filled from outside the group or craft
in which the vacancy exists and no layoff exists for such group or craft, then
the job will be posted and filled in accordance with the following procedure:  
  1)   Job Posting — The job vacancy will be posted for seven (7) calendar days
at each of the main gates and on departmental bulletin boards within the plant.
    2)   Job Bidding — Each employee who desires to bid for the posted job may
do so by going to the Human Resources Department and signing a job bidding form
within the seven (7) day period.

  i.)    Any employee who knows that they will be absent from the plant (for
reasons such as vacation, jury duty, etc.) may submit to the Human Resources
Department a pre-bid indicating those jobs they desire should a vacancy be
posted during their absence. The employee submitting a pre-bid will be
considered for a vacancy only if their pre-bid is received prior to the seven
(7) day period outlined in the job vacancy announcement. Each pre-bid shall be
effective only for the duration of the individual’s specific absence.

  b)   Selection — Posted vacancies will be filled by the qualified bidder with
the greatest bargaining unit seniority. Successful bidders will be transferred
to their new job within 120 calendar days following the date of notification of
successful bid unless the COMPANY demonstrates, subject to the grievance and
arbitration provisions of the contract, that to move said successful bidder
would create a situation where the employee’s job cannot be manned in a safe
manner.

  1)   The successful bidder will enter the new job classification at the
appropriate rate as indicated on the job vacancy announcement.     2)   The
provisions of Section 11 of this Article will apply to employees who are
transferred from one group or craft to another in accordance with the job
bidding procedure.

  c)   Bidding Rules

  1)   If the COMPANY determines that the senior employee bidding on a posted
job is not qualified, the employee may file a grievance contesting such
determination at Step 2 of the grievance procedure, which may, if not
satisfactorily resolved, be submitted to arbitration in accordance with the
arbitration procedure as outlined in Article 28. Nothing contained herein shall
interfere with the filling of the vacancy with another employee or with a new
hire, pending settlement of a grievance.     2)   Employees whose bids have been
denied on the basis of qualifications will not be considered again for transfer
to the same group or craft until they have shown proof that their qualifications
now fit the requirements of the job.     3)   A successful bidder will not be
eligible for another transfer until they have reached the top rate of their
classification and served an additional period of time equal to the time
required to reach the top rate.

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  4)   A successful bidder who refuses to accept a tendered transfer will not be
reconsidered for any other transfer for a period of one (1) year after date of
refusal.

  d)   An employee who has been returned to their last previous group or craft
for inability to perform work of the new classification as provided in
Section 11, Article 6 of the Articles of Agreement will not be considered for
any further transfer for a period of one (1) year from the date of return to
their last previous group or craft.     e)   An employee shall be limited to one
transfer to a group or craft having a lower top rate or one transfer to group or
craft having an equal top rate. Subsequent lateral or downward transfer to
another group or craft shall be approved only when in the best interest of the
employee and by mutual agreement of COMPANY and UNION.     f)   No Qualified
Bidders — If none of the bidders are qualified for a posted job, or if there are
no bidders, the COMPANY shall have the right to fill the job as it sees fit.    
g)   Associate Operators – Associate operators will be selected based on
criteria determined at management discretion.

34   Section 10 — Transfers

  a)   When a surplus of employees exists in any Group and/or department or unit
for any reason, the UNION and the COMPANY will meet and discuss a plan to
transfer employees to other groups and/or departments where openings exist in an
effort to prevent layoff.

35   Section 11 — Layoffs

  a)   Layoffs in groups 2, 4 and maintenance crafts shall be in inverse order
of group, or craft seniority, depending on the need for employees in that
particular group or craft, it being understood that in any group or craft the
top classification will not be filled by an employee not having both skill and
ability and group or craft seniority. Layoffs in group 1 will be done in inverse
order of plant-wide group seniority, except that employees working in a unit
constructed after 05/01/07 may be bypassed for layoff during the first four
(4) years of the new unit’s operation.     b)   An employee transferred from one
group or craft shall retain seniority in their former group or craft but will
not be allowed to exercise their seniority, nor shall the COMPANY be allowed to
transfer the employee back to their old group or craft unless the employee is
being laid off for reduction in force or because their work performance has been
such that the employee would be laid off for inability to perform the work.    
c)   Employees being laid off for reduction in force may exercise the retained
seniority in their old group or craft to forestall layoff provided that they
meet the current qualification requirements of their previous job.

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  d)   An employee being laid off for inability to perform the work prior to
reaching top pay in the classification in the group or craft to which they were
transferred will be considered to have accumulated seniority in their old group
or craft up to the time they were declared unable to perform such work and will
be allowed to exercise that seniority in their old group or craft to forestall
layoff. An employee transferring to a one rate job will be given a trial period
of ninety (90) days and, if unable to perform the work, will be considered to
have accrued seniority in their old group or craft during that period. They will
be allowed to exercise such seniority in order to forestall layoff.     e)  
Discharge for cause or termination for any reason other than those referred to
above will not be reason for the employee to exercise their seniority rights in
the old group or craft.

36   Section 12 — Rehiring

  a)   Rehiring shall be in inverse order of layoffs. Employees being recalled
shall be notified by registered letter, return receipt requested, mailed to the
last address on record in the COMPANY’S files. If the COMPANY does not receive a
reply to said letter from the employee, within ten (10) days from the date of
its delivery as shown on the return receipt, stating that they will return to
work within ten (10) days from said delivery date; or, if they fail to so return
to work although they have sent such a reply, the next eligible employee will be
placed in the vacancy.     b)   In special cases, an employee, when replying
within ten (10) days to the COMPANY’S notice requesting them to return to work,
may be given an extension of time by the COMPANY beyond the ten (10) day limit
specified above. Failure to so reply or failure to so report to work will
abrogate all rehiring and seniority rights on the part of said employee. In case
of an emergency, the COMPANY may temporarily fill any vacancy without waiting
for any period of time to expire. After the emergency has expired, such
vacancies will be filled according to the regular procedure.     c)   Where the
period of recall is in the best judgment of the COMPANY to be less than ninety
(90) calendar days, the recalled employees may decline recall and not lose
subsequent recall rights.     d)   If the period of recall is less than a 40
hour work week, the COMPANY is not obliged to recall an employee for such
assignment.

37   Section 13 — Grievances

  a)   In all cases where the UNION or the employee claims that the principle of
seniority has been violated, such grievance must be taken up within ten
(10) days of the alleged violation and shall be handled according to the
procedure set out in Article 27 hereof. In the event the employee grieved is not
actively working on the day of such violation, the period of limitation shall
begin on the day the employee returns to work.

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ARTICLE 7
SUPERVISORS DOING HOURLY WORK

38  a)   Anyone employed by the COMPANY in the capacity of a foreman or a
supervisor will be permitted to perform work that is normally performed by
bargaining unit employees, except as limited by Article 7 (b), below.

  b)   Foremen and supervisors will not be permitted to perform work normally
performed solely by bargaining unit employees, if bargaining unit employees are
laid off as a direct or indirect result or if the direct or indirect result is
that employees on the recall list are prevented from being recalled. It is
expressly agreed that work that is normally performed both by bargaining unit
employees and by foremen or supervisors is not “work that is normally performed
solely by bargaining unit employees” and consequently is not covered by the
preceding sentence. The management of the COMPANY will determine, in its sound
discretion, whether employees would be laid off and whether recalls would be
prevented as a result of the performance by foremen or supervisors of “work
normally performed solely by bargaining unit employees.”

ARTICLE 8
WORK CLASSIFICATIONS

39 a)   Wage rates for all classifications of work within the bargaining unit
shall be mutually agreed to between the COMPANY and the UNION, set forth
separately, and attached to this Agreement and marked “Exhibit B”.

ARTICLE 9
STAFFING OF NEW UNITS

40 a)   The COMPANY agrees to consult with the UNION in connection with the
staffing of new units or consolidation of departments in the operating section.

ARTICLE 10
STEWARDS

41 a)   The UNION may designate for each Department in Operations and each craft
in Maintenance, a Shop Steward who shall call to the attention of the foreman or
supervisor any questions of working conditions that may arise in their
department or craft.

  b)   Discussion between the Shop Steward and Foreman and/or the Supervisor
shall be at such time and place as not to interfere with work in the department
or craft.     c)   If the Shop Steward and Foreman or Supervisor are unable to
agree, the matter will be referred to the department head involved in accordance
with procedure for handling grievances as set out in Article 27, it being agreed
that the Shop Steward shall suffer no loss in pay for acting in that capacity.

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  d)   Any employee called in for discussion that might result in disciplinary
action or any entry to be made in their personnel file may be permitted to have
a Steward present.     e)   One person within the bargaining unit designated by
the Business Manager of the UNION may be named to act in the capacity as a
Benefits Steward for hourly employees. This Steward shall be provided with a
locked file cabinet in a suitable location within the plant in which to file
records and information. All medical, dental, disability, and other benefit
forms and associated correspondence presented or received by the COMPANY are
confidential and private information and the COMPANY is required to treat it as
such. Any confidential records and information sought by the UNION shall be
obtained directly from the concerned employee or, with written permission by the
employee, from the Human Resources Department.     f)   Nothing in this
agreement shall be construed as preventing any employee so represented from
dealing directly with the COMPANY’S Human Resources personnel.

ARTICLE 11
CONTRACT WORK

42  a)   The COMPANY reserves the right to utilize independent contractors for
any purpose, including the performance of any amount of work normally performed
by employees in the bargaining unit, provided employees in Groups 1 and 4, and
the Instrument/Electrical and Machinist crafts are not laid off as a direct or
indirect result of such work being contracted out; nor shall any such work
contracted prevent the recall of laid off employees from these groups. It is
further agreed that (consistent with the terms of the parties’ previous
collective bargaining agreements and past practices) the performance of such
work under any circumstances by contractor personnel shall not result in such
personnel becoming part of the bargaining unit or in the application of the
terms of this Agreement to such personnel, whether they are deemed to be jointly
employed by Sterling or otherwise.

ARTICLE 12
PAY DAY

43  a)   All regular employees covered by this Agreement shall be paid in full,
once every two weeks on regular paydays established by the COMPANY except that
when a holiday falls on a payday, the employees will be paid the day before the
holiday. Each employee on paydays shall be provided with an itemized statement
of gross earnings and all deductions for any purpose.

  b)   All paychecks will be directly deposited with the financial institution
of the employee’s choice by the individual bargaining unit employee signing a
statement so indicating and holding the COMPANY harmless if their financial
institution has not credited their account in a timely manner.     c)   The
COMPANY further agrees that if any questions arise concerning time credited or
pay received by an employee, the time cards and other pertinent records will be
made

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      available for examination to the employee and the Shop Steward. In the
event the difficulty cannot be resolved at that time, then the same shall be
considered a grievance and handled according to the regular grievance procedure.
    d)   A pay error of less than eight (8) hours pay will be corrected on the
next regular paycheck. An error of eight (8) or more hours pay will be corrected
via a special make-up check.

ARTICLE 13
PHYSICAL EXAMINATIONS

44  a)   An applicant for employment, before being hired, must meet certain
minimum standards of health and physical fitness. A licensed physician employed
by the COMPANY will give the physical examination.

  b)   Periodic examinations of employees will be carried on with the principal
idea of helping employees improve their own health condition and to enable
COMPANY to guard the health of its employees.     c)   Employees who become
physically unfit to perform one or more of the essential functions of their
assigned classification, may be assigned other work, if available, and until, in
the opinion of the doctor retained by the COMPANY, the employee is able to
resume the work of their designated classification.     d)   The COMPANY agrees
to continue notification and to send a copy of such individual test results to
employees who fall outside the normal medical limits and to provide a copy to an
employee who comes to the Heath Services Department and requests such
information.     e)   When an employee is scheduled for a chest x-ray as part of
their physical, the COMPANY will provide for the x-ray to be read by a
“B-Reader”. For employees in the Insulator Craft, a second x-ray, read by a
“B-Reader”, will be provided at six (6) month intervals at the request of an
insulator.

ARTICLE 14
DISCRIMINATION

45  a)   No members of a signatory union shall be discriminated against,
discharged or harassed on account of their activities or interest in their UNION
while carrying out in good faith the terms of this Agreement.

  b)   Charges of such discrimination, discharge or harassment, if any, shall be
handled according to the regular grievance procedure.

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ARTICLE 15
UNION REPRESENTATIVES

46  a)   When in the opinion of a Steward or Plant Committeeman, or the COMPANY,
the counsel of a business representative of the Texas City, Texas Metal Trades
Council, or any of the organizations signatory to this Agreement, is advisable
or necessary to aid in the resolving of a grievance that has arisen, such
business representative shall be permitted to enter the premises of the COMPANY,
subject to the regulations governing visitors to this plant.

ARTICLE 16
JURY SERVICE

47   Employees kept away from work because of reporting for jury service or for
service as a witness under court subpoena will be paid their regular
straight-time hourly rate, exclusive of any overtime or other premium pay,
subject to the following provisions.

48   Section 1 — Morning Court Appearance

  a)   Employees working days are not required to report back for work if
dismissed from court duty at or after 11:30 a.m. Employees dismissed before
11:30 a.m. are required to report for work and complete the workday.     b)  
Employees on the 10:30 p.m. to 6:30 a.m. (or 11:30 p.m. to 7:30 a.m.) shift
shall not be required to work the shift on the calendar day of their first day
in court, nor any other 10:30 p.m. to 6:30 a.m. (11:30 p.m. to 7:30 a.m.) shift
falling on a day they are scheduled to be in court.     c)   Employees scheduled
to work the 2:30 p.m. to 10:30 p.m. or 3:30 p.m. to 11:30 p.m. shift are not
required to report for their shift if they are released from court after
10:00 a.m.     d)   Employees scheduled to work the 10:30 p.m. to 6:30 a.m. (or
11:30 p.m. to 7:30 a.m.) shifts are not required to report for work on these
shifts if dismissed from court duty at or after 12:00 p.m. If released before
noon, they are expected to work their scheduled shifts.

49   Section 2 — Afternoon Court Appearance

  a)   Employees working days are required to report for work at the beginning
of their shift and will be released a reasonable period of time prior to their
court appearance.     b)   Employees scheduled to work the 2:30 p.m. to
10:30 p.m. (or 3:30 p.m. to 11:30 p.m.) shift are not required to report for
work prior to an appearance in court which begins after the start of their
scheduled shift and before 6:30 p.m. Employees scheduled to work the 2:30 to
10:30 p.m. (or 3:30 p.m. to 11:30 p.m.) shift who serve three (3) or more hours
in court or who are dismissed from court at or after 6:30 p.m. are not required
to work the remainder of their scheduled shift on that payroll day.

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  c)   Employees scheduled to work the 10:30 p.m. to 6:30 a.m. (or 11:30 p.m. to
7:30 a.m.) shift whose court appearance begins before 3:00 p.m. are not required
to work their graveyard shift on that calendar day. Employees scheduled to work
the 10:30 p.m. to 6:30 a.m. (or 11:30 p.m. to 7:30 a.m.) shift are not required
to work the shift falling on the payroll day of an appearance in court if
released from court at or after 3:00 p.m.

50   Section 3

  a)   Employees are required to furnish proof from the court of such service,
showing the date and time served and amount paid for their services. With regard
to jury service, the COMPANY agrees to treat the documented release time the
same for standby as for court appearances.

51   Section 4

  a)   An employee who is to report for court duty in the afternoon shall be
given a reasonable period of time to go home, change clothes, etc., eat and then
drive to the courthouse for duty; or that an employee released from court duty
before 12:00 p.m. shall be given reasonable time to go home, change clothes, eat
and drive to the plant.

ARTICLE 17
ELECTION DAY REGULATIONS

52  a)   It is further agreed that arrangements shall be made so that all
employees working days or day shifts who are requested to work overtime, shall
have sufficient time off to vote on election days covering City, State, and
National elections, and such time off shall not be deducted from the employee’s
wage.

  b)   An employee appointed as an election judge or observer or those elected
as delegates to political conventions shall be granted (a) vacation bank days if
eligible; or (b) an excused absence. The request must be made in advance and
must not conflict with or impair plant operation.

ARTICLE 18
REPLACEMENT OF CLOTHING

53  a)   Any employee required to perform work which results in the damage to
clothes or shoes by chemical or fire action, to such an extent they are no
longer suitable for wear, shall be furnished with suitable clothing or be given
a cash replacement allowance provided the damage did not occur due to the
employee’s failure to wear proper PPE when required; reimbursement is to be at
replacement cost less depreciation for normal wear. Replacement cost shall mean
the cost to replace the clothing at the time it is ruined.     b)   All
employees required to perform work which results in damage to clothes and shoes
by chemical or fire action will be furnished proper protective clothing and
equipment which is appropriate under the conditions prevailing. All such
clothing and

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equipment shall be returned, as directed by the COMPANY, at the completion of an
assignment or shift, whichever is applicable.
ARTICLE 19
LAYOFF NOTICE — SEPARATION ALLOWANCE

54  a)   Whenever it is necessary to lay off an employee or employees because of
lack of work due to curtailment of production, process changes, changing
requirements of craft work, or any other reason beyond control of the COMPANY,
such employee or employees shall be given ten (10) working days’ notice of such
layoff. The COMPANY shall have the option of paying for their time in lieu of
notice.     b)   In the event of a hurricane evacuation, acts of God or other
situations beyond the reasonable and direct control of the COMPANY, the notice
provisions of this Article will not apply.     c)   If it is necessary to lay
off employees because of any labor dispute preventing normal operations of the
plant, three (3) calendar days’ notice will be given. The COMPANY shall have the
option of paying for this time in lieu of notice.     d)   Hourly paid
employees, who are laid off as a result of economic curtailment, will be
eligible for a separation allowance in keeping with the following provisions:

55   Section 1 — Mode of Compensation

  a)   The Separation Allowance is computed on the basis of years of continuous
service with the COMPANY. Continuous service for the purpose of this agreement
is defined as time spent working for the COMPANY computed from the employee’s
last date of hire. The maximum allowance for any given period of layoff shall be
as follows:

      ALLOWANCE SCHEDULE Years of Continuous Service   Pay Allowance Under
1 year   2 weeks 1 through 4   4 weeks 5 through 9   8 weeks 10 or more  
12 weeks plus 1/2 week     for each year in excess of 10

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56   Section 2 — Method of Payment

  a)   The Separation Allowance will be paid in bi-weekly installments at their
regular bi-weekly pay amount until the maximum allowance specified above is
reached, provided the employee continues to meet the eligibility requirements.  
  b)   Should an employee be recalled to active employment before exhausting
this maximum allowance, payments will cease as of the effective date of recall.
Any remaining balance will be available for payment in the event the employee is
subsequently laid off before meeting the full reinstatement requirement
specified below. However, in the event the employee meets the requirements for
full allowance reinstatement, the payments will not exceed those specified in
Section (1) above.     c)   Any employee who is recalled to regular active
employment after exhausting the maximum allowance payments will be ineligible
for further separation payments until they have completed 78 continuous weeks of
active employment, at which time they will again become eligible for full
benefits under Section (1) above.     d)   All monies paid as Separation
Allowance will be subject to applicable taxes and other required withholdings.

57   Section 3 — Eligibility

  a)   Separation Allowance is not payable to any employee who:

  1)   Resigns or abandons employment for any reason.     2)   Becomes deceased.
    3)   Elects normal or early retirement.     4)   Is discharged.     5)  
Accepts a position in Sterling that is not within this bargaining unit.     6)  
Is receiving either occupational or non-occupational disability benefits until
said benefits are exhausted, and only then, provided the employee is still on
layoff status.     7)   Receives total and permanent (Long-Term Disability)
disability benefits.     8)   Is recalled from layoff.     9)   Is offered a
position with an acquiring company, of equivalent pay and benefits at the Texas
City Plant.

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  b)   The above Separation Allowance shall not be paid in the event that the
lack of work is due to a labor dispute or to fire, flood, water, or power
failure, or other act of God.

ARTICLE 20
LEAVE OF ABSENCE

58  a)   The COMPANY shall grant leave of absence, up to ninety (90) days
length, for personal reasons upon request and explanation by the employee,
provided that, in the opinion of the COMPANY, the reason for the request is
worthy and such leave shall not be used, except with the permission of the
COMPANY, for the purpose of accepting other employment and such leave shall not
affect the seniority status of said employee and/or employees.     b)   The
COMPANY shall, upon at least ten (10) days notice given by the UNION, grant
leaves of absence not to exceed thirty (30) days, to employees to attend UNION
conventions or meetings, provided not more than a total of three (3) employees
from the plant or one (1) employee from a department shall be away for that
purpose at any one time.     c)   The COMPANY shall, upon at least two (2) weeks
notice given by the UNION, grant leaves of absence not to exceed one (1) year in
length to a maximum of two (2) employees during any one period for purposes of
accepting employment with a union signatory to this Agreement. Employees on such
leaves of absence will maintain their seniority status while on leave providing
they maintain continuous service with said union. Such leaves of absence will be
automatically extended on a year-by-year basis for the duration of the
Agreement, upon receipt by the COMPANY, of a written request from the UNION at
least two (2) weeks prior to the expiration of each one (1) year period.
Employees desiring to return from such leaves will give the COMPANY at least two
(2) weeks notice in writing, and upon return will be required to take a
pre-employment physical as if they were new employees.     d)   Unpaid leave to
care for a newborn child will be administered under the guidelines of the Family
and Medical Leave Act.     e)   Employees elected or appointed to public office
will be allowed an excused absence, without pay, providing their absences do not
create a cost to the COMPANY or impair normal operations.

ARTICLE 21
SANITATION AND SAFETY

59  a)   All covered bargaining unit employees who, in order to perform their
normal duties, are required by state law to possess either a commercial or
chauffeur’s license shall be reimbursed the cost of these licenses.

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  b)   Inspection of any job for safety purpose may be secured upon the request
of any employee assigned to that job; such inspection to be made by a member of
the Plant Safety Department or other supervision with the employee involved. If
the result of this inspection indicates an unsafe condition, the job will be
postponed until proper steps have been taken to remedy the condition unless, in
the opinion of the supervisor, postponing the job creates a greater hazard.    
c)   When an employee accompanies an OSHA representative, while on COMPANY time
during an in-plant investigation, said employee shall not suffer any loss of
pay.

60   Prescription Safety Glasses -

  a)   The COMPANY agrees to pay up to one hundred dollars ($100.00) applicable
to the lenses for one pair of prescription safety glasses purchased through the
Safety Department. Such glasses may be tinted or clear. Where the employee’s
prescription is from a licensed physician and states that the employee’s eye
condition makes it mandatory that they wear dark glasses during daylight hours,
the COMPANY will agree to pay up to an additional one hundred dollars ($100.00)
for the purchase of an additional pair of shaded glasses. It is also understood
that the COMPANY will pay up to one hundred dollars ($100.00) applicable to the
lenses for the purchase of new safety glasses when an employee’s prescription is
changed.     b)   The COMPANY will pay 100% for the initial eye exam from an
approved provider. The COMPANY will pay 75% for subsequent eye exams in two
(2) year intervals from an approved provider.     c)   Additionally, up to two
(2) pair of non-prescription safety sunglasses or sunglass clip-ons will be
provided each year from an approved list.     d)   The COMPANY payment toward
frames for prescription safety glasses is $50.00.     e)   The COMPANY agrees to
provide one (1) pair of prescription glasses for welders. If additional glasses
are needed, requests will be evaluated and processed by the Plant Safety
Department on a case by case basis.     f)   Up to two pairs of clip-on glasses
per year shall be furnished by the COMPANY to the Operating Engineers, Local 450
members only. Clip-on glasses may be purchased at cost by other employees at the
Safety Supply section. Additionally, the COMPANY agrees to provide one pair of
colored prescription safety glasses for Operating Engineers required to operate
hoisting equipment.

61   Safety Shoes -

a)   The COMPANY will provide to each bargaining unit employee up to two
(2) pairs of approved chemical resistant safety shoes per contract year at the
COMPANY’S expense up to a maximum of $100.00 per pair. Employees will be allowed
to opt, instead, for one (1) pair of more expensive safety shoes per contract
year at

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     COMPANY’S expense up to a maximum of $175.00 per pair. In either case, the
employee will pay the additional cost above the maximum COMPANY dollar
contribution where applicable.
ARTICLE 22
BULLETIN BOARDS

62  a)   It is further agreed that the COMPANY shall provide an electronic
bulletin board for the posting of UNION notices and the currently effective
collective bargaining agreement. This board shall be used for the display of the
following notices: UNION meetings, UNION appointments, UNION elections, and
UNION social affairs. All notices to be posted on said board must first have the
approval of the Plant Manager or his designee. It is agreed that no UNION matter
of any kind shall be posted in and about the plant except on said board. In
addition, postings must be supplied in the form of a scanable document. Approved
postings will be removed after 10 days.

ARTICLE 23
COMPANY RULES

63  a)   It is further agreed by both parties to this Agreement that fair
treatment, good service, and due diligence in observance of the rules as
promulgated by the COMPANY are essential to the maintenance of satisfactory
working conditions and wages described in this Agreement and for efficient
production provided that such rules as may be promulgated by the COMPANY shall
not in any way conflict with the terms of this Agreement.

ARTICLE 24
PRODUCTIVITY STATEMENT

64  a)   The COMPANY and the Texas City Metal Trades Council agree that a
profitable and highly competitive Texas City plant enhances the job security of
all plant employees. Both parties recognize the necessity of making productivity
improvements to ensure the future profitability and competitiveness of the
plant.     b)   While acknowledging their respective rights and obligations, the
COMPANY and the UNION further recognize that in today’s rapidly changing
business environment a cooperative versus a confrontational approach to labor
relations matters is vital to the plant’s success. Specifically, the parties
have endorsed the following principles to reinforce their emphasis on this
productive collaboration:

  1)   A working environment that fosters increased effectiveness, efficiency
and productivity of plant operations is a highly desirable goal all employees
should contribute to achieving.

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  2)   Timely, effective two-way communications are basic to productive plant
operations.     3)   As appropriate, problem solving groups, as well as
participative concepts such as quality circles, may be facilitated. Productivity
improvement plans, programs and results will be periodically reviewed with the
Plant Union Committee.

  c)   The COMPANY and the UNION recognize that it is desirable and mutually
beneficial to set up an annual meeting to review Work Practices vs. Best of
Class in Industry. The purpose of these meetings would be to identify possible
areas of improvement that could enhance the COMPANY’S competitiveness within the
industry.     d)   During such meetings, possible areas of improvement
identified which would require modifying, amending, or waiving any of the
provisions of this Labor Agreement shall be implemented only by mutual consent
of both the COMPANY and the UNION.

ARTICLE 25
FUNERAL LEAVE

65  a)   Employees with ninety (90) days of continuous service will be given a
three (3) day leave of absence to attend the funeral of their spouse, child,
parent, brother, sister, parent-in-law, brother-in-law, sister-in-law,
son-in-law, daughter-in-law, grandparent, grandchild, stepchild, stepmother,
stepfather, or spouse’s grandparent. These shall be three (3) consecutive
calendar days, one (1) of which must be the day of the funeral. Employees will
be paid for any such days lost from work at their regular straight-time hourly
rate, exclusive of any overtime or other premium pay, provided such are their
regularly-scheduled work days. No employee shall receive funeral leave pay for
any day that is not a regularly-scheduled workday nor for any day on which they
are absent from work or on leave for any other purpose.     b)   Upon the death
of a relative of an employee or employee’s spouse where said relative has been a
long term resident of the employee’s household immediately prior to death and/or
confinement to a health facility, funeral leave provisions shall apply the same
as that which applies to the death of a person defined above within the
immediate family.     c)   The COMPANY agrees that when a death in an employee’s
immediate family, as defined above, occurs while the employee is on vacation,
the employee, with sufficient notice to the COMPANY may stop their vacation and
start their funeral leave in accordance with this article.

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  d)   An employee absent from their regular work schedule due to the imminent
death of a listed relative may receive funeral leave provided such lost time
occurs within the three-day period selected by the employee as funeral leave
under this article.     e)   The COMPANY agrees to double the allotted Funeral
Leave when two or more listed family members die concurrently.     f)   Upon
return to work, employees shall complete and sign a COMPANY “Funeral Leave Pay”
form and submit satisfactory proof of relationship to the deceased and of actual
attendance at the funeral.     g)   An employee will be excused without the loss
of straight time earnings to serve as an active pallbearer on the day of the
funeral of an employee or retired employee of the Texas City Plant. The request
for the employee to serve must be from a member of the deceased employee’s
immediate family and no more than six (6) employees may be excused for such
pallbearer service at any one funeral. Where the employee or employees to be
excused would result in the impairment of plant operations, the COMPANY reserves
the right to limit the number of employees absent.

ARTICLE 26
STRIKES AND LOCKOUTS

66  a)   All members of the UNION agree to conform to the rules and regulations
of the COMPANY insofar as they do not violate the conditions of these Articles
of Agreement. No member of the UNION employed by the COMPANY shall be
discriminated against for upholding UNION principles not inconsistent with the
terms of this Agreement. The COMPANY and the UNION desire that production shall
continue without interruptions. The COMPANY and the UNION further agree that
good employer/employee relations cannot exist unless there is a serious effort
on the part of both the COMPANY and the UNION to settle in a peaceable manner
all disputes that may arise. Therefore, as a means of promoting continued
production and employment and improved employer/employee relationships, the
COMPANY and the UNION agree that the grievance procedure and arbitration
procedure provided in this Contract shall be used to peaceably settle without
strike disputes that are covered by such grievance and arbitration procedure.  
  b)   It is agreed that there will be no lockout by the COMPANY or strike or
work stoppage by the UNION.     c)   In the event of such strike or work
stoppage, there shall be no liability on the part of the UNION, its officers or
agents, if such strike or work stoppage was not authorized, encouraged or
condoned by the UNION.     d)   The UNION agrees to cooperate with the COMPANY
and use means at its disposal to

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      settle such strike or work stoppage and request such employees to return
to work.

  e)   This provision shall no longer be binding on the COMPANY or the UNION if
either party has served proper notice requesting changes or modifications of
this Agreement in accordance with the terms of Article 32 and either party has
given written notice that is discontinuing negotiations.

ARTICLE 27
GRIEVANCE PROCEDURE AND DISCIPLINE RECORDS

67  a)   The parties to this Agreement agree that any dispute, complaints, or
grievance, except those pertaining to discharge, arising out of the
interpretation or application of the terms of this Agreement, shall be settled
promptly in accordance with the following procedure:

  1)   It is understood and agreed that no complaint, dispute, or grievance
shall be submitted to either the COMPANY or UNION after a lapse of ten (10) days
from the time the incident causing the complaint, dispute, or grievance shall
have occurred or become known to the employee.     2)   Step 1 — Any employee or
group of employees either individually or with, or through, their Steward, may
discuss with the immediate supervisor any complaint or other matter which they
feel requires clarification. The supervisor shall have five (5) days in which to
render a verbal decision to said employee(s) and the Steward involved, if any.
Should the decision fail to bring about a satisfactory settlement in the matter,
it may become a grievance and may be handled in accordance with Step 2.

  i)   It is understood that when a group of employees desire a clarification on
a matter in which they are commonly involved, one employee in the group, with or
through the steward, if desired, shall be designated by the group to discuss the
matter with the supervisor. Matters which do not affect the employees as a group
in a common manner, or which may require individual adjustment, shall be
presented on an individual basis.

  3)   Step 2 — Within five (5) days of receipt of the verbal decision at Step
1, the employee or group of employees, either individually or through their
steward, may file the grievance, on forms provided by the COMPANY and the UNION,
through the immediate supervisor to their department head. Within five (5) days
of receipt of the grievance, the department’s supervision, and a representative
of the Human Resources Department shall meet with the employee, their steward,
the appropriate Plant/Union Committeeman and the Business Manager of the UNION
or designee, for the purpose of discussing the grievance. Supervision shall have
five (5) days in which to render a decision. If the decision brings about a
satisfactory settlement of the matter, it shall be reduced to writing and shall
be delivered to the employee, the steward and the UNION.

  i)   If the decision fails to bring about a satisfactory settlement, it may be
appealed

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      in writing by the employee or group of employees, either individually, or
through their Steward, to the Plant Manager or designee, within ten (10) days of
the decision and will be handled in accordance with Step 3.

  4)   Step 3 — A grievance appealed to Step 3 will be entered on the agenda of
the next meeting of the Plant/Union and the Plant Management Committees if the
appeal is received at least ten (10) days prior to its scheduled meeting. If
received within the ten (10) day period prior to a meeting, it shall be placed
on the agenda for the following meeting.     5)   An employee having a grievance
in regard to contractual sick pay benefits may file a grievance directly with
the Human Resources Department, who shall have five (5) days’ time in which to
investigate and answer the grievance. Should the answer fail to bring about a
satisfactory settlement to the grievance, then the employee may, within five
(5) days, appeal the grievance directly to Step 3 of the grievance procedure.  
  6)   After discussion of the grievance by the Plant/Union and Plant Management
Committees, it shall be answered, in writing, to the UNION within ten (10) days.

If the grievance is settled at Step 3, the answer shall reflect the settlement.
If the grievance has not been settled, then the COMPANY’S answer shall state why
the grievance is denied.

  b)   The COMPANY and the UNION recognize that it is desirable and mutually
beneficial to have regular monthly meetings for the purpose of discussing any
grievances placed on the agenda for the respective meeting. For this purpose,
the representatives of the UNION shall consist of a committee designated by the
UNION and shall be called the Plant/Union Committee (PUC), of which there shall
be seven (7) employee members. Employees in the probationary period of
employment shall not be eligible for membership on the PUC.     c)   If an
employee is discharged, the COMPANY, within three (3) days of the discharge,
shall, on request of the employee provide the employee with a written statement
of the reason or reasons for the action taken. If the UNION desires to protest
the discharge, the UNION, instead of following the procedure set forth in Steps
1 and 2 of the Article, may, within ten (10) days after the discharge in
question, file directly with the COMPANY, a written request for a hearing. Such
hearing shall be held within two (2) days after receipt by the COMPANY of such
written request. At such hearing, evidence may be presented on behalf of the one
discharged and by the COMPANY.     d)   If the evidence presented by the UNION
to the COMPANY warrants the reinstatement of the discharged employee or
employees, such reinstatement shall be to their former position without loss of
seniority or vacation credits. All other terms of the reinstatement may be
agreed upon between the COMPANY and the UNION at this time. If the COMPANY and
the UNION cannot agree that the discharge was justified, the dispute may be
referred to arbitration in accordance with the procedure

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      set forth below.

  e)   If a grievance or discharge protest cannot be settled to the mutual
satisfaction of the COMPANY and UNION in Steps 1 through 3 or as otherwise
provided above, the UNION shall have forty-five (45) days during which to notify
the COMPANY of their desire to arbitrate the dispute.     f)   Except where
stated otherwise, all time limits noted in this Article are exclusive of
Saturdays, Sundays and holidays as listed in Article 4, Sec. 3 (a). Extensions
of time limits as set forth in this Article, may be requested by either the
COMPANY or the UNION to take care of unusual cases.     g)   Whenever a
supervisory employee places charges or letters of reprimand on an employee’s
record, a copy of such charges or letters of reprimand must be furnished to such
employee. Any charges or letters of reprimand made against an employee may be
referred by the employee to the grievance procedure for handling if the employee
feels the charges or letters of reprimand are unfounded or not justified.     h)
  If an employee has gone a period of twenty-four (24) months without receiving
a letter of warning or reprimand, no letters issued to the employee previously
(except those which involved disciplinary suspension) will be used for the
purpose of further disciplinary action. Disciplinary suspension will be limited
to five (5) years for the purpose of further disciplinary action.

ARTICLE 28
ARBITRATION PROCEDURE

68  a)   If a grievance has not been settled to the mutual satisfaction of the
COMPANY and UNION after completing Step 3 of the grievance procedure provided
above, the UNION shall have forty-five (45) days during which to notify the
COMPANY of their desire to arbitrate the dispute. A panel of five (5) neutral
arbitrators shall be requested in writing from the Federal Mediation and
Conciliation Service (FMCS), a copy of such letter will be given to the other
party. Upon receipt of the panel of arbitrators, the parties shall alternately
strike same, with the first strike determined by flip of a coin.     b)  
Grievances appealed to arbitration but not scheduled for hearing within 12
months of the appeal are considered to be dropped.     c)   The COMPANY and the
UNION shall bear the expenses of their respective advocates. All other expenses
of the arbitration shall be borne by and divided equally between the UNION and
the COMPANY.     d)   The arbitrator selected shall have no power or authority
to amend, alter or modify this Agreement, including any appendices hereto, but
shall be limited to deciding whether or not a violation of its express terms has
been committed. The decision of the arbitrator shall be final, conclusive and
binding upon all employees, the UNION and the COMPANY. The arbitrator shall have
no power to establish wage scales, rates for

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      new jobs, or to change any wage. He shall have no power to substitute his
discretion for that of the COMPANY in cases where the COMPANY has retained
discretion or the right to act under this Agreement. The arbitrator shall, in
his decision, specify whether or not the decision is retroactive or the
effective date thereof.

  e)   Time limits: If the UNION or Grievant fails to observe the time limits
set forth in the Grievance or Arbitration Procedures, the grievance shall be
considered closed and no further proceeding thereon shall lie. If the COMPANY
fails to meet the time limits set forth, the grievance may be appealed to the
next step of the grievance or arbitration procedures.

ARTICLE 29
ABROGATION OF CONTRACT ARTICLES

69   Should any part hereof, or any provisions herein contained, be rendered or
declared invalid by reason of any existing or subsequently enacted legislation
or by a decree of a court of competent jurisdiction, such invalidation of such
part or portion of this Agreement shall not invalidate the remaining portion
hereof and they shall remain in full force and effect.

ARTICLE 30
OCCUPATIONAL & NON-OCCUPATIONAL
ACCIDENT AND SICKNESS PLAN

70   Section 1

  a)   This Benefit Plan is provided to aid employees in meeting their expenses
while suffering from an illness or accident in accordance with the following
schedule:

                  Maximum Number Plant Service Credit       of Weeks Benefit Six
months to 1 year
Over 1 year       12 weeks
26 weeks

  b)   Plant Service Credit shall mean employment with the COMPANY, which is
credited to the employee from the records of the COMPANY and shall start with
the employee’s hiring date with the COMPANY. No credit shall be given for
absence due to leave of absence, layoff or strikes.

71   Section 2

  a)   Maximum Number of Weeks Benefits is determined by the employee’s Plant
Service Credit, and all disability periods occurring within the Plant Service
Credit year will be totaled for the purpose of computing the Maximum Benefits
allowed for that year.     b)    Unused benefits during a Plant Service Credit
year may not be carried over to the next Plant Service Credit year.

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  c)   An employee whose continuous absence due to an illness or injury extends
from one (1) service year to another shall be entitled to a maximum of
twenty-six (26) weeks benefits for that disability. An employee whose continuous
absence exceeds such Maximum Benefits must return to work for a period of sixty
(60) days for a related disability or one (1) day for an unrelated disability in
order to receive further benefits to which they may be entitled. Total benefits
will not exceed twenty-six (26) weeks in a Plant Service Credit year.

72   Section 3

  a)   The Plan provides benefits based on a normal workweek of forty (40) hours
and a normal day of eight (8) hours. In case the number of hours in the normal
workweek or workday is changed, the benefits listed below will be changed in
direct proportion to the change in the scheduled working hours.     b)   The
benefits provided for herein shall be less any amount or amounts of disability
benefits which may be provided for through the State or Federal legislation,
Workers Compensation, or benefits provided in the Hourly Disability Benefit
Plan.

73   Section 4

  a)   This Benefit Plan will provide benefit payments based on the employee’s
base hourly rate, exclusive of all premium pay. Benefit payments will be made
for an employee’s disability for each scheduled workday up to the maximum number
of weeks for which the employee is eligible according to the schedule in
Section 1.     b)   The COMPANY will provide benefits in an amount equal to 90%
of an employee’s base straight-time earnings for workdays lost due to
non-occupational disability and up to 100% of an employee’s base straight-time
earnings for workdays lost due to occupational disability.     c)   An employee
who has completed the probationary period but has less than six (6) month’s
service and otherwise is qualified for benefits from this Plan on a holiday will
be guaranteed up to eight (8) hours pay.

74   Section 5

  a)   An employee must present evidence satisfactory to the COMPANY, showing
that an absence is due to illness or accident within the meaning of this Plan on
forms provided by the COMPANY.     b)   The employee, the doctor, or a member of
the family must report an employee’s absence to the Health Services Department
by the third day of absence. Failure to comply will be considered an absence
without leave.     c)   Additionally, an employee’s occupational injury or
illness must be reported to

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      supervision as soon as it becomes known to the employee or it will be
considered a late report and subject to disciplinary action.

  d)   Employees must adopt such remedial measures as may be commensurate with
their disability and permit such reasonable examinations and inquiries by the
COMPANY’S Health Services Department representative as, in its judgment, may be
necessary to ascertain the employee’s condition.

75   Section 6

  a)   Payments will not be made for:

  1)   Any period of disability during which the employee is not under treatment
by a licensed physician or a licensed chiropractor.     2)   Any disability
caused directly or indirectly by war or riot.     3)   Any sickness or injury
due to the employee’s

  i)   Willful intention to injure oneself or another;     ii)   Intoxication or
the use of drugs except when in an EAP approved treatment program for substance
abuse.

  4)   Any disability occurring while the employee is working for wages or
profit.     5)   Any disability due to misconduct.     6)   Any disability when
an employee is absent because of layoffs, strikes, or leave of absence or on
vacation. Any employee who is injured or becomes sick during vacation and is
unable to return to work at the end of the vacation shall qualify for benefits
in accordance with the Plan.

  b)   All benefits under this plan shall cease immediately when employment with
the COMPANY is terminated for any reason.

76   Section 7

  a)   The COMPANY reserves the right to withhold benefit payments to any
employee who is guilty of submitting a false claim or of abuse of the privileges
covered and may take disciplinary action including discharge.

77   Section 8

  a)   Employees receiving sick benefits under this Article at the time a work
stoppage occurs will continue to be covered under this Article until certified
able to return to

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      work. Employees whose illness or injury occurs after a work stoppage
begins will not receive benefits, as set forth in this Article, until the
settlement of the work stoppage.

78   Section 9

  a)   The COMPANY agrees that when an employee becomes ill or is injured while
on vacation and is certified as disabled by a licensed physician, they will be
able to cancel subsequent full weeks of vacation beyond the week in which they
become certified as disabled upon proper notification to the COMPANY.     b)  
The COMPANY agrees that if an employee is hospitalized while on vacation, the
employee’s vacation may be canceled and the employee placed on sick leave on the
day of hospitalization. For purposes of this paragraph, the day is defined as
the payroll day appropriate to the employee’s regular work schedule.

ARTICLE 31
WORK ASSIGNMENTS

79  a)   There is no jurisdiction. Work will be assigned on the basis of skill
and ability taking into account that the needed skills will be represented.    
b)   Bargaining Unit employees will not be required to train non-Sterling
personnel.

ARTICLE 32
CONTRACT PERIOD

80  a)   This agreement shall become effective on the date of signing and shall
remain in effect until 4:00 p.m. on May 1, 2012, and the same shall
automatically renew itself from year to year thereafter unless either party
shall have given the other written notice of desired changes or termination at
least sixty (60) days before the anniversary date.     b)   This Agreement is in
full settlement of all contractual issues in dispute between the COMPANY and the
UNION. The parties acknowledge that during the negotiations which resulted in
this Agreement, each had the unlimited right and opportunity to make demands and
proposals with respect to any subject or matter not removed by law from the area
of collective bargaining, and that the understanding and agreements arrived at
by the parties after the exercise of that right and opportunity are set forth in
this Agreement.     c)   The COMPANY and UNION also agree that any subsequent
agreement reached within the duration of this Agreement will be in compliance
with applicable Federal laws, regulations, guidelines and standards.     d)  
The UNION and Sterling agree that all pending and unsettled grievances will be
subject to the Grievance and Arbitration Process (including all timeliness and
other defenses permitted by the either the expired or new Agreement) and will
not be

38

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      affected in any way by Article 32(b) of the Agreement. The parties further
agree that all pending unfair labor practice charges will not be affected in any
way by Article 32(b) of the Agreement. The parties further agree that the Return
to Work agreement dated September 11, 2002 will not be rendered unenforceable by
the terms of this Article.

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81
  Contract Period: May 1, 2007 to May 1, 2012    
 
       
 
  STERLING CHEMICALS, INC.    
 
       
 
 
 
Sr. V.P., Manufacturing    
 
       
 
 
 
Human Resources Manager    
 
       
 
  TEXAS CITY, TEXAS METAL TRADES COUNCIL AFL-CIO    
 
       
 
 
 
President    
 
       
 
  Electrical Workers Local No. 527    
 
       
By
       
 
 
 
   
 
  Operating Engineers No. 564    
 
       
By
       
 
 
 
   
 
       
 
  International Association of Machinists No. 6    
 
       
By
       
 
 
 
   

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EXHIBIT A
TWELVE-HOUR SHIFT AGREEMENT

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
This Agreement is applicable to Groups 1, 2, and 4 employees assigned to the 12H
Shift Schedule (designated 12H). In addition, only those Articles, Appendices
and Letters of Understanding specifically cited herein are modified by this
Agreement. Those provisions in the basic agreement not addressed here remain
effective for all employees affected by this Agreement as well as all other
represented employees.
The COMPANY will not relinquish its rights to determine hours and schedules of
work except as specifically limited in the Articles of Agreement. It is
expressly provided, however, that the COMPANY for legitimate business cause, may
cause the discontinuance of the use of the 12H Shift with at least ninety
(90) days notice of the effective date of such discontinuance.
Day Jobs
Straight day employment shall be determined on the basis of senior qualified.
Extra Operators
Employees in excess of the department’s minimum staffing needs may be defined as
“extra”. Extra employees will not receive pay at time-and-one-half (1-1/2)
premium for shift changes where notice was received more than twenty-four
(24) hours in advance of the start of the new shift.
Wages
The hourly wage rate of an employee assigned to the 12H Rotating Shift Schedule
must be adjusted so as to provide the annual earnings under the 12H Shift
arrangement which shall equal that which the employee would have earned under
the 8-Hour Rotating Schedule if he/she worked an equal number of hours.
This adjustment is necessary due to the requirement of paying overtime hours
over eight (8) in a scheduled work day, and on holidays.
Under the 12H Schedule, an employee will work eight (8) hours at the straight
time rate and four (4) hours at the time and one-half premium rate. To make the
earnings for 12 hours of work equal to that which the employee would have earned
at the straight time rate, the eight-hour (regular negotiated) rate must be
reduced by multiplying said rate by a factor of 0.8685, and then rounding to the
nearest penny.
The contractual wage rate of the various classifications affected by the 12H
Shift arrangement shall, as applies to those regularly assigned to the 12H
Schedule, be reduced by a factor of 0.8685. Calculation of the 0.8685 factor and
the application of the adjusted rate are attached at the end of this Exhibit.
Premium pay practices for holidays and shift differential, and pay continuation
practice for vacation, jury duty, etc. are attached in order by Article and
Section.
EXHIBIT A

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TWELVE HOUR SHIFT AGREEMENT
After consultation with the UNION, the COMPANY may, at it’s discretion, change
the calculation formula and/or factor for determining the twelve-hour wage rate,
provided that employees are given at least a thirty (30) day notice and such a
change does not result in a reduction and/or loss of pay.
Employee Benefit Plans
The COMPANY will make SIP matching contributions for 12H shift employees in
accordance with Exhibit C.
Life Insurance, and Disability Benefits will be calculated on 2080 annual hours
at the unadjusted rate with no benefit payment difference for an 8-hour or 12H
Shift employee with similar service for the COMPANY.
Under the Pension Plan, the scheduled 104 hours of overtime in the 12 Hour Shift
Schedule are applied in the calculation for bargaining unit average overtime.
Overtime
Operation on the 12H Shift (versus the 8 hour shift) prevents employees from
covering a vacant shift by holding over one-half of the shift and by the next
shift coming in early (total of 18 hours), or doubling over both shifts (total
of 24 hours). Therefore, the majority of overtime will have to be covered by
employees on the their days off.
The Overtime Agreement will be used throughout all the affected groups,
including day workers in those areas where 12H Shift employees work
Overtime coverage will be provided on a voluntary basis as described below until
an overtime group fails to meet its commitment to staff its respective unit
around-the-clock. If a voluntary system fails to provide the necessary coverage,
an alternate system will be initiated as required. A mandatory on-call system
will be implemented if the voluntary system fails to produce the number of
people required for overtime coverage.

  •   The 12H Shift will make some changes necessary in the overtime procedures.
    •   Normally, it will be necessary to cover vacant shift with persons on the
off shifts.     •   Overtime procedures are included in the document for all
affected groups.     •   The UNION agrees to a firm commitment to staff the
plant.

As a general practice, overtime will be pre-scheduled however practical by
scheduling the off shift for all known overtime before each shift’s days off. If
there are no volunteers, the low person will be forced to work overtime. The
COMPANY will attempt up to twelve (12) hours before overtime is to begin to get
the lower off shift person.

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
Employees who are forced out on overtime and work up to or into their regular
shift, shall be excused from work on their regular shift without pay, once the
employee has performed twelve (12) hours of continuous work if the employee so
requests.
It is recognized that with a 12 Hour Schedule, it is no longer possible for an
employee to “hold over” one-half (1/2) the shift and another employee to come in
early one-half (1/2) the shift (total of 18 hours each), or “double over” (total
of 24 hours). An employee cannot be forced to work more than sixteen
(16) consecutive hours.
Operators who work 8-hour day shift schedules in the overtime group, will comply
with this procedure on weekends and holidays.
When it is necessary to provide overtime coverage by calling in an employee, a
change in the overtime procedure is necessary to ensure adequate staffing of the
plant. A call-in list would provide names of employees eligible to work the 12
hours (i.e., capable of working the full shift without interfering with their
next scheduled shift). The employee with the lowest number of hours would be
contacted first, and on through the list.
An employee who accepts an overtime assignment, can later turn it down; however,
he/she will still be required to work unless another qualified employee (not the
standby or forced person) volunteers to work. Volunteers will not be sought
later than four (4) hours prior to the start of the shift.
When it is necessary to provide overtime coverage by calling in an employee, the
following procedure shall be followed:

1)   Call the low person off shift who is eligible to perform the job. The first
person contacted by telephone may refuse the assignment, but if he/she refuses,
he/she will be informed that he/she is in the “forced” position. If subsequent
calls to other persons fail to produce volunteers, then the “forced” persons
will be required to report to work.   2)   If the list of low persons off shift
fails to produce the staffing necessary, the following procedure shall be
followed:

  a)   Force the on shift low person(s) on holdover for up to four (4) hours.  
  b)   Force out low person on-coming shift for up to four (4) hours.     c)  
When necessary to do this, the middle four (4) hours will be covered as the
COMPANY sees fit.     d)   This constitutes a breakdown in the voluntary system
and may lead to the Mandatory Procedure.

EXHIBIT A

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TWELVE HOUR SHIFT AGREEMENT

  3)   In those situations where it is anticipated that the overtime required on
a job shall not exceed eight (8) hours duration, the overtime will be offered to
those employees present in the plant or to the on-coming shift rather than
calling out the off shift.

Mandatory Overtime Procedure
Should the voluntary overtime system fail to provide coverage for overtime in an
overtime area, the COMPANY will review the circumstances and decide if the
voluntary system will continue to fail. If so determined, then the following
Mandatory Overtime Procedure and standby system will be initiated.

1)   The primary shift (shift on short days off) and the secondary shift (shift
on 8-day long change) will provide the needed personnel for standby. A volunteer
list will be posted for employees desiring to stand by for overtime on shift as
they desire.   2)   The number of standby personnel will be determined by
management, dependent on training, job flexibility and the number of jobs per
overtime area, but will be kept to the minimum necessary. Standby duties shall
be rotated on an equitable basis among all employees of the overtime group and
will be for the entire off period. It is preferred that different standby
personnel be scheduled for coverage of the day and night shift, of an off
period. Standby lists will be posted prior to the beginning of the employee’s
days off.   3)   The personnel on standby will not be scheduled for known
overtime.   4)   It will be the responsibility of the person(s) on standby to be
available by phone between 3:30 a.m. and 6:30 a.m. and/or 3:30 p.m. and 6:30
p.m. If the standby personnel are not at home, it is their responsibility to let
the appropriate on-duty person know where they can be reached. Standby personnel
may, at the employee’s option, check out a pager prior to the start of their
standby period in order to facilitate communication. However, when pagers are
unavailable, the standby employee will comply with the mandatory overtime
procedure. The employee is responsible for verifying that the pager is working.
  5)   The person(s) on standby should be prepared to report to work by the
beginning of the shift.

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
Charging of Overtime
An employee, who is contacted and refuses overtime, will be charged the total
hours paid for such overtime.
ARTICLE 3
HOURS OF WORK
Section 1
Work day will be defined as a consecutive twenty-four (24) hour period beginning
at 6:30 a.m.
12H Shift Workers
Twelve (12) consecutive hours of work per day shall constitute a days work. Day
shift will be from 6:30 a.m. to 6:30 p.m. and night shift will be from 6:30 p.m.
to 6:30 a.m. The payroll week for employees on the 12H Shift starts at 6:30 p.m.
Thursday, and runs until 6:30 p.m. the following Thursday. The payroll day
starts at 6:30 p.m. and runs until 6:30 p.m. of the following day. Shift workers
are permitted sufficient time to eat during their shift without loss of pay for
such period.
The 12H Shift Schedule will be as follows:

     
 
  Four           12-Hour Days
 
   
 
  Two Days Off
 
   
 
  Three           12 Hour Nights
 
   
 
  Two Days Off
 
   
 
  Three           12-Hour Days
 
   
 
  Two Days Off
 
   
 
  Four           12-Hour Nights
 
   
 
  Eight           Days Off

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
ARTICLE 4
OVERTIME AND HOLIDAYS
Section 1

a)   An employee shall be paid at the rate of one and one-half (1-1/2) times his
adjusted rate for hours worked over eight (8) and up to twelve (12) and at a
rate of one and one-half (1-1/2) times his unadjusted rate for hours worked in
excess of twelve (12) within a given twenty-four (24) hour payroll day.   b)  
For 12H Shift Workers, time worked in excess of their weekly scheduled hours (36
or 48), shall be paid at the rate of one and one-half (1-1/2) times the
unadjusted base rate of pay.

Section 3
Holiday and Holiday Pay
All holidays listed in the Articles of Agreement will be recognized. Holiday Pay
provisions begin at 6:30 a.m. on the day of the holiday.
Employees assigned to the 12H Shift Schedule shall receive the following pay for
holidays:

1)   For holiday not worked: 8 hours times a premium factor of 1.151 times the
adjusted hourly rate.   2)   For all regularly scheduled hours worked on a
holiday: 2.879 times the employee’s adjusted hourly rate.

  a)   For holiday hours worked outside the regular schedule, when it occurs on
the same shift as the last regularly scheduled shift worked: 1.5 times the
unadjusted rate times hours worked during the first 8 hours of the shift, plus
2.5 times the unadjusted rate times hours worked during the last four hours of
the shift, plus Item No. 1 above.     b)   For holiday hours worked outside the
regular schedule, when it occurs on the opposite shift as the last regularly
scheduled shift worked: 2.5 times the unadjusted rate plus Item No. 1 above.

All other provisions in the Articles of Agreement concerning holidays and
holiday pay shall continue to apply.

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
Section 5
Shift Differential
For employees assigned to the 12H Shift, the contractual rate of shift
differential will be amended to provide:

•   6:30 a.m. to 6:30 p.m. — no differential   •   6:30 p.m. to 6:30 a.m. —
$1.00 differential (adjusted where applicable — 87.7 cents)

Employees assigned to the 12H Shift Schedule shall receive the following shift
differential pay for holidays and when working outside the regular 12H Schedule:

•   For regularly scheduled hours worked on the night shift of a holiday: 2.879
times the adjusted shift differential rate of 87.7 cents.   •   For hours worked
on the night shift outside the schedule on a holiday: 2.5 times the contractual
rate of $1.00.   •   For all hours worked on the night shift outside the regular
schedule, excluding holidays: 1.5 times $1.00.   •   For holidays not worked: No
shift differential.   •   For the night shift of the last scheduled day of rest
worked (if all days of rest worked): 2.0 times $1.00.   •   After consultation
with the UNION, the COMPANY may, at its discretion, eliminate the shift
differential premium by splitting it equally and applying to both shifts,
provided that employees are given at least a thirty (30) day notice and such
change does not result in a decrease in pay over a full 28 day rotation cycle
that includes no holidays.

ARTICLE 5
VACATION
The vacation policy will allow 8-hours excused absence to be taken during a
48-hour work week in conjunction with 40 hours vacation to fill out the period
between days off.
Remnant hours (4 or 8 hours remaining at the end of the vacation year) may be
used, at the employee’s discretion as follows:

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT

a)   Take off with pay in conjunction with time off without pay, totaling 12
hours. This does not constitute an additional bank day.   b)   Take pay in lieu
of vacation (at the adjusted hourly rate).   c)   A twelve (12) hour shift
employee may opt to work his/her shift and take remnant hours (four (4) or eight
(8) hours) at the beginning or end of their respective shift. This must be
scheduled in advance to allow for proper coverage of the shift. This does not
constitute an additional bank day.   d)   When it becomes known in advance that
an employee has remnant vacation hours he/she may request to schedule these
prior to the end of the vacation year, but only if all other vacation has been
used.

Section b)
The vacation pay, for employees entitled to vacation, is computed on the basis
of eight (8) hours times the adjusted hourly rate plus four (4) hours at time
and one-half the adjusted hourly rate for each twelve-hour shift taken as
vacation.
Section e)
An employee may place up to six (6) shifts (72 hours) of their vacation in a
vacation bank prior to January 1 with such days to be taken at any time during
the vacation year when requested by the employee. Three (3) bank days (36 hours)
may be taken with one (1) hours notice. Thirty (30) hours notice for the other
three (3) bank days (36) hours will be required except in cases of emergencies.
An employee will be allowed to convert one (1) 12 H bank day to three (3) four
hour bank days to be taken at the beginning or end of a shift, within a vacation
year. All three (3) four hour bank days must be used or lost. They cannot be
treated as remnants. These bank days must be scheduled with thirty (30) hours
notice and supervisor approval. No overtime meals will be
granted for employees covering four hour bank days.
The employee exercising the four hour bank day will be responsible for finding
coverage for the opening within the overtime guidelines.
This will be implemented for a one (1) year trial period and after that year
will be continued with agreement between the UNION and the COMPANY.
An employee is entitled to one split for each forty (40) hours of vacation
earned.

50

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
Section m)
When a holiday is observed on an employee’s scheduled vacation day, they will
have the option of an extra day vacation or eight (8) hours pay at 1.151 times
the adjusted hourly rate.
ARTICLE 6
SENIORITY
Section 9
Job Bidding Procedure
Job Posting: The job vacancy will be posted for eleven (11) calendar days at
each of the main gates and on departmental bulletin boards within the plant.
ARTICLE 16
JURY SERVICE
Employees on the day shift (6:30 a.m. to 6:30 p.m.) are not required to report
back to work if dismissed from court duty at or after 12:30 p.m. Employees
dismissed before 12:30 p.m. are required to report for work and complete the
work day. COMPANY has the option to utilize the overtime replacement or to send
them home. Employees on the night shift (6:30 p.m. to 6:30 a.m.) are not
required to report for work if jury service commences less than eight (8) hours
from the end of the last shift, or if jury service is terminated less than eight
(8) hours before the beginning of the next shift.
Jury duty pay for hours excused as provided above shall be: first eight
(8) hours of a shift excused shall be at the adjusted rate and all hours excused
after eight (8) hours shall be at one and one-half (1-1/2) times the adjusted
rate.
ARTICLE 25
FUNERAL LEAVE
Employees will be given up to three (3) consecutive 12-hour days off, one (1) of
which must be the day of the funeral. Employees will be paid for funeral leave
days at eight (8) hours times the adjusted hourly rate plus four (4) hours at
time and one-half (1-1/2) the adjusted hourly rate.

51

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
ARTICLE 30
OCCUPATIONAL & NON-OCCUPATIONAL
ACCIDENT AND SICKNESS PLAN
Section 4
The plan will provide benefit payments for 12H Shift employees, based on the
unadjusted hourly rate, exclusive of all premium pay, times 0.9524.
The COMPANY will provide benefits to a 12H Shift employee in an amount to equal
90% of the employee’s adjusted base earnings for work time lost due to
non-occupational disability. The adjusted base will be calculated by multiplying
0.9524 times the unadjusted hourly rate times the hours lost. The benefits for
occupational disability will be equal to 100% of the employee’s adjusted base
earnings for work time lost.
WAGE ADJUSTMENT
Wage Adjustment
The intent of wage adjustment is to adjust hourly wage rate and shift
differential so the 12H schedule can be paid within contractual premium
agreements and:

1)   Cause the employee no loss of earnings.   2)   Pay the employee at least a
1.5 premium for the additional 104 hours per year in the 12H schedule versus the
existing 8-hour schedule, and   3   Keep the total cost of the 12H schedule at
approximately the same cost of the 8-hour schedule.

Hours Worked and Paid Under 8-Hour and 12-Hour Shift Schedule
Presently, shift employees are scheduled to work an average of 2080 hours per
year. With a 12H shift, employees will be scheduled to work an average of 2,184
hours per year. Therefore, pay practices for the 12H shift must be calculated as
if the employee were working an additional 104 hours at least a 1.5 premium.

52

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT

A)   Average annual earnings on the present 8-hour schedule, based on 2080 hours
worked.

                              Hours   Premium   Hours Type   Worked   Factor  
Paid
Total S/T Worked (excl. holidays)
    2,017.1       1.0       2,017.1  
Scheduled Holiday (Avg. = 7.86 days)
    62.9       2.5       157.1  
Holiday Off Hours (Avg. = 3.14 days)
    (25.1 )     1.0       25.1  
 
                       
 
    2,080.0               2,199.3  

    Earnings = 2,199.3 ($16.73) = $36,794.29   B)   Average annual earnings
under an 8-hour, 2,184-hour schedule:

                              Hours   Premium   Hours Type   Worked   Factor  
Paid
Total S/T Worked (excl. holidays)
    2,017.1       1.0       2,017.1  
Additional hours at 1.5 premium
    100.9       1.5       151.4  
Scheduled Holiday (Avg. = 8.25 days)
    66.0       2.5       165.0  
(includes 3.1 additional hours) Holiday Off Hours (Avg. = 2.75 days)
    (22.0 )     1.0       22.0  
 
                       
 
    2,184.0               2,355.5  

    Earnings = 2,355.5 ($16.73) = $39,407.52   C)   Average annual earnings
under the 12H, 2,184-hour schedule:

                              Hours   Premium   Hours Type   Worked   Factor  
Paid
Scheduled S/T (excl. holidays)
    1,412       1.0       1,412.0  
Scheduled O/T (excl. holidays)
    706       1.5       1,059.0  
Holiday Hours (Avg. 5.5 days)
    66       2.879       190.0  
Holiday Off Hours (Avg. 5.5 days)
    (44 )     1.151       50.6  
 
                       
 
    2,184               2,711.6  

    Annual earnings are the same as in Case B = $39,407.52

                 
Wage Rate
  =   $39,407.52   =   $14.53                           2,711.6        

53

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT

    Ratio of 12H rate to 8-hour rate =

                      $16.73   =   1.151   $14.53   =   0.8685                  
    $14.53           $16.73        

    Earnings 2,711.6 ($14.53) = $39,399.55

Shift Differential
Currently, shift employees receive shift differential for working the evening
and midnight shifts. When premium rates apply to hours worked, the same premium
is applied to shift differential.
Under the 12H shift, shift differential will be paid for the night shift only,
therefore, the rate must be adjusted to keep annual earnings the same. Shift
differential will continue to be increased by premium rates, and will continue
to be paid only for hours worked.

  A)   Average Annual Shift Differential under the present 8-hour schedule,
based on 2,080 hours worked:

                                              Hours     Premium     Hours      
        Type   Worked     Factor     Paid     Rate     Earnings  
Eve Shift (excl. holidays)
    672.4       1.0       672.4     $ 0.50     $ 336.20  
Mid Shift (excl. holidays)
    672.4       1.0       672.4     $ 1.00     $ 672.40  
Holiday Eve Shift
    21.0       2.5       52.5     $ 0.50     $ 26.25  
Holiday Mid Shift
    21.0       2.5       52.5     $ l.00     $ 52.50  
 
                                     
 
                                  $ 1,087.35  

  B)   Average Annual Earnings on the present 8-hour schedule, based on 2,184
hours worked:

                                              Hours     Premium     Hours      
        Type   Worked     Factor     Paid     Rate     Earnings  
Eve Shift S/T (excl. holidays)
    672.4       1.0       672.4     $ 0.50     $ 336.20  
Eve Shift O/T (excl. holidays)
    33.6       1.5       50.4     $ 0.50     $ 25.20  
Mid Shift S/T (excl. holidays)
    672.4       1.0       672.4     $ 1.00     $ 672.40  
Mid Shift O/T (excl. holidays)
    33.6       1.5       50.4     $ 1.00     $ 50.40  
Holiday Eve Shift
    22.0       2.5       55.0     $ 0.50     $ 27.50  
Holiday Mid Shift
    22.0       2.5       55.0     $ l.00     $ 55.00  
 
                                     
 
                                  $ 1,166.70  

54

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT

  C)   Average Annual Shift Differential on the 12H shift schedule, based on
2,184 hours worked:

The 12H shift differential rate (unadjusted) is calculated as follows:

                                                  8-Hour Schedule     12H
Scheduled
Days
  $0.00/hr. * 8     =     $ 0.00     Days     —     No differential
Eves.
  $0.50/hr. * 8     =     $ 4.00     Nights     —     $12.12 hr. = $1.00/hr
Mid
  $1.00/hr. * 8     =     $ 8.00                          
 
                                             
 
                  $ 12.00 /day                         

                                              Hours     Premium     Hours      
        Type   Worked     Factor     Paid     Rate     Earnings  
S/T Night Shift (excl. holidays)
    706       1.0       706.0     $ 1.00     $ 706.00  
O/T Night Shift (excl. holidays)
    353       1.5       529.5     $ 1.00     $ 529.50  
Holiday Night Shift
    33       2.879       95.0     $ 1.00     $ 95.00  
 
                                   
 
                    1,330.5             $ 1,330.50  

      Therefore, the negotiated shift differential must be adjusted by:

             
$1,166.70
  = 0.877                     $1,330.50            

      to keep annual earnings the same.         Annual Earnings = $1,330.5
(0.877) $1,166.85

Summary — Combined Annual Earnings

  A)   Under present 8-Hour (2,080 hours) schedule:

         
Straight Time, O/T & Holiday Wages
  $ 36,794.29  
Shift Differential
    1,087.35  
 
     
 
  $ 37,881.64  

  B)   Under an 8-hour (2,184 hours) schedule:

         
S/T, O/T & Holiday Wages
  $ 39,407.52  
Shift Differential
    1,166.70  
 
     
 
  $ 40,574.22  

55

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT

  C)   Under the 12H (2,184 hours) schedule:

         
S/T, O/T & Holiday Wages
  $ 39,399.55  
Shift Differential
    1,166.85  
 
     
 
  $ 40,566.40  

Pay Rates
     Premiums under the 12-hour schedule will be as follows:

                                  A)  
Straight time hours as part
  1.0     x     12 hour base                
of the regular schedule
  1.0     x     $14.53   =   $ 14.53      
 
                            B)  
Overtime hours as part
  1.5     x     12 hour base                
of the regular schedule
  1.5     x     $14.53   =   $ 21.80      
 
                            C)  
Hours worked beyond 12.
  1.5     x     $16.73   =   $ 25.10      
or
                               
Hours worked outside regular schedule.
                               
or
                               
Hours worked for schedule change outside contract notice.
                               
 
                            D)  
Hours worked on last
  2.0     x     $16.73   =   $ 33.46      
schedule day of rest (if all days of rest worked that week).
                               
 
                            E)  
Hours worked on scheduled
  2.879     x     12 hour base                
holiday up to 12 hours.
  2.879     x     $14.53   =   $ 41.83      
 
                            F)  
Hours worked on holiday
  2.5     x     $16.73   =   $ 41.83      
outside regular schedule
                               
 
                            G)  
Vacation Pay, Jury Duty,
  8 Hrs.     x     12-Hour base                
Funeral Pay, etc.
  + 4 Hrs.     x     1.5 x 12-Hour base              
 
                            H)  
Holiday not worked (8 hours)
  1.151     x     $14.53   =   $ 16.72  

56

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
EXAMPLE OF SICKNESS PLAN CALCULATIONS

         
Basis: 2-Week Sickness
       
 
       
Ratio of 8-Hour to 12-Hour Schedules
       
 
       
80-Hours/2 Weeks
  = 0.9524  
84-Hours/2 Weeks
       
 
       
40-Hour Weeks — Current Schedule
       
 
       
40 x 2 x $16.73 x 0.90
  = $ 1,204.56  
 
       
36/48-Hour Weeks - 12H Schedule
       
(36 + 48) x $16.73 x 0.9524 x 0.90
  = $ 1,204.58  
 
     
 
       
Difference
  = $ 0.02  
 
     

57

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EXHIBIT A
TWELVE HOUR SHIFT AGREEMENT
January 31, 1991
Interpretation of Attachment E
12 Hour Shift, Operations Overtime Agreement
Page 20 applies to scheduled overtime, and
Page 21 applies to call-out overtime
SCHEDULED OVERTIME, Attachment E Page 20
It is our intent to inform people, by their last work day, of any scheduled
overtime needs known to exist during their off days. Adequate notice should be
provided when scheduled overtime wants to be turned down so that coverage can be
arranged no later than 12 hours prior to the start of the overtime period. If no
replacement can be arranged, the employee remains scheduled for the overtime
assignment.
CALL-OUT OVERTIME, Attachment E Page 21
It is our intent to arrange for overtime coverage as far in advance as possible,
once a need has been identified. Less than a 4-hour notice should be necessary
only when short notice illness, emergency, or 1-hour day bank day requests are
received. Therefore, a crew on off days will be contacted as soon as possible
once a vacancy exists. Each department can determine an appropriate method to
contact people for overtime coverage.
If a person accepts a call-out overtime assignment, he can later turn it down,
if coverage can be arranged no later than 4 hours prior to the start of the
overtime period.

         
/s/ P. J. Pollock
      /s/ Wayne R. Parker
 
       
FOR THE UNION
      FOR THE COMPANY
 
       
6/2/93
      6/2/93
 
       
DATE
      DATE

58

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EXHIBIT B
WAGE RATES
Top Rates

                                                                               
              Current           5/1/07           5/1/08           5/1/09        
  5/1/10           5/1/11
I&E
    27.82       10 %     30.60       4 %     31.83       4 %     33.10       4 %
    34.42       4 %     35.80  
Machinists
    27.60       10 %     30.36       4 %     31.57       4 %     32.84       4 %
    34.15       4 %     35.52  
Outside Operator
    26.01       10 %     28.61       4 %     29.76       4 %     30.95       4 %
    32.18       4 %     33.47  
Material Handler
    24.52       10 %     26.97       4 %     28.05       4 %     29.17       4 %
    30.34       4 %     31.55  
Lab Analyst
    24.52       10 %     26.97       4 %     28.05       4 %     29.17       4 %
    30.34       4 %     31.55  
New Hire Progressions*
 
*Note:  The COMPANY will determine the appropriate starting point within the
related progression for each new hire based on the individual’s experience level
and education.
  Outside Operator:   Current           5/1/07           5/1/08           5/1/09
          5/1/10           5/1/11
Start
    18.21       10 %     20.03       4 %     20.83       4 %     21.67       4 %
    22.53       4 %     23.43  
End of 12 Months
    20.81       10 %     22.89       4 %     23.81       4 %     24.76       4 %
    25.75       4 %     26.78  
End of 24 Months
    23.41       10 %     25.75       4 %     26.78       4 %     27.85       4 %
    28.97       4 %     30.13  
End of 36 Months (Journeyman Rate)
    26.01       10 %     28.61       4 %     29.76       4 %     30.95       4 %
    32.18       4 %     33.47     Pumper Gauger:   Current           5/1/07    
      5/1/08           5/1/09           5/1/10           5/1/11
Start
    17.16       10 %     18.88       4 %     19.63       4 %     20.42       4 %
    21.23       4 %     22.08  
End of 12 Months
    19.62       10 %     21.58       4 %     22.45       4 %     23.34       4 %
    24.28       4 %     25.25  
End of 24 Months
    22.07       10 %     24.28       4 %     25.25       4 %     26.26       4 %
    27.31       4 %     28.40  
End of 36 Months (Journeyman Rate)
    24.52       10 %     26.97       4 %     28.05       4 %     29.17       4 %
    30.34       4 %     31.55     Lab Analyst:   Current           5/1/07      
    5/1/08           5/1/09           5/1/10           5/1/11
Start
    17.16       10 %     18.88       4 %     19.63       4 %     20.42       4 %
    21.23       4 %     22.08  
End of 12 Months
    19.62       10 %     21.58       4 %     22.45       4 %     23.34       4 %
    24.28       4 %     25.25  
End of 24 Months
    22.07       10 %     24.28       4 %     25.25       4 %     26.26       4 %
    27.31       4 %     28.40  
End of 36 Months (Journeyman Rate)
    24.52       10 %     26.97       4 %     28.05       4 %     29.17       4 %
    30.34       4 %     31.55     Machinist:   Current           5/1/07        
  5/1/08           5/1/09           5/1/10           5/1/11
Start
    19.32       10 %     21.25       4 %     22.10       4 %     22.99       4 %
    23.91       4 %     24.86  
End of 12 Months
    21.39       10 %     23.53       4 %     24.47       4 %     25.45       4 %
    26.47       4 %     27.53  
End of 24 Months
    23.46       10 %     25.81       4 %     26.84       4 %     27.91       4 %
    29.03       4 %     30.19  
End of 36 Months
    25.53       10 %     28.08       4 %     29.21       4 %     30.37       4 %
    31.59       4 %     32.85  
End of 48 Months (Journeyman Rate)
    27.60       10 %     30.36       4 %     31.57       4 %     32.84       4 %
    34.15       4 %     35.52     Instrument & Electrical:   Current          
5/1/07           5/1/08           5/1/09           5/1/10           5/1/11
Start
    19.47       10 %     21.42       4 %     22.27       4 %     23.16       4 %
    24.09       4 %     25.05  
End of 12 Months
    21.14       10 %     23.25       4 %     24.18       4 %     25.15       4 %
    26.16       4 %     27.20  
End of 24 Months
    22.81       10 %     25.09       4 %     26.09       4 %     27.14       4 %
    28.22       4 %     29.35  
End of 36 Months
    24.48       10 %     26.93       4 %     28.01       4 %     29.13       4 %
    30.29       4 %     31.50  
End of 48 Months
    26.15       10 %     28.77       4 %     29.92       4 %     31.11       4 %
    32.36       4 %     33.65  
End of 60 Months (Journeyman Rate)
    27.82       10 %     30.60       4 %     31.83       4 %     33.10       4 %
    34.42       4 %     35.80  

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EXHIBIT C
EMPLOYEE BENEFITS
Except as modified below, the COMPANY agrees to continue to provide employee
benefits under the plans listed below as in effect on May 1, 2007. These
benefits will last for the duration of this agreement and will be subject to
change as negotiated in future contracts.
Sterling Chemicals, Inc. Medical Benefits Plan for Hourly-Paid Employees
Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Hourly-Paid
Employees
Sterling Chemicals, Inc. Dental Assistance Plan for Hourly-Paid Employees
Sterling Chemicals, Inc. Hourly Employees’ Flexible Spending Account Plan
Sterling Chemicals, Inc. Disability Benefits Plan for Hourly-Paid Employees
Sterling Chemicals, Inc. Group Life Insurance Plan for Hourly-Paid Employees
Sterling Chemicals, Inc. Savings and Investment Plan
Notwithstanding any provision of this Exhibit C, the Articles of Agreement, or
otherwise to the contrary, the COMPANY reserves the right to amend and/or
terminate the Hourly Paid Employees’ Pension Plan in accordance with existing
laws at any time or times, if the COMPANY determines such action to be
appropriate, in its sole discretion. The COMPANY agrees that any such changes or
termination will not reduce the accrued pension benefits of any participant.
Except as noted above for the Hourly Paid Employees’ Pension Plan, nothing in
this Agreement shall restrict the COMPANY from changing the language in the
official plan documents or changing the providers of plan benefits as long as
the benefits provided are not decreased (unless required by law).
Savings and Investment Plan (SIP): Effective July 1, 2007, the COMPANY will
provide matching contributions equal to 100% of the first 6% of employee
contributions made on base pay for all covered bargaining unit employees,
subject to plan provisions already in effect.
Hourly Paid Employees’ Pension Plan: Hourly bargained for employees hired after
May 27, 2004, continue to be ineligible to participate in the Hourly Paid
Employees’ Pension Plan, hereinafter referred to as the Hourly Pension Plan.
Effective July 1, 2007, the Hourly Pension Plan will be frozen. This means that
participants will no longer receive benefit service credit toward their pension
retirement benefit nor will compensation changes affect their pension retirement
benefit. Active participants will continue to accrue vesting service. In
addition, effective July 1, 2007, a participant in the Hourly Pension Plan may,
once he or she has attained 62 years of age and has at least five years of
vesting service, elect to take early retirement while continuing to work for the
COMPANY (“In-Service Retirement”). This option is not, however, available for
employees who are receiving sick pay or disability benefits. The monthly benefit
for In-Service Retirement will be determined in the same manner as if the
employee actually retired.
Life Insurance and Accidental Death & Dismemberment Insurance (AD&D) Benefits:
The COMPANY will not provide retiree life insurance benefits. Effective May 1,
2007, the COMPANY will provide $100,000 of AD&D insurance to all active
employees.
Dental Premiums: Employee dental premiums will be increased 5% on January 1st of
each year through the expiration of this contract. After-tax payment of premiums
is not allowed.
Medical Premiums: Effective January 1, 2005, active employee medical premiums
will equal 20% of projected expenses and be based on the medical claims,
prescription drug claims and stop-loss insurance premiums attributable to
participants in the active medical plan. After-tax payment of premiums is not
allowed.
PPO Medical Plan: (1) Change coordination of benefits from standard to
carve-out. This means that in situations where the Sterling Medical Plan is
secondary, total benefits from both plans will be limited to the amount the
Sterling Medical Plan would have paid had it been primary. (2) The COMPANY will
increase

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EXHIBIT C
EMPLOYEE BENEFITS
the hearing aid maximum from $750.00 to $1000.00 dollars. (3) Effective
January 1, 2008, the COMPANY agrees to increase the lifetime medical maximum
from $1,500,000 to $2,000,000 per participant. Notwithstanding the foregoing,
any medical plan participant who has already received $1,500,000 in medical
benefits prior to January 1, 2008, will not be eligible for these additional
benefits. Additionally, any participant for whom the COMPANY is unable to obtain
stop loss insurance coverage from the low cost stop loss insurance provider
without additional cost will not be eligible for these additional benefits.
HMO Medical Plan: The COMPANY shall make available an HMO for employees.
Employee premiums shall equal 20% of the billed cost to the COMPANY by the HMO.
If the COMPANY should decide to provide HMO benefits on a self-insured basis at
a later date, the COMPANY agrees to use a similar methodology to calculate HMO
employee premiums as is used for the PPO plan.
Benefit Exclusions: Effective January 1, 2008, employees may not cover working
spouses as eligible dependents in the COMPANY medical and dental plans (PPO,
HMO, Prescription Drugs or Dental) if the working spouse is eligible for
coverage by their employers at any or no cost. An actionable status verification
of non-coverage will be required of all employees who wish to cover their spouse
as an eligible dependent.
Prescription Drugs: Effective January 1, 2008, the prescription drug co-pay for
current employees and employees who retire during the term of this agreement
will be 10% on generic drugs, 20% on preferred brand (second tier) drugs and 40%
on non-preferred brand (third tier) drugs.
Disability Insurance: Disability income benefits for psychiatric and substance
abuse claims will not be payable beyond 30 months from the initial date of
disability.
Retiree Medical Benefits (including prescription drug coverage): Current
employees hired before May 27, 2004 who retire after this agreement is ratified
(“Future Retirees”) and who at retirement are at least age 55 and who have at
least 10 years of Vesting Service (as defined in the Hourly Paid Employees’
Pension Plan), will be eligible to participate in the Sterling Chemicals, Inc.
Medical Benefits Plan for Retirees and the Sterling Chemicals Inc. Prescription
Drug Benefits Plan for Retirees (collectively the “Retiree Medical Plan”) until
they reach age 65. When a Future Retiree enrolled in the Retiree Medical Plan
reaches age 65 and therefore loses coverage, he or she may continue to cover his
or her spouse up to age 65 (as long as the marriage continues). When a Future
Retiree enrolled in the Retiree Medical Plan reaches age 65 and therefore loses
coverage, coverage for all dependent children ceases. If a Future Retiree
marries or remarries after retirement, their new spouse is not eligible for
coverage under the Retiree Medical Plan.

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EXHIBIT C
EMPLOYEE BENEFITS
Effective January 1, 2008, the COMPANY’S contributions toward the cost of
retiree medical will be as follows:

                  Retiree and spouse both under age 65   Current   1/1/08
Retiree only
    323.72       323.72  
Retiree plus spouse
    712.16       712.16  
Retiree plus child(ren)
    582.69       582.69  
Retiree plus family
    971.14       971.14  
 
               
Retiree and spouse both equal to or over age 65
               
Retiree only
    107.90     not available
Retiree plus spouse
    237.39     not available
Retiree plus child(ren)
    366.88     not available
Retiree plus family
    496.36     not available
 
               
Retiree or spouse under age 65, other one equal to or over 65
               
Retiree plus spouse
    431.62     not available
Retiree plus family
    690.59     not available
Retiree only or spouse only
    —       323.72  
Retiree plus children
    —       582.69  

The COMPANY shall have the right to modify the prescription drug benefits to
take full advantage of the prescription drug provisions of Medicare. The COMPANY
shall be solely responsible for deciding whether, when and how any changes to
prescription drug coverage will take effect.
Employees hired (or rehired) on or after May 27, 2004 will not be eligible to
participate in the Retiree Medical Plan.
Flex Spending: Effective January 1, 2008, forfeitures in the Flex Spending
Accounts (health care and dependent care) will not be reallocated to
participants in the plan.
Disclaimer as to Current Retirees: Nothing contained in this Exhibit C (or the
new collective bargaining agreement of which it is a part) shall apply to
persons who retired before May 27, 2004. Any prior contractual commitments, in
prior collective bargaining agreements or otherwise, creating exceptions to the
Sterling Chemicals, Inc. Medical Benefits Plan for Retirees or the Sterling
Chemicals, Inc. Prescription Drug Benefits Plan for Retirees, including but not
limited to, medical premium contribution percentages for any individual who
retired prior to the ratification of this agreement, have expired and are not
renewed by this agreement. The COMPANY retains the right to modify, amend, or
terminate the Sterling Chemicals, Inc. Medical Benefits Plan for Retirees and
the Sterling Chemicals, Inc. Prescription Drug Benefits Plan for Retirees as
provided in the summary plan description and other plan documents.
The COMPANY will provide Summary Plan Descriptions electronically to employees
each year and will make benefit plan documents available to an employee upon
request.

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NO JURISDICTION
SUPPORTING INFORMATION

1.   Operators perform CLAIR, TPM, and minor maintenance.       Examples:

  •   help Machinist pull and install pump     •   pull small pump and
decontaminate     •   pull small control valve up to level of skill and ability
    •   install and pull blinds for product changeover and to prepare equipment
(small number of blinds)

2.   Maintenance planners plan total hours to perform job.   3.   Maintenance
foreman assigns jobs based on skill and ability. You could have crews of all one
craft or mixture of crafts. Crew would secure permits, get necessary materials,
communicate with foreman and operations.

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