Document:

Exhibit 10.2

 

Labor
Contract

Agreement

 

between

 

Frank
Holton Company

A Division of Conn-Selmer, Inc.

 

and

 

Local No. M94

of the

International Brotherhood of
Boilermakers,

Iron Shipbuilders, Blacksmiths,
Forgers & Helpers

 

 

Effective August 16, 2005

Through

July 20, 2008

 

 

AGREEMENT

 

THIS AGREEMENT made and effective this 16th
day of August, 2005 by and between Conn-Selmer, Inc., and its successors
located and doing business in Elkhorn, Wisconsin (hereinafter referred to as
the “Company”), and LOCAL NO. M94 of THE INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, IRON SHIPBUILDERS, BLACKSMITHS, FORGERS & HELPERS
(hereinafter referred to as the “Union”).

 

WITNESSETH:

 

SECTION 1.                                This
Agreement is entered into for the purpose of collective bargaining on wages,
hours, and working conditions and to provide a method of adjusting grievances
arising in regard thereto during the term of this Agreement.

 

SECTION 2. The parties hereto agree to
abide by all provisions herein and to work in harmony for the promotion of the
business.

 

ARTICLE I

RECOGNITION

 

SECTION 1.  The Company recognizes the Union as
collective bargaining agent for all employees, except supervisors and those in a
technical, clerical or administrative capacity.

 

SECTION 2.  Supervisors are hereby defined as supervisory
employees having direction over the work of other employees and who shall have
charge of recognized departmental divisions including, but not restricted to,
Machining, Fabrications, Tool Room, Valve, Large Horn Mount, Small Horn Mount,
Assembly, Buffing, Repair, Inspection and Maintenance or who shall have general
supervision in two or more of the above departments.

 

SECTION 3. Clerical and Administrative employees are defined as
those whose work consists primarily of mental rather than physical effort and
which may involve record keeping, figuring, typing, filing, etc.

 

SECTION 4. A Lead Person is a regular
Union member who shall perform production work. In addition, the employee may
supervise other departmental employees and direct the performance of work as
scheduled by the supervisor.  A Lead Person has no authority to fire or
hire, nor recommend the same. The employee shall be paid a $.50 per hour above
the highest job grade of the department.

 

SECTION 5. Employees not coming under
the provisions of this Agreement, i.e., Supervisors,
Clerical and Administrative employees, shall not become members of the Union
and if transferred to such work, shall resign from the Union.

 

2

 

SECTION 6. Summertime help (students)
shall be required to become Union members following 90 continuous calendar days
of annual employment.

 

ARTICLE II

REPRESENTATION

 

SECTION 1. The Union shall elect a Union
Shop Committee whose duties it shall be to confer with the Company on all
matters of mutual interest that may arise between the Company and the Union.
Prior to any company postings, the Company agrees to discuss with the Union
Shop Committee, policy changes, and plant rules. In addition, the Company
agrees to prior discussions regarding layoffs and recalls with the Union.

 

SECTION 2. It is understood and agreed
that all grievance meetings shall be held during the first shift (day shift)
during the working hours and the Company shall pay the Union Committee for all
lost time for said meeting.

 

SECTION 3.  The Company shall permit employees to take a
leave of absence, without pay, as official representatives of the Union to
attend State or International conventions, conferences or workshops, subject to
the following:

 

a)              As to the Union’s
International Convention, a maximum of two (2) employees may receive an
excused leave of absence up to a maximum of five (5) days during such
Convention.

 

b)             As to State,
conferences or workshops, a maximum of two (2) employees may receive an
excused leave of absence during said conferences and/or workshops.  Such leave(s) shall not exceed three (3) conferences
or workshops per calendar year.

 

c)            The Company shall
grant an excused leave of absence for four (4) employees for the purpose
of arbitration hearing, the formulation of contract proposals and negotiations
of same.

 

Not withstanding the above, the Company shall grant the Union President
an excused absence with one (1) month notice to attend to Union business
away from the Company premises not to exceed the five (5) days per
calendar year.

 

ARTICLE III

MANAGEMENT RIGHTS

 

All rights of Management, which are not
specifically limited by the provisions of other articles of the Agreement, are
retained by the Company. The Management of the business and the direction of
the working forces including, but not limited to, the right to plan, direct and
control all the operation of services to be performed in or at the plant or by
employees of the Company; to assign and transfer employees; to schedule the
working hours; to hire, promote, to suspend, discipline, discharge for cause,
or to relieve

 

3

 

employees because of lack of work or for other legitimate reasons; to
make and enforce reasonable shop rules and reasonable regulations; to
introduce new and improved methods, materials, equipment or facilities, are the
exclusive functions of Management, limited only by the express language of this
Agreement addressed to a specific function of Management; provided, however,
that such rights shall not be exercised to conflict with any of the express
written provisions of this Agreement.

 

ARTICLE IV

GRIEVANCE PROCEDURE

 

SECTION 1. For the purposes of this
Agreement, a grievance is any dispute or difference of opinion between the
Company and the Union or between the Company and any employee covered by this
Agreement involving the meaning, interpretation or application of the
provisions of this Agreement. All employee grievances and complaints shall be
handled in the following manner:

 

	
  STEP 1.

  	
  Any employee who has a complaint shall
  discuss it orally with the employee’s supervisor either alone or accompanied
  by committeemen, as the employee may desire.

  
	
   

  	
   

  
	
  STEP 2.

  	
  If a complaint is not settled
  satisfactorily as provided in Step 1 and the employee desires to process a
  grievance or if the Union decides to file a general policy grievance, such
  grievance shall be reduced to writing and presented to the employee’s
  supervisor. Such document, to be considered, must be signed by the employee
  and/or the employee’s committeeman and must be presented to the supervisor
  within seven (7) working days after the employee acquired knowledge of
  the event giving rise to the grievance. The supervisor shall provide the
  employee with a written answer to such grievance within seven
  (7) working days.

  
	
   

  	
   

  
	
  STEP 3.

  	
  If the employee or the Union is
  dissatisfied with the supervisor’s answer to Step 2, and the Union desires to
  appeal the grievance further, it may do so by submitting a written appeal to
  the Production Manager within seven (7) working days following receipt,
  by the employee, of the supervisor’s Step 2 answer. The Production Manager
  shall provide the committee with a written answer to a grievance so appealed
  within seven (7) working days.

  
	
   

  	
   

  
	
  STEP 4.

  	
  If the Union is dissatisfied with the
  results of the joint meeting in Step 3, and desires to appeal the grievance
  further, it may do so by submitting a written appeal to the General Manager
  within seven (7) working days following receipt, by the committee, of
  the Production Manager’s Step 3 answer. The General Manager shall provide the
  committee with a written answer to a grievance so appealed within seven
  (7) working days.

  
	
   

  	
   

  
	
  STEP 5.

  	
  If the Union is dissatisfied with the
  General Manager’s answer in Step 4, a joint meeting will be called within
  twenty (20) working days, to be attended by the Company and Union
  representatives to discuss and seek resolutions to the grievance.

  

 

4

 

	
  STEP 6.

  	
  If the Union is dissatisfied with the
  General Manager’s answer in Step 5, and desires to appeal the grievance to
  arbitration, it may do so by giving written notice of its request for
  arbitration to the General Manager within ten (10) working days
  following receipt of the General Manager’s Step 5 answer. Such written notice
  shall identify the particular grievance involved. The grieving party shall request from the
  Federal Mediation and Conciliation Service (“FMCS”) a list of five
  (5) arbitrators. Upon receipt of such list, the Union and the Company
  shall use a coin toss to determine which party shall strike first from the
  list of arbitrators provided by the FMCS. Each party shall strike one name in
  an alternating manor until one name remains. This selection process shall be
  completed within thirty (30) working days of receipt of said list. The grieving party shall notify
  the FMCS of the remaining name. The award of the arbitrator shall be final
  and binding on the Company, the Union and the employee and employees involved.
  The expenses of the arbitrator, including the arbitrator’s fee, shall be
  shared equally by the parties. Each party shall pay its own costs of
  preparation and presentation.

  
	
   

  	
   

  
	
   

  	
  The arbitrator shall only have the power
  and authority to interpret and apply the provisions of this Agreement to the
  grievance presented and the arbitrator’s decision shall apply only to the
  issue arising out of the facts of such grievance. The arbitrator shall have
  no authority to alter, amend, modify, nullify, ignore or add to the
  provisions of this Agreement. The arbitrator shall have the power and
  authority to establish the effective date of any award.

  
	
   

  	
   

  
	
   

  	
  Copies of all arbitration awards shall be
  given to the Company and the Union.

  

 

SECTION 2. Grievances protesting the
discharge of any employee covered by this Agreement must be in writing, must be
signed by the employee or his/her Union representative and must be submitted to
the Production Manager at Step 3 of the foregoing procedure, within five (5) working
days following the date of discharge.

 

ARTICLE V

SENIORITY

 

SECTION 1.  ACQUIRING SENIORITY.   New employees and rehired employees shall be
regarded as probationary employees and shall establish seniority after the
first sixty (60) calendar days of continuous employment with the Company and if
retained thereafter, shall be placed upon the seniority list of last hiring.
(The Company may discharge or transfer employees at any time during
probationary period.)  In case of layoff,
part-time and probationary employees, excluding watchmen and firemen, shall be
laid off first. When a probationary employee is laid off, the employee’s
employment shall terminate unless it is anticipated that the layoff will be
temporary. If the employee is recalled within a period not exceeding the date
of layoff, the employee shall be reinstated rather than rehired.

 

5

 

SECTION 2.  LOSS OF SENIORITY.     Seniority shall be broken for the
following reasons:

 

1.                                       If
the employee is discharged for just cause;

 

2.                                       If
the employee voluntarily quits the employee’s employment;

 

3.                                       After
being laid off and after receiving notice to return to work, an employee fails
to both (a) advise the Company within forty-eight (48) hours of receipt of
such notice of the employee’s intention to return to work, and (b) return
to work within five (5) days of notice to do so;

 

4.                                       If
any employee has seniority of up to one (1) year, and the employee had
been laid off for a period exceeding the amount of seniority, or if an employee
has seniority of more than one (1) year if the employee has been laid off
for a period exceeding five (5) years.

 

Notwithstanding the provisions of paragraph 3
above, a laid-off employee may refuse work offered by the Company without
change of the employee’s seniority status unless the Company can guarantee the
employee at least thirty (30) days of employment, or assure the employee that
to the best of its knowledge and belief, without constituting a guarantee
thereof, the Company could offer the employee at least ninety (90) days’ work.
Seniority rights shall not be impaired by absence on leave mutually agreed to
by the Union and the Company. Upon receipt of a request in writing for a
medical leave of absence, the Company will grant such a leave for the period of
time certified by the employee’s physician. In the case of all approved leaves
of absence, the employee shall retain all seniority rights which the employee
enjoyed at the time of taking the leave. 
If the employee overstays a leave of absence without notice and without
justifiable cause, seniority may be considered to have been broken at the
option of the Company.

 

SECTION 3. SENIORITY LISTS. The Company
shall furnish the Union, upon request, seniority lists of the employees in each
department at the time the request is made and such lists shall include the
employee’s seniority date in the department and the employee’s last date of
hire by the Company. The lists shall be delivered to the Union not later than
ten (10) days from the date of the request. Any challenge as to the
sequence of the seniority lists shall be protested through the grievance
procedure. Seniority lists shall be furnished by the Company to the Union not
less often than every six (6) months. The Company shall furnish to the
Union a list of managers and supervisors who exercise authority over employees
in the bargaining unit and the Company shall keep said list current by
providing the Union with information concerning any additions or deletions
there from.

 

SECTION 4. TRANSFERS. Seniority shall not accrue in more than one
department nor shall an employee’s seniority be transferred from one department
to another. When an employee is temporarily transferred from one department to
another the employee shall continue to accumulate seniority in the department
from which the employee is temporarily transferred and the employee shall not
accumulate seniority to

 

6

 

the
department to which the employee is temporarily transferred.  Any employee may be permanently transferred
to another department only with the consent of the employee in the event the
employee shall lose all seniority in the department from which the employee was
transferred and shall commence to accumulate seniority in the department to
which the employee is transferred and from the date of the transfer. Within
thirty (30) days of a permanent transfer, an employee so transferred may elect
to return to the department from which the employee was transferred without
loss of seniority in the employee’s old department. An employee temporarily
transferred shall receive the rate of pay of the job from which the employee
was transferred or the rate of pay to which the employee is transferred,
whichever is the higher, for the period of transfer. The least senior employee
in the department who is qualified for a job in another department, which
requires additional personnel, will be the one who is transferred.

 

SECTION 5. LAYOFFS AND RECALL.  For purposes of layoff, entitlement to
remaining jobs shall be based upon the following:  average number of units by cell, job efficiency in a batch process, and
attendance; but
when the foregoing factors are relatively equal as between two or more
employees, seniority shall govern. Layoffs in a department shall be governed by
the foregoing factors utilizing departmental seniority and any employees laid
off shall be entitled to exercise the rights set forth in this Section 5.  Reference Attachment A (Batch Process ) and
Attachment B (Cell Production).

 

If a reduction of force within a department
shall necessitate the layoff of an employee with two (2) or more
continuous years of employment with the Company, such an employee may utilize
that seniority to replace any other employee in any other department who has
been continuously employed by the Company for a lesser period, provided the
former has the ability to perform the new job. The employee so replaced, if the
employee has two (2) years or more continuous employment with the Company,
shall have a similar right to replace any employee in any department who has
less continuous employment service with the Company, provided the former
maintains the same level of efficiency as the employee they have displaced
according to the following schedule:  50%
of level after 5 work days, 75% level after 10 work days and 100% level after 15 work days. This procedure will
be followed until an employee is replaced who has less than two (2) years
of continuous service with the Company and in that event, such employee shall
be laid off. An employee who replaces another under this procedure and thereby
enters a new department shall be placed on the bottom of the seniority list in
such new department, but such employee shall have first right to return to his
old job if and when the employee’s old job is reactivated. If at that time an
employee elects not to return to the employee’s old job when it again becomes
available, the employee shall lose all seniority in the employee’s old
department and the employee’s seniority in the employee’s new department shall
date from the time of the employee’s election not to return to the old
department.

 

In the event of the disestablishment of an
entire department and the ceasing of operations of that department, employees
within that department shall be advised whether or not the department is likely
to reopen in the foreseeable future. If it is not likely that the department
will be re-established within the foreseeable future,

 

7

 

employees with two (2) or more years of continuous service with
the Company may then elect to accept permanent transfers to any other
department into which they may transfer pursuant to the foregoing procedure and
in that event their seniority in such new department shall date from the time
of the transfer. An employee may, however, elect not to exercise the employee’s
seniority by replacing an employee with less continuous service and shall have
the option of accepting voluntary layoff subject to recall in line with the employee’s
departmental seniority to the job the employee held at the time of the
layoff.  In the event that work becomes
available in a department in which an employee has been laid off, the Company
may temporarily transfer someone from another department to do the work in
preference to recalling the laid off employee unless the work shall amount to
more sixteen (16) hours per week
for a two (2) week consecutive period.  It is agreed that this provision shall not
operate to give regular and continued work to an employee who otherwise would
be on layoff.  Two (2) days’ notice
shall be given to any employee to be laid off for a week or more.  Failing to give two (2) days’ notice
where applicable, the Company shall give the employee two (2) days’ pay in
lieu thereof, provided, however that the foregoing requirement for notice and
pay in lieu thereof shall not be applicable to layoffs caused by acts of
nature, or power failures that are not due to negligence of the Company. The
Company may reduce hours for a period of four (4) weeks if it becomes
necessary to curtail production due to a reduction in business.  If at the end of the time business conditions
still warrant, the Company agrees to consult with the Union as to the
advisability of continuing at less than forty (40) hours per week, or instead,
laying off a sufficient number of employees so as to permit a return to a 40-hour
week. A reduction in working hours as aforesaid shall not prevent the Company
from also laying off such number of employees as it deems necessary to meet
business conditions.

 

For purposes of layoff only, members of the
Union Shop Committee shall be considered to be at the top of their respective
departmental seniority lists. Accordingly, in case of a closedown of an entire
department and a discontinuance of the operations of that department, Union
Shop Committee members may exercise their rights to replace employees in other
departments with less continuous service, provided the Committee man possesses
the ability to perform the job and has two (2) or more years of continuous
service with the Company.

 

SECTION 6. BUMPING PROCEDURE. An
employee who replaces another employee through the bumping procedure is bumping
the employee and the regular classification that employee is performing at that
given time. The successful bumping employee will be allowed a fifteen (15)
working day training period to attain the same level of proficiency of the
employee being displaced.  Should the employee fail to reach such
proficiency the employee will be laid off.

 

SECTION 7.
PROMOTIONS FROM BARGAINING UNIT. Employees transferred to a position with the
Company outside the bargaining unit shall, if returned to the bargaining unit
within the three (3) calendar month period immediately following transfer,
be credited with all seniority accumulated by them up to and including the date
of such promotion.

 

8

 

ARTICLE VI

HOURS, OVERTIME

 

SECTION 1. The regular workweek shall be
forty (40) hours, eight (8) hours per day, to be performed on Monday,
Tuesday, Wednesday, Thursday, and Friday. All hours worked in excess of forty
(40) hours per week, excepting watchmen and firemen, shall be considered
overtime and shall be paid for the rate of time and one-half (1-1⁄2) the regular
rate of pay for such work. Paid holidays shall be considered as time worked for
purposes of computation of overtime. All employees shall punch the time clock “in”
and “out” and shall only be paid for the work “clocked.”

 

SECTION 2. All work performed on Sunday and following legal
holidays: New Year’s Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, Christmas Day,
New Year’s Eve shall be paid for at double the regular rates of pay for the
work performed.

 

SECTION 3. The Company shall post a list every two (2) weeks
upon which employees desiring to make themselves available for overtime work or
general maintenance assignments during that month shall record their names.

 

Assignments for such general maintenance work shall be distributed from
that list by seniority, provided the employees have the ability to perform the
required tasks. If at any time such list is exhausted, the Company may offer
such overtime general maintenance assignments to any employee who will accept
the same and the Union Shop Committee shall cooperate in attempting to provide
employees necessary to perform such work.

 

SECTION 4. Production overtime
assignments shall be distributed first, to
employee(s) currently in the job classification, second,
to employee(s) with current skill proficiency in the job and, third, in accordance with seniority within the department
involved, provided the employee has the ability to perform the necessary
work.  If work is available in a department
for more people than those within the department who are willing to work,
opportunity shall be afforded to employees outside the department in accordance
with seniority, provided the employee has the ability to perform the work. The
Company agrees to give notice of Saturday overtime work no later than the end
of the work shift on the preceding Thursday. 
Employees are required to work a reasonable amount of overtime as
scheduled by the Company. If an employee is scheduled and accepts an overtime
assignment and fails to fulfill that assignment, it shall be considered an “unexcused
absence” and shall become part of the employee’s record. Further, that employee
will be bypassed, seniority-wise, for the next two (2) overtime
assignments. If the employee calls in “as required” with a valid and acceptable
excuse, no action will be taken.

 

SECTION 5. An employee who is injured on
the job so seriously that the employee shall see a physician and that physician
determines that the employee should not return to work for the duration of the
day of injury and submits the employee’s physician’s statement in writing to
such effect to the Company the employee shall be

 

9

 

paid at the employee’s base rate or average earnings for the time loss
from the scheduled shift on the day of injury.

 

ARTICLE VII

WAGES

 

SECTION 1.  Wage rates effective during the term of this
Agreement shall be paid in accordance with the classification of production
jobs by grade and maximum progression rate as are in Schedule A.

 

SECTION 2. The Company accepts the
principle of “equal pay for equal work” and will administer same in accord with
the Civil Rights Act of 1964.

 

SECTION 3. The Company agrees to pay for
ten (10) holidays per year subject to the following conditions:

 

a)                                      The
holidays shall be New Year’s Day, Good Friday, Memorial Day, Fourth of July,
Labor Day, Thanksgiving Day, Day after Thanksgiving, Christmas Eve, Christmas
Day, and New Year’s Eve provided that holiday pay shall be given only to
current active employees.

 

b)                                     The
employee must have sixty (60) days of service from the date of the employee’s
last hiring.

 

c)                                      The
employee must be in attendance the regular working day before and after the
holiday unless the employee has been excused. Attendance the day before and the
day after the Fourth of July shall not be required if it falls during the
regular vacation period.

 

d)                                     Holiday
pay shall be figured on the basis of eight (8) times the employee’s
regular straight time hourly rate.

 

e)                                      Holidays
falling on Saturdays shall be celebrated on the preceding Friday. Holidays
falling on Sundays shall be celebrated on the following Monday and employees
shall receive holiday pay for those days.

 

SECTION 4. Paychecks shall be issued on
a weekly basis not later than Friday following the close of workweek which
shall be Monday through Sunday.

 

SECTION 5. Any active employee who has
enlisted in the National Guard or in Military Reserves and who is required to
attend a training camp shall receive from the Company the difference between
the employee’s service pay and the employee’s hourly rate with the Company.
Such pay shall be limited to two (2) weeks in one (1) year.

 

Before drawing such difference in pay from
the Company, the employee shall submit for Company inspection a certified
statement of the employee’s service pay.

 

10

 

SECTION 6. Any employee transferred to
equal or lower rated classification within another department because of lack
of work and in order to avoid being laid off shall be paid during the period of
such transfer as follows:

 

(a)                                  An
employee with less than three (3) years of service at the time of such
transfer shall be paid the rate of the job to which the employee is transferred
and at the employee’s own skill level at the transfer job (giving credit for
general knowledge of product and shop practice).

 

(b)                                 An
employee having three (3) or more years of service at the time of such
transfer, and who has not previously occupied the job to which the employee is
transferred, shall receive not less that twenty cents ($.20) per hour below
maximum daywork progression rate for the job to which the employee is
transferred.

 

(c)                                  An
employee having three (3) or more years of service at the time of such
transfer, and who has previously occupied the job to which the employee is
transferred, shall receive not less than the maximum daywork progression rate
for the job to which the employee is transferred.

 

SECTION 7. In the event that the Company
establishes a new job classification, it will establish an hourly rate for such
classification and/or operation and notify the Union thereof. If the Union
disagrees with such hourly rate, it may file a grievance within then (10) days
following such notice protesting the rate established by the Company. Such
grievance procedures are set forth in Article IV hereof. The test of
appropriateness of the new rate shall be whether it bears proper relationship
to the rates set forth in Schedule A, giving proper consideration to the
job content and skill involved.

 

SECTION 8. An employee who is on the payroll and who has a death
in the employee’s immediate family (meaning father, mother, current
father-in-law or mother-in-law, sister, brother, wife, husband, son or daughter,
including legally adopted sons and daughters, current stepchild or stepparent,
grandparent or grandchild) shall be given not more than three (3) working
days off with pay where and to the extent necessary to permit such employee to
arrange for and/or attend the funeral.

 

SECTION 9. Employees who are hired on or
after July 21, 1980, shall receive the following automatic increases until
they reach the maximum progression rate:

 

	
  Minimum Amount of Increase

  	
   

  	
  Payable After

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $.10 per
  hour

  	
   

  	
  The first 8 weeks of employment

  	
   

  
	
  $.10 per
  hour

  	
   

  	
  The first 24 weeks of employment

  	
   

  
	
  $.15 per
  hour

  	
   

  	
  The first 36 weeks of employment

  	
   

  

 

11

 

Thereafter, upon completion of the first 52 weeks of employment, such
employee shall receive not less than the maximum progression rate for the
employee’s classification.

 

SECTION 10. Employees who are subpoenaed
for jury service shall receive the difference between the amount paid to the
employee by the court for jury service and the amount of regular straight time
earnings lost as a result of the absence from work caused thereby, for a
maximum period of two weeks, provided, however, that the foregoing shall not
apply in the event that the Company seeks to have an employee excused from jury
service and the employee fails or refuses to cooperate in seeking to be
excused. To be eligible for jury pay, the employee must provide the Company
with a copy of the check received from the Court for jury service.

 

SECTION 11. At any time during the life
of the contract, either party may request discussions concerning the new wage
plans or new methods of compensation, including, but not limited to, incentive
pay plans for some or all the classifications covered by this Agreement, and
the parties shall thereupon promptly appoint representatives to meet and
discuss such matters in good faith in an effort to arrive at a mutually
agreeable provision which may be instituted during the term of this Agreement.

 

ARTICLE VIII

DISCIPLINE AND DISCHARGE

 

SECTION 1. No employee covered by this
Agreement shall be discharged or disciplined except for good and sufficient
cause. Any discharged employee may appeal the employee’s discharge through the
Union Shop Committee for the Union and if after investigation, the Union Shop
Committee believes there may insufficient cause, it shall follow the regular
grievance procedure and, where applicable, may request arbitration.

 

SECTION 2. No employees shall be
disciplined for acting properly in any capacity as a representative of the
Union.

 

SECTION 3. The following shall
constitute “cause” for immediate discharge:

 

(a)                                  Gross
or repeated disregard of Company safety rules.

 

(b)                                 Fighting
or drunkenness.

 

(c)                                  Stealing
property of the Company or fellow employees.

 

SECTION 4. Following shall be considered
“cause” for discipline (temporary layoff or discharge):

 

(a)                                  Refusal
to carry out reasonable and proper instructions of supervisor.

 

(b)                                 Solicitation
of Union membership or conducting internal Union business on Company time.

 

(c)                                  Work
below reasonable quality or quantity standards.

 

12

 

(d)                                 Coercion
of a fellow employee or conduct dangerous to the health or safety of another
employee.

 

SECTION 5. Procedure for discipline of Section 4 violations:

 

(a)                                  First,
one documented verbal warning.

 

(b)                                 Next,
one written warning with copies to the Union.

 

(c)                                  Next,
three days without pay (at the Company’s discretion).

 

(d)                                 Last,
discharge.

 

SECTION 6. Reinstatement

 

All disciplinary warnings shall be cancelled
following six consecutive months’ employment without disciplinary citation.
Disciplinary warnings shall be removed from the employee’s file after two (2) years.

 

ARTICLE IX

VACATION PAY

 

SECTION 1.

 

(a)                                  Paid
vacations shall be accorded from the date hired in accordance with the
following schedule:

 

	
  10 weeks of service

  	
   

  	
  1 day of vacation

  
	
  20 weeks of service

  	
   

  	
  2 days of vacation

  
	
  30 weeks of service

  	
   

  	
  3 days of vacation

  
	
  40 weeks of service

  	
   

  	
  4 days of vacation

  
	
  50 weeks of service

  	
   

  	
  5 days of vacation

  
	
  2 years of service

  	
   

  	
  10 days of vacation

  
	
  5 years of service

  	
   

  	
  11 days of vacation

  
	
  8 years of service

  	
   

  	
  12 days of vacation

  
	
  10 years of service

  	
   

  	
  15 days of vacation

  
	
  15 years of service

  	
   

  	
  17 days of vacation

  
	
  20 years of service

  	
   

  	
  18 days of vacation

  
	
  23 years of service

  	
   

  	
  19 days of vacation

  
	
  25 years of service

  	
   

  	
  20 days of vacation

  

 

An employee shall receive the vacation pay to
which the employee is entitled on the last day before the scheduled vacation
begins; except that after January 1, 1977, employees qualifying for
fifteen (15) days of vacation pay may, in the alternative, elect to receive the
last five (5) days of such vacation pay on either the first or last pay
day in December of the vacation year, provided, further that if the
employee wishes to elect

 

13

 

such alternative payment date, the employee notify the Company, in
writing (on forms provided by the Company) no later than May 1 of the
vacation year.

 

(b)                                 In
the case of employees having over one (1) year of actual service since the
employee’s last hiring, the employee must have worked at least thrity-nine (39)
whole or partial weeks during the subject vacation year to entitle the employee
to the employee’s full vacation credit. If the employee has worked less than
thirty-nine weeks in the vacation year, the employee shall receive such
proportion of the employee’s normal vacation credit as the number of weeks
actually worked is in relation to fifty-two (52) weeks.

 

(c)                                  For
the purpose of this Article, length of service shall be figured as of June 30
and the “vacation year” shall be the year ending June 30. “Weeks of
Service” in Section 1 above is defined as whole or partial weeks in which
service is rendered.

 

(d)                                 Vacation
pay shall be computed at employee’s average hourly rate including overtime and
incentive pay for four (4) quarterly social security periods for the
previous calendar year ending December 31 for an eight (8) hour day.

 

(e)                                  The
date allotted to an employee for a vacation will be established by the Company
so as to cause a minimum of interference with normal Company operations.
Consistent with the preceding sentence, employees will be given preference as
to the time of their vacation on the basis of seniority. In case of a shutdown
for vacation purposes the Company will give notice to the Union and employee
not later than January 15 and five (5) months prior to the scheduled
vacation. In emergencies, employees may be scheduled by seniority and
qualifications to work.

 

(f)                                    In
the case of any employee who has been laid off before the regular vacation
period and has not been recalled to work, the employee shall, at the time of
regular vacation period, receive that proportion of the vacation pay to which
the employee would have been entitled had the employee not been laid off, which
shall be calculated as the number of weeks worked by the employee in the
vacation year in relation to fifty-two (52) weeks.  In no event, however, shall any employee be
entitled to vacation pay who has lost seniority under Section 5 of Article V
of this Agreement prior to the end of the vacation year.  No other provisions of the Agreement shall
be  to give laid off employees vacation
pay rights other than as provided in this subsection.

 

(g)                                 In
the case of any employee leaving the service of the Company to enter the Armed
Services of the United States, any vacation credit accrued at the time of
leaving shall be allowed and paid to the employee at that time.

 

(h)                                 Any
employee eligible for vacation must actually take time off for the full
vacation earned during the regular vacation period, or, at the Company’s
option, at some other time, mutually agreed upon. This section shall be

 

14

 

subject to further negotiation if problems
develop from it in regard to possible Defense or War Work.

 

(i)                                     If
an employee retires or is incapacitated at any age, the employee shall receive
at the time of retirement or disability, that portion of the employee’s
vacation pay to which the employee would be entitled under Article IX, section 1
(b) above. In the event of the death of an active employee before the
regular vacation period, the employee’s wife or husband or nearest of kin shall
receive vacation pay earned in such proportion as months worked in the current
vacation year bear to twelve (12) months.

 

(j)                                     If
an employee has five (5) years of service, such employee, if the employee
elects, may take all of the employee’s days of vacation to which the employee
is entitled rather than take ten (10) days of vacation and the balance in
wages, in lieu of days off.

 

(k)                                  The
Company will permit unscheduled vacation leave, not to exceed one day per
calendar year, in the event an employee has an emergency or otherwise
unforeseeable inability to work. The employee must provide telephone notice to
the office prior to the shift starting time on the day to be taken as vacation.

 

ARTICLE X

GROUP HEALTH INSURANCE BENEFITS

 

Conn-Selmer, Inc. Choice Benefit Plan

 

1.               The attached Health
Care Plan will go into effect on October 2, 2005.

 

2.               The employee weekly
contribution for the Health Care Plan “Choices” will be as follows:

 

CHOICE ONE - Enhanced

 

	
   

  	
   

  	
  Effective

  10/2/05

  	
   

  
	
  Single

  	
   

  	
  11.22

  	
   

  
	
  Employee +
  1*

  	
   

  	
  28.00

  	
   

  
	
  Employee +
  Family

  	
   

  	
  31.00

  	
   

  

 

15

 

CHOICE
TWO - Basic

 

	
   

  	
   

  	
  Effective

  10/2/05

  	
   

  
	
  Single

  	
   

  	
  7.50

  	
   

  
	
  Employee +
  1*

  	
   

  	
  21.00

  	
   

  
	
  Family

  	
   

  	
  22.53

  	
   

  

 

*                 +1 defined as Eligible spouse or one (1) eligible child as defined
in the Summary Plan Description.

 

**          Employee contribution
increases will be capped at $6.00 per week in the second and third year of the
contract.  Future employee contribution
increases will be effective 7/24/06 and 7/23/07 respectively.

 

3.               The
attached Dental Care Plan will go into effect on October 2, 2005.

 

4.               The employee weekly
contributions for the Dental Care Plan will be as follows:

 

	
   

  	
   

  	
  2005

  	
   

  	
  7/24/06

  	
   

  	
  7/23/07

  	
   

  
	
  Single

  	
   

  	
  2.50

  	
   

  	
  2.50

  	
   

  	
  2.60

  	
   

  
	
  Family

  	
   

  	
  7.25

  	
   

  	
  7.25

  	
   

  	
  7.35

  	
   

  

 

5.               The
attached Vision Plan will go into effect on October 2, 2005.

 

6.               The
employee weekly contributions for the Vision Plan will be as follows:

 

	
   

  	
   

  	
  2005

  	
   

  	
  7/24/06

  	
   

  	
  7/23/07

  	
   

  
	
  Single

  	
   

  	
  1.50

  	
   

  	
  1.60

  	
   

  	
  1.70

  	
   

  
	
  Family

  	
   

  	
  3.25

  	
   

  	
  3.35

  	
   

  	
  3.45

  	
   

  

 

During the term of the Agreement, if an
employee opts out of the Vision Plan for any reason, the employee will not be
allowed to re enroll unless agreed to in the next round of negotiations.

 

7.               Disability.  The weekly indemnity for sickness or accident
shall be $155.00 per week for a maximum of thirteen (13) weeks subject to a
seven (7) day waiting period unless disability requires immediate
hospitalization than the seven (7) day waiting period shall be waived.

 

ARTICLE XI

WORKING CONDITIONS

 

SECTION 1. If any employee is notified
to report to work, or in normal working hours the employee is not notified that
the employee is not needed and the employee does report, the employee shall
receive not less than two (2) hours’ pay at the hourly rate.

 

16

 

SECTION 2. The Company will continue to
make reasonable provisions for the safety and health of an employee during the
hours of employment in accordance with the Laws of Wisconsin. To insure safety
issues are addressed in a timely manner, a Safety Committee will be formed. The
committee will consist of two (2) management-appointed employees and two (2) Union-appointed
employees who will meet not less than quarterly for a plant walk-through and a
safety review. Additional meetings can be called at the request of either
party.

 

SECTION 3. The last five (5) minutes
of each shift will be devoted to personal cleanup and cleanup of the work area.

 

SECTION 4. Regular working hours on an
eight (8) hour day shall be from 7:00 a.m. to 12:00 Noon and from
12:30 p.m. until 3:30 p.m. It is understood that those hours apply to
the general run of production work only and do not affect the right of the
Company to schedule other hours for maintenance or custodial employees or
for production or other employees for special situations brought by a shortage
of facilities or equipment.

 

SECTION 5. Employees who are not in the bargaining unit shall not
do work ordinarily done by production employees except that supervisor may
instruct or set up their department and in so doing may move materials within
or without the supervisor’s own department and perform minor production work on
a fill-in or emergency basis; provided, however, that supervisor shall do no
production work when no bargaining unit employees are working in the supervisor’s
department. The limitation will not apply to experimental work, instruction or
aiding any employees with trouble or developing a method of operation. Prior to
the filing of any grievance of a dispute under Article XI, Section 5,
a member of the local union committee will notify the Plant Manager of a
possible violation.

 

SECTION 6.  In the event there is a permanent job vacancy
in a department, it will be posted within the department and may be filled in
the department by the most senior qualified applicant.  If a permanent unfilled vacancy results from
this procedure, notice of this unfilled vacancy shall be placed on the Company
bulletin boards for two (2) working days before the position is filled so
that all interested employees may apply for the position.  The position will be filled by the most
senior qualified applicant.  The Company
agrees to post job descriptions with notices of all vacancies as the same
occur.  Where an employee transfers or is
promoted hereunder, the employee must demonstrate qualification in the new job
within thirty (30) calendar days or return to the previous job.  However, if performance is not satisfactory,
but the employee shows progress, the Company agrees to extend the probationary
period by thirty (30) calendar days.

 

SECTION 7. Rest period for all employees
shall be between 9:15 a.m. and 9:30 a.m. each morning.

 

17

 

ARTICLE XII

UNION SECURITY

 

SECTION 1. Any employee who is a member
of the Union in good standing on the effective date of this Agreement, shall,
as a condition of employment, maintain the employee’s membership in the Union
to the extent of paying membership dues and uniform assessments uniformly
levied against all Union Members. Such dues and uniform assessments shall be
deducted from the employee’s paycheck once each month when the Company is
furnished a deduction authorization signed by the individual employee.

 

SECTION 2. Any employee hired subsequent
to May 1, 1951, shall become a member of the Union sixty (60) days after
hiring, and the employee shall, as a condition of employment, maintain the
employee’s membership to the extent of paying membership dues and uniform
assessments uniformly levied against all Union members. The employee shall be
on probation for sixty (60) days following the employee’s hiring and may be
discharged without recourse to grievance procedure during that period.

 

SECTION 3. If an employee is denied
Union membership for any reason other than non-payment of dues, the employee’s
employment status under this Agreement shall not be affected and the employee
shall be able to perform bargaining unit work.

 

ARTICLE XIII

CONCLUSION

 

SECTION 1. During the term of this Agreement, the Company shall
not conduct a lockout at its plant and the Union shall not strike or cause its
members to strike, conduct a slowdown or otherwise interfere with production
for any cause.

 

In the event that individual employees,
acting without Union sanction or authorization, should violate any provision of
this Section, the Union agrees to try to induce such employees to stop the
violation and/or return to work. The Union shall have twenty-four (24) hours in
which to accomplish such purpose.

 

All employees who fail to cease the violation or work stoppage within
such twenty-four (24) hours may be discharged or otherwise disciplined by the
Company which may assess such penalty as it finds appropriate in the
circumstances.

 

SECTION 2. All provisions of this Agreement shall be effective August 16,
2005 for a three-year agreement expiring as of 12:01 a.m. on July 20,
2008.  The Company and Union agree to
start negations for subsequent contracts at least thirty (30) days prior to the
expiration of the then current contract.

 

18

 

IN WITNESS WHEREOF, the parties have executed
this Agreement the day and year first above written, pursuant to resolutions
duly adopted by its directors and members, respectively.

 

 

	
   

  	
  CONN-SELMER, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Michelle Hammer

  	
   

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  	
  Human
  Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LOCAL NO. M94 of THE

  
	
   

  	
  INTERNATIONAL BROTHERHOOD OF

  
	
   

  	
  BOILERMAKERS, IRON SHIP

  
	
   

  	
  BUILDERS, BLACKSMITHS,

  FORGERS & HELPERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Vicki Freitag

  	
   

  
	
   

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
    /s/
  Mike Bagnall

  	
   

  
	
   

  	
   

  	
  Secretary

  

 

19

 

SCHEDULE A

 

HOLTON

CLASSIFICATION OF PRODUCTION JOBS

BY GRADE AND MAXIMUM PROGRESSION RATE

 

	
  Grade

  	
   

  	
  Job Classification

  	
   

  	
  Current

  Effective

  7/22/2002

  	
   

  	
  Effective

  8/16/05

  	
   

  	
  Effective

  7/23/06

  	
   

  	
  Effective

  7/23/07

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $0.00

  	
   

  	
  $0.20

  	
   

  	
  $0.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
  General (Deleader, General Machine, Parts
  Washer, Janitor)

  	
   

  	
  10.03

  	
   

  	
  10.03

  	
   

  	
  10.23

  	
   

  	
  10.43

  	
   

  
	
   

  	
   

  	
  Labor (Maintenance helper)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
  Silver Solderer – skilled

  	
   

  	
  10.29

  	
   

  	
  10.29

  	
   

  	
  10.49

  	
   

  	
  10.69

  	
   

  
	
   

  	
   

  	
  Packer/Shipper

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Stockkeeper
  – Receiving

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Small
  Fabrication – Bender – Small, Benchwork Forming

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Finish
  Inspector – Horns

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Trombone
  Slide Maker

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mounter A
  (Valve & Slide Mounter, Slide Mounter)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lapper

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
  Piston Assembler

  	
   

  	
  10.39

  	
   

  	
  10.39

  	
   

  	
  10.59

  	
   

  	
  10.79

  	
   

  
	
   

  	
   

  	
  Strapper

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hydraulic
  Draw Press Operator

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Heat Treater

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Assembler A
  (Trombone)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Buffer A
  (Wheel Buffer, Hand Colorman/Buffer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Valve
  Assembler

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
  Small Parts

  	
   

  	
  10.49

  	
   

  	
  10.49

  	
   

  	
  10.69

  	
   

  	
  10.89

  	
   

  
	
   

  	
   

  	
  Assembler B (Large Horn, French Horn)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  Solderer-Welder

  	
   

  	
  10.60

  	
   

  	
  10.60

  	
   

  	
  10.80

  	
   

  	
  11.00

  	
   

  
	
   

  	
   

  	
  Maintenance A – general - waste water treatment

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Play Test

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Buffer B
  (Wheel Polisher & Buffer)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lacquer Room Operator

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mounter B

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
   

  	
  Wheel Polisher

  	
   

  	
  10.81

  	
   

  	
  10.81

  	
   

  	
  11.01

  	
   

  	
  11.21

  	
   

  
	
   

  	
   

  	
  Hand Screw
  Machine Operator

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Sousa/Tuba
  Mounter

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

20

 

	
  Grade

  	
   

  	
  Job Classification

  	
   

  	
  Current

  Effective

  7/22/2002

  	
   

  	
  Effective

  8/16/05

  	
   

  	
  Effective

  7/23/06

  	
   

  	
  Effective

  7/23/07

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $0.00

  	
   

  	
  $0.20

  	
   

  	
  $0.20

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22

  	
   

  	
  Licensed Plant Wastewater

  	
   

  	
  11.05

  	
   

  	
  11.05

  	
   

  	
  11.25

  	
   

  	
  11.45

  	
   

  
	
   

  	
   

  	
  Treatment
  Operator

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bender –
  large

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24

  	
   

  	
  Buffer C

  	
   

  	
  11.17

  	
   

  	
  11.17

  	
   

  	
  11.37

  	
   

  	
  11.57

  	
   

  
	
   

  	
   

  	
  Dent Check/Repairman

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25

  	
   

  	
  Wheel Colorman (All Models)

  	
   

  	
  11.44

  	
   

  	
  11.44

  	
   

  	
  11.64

  	
   

  	
  11.84

  	
   

  
	
   

  	
   

  	
  Electrician

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CNC Operator

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tool &
  Die Machinest

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27

  	
   

  	
  Bell Spinner

  	
   

  	
  11.64

  	
   

  	
  11.64

  	
   

  	
  11.84

  	
   

  	
  12.04

  	
   

  
	
   

  	
   

  	
  Sousa/Tuba Color Buff

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28

  	
   

  	
  Maintenance B

  	
   

  	
  New

  	
   

  	
  13.00

  	
   

  	
  13.20

  	
   

  	
  13.40

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30

  	
   

  	
  Tool & Die Journeyman

  	
   

  	
  New

  	
   

  	
  18.00

  	
   

  	
  18.20

  	
   

  	
  18.40

  	
   

  
	
   

  
	
  
  

  

  

  
	
   

  	
   

  	
  * First Aid Attendant will receive $.30 per
  hour in addition to normal rate.

  	
   

  

 

21

 

LETTER
OF UNDERSTANDING

 

CRITERIA FOR
DETERMINATION OF LAYOFF

 

The Company and the Union agree to accept
past qualified experience as related to the listing of Job Titles listed in Schedule A
set forth in the Collective Bargaining Agreement dated July 21, 2000 for
determining experience.

 

For all new employees hired on or after the
ratification of the Agreement, the new Schedule A which includes job
combination will be considered in determining their past qualified job
experience level.

 

22

 

LETTER OF UNDERSTANDING

 

An employee eligible for leave under the
federal Family and Medical Leave Act (“FMLA”) or the Wisconsin Family and
Medical Leave Act (“WFMLA”) may elect to substitute any accrued and unused paid
or unpaid leave for unpaid FMLA or WFMLA leave. 
If any other such paid or unpaid leave is substituted, the FMLA or WFMLA
leave period shall not be extended. 
Although FMLA and WFMLA leave is generally unpaid, an employee may
receive workers’ compensation benefits if eligible under applicable law, or
disability benefits if eligible under the terms of the Company’s short-term disability
plan. Any period during which the employee receives such benefits shall not
extend the FMLA or WFMLA leave period. 
FMLA and WFMLA leave shall run concurrently with any substituted paid or
unpaid leave.

 

23

 

LETTER OF UNDERSTANDING

 

CRITERIA FOR  LUMP SUM PAYMENT

 

No later than two (2) weeks after the
Company has received notice that the Contract has been ratified, the Company
will pay to each eligible employee a lump sum payment of $400.00 minus all
required deductions; provided however, if the committee unanimously recommends
the Company’s offer and the Contract is ratified no later than Friday, August 12,
2005 the Company will add $100.00 to this $400.00 lump sum payment for a total
of $500.00 to each eligible employee.

 

24Exhibit 10.98

 

 

 

Russ
Berrie and Company, Inc.

111
Bauer Drive, Oakland, NJ 07436

(201)
337-9000   (800) 631-8465

 

                                                                                                                                                November 3, 2005

 

Mr. Keith Schneider

P.O. Box 624

Double Bay, NSW 1360

Australia

 

Dear Keith:

 

                I am pleased to
offer you the position of Executive Vice President and General Sales Manager —
U.S. Specialty Gift Division of Russ Berrie and Company, Inc. (the “Company”)
effective November 7, 2005.

 

                Your employment
with the Company will consist of the following:

 

1.               COMPENSATION.

a.                                  Base Salary.  Your
base salary will be at an annual rate of U.S. $350,000.

b.                                 Incentive Compensation.  Your
2006 incentive compensation (“IC”) program, and eligibility therefor, is set
forth on Exhibit A attached hereto and incorporated herein.  Payment of the IC (or portion thereof) is
predicated upon meeting both objective (corporate) and subjective (individual) performance
standards established for the applicable year. 
The IC is generally paid in February of the year following the
applicable year.  In order to receive the
IC payment (or any portion thereof), you must be actively employed by the
Company at the time of the IC payment.  For
the year 2006, U.S. $100,000 of your IC is guaranteed to be paid and it will be
paid quarterly in 4 equal installments of U.S. $25,000 each, as soon as
reasonably practicable after the end of each of the Company’s fiscal quarters.

c.                                  Super-Incentive Bonus.  For 2006, you shall be eligible for a one-time
Super-Incentive Bonus (“SIB”) of a maximum of U.S. $100,000 payable in two parts
as follows:

(i)                                                       Part 1 SIB: one-half of the SIB (i.e.,
U.S. $50,000) is payable to you if 2006 net sales in the U.S. Specialty Gift
Division are at least U.S. $65,000,000. 
If at least U.S. $65,000,000 of net sales in the U.S. Specialty Gift
Division are not achieved in 2006, then no part of the Part 1 SIB will be paid;
and

 

1

 

(ii)                                                    Part 2 SIB: one-half of the SIB (i.e.,
U.S. $50,000) is payable to you if, in 2006 (as compared to 2005), the U.S.
Specialty Gift Division breaks even in its EBITDA.  Your eligibility for payment of the Part 2
SIB will be calculated on the basis of a sliding scale as follows:  if 2006 EBITDA for the U.S. Specialty Gift
Division is within U.S. $2,000,000 of the break-even point, then you will
receive one-half of the Part 2 SIB; if 2006 EBITDA for the U.S. Specialty Gift
Division is within U.S. $1,000,000 of the break-even point, then you will
receive three-fourths of the Part 2 SIB, and; if 2006 break-even EBITDA for the
U.S. Specialty Gift Division is achieved, then you will receive the entire Part
2 SIB (namely, the full one-half of the SIB or U.S. $50,000).  If 2006 EBITDA does not reach within U.S.
$2,000,000 of the break-even point, then no part of the Part 2 SIB will be paid.

 

2.               GROUP HEALTH AND DISABILITY.  Employees
are eligible to participate in the Company’s group health plan (medical and
dental insurance coverage), life insurance plan and long term disability
insurance plan after 90 days of continuous employment.  Because you are currently employed by the
Company’s global organization, the 90 day waiting period will be waived for you
and, immediately upon your date of hire, you will be eligible to participate
in:

 

a.               The Company’s contributory Group Health Plan and Group
Dental Plan.

b.              The Company’s non-contributory Life Insurance Plan.
This is provided at no cost to you.

c.               The Company’s non-contributory Business Travel
Insurance Plan.  This is provided at no
cost to you.

d.              The Company’s non-contributory Accidental Death and
Dismemberment Plan.  This is provided at
no cost to you.

e.               The Company’s non-contributory Long Term Disability
Plan.  This is provided at no cost to
you.

 

3.               VOLUNTARY BENEFITS.  Employees are
eligible to participate in the Company’s voluntary benefit program after 90
days of continuous employment.  Because
you are currently employed by the Company’s global organization, the 90 day
waiting period will be waived for you and, immediately upon your date of hire,
you will be eligible to participate in the following voluntary benefits plans:

 

2

 

a.   Healthcare Flexible Spending Account.

b.   Dependent Care Flexible Spending Account.

c.   Supplemental Disability and Accident
Insurance Plans.

 

4.               STOCK OPTIONS.  On December
1, 2005, you shall receive 75,000 stock options.  These options will vest ratably over a period
of 5 years.  These options will be
granted under and pursuant to the Company’s 2004 Stock Option, Restricted and
Non-Restricted Stock Plan.  Such options
will be Non-Qualified Stock Options. 
Possible future grants of stock options shall be at the sole discretion
of the Compensation Committee of the Board of Directors of the Company.

 

5.               401(k) Plan.  Employees are
eligible to participate in the Company’s 401(k) plan after 6 months of
continuous employment. Because you are currently employed by the Company’s
global organization, the 6 month waiting period will be waived for you and,
immediately upon your date of hire, you will be eligible to participate in the
Company’s 401(k) plan based on its current provisions.  Under the current plan terms, the Company
matches a portion of your contribution to your 401(k) account.  The Company’s contribution vests over a
period of 4 years of employment.

 

6.               EXECUTIVE DEFERRED COMPENSATION PLAN. 
Within the first 30 days of your date of hire, you will be eligible to
participate in the Company’s Executive Deferred Compensation Plan.

 

7.     VACATION.  The
Company’s vacation policy provides that after 6 months of employment, employees
are eligible for one week paid vacation. 
The Company’s vacation policy further provides that thereafter, beginning
with the following calendar year, employees are eligible for two weeks paid
vacation and, upon their fifth anniversary with the Company, employees are
eligible for three weeks paid vacation. 
You will be eligible for vacation above and beyond the aforementioned
policy.  Beginning with calendar year
2006, you will be immediately eligible for the maximum paid vacation level (namely,
three weeks paid vacation per year).

 

8.               HOLIDAY/SICK. You will be eligible for paid holidays and sick time
in accordance with Company policy. Because you are currently employed by the
Company’s global organization, the 44 accrued and unused sick days which you
currently have as an employee of RUSS Australia will be credited to your
accrued and unused sick days at the Company and debited from your accrued and
unused sick days as an employee of RUSS Australia (to the extent permitted by
law in Australia).

 

9.               CAR ALLOWANCE  You will
receive an allowance of U.S. $1,100 per month to cover the cost of an
automobile, automobile insurance, automobile maintenance and repair, gasoline
and any and all other costs and expenses relating to such automobile.  

 

3

 

10.         SEVERANCE.  In the event
that you are terminated from the Company for reason other than cause or other
than your own voluntary resignation, you will be eligible to receive severance
in accordance with the Company’s severance policy for Domestic Vice Presidents
(and above), a copy of which is attached hereto as Exhibit B.

 

11.         RELOCATION.  Pursuant to
the Company’s policy, the movement of your household good will be paid as a
direct expense of the Company to the applicable vendor.  Three estimates are required.  Company policy reimburses eligible executives
for documented expenses up to U.S. $27,500 relating to relocation.  However, such policy amount will be increased
for you due to your relocation from Australia. 
The Company will reimburse you for up to U.S. $100,000 of documented
expenses relating to relocation.

 

12.         TRAVEL AND EXPENSE ALLOWANCE. 
The Company shall reimburse you, on a dollar-for-dollar basis, for your
documented business-related expenses.

 

12.         SUPPLEMENTAL ALLOWANCE.  The Company
will reimburse you for up to U.S. $30,000 per year of documented expenses related
to your Eligible Family travel between the United States and Australia.  Eligible Family consist of your spouse, your
children, your parents and your parents-in-law.

 

13.         CHANGE IN CONTROL SEVERANCE PLAN. 
You have previously received the Company’s Change in Control Severance
Plan.

 

You are
responsible for any and all tax obligations on the compensation and benefits
package outlined above (other than the withholding and other required
deductions that the Company will make from your paychecks).  In addition, this offer of employment is
subject to presentation of appropriate documentation to the effect that you are
eligible to work in the United States.

 

The Company
reserves the right to change or modify these programs.  In addition, employment with the Company is
considered “at will” and does not represent a specific guarantee.

 

Keith, I want to
welcome you to the U.S. Specialty Gift Division and wish you much success in
your new position.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Andrew R. Gatto

  
	
   

  	
   

  	
  Andrew R. Gatto

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  cc: B. Landman

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Keith Schneider

  	
   

  	
   

  
	
  Keith Schneider

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
  November 9, 2005

  	
   

  	
   

  
				

 

 

4

 

EXHIBIT A

 

 

KEITH
SCHNEIDER’S INCENTIVE COMPENSATION PROGRAM 

(effective
January 1, 2006)

 

IC
Factor:  50% of Base Salary (2006 Base
Salary is U.S. $350,000; 50% is U.S. $175,000)

 

 

 

2006 CORPORATE OBJECTIVES:

 

	
   

  	
  The IC Target for the U.S. Specialty Gift Division

  	
   

  	
  Value: 50%* of IC Factor

  
	
   

  	
  will be established by management and approved by

  	
   

  	
  (U.S. $87,500)

  
	
   

  	
  the Board of Directors (or appropriate committee

  	
   

  	
   

  
	
   

  	
  thereof)

  	
   

  	
   

  

 

     *Value could be up to 100%
of the IC Factor if the Maximum Target is reached.

 

 

 

2005 INDIVIDUAL OBJECTIVES:

 

	
   

  	
   

  	
   

  	
  Value: 30% of IC Factor

  
	
   

  	
   

  	
   

  	
  (U.S. $52,500)

  
	
   

  	
  To Be Determined

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

 

2005 INDIVIDUAL INITIATIVES:

 

	
   

  	
   

  	
   

  	
  Value: 20% of IC Factor

  
	
   

  	
   

  	
   

  	
  (U.S. $35,000)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To Be Determined

  	
   

  	
   

  

 

 

5

 

EXHIBIT B

 

SEVERANCE POLICY FOR DOMESTIC VICE PRESIDENTS (AND ABOVE)

OF RUSS BERRIE AND COMPANY, INC., 
Effective February 11, 2003

 

The
Company’s severance policy is amended for domestic Vice Presidents (and above;
collectively referred to herein as “VPs”) and is effective February 11, 2003,
as follows:

 

Domestic
VPs, if terminated by the Company without cause and not in connection with a
change in control of the Company (namely, more than 6 months prior to or more
than 2 years after such Change in Control), are eligible, based on tenure with
the Company, for the following severance payment:

 

•                     VPs with less than 1 year of service
with the Company would receive 4 months of severance pay

 

•                     VPs with at least 1 year of service
but less than 2 years of service with the Company would receive 6 months of
severance pay

 

•                     VPs with at least 2 years of service
but less than 6 years of service with the Company would receive 8 months of
severance pay

 

•                     VPs with at least 6 years of service
but less than 10 years of service with the Company would receive 10 months of
severance pay

 

•                     VPs with 10 or more years of service
with the Company would receive 12 months (i.e., one year) of severance pay

 

The
severance is to be paid at the salary rate (base pay not including bonus(es) or
commissions) in effect on the termination date. 
The severance will be paid over the course of the severance period in
accordance with the Company’s normal pay schedule (not in a lump sum).  During the severance period, the terminated
VP is also entitled to remain on the Company’s (1) health and dental insurance
plan (making the same payroll contribution as he/she made, on the date of
termination, as an active employee), and (2) all other insurance plans for
which he/she was eligible on the date of termination.  In addition, for a period of 60 days, the
terminated VP is entitled to use of the Company automobile (or payment of an
automobile allowance) or reimbursement of certain automobile expenses, as the
case may be, in accordance with the nature and type of automobile perk that the
VP had in effect on the date of termination.  
If the terminated VP obtains gainful employment during his/her severance
period, then the severance payments will be terminated effective on the date
that he/she begins new employment.

 

“Change-in-control”
and “cause” shall have the meanings assigned thereto in the Company’s Change in
Control Severance Plan.

 

As a
condition to receiving the aforementioned severance payment and benefits, the
eligible terminated VP must sign and deliver to the Company the Company’s form
of General Release of Claims, Non-Compete, Non-Hire and Non-Disparagement
Agreement.

 

This amended severance policy
supercedes any other agreement between the Company and a VP that provides for
lesser benefits with respect to the type of termination covered hereby in
effect on the effective date of this amendment or thereafter.

 

6

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