**Exhibit 10.16**

** **

**Agreement**

** **

**STEINWAY & SONS**

 

**WITH**

 

**LOCAL 102, F.W.**

 

**I.U.E., A.F.L., C.I.O.**

 

 

**OCTOBER 1, 2003**

 

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  AGREEMENTmade as of October 1, 2003 between Steinway, Inc. d.b.a. Steinway &Sons,  (the “Company”) and Local 102,F.W., AFL-CIO, (the “Union” .)

 

WITNESSETH:

 

  WHEREAS, it isthe intent and desire of both the Company and the Union to cooperate with eachother in the administration of the provisions of this Agreement in order toachieve more stable and desirable conditions of employment for the employeescovered hereby and more harmonious and profitable operations for the Company;

 

  NOW, THEREFORE,in consideration of these premises, the parties hereto do hereby covenant,promise and agree as follows:

 

ARTICLE1.

EMPLOYEESCOVERED BY THIS

AGREEMENT

 

  The term“Employees” whenever used herein shall apply to all present and futureemployees of the Company employed in New York City, except the following whoare expressly excluded: executives, supervisory employees (including allforemen, and assistant foremen), clerical, administrative and Retail SalesDepartment personnel, Moving Department and building service personnel. ThisAgreement covers all Employees.

 

ARTICLE2.

UNIONSECURITY

 

A. Present Employees who aremembers of the Union shall remain members in good standing for the durationof  this Agreement as a condition ofemployment.

 

B. Present Employees who arenot members of the Union and new Employees shall become members of the  Union thirty (30) days after the date ofhiring, and remain members in good standing for the duration of this Agreementas a condition of employment.

 

C. Subject to any applicableState or Federal law, the Company agrees that upon the written request of theUnion, it will not continue in its employ any Employee who is not a member ofthe Union in good standing.

 

D. An Employee shall bedeemed in good standing hereunder as long as such Employee pays his or herinitiation fee and monthly Union dues as they come due.

 

E. The Company shall have theright to obtain new Employees from any possible source whatever, except,however, the Company shall notify the union of any vacancy or vacancies andgive to the Union an opportunity to send its members to become applicants forsuch vacancies.   The Company agreesthat it Will not discriminate against any applicant sent by the Union.

 

F. The Union agrees to acceptall new Employees as members without limitations, provided such Employeesremain in good standing.

 

ARTICLE3.

CHECK-OFF

 

  The Company agrees to deduct the current monthly dues of eachEmployee who is a member of the Union on the first day of each month and toremit monies so deducted to the Financial Secretary of the Union not later thanthe 1st day of the current month, provided, however, that the Company hasreceived from each such Employee a written assignment of such funds to theUnion, which shall not be irrevocable beyond the termination date of thisAgreement or one (1) year, whichever is earlier. No dues or other monies shallbe collected by the Union on the premises of the Company.

 

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ARTICLE4.

STRIKESAND LOCKOUTS

 

A. The Union, its officers,agents, members and any organization to which the Union may be affiliated,shall not be liable for damages to the Company for Unauthorized Stoppages (ashereafter defined) by any Employees , but any Employee committing any unlawfulact, other than a breach of contract by Unauthorized Stoppage, shall be liableto the Company for any damages it thereby suffers. In the event of anyUnauthorized Stoppage, the Executive Board of the Union shall forthwithdisaffirm such actions in a writing mailed to the Company. The word“Unauthorized” whenever used herein shall mean any Stoppage not pursuant to orin accordance with the written decision or ratification of said ExecutiveBoard. The word “Stoppage’’ whenever used herein shall include any stoppage,strike, quit, walkout, picketing, slowdown or any concerted activity inviolation of this Agreement.

 

B. The Union shall notauthorize or engage in, nor shall Employees engage in, any Stoppage, and theCompany shall not lock out said Employees.

 

C. In the event of anyStoppage, the Company shall, subject to the limitations of paragraph A above,have and reserve the right to prosecute and take any suit, action or proceedingand assert any and all claims or remedies, legal, equitable or otherwise,including but not limited to damage suits, injunctions, discharges, loss ofseniority and other rights, and other disciplinary action, that may be affordedto it. In the event that the Union complies with this Agreement, no such suit,action or proceeding shall be maintained against the Union.

 

D. During any period in whichany Employees are engaged in any Stoppage, the Company will not be required tobargain with the Union with respect to such Employees.

 

E. In the event of anyStoppage or in the event of any threat thereof, the Union will in itsdiscretion, or upon written request by the Company mail to the Employeesinvolved in such action a notification that such action is Unauthorized and adirection that such Employees either promptly return to or remain at theirrespective jobs and that they cease any action which may adversely affectproduction. A copy of such notification shall be mailed to the Company whennotification is mailed to the Employees. Upon written notice to the Union bythe Company, if the Union’s notification has not brought about a termination ofsuch action, the Union will take such further steps as the Union, in its discretion,deems reasonable and appropriate to bring about compliance with such notice.

 

ARTICLE5.

SAFETYAND HEALTH

 

  The Companyagrees to abide by all Federal, State and Municipal rules and regulations forthe safety and health of its Employees.

 

ARTICLE6.

SHOPRULE CHANGE

 

  The Company maychange its present factory Rules and Regulations (a copy of which is annexedhereto as Appendix I) from time to time. Except in cases of emergency, theCompany  shallprovide forty-eight (48) hours notice to the Union, and shall consult with theUnion before implementing any such changes.

 

ARTICLE7.

TRIALPERIOD

 

  “Trial Periods”shall be (i) one month for porters, (ii) six months in the Coating, Fraizingand Veneer Departments, (iii) twelve months in the Top-Making, Case-Making,Action Regulating, Upright Finishing, Damper-Making, Action-Tone Regulating,Belly-men, Fly Finishing, Tuning, Action-Making and Key Making Departments and(iv) three months in and for all other departments.

 

ARTICLE8.

DISCHARGEOF EMPLOYEES

 

A. During a Trial Period, theCompany shall have the absolute right to discharge any new Employee, orre-transfer any old Employee, with or without cause, after notifying the shopchairman or, in his absence, the Union.

 

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B. After the Trial Period,the Company shall, upon adequate prior notice to the Union, have the right todischarge any Employee only for cause, which shall include being under theinfluence of or in possession of an open container of alcoholic beverage or theinfluence of or illegally in possession of drugs while within Companyfacilities, dishonesty, insubordination, repeated refusal to obey orders,smoking in the plants or failure otherwise to comply with Company Rules andRegulations, as amended from time to time. The Company shall have the right todischarge any Employee for incompetence and any Employee for uneconomicproductivity.

 

C. All Employees dischargedshall be given final pay on their last day of work.

 

ARTICLE9.

INJUREDAND AGED EMPLOYEES

 

  The Company,after consultation with the Union, will endeavor wherever possible, to provideother employment for Employees injured during the course of their employmentand for Employees who become too old any longer to perform the work theretoforeperformed by them.

 

  Any Employee, nototherwise compensated therefor by insurance, shall, if injured on the Companypremises in the course of his work and in the sole, conclusive opinion of theCompany’s doctor, be unable to continue for the balance of the day, be entitledto pay for the balance of one (1) full working day.

 

ARTICLE10.

HOURSOF WORK

 

A. The regular hours, workdayand workweek shall be set from time to time the same as heretofore. Except asprovided in sections B through C below, time and one-half shall be paid for allhours worked (i) on Saturdays, (ii) in excess of eight (8) in any one (1) day,(iii) forty (40) in any one (1) workweek, or (iv) on the holidays listed inArticle 21. Double, but in no event triple, time shall be paid for all hoursworked on Sundays.

 

B. In the case of watchmen,engineers, firemen, and power plant employees, the workweek may be staggered toinclude Saturday, Sunday and holidays, without additional premiums as such,except that they shall be paid time one-half for all hours worked on a sixth (6th)workday and double time for all hours worked on a seventh (7th) workday, in anyone (1) forty (40) hour workweek.

 

C.(i)   Service Employees will work an eight hourday and not be limited to a specific number of jobs per day. Overtime willbegin after eight hours in any one day or forty hours in any one week.

 

(ii)   Start times for the work day will beestablished to meet customer requirements and may vary from employee toemployee. The Company will endeavor to not change  an individual Service Employee’s starting time more than once amonth and will give the Service Employee sufficient notice of any such change.The Company believes it will be possible to schedule start times on a voluntarybasis. However if Company needs are not being met on a voluntary basis, theCompany reserves the right to hold further discussions on this matter with theUnion in an effort to reach agreement on a mutually acceptable schedule.

 

(iii)   Service Employees working outside will notbe assigned work on a job-by-job basis. They will be required to call in at the beginning of each day and at theend of each job, at which time they will be assigned their next job.

 

(iv)   When a Service Employee is beginning theworkday off the Company’s premises, the workday will begin at the time ofarrival at the first call. The workday will end at the completion of the lastcall.

 

(v)   The Company will pay travel expenses at designated rates forService Employees traveling to and from Steinway Hall on Company business. Itwill also pay travel expenses for the outbound trip to any off-premises jobs,and travel between off-premises jobs and for the trip from the last job back tothe Service Employee’s residence.  TheCompany will pay all tolls incurred while traveling on Company business,including any tolls incurred while returning home from the last call.

 

(vi)   Service Employees who must travel more thanfifty (50) miles from their home to their first job or from their last job totheir home will be compensated at their regular  hourly rate, plus overtime if applicable, for travel beyond fifty(50) miles. Hours worked will be calculated on the basis of fifty (50) milestraveled equals one hour

 

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worked. If an Employee hired after the date of this Agreement moves hisor her residence after being hired and such relocation results in additionaltravel, then the application of this subsection (vi) shall be in the discretionof the Company.

 

D.  No overtime premiums shall be duplicated for any hour; however,the higher premium applicable to any hour shall be payable.

 

E. The Company may at anytime reasonably require any Employee to work overtime. Any Employee with areasonable, bona fide excuse preventing working overtime shall not be requiredto work such overtime. The Union and Company shall make reasonable efforts toassist each other in effecting the intent that the Company’s production not beunreasonably  impeded and dueconsideration be given to individual Employee’s needs.

 

ARTICLE11.

WAGERATES

 

A. General Increase.The wage of each Employee covered by the Agreement shall be increased for eachhour worked as follows:

 

Effective October 1, 2003 -Bonus payment in lieu of increase - $250.00 to be paid in December 2003 and$750 to be paid in January 2004.

 

Effective January 1, 2005 -2% of base rate per hour.

 

Effective January 1, 2006 -2% of base rate per hour.

 

The average shall beconformed in all aspects to reflect the changes in wages.

 

B. Hourly Work. Theofficial list of skill classification and rates for each hourly rated operationis maintained in the office Payroll Department, a copy of which has beenfurnished to the Union. Each foreman has in his possession an up-to-date listof skill classifications in his department, which may be inspected any timeduring regular business hours by any employee in the department. The per hour rate schedule for each skillclassification is outlined in Appendix II.

 

The skill of each operationcontinues as heretofore classified without upgrading or downgrading.  Hiring rates for all Employees may behigher, depending on experience and as the Company may deem proper.

 

New hourly Employees shall,after a thirty (30) day initiation period, be granted either an increase of$.25 per hour or such cents as is necessary to bring him up to the maximum ofhis classification rate, whichever is the lesser in amount. Each new day workEmployee will be granted an additional $.25 per hour increase after eight (8)weeks of employment and every eight weeks thereafter until such Employeereaches the maximum of his classification rate. With respect to the last twosentences of this paragraph, an Employee must have worked each day of theinitiation period or subsequent eight weeks period(s). If the Employee isabsent from work for any reason other than a scheduled holiday as provided inArticle 21, initiation period of subsequent eight week period(s) will beextended accordingly.  The Company mayestablish, after consultation with the Union, a new and larger list of skillclassifications. Each hourly rated job will be evaluated and placed in one ofthe new classifications. No present Employee’s hourly rate will, as a result,be less than his rate, for the same operation, payable at the time hisoperation is assigned a new skill classification.

 

C. Apprentices An“Apprentice” is an Employee without prior training in mechanical skills in theparticular operation to which he is assigned. During this “Apprenticeship” heshall receive hourly rates, subject to the foregoing, to be fixed by theCompany, after consultation with the Union. After he has, in the Company’sopinion, and after consultation with the Union, learned his operation, he shallreceive the rate then prevailing for his operation.   Seniority shall, however, date from the date of his originalemployment.

 

D. Commissions TheCompany will pay to any Employee a five percent (5%) commission on the invoicedamount of any sale of service work brought to it initially by that Employee. Inorder to qualify for the commission, the Employee must either personally writethe sale or provide the name of the customer and the item/service to bepurchased, prior to the Company’s knowledge of the sale. (i.e. after the firstclaims against

 

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sales already written are not commissionable) Routine work (see below)which is performed on a call booked by the Company will not be commissionable,but major repair jobs and service contracts will be. (See attached price listfor examples of commissionable items and amount of commission).  This provision does not apply to new or usedpiano sales.

 

(i)   Commissions will be paid out only on invoiced service/sales. Thecommission will actually be paid to the Employee within four pay periods afterthe end of the month in which the service/sale was invoiced. The commissionswill be paid by separate check, i.e., not included in regular payroll checks.

 

(ii)   “Routine work” means work booked by theCompany and assigned to the technician, as well as minor adjustments andrepairs performed in the first two hours of a routine service call, e.g. easingof keys; adjusting pedals, pitch raise, replacing strings, evening out voicing;etc.

 

(iii)   “Major repair” means any job which requiresmore than two hours (including tuning) in the customers’ home; any job whichhas to be brought into the shop; any service, part, or service contract on theprice list valued at more than $150 which was not part of a service order writtenby the Company.

 

(iv)  The current service price list will beissued to all service Employees. This service list will state prices forvarious services and the applicable employee commission for the sale of thoseservices. Where n.a. appears, no commission will be paid for sale of suchservices. New or additional services added to this price list for sale byservice Employees, Will be commissionable at five (5%) percent.

 

ARTICLE12.

NEWOPERATIONS AND METHOD CHANGES

 

  The Company mayinstitute new operations and methods, and determine the skill classificationthereof within existing factory skill classifications, and work thereon shallcommence when and continue as long as the Company directs. Rates shall bedetermined by the Company by comparison of time and skill with existingoperations and methods and the related hourly rate.

  If within thirty(30) days of regular work commencing on such operation or method both partiesfail to present a written grievance regarding such rate, it shall be conclusivelydeemed properly established. If a grievance is filed within such period, theEmployees shall continue to work at such rate until such grievance has beenfinally determined, at which time, if the rate is increased, each Employeeshall be paid the amount of such increase for each hour worked by him at thelesser rate. If the rate is decreased, the Employee shall, after the date offinal determination be paid at such new rate but no Employee shall be obligedto refund any overpayment made. When a job previously performed by hand ismechanized, the same shall be deemed a new method and subject to the foregoingprovisions.

 

ARTICLE13.

TRANSFER

 

A. Notice. Alltransfers shall be upon notice to the Union, at which time it shall bedetermined whether the transfer is permanent or temporary. Except where theparties otherwise agree, a transfer shall be deemed temporary for six (6)months, after which it shall be deemed permanent.

 

B. Temporary (i)Seniority rights shall not be affected by temporary transfers. If any Employeeso transferred would by reason of Article 16 be required to be laid off, heshall instead be transferred back to his old department and resume hisseniority status there.

(ii)  Where an Employee is, for the Company’sconvenience, temporarily transferred from his regular operations to lower rateoperations, he shall be paid for such temporary operation at an hourly rateequivalent to his average hourly earnings. If he is so transferred to a higherrate operation, he shall receive the higher rate for such operation. (iii)Temporary transfers accepted in lieu of layoff are for the convenience of theEmployee who shall in such case be paid the existing wage rate for suchoperation.

 

C.  Permanent. (i) New Seniority shall be acquired bypermanent transfers, Effective from the date of transfer. (ii) No one shall,without the Union’s consent, be permanently transferred to lower rateoperations unless there is, at the time, insufficient work for full employmentof all Employees in the higher rate operation. (iii) Any Employee permanentlytransferred to a higher rate operation shall, after his Trial Period, receivesuch higher rate,

 

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provided he is in all respects qualified to perform the work. (iv) AnyEmployee permanently transferred and laid off within a two (2) year period ofsuch transfer for at least thirty (30) consecutive days shall retain seniorityrights in the position held immediately prior to such transfer.

 

D. Foreman. AnyEmployee who is made a foreman shall retain his seniority status in allrespects for one (1) year as long as he continues Union membership with paymentof dues and assessments, and if re-transferred to his former position shallresume his seniority status as if his status had been uninterrupted. After one(1) year, or upon termination of Union membership, whichever is earlier, suchforeman shall, in the event of re-transfer, thereafter be entitled only to theseniority of a Regular Employee, (as defined hereafter) with lowest  Regular Employee seniority status as of thedate of such re-transfer. Except as above indicated, in either of the aboveevents, a foreman shall continue to be deemed a Regular Employee and retain allRegular Employee privileges in case of retransfer.

 

E. Minimum Period. AnEmployee who has transferred from one position to another must remain in thatposition for a minimum period equal to the Trial Period plus six (6) months,but in no event greater than fifteen (15) months.

 

ARTICLE14.

LEADPERSONAND INSTRUCTORS

 

  The Union andCompany will agree as to each operation upon the instruction time to beallocated for each break-in, such time to be graded in a reducing scale so asnot to cover the entire Trial Period. Until agreement or arbitration award to thecontrary, the Company’s time allocation shall control and shall be accepted byInstructors. All agreements or awards shall, however be retroactive to the dateof filing grievance. While instructing, the Instructor shall receive ascompensation per hour his posted average hourly earnings plus 15¢ per hourextra while instructing. No Employee may refuse to instruct another Employee inhis work without a good reason.

 

  The Company maydetermine a need for and designate a “leadperson” in those areas where assistanceto the Foreman may be required distributing materials or work assignments,recording of completed work, set-up or work preparation, in process review orinspection, or other administrative duties which aid production.

 

  The leadpersonmay function as the temporary departmental supervisor in the Foreman’s absence.

 

  The designatedlead person will receive as compensation $1.00 per hour above his posted hourlyrate.

 

  Leadpersondesignation does not alter that employee’s status as an employee covered bythis agreement or seniority in any way, and may be transferred or ended basedon the Company’s determination of need.

 

  Leadpersonresponsibilities do not include authority to discipline employees.

 

ARTICLE15.

WORKRECORDS

 

  Each Employeeshall record work performed, indicating quantity and description of, and hoursspent on, each unit of production. No records shall be accepted unless approvedby the foreman.

 

ARTICLE16.

DIVISIONOF WORK AND SENIORITY

 

  “RegularEmployees” are those continuously in the Company’s employ for two (2) years ormore. “Temporary Employees” are all other Employees. Seniority layoffs andrecalls shall be by categories, departments and operations, not plant-wide,both as to existing and new departments and operations.

 

  During slackseasons, Temporary Employees shall be laid off first. Thereafter, equaldivision of work shall take place among Regular Employees. Regular Employeesshall be laid off and recalled on the basis of seniority. Temporary Employeesshall likewise be recalled based on seniority after all Regular Employees havebeen recalled. New Employees shall not be hired in any category, department oroperation until all Regular and Temporary Employees therein have been recalled.Except as provided in Article 22, seniority rights shall not be

 

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affected by layoffs but shall in any event cease upon termination ofemployment. The Company may, in its discretion, in lieu of the foregoing and atthe Union’s request, permit Temporary and Regular Employees to share work onthe basis of “Alternating Layoffs”, i.e. working five (5) full days one (1)week and being laid off the following week. In the event of Alternating Layoffsas provided herein, such layoffs shall not be deemed a General Layoff.

 

  The Company mayrecall out of turn any Employee where he, and no one preceding him on the list,can satisfactorily perform the work to be done. In the event of dispute, theCompany’s recall choice shall control, until final determination of thedispute. If the Union’s choice is sustained, he shall receive the difference inthe pay he would have earned and the pay actually earned from the time hebecame entitled to recall to the date he is recalled. Employees recalled out ofturn shall be passed over on their next regular turn in order that whereverpracticable there be equal division of work.

 

  In any event, thePresident, Secretary Treasurer and Shop Chairman shall, during their respectiveterms of office have plant-wide seniority on layoffs and recalls, provided suchofficials can satisfactorily perform the operation affected. The Union shallimmediately upon election of the above officials advise the Company thereof.

 

  Union delegatesshall, under similar limitations, have department-wide seniority and shall notbe subject to prior seniority of the other Union officials. This article shallnot apply to any Employee while on leave of absence.

 

ARTICLE17.

ADJUSTMENTOF GRIEVANCES AND DISPUTES

 

All disputes shall be settledin the following order between:

 

(a) The aggrieved Employee,department delegate and either foreman or department head.

 

(b) The shop steward andeither the plant superintendent or service manager

 

(c) The President orRepresentative and either the plant manager or management representative

 

(d) The respective executivesof the parties. In case of any dispute, work shall continue to be performed inaccordance with the Company position until such dispute has been fullydetermined.

 

It is agreed that grievances willbe expeditiously Processed by both parties, and that the parties will use theirbest efforts to consider disputes within the following time periods:

 
| At Step (a)         |   | 1 working day        |
|---------------------|--------|----------------------|
| At Step (b)         |   | 5  working days |
| At Step (c)&(d) |   | 10 working days      |

 

If a dispute cannot besettled after either (c) or (d) above, the dispute shall, at the writtenrequest of either party, be submitted to arbitration within ninety-six (96)hours, excluding Sundays, and determined pursuant to the New York ArbitrationLaw in accordance with the American Arbitration Association rules in effect, byan arbitrator chosen from a panel of persons to be provided by saidAssociation.

 

If either party, after duedemand and notice, refuses to arbitrate or fails to appear , the other partymay nevertheless proceed to arbitration as above provided.

 

Any findings, decisions andawards, including reinstatement, shall be binding and conclusive upon theparties and judgment thereon may be entered in any court of the forum havingjurisdiction. The expense of the arbitrators’ fees, if any, shall be jointlyborne by the parties.  The expense ofstenographic minutes shall be borne by the party ordering same for itsexclusive use.

 

No award shall be retroactiveprior to the date of the formal Presentation in writing of any grievance by theUnion.

 

All Union grievances to thedate of the execution of this Agreement are deemed to have been settled anddetermined.

 

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All Union grievances ordisputes shall be deemed conclusively settled, determined and rejected unlesssubmitted to arbitration within thirty (30) days from the date they firstreached state (c) or (d) above.

 

In case of disputes, awalkout constitutes a breach of contract by the Employees. Work shall continueto be performed in accordance with the Company’s decision until such disputehas been fully determined pursuant to this grievance procedure.

 

The grievant may be presentat any step of the grievance procedure, at the Union’s option, provided thatsuch attendance will not unreasonably interfere with plant operations

 

ARTICLE18.

VETERANS

 

Any Employee who leaves theCompany for United States military service shall , upon his request withinthree (3) months from the date of his discharge, be reinstated, without loss ofseniority in his former position, provided that he is (i) available for workwithin six (6) months after discharge and (ii) in the Company’s opinion afterconsultation with the Union, still competent to perform his prior job satisfactorily.In so rehiring him, the Company may discharge any of his successors. If he ismentally or physically unable to perform his prior work, or if the operationhas been discontinued, the Company will endeavor, wherever possible, afterconsultation with the Union, to provide him with some other suitable work forwhich purpose the Company may discharge any Employee hired during his absence.

 

Nothing herein limits therights of veterans as provided under any law, regulation, order, award,judgment or decree of the United States Government, or of the state of NewYork, or of any of their respective subdivisions, agencies, departments,boards, courts, or tribunals, and compliance therewith by the Company shall notbe deemed a breach of this Agreement. To the extent that any provision hereofshall be inconsistent with same, such provision shall be deemed modified so asto conform with same. The Company shall notify the Union of any action,proceeding or hearing commenced by any veteran affecting the provisions Of thisArticle. The Union agrees that it shall not require the Company to deny to anysuch Employee any right properly asserted by him.

 

Veterans shall, on request,be granted a leave of absence not exceeding one (1) year to attend industrialtraining schools sponsored by the Government.

 

ARTICLE19.

HOLIDAYS

 

New Year’s Day, Lincoln’sBirthday, Washington’s Birthday, Memorial Day, Independence Day, Labor Day,Columbus Day, Veterans Day, Thanksgiving and the day after Thanksgiving andChristmas are the only legal holidays hereunder and will be celebrated inaccordance with the New York Uniform Holiday Act. Except in the event ofemergency, no Employees, other than outside tuners, watchmen, firemen,engineers, coal passers, power plant employees and maintenance departmentemployees at 109 West 57 Street shall be required to work on Sundays or saidlegal holidays.

 

Employees shall be paid forsuch holidays without working, at the Employee’s then regular hourly rate foreight (8) hours, provided that the Employee works his regular shift of workdays immediately preceding and following the holiday unless prevented fromworking because, within one (1) month immediately preceding the holiday date,he was either bona fide ill or laid off. An Employee shall not lose his holidaypay if on such work days preceding and following the holiday he loses work notexceeding a total of three (3) hours spread over both days, provided that hisloss of work is not arbitrary, or without justifiable cause or is in accordancewith his regular working practices. Unworked holidays shall be included, indetermining hours worked for overtime purposes. If a holiday occurs within anyEmployee’s vacation period, his vacation shall be extended one (1) day.

 

In the event that Federal orState legislation replaces one (1) or more of these holidays with anothercalendar day, then such other day or days shall become the holiday under thisArticle, in place of and not in addition to the superseded holiday date.

 

The Company shall allowEmployees to depart from work at 11:30 a.m. on Christmas Eve and New Year’sEve. Each Employee who has worked the full four (4) hours (i.e. 7:30 - 11 :30)prior to such early departure shall

 

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receive four (4) hours additional pay at said Employee’s average hourlypay for each of these days. Saturday holidays will be celebrated on the Fridayprior to the holiday. Sunday holidays will be celebrated on the Monday after.Christmas Eve and New Year’s Eve will be the last work day before the holiday.

 

 

ARTICLE20.

VACATIONAND CHRISTMAS BONUSES

 

A. *Vacation.*

1. For purposes of vacationpay calculations, June 1 is used as the cutoff date. All Employees will receivevacation pay in accordance with the schedule below. All hours paid as vacationpay shall be computed, in the case of non-day rate workers, at the Employee’sposted average hourly rate then in effect and, in the case of day rate workers,at the Employee’ s hourly rate then in effect.

 
|                     |   | **DAYS WORKED**        |       |
|--------------------------|--------|------------------------|------------|
| **Service as of June 1** |   | **Less than  80 days** | ** ** | **80 thru  159 days** | ** ** | **160 days  and over** | ** ** |
| 0-6  months              |   | 0                      |       | 0 |   | 0 |   |
| 6  mos. To 1 year        |   | 0                      |       | 40  hrs. |   | 40  hrs. |   |
| 1  year thru 5 years     |   | 0                      |       | 40  hrs. |   | 80  hrs. |   |
| 5  years thru 14 years   |   | 0                      |       | 60  hrs. |   | 120  hrs. |   |
| 15  years thru 19 years  |   | 0                      |       | 80  hrs. |   | 160  hrs. |   |
| 20  years and over       |   | 0                      |       | 100  hrs. |   | 200  hrs. |   |

 

In determining whether anEmployee qualifies for ten (10) or twenty (20) years employment, as the casemay be, he shall be entitled to credit only for calendar years in which heactually worked for the Company at least one hundred and sixty (160) days.

 

2.   For the purpose of determining worked days as provided in thissection, bona fide days of illness and layoff (in the aggregate not exceedingtwenty-five (25) days towards the eighty (80) day minimum and forty-five (45)days towards the 160 day minimum) as well as days off for vacation and holidayshall be deemed Working Days.

 

3.   The Company has the option of shutting its plant for a two weekor three week vacation period during the months of July and August. The Companywill continue its practice of allowing for additional vacation due thoseEmployees, pursuant to the eligibility requirements above, outside suchvacation period, but within the vacation year. The Company, when given reasonableadvance notice, will not unreasonably deny requests of Employees for the takingof the additional vacation at a desired time. To this end the Union and Companyshall make reasonable efforts to assist each other in effecting this clause.The Company’s production needs will not be impeded and due consideration willbe given to the Employees’ individual needs. If there is more than one request in the same Department for the sametime period seniority will prevail. If the Company has work, an Employee withfour(4) or five (5) weeks of vacation eligibility , may choose to work and bepaid for such vacation time, in lieu of actual time off, and also receiveregular compensation for work performed during this period, payment for suchvacation time to be effected on June 1. If the Company shuts down its plant fora two-week or three-week vacation period the Company will notify the Union ofthe date at least thirty (30) days in advance.

 

4.   Vacations shall be prorated for Employees who have at least one(1) full year of service as of June 1 of any year, and whose employment isterminated. Such pay to be prorated on the basis of 1/240th of the Employee’svacation entitlement for each day worked as that term is described inSubsection C. below.

 

B. *Christmas Bonus*

All Employees continuouslyemployed by the Company (i) for at least six (6) months but less than one (1)year immediately preceding December 1st of each year of theterm hereof, shall receive twelve (12) hours, or (ii) those so employed by theCompany for one (1) year or more shall receive twenty-four (24) hour Christmasbonus pay in each year of the term hereof. The bonus shall be computed at the Employee’s hourly rate then ineffect, provided that such Employee continues in such employment to at leastthe week in which such bonus is to be paid and actually worked for the Companyfor eighty (80) actual working days in case (i) and for one hundred

 

10

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and sixty (160) actual working days in case (ii) in the twelve (12)months immediately preceding. Such bonus shall be paid by a separate checkaccompanying the second pay check in December.

 

C. *Absences*

Absence by reason of layoff,illness, leaves or any other cause whatsoever, shall not be deemed “actual work”,hereunder, except as provided in Article 20 Section A-2. If any Employee worksany part of a day, he shall be entitled to a full day’s credit for work incomputing vacation and Christmas bonus days worked provided that there isjustifiable and reasonable cause for not working the balance of the day.Further, all time lost due to injury on the job (which qualifies as a workerscompensation injury) shall be counted toward vacations and Christmas bonus.

 

D. *Layoffs*

If the aggregate generallayoff of an entire department or plant shall exceed forty (40) days, then asto each Employee affected by such layoff, there shall be included all paidholidays to each such Employee so entitled during the term as actual workingdays in computing vacation and Christmas bonus days worked thereunder.

 

ARTICLE21.

ELIMINATIONOR CHANGE OF OPERATIONS

 

A. As to operations presentlyperformed at the Company’s Plants: No such work shall be performed elsewhere bythe Company unless the provisions in Section D have been or will be satisfied.

 

B. As to new operationsperformed at the Company’s Plants: (i) The Company may institute any newdepartment or operation. (ii) The Union shall have the opportunity to furnishfor such operation the best labor then available in the open market. (iii)Trial Periods shall be jointly determined for new Employees; for old, thirty(30) days. Permanent transfers to these operations shall be with the Employee’sconsent; if not, revert to his prior status. In temporary transfers, seniorityshall neither be acquired nor affected. (iv) New operations may be suspended ordiscontinued at the Company’s discretion provided that the provisions inSection D have been or will be satisfied. Moreover, on discontinuance,Employees shall revert to their prior seniority, if any, in other departments.

 

C. The parties recognize thegeneral principle between them that they will mutually cooperate to avoid theelimination of a department or change of operation as the result of thepurchase of foreign parts. It is, however, recognized that this principle shallnot apply to any plant of the Company which may be situated abroad, to thepurchase of raw materials, incidental small parts or hardware not customarilymanufactured by the Company, or purchased by it within the United States,regardless of place of origin, nor shall this principal apply to any otherpurchases within the United States, regardless of the place of origin of thearticle purchased nor to any other purchases outside the United States whichneither effects the elimination of a department or material change inoperation, or which is being purchased by the Company at any time that anagreement between the parties hereto is made.

 

D. (i) The Company will givethe Union reasonable notice of its intent to change operations or to purchaseforeign parts where the effects of its action would be to permanently displacean Employee from his current job. If requested , the Company will meet with theUnion to discuss its intended action. (ii) In any such discussion the Companyshall explain the reason why it needs to take any proposed action and the Unionmay respond on the merits including the suggestion of any alternative actionconsistent with the Company’s needs. The Company will consider such suggestionbefore making the final decision. (iii) In the event that an Employee will bepermanently displaced from his current job because of a change in operations orthe Company’s purchase of foreign parts, the Company will make reasonableefforts to find him another available job for which he is qualified within theplant, including returning him to a prior position which may have held. Hisrate for such job will be the rate commonly associated with the job. If noavailable job exists, the Company shall lay the Employee off provided thatCompany shall demonstrate legitimate business reasons for the change inoperations or the purchase of foreign parts. In the event that the Union andthe Company cannot agree that the Company had legitimate business reasons for achange in operations or the purchase of foreign parts, this question shall besubmitted for binding arbitration.

 

11

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ARTICLE22.

TERMINATIONOF EMPLOYMENT

 

An Employee shall be deemedterminated in any of the following events: (i) discharges for cause; (ii)voluntary quitting, (iii) in the case of temporary Employees with less thanthree (3) months service, when laid off; (iv) when an Employee has been laidoff for more than twelve (12) months unless the Employee has at least seven (7)years service in which case employment will be terminated when the Employee hasbeen laid off more than twenty four (24) months, (v) in the case of anyEmployee, temporary or permanent, if he fails to report back within three (3)days after being recalled for work, unless such failure is due to a bona fideexcuse preventing his return. Other employment shall be no excuse under anycircumstances.  Layoff of permanentEmployees shall not, except as provided above, affect their right of reemployment.  Every employee absent from work for three(3) or more consecutive work days shall cause the Company to be notified of thecause thereof, or be subject to termination.

 

ARTICLE23.

LEAVESOF ABSENCE

 

Employees while on leave arenot deemed laid off and retain all seniority rights but acquire no benefits.The business agent shall be deemed on leave during the term of his office orthis Agreement, whichever is shorter. No leave shall be longer than six (6)months.  Employees must be employed formore than sixty (60) days to be eligible for a medical leave of absence.Employment will be terminated when an Employee is on a medical leave (includingWorker’s Compensation) for more than twelve (12) months unless the Employee hasat least seven (7) years service in which case employment will be terminatedwhen the Employee has been on a medical leave more than twenty four (24)months.

 

During any periods, no morethan ten percent (10%) of the Company’s key Employees or of any department orof the entire plant personnel shall be on leave. All applications for leavemust be in writing, submitted to the Company at least sixty (60) days beforethe proposed date of departure and the Employee shall receive written notice ofapproval or disapproval at least (30) days before such date of departure. Noleaves shall be retroactive.

 

All applications for leavewill be reviewed by a committee of four (4), two (2) appointed by the Companyand two (2) by the Union. Consideration will be given first to the need forproduction in the applicant’s department, and the effect of his leave on otherdepartments.  Consideration will be nextgiven to the applicant’s length of service, the reason for leave, and hisrecord of prior leaves or absences.

 

The recommendation of amajority of the committee shall be required for, and govern the right to, anyleave, and shall be binding upon all of the parties.

 

ARTICLE24.

CALL-INPAY

 

Employees who are requestedto report for work and do so on time are guaranteed a minimum of four (4)hour’s work or pay in any day.

 

ARTICLE25.

INSURANCE

 

During the term hereof, theCompany shall pay a contribution of the United Furniture Workers Insurance Fundon or before the fifteenth day of each month for each Employee covered hereinas may be covered under such Fund who was an Active Employee during theprevious month. The rate of contributions per Employee shall be as follows:

 

Effective for the month ofOctober 2003 (payable November 15, 2003) $540.00 per month.

Effective for the month ofJanuary 2005 (payable February 15, 2005) $605.00 per month.

Effective for the month ofJanuary 2006 (payable February 15, 2006) $652.00 per month.

 

An “Active Employee” is anyEmployee who has received pay for actual work performed at any time during themonth (including; Employees on vacation or sick days paid by the Company butexcluding Employees on lay-off or leave of absence)

 

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Such Insurance Fund shall bea trust fund for the sole benefit of the Employees of the Company and of othercompanies which similarly contribute to said Fund, for the purchase, orprovision by self insurance, of group Life Insurance, Group Accident, Death andDismemberment Insurance, Group Accident and Health Insurance, HospitalizationInsurance and Group Surgical Insurance as the Fund’s Trustees determine toprovide.

 

To the extent that in themanner above mentioned, the Company joins with other companies in theFurniture, Bedding and Piano Industries, who have made or may make contractscontaining provisions similar to those set forth in this section, inmaintaining the said Fund, it being understood, however, that the Fund will beheld and managed by Trustees thereof under the terms and provisions of aDeclaration of Trust or Trust Agreement to which the Trustees of the Fund areparties. It is further understood and agreed that the Company shall be under noobligation to see to the application of monies paid to the Trustees pursuant tothis paragraph for the purposes and use above-mentioned.

 

The Company agrees to furnishto the Union and to the Fund above named, records of Employees hired,classifications of Employees, names, social security numbers and wages paid.

 

The Union represents thatsaid trust fund is exempt from the restrictions contained in Section 302(c) ofthe Labor Management Relations Act of 1947 and that said fund shall at alltimes continue to be a Fund conforming with and entitling the Company toexemption under the New York Disability Benefits Law.

 

ARTICLE26.

PENSIONS

 

Subject to the provisionsbelow, the Company shall contribute to the United Furniture Workers’ PensionFund A a sum equal to but not exceeding five and one quarter percent (5.25%) ofits previous month’s payroll for such Employees covered herein as may becovered under such fund. Said Fund shall continue to be subject to thefollowing conditions:

 

A. Said Fund shall be a planentitling the employer to a tax deduction as an ordinary expense under the taxlaws for any contributions made by it to said Fund certified by theCommissioner  of Internal Revenue as taxdeductible under Section 162 of the Internal Revenue Code.

 

B. During any period thatpiano work is frozen by Government order or authority, the Company’scontribution to said Fund shall be made only as to Employees who had previouslybeen engaged in piano work and who continue to work for the Company during theperiod of such freeze, and shall not be required to be made as to any otherEmployees.

 

C. During the period a newforeman retains his full seniority status as described in Article 13(D),pension contributions for him will be held in reserve. If after such period,the foreman continues in such capacity, he may apply for the ‘WithdrawalBenefit” provided under Section IV D(1) of the United Furniture Worker’sPension Plan A. However, if the foreman returns to his prior position, thereserve will be transferred to the United Furniture Worker’s Pension Plan A. Noother adjustments will be made in favor of the United Furniture Worker’s PlanA., either at the time of promotion to foreman or in the event of demotionafter the one (1) year temporary

period.

 

D. All provisions of thisArticle 26 shall be subject to the agreement, as amended, made June 25, 1974between the Trustees of the United Furniture Worker’s Pension Plan A and theTrustees of the Steinway & Sons Pension Fund, the United Piano Workers,Local 102 of United Furniture Workers of America, AFL-CIO and Steinway &Sons.

 

ARTICLE27

LAYOFF

 

A general layoff of an entiredepartment or plant shall be upon at least one (1) week’s notice to the Union,except in cases of an Act of God or public enemy, emergency, contractcancellation, government priorities, strike, fire, epidemic, floods or anycauses, similar or dissimilar to the foregoing, not within the Company’scontrol. In the event of a general lay-off exceeding six (6) consecutivecalendar weeks, such Employees so laid

 

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off shall at the end of the sixth (6th) consecutive week of theirlayoff, unless theretofore terminated as provided in Article 24, be paid forty(40) hours regular straight time computed at their average hourly earnings atthe date of layoff.

 

If the Company shall find itnecessary to lay off any Employees for any reason other than lack of work, theCompany will give the Union at least five (5) business day’s notice before thelay-off, including the names, positions and seniority dates of the Employees tobe laid-off. If requested, the Company will meet with the Union to discuss itsintended action. In any such discussion the Company shall explain the reasonwhy it needs to take any proposed action and the union may respond on themerits including the suggestion of any alternative action consistent with theCompany’s needs. The Company will consider and respond to such suggestionsprior to implementing any lay-off.

 

In the event the Union andthe Company cannot agree that the Company had a legitimate business reason fora lay-off or that the Company identified the proper Employees to be laid-off,the Union retains the right to submit the question to binding arbitration.  If an Employee has been laid off, the workperformed by that Employee may not be performed by persons from anothercategory, department or operation for more than one (1) day per week withoutthe Union’s consent.

 

The Company shall notify theUnion before assigning overtime to any Employee in the category or operationpreviously occupied by a laid-off Employee. The Company shall not use overtimeto avoid the recall of a laid-off Employee.

 

ARTICLE28.

SHOPCHAIRMAN

 

  Inasmuch as the Company deems that such services facilitatethe operation of its factory, the Company agrees that time spent in processinggrievances by either Shop Chairman while such Chairman is a Company Employee onCompany premises and during regular working hours, shall be paid by the Companyat such Employee’s regular hourly rate.

 

ARTICLE29.

WARWORK

 

  If, the Company shall become engaged in war work, Employeesengaged in such work (i.e. other than regular piano work) shall not be entitledto or acquire any of the seniority benefits of this Agreement, it being theintention of the parties that Employees acquire seniority only to the extentemployed on piano work.

 

ARTICLE30.

JURYDUTY PAY

 

A.   Regular Employees who have completed one (1) year of continuousservice with the Company whose absence from work is necessitated by service asa juror, shall receive jury duty pay based upon the difference between thecompensation said Employee received for his services as a juror and his averagehourly pay effective at the time of such service. Jury duty pay shall be paidonly for days on which the Employee would otherwise have worked his regularlyscheduled workday. In no case shall jury pay be paid for more than ten (10)days in each contract year.

 

B.   In order to be eligible for jury duty pay, an Employee who issummoned for jury duty must immediately present such summons to his supervisorsand the Employee must provide the Company with a statement signed by an officialof the court certifying as to the Employee’s service as a juror of reportingfor jury duty, the date or dates of such service, and the compensation paid himtherefor.

 

ARTICLE31.

BEREAVEMENTPAY

 

  In the event thatthe spouse, child, parent, brother or sister, stepmother, stepfatherstepsister, or stepbrother of an Employee shall die, such Employee shall beentitled to three (3) days bereavement pay at the ‘regular hourly rate foreight (8) hours per day, provided that the time is actually taken off. TheCompany reserves the right to require proof of death.

 

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ARTICLE32.

SICKLEAVE

 

A. On the first anniversaryof their employment with the Company, each Employee shall be entitled to two(2) paid sick days (eight (8) hours at the regular hourly rate) in the event ofsickness on the second anniversary of their employment with the Company, eachEmployee shall be entitled to three (3) additional paid sick days in the eventof sickness. On October 1, 2004 (and subsequently November 1, 2005 and December1, 2006 and January 1 thereafter), Employees shall be entitled to five (5) paidsick days in the event of sickness. Sick days shall be noncumulative and if nottaken in any one (1) contract year shall be paid on the first pay periodfollowing the close of that contract year. Notwithstanding the prior sentence,Employees in the employ of the Company for a period of one (1) year who do notuse their two (2) sick days may accumulate those days and use them in thefollowing year. Employees will be paid their sick day entitlement for the first2, 3, or 5 absences in the contract year. Sick days taken pursuant to thisArticle will not be used against Employees for disciplinary reasons.   Notwithstanding the foregoing, the Companyand the Employee may agree on the Employee’s use of sick time for reasons otherthan sickness.

 

B. Effective at the beginningof the first full calendar quarter following their first anniversary ofemployment, Employees will be eligible to earn bonuses for perfect attendancein accordance with the following rules;

 

1)         Employees shall receive a bonus of the one hundred dollars ($100) foreach quarter of the contract year (October 1, 2003 - October 31, 2004, November1, 2004 - November 30, 2005 and December 1, 2005 — December 31, 2006) in whichthey have perfect attendance. Bonuses will be paid quarterly.  *Note:*Forthe contract conversion period of October 1, 2003 through December 31, 2004,employees may be eligible for an additional $50.00 attendance bonus for thoseemployees with perfect attendance for 5 quarters (i.e. 1 paid sick day perquarter for 5 quarters — October 1, 2003 — December 31, 2004).

 

2)         Employees shall receive an additional bonus of the one hundred dollars($l00) for perfect attendance for an entire contract year (October 1 -September 30). This bonus will be paid annually. Employees with less than afull contract year of eligibility in the attendance bonus plan may receive apro rata share of the yearly bonus if they maintain perfect attendance for thatportion of the contract year during which they were eligible.

 

3)         Employees who are qualified and receive a bonus in accordance with therules listed in Section B. 1) of this Article, will receive an additional bonusfor each quarter in which plant wide absenteeism is improved from 6%, by onefull percentage point, or more.

 

Each 1% reduction in theabsence rate from 6% (to 5%, 4%, 3%, etc.) will entitle those employees whohave qualified for attendance bonuses to an additional $100, for that quarter.

 
| Example:                                                           |
|--------------------------------------------------------------------|
|                                                               |
| Current 6% plant wide  absence rate = current $100/quarterly bonus |
|                                                               |   |   |   |
| Improvement to 5% plant  wide absence rate                         | = current |   | $100/quarterly bonus |
|                                                               | + additional |   | $100 bonus |
|                                                               |   |   | $200/quarterly bonus |
|                                                               |   |   |   |
| Improvement to 4% plant  wide absence rate                         | = current |   | $100/quarterly bonus |
|                                                               | + additional |   | $200 bonus |
|                                                               |   |   | $300/quarterly bonus |

 

The annual attendancebonus for employees who qualify for and receive a bonus under Section B. 2) ofthis article will likewise be increased $100 for each annual reduction of onefull percentage point below 6% for the contract year.

 

Perfect attendance means noabsenteeism for any reason except: paid Vacation, paid Funeral leave; paidMilitary leave; Jury Duty, and one paid Sick Day per quarter.

 

Employees may take the onepaid sick day per quarter in two four hour segments without penalty.

 

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The Company and Union alsoagree that Employees may be absent due to layoff up to fifteen (15) days in acalendar quarter without such absences counting against them for the purpose ofdetermining eligibility for the attendance bonus.

 

ARTICLE33.

MISCELLANEOUS

 

A. The Company shall not moveits plant outside the five boroughs of New York City.

 

B.  Any authorized Union representative may, at any reasonable timeduring business hours, enter the Company’s premises by way of the office,provided there is no Union organization or activity on Company time orproperty.

 

C.  Except as specifically modified hereunder or in the Company’sreasonable discretion from time to time here under the present generalpractices and conditions of employment shall continue.

 

D.  The masculine gender herein shall apply to females wherever thecontext permits.

 

E.  This Agreement shall be binding upon and inure to the benefit ofthe respective parties, their successors and assigns.

 

F.  It is not a breach of this Agreement if the Employees refuse, orare ordered not to work upon goods being manufactured in a shop where therethen exists a strike or lockout. Nothing herein shall be deemed a condonationby the Company of any violation of law, State or Federal, nor does the Unionconcede that compliance with this Section is unlawful.

 

G.  Foremen and assistant foremen may continue to perform productionwork as heretofore.  Additionalproduction work may not be performed by them unless the Employees who regularlyperform such work are not available.

 

H.  This Agreement shall be at all times subject to the laws, rules,regulations, orders and edicts, State and Federal, including national emergencyand Priority orders and rulings, now or hereafter enacted or promulgated, andit shall not be a breach if either party is thereby prevented from performancehereof, in whole or part.

 

I.  This Agreement contains the entire understanding between theparties and shall not be waived or in any respect changed, except in a writingsigned by both parties. All oral waivers, representing and changes are herebyexpressly renounced and excluded.

 

J.  Employees required to use their automobiles for Company businesswill be reimbursed at the appropriate rate per mile authorized by the InternalRevenue Service.

 

K.  Employees will be allowed fifteen (15) minutes for the purpose ofcashing checks on pay day through December 31, 2003. This practice isdiscontinued after that date.

 

L.  Those Employees who are required to wear safety shoes will bereimbursed up to $75 per year by the Company for the purchase of a pair ofsafety shoes. The Company will reimburse up to $35 per year for the purchase ofa pair of safety shoes by those Employees who are not required to wear safetyshoes.

 

M.  The Company will provide each Employee, at a provider of theCompany’s choice, an annual eye exam and a single pair of safety glasses at nocost to the Employee.

 

N. The Company shall post alljob openings other than for entry level positions for three (3) business days.

 

ARTICLE34.

TERMINATIONAND RENEWAL

 

This Agreement shall remainin full force and effect for the period from the date hereof until December 31,2006. Not less than sixty (60) days prior to the expiration of this Agreement,either party desiring terminations or modifications thereof shall make knownits demands in writing to the other party, and if neither .party shall givesuch notice, this Agreement shall continue in full force and effect for theperiod of one (1) additional year, and

 

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similarly, from year to year thereafter. If either party shall give suchnotice, then negotiations shall commence forthwith. Only matters set forth insuch demands shall be considered in negotiations. This Agreement, including thewage provisions thereof, is not subject to reopening, change or modificationduring the term, for any cause whatsoever unless the parties hereto agreeotherwise.

 

IN WITNESS THEREOF, theparties hereto have caused these presents to be signed by

their respective dulyauthorized officers as of the day and year first above written.

 
|   | STEINWAY, INC.  |
|--------|-----------------|
|   |            |   |
|   | *By:*           | /s/ Bruce A. Stevens |   |
|   |            | Bruce  A. Stevens |   |
|   |            | *President* |   |
|   |            |   |
|   | Local 102 F.W.  |
|   | I.U.E., AFL-CIO |
|   |            |   |
|   |            |   |
|   | *By:*           | /s/ Harry Boot |   |
|   |            | Harry  Boot |   |
|   |            | *President* |   |
|        |                 |  |  |  |  |

 

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APPENDIXI.

FACTORYRULES AND REGULATIONS

 

1. This is a Union Shop, andyour attention is drawn to our Union agreement which is available in printedform, and is binding on the Company, the Employees and the Union.

 

2. The regular working timeis eight (8) hours daily, from 7:30 a.m. to 4:15 pm with three-quarters of anhour for lunch between 12:00 Noon and 12:45 p.m. Everyone is expected to startwork promptly and to remain at their work until quitting time; five (5) minutesis allowed for washing and dressing, both before lunch and at the end of the day,indicating by blowing the whistle. Factory gates will be opened thirty (30)minutes before starting time and closed twenty (20) minutes after quittingtime.

 

3. Every Employee must punchin at assigned time clock or department when arriving and when leaving theFactory. It is forbidden to punch someone else’s card for him.

 

4. It is the duty of everyperson employed in this establishment to carry out and complete the workassigned to him with care and diligence and without interruption during regularwork hours.

 

5. Employees are prohibitedfrom visiting other departments than those in which they are employed for thepurpose of talking with others during working hours, except in discharge oftheir proper duties.

 

6. It is forbidden tothreaten or molest other workmen, or to detain them in any manner from theirwork, to quarrel with them, or to indulge in loud or boisterous language.Radios should be kept tuned down so as not to interfere with other workers. Theuse of headphone radios, tape players, cellular phones or similar devices isstrictly prohibited on the shop floor during work hours.

 

7. Workmen fighting (orinvolved in an altercation) in the Factory, or in the immediate vicinity of theFactory during work hours, will be discharged at once.

 

8. Safety is important to allof us, and we expect everyone to avoid injury, and to report promptly to theforeman any unsafe condition that could cause an accident.

 

9. Any accident, no matterhow minor it may seem, must be immediately reported to the foreman.

 

10. It is a basic conditionof employment that each Employee work the full scheduled time for his operationeach day. If an unforeseen illness or emergency should prevent anyone fromworking, the Company must be promptly notified of the reason.

 

11. Every workman must cleanup his working place daily, and sweep all dirt and shavings from under and atleast two (2) feet around his bench, and shut the window, turn out lights, andshut off all utilities, power, or equipment under his control before leaving theshop.

 

12. Workmen must allow thedoorkeeper, on request, to inspect the contents of bundles, packages, etc. thatthey may carry in or out of the factory.

 

13. Smoking, drinkingintoxicating liquor, or use of controlled or illegal substances and gamblingare absolutely prohibited in the factory.

 

14. No one is permitted to dowork for himself or others in the factory, unless authorized by the foreman.

 

15. The Company phones arenot to be used for personal business. In the event of emergency, you can be reachedthrough our switchboard. Pay telephones are available for employees use duringother than working hours.

 

16. It is prohibited to callor hold meetings in any part of the establishment, or to distribute or put upany placards, posters, or circulate lists, or make collection for any purposewhatsoever, without authorization.

 

17. No visitors of any kindare permitted in the factory without authorization from the office.

 

18

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18. Employees who engage inviolent criminal activities outside the plant whose continued employment willpose a serious and imminent threat to the health, safety and welfare of otherEmployees may be terminated.

 

19. These rules andregulations must be observed by every Employee, and any breach will be causefor disciplinary action, subject to the grievance procedure in our Unioncontract.

 

20. It is absolutelyprohibited to bring firearms or other weapons into the workplace.  Employees who do so will be discharged atonce.

 

21. The Company reserves theright to remove (or request removal) of posters, banners or other materialswhich depict images or convey sentiments which are inappropriate oroffensive.  (This right does not extendto notices posted by the Union.)

 

APPENDIX II.

SKILL CLASSIFICATION

 
|            |   | **10/1/03**  |   | **1/1/05**   | ** ** | **1/1/06**  | ** ** |
|-----------------|--------|--------------|--------|--------------|------------|-------------|------------|
| Skilled  A      |   | 15.36        |   | 15.67        |       | 15.98       |       |
| Skilled  B      |   | 15.23        |   | 15.53        |       | 15.84       |       |
| Skilled  C      |   | 15.04        |   | 15.34        |       | 15.65       |       |
| Semi-Skilled  A |   | 14.65        |   | 14.94        |       | 15.24       |       |
| Semi-Skilled  B |   | 14.37        |   | 14.66        |       | 14.95       |       |
| Unskilled       |   | 14.15        |   | 14.43        |       | 14.72       |       |
| Hiring  Rate    |   | 8.60         |   | 8.77         |       | 8.95        |       |
|            |   |         |   |         |       |        |       |
|            |   | 0%  increase |   | 2%  increase |       | 2% increase |       |

 

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INDEX

 
|                                  | **Sections**   |
|---------------------------------------|----------------|
| Apprentices                           | 11C            |
| Bereavement Pay                       | 31             |
| Call-In Pay                           | 4              |
| Change of Operations                  | 12,  21        |
| Check-off                             | 3              |
| Christmas Bonus                       | 20B            |
| Covered Employees                     | 1              |
| Discharge                             | 8,  22         |
| Division of Work.                     | 16             |
| Employee                              | 1              |
| Foreman                               | 13D,  26C, 33G |
| General Lay-off                       | 27             |
| Grievance Procedure                   | 4D,  17        |
| Health                                | 5,  9, 25      |
| Hiring                                | 2  E, F        |
| Hiring Rates                          | 11B            |
| Holidays                              | 19             |
| Hourly Rates.                         | 11B,  12       |
| Hours of Work.                        | 10,  16        |
| Injured and Aged Employees            | 9              |
| Instructors.                          | 14             |
| Insurance                             | 25             |
| Jury Duty Pay                         | 30             |
| Layoff                                | 27             |
| Leave of Absence                      | 18,  23        |
| Lockout.                              | 4              |
| New Operations &  Methods Changes | 12,  21        |
| Overtime                              | 10  D-E        |
| Pension                               | 26             |
| Safety                                | 5              |
| Seniority                             | 13,16          |
| Shop Chairman                         | 28             |
| Shop Rules                            | 6,  9          |
| Sick Leave                            | 32             |
| Strikes                               | 4              |
| Terminations                          | 8,  22         |
| Termination and Renewal.              | 34             |
| Transfers                             | 13             |
| Trial Period                          | 7              |
| Tuning Department                     | 10C            |
| Union Activities                      | 3,  33B        |
| Union President                       | 16,  17, 33B   |
| Union Security                        | 2              |
| Vacations                             | 20             |
| Veterans                              | 18             |
| Wages                                 | 11             |
| Work Records                          | 15             |
| Work & Seniority                  | 16             |
| Workweek                              | 16             |

 

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**Notes**

 

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