Document:

EX-10.L

 

Exhibit 10(l)

SCHERING-PLOUGH CORPORATION

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(AMENDED AND RESTATED JANUARY 1, 2005)

PREAMBLE

Schering Corporation has adopted the Schering-Plough Corporation Supplemental Executive Retirement
Plan to ensure the payment of a competitive level of retirement income to attract, retain, and
motivate selected executives of the Corporation and its Affiliates. The Plan is intended to be a
non-qualified, supplemental retirement plan that is unfunded and maintained primarily for the
purpose of providing deferred compensation for a select group of management or highly compensated
employees of the Corporation or its Affiliates pursuant to Sections 201(2), 301(a)(3), and
401(a)(1) of ERISA and, as such, to be exempt from the provisions of Parts 2, 3, and 4 of Subtitle
B of Title I of ERISA. The Plan was originally effective as of January 1, 1983, however, this
amendment and restatement is effective as of January 1, 2005 and only applies to employees of the
Corporation or an Affiliate on or after that date. Except as otherwise defined herein, all
capitalized terms shall have the meaning given to them in the Retirement Plan.

ARTICLE 1

DEFINITIONS

	1.1	 	“Affiliate” means any corporation, partnership, or other organization controlled by or under
common control with the Corporation.
	 
	1.2	 	“Average Final Earnings” means a Participant’s or Former Participant’s average annual
Earnings during the sixty consecutive months for which his or her Earnings were highest during
the last one hundred twenty consecutive months prior to his or her Separation from Executive
Service.
	 
	1.3	 	“Board” means the Board of Directors of Schering-Plough Corporation.
	 
	1.4	 	“Change of Control” means Change of Control as defined in the Corporation’s 2002 Stock
Incentive Plan or any successor stock incentive plan.
	 
	1.5	 	“Change of Control Termination Date” means the date, following a Change of Control, as of
which a Participant or Former Participant has a Separation from Service.
	 
	1.6	 	“Code” means the Internal Revenue Code of 1986, as amended.
	 
	1.7	 	“Committee” means the Committee provided for in Section 6 of the Plan.
	 
	1.8	 	“Corporation” means Schering-Plough Corporation, a New Jersey Corporation, and any successor
or assigns thereto.
	 
	1.9	 	“Deferral Rate” means, for each calendar quarter, a rate equal to the actual yield on
three-month U.S. Treasury bills as reported in the Wall Street Journal on the first business
day of such calendar quarter.

 

 

	1.10	 	“Early Retirement Date” means:

	 	(a)	 	with respect to any person who, prior to March 1, 2006, both attained age 55
and became a Participant of the Plan, the later of the Participant’s attainment of age
55 and his or her Separation from Service; and
	 
	 	(b)	 	with respect to any other person, the latest of his or her attainment of age
55, Separation from Service, and the date he or she completes five years of Eligibility
Service under the Retirement Plan.

	1.11	 	“Earnings” means Compensation under the Retirement Plan prior to the Participant’s Separation
from Executive Service plus, for periods prior to January 1, 2004, bonuses awarded for such
periods under any executive or management incentive plan of the Corporation or an Affiliate;
provided, however, that the amount of Earnings credited for any bonus earned in the calendar
year in which the Participant’s Separation from Executive Service occurs but not paid until
after the Participant’s Separation from Service shall be the estimated bonus as determined by
the Committee.
	 
	1.12	 	“Effective Date” means January 1, 2005.
	 
	1.13	 	“Equivalent Actuarial Value” means the equivalent value when computed on the basis of the
interest rate determined as of such date under the regulations of the Pension Benefit Guaranty
Corporation for determining the present value of a lump sum distribution on plan termination
that were in effect on September 1, 1993 and the 1994 Group Annuity Reserving mortality table.
Notwithstanding the foregoing, effective January 1, 2006, Equivalent Actuarial Value shall be
determined by using the market yield on U.S. Treasury securities at 10-year constant
maturities (non-inflation issues adjusted to constant maturities), as set forth in Federal
Reserve Statistical Release H.15 for the first business day of the month in which the
Participant’s Separation from Service occurs and the mortality table used to determine
automatic lump sum cash outs under the Retirement Plan.
	 
	1.14	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.15	 	“Executive Status” means:

	 	(a)	 	prior to January 1, 2004, employment in E-Grade pay status; and
	 
	 	(b)	 	on or after January 1, 2004:

	 	(i)	 	employment as a member of the Corporation’s Executive
Management Team or Operations Management Team; or
	 
	 	(ii)	 	effective on and after January 1, 2005, solely with respect to
an individual who did not become a Participant of the Plan prior to January 1,
2005, designation as a Participant of the Plan by the Chief Executive Officer
of the Corporation.

Once a person attains Executive Status, he or she shall remain in Executive Status until his
or her Separation from Executive Service.

	1.16	 	“Former Participant” means a former employee or an employee who has been removed from
Executive Status and on whose behalf a benefit is payable under the Plan.

 

 

	1.17	 	“Other Retirement Income” means the employer-provided retirement income payable to a
Participant, Former Participant or Beneficiary (as defined in the Retirement Plan) from the
following sources:

	 	(a)	 	the Schering-Plough Retirement Benefits Equalization Plan, as amended from time
to time;
	 
	 	(b)	 	any other contract, agreement, or other arrangement with the Corporation or an
Affiliate (excluding the Retirement Plan) to the extent, as solely determined by the
Committee, it provides defined-benefit-type retirement or pension benefits; and
	 
	 	(c)	 	any contract, agreement, or other arrangement with the Corporation or an
Affiliate to the extent it provides defined-contribution-type retirement or pension
benefits which are the Participant’s or Former Participant’s primary source of
retirement or pension benefits, as solely determined by the Committee.

	1.18	 	“Participant” means an executive employee of the Corporation or an Affiliate who becomes a
participant in the Plan pursuant to Section 2.
	 
	1.19	 	“Plan” means the Schering-Plough Corporation Supplemental Executive Retirement Plan, as
amended from time to time.
	 
	1.20	 	“Retirement” means the Separation from Service of a Participant on or after his or her Normal
Retirement Age, Early Retirement Date, or Change of Control Termination Date, or the deemed
retirement of a Participant pursuant to an employment agreement between him or her and the
Corporation or an Affiliate.
	 
	1.21	 	“Retirement Plan” means the Schering-Plough Corporation Retirement Plan, as amended from time
to time.
	 
	1.22	 	“Retirement Plan Benefit” means the amount of benefit payable from the Retirement Plan to a
Participant, Former Participant or Beneficiary.
	 
	1.23	 	“Separation from Executive Service” means the earlier of (i) the Participant’s Separation
from Service or (ii) the date the Chief Executive Officer of the Corporation determines that
the individual is no longer entitled to participate in the Plan.
	 
	1.24	 	“Separation from Service” means “separation from service” as defined under Section
409A(a)(2)(A)(i) of the Code.
	 
	1.25	 	“Service” means an individual’s period of employment with the Corporation or an Affiliate as
a Participant prior to his or her Separation from Executive Service for which benefits are
accrued under the Retirement Plan; provided, however, that if the individual has completed at
least 10 years of Benefit Service under the Retirement Plan, Service shall also include the
individual’s period of employment with the Corporation or an Affiliate for which benefits are
accrued under the Retirement Plan prior to the date he or she became a Participant of this
Plan; and provided further, that if the individual first becomes a Participant of this Plan on
or after January 1, 2005, Service shall also include the individual’s Eligibility Service
under the Retirement Plan prior to membership in the Retirement Plan, up to one year, if not
otherwise included in his or her Service pursuant to the prior provisions of this Section
1.25.

 

 

	1.26	 	“Supplemental Benefit” means a supplemental retirement benefit or survivor benefit as
determined under Article 4 or Article 5, respectively, as of any date of reference.
	 
	1.27	 	“Surviving Spouse” means a person of the opposite sex of the Participant or Former
Participant who is the Participant’s or Former Participant’s husband or wife as provided in
the Defense of Marriage Act of 1996, who has been married to the Participant throughout the
one-year period ending on the Participant’s date of death.

ARTICLE 2

ELIGIBILITY AND PARTICIPATION

	2.1	 	Any person who was a Participant in the Plan immediately prior to the Effective Date shall
continue to be a Participant as of the Effective Date, provided the person is in active
employment with the Corporation or an Affiliate on the Effective Date.
	 
	2.2	 	Any person who does not become a Participant of the Plan pursuant to Section 2.1 shall become
a Participant of the Plan on the later of:

	 	(a)	 	the first date he or she is in Executive Status; and
	 
	 	(b)	 	the earlier of (i) the date he or she is credited with one (1) year of
Eligibility Service under the Retirement Plan and (ii) the date he or she has attained
age 40;

provided the person is in active employment with the Corporation or an Affiliate at that
time.

	2.3	 	A person who is on a leave of absence on the date he or she would otherwise become a
Participant pursuant to Section 2.2 shall become a Participant on the date his or her leave of
absence terminates and he or she resumes active employment.

ARTICLE 3

ELIGIBILITY FOR BENEFITS

	3.1	 	Each Participant or Former Participant is eligible to commence receiving benefits under this
Plan on the first day of the month coincident with or next following his or her Separation
from Service.

ARTICLE 4

AMOUNT AND FORM OF RETIREMENT BENEFIT

	4.1	 	Normal Retirement Date or Postponed Retirement Date. The Supplemental Benefit of a
Participant or Former Participant whose Separation from Service occurs on or after his or her
Normal Retirement Age shall be calculated as an annual benefit payable monthly commencing on
the first day of the calendar month coincident with or next following his or her Retirement
equal to:

	 	(a)	 	the sum of:

	 	(i)	 	2% of his or her Average Final Earnings multiplied by his or
her years of Service up to twenty years, plus
	 
	 	(ii)	 	1% of his or her Average Final Earnings for each year of
Service in excess of twenty years;

 

 

up to a maximum of 55% of Final Average Earnings, reduced by:

	 	(b)	 	his or her Other Retirement Income and Retirement Plan Benefit.

The annual benefit calculated under this Section 4.1 of a Participant or Former Participant
who was in Executive Status prior to the Effective Date and who has completed 10 years of
Service in Executive Status and reached age 60 on or prior to his or her Separation from
Service shall not be less than an annual benefit payable monthly commencing on the first day
of the calendar month coincident with or next following his or her Retirement equal to 35%
of his or her Average Final Earnings reduced by his or her Other Retirement Income and
Retirement Plan Benefit.

	4.2	 	Early Retirement Date or Change of Control. The Supplemental Benefit of a
Participant or Former Participant whose Separation from Service occurs prior to his or her
Normal Retirement Date but on or after his or her Early Retirement Date or after a Change in
Control shall be calculated as described in Section 4.1 above, but with reference to the
Participant’s Early Retirement Date or Change of Control Termination Date rather than his or
her Normal Retirement Age and reduced by (i) the reduction factor set forth in the following
chart that corresponds to the Participant’s age at his or her Early Retirement Date or Change
of Control Termination Date, as applicable:

	 	 	 	 	 
	 	 	 
	Age at Early Retirement Date or Change of Control Termination Date	 	Reduction Factor
	64

	 	 	0	%
	63

	 	 	0	%
	62

	 	 	0	%
	61

	 	 	0	%
	60

	 	 	0	%
	59

	 	 	4	%
	58

	 	 	8	%
	57

	 	 	12	%
	56

	 	 	16	%
	55

	 	 	20	%

	 	 	 	 	 
	Age at Change of Control Termination Date	 	Reduction Factor
	54

	 	 	25.5	%
	53

	 	 	31	%
	52

	 	 	36	%
	51

	 	 	40	%
	50

	 	 	44	%
	49

	 	 	48	%
	48

	 	 	51	%
	47

	 	 	54	%
	46

	 	 	57	%
	45

	 	 	59.5	%
	44

	 	 	62	%

 

 

	 	 	 	 	 
	Age at Change of Control Termination Date	 	Reduction Factor
	43

	 	 	64	%
	42

	 	 	66	%
	41

	 	 	68	%
	40

	 	 	70	%
	39

	 	 	71.5	%
	38

	 	 	73	%
	37

	 	 	74	%
	36

	 	 	75	%
	35

	 	 	76	%

The annual benefit calculated under this Section 4.2 of a Participant or Former Participant
who was in Executive Status prior to the Effective Date and who has completed 10 years of
Service in Executive Status and reached age 60 on or prior to his or her Separation from
Service shall not be less than an annual benefit payable monthly commencing on the first day
of the calendar month coincident with or next following his or her Retirement equal to 35%
of his or her Average Final Earnings reduced by his or her Other Retirement Income and
Retirement Plan Benefit.

	4.3	 	Other Termination. The Supplemental Benefit of a Participant or Former Participant
whose Separation of Service occurs for a reason other than Retirement, disability, death, or
following a Change of Control, shall be calculated as an annual benefit payable monthly
commencing on the first day of the calendar month coincident with his or her Normal Retirement
Date.
	 
	4.4	 	Disability. In the event that a Participant or Former Participant has become totally
and permanently disabled for the purposes of the Corporation’s long-term disability program,
disability retirement benefits shall be payable under this Plan, and shall be determined
pursuant to Section 4 hereof, with Earnings (as defined herein) and Service deemed to have
continued for such period, if any, as shall be applicable under the disability retirement
benefit provisions of the Retirement Plan.
	 
	4.5	 	Pre-March 1, 1987 Provisions. For the purpose of determining Supplemental Benefits
under the foregoing paragraphs of this Section 4:

	 	(a)	 	Service prior to March 1, 1987, for all executives who were Participants in the
Plan on January 1, 1983, shall be deemed to be in an E-grade pay status; and
	 
	 	(b)	 	in no event shall the Supplemental Benefit of an actively employed executive
participating in the Plan on March 1, 1987, be less than the Supplemental Benefit that
would be payable if such Supplemental Benefit were determined under the provisions of
the Plan as in effect immediately prior to such date and the executive’s earnings and
service as of February 28, 1987.

	4.6	 	Form of Payment. Supplemental Benefits shall be payable in a lump sum as soon as
administratively practicable following the Participant’s Separation from Service. Such lump
sum shall be of Equivalent Actuarial Value to the benefit calculated under Sections 4.1, 4.2,
4.3, 4.4, and 4.5 above that would have been provided commencing as of the Participant’s
Normal Retirement Date, or the first day of the month following the Participant’s Separation
from Service, if later. Notwithstanding the preceding sentence, in the case of a Participant
whose Separation from Service is on or after his or her Early

 

 

	 	 	Retirement Date, the lump sum shall be of Equivalent Actuarial Value to the benefit that
would have been calculated under Sections 4.1, 4.2, 4.4, and 4.5 above that would have
provided commencing on the first day of the month following the Participant’s Separation
from Service. Notwithstanding the foregoing, the portion of the Supplemental Benefit that
is accrued after December 31, 2004, for any Participant who is a specified employee as
defined in Section 409A of the Code, shall be delayed for a period of six (6) months
following such Participant’s Separation from Service. If a Participant or a Former
Participant has a Separation from Service by Retirement and dies before receiving full
payment of his or her Supplemental Benefit, payment of the Supplemental Benefit shall be
made to his or her Beneficiary, subject to Section 5. Payment made in accordance with this
Section 4.6 shall constitute full and complete satisfaction of the Corporation’s obligation
in respect thereof. A Participant may elect to defer receipt of his or her Supplemental
Benefit in accordance with the terms of the Savings Advantage Plan to the extent that such
plan complies with Section 409A of the Code in a manner that will not result in the
incurrence of Section 409A excise taxes to the Participant.
	 
	4.7	 	Section 162(m) of the Code. The Committee may, in its sole discretion, defer the
payment of any lump sum to a Participant or a Former Participant who is a “covered employee”
as defined in Section 162(m) of the Code, if such payment would be subject to such Section’s
limitation on deductibility; provided, however, that such payment shall not be deferred to a
date later than the earliest date in the year in which such payment would not be subject to
such limitation; and further provided that the Corporation shall, at the time of payment of
any amount so deferred, pay interest thereon from the due date thereof at the Deferral Rate,
compounded quarterly.
	 
	4.8	 	Delayed Payment. If a lump sum payment to a Participant or Former Participant, or
the Beneficiary thereof, including a payment delayed pursuant to Section 4.6, commences later
than the 15th day of the month following the month in which the Participant’s
Separation from Service occurs, the Corporation shall, at the time of payment of such lump
sum, pay interest thereon from the 15th day of the month following the month in
which the Participant’s Separation from Service occurs to the date payment is issued at the
Deferral Rate, compounded quarterly.
	 
	4.9	 	Forfeitability. Except as otherwise provided herein, the Supplemental Benefit of
each Participant and Former Participant under the Plan shall at all times be 100 percent
vested and nonforfeitable.
	 
	4.10	 	Offset. If any Retirement Plan Benefit or Other Retirement Income is payable to a
Participant, Former Participant or Beneficary, and the form of such Retirement Plan Benefit or
Other Retirement Income is other than a lump sum or such Retirement Income or Other Retirement
Benefit is paid at a time other than when the Supplemental Benefit is paid under this Plan,
such Retirement Plan Benefit or Other Retirement Income shall be converted to a lump sum of
Equivalent Actuarial Value for purposes of determining the offset applied under this Plan.
The Committee shall be empowered to make such additional equitable adjustments to accomplish
the purposes of the foregoing as the Committee in its sole discretion shall determine.
	 
	4.11	 	Enhanced or Reduced Benefits. Notwithstanding the forgoing and subject to the
approval of the Corporation’s Chief Executive Officer, an employment or similar agreement
between a Participant and the Corporation may enhance or reduce the benefit provided to or on
behalf of such Participant under this Plan. In no event will an enhanced benefit be
separately paid under both an employment or similar agreement and this Plan in a manner that
results in a duplicative benefit.

 

 

ARTICLE 5

SURVIVING SPOUSE BENEFIT

	5.1	 	Upon the death of a Participant or Former Participant while employed by the Corporation or an
Affiliate who has at least 5 years of Eligibility Service under the Retirement Plan, his or
her Surviving Spouse shall be entitled to a survivor benefit under this Plan based upon the
Participant’s or Former Participant’s Supplemental Benefit immediately prior to his or her
death, but without any reduction factor, in accordance with the following schedule:

	 	 	 	 	 
	Age and Service at Time of Death	 	Survivor Benefit
	a.

	 	Age 55 or more with 5 or more years of
Eligibility Service.
	 	50% of the Participant’s or
Former Participant’s
Supplemental Benefit.
	 
	 	 	 	 
	b.

	 	Ages 50 through 54 with 5 or more
years of Eligibility Service, and age plus
years of Eligibility Service equal 65.
	 	50% of the Participant’s or
Former Participant’s
Supplemental Benefit
multiplied by 80.0%.
	 
	 	 	 	 
	c.

	 	Below age 50 with 5 or more years of
Eligibility Service, and age plus years of
Eligibility Service equal 65.
	 	50% of the Participant’s or
Former Participant’s
Supplemental Benefit
multiplied by 53.1%.

less any Retirement Plan Benefit or Other Retirement Income payable to the Surviving Spouse
whether or not the Participant or Former Participant has elected or has been deemed to have
elected to have such benefit or retirement income paid to his or her Surviving Spouse.

	5.2	 	Upon the death of any Participant or Former Participant who does not have at least 5 years of
Eligibility Service, his or her Surviving Spouse shall be entitled to a survivor benefit under
this Plan based upon his or her Supplemental Benefit immediately prior to his or her death and
computed as if he or she had retired on the day before his or her death and had elected a 50%
Qualified Joint and Survivor Annuity (as defined in the Retirement Plan) for the benefit of
his or her Surviving Spouse. Such survivor benefit under this Plan shall be reduced by any
Retirement Plan Benefit and Other Retirement Income payable to the Surviving Spouse whether or
not the Participant or Former Participant has elected or has been deemed to have elected to
have such benefit or retirement income paid to his or her Surviving Spouse.
	 
	5.3	 	A Surviving Spouse’s benefits provided under Section 5.1 or 5.2 shall be paid in a lump sum
as of the first day of the month following the month in which the Participant or Former
Participant dies. Such lump sum shall be of Equivalent Actuarial Value to the benefit
calculated under Section 5.1 or 5.2 that would have been provided commencing as of the
Participant’s Normal Retirement Date, or the first day of the month following the
Participant’s date or death, if later. Notwithstanding the preceding sentence:

	 	(a)	 	in the case of a Participant whose date of death is on or after his or her
attainment of age 55 and who, prior to March 1, 2006, both became a Participant of the
Plan and attained age 55, or
	 
	 	(b)	 	in the case of a Participant whose date of death is on or after the later of
his or her attainment age 55 and completion of five years of Eligibility Service:

 

 

the lump sum shall be of Equivalent Actuarial Value to the benefit that would have been
provided commencing on the first day of the month following the Participant’s date of death.

ARTICLE 6

COMMITTEE

	6.1	 	Committee. The Plan shall be administrated by the Committee, which shall consist of
such persons as may be appointed by the Chief Executive Officer of the Corporation. The
Committee shall have (a) complete discretion to supervise the administration and operation of
the Plan, (b) complete discretion to adopt rules and procedures governing the Plan from time
to time, and (c) sole authority to give interpretive rulings with respect to the Plan.
	 
	6.2	 	Binding Effect of Decisions. Any decision or action of the Committee with respect to
any question arising out of or in connection with the administration, interpretation, or
application of the Plan shall be final and binding upon all persons having any interest in the
Plan.
	 
	6.3	 	Indemnification of Committee. The Corporation shall indemnify and hold harmless the
members of the Committee against any and all claims, loss, damage, expense, or liability
arising from any action or failure to act with respect to the Plan, except in the case of
gross negligence or willful misconduct by any such member.

ARTICLE 7

AMENDMENT AND TERMINATION OF PLAN

	7.1	 	Amendment. The Board, or the Board’s delegate, on behalf of itself and of each
Affiliate, may at any time amend, suspend, or reinstate any or all of the provisions of the
Plan, except that no such amendment, suspension, or reinstatement may adversely affect any
Participant’s or Former Participant’s vested Supplemental Benefit, as it existed immediately
before the effective date of such amendment, suspension, or reinstatement, without such
Participant’s or Former Participant’s prior written consent. Written notice of any amendment
or other action with respect to the Plan shall be given to each Participant.
	 
	7.2	 	Termination. The Board, or the Corporation’s delegate on behalf of itself and of
each Affiliate, in its sole discretion, may terminate this Plan at any time and for any reason
whatsoever. On and after Plan termination, the Committee shall take those actions necessary
to administer any Supplemental Benefits existing prior to the effective date of such
termination; provided, however, that a termination of the Plan shall not adversely affect the
value of a Participant’s or Former Participant’s Supplemental Benefit, or the timing or method
of distribution of a Participant’s or Former Participant’s Supplemental Benefit, without the
Participant’s or Former Participant’s prior written consent.

ARTICLE 8

MISCELLANEOUS

	8.1	 	Funding. Participants, their Beneficiaries, and their heirs, successors, and assigns
shall have no secured interest or claim in any property or assets of the Corporation. The
Corporation’s obligation under the Plan shall be merely that of an unfunded and unsecured
promise of the Corporation to pay money in the future.

 

 

	8.2	 	Expenses. All expenses of administering the Plan shall be borne by the Corporation,
to the extent they are not paid from any trust fund established by the Corporation to help
defray the costs of providing Plan benefits.
	 
	8.3	 	Nonassignability. No right or interest under the Plan of a Participant, Former
Participant, or his or her Beneficiary (or any person claiming through or under any of them)
shall be assignable or transferable in any manner or be subject to alienation, anticipation,
sale, pledge, encumbrance, or other legal process or in any manner be liable for or subject to
the debts or liabilities of any such Participant, Former Participant or Beneficiary.
	 
	8.4	 	Claims Procedure.

	 	(a)	 	Claim. A person who believes that he or she is being denied a
Supplemental Benefit to which he or she is entitled under the Plan (hereinafter
referred to as a “Claimant”) may file a written request for such benefit with the
Committee, setting forth the claim.
	 
	 	(b)	 	Claim Decision. Upon receipt of a claim, the Committee shall advise
the Claimant that a reply will be forthcoming within 90 days and shall, in fact,
deliver such reply within such period. If special circumstances require that the
90-day time period be extended, the Committee shall so notify the Claimant and shall
render the decision as soon as possible, but no later than 180 days after receipt of
the request for review.
	 
	 	(c)	 	Information. If the claim is denied in whole or in part, the Claimant
shall be provided an opinion, using language calculated to be understood by the
Claimant, setting forth:

	 	(i)	 	The specific reason or reasons for such denial;
	 
	 	(ii)	 	The specific reference to pertinent provisions of this Plan on
which such denial is based;
	 
	 	(iii)	 	A description of any additional material or information
necessary for the Claimant to perfect his claim and an explanation why such
material or such information is necessary;
	 
	 	(iv)	 	Appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review;
	 
	 	(v)	 	The time limits for requesting a review under subsection (c)
and for review under subsection (d) hereof; and
	 
	 	(vi)	 	A statement of the Claimant’s right to bring an action under
Section 502 of ERISA upon a claim denial on review.

	 	(d)	 	Request for Review. Within 60 days after the receipt by the Claimant
of the opinion described above, the Claimant may request in writing that the Committee
review its determination. The Claimant or his or her duly authorized representative
may, but need not, review the pertinent documents and submit issues and comment in
writing for consideration by the Committee. If the Claimant does not request a review
of the initial determination within such 60-day period, the Claimant shall be barred
and estopped from challenging the determination.

 

 

	 	(e)	 	Review of Decision. Within 60 days after the Committee’s receipt of a
request for review, it will review the initial determination. After considering all
materials presented by the Claimant, the Committee shall render an opinion, drafted in
a manner calculated to be understood by the Claimant, setting forth the specific
reasons for the decision and containing specific references to the pertinent provisions
of this Plan upon which the decision is based and a statement of the Claimant’s right
to bring an action under Section 502 of ERISA. If special circumstances require that
the 60-day time period be extended, the Committee shall so notify the Claimant and
shall render the decision as soon as possible, but no later than 120 days after receipt
of the request for review.

	8.5	 	Limitation of Rights of Participants and Former Participants. Nothing in this Plan
shall be construed as conferring upon any Participant or Former Participant any right to
continue in the employment of the Corporation or an Affiliate, nor shall it interfere with the
rights of the Corporation or an Affiliate to terminate the employment of any Participant or
Former Participant and/or to take any personnel action affecting any Participant or Former
Participant without regard to the effect which such action may have upon such Participant or
Former Participant as a recipient or prospective recipient of Supplemental Benefits under the
Plan. Any amounts payable hereunder shall not be deemed salary or other compensation to a
Participant or Former Participant for the purposes of computing benefits to which the
Participant or Former Participant may be entitled under any other arrangement established by
the Corporation or Affiliate for the benefit of its employees.
	 
	8.6	 	No Limitation on Actions of Corporation or Affiliates. Nothing contained in the Plan
shall be construed to prevent the Corporation or an Affiliate from taking any action that is
deemed by it to be appropriate or in its best interest. No Participant or other person shall
have any claim against the Corporation or an Affiliate as a result of such action.
	 
	8.7	 	Obligations to Corporation. If a Participant or Former Participant becomes entitled
to a distribution of a Supplemental Benefit under the Plan, and if at such time the
Participant or Former Participant has outstanding any debt, obligation, or other liability
representing an amount owing to the Corporation or an Affiliate, the Corporation or Affiliate
may offset such amount owed to it against the amount of benefits otherwise distributable.
Such determination shall be made by the Committee.
	 
	8.8	 	Captions. The captions contained herein are for convenience only and shall not
control or affect the meaning or construction hereof.
	 
	8.9	 	Governing Law. The Plan is intended to constitute an unfunded plan providing
retirement or deferred compensation benefits for officers and highly compensated employees
exempt from the requirements of parts 2, 3, and 4 of Subtitle B of Title I of ERISA. Except
to the extent otherwise provided in ERISA and the Code, this Plan shall be construed,
regulated, and administered under the laws of the State of New Jersey.
	 
	8.10	 	Successors. The provisions of the Plan shall bind and inure to the benefit of
Schering Corporation, the Corporation, and the Affiliates, and their respective successors and
assigns. The term successors as used herein shall include any corporate or other business
entity that, whether by merger, consolidation, purchase, or otherwise, acquires all or
substantially all of the business and assets of Schering Corporation, the Corporation, or an
Affiliate and successors of any such Corporation or other business entity.
	 
	8.11	 	Illegal or Invalid Provision. In case any provision of the Plan shall be held
illegal or invalid for any reason, such illegal or invalid provision shall not affect the
remaining

 

 

	 	 	parts of the Plan, and the Plan shall be construed and enforced without regard to such
illegal or invalid provision.
	 
	8.12	 	Protective Provisions. Each Participant shall cooperate with the Corporation or an
Affiliate by furnishing any and all information requested by the Corporation or Affiliate to
facilitate the payment of benefits hereunder.
	 
	8.13	 	Withholding Taxes. The Corporation may make such provisions and take such action as
it may deem necessary or appropriate for the withholding of any taxes which the Corporation is
required by any law or regulation of any governmental authority, whether Federal, state, or
local, to withhold in connection with any benefits under the Plan, including, but not limited
to, the withholding of appropriate sums from any amount otherwise payable to, or on behalf of,
the Participant. Each Participant, Former Participant and Beneficiary, however, shall be
responsible for the payment of all individual tax liabilities relating to any such benefits.
	 
	8.14	 	Inability to Locate Participant, Former Participant, or Beneficiary. In the event
that the Committee is unable to locate a Participant, Former Participant or Beneficiary within
two years following the date he or she was to commence receiving payment, the entire
Supplemental Benefit payable shall be forfeited. If, after such forfeiture, the Participant,
Former Participant or Beneficiary later claims such Supplemental Benefit, such Supplemental
Benefit shall be reinstated without interest or earnings thereon and paid pursuant to the
terms of the Plan.
	 
	8.15	 	Facility of Payment. If, in the opinion of the Committee, a person to whom a benefit
is payable under the Plan is unable to care for his or her affairs because of illness,
accident, or any other reason, any payment due the person, unless prior claim therefore shall
have been made by a duly qualified guardian or other duly appointed and qualified
representative of such person, may be paid to some member of the person’s family, or to some
other party who, in the opinion of the Committee, has incurred expenses for such person. Any
such payment shall be a payment for the account of such person and shall be a complete
discharge of liability under the Plan.
	 
	8.16	 	Notice. Any notice or filing required or permitted to be given to the Committee
under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or
certified mail, to the Corporation’s Senior Vice President of Human Resources, or to such
other entity as the Committee may designate from time to time. Such notice shall be deemed
given as to the date of delivery, or, if delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or certification.

PHLLIB-888551.8EX-10.C

 

EXHIBIT 10(c)

NATIONAL COLLECTIVE BARGAINING AGREEMENT

By and Between:

LIZ CLAIBORNE, INC.

AND

UNITE HERE

Effective: June 1, 2006

Expires: May 31, 2009

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE 1 :

	 	UNION RESPONSIBILITY
	 	- 2 -
	 
	 	 	 	 
	ARTICLE 2:

	 	BARGAINING UNIT AND UNION RECOGNITION
	 	- 2 -
	 
	 	 	 	 
	ARTICLE 3:

	 	UNION MEMBERSHIP
	 	- 3 -
	 
	 	 	 	 
	ARTICLE 4:

	 	EMPLOYER’S OBLIGATIONS
	 	- 4 -
	 
	 	 	 	 
	ARTICLE 5:

	 	AFTER ACQUIRED AND NEW FACILITIES
	 	- 5 -
	 
	 	 	 	 
	ARTICLE 6:

	 	TRIAL PERIOD
	 	- 8 -
	 
	 	 	 	 
	ARTICLE 7:

	 	HIRING RATES AND MINIMUM WAGE SCALES
	 	- 8 -
	 
	 	 	 	 
	ARTICLE 8:

	 	CHANGE IN LEGAL MINIMUMS
	 	- 9 -
	 
	 	 	 	 
	ARTICLE 9:

	 	COST OF LIVING ADJUSTMENT
	 	- 9 -
	 
	 	 	 	 
	ARTICLE I0:

	 	JOB SECURITY/HANDLING AND DISTRIBUTION OF PRODUCT
	 	- 10 -
	 
	 	 	 	 
	ARTICLE 11:

	 	CHANGE IN PAY SYSTEMS
	 	- 10 -
	 
	 	 	 	 
	ARTICLE 12:

	 	WAGE INCREASES
	 	- 11 -
	 
	 	 	 	 
	ARTICLE 13:

	 	CHECK-OFF
	 	- 11 -
	 
	 	 	 	 
	ARTICLE 14:

	 	NO DISCRIMINATION
	 	- 12 -
	 
	 	 	 	 
	ARTICLE 15:

	 	EMPLOYMENT STANDARDS
	 	- 12 -
	 
	 	 	 	 
	ARTICLE 16:

	 	HEALTH AND SAFETY
	 	- 13 -
	 
	 	 	 	 
	ARTICLE 17:

	 	HOURS OF WORK AND OVERTIME
	 	- 14 -
	 
	 	 	 	 
	ARTICLE 18:

	 	TEMPORARY EMPLOYEES
	 	- 15 -
	 
	 	 	 	 
	ARTICLE 19:

	 	HOLIDAYS, PERSONAL DAYS/PAID TIME OFF AND SICK DAYS
	 	- 16 -
	 
	 	 	 	 
	ARTICLE 20:

	 	BEREAVEMENT LEAVE
	 	- 17 -
	 
	 	 	 	 
	ARTICLE 21 :

	 	SHOP STEWARD
	 	- 17 -
	 
	 	 	 	 
	ARTICLE 22:

	 	SENIORITY/LAYOFF
	 	- 17 -
	 
	 	 	 	 

- i -

 

	 	 	 	 	 
	ARTICLE 23:

	 	WORK ASSIGNMENTS
	 	- 18 -
	 
	 	 	 	 
	ARTICLE 24:

	 	DISCHARGES
	 	- 18 -
	 
	 	 	 	 
	ARTICLE 25:

	 	LEAVES OF ABSENCE
	 	- 18 -
	 
	 	 	 	 
	ARTICLE 26:

	 	TIME CLOCK
	 	- 20 -
	 
	 	 	 	 
	ARTICLE 27:

	 	RIGHT TO VISIT SHOP
	 	- 20 -
	 
	 	 	 	 
	ARTICLE 28:

	 	EMPLOYEE BENEFIT FUNDS
	 	- 21 -
	 
	 	 	 	 
	ARTICLE 29:

	 	DISABILITY
	 	- 27 -
	 
	 	 	 	 
	ARTICLE 30:

	 	GRIEVANCES AND ARBITRATION
	 	- 27 -
	 
	 	 	 	 
	ARTICLE 31:

	 	NO STRIKE/NO LOCKOUT PLEDGES
	 	- 29 -
	 
	 	 	 	 
	ARTICLE 32:

	 	NO REDUCTION OF WAGES OR OTHER BENEFITS
	 	- 29 -
	 
	 	 	 	 
	ARTICLE 33:

	 	STRUCK WORK-LABOR DISPUTE CROSSING PICKET LINES
	 	- 30 -
	 
	 	 	 	 
	ARTICLE 34:

	 	TEMPORARY APPOINTMENT TO UNION STAFF
	 	- 30 -
	 
	 	 	 	 
	ARTICLE 35:

	 	CONFORMITY TO LAW
	 	- 30 -
	 
	 	 	 	 
	ARTICLE 36:

	 	JURY DUTY
	 	- 31 -
	 
	 	 	 	 
	ARTICLE 37:

	 	UNION ACTIVITIES
	 	- 31 -
	 
	 	 	 	 
	ARTICLE 38:

	 	JOINT LABOR-MANAGEMENT COMMITTEE
	 	- 31 -
	 
	 	 	 	 
	ARTICLE 39:

	 	VACATIONS
	 	- 32 -
	 
	 	 	 	 
	ARTICLE 40:

	 	CUTTING
	 	- 32 -
	 
	 	 	 	 
	ARTICLE 41:

	 	REPORTING PAY
	 	- 32 -
	 
	 	 	 	 
	ARTICLE 42:

	 	NO WAIVER
	 	- 32 -
	 
	 	 	 	 
	ARTICLE 43:

	 	MANAGEMENT RIGHTS
	 	- 33 -
	 
	 	 	 	 
	ARTICLE 44:

	 	DURATION OF AGREEMENT
	 	- 33 -

- ii -

 

     THIS
AGREEMENT is made and entered into as of June 1, 2006 by and between LIZ CLAIBORNE,
INC., (hereinafter designated as the “Company”) and UNITE HERE (hereinafter designated as the
“Union” or “UNITE HERE”).

W I T N E S S E T H :

     WHEREAS, the Company is engaged in an integrated process of production, handling and
distribution of garments; and

     WHEREAS, the Employer owns or leases and operates several distribution centers and samplerooms
in which the Union represents the majority of the employees employed by the Employer, and the
Employer recognizes the Union as the exclusive bargaining representative of its warehouse and
sampleroom employees; and

     WHEREAS, the various distribution centers and samplerooms have been governed by separate
collective bargaining agreements covering individual facilities; and

     WHEREAS, to provide uniformity of conditions and ease of administration, the parties choose to
consolidate the separate bargaining units and collective bargaining agreements into a national
multi-plant agreement, to be supplemented by local agreements covering specific facilities; and

     WHEREAS, the parties desire to cooperate in establishing conditions which will tend to secure
a living wage, fair conditions and standards of employment and to provide for a fair and peaceful
adjustment of all disputes so as to secure uninterrupted operation of work.

     NOW, THEREFORE, the parties hereto agree as follows:

- 1 -

 

ARTICLE 1: UNION RESPONSIBILITY

     The Union shall have the sole responsibility for administering and enforcing this Agreement
and for obtaining compliance with its terms. The sole persons authorized or having the power to act
as agents of the Union, or to bind the Union legally with respect to matters arising out of this
Agreement or arising out of the relations between the Employer and the Union, or to subject the
Union to any liability whatever by reason of any acts or omissions is the President of the Union
and the managers of the signatory Locals thereof or such substitute or additional persons as the
Union may hereafter formally designate by written notice to the Employer. The Union shall not be
responsible for the acts or omissions of any other person, including members and employees of the
Union.

ARTICLE 2: BARGAINING UNIT AND UNION RECOGNITION

     2.1 The scope of the bargaining unit covers the following distribution centers and samplerooms
presently located at:

HQ 1 — 1 Claiborne Avenue, North Bergen, NJ

1441 Broadway and 240 West 40th Street, New York, New York

Mt. Pocono 1 and 2 — 1 Liz Way, Mt. Pocono, Pennsylvania,

Cosmetics — 120 Herrod Boulevard, Dayton, New Jersey

Jewelry — 1 Powder Hill Road, Lincoln, RI

     2.2 The bargaining unit consists of all distribution center and sampleroom employees,
including cutters and related crafts, and all housekeeping department employees employed by the
Employer at the covered facilities. Local supplemental agreements may further define the

- 2 -

 

bargaining unit at specific facilities. It is agreed that the Union represents a majority
of said employees and that during the term of this Agreement the Union shall be the sole and
exclusive bargaining representative of all employees in the bargaining unit as hereinabove
described. Office, clerical, supervisory and executive employees, as well as any employees who may
be employed at the retail facility at any location, are excluded from the provisions hereof.

     2.3 “Workers” or “employees” as used in this Agreement means those employees
covered by the bargaining unit as well as those who may be hereinafter included.

     2.4 This Agreement shall be the National Agreement. There shall be Supplemental Agreements
which govern certain terms and conditions of employment at individual facilities. In case of
conflict between this National Agreement and a Supplemental Agreement, the Supplemental Agreement
shall govern. Any dispute unresolved as to whether a conflict exists between the National and a
Supplemental Agreement or whether a particular dispute is subject to resolution under the
provisions of the National or a Supplemental Agreement shall be subject to arbitration pursuant to
Article 30 of this National Agreement.

ARTICLE 3: UNION MEMBERSHIP

     3.1 Good standing membership in the Union shall be a condition of employment with the Employer
for all bargaining unit employees who have such membership on the date of execution of this
Agreement; it shall also be a condition of employment with the Employer for all other bargaining
unit employees on and after the thirtieth (30th) day following the execution or effective date of
this Agreement, or on or after the thirtieth (30th) day following the beginning of their
employment, whichever is the later. If the foregoing is prohibited by law, then at the

- 3 -

 

corresponding time all employees shall be required as a condition of employment (unless
prohibited by law) to pay to the Union a service charge to reimburse it for the cost of negotiating
and administering this agreement.

     3.2 Good standing membership in the Union for purposes of this Article means such
membership in the Union through membership in any affiliate of UNITE.

     3.3 In the event that paragraph 3.1 may not be lawfully applied, all employees shall be
informed by the Employer of the existence of this Agreement and the terms thereof and shall be
advised by the Employer that, in its opinion, good labor-management relations are and will be best
served and promoted if such employees become and remain members of the Union. The Employer agrees
to implement and promote this provision by posting copies of the following notice near all time
clocks and in other prominent places such as bulletin boards in its facilities:

“NOTICE TO ALL EMPLOYEES”

     This plant is being operated under the terms of an agreement with UNITE HERE. All wages, hours
and other conditions of employment are regulated by the terms of this agreement.

     Good labor management relations will be best served and promoted, in our opinion, if all our
employees covered by this agreement become and remain members of this Union.

Signed:

Name of Employer:

ARTICLE 4: EMPLOYER’S OBLIGATIONS

     All of the terms and provisions of this Agreement shall be binding upon the Employer and upon
its subsidiaries, successors and assigns. In the event the Employer sells or transfers its business
to another, it shall nevertheless continue to be liable for the complete performance of

- 4 -

 

the terms and provisions of this Agreement by the purchaser or transferee until the
purchaser or transferee expressly, in writing, assumes such performance and agrees to be fully
bound by the terms and provisions of this Agreement.

ARTICLE 5: AFTER ACQUIRED AND NEW FACILITIES

     5.1 This Article applies only to facilities, not including retail stores, in the United States
and Canada and in no manner affects the Employer’s rights regarding the assignment of work as set
forth in See. 10.3 of the collective bargaining agreement enabling the Employer to assign any work
to whichever facility it chooses.

     5.2 The Employer agrees to give the Union the address of facilities it opens or acquires plus
a list of those classifications covered by this agreement that are (or will be) employed in such
facilities as early in the process of acquisition or opening as possible.

     5.3 When the Employer acquires a new facility by merger, acquisition or consolidation, it
shall advise the Union within one (1) year after such merger, acquisition or consolidation whether
the facility will be maintained by the Employer or disposed of in some fashion. If the facility is
to be shut down, the Employer is obligated to commence to close the facility by taking substantial
steps towards that end (such as the issuance of WARN notices, the announcement of a firm closure
date, or the removal of substantial product) within two (2) years from the date the facility was
acquired. In any event, from the time the Employer acquires such facility, it shall not engage,
directly or indirectly, in any anti-union discussions or activities, nor shall the Union disparage
the Employer, its products, practices or policies should it have any contact with the employees.

     5.4 The parties agree that the time limits set forth in See. 5.3 above are outside limits

- 5 -

 

     and in the spirit of cooperation the employer agrees to notify the Union promptly after a
decision
is made to either retain or dispose of an acquired facility.

     5.5 With respect to newly opened facilities or acquired facilities where the Employer has
notified UNITE HERE that it will maintain such facility or facilities, the Employer shall be
neutral and shall not oppose the Union’s organizing efforts directly or indirectly.

     5.5.1 The Employer shall recognize the Union when it demonstrates majority support
through signed authorization cards. If the facility is in the United States, the
bargaining unit shall be constituted as set forth in Sec. 2.2 of this Agreement. If the
facility is in Canada, the bargaining unit shall be mutually agreed upon or, absent
agreement, constituted as set forth in the Canadian National Collective Labour
Agreement between Liz Claiborne (Canada) Ltd. and UNITE HERE. A mutually agreeable
neutral, or, absent agreement, an Arbitrator designated in this Agreement shall
determine whether the Union has obtained majority support. The Employer waives its
right to resolve the representation issue through the NLRB processes.

     5.5.2 Upon request of the Union, the Employer shall provide access to the Union to
communicate with employees concerning representation in non-work areas at non-work
times. The Union and its representatives shall not disparage the Employer, its
products, practices, or policies.

     5.5.3 Any dispute arising from this provision shall be resolved through final and
binding arbitration as set forth in this Agreement.

     5.5.4 At the earliest time permitted by law, the parties shall meet and confer
regarding terms of employment to be set forth in any collective bargaining agreement

- 6 -

 

to be negotiated by the parties covering the facility. The arbitrator is
authorized to award appropriate relief if the Union fails to meet and confer, including
relieving the Employer of its obligations under this article if the Union’s failure is
egregious.

     5.5.5 In the case of a facility where the bargaining unit is projected to consist
of 100 or less employees when fully integrated in the Employer’s operations, the
expiration date shall be the same as the expiration date of the National Agreement. In
all other instances, the parties will agree upon a termination date as part of the
negotiations for a collective bargaining agreement.

     5.6 In those instances where the Employer acquires Companies whose distribution facilities are
operated by third parties that do not have a collective bargaining relationship with UNITE HERE or
any of its affiliates, and who under the provisions of the second paragraph of Sec. 10.2 are
required to have a collective bargaining relationship with UNITE HERE or an affiliate thereof, the
Employer shall assign such work to its existing UNITE HERE facilities or assign the work to a third
party in accordance with the terms of Article 10.

     5.7 Nothing contained herein shall require the Employer to violate the law or any
binding legal or contractual obligation.

     5.8 The parties affirm their commitment to the free choice of employees concerning
unionization. Neither party shall interfere with, restrain or coerce employees in the exercise of
their rights to support, or to not support, unionization.

- 7 -

 

ARTICLE 6: TRIAL PERIOD

     The first thirty (30) calendar days of employment for newly- hired employees shall be deemed
their trial period during which time they may be discharged without regard to cause. The trial
period may be extended for another fourteen (14) calendar days with the written consent of the
Union. Upon the expiration of the trial period, the newly-hired employee will be deemed a regular
employee. The trial period shall not be abused by the Employer and any claim of abuse shall be the
subject of arbitration hereunder.

ARTICLE 7: HIRING RATES AND MINIMUM WAGE SCALES

     7.1 The hiring rates in effect in the various facilities and job classifications, if any
shall be set forth in the local Supplemental Agreements.

     7.2 All hiring rates at all facilities covered by this agreement shall increase $0.25 per hour
effective, May 28, 2006, $0.25 per hour effective, June 3, 2007, and an additional $0.25 per hour
effective June l, 2008. The hiring rates may not be decreased. They may increase only upon mutual
agreement of the parties.

     7.3 Upon satisfactory completion of the trial period, an employee shall receive an
additional $0.50 per hour.

     7.4 All employees who have completed their trial period as of May 28, 2006 shall receive at
least $0.25 an hour above the newly-established minimum wage rate in Paragraph 7.3. Employees who
are in their trial period on May 28, 2006 shall receive the greater of the wage increase effective
on May 28, 2006 or $0.50 above the May 28, 2006 hiring minimum, but not both.

- 8 -

 

ARTICLE 8: CHANGE IN LEGAL MINIMUMS

     If, during the term of this Agreement, a new applicable federal or state minimum wage law is
enacted or becomes effective which increases the applicable minimum wage hereunder, then the
minimum wage set forth herein shall be automatically increased so that such minimum wage shall be
no less than 15% above any newly-established state or federally mandated legal minimum.

ARTICLE 9: COST OF LIVING ADJUSTMENT

     Should the cost of living, as reflected in the U.S. Consumer Price Index for the period of
June 2006 through November 2007 increase ten (10%) percent over the Consumer Price Index for May
2006, as published in June 2006, then the regular hourly wages of all employees shall be increased
ten cents ($0.10) per hour. Additionally, hourly increases of five cents ($0.05) per hour shall be
paid for each additional increase in the cost of living of one-half of one percent (.5%). Cost of
living increases payable under this provision shall not exceed twenty-five cents ($0.25) per hour.
Rises in the Consumer Price Index shall be measured over an eighteen (18) month period, as set
forth above, by utilizing the consumer Price Indices for the Urban Wage Earners and Clerical
workers, U.S. Cities, Average, printed and released in the months of July 2006 through December
2007. Wage increases due hereunder shall be effective January 4, 2008.

- 9 -

 

ARTICLE 10: JOB SECURITY/HANDLING AND DISTRIBUTION OF PRODUCT

     10.1 No employee shall be involuntarily permanently laid off as a direct result of the
Employer’s use of a third party contractor to distribute its product.

     10.2 To protect the job security of the employees of the Employer and to preserve labor
standards among workers who are employed in the integrated process of production of the Employer’s
garments, the parties agree to the following:

     In the event the Employer engages a third party
contractor to operate a distribution facility entirely dedicated to the distribution of the
Employer’s garments for a period in excess of two (2) years, or if the Employer engages a third
party contractor where the Employer’s garments will take over 50% of the square footage of the
third party’s facility for more than three (3) months, such third party contractor must have a
collective bargaining relationship with UNITE or an affiliate thereof.

     10.3 Subject to the protections set forth above, nothing contained herein or in any Local
Supplement shall be deemed to restrain the Employer in its determination as to the methods or means
by which its products are handled and distributed, including, but not limited to, the allocation of
products and functions among the Employer’s facilities or the use of facilities not owned, leased
or operated by the Employer.

ARTICLE 11: CHANGE IN PAY SYSTEMS

     The Employer reserves the right to change the method of payment for some of the general
distribution or quality assurance employees to an incentive system. Employees on the incentive
system shall not be paid less than their current hourly rate. The Union may assert

- 10 -

 

reasonable challenges to the fairness of the proposed incentive system. Any disputes regarding
the implementation of such systems may be submitted to the arbitrator for resolution.

ARTICLE 12: WAGE INCREASES

     12.1 The wage increases for employees shall be as follows:

     Effective May 28, 2006, employees shall receive a wage increase of $0.50 per
hour.

     Effective June 3, 2007, employees shall receive a wage increase of $0.50 per
hour.

     Effective June 1, 2008, employees shall receive a wage increase of $0.50 per
hour.

ARTICLE 13: CHECK-OFF

     13.1 Subject to the requirements of law concerning authorization and assignment by the
employees individually, the Employer shall deduct membership dues (which shall be deemed to include
periodic fixed dues, initiation fees and assessments) or, to the extent permitted by law, service
charges, from the earnings of its employees monthly and transmit the same to the Union promptly in
accordance with past practice thereafter.

     13.2 The Employer shall deduct, from the wages or salary of each employee who voluntarily
executes the Political Action Committee (“PAC”) payroll deduction authorization form that is
Attachment A to this Agreement, the contributions at the frequency of deductions so authorized on
that form, and remit those contributions to the Union at the same time as the

- 11 -

 

Employer remits to the Union the Union dues that are separately voluntarily authorized by
employees to be deducted from their gross wages or salaries and remitted to the Union pursuant to
Article 13 Section 1 of this Agreement. With each PAC contribution
remittance the Employer shall provide the Union with a written itemization setting forth as to each
contributing employee his or her name and the contribution amount. The parties acknowledge that the
Employer’s cost of administration of this PAC payroll deduction have been taken into account by the
parties in their negotiation of this Agreement and had been incorporated in the wage, salary and
benefits provisions of this Agreement. 13.3 Sums deducted by the Employer under the provisions of
Paragraphs 13.1 and 13.2 of this Article shall be kept separate and apart from general funds of the
Employer and shall be held in trust by the Employer for the benefit
of the Union, and/or the PAC, as
the case may be.

ARTICLE 14: NO DISCRIMINATION

     The Employer shall not discriminate against any employee on the basis of race, creed,
religion, color, national origin, sex, age, sexual orientation, citizenship status, disability,
veteran’s status or membership in or activities on behalf of the Union, unless required by this
Agreement. The Employer, however, shall not employ children or adolescents where such employment is
prohibited by an applicable federal or state law or regulation.

ARTICLE 15: EMPLOYMENT STANDARDS

     15.1 All wages, earnings, overtime and holiday pay shall be paid on the day they were
customarily paid, but no later than the Friday following the week in which they were earned.

- 12 -

 

     15.2 The Employer shall not charge an employee for any damage to materials unless
caused willfully.

     15.3 The Employer shall supply necessary machines and tools to its employees.

     15.4 No officer
of the Employer, supervisory employee or any other person outside of the bargaining unit shall
perform any work covered by this Agreement, except as specified in Article 18 or in the event of
unexpected absenteeism, an emergency, or for training purposes.

     15.5 All paid breaks shall be fifteen (15) minutes.

     15.6 Employees may elect to receive their pay by having the Employer make a direct
deposit to the employee’s designated account.

ARTICLE 16: HEALTH AND SAFETY

     16.1 The Employer shall fully comply with all standards, laws and regulations of
health, sanitation and safety, including all regulations of the local fire department.

     16.2 The Employer shall provide an adequate number of drinking fountains.
Restrooms and work areas shall be kept in a clean, sanitary condition, and will be well-lighted
and heated.
Air conditioning shall be maintained in the Employer’s
facilities where it currently exists.

     16.3 A worker may refuse to perform work which he reasonably believes would pose a
serious threat of injury or illness.

     16.4 The Employer shall be exclusively responsible for health, safety and sanitation
conditions in its shop. Neither the Union nor its agents or representatives shall be liable for any
job-related injury, illness or death.

- 13 -

 

     16.5 The Joint Labor-Management Committee set forth in Article 38 shall address issues of
health and safety and may make recommendations for the correction of unsafe or harmful conditions
and practices and may make recommendations for rules and procedures to prevent accidents and
disease and for the promotion of the health, safety and sanitation of the workers.

     16.5.1 The Employer shall facilitate limited safety training of employees by, at the
Union’s request: 1) providing one day’s paid leave of absence per year to one employee in
each shop designated by the Union to attend health and safety training, and 2) permitting
all employees to participate in one paid hour per year of safety training in the shop
during working time. The parties shall schedule such training at a mutually convenient
time. This safety-training paragraph does not diminish in anyway the Employer’s
responsibility to provide a safe and healthful workplace under this Agreement. The Union
will provide such training only to the extent feasible and is not obligated to provide such
training.

ARTICLE 17: HOURS OF WORK AND OVERTIME

     The provisions governing hours of work and overtime, including overtime premiums shall be set
forth in the local supplemental agreements covering the individual facilities and the practices
developed thereunder shall continue.

- 14 -

 

ARTICLE 18: TEMPORARY EMPLOYEES

     18.1 The Employer, from time to time, may have the need for additional temporary employees.
Such temporary employees shall not be employed by the Employer for longer than forty (40)
consecutive days.

     18.2 Temporary employees shall not be considered to be in the bargaining unit. The temporary
employees shall be informed of their temporary status when hired and shall acknowledge the same in
writing, a copy of which shall be provided to the Union.

     18.3 In the event that a temporary employee remains employed beyond the forty (40) day period,
then such employee shall be placed in the bargaining unit and benefit fund contributions for that
employee shall be paid retroactively from the original date of hire. Union obligations for such
employee shall be computed on the basis of the original date of hire.

     18.4 The Employer shall not employ temporary employees if any of the bargaining unit employees
performing such work are on layoff. The Employer agrees that the job security and earning
opportunities shall not be diminished for the regular bargaining unit employees when temporary
employees are used. The Employer shall not abuse its right to use temporary employees to avoid
hiring regular bargaining unit employees.

     18.5 Temporary employees may be used in the housekeeping department: a) in the event the
Company is understaffed in housekeeping, until bargaining unit employees can be hired; b) the
Company is engaged in a special project which requires additional personnel power for a limited
period of time; or c) the Company is confronted by emergency circumstances.

- 15 -

 

ARTICLE
19: HOLIDAYS, PERSONAL DAYS/PAID TIME OFF AND SICK DAYS

     19.1 Each Supplemental Agreement shall set forth the number of designated holidays and sick
days, personal days or paid days off that shall be granted. Employees shall be eligible for
holidays at time of hire and those employees who have completed their trial period shall be
eligible for paid time off, sick days, or personal days.

     19.2
Employees may refrain from working one (1) additional day each year on a
national or ethnic holiday of their choice, but without pay.

     19.3 An employee shall not be eligible for holiday pay if:

     19.3.1 He or she is absent from work on the work day immediately before or after
the holiday, except for a justifiable cause, which shall include absence from work when
the shop is not in operation; or

     19.3.2 He or she becomes disabled and the holiday
falls on a day beyond the sixtieth (60th) day after the said employee last worked in
the shop.

     19.4 When personal days are provided, they must be scheduled with the approval of
the Employer. Sick days and/or personal days may be taken in one-half
(1/2) day increments.

     19.5 Employees shall be paid for unused sick days, personal days and paid days off at the end
of the applicable leave year. The local Supplemental Agreements shall set forth the system for
accruing days off, that is, calendar year, contract year or anniversary date.

     19.6 The Employer shall not count any compensated time off as absences for
disciplinary purposes.

     19.7 Holiday pay shall be paid at an employee’s regular hourly rate. When an
incentive system is in effect, the applicable local Supplemental Agreement shall set forth the

- 16 -

 

computation for holidays and other paid days off, which shall not be lower than the extant
holiday rate.

     19.8 When a holiday falls during an employee’s vacation, the employee shall receive
the holiday pay and shall not be charged a vacation day for that day.

ARTICLE 20: BEREAVEMENT LEAVE

     The provisions governing bereavement leave shall be set forth in the local supplemental
agreements covering the individual facilities and the practices developed thereunder shall
continue.

ARTICLE 21: SHOP STEWARD

     There shall be in the facility of the Employer Shop Steward(s)designated by the
Union. The Shop Steward(s)shall be compensated by the Employer for time unavoidably lost
during working hours in the process of adjusting grievances. For purposes of layoff only, Shop
Steward(s) shall have super-seniority over other bargaining unit employees.

ARTICLE 22: SENIORITY/LAYOFF

     The provisions governing seniority and lay off shall be set forth in the local supplemental
agreements covering individual facilities and the practices developed thereunder shall continue.

- 17 -

 

ARTICLE 23: WORK ASSIGNMENTS

     The provisions governing transfers, promotions, job classifications, cross-training and job
postings shall be set forth in the local supplemental agreements covering individual facilities and
the practices developed thereunder shall continue.

ARTICLE 24: DISCHARGES AND DISCIPLINE

     24.1 No employee shall be discharged without just and sufficient cause, except during his
trial period. If the discharge or disciplinary act is found to be unjustified, the employee shall
be reinstated and may be compensated for his loss of earnings during the period of such discharge
or disciplinary act.

     24.2 All disciplinary notices, including those for absences, shall be of no effect one
year after the occurrence.

     24.3 The Employer shall inform the Union of all discipline imposed on an employee,
including verbal warnings.

ARTICLE 25: LEAVES OF ABSENCE

     25.1 The Employer shall grant reasonable leaves of absence to employees for a justifiable
cause. Except as may be required by law, the Employer is not required to grant a leave for a period
of less than five (5) consecutive work days. Employees on leaves of absence shall not lose any job
rights and shall be entitled to return to their regular job prior to such absence.

- 18 -

 

25.2 RETURN FROM MILITARY SERVICE –

25.2.1 Any employee who has been conscripted, inducted or drafted into the military service
of the United States Government, shall, upon termination of such service, be restored to his
former position or to a position of like seniority status and pay provided he applied for
re-employment within ninety (90) days after the date of his discharge.

25.2.2 Employees who are called to active duty by the National Guard or Reserve will be
paid the difference between their military pay and their regular
straight time wages for up to four
(4) weeks. This shall not include scheduled training exercises for weekends or two weeks.

25.3 FAMILY AND MEDICAL LEAVE

     25.3.1 The Employer shall grant, upon request of the Union, up to six (6) months’ leave of
absence without pay to male and female employees for the employee’s own serious health condition
as defined by the Family and Medical Leave Act (“FMLA”), or for the birth or adoption of a child or
for the care of family member or live-in partner with a serious health condition.

     25.3.2 The Employer may hire a provisional employee for a period not to exceed six (6) months
to take the place of any employee who is on Family Leave. Upon the date of hire, the Employer
shall give the Union and the provisional employee notice of the employee’s provisional status. During
such period, provisional employees shall be entitled to all the rights of regular employees under this
Agreement. The Employer may retain a provisional employee as long as such action does not displace
the

 - 19 - 

 

employee on Family Leave or any other regular employee. An employee on Family Leave shall
be entitled to return to his or her regular job prior to such absence, or an equivalent
position, and, subject to the foregoing, shall not lose any rights or privileges under
this Agreement.

     25.3.4 The employee, whether or not s/he is eligible under the FMLA, may use family
and medical leave on an intermittent basis (as defined by the FMLA) to the extent that
such use is permitted under the rules and regulations promulgated under the FMLA.

     25.4 The Employer may require proper medical certification for leaves relating to an
employee’s own serious health condition, or for the care of a seriously ill family member or live
in partner.

     25.5 An employee’s medical leave for work-related or non-work related injury or illness may
last up to one year. FMLA leave runs concurrently with contractual medical leave.

ARTICLE 26: TIME CLOCK

     The Employer shall maintain an adequate number of time clocks on its premises, and each
employee covered by this Agreement shall punch his or her time card before starting work and at the
completion of work and before and after lunch.

ARTICLE 27: RIGHT TO VISIT SHOP

     Duly authorized representatives of the Union, including engineers and accountants, shall
have the right to visit the premises of the Employer at reasonable times for the purpose of

 - 20 - 

 

ascertaining whether the provisions of this Agreement are being complied with. Such visits shall be
conducted so as not to cause interference with operations. In addition, the Employer shall provide
access to relevant accounting books and records as the Union may reasonably request in order to
ascertain whether the provisions of this Agreement are being complied with.

ARTICLE 28: EMPLOYEE BENEFIT FUNDS

     28.1 The Employer shall pay monthly to the Union a cents per hour contribution, a monthly rate
and/or an amount equivalent to a percentage, as described below or in the applicable Supplemental
Agreement, of each total gross weekly payroll (before deduction for federal, state or local taxes),
including direct holiday pay, vacation pay and bonuses, of all bargaining unit employees (whether
Union or non-Union employees, and whether regular or trial period employees) employed in its facility.
All payments shall be due on the tenth (10th) day of the following month. Such payments shall be
allocated towards the following Funds:

     28.1.1 Towards the UNITE HERE National Retirement Fund, a trust fund established by collective
agreement for the purpose of providing pensions or annuities on retirement, disability or death of
participants.

     28.1.2 Towards the UNITE HERE National Health Fund, a trust fund established by
collective agreement for the purpose of providing employees with health, welfare and
recreation benefits and services.

     28.1.3 The Employer shall contribute to substitute employee benefit funds as may be
required by local Supplemental Agreement.

 - 21 - 

 

     28.2 For those facilities participating in the UNITE HERE National Retirement Fund (the
“NRF”), the Employer shall contribute to the NRF to provide the prior basic benefit and to provide
the new, enhanced benefit [NRF 2000] at a rate set forth in the local supplemental agreement. The
Employer shall provide the Union, for the NRF, on a monthly basis (within thirty (30) days of the
end of each month), the name, social security number, gross wages
paid to each covered employee and
the number of hours paid for in the period (or such other information as the Union may require in
the future related to the NRF 2000 Benefit.) The Union may, in its sole discretion, assign
collection of employer contributions to the UNITE HERE National Retirement Fund or any other
designee.

     28.3 For the month of June 2006 the Employer will pay the funds at the existing rate for
health and welfare benefits. Effective July 1, 2006 and thereafter, the Employer shall contribute
the monthly figure set forth in the applicable supplemental agreement. The Employer shall
contribute for each employee beginning with the first of the month following the completion of the
probationary period. The Employer shall maintain contributions for six months for an employee on
disability leave or workers compensation leave, and for three months for temporary layoff or for
other leave described under paragraph 25.3 of this Agreement. The applicable employee co-premiums,
if any, shall be set forth in the appropriate local supplement The Employer further agrees that the
co-payment shall be made to a Section 125 Plan. Should the Employer not have its own Section 125
Plan, the Employer shall participate in a Fund established Section 125 Plan. In addition to any
other requirements which the Fund may establish concerning an employee’s eligibility to participate
in and/or receive benefits from the  Fund, it is also understood that no contributions will be required
for any employee or former

 - 22 - 

 

employee
of the Employer who is participating in and/or receiving benefits
from the Fund as a result of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The Union shall
provide the Employer with a copy of all benefit enrollment forms for
employees who have elected family
coverage through the National Health Fund. If those enrollment forms
are not available on hard copy,
the Union shall provide the Employer with access to such data in whatever form it is maintained.
Additionally, the Union shall promptly supply copies of enrollment forms reflecting a change in
status to the Employer as soon as such forms are completed.

     28.4 If at any time during the life of this Agreement, as a result of government mandated
requirements, a benefit or a cost of any of the benefits shall be increased, or a new benefit
required, or the cost to any fund of providing existing or new
benefits is increased, the Union shall
have the right to request additional company contributions to cover the expense thereof.

     28.5 The said National Health Fund shall continue to be maintained and administered by the
Board of Trustees in accordance with the by-laws or rules and
regulations adopted by the Board of
Trustees for that purpose. The Employer shall have no legal or equitable right, title, claim or
interest in or to said Fund, or the administration thereof. No individual employee have any legal
or equitable right, title or interest in, or claim against, his or any other employer’s payments
towards the National Health Fund, or against said Fund, except as may be provided the by-laws or
rules and regulations of said Fund.

     28.6
The said National Retirement Fund shall be administered in accordance
with its by-laws or
rules and regulations by a Board of Trustees. Each Board of Trustees shall be

 - 23 - 

 

composed of Union representatives and an equal number of representatives of employer contributors
to that Fund. In the event that the Board of Trustees shall be deadlocked on any issue or matter
arising in connection with its Fund, the same shall be decided by a
neutral Person as set forth in the
by-laws or rules and regulations of said Fund, and his decision shall be final and binding. The
parties hereto hereby ratify, confirm and approve the composition and membership of each Board of
Trustees as now or hereafter constituted.

     28.7 Each Board of Trustees mentioned in Paragraph 28.5 or 28.6 above shall adopt and
promulgate such by-laws or rules and regulations to effectuate the
purpose of its Fund as it may deem
necessary and desirable, including the detailed basis upon which
payments from the Fund will be made,
and shall have the power to modify the same from time to time without notice, whenever it may deem
it necessary or desirable to do so. The parties hereby agree to be bound thereby and they are
hereby incorporated in and made part of this Agreement. It is agreed that such Boards of Trustees
may not increase the Company’s level of contribution during term of this Agreement.

     28.7.1 The Board of Trustees or other body administering any of the benefit funds,
except the UNITE HERE National Retirement Fund, is hereby authorized and empowered, in
its sole discretion and upon such basis as it deems desirable, to transfer or mingle
the assets of or to merge said Fund with any other fund or funds now existing or
hereafter established and provided for in a collective agreement UNITE HERE or an
affiliate thereof. In the event of such mingling, transfer or merger, the amounts
hereinabove provided to be allocated towards the respective funds shall thereafter be
paid over to the fund or funds with which there has been

 - 24 - 

 

such mingling, transfer or merger.

     28.7.2
The Board of Trustees of the UNITE HERE National Retirement Fund is hereby
authorized and empowered, in its sole discretion and upon such basis as it deems
desirable, to transfer or mingle the assets of said Fund or to merge
said Fund with any
other retirement fund or funds.

     28.8
None of the monies paid into the National Retirement Fund shall be
used for any purpose other
than to provide for pensions or annuities on retirement or death of
employees and to pay the operating
and administrative expenses thereof. The monies of the other benefit
funds shall be kept separate and
apart from all other monies except as allowed in Paragraphs 28.7.1
and 28.7.2.

     28.9 Only the assets of each benefit fund shall be available for the payment of the benefits
provided by that benefit fund and only to the extent that such benefit fund is financially able to
make such payments.

     28.10
The Employer shall have no legal or equitable right, title, claim or
interest in or to said
Funds. No individual employee shall have any legal or equitable
right, title or interest in, or claim
against, his or any other employer’s payments towards said Funds or against said Funds, except as
may be provided by the by-laws or rules and regulations of said Funds.

     28.11 An annual audit of each Fund shall be made by accountants designated by the Board of
Trustees. A statement of the results of such audit shall be made available for inspection by
interested persons at the principal office of the Fund and at such other places as may be
designated by its Board of Trustees.

 - 25 - 

 

     28.12 In the event benefit fund contributions are collected on behalf of a health and welfare
fund other than the National Health Fund listed in Paragraph 28.1.2, the person who collected the
contributions shall remit the contributions to the proper health and
welfare fund.

     28.13 The Union or the Board of Trustees of a Fund, or both of them, shall be proper
parties-in-interest to enforce collection of payments due from the
Employer towards said Funds. Should the matter be submitted to arbitration and the arbitrator find against the Employer, he may
also order and direct the Employer to pay interest at the current
prime rate of interest as set by the
Amalgamated Bank of New York, 1710 Broadway, New York, New York. He may also order and direct the
Employer to pay the cost of investigation of payments due. Should the matter be submitted to
arbitration and the arbitrator find against the Employer, the
arbitrator may order and direct the
Employer to pay the cost of investigation together with reasonable attorneys’ fees and other
expenses incurred in connection with the matter. In addition, the arbitrator may grant such other
relief as he deems appropriate under the circumstances.

     28.14 The Union or the appropriate Board of Trustees or Boards of Trustees shall have the
right to enforce this Article, including the provisions pertaining to delinquent contributions, by
proceeding through arbitration or by instituting appropriate action before a court or governmental
agency or by pursuing any other remedies provided by law or this Agreement.

     28.15 The Employer shall contribute one dollar ($1.00) per month for each employee after s/he
has completed ninety (90) days of employment for the purposes of education and scholarship to a
fund designated in the local supplement.

     28.16
Life Insurance. The Employer will bear the cost of a life insurance benefit of
$35,000.00 per employee through the Amalgamated Life Insurance Company at a cost of $0.40

 - 26 - 

 

per month per thousand dollars of insurance coverage per employee.

ARTICLE 29: DISABILITY

     Disability benefits currently in effect shall continue and shall be specified in the
applicable Supplemental Agreement.

ARTICLE 30: GRIEVANCES AND ARBITRATION

     30.1 Any and all disputes between the Union or any employees and the Employer involving an
alleged breach or issue of application or interpretation of this
Agreement or a local Supplemental
Agreement shall be adjusted as follows:

     30.1.1 The shop steward, together with a representative of the Union, shall attempt to settle
the matter with a representative of the Employer. No adjustment shall be deemed binding on the
Union unless approved by the Manager of the Union or the designated Business Agent servicing the
facility. Disputes not specific to an employee or group of employees may be brought by a
representative of the aggrieved party.

     30.1.2 A grievance is time barred if it is not submitted in writing to the
Employer within sixty (60) working days of the occurrence of the condition or such time
as the affected employee or the Union knew of the condition giving
rise to the grievance. In the case of a continuing violation, a
remedy may be granted for up to one year prior to the filing of the
grievance. The time limit for filing grievances shall not apply to
disputes concerning payment of benefit fund contributions or disputes regarding

 - 27 - 

 

Article 10.

     30.1.3 If they shall fail satisfactorily to dispose of any such grievance, the
matter shall be submitted to an arbitrator selected by mutual
agreement from the panel set
forth herein. If the parties cannot agree on an arbitrator, they shall select an
arbitrator by alternately striking members of the panel. The arbitrator who heard the
previous case shall be struck first. The panel shall consist of:

Daniel Brent

Robert Light

Joan Parker

Rosemary Townley

     30.2 Either party desiring to use the arbitration procedure as herein provided shall transmit
a written notice to the other party no later than four (4) months after the filing of grievance.
The award or decision of the arbitrator, in addition to granting such
other relief as the arbitrator may
deem proper, may contain provisions commanding affirmative acts or restraining acts and conduct of
the parties. If either party shall default in appearing before the
arbitrator, he is empowered
nevertheless to take the proof of the party appearing and render an award thereon. Any award or
decision of the arbitrator shall be final and binding and shall be enforceable appropriate
proceedings at law or in equity. His fee shall be borne equally by
the parties hereto.

     30.2.1 The parties agree that any papers, notices or processes to initiate or continue an
arbitration hereunder may be served by mail, and all papers, notices
or processes in any application
to a court to confirm or enforce an arbitration award hereunder, including service of the papers
conferring jurisdiction of the parties upon the court, may be served by certified or regular mail,
directed to the last-known address of the Employer or the Union.

 - 28 - 

 

     30.3 The procedure herein established for the adjustment of disputes shall be the
exclusive means for the determination of all disputes, complaints,
controversies, claims or grievances
whatsoever, including the arbitrability of any dispute. It is intended that this provision shall be
interpreted as broadly and inclusively as possible. Neither party
shall institute any action or proceeding in
a court of law or equity, State or Federal, or before an
administrative tribunal, other than to compel
arbitration, as provided in this Agreement, or with respect to the award of an arbitrator. This
provision shall be a complete defense to and also grounds for a stay of any action or proceeding
instituted contrary to this Agreement.

     30.4
Any dispute, complaint, controversy, claim or grievance hereunder
which any employee may have
against the Employer may be instituted and processed only by the
Union in the manner herein provided. No
employee shall have the right individually to institute or process any action or proceeding with reference
to any dispute, complaint, controversy, claim or grievance, or to initiate or compel arbitration in
the event the Union fails or refuses to proceed to with arbitration.

 ARTICLE 31: NO STRIKE/NO LOCKOUT PLEDGES

     There
shall be no strikes or lock-outs during the term of this Agreement
for any reason
whatsoever, except as set forth in Article 33.

 ARTICLE 32: NO REDUCTION OF WAGES OR OTHER BENEFITS 

     Wages and other terms and conditions of
employment now existing or hereafter established at any facility of the Employer shall not be
lowered, except by mutual agreement.

 - 29 - 

 

Any custom or practice existing in a facility at the time of the execution of this Agreement more
favorable to the employees than the provisions hereof shall be continued as heretofore.

ARTICLE 33: STRUCK WORK-LABOR DISPUTE CROSSING PICKET LINES

     To the extent that a contractor’ manufacturing work involves the integrated process of
production of the Employer’s garments, the Employer and its contractors have a close unity interest
with each other and in any labor dispute, and to such extent, the Employer and its contractors are
not neutrals with respect to each other but are jointly engaged in an integrated production effort.
Accordingly, to the extent permitted by law, it shall not be considered a breach of this agreement
on the part of the Union, any of its affiliates or on the part of any employee if such worker
refuses to cross any lawful picket line recognized by the Union or its affiliates or to enter upon the
lawfully picketed premises of said contractor, either of his or own volition or by direction of the
Union or the International or to refuse to handle garments from a contractor with whom the Union or
any of its affiliates has a lawful labor dispute.

 ARTICLE 34: TEMPORARY APPOINTMENT TO UNION STAFF

     The Union shall have the right to appoint an employee to its staff on a temporary basis,
not to exceed nine (9) months, without said employee losing his seniority rights.

ARTICLE 35: CONFORMITY TO LAW

     35.1 If any provision of this Agreement or the enforcement or performance of such
provision is or shall at any time be determined to be contrary to law by or enjoined by a court or

 - 30 - 

 

administrative agency, then such provision shall not be applicable or enforced or performed
except to the extent permitted by law. The Union and the Employer
shall thereupon negotiate a substitute provision.

     35.2 If any provision of this Agreement or its application is held invalid or enjoined,
the remainder of this Agreement shall not be affected thereby.

 ARTICLE 36: JURY DUTY

     Jury duty leave shall be set forth in the local supplemental agreement.

 ARTICLE 37: UNION ACTIVITIES

     37.1 Any employee who is called from his or her employment to serve on the Union’s Negotiating
Committee shall be paid his or her full wage during the entire time
he or she shall serve on the Union’s
Negotiating Committee. A maximum of one committee member for every twenty-five (25) bargaining unit
employees shall receive this benefit.

     37.2 The Union shall have access to bulletin boards in the facilities.

     37.3 The Company will pay five thousand dollars (5,000.00) for printing and
translation of the contract. The Union will do the printing and translation.

ARTICLE 38: JOINT LABOR-MANAGEMENT COMMITTEE

     The
Employer and the Union shall designate an equal number of
representatives to form a Joint
Labor-Management Committee. The Committee shall meet regularly at
least one (1)  time per month. The
Employer shall compensate employees at their regular rate of pay for serving on

 - 31 - 

 

     the Committee during working time.

 ARTICLE 39: VACATIONS

     Vacation pay and time off shall be set forth in the applicable local Supplemental
Agreements.

 ARTICLE 40: CUTTING

     Any
cutting and related tasks, such as marking, grading and digitizing,
shall be performed under the
conditions specified in the Supplemental Agreement covering employees
represented by Local 10.

 ARTICLE 41: REPORTING PAY

     Employees shall receive reporting (call-in) pay as set forth in the applicable local
Supplement Agreements.

 ARTICLE 42: NO WAIVER

     The failure of either party to this Agreement to require strict performance of any provision
of the Agreement shall not be deemed a waiver or abandonment of any
of the rights or  remedies provided herein
for violation of the Agreement or any provision thereof; nor
shall it constitute a waiver or abandonment of any right or remedy herein provided for a
subsequent violation of any provision of the Agreement.

 - 32 - 

 

 ARTICLE 43: MANAGEMENT RIGHTS

     All rights and prerogative which may lawfully be exercised by management and which are not
specifically abridged or limited by this Agreement or the applicable local Supplemental Agreement
are reserved to the Employer.

 ARTICLE 44: DURATION OF AGREEMENT

     This Agreement shall be effective June 1, 2006 and continue in effect until midnight of the
31st day of May, 2009.

     IN WITNESS WHEREOF, the parties shall have hereunto set their
hands and seals the year and date hereinabove written.

	 	 	 	 	 
	 

	 	 	 	 
	LIZ CLAIBORNE, INC.	 	 
	 
	 	 	 	 
	By:

	 	/s/ John Moroz	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	UNITE HERE	 	 
	 
	 	 	 	 
	By:

	 	/s/ Bruce Raynor	 	 
	 

	 	 	 	 
	 

	 	Bruce Raynor, President	 	 
	 
	 	 	 	 
	LOCAL 10	 	 
	 
	 	 	 	 
	By:

	 	/s/ Richard Guido	 	 
	 

	 	 	 	 
	 

	 	Richard Guido, Manager	 	 
	 
	 	 	 	 
	LOCAL 23-25	 	 
	 
	 	 	 	 
	By:

	 	/s/ May Chen	 	 
	 

	 	 	 	 
	 

	 	May Chen, Manager	 	 

 - 33 - 

 

	 	 	 	 	 
	 

	 	 	 	 
	LOCAL 99	 	 
	 
	 	 	 	 
	By:

	 	/s/ Christine Kerber	 	 
	 

	 	 	 	 
	 

	 	Christine Kerber, Manager	 	 
	 
	 	 	 	 
	NEW ENGLAND JOINT BOARD	 	 
	 
	 	 	 	 
	By:

	 	/s/ Warren Pepicelli	 	 
	 

	 	 	 	 
	 

	 	Warren Pepicelli, Manager	 	 
	 
	 	 	 	 
	PENNSYLVANIA, OHIO AND SOUTH JERSEY	 	 
	JOINT BOARD, LOCAL 109	 	 
	 
	 	 	 	 
	By:

	 	/s/ David Melman	 	 
	 

	 	 	 	 
	 

	 	David Melman, Manager	 	 

 - 34 -

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