Document:

Exhibit
10.17

 

AGREEMENT

 

between

 

Roller Bearing

Company of America

 

and

 

International Union U.A.W.

Local 502

 

July 1, 2004

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Parties to the Agreement

  	
   

  
	
  2

  	
  Philosophy
  Statement

  	
   

  
	
  3

  	
  Union
  Recognition

  	
   

  
	
  4

  	
  Union Security and
  Check-off

  	
   

  
	
  5

  	
  Non-Discrimination

  	
   

  
	
  6

  	
  Structure and
  Decision-Making Process

  	
   

  
	
  7

  	
  Work
  Performed Outside the Bargaining Unit

  	
   

  
	
  8

  	
  Training

  	
   

  
	
  9

  	
  Probation
  Period

  	
   

  
	
  10

  	
  Seniority

  	
   

  
	
  11

  	
  Layoffs and Recall to Work

  	
   

  
	
  12

  	
  Open Jobs

  	
   

  
	
  13

  	
  Severance Pay

  	
   

  
	
  14

  	
  Leave of
  Absence

  	
   

  
	
  15

  	
  Overtime

  	
   

  
	
  16

  	
  Wages and Other
  Compensation

  	
   

  
	
  17

  	
  Perfect
  Attendance/Service Time Award

  	
   

  
	
  18

  	
  New Products

  	
   

  
	
  19

  	
  Shift Premium

  	
   

  
	
  20

  	
  Paid Break and Lunch
  Periods

  	
   

  
	
  21

  	
  Reporting Pay

  	
   

  
	
  22

  	
  Temporary
  Transfers

  	
   

  
	
  23

  	
  Vacations

  	
   

  
	
  24

  	
  Holidays

  	
   

  
	
  25

  	
  401K

  	
   

  
	
  26

  	
  Personal
  Illness/Workers’ Compensation

  	
   

  
	
  27

  	
  Safety
  and Health

  	
   

  
	
  28

  	
  Union
  Facilities

  	
   

  
	
  29

  	
  Dispute
  Resolution

  	
   

  
	
  30

  	
  Living
  Agreement

  	
   

  
	
  31

  	
  Insurance

  	
   

  
	
  32

  	
  Waiver
  of Any Clause

  	
   

  
	
  33

  	
  No
  Strike – No Lockout

  	
   

  
	
  34

  	
  Duration
  of Agreement

  	
   

  
	
   

  	
  Apendix A – Pay Rates

  	
   

  
	
   

  	
  Company Contribution to
  Retiree Health Insurance

  	
   

  
	
   

  	
  Index

  	
   

  

 

 

AGREEMENT

between

ROLLER BEARING COMPANY OF AMERICA

and

INTERNATIONAL UNION U.A.W.

LOCAL 502

 

July 1, 2004

 

ARTICLE 1

PARTIES TO THE AGREEMENT

 

This
Agreement is entered into between ROLLER BEARING COMPANY OF AMERICA (“RBC” or
the “Company” or the “Employer”) and the INTERNATIONAL UNION U.A.W. and its
Local 502 (the “Union”).

 

ARTICLE 2

PHILOSOPHY STATEMENT

 

This
Agreement recognizes the need for a new approach to Union/Management relations
and the more effective use of human resources in the manufacture of bearings
worldwide. It further recognizes the competitiveness in the bearing industry
and the potential for increased global competitive pressures with our current
and future customers. Both parties recognize the need to develop and maintain
an atmosphere of cooperative problem solving to accomplish our mutual
objectives. We understand that our job security depends upon our success in
making quality bearings, in a cost-effective manner, and in satisfying our customer
expectations and commitments.

 

We
believe that people want to be involved in decisions that affect them, care
about their jobs and each other, take pride in themselves and in their
contributions and want to share in the success of their efforts.

 

Making
progress toward these mutually agreed upon goals will require a relationship of
mutual respect, open communication, shared success, mutual aid, innovative
problem solving, and shared decision-making. The parties agree that in order
for the Union to effectively represent its members, the Union must have a role
in the decision-making process that affects its members. It is the intent of
the UAW and RBC to create a workplace that recognizes the need for people to be
treated with respect and dignity and

 

1

 

recognizes that collective
bargaining can be an essential and constructive force in our plant. All parties
in this Agreement will strive to make the West Trenton plant of RBC the best of
its kind in the marketplace; making the highest quality product; a cost
effective, profitable operation; a coveted place to work, and a responsible
member of the community.

 

It
is in this renewed spirit of mutual respect and recognition of each other’s
stakes and equities that this Agreement is entered into and agreed upon.

 

ARTICLE 3

UNION RECOGNITION

 

The Company
recognizes the Union as the exclusive collective bargaining agent for all the
Company’s production and maintenance employees at its plant in West Trenton,
New Jersey, in respect to rates of pay, wages, hours of employment and other
conditions of employment, excluding, however, office employees, supervisors,
plant protection employees, laboratory employees, and time study personnel,
pursuant and subject to the provisions of the Labor-Management Relations
Act-1947 and amendments thereto.

 

ARTICLE 4

UNION SECURITY AND CHECK-OFF

 

To the extent
permitted by law, all bargaining unit members shall be required, as a condition
of employment, to become and remain members in good standing of the Union on
and after the thirtieth (30th) day following the beginning of their employment
or the effective date of this Agreement, whichever is the later, to the extent
of paying an initiation fee and membership dues specified by the Union. No
employee shall be discharged by the Company for failure to maintain good
standing in the Union until such employee has received a written notice from
the Union that he is not in good standing, and has at least seven (7) days
thereafter in which to put himself  in
good standing. For the purposes of this Article, “good standing with the Union”
means that the employee’s dues for any month must be tendered by the last day
of the month following such month.

 

RBC
will provide for check-off of union dues and initiation fees on behalf of
employees who request such a service in accordance with prevailing law. The
Union shall indemnify and save RBC harmless with respect to any claims or
expenses arising out of any action taken as or not taken by

 

2

 

RBC for the purpose of complying with this Article.

 

ARTICLE 5

NON-DISCRIMINATION

 

The philosophy
and mission of RBC are designed to be in full and complete compliance with the
legal and moral principles of equal opportunity in employment. Accordingly, the
Company and the Union pledge, on behalf of themselves, as well as their
officers, members and representatives to treat all persons equally without
regard to their race, color, religion, age, sex, national origin, disability,
or veteran’s status. Although the term “he” is used throughout this Agreement,
it is used to represent both male and female employees and is not intended to
be discriminatory or exclusive in any way, but rather to simplify the language
for understanding.

 

The Company
agrees that neither it nor any of its representatives will intimidate, coerce,
interfere with or discriminate against any employee because of proper activity
on behalf of the Union. The Union agrees that it nor any of its officers or
members will threaten, intimidate, coerce or interfere in any manner with any
employee.

 

ARTICLE 6

STRUCTURE AND
DECISION-MAKING PROCESS

 

The intent of
the parties is to create an evolutionary process towards a goal in which
employees will be part of the decision-making process with respect to producing
to schedule, producing a quality product, performing to budget, housekeeping,
health, safety, environmental conformance, maintenance of equipment, material
and inventory control, training, job assignment, repairs, scrap control, and
scheduling time off.

 

WORK GROUP
MEMBER: 

 

The
individual RBC employee.

 

WORK GROUP:

 

An integrated
group of not more than 20 Work Group Members with a common manufacturing and
support purpose related to a product or products.

 

The Work Group
will have the responsibility and authority to produce quality products to schedule at
competitive costs. It will have responsibility for both direct and indirect
work and, as such, will hold meetings, obtain

 

3

 

supplies,
keep records, seek resources as needed, and be responsible for job preparation
and attainment of its own materials and supplies. It will constantly seek
improvement in quality, cost, and the work environment. The Work Group will
also be responsible for the planning and scheduling of the work and
communications within and outside the group.

 

WORK GROUP REPRESENTATIVE:

 

An employee
elected by the Work Group to participate with management in coordinating the
administrative functions of the Work Group and report at least monthly on Work
Group progress to the Plant Council. The Plant Council may recall a Work Group
Representative upon petition of at least two-thirds of the members of the Work
Group.

 

WORK GROUP SUPERVISOR:

 

A
member of management who will coordinate the activities of the Work Group. In
addition, Work Group Supervisors will be responsible for employment,
termination, and coordination of job transfers, and will do advanced planning
for resources, both short and long term, and will determine and plan resources
needed by the Work Groups, including administration, engineering, materials,
financial, etc.

 

UNION PLANT COMMITTEE:

 

The Union
Plant Committee is elected by the union members according to the Union bylaws.
Membership will consist of a President and one additional member for every
forty (40) employees, with a minimum of no less than three members. Union Plant
Committee members and two members of the Education and Training Committee will
have top seniority for layoffs and recall purposes. They will be assigned to
serve on the Plant Council and the other committees created by this Agreement
as the Union sees fit. The Union President or his designee will be afforded up
to twenty (20) hours per week for the purpose of conducting Union business.

 

PLANT COUNCIL:

 

A consultative
employee group, consisting of three (3) members of the Union Plant
Committee and an equal number of representatives from the Company, including
the Plant Manager or his designee, who participate in decision-making processes
addressing issues affecting the entire plant or which have not been resolved in
the Work Group. Additional members may be added by mutual agreement of the
parties on an ad hoc basis while resolving specific issues. The Plant Council
will meet as often as necessary, but at least weekly.

 

In connection
with the foregoing and with other issues affecting the

 

4

 

plant, the parties recognize
that all functions of management are reserved exclusively to the Company,
except insofar as they are delegated or shared pursuant to the terms of this
Agreement. These functions include the management of the business, the
determination of the products, methods, processes and means of manufacturing,
the establishment of the size and direction of the work force, the setting of
working schedules, the rights to hire, promote, demote, lay off, transfer,
discipline, discharge for proper cause and establishing fair efficiencies and
Shop Rules. The Company will perform these functions in the spirit of the
Philosophy Statement of this Agreement.

 

Within the
Work Groups, decisions on matters within the Groups’ authority which are not
otherwise provided for in this Agreement will be made through the consensus
decision-making process outlined below:

 

a)                                      Such
decisions shall be made in the context of the Philosophy Statement (Article 2)
and the Structure and Decision-Making framework (Article 6).

 

b)                                     Decisions should be achieved through the joint
efforts of all to discover the best solution.

 

c)                                      Decisions must be arrived at promptly.

 

d)                                     A decision must provide a high level of
acceptance for all parties.

 

e)                                      Once a decision is reached, all parties must
be totally committed to the decision.

 

f)                                        Any party may object to a proposed decision,
in which event the objecting party must propose concrete alternatives.

 

g)                                     In the event an alternative solution is not
forthcoming, the objecting party must re-evaluate its position in the context
of the Philosophy Statement.

 

h)                                     In the event a decision acceptable to all
parties is not promptly attainable, the matter will be referred to the Plant
Council.

 

The Plant
Council will also seek to reach decisions on matters within its authority under
this Agreement by means of the consensus decision-making process outlined
above, provided that, if such a decision is not promptly attainable, the
Company shall have the right to take action, subject to the

 

5

 

Union’s right to grieve under
the Agreement.

 

ARTICLE 7

WORK PERFORMED OUTSIDE THE
BARGAINING UNIT

 

1.                                       The
parties shall conform to the principle that non-bargaining unit employees shall
not perform any operation which would deprive employees of their regular work.
This is not to be interpreted to prevent their necessary function of
instruction and demonstration and of engaging in productive activities where
required in order to handle incidents which affect efficient operation.

 

2.                                       Non-bargaining
unit employees may be used to perform experimental work, with or without the
assistance of employees in the bargaining unit, as management determines.
Experimental work is defined to mean all work involved in the development of
new, different or modified products, parts, tools or equipment.

 

3.                                       When
experimental work is to be performed on a production basis, it will be assigned
to bargaining unit employees. 
Experimental work on a production basis is defined to mean production of
products, parts, tools or equipment after design and testing have been
completed and production for inventory or orders has commenced, and will be
assigned to bargaining unit employees.

 

ARTICLE 8

TRAINING

 

Both the Union
and the Company recognize that training will be required to prepare Work Group
and Plant Council Members to perform these functions and that this
transformation will require a gradual cultural change, but agree to work
together over the life of this Agreement to obtain the skills necessary to meet
the levels of authority and responsibility described here.

 

A Training and
Education Committee has been established to develop, schedule and manage
the training and education process. Two (2) employees selected by the UAW
N.J. Area Director and two (2) employees selected by the RBC Plant Manager
will constitute the Training and Education Committee. A minimum of two (2) hours
training and/or education will be provided for each employee per month when
averaged on a yearly basis. This minimum training and education requirement
will include either

 

6

 

on-the-job training to learn to perform specific
skills and/or classroom training on subjects necessary to conform with the
Philosophy Statement of this Agreement. The Training and Education Committee
will work with the members of the Work Groups to develop, schedule, and
implement training and education programs.

 

The Training
and Education Committee will develop a training and education plan that will
include necessary skills and education for the implementation of this
Agreement. This plan will include a schedule of training for all employees
in coordination with the principles of the pay for knowledge and skills
process. A skills assessment of all employees and the requirements for all
levels of each classification will be included in the plan. The Training and
Education Committee has submitted its initial plan for six months training and
education to the Plant Council. The training and education plan is on going
process and will be updated as needed during the length of this contract. The training
and education plan will include the utilization of a qualified trainer or
trainers selected by the Plant Council, whose duties may also include helping
the parties to facilitate the process. Expenses for training and education will
be borne by the Company or through grants where available. After the initial
training and education plan, the Committee will submit a plan every six (6) months
for approval. Training will begin within thirty (30) days of the approval of
the plan which must be finalized within two (2) weeks of its submission.
In the event the members of the Committee shall fail to reach consensus on any
aspect of the plan, the opposing views shall be submitted to the Plant Council
for determination.

 

Each Training and Education
Plan will include (but will not be limited to):

 

•                                          technical skills

•                                          problem-solving

•                                          consensus decision-making

•                                          business basics and philosophy

•                                          trade unionism

•                                          team building

•                                          English as a second language.

 

Any Skilled
Trades components of the training and education plan will be developed with the
assistance of the DAW Skilled Trades Department.

 

Each member of
the Union Plant Committee will be given a minimum of 60 hours of training in
business and economics related studies each year of this labor agreement, at Company
expense. Such training may include

 

7

 

visits to other manufacturing
facilities, classroom training, or on-site training, etc. and will be
determined by joint union and management agreement.

 

Unless deemed
otherwise, all training and education approved by the Plant Council as part of
the Training and Education Plan will be mandatory and costs will be borne by
the Company.

 

ARTICLE 9

PROBATIONARY PERIOD

 

1.                                       Any new or rehired employee shall be
considered on probation with no seniority for a period of sixty (60) scheduled
work days, not including absence days for any reason. Once the probationary
period is satisfactorily completed, the employee will receive seniority credit
dated back to the first day of his current hiring.

 

2.                                       The
Company may, at any time, transfer, layoff, or discharge a probationary
employee for any reason whatsoever and no claim may be made by the Union or any
of its members that the transfer or discharge of such employee was improper. Bargaining
unit employees will not be asked to pass judgment on the performance of the
probationer.

 

ARTICLE 10

SENIORITY

 

1.                                       Computing Seniority

 

A.                                   The seniority standing of an employee shall be
computed on the basis of the length of his service.  His seniority date is his date of hire. When
more than one employee is hired on the same date, to establish their seniority
position, their names will be placed on the seniority lists in alphabetical
order by last name (at the time of hire), then first name, if needed.

 

B.                                     Service will accumulate during an approved
personal leave of absence, Union leave, family and medical leave, maternity
leave, sick leave, military leave, funeral leave, or jury duty.

 

2.                                       An employee’s length of service and seniority
shall be considered ended, and the employee will have no further recall or
other rights as an employee of any kind or nature, except the right to vacation
pay, and

 

8

 

insurance continuation through COBRA, if such an employee:

 

A.                                   Voluntarily quits his employment (if rehired
by the Company within three (3) working days after quitting, seniority
shall not be affected), or

 

B.                                     Is discharged for proper cause, or

 

C.                                     Is absent for three (3) working days
without properly notifying the Company, unless a satisfactory explanation is
given for failure to call. (NOTE: this does not remove the obligation of
calling in on the first day of absence), or

 

D.                                    Fails to return to work from layoff within
five (5) working days after proper notification by certified mail, return
receipt requested or an accepted method of overnight delivery by the Company at
the last known address as it appears on the Company records, unless a
satisfactory reason is given, or

 

E.                                      Fails to return to work at the end of an
approved leave of absence or gives a false reason for obtaining a leave of
absence, or

 

F.                                      Passes the time limit for recall from layoffs,
or

 

G.                                     Requests and receives severance pay as a
result of a qualified lay off.

 

ARTICLE 11

LAYOFFS AND RECALL TO WORK

 

1.                                      Layoff Provisions

 

A.                                   The Company will give at least seventy-two
(72) hours notice prior to layoff to the employees affected, even if only one
employee is affected.

 

B.                                     When a job is eliminated within a
classification in a Work Group, the least senior employee in that
classification in the Work Group will be displaced.

 

C.                                     An employee displaced from a classification
within a Work Group may bump on the basis of plant seniority the least senior
employee in the same or a lower rated classification in another Work Group. The
employee will designate a job choice within 48 hours from the end of

 

9

 

the shift on
which he was displaced. Employees can only bump into a Skilled Trades job if
they previously held the job.

 

2.                                      Recall Provisions

 

A.                                   Recall will be offered to employees on the
recall list in reverse order of layoff when there are no successful bidders for
an open job.

 

B.                                     If an employee on the recall list is offered
regular, full-time re-employment of 60 working days or more on the same job and
shift as previously held, and he refuses to accept it, he will be dropped from
the recall list and no longer have any rights under this Agreement, except the
right to any unpaid vacation and benefits through COBRA.

 

C.                                     If an employee on the recall list is offered
regular, full-time re-employment of 60 working days or more on a different job
or shift than his regular job, and he refuses to accept it, he will remain on
the recall list until such time as he is offered another opportunity to return
to work. A third refusal to return to work will cause such employee to be
removed from the recall list and no longer have any rights under this
Agreement, except the right to any unpaid vacation and benefits through COBRA.

 

D.                                    Employees on the recall list are responsible
for keeping the Company notified of any change of address or phone. If the
Company cannot contact a previous employee at the last know address, he will be
dropped from the recall list.

 

E.                                      A laid off employee will remain on the recall
list according to the following time limits:

 

SENIORITY TIME LIMIT

 

	
  Probationers

  	
   

  	
  No
  Recall

  
	
  2
  years or less

  	
   

  	
  2
  years

  
	
  2
  years to 5 years

  	
   

  	
  equivalent
  of seniority

  
	
  5
  years and over

  	
   

  	
  5
  years

  

 

10

 

ARTICLE 12

OPEN JOBS

 

1.                                       Filling Open Jobs

 

A.                                   Whenever the Company determines that an open
job exists in the Bargaining Unit (other than a Skilled Trades job):

 

1)                                      The Company will post notice of such opening
for forty-eight (48) hours. Employees who wish to apply for the opening must do
so by putting a job bid form in the Bid Box during the posting period. Only
those employees who apply during such 48-hour period will be considered
for the job and will have a right to grieve the final selection.

 

2)                                      Any employee may submit a bid under the
provisions of paragraph 1) above on behalf of an employee who is on vacation or
leave of absence during the posting period. 
Employees on leave of absence will be considered, provided they will be
returning from leave in a reasonable period of time.

 

3)                                      Applicants will be awarded the open job on the
basis of seniority.

 

4)                                      A successful bidder will be transferred to the
open job within forty-five (45) calendar days after he is designated.

 

B.                                     When an open job exists in one of the Skilled
Trades classifications, the posting and bidding procedure outlined in Subsection A
above shall apply. The job will be awarded on the basis of seniority. However,
employees who have previously held a job in the Skilled Trades classification
in which the open job exists, will be given priority. Those employees bidding
for the job who have not previously held a Skilled Trades job will be required
to take a standard skills assessment test to verify qualification and aptitude
for successful performance. Where no applicant possesses the requisite
qualifications, the Company may determine whether to train or hire on the
outside.

 

2.                                       Successful applicants will receive a rate of
pay commensurate with previous experience, qualifications, and training.

 

3.                                       Successful applicants will be trained on the
shift where suitable training conditions exist, and will be moved to the posted
shift as soon as practical after sufficient skill levels are reached.

 

4.                                       Situations where successful applicants either
change their mind about a job or receive a job failure will be reviewed by the
Plant Council and appropriate actions taken as agreed.

 

11

 

5.                                       If an unqualified candidate is selected for a
Skilled Trades position, the Training and Education Committee will develop a
two-year apprenticeship program, including classroom and on-the-job
assignments, which will provide comprehensive exposure to all required skills
for successful performance of the job. The program will be submitted to the
Plant Council for review and approval.

 

ARTICLE 13

SEVERANCE PAY

 

1.                                       In the event that the Company transfers any
equipment or jobs or any part thereof to another location established by it
beyond a twenty-five mile radius from the center of West Trenton, NJ, and, in
the future event, that such transfer is the immediate cause of, or that such
transfer directly or indirectly results in a layoff of employees, any employee
thus laid off shall have the option to elect to take severance pay in lieu of
such layoff subject to the provisions below:

 

A.                                   In the event that such transfer as described
above, results in a bumping of employees without a layoff, any such bumped
employee who is entitled under the provisions of this Agreement to another job
covered by this Agreement, which would result in a loss of less than $1.00 per hour
in wages below the job from which he is being bumped or from which he was
originally bumped because of a transfer within the time limit, shall not be
entitled to severance pay.

 

Any such
employee thus bumped who is not entitled under the provisions of this Agreement
to another job covered by this Agreement which would result in a loss of less
than $1.00 per hour in wages below the job from which he is being bumped, or
from which he was originally bumped because of a transfer within the time
limit, shall have the option to elect to take severance pay in lieu of the job
to which he is entitled under the provisions of this Agreement.

 

B.                                     When a layoff or bumping as a result of a
transfer, occurs between the date of the transfer and within the following two
years, employees in such layoffs or bumping with more than one year seniority shall
have a claim on severance pay.

 

C.                                     When a layoff or bumping, as a result of a
transfer, occurs two years after the date of the transfer, but within five
years of the transfer, employees in such layoff or bumping shall have a claim
to severance pay, when the length of their seniority is more than the time
period

 

12

 

between the date of the transfer and the date of the
layoff or bumping.

 

D.                                    When the layoff or bumping as a result of the
transfer, occurs five years or more after the date of the transfer, there shall
be no claims for severance pay.

 

E.                                      Severance Pay

 

1)                                      To elect to take such severance pay in lieu of
layoff or bumping, the employee must advise the Company of his election in
writing, delivered to it within 90 days after the commencement of the layoff or
incident of bumping. Severance pay shall be computed on the basis of forty
hours pay at the employee’s regular straight time hourly rate, at the date of
the commencement of the layoff or incident of bumping, for each year of
seniority since the date of the last hire.

 

2)                                      The Company will increase the severance pay
from 1 week to 2 weeks per year of service whenever productivity increases an average
of 1% a month.

 

Otherwise,
severance pay of 1 week will apply.

 

	
  Formula:

  
	
   

  
	
  +
  West Trenton Plant Sales Dollars

  
	
  +
  Transfers to Hartsville and Warehouse in Sales Dollars

  
	
  +/-
  Change in WIP + Finished Goods Inventory

  
	
   

  
	
  =
  Output

  

 

	
  Hours
  = Total straight time + overtime hours

  
	
  Output
  = Productivity Measure Hours

  

 

F.                                      Severance pay hereunder shall be paid to an
electing employee within one year after the receipt by the Company of the
notice of election and, upon payment of severance pay in a lump sum, the
employee shall thereafter have no further seniority, recall or other rights as
an employee of any kind or nature, except the right to vacation pay due to him
under Article 23.

 

G.                                     Seniority employees on extended sick leave
have no claim under the above provisions.

 

13

 

2.                                       Until such a time as the Plant Closing
Notification laws go into effect, the Company will give the employees 45 days
advance notice of an imminent plant closing as the laws’ language pertains.
When the law goes into effect, it will comply fully with the language of the
law.

 

ARTICLE 14

LEAVE OF ABSENCE

 

1.                                       Types
and Conditions of Leave

 

A.                                     Personal Leave

 

Upon written
application, a leave of absence for a specified purpose, and a specified period
of time may be granted to employees with the mutual consent of the Company and
the Union. A copy of such leave is to be given to the Union.

 

B.                                     Union
Leave

 

Members of the
Union, not to exceed one (1) for every forty (40) represented employees at
any one time, elected or appointed by the Union to assignments which take them
away from their employment with the Company, shall be given a leave of absence
for the period of such Union assignment, and upon return to work for the
Company shall be re-employed on the same job which they performed at time of
leave and at the rate of pay prevailing for that job.

 

Duly elected
Union representatives, not to exceed one (1) for every forty (40)
represented employees at any one time, shall be granted leaves of absence for
short periods to attend Union Conventions and similar Union functions.

 

The Union will
give the Company as much notice as possible whenever more than two Union
representatives will be out of the plant simultaneously.

 

C.                                    Sick Leave

 

An employee,
who may become ill or injured and qualify for non-occupational state
disability, and has supported his absence with satisfactory evidence similar to
that required under the Company’s Family and Medical Leave policy, shall, upon
application, be granted an unpaid leave of absence. The employee must provide
medical evidence of continued

 

14

 

disability as required.

 

An employee on
SLOA or workers’ compensation will not receive an attendance infraction for
absenteeism but they will not qualify for Perfect Attendance.

 

In all
instances, upon returning to work, a statement must be presented from a
qualified physician stating the employee is physically capable of performing
his regular job assignment. The Company reserves the right to obtain a second
opinion from a qualified physician designated by the Company and at the Company’s
expense. The employee will return to his previous job provided work is
available and he has the seniority to do so. If the leave was an approved FMLA
Leave for personal disability, he will return to his previous job or a
comparable job. Otherwise, he will be eligible to bump another job, subject to
the seniority provisions of this Agreement, and provided he has the skill and
ability to perform the work.

 

D.                                    Family and Medical Leave

 

It is
understood that all of the leave provisions herein shall be administered in a
manner consistent with an employee’s rights, if any, under applicable family
and medical leave statutes. Likewise, it is the parties’ intent that the
Company shall have the right to exercise any rights of an employer under such
applicable statutes.

 

E.                                     Maternity Leave

 

Employees
absent from work due to pregnancy shall be granted Sick Leave as described
above, provided the required application, approvals, procedures and proof of
medical disability are followed as outlined in the Company’s FMLA Policy and
conform to current applicable laws concerning maternity absences. A leave of
absence for pregnancy may be extended up to three (3) months following
delivery, without loss of seniority or service. In all instances, upon
returning to work following a delivery, a statement must be presented from the
family physician stating the employee is physically capable of performing her
regular job assignment.

 

F.                                     Funeral Leave

 

A seniority
employee who has a death occur in his immediate family (father, step-father,
mother, step-mother, husband, wife, brother, step-brother, sister, step-sister,
child, father-in-law, mother-in-law) will be excused from work up to three
days. A seniority employee whose grandchild, step-child,

 

15

 

grandparent(s) or spouse’s
grandparent(s) pass away, will be excused from work for one day.

 

For each such
day of absence on which he otherwise would have worked and does not work, he
shall be paid eight times his regular straight time hourly rate, provided the
employee attends the funeral and submits proof of death. In the case of death
in foreign residence, a death certificate is required.

 

G. Jury Duty

 

A seniority
employee who is called to and reports for jury duty shall be excused from work
on the days on which he serves or where jury duty was canceled after he
reported to serve. In addition, he shall receive for each day of jury service
on which he otherwise would have worked and does not work, eight times his
regular straight time hourly rate.

 

Such payments
shall not exceed a total of twenty (20) days in any calendar year. Such
compensation shall be payable only if the employee gives the Company prior
notice of such jury duty call; and presents proper evidence as to the jury duty
performed.

 

H. Military Leave

 

The Company
will conform to the requirements of any applicable provisions of law with
respect to military training or service.

 

2.                                       Leave Provisions

 

A.                                   Any employee on leave may return to work in
line with his seniority, before the expiration of the leave, providing not less
than seven (7) calendar days notice is given to Management.

 

B.                                     Employees who are approved for Personal Leave
will be required to apply any remaining vacation days to the beginning of the
leave period commencing with the first day of the leave.

 

C.                                     Employees who are approved for Personal Leave,
Union Leave, Sick Leave, Military Leave (except for yearly two-week
encampments), Family and Medical Leave and Maternity Leave will be granted such
leave without pay.

 

16

 

ARTICLE 15

OVERTIME

 

The regular
work week will be scheduled as eight (8) hours a day, forty (40) hours per
week, as long as, in the Plant Council’s judgment, it is practicable and
consistent with the efficient operation of the plant.

 

Overtime
opportunities will be substantially equalized within a Production Work Group,
between those employees with the appropriate skill level for the required work.
Work Groups will develop and administer their own plans for a fair and
consistent scheduling and regulation of overtime opportunities within the
group. The Plant Council will develop plans for a fair and consistent
scheduling and regulation of overtime opportunities between Work Groups, which
will be administered by the Work Groups.

 

In the case of
Saturday work, announcement prior to 9:00 a.m. on the previous Thursday
will be considered as sufficient. In the event that this work is canceled after
that time, the Company will compensate the affected employee at the rate of
four (4) hours overtime pay.

 

Employees will
be paid time and one-half for:

 

a)                                      Time worked in excess of eight hours in any
continuous twenty-four hours, beginning with the starting time of the employee’s
regularly assigned shift.

 

b)                                     All work performed in excess of forty (40) hours
in any normal work week

 

c)                                      All time worked on any shift which starts on
Saturday. 

 

Double
time shall be paid for:

 

a)                                      All work performed on Sundays and holidays,
except the 1st hour of the normal night (third) shift and as provided under Article 24.

 

ARTICLE 16

WAGES AND OTHER COMPENSATION

 

1.                                       Effective July 1, 2004 a three percent
(3%) general increase will be

 

17

 

applied to all
individual rates of pay of each member of the bargaining unit. Employees who
are not on the active roll at the time of the general increase will receive the
increase adjustment at the time they return to the active roll.

 

2.                                       Effective July 1, 2005 a three percent
(3%) general increase will be applied to all individual rates of pay of each
member of the bargaining unit. Employees who are not on the active roll at the
time of the general increase will receive the increase adjustment at the time
they return to the active roll.

 

3.                                       Effective July 1, 2006 a three percent
(3%) general increase will be applied to all individual rates of pay of each
member of the bargaining unit. Employees who are not on the active
roll at the time of the general increase will receive the increase adjustment
at the time they return to the active roll.

 

4.                                       Classifications and Pay for Knowledge and
Skills

 

a)                                      The new system will consist of three
classifications:

 

Production

Skilled Trades (Maintenance)

Skilled Trades (Tool Room)

 

Furthermore,
within each classification, there will be four levels of training:

 

Basic

Core

Intermediate

Advanced

 

Training will
be provided in each level, as necessary, and as determined by the Education and
Training Committee in consultation with the Work Groups and with final approval
by the Plant Council.

 

b)                                     Pay rates for each classification and level
are listed in back of book – Appendix A

 

c)                                      Each employee assigned to a Work Group will be
required to complete the Basic and Core levels of training for that group.  Intermediate and Advanced level training
shall be voluntary. However, if management

 

18

 

of the Work Group determines that insufficient intermediate and advanced
levels of training are available within the Group, it may resort to necessary
measures which may include transfers.

 

d)                                     The
three-classification and pay for knowledge and skills system is designed to
create greater flexibility and efficiency, and is not designed to reduce the
work force. Therefore, during the term of this Agreement, there will be no
layoffs of bargaining unit employees as a direct result of the institution of
this system. However, it is mutually agreed that the Company retains the right
to adjust the size of the work force due to business, market or other such
conditions. Moreover, management of the Work Groups will be free to assign
employees in accordance with the knowledge and skill levels they have attained.

 

ARTICLE 17

PERFECT ATTENDANCE/SERVICE
TIME AWARD

 

1.                                       Employees who have perfect attendance by
working all regularly scheduled hours (not including overtime) in any specified
quarter will earn a $150.00 Perfect Attendance Award for that period. For
purposes of this award, perfect attendance is defined as no available hours
missed for unexcused absences, illness or injury, discipline, leave of absence,
or strike.

 

An employee on
SLOA or workers’ compensation will not receive an attendance infraction for
absenteeism but they will not qualify for Perfect Attendance.

 

2.                                       Employees actively at work on March 31
with more than five (5) years seniority will receive $9 a year for each
year of service as a Service Time Award. Service time will be calculated each
year on March 31 and the award will be paid on April 30.

 

ARTICLE 18

NEW PRODUCTS

 

1.                                       When and if, from time to time, the Company,
at its discretion, decides to
manufacture a different product, new to the plant, it may create a new Work
Group or otherwise staff the production of such product by means of recalling
or rehiring experienced employees or by means of new hires. If the Company
believes that the skills and/or knowledge

 

19

 

needed to produce such product on an efficient and profitable basis are
substantially different than the skills and knowledge in the existing Work
Groups:

 

a)                                      the Company will install a wage range for the
positions;

 

b)                                     the wage range will be explained in the Plant
Council with the object of obtaining a consensus agreement. The wage program
may be installed by the Company without a consensus agreement in the Plant
Council subject to adjustment as provided below;

 

c)                                      when a wage range is installed, the Union may
process the issue in accordance with Article 29 below, including
submission to arbitration of a grievance alleging that such does not bear a
fair relationship to the wage structure in the plant. The decision of the
arbitrator, if any, shall be effective as of the date when the employee(s) commenced
manufacturing such different product.

 

ARTICLE 19

SHIFT PREMIUM

 

1.                                       A shift premium of 10% of the regular hourly
rate will be paid to all employees whenever they are assigned to and working on
the afternoon and night shifts for the life of the contract.

 

2.                                       Where scheduled variations from the regularly
scheduled shifts occur, the jobs involved will be considered as falling on the
shift on which a major part of the job is worked.

 

3.                                       Any employee who is called in to perform work
in the shift preceding or succeeding his regularly assigned shift, or who holds
over beyond his regularly assigned shift, will be paid the shift premium, if
any, applicable to the shift on which a major portion of his regular scheduled
hours are worked. However, when an employee on the Day Shift or the Afternoon Shift
works twelve or more continuous hours per day, including paid lunch period, he
shall be paid the applicable shift premium for all hours worked over eight.

 

4.                                       Shifts shall be identified as follows:

 

(a)                                  Day Shift - (1st Shift)

When the majority of hours on an employee’s regularly
assigned shift shall fall between 7:00 a.m. and 3:00 p.m., inclusive,
he shall be considered 

 

20

 

as working on the Day Shift.

 

(b)                                 Afternoon Shift - (2nd Shift)

When the majority of hours on an employee’s regularly
assigned shift shall fall between 3:00 p.m. and 11:00 p.m.,
inclusive, he shall be considered as working on the Afternoon Shift.

 

(c)                                  Night Shift - (3rd Shift)

When the majority of hours on an employee’s regularly
assigned shift shall fall between 11:00 p.m. and 7:00 a.m.,
inclusive, he shall be considered as working on the Night Shift.

 

5.                                       An employee on 2nd or 3rd shift, who has been
awarded a new job on either 2nd or 3rd shift, and who, for the Company’s
convenience has been temporarily transferred to day shift for training, shall
receive shift premium during the period of such training. New employees will
only be paid shift premium, when transferred to the applicable shift(s). Day
shift personnel will be paid under other applicable provisions of the Contract.

 

ARTICLE 20

PAID BREAK AND LUNCH PERIODS

 

All employees
will receive two (2) Company-paid, twenty (20)-minute paid breaks each
shift. The Work Groups will be responsible for scheduling break times for the
group.

 

Employees are
encouraged to remain on Company property during break times. Those who remain
on Company property are not required to clock out, whereas those who leave the
grounds, must clock out and back in upon their return to the plant.

 

Employees who
remain on Company property must take their breaks only in the cafeteria, rest
rooms, or on the Company grounds and parking lots. Breaks may not be taken on
the manufacturing floor.

 

All vending
machines will be located in the cafeteria and all profits generated will go to
the Union’s activity fund to be expended as they decide.

 

21

 

ARTICLE 21

REPORTING PAY

 

1.                                       Any employee who has not been notified when
there is lack of work, and therefore reports to work as scheduled, shall
receive four (4) hours pay at his regular hourly rate, unless the lack of
work is caused by circumstances beyond the control of the Company, or resulted
from a labor dispute, or alternative work was made available, or the employee
could not be reached because of an outdated phone number.

 

2.                                       If an employee is asked to return to work
after completing his shift and leaving the plant or he is asked to come in to
work when he was not already scheduled, he will be paid the applicable overtime
rate for the work.  If the call back time
is less than three hours, he will receive his regular rate of pay for the
difference between the hours worked and three hours.

 

ARTICLE 22

TEMPORARY TRANSFERS

 

Employees may
be temporarily transferred to other jobs, within the Work Group and outside the
Work Group, as required to meet production needs. Employees will not be
temporarily transferred between classifications except with the employee’s
consent or in order to deal with the production needs of the business on the
last three work days of the production month.

 

ARTICLE 23

VACATIONS

 

1.                                       Current Vacation Year is defined as the
current twelve months between June 1 and May 31.

 

2.                                       Vacation pay = hours worked x applicable % x
straight time rate with night premium in effect on June 1 of the current
vacation year

 

Or

 

Vacation pay = gross wages x applicable % Whichever pay is greater

 

22

 

A.                                   Vacation
Pay Schedule:

 

	
   

  	
   

  	
  Eligible Time Off

  	
   

  	
  Applicable %

  
	
  6 mos.
  less than 1 yea

  	
   

  	
  1 week

  	
   

  	
  2

  
	
  1 year less than 2
  years

  	
   

  	
  1 week
  2 days

  	
   

  	
  2.8

  
	
  2 years less than 3
  years

  	
   

  	
  1 week
  4 days

  	
   

  	
  3.6

  
	
  3 years less than 5
  years

  	
   

  	
  2 weeks
  2 days

  	
   

  	
  4.8

  
	
  5 years less than 7
  years

  	
   

  	
  2 weeks
  3 days

  	
   

  	
  5.2

  
	
  7 years
  less than 9 years

  	
   

  	
  2 weeks 4 days

  	
   

  	
  5.6

  
	
  9 years
  less than 11 years

  	
   

  	
  3 weeks

  	
   

  	
  6.0

  
	
  11 years
  less than 13 years

  	
   

  	
  3 weeks
  1 day

  	
   

  	
  6.4

  
	
  13 years less than 15 years

  	
   

  	
  3 weeks
  2 days

  	
   

  	
  6.8

  
	
  15 years
  less than 17 years

  	
   

  	
  3 weeks
  3 days

  	
   

  	
  7.2

  
	
  17 years
  less than 19 years

  	
   

  	
  3 weeks
  4 days

  	
   

  	
  7.6

  
	
  19 years
  less than 21 years

  	
   

  	
  4 weeks

  	
   

  	
  8.0

  
	
  21 years
  less than 23 years

  	
   

  	
  4 weeks
  1 day

  	
   

  	
  8.4

  
	
  23 years
  and over

  	
   

  	
  4 weeks
  2 days

  	
   

  	
  8.8

  

 

B.                                     Factor
for Computed Clock Hours Calculation

 

1)                                      Calculation:

 

a)                                      Between 1500 hours and 2000 clocked worked
hours shall be paid at 2000 hours

 

Vacation = 2000 x applicable % x straight rate with
night premium in effect on June 1 of the current vacation year

 

b)                                     Over 2000 clocked worked hours

 

Vacation pay = hours worked x applicable % x straight
time rate with night premium in effect on June 1 of the current vacation
year

 

Or

 

Vacation pay = gross wages x applicable % whichever
is greater

 

c)                                      Less than 1500 clocked hours of work

 

Vacation pay = gross wages x applicable %

 

2)                                      For the purpose of computing clocked hours,
any hours lost because 

 

23

 

of a work week scheduled under forty (40) hours
(except as listed in Paragraph 3.a.) or hours paid for negotiating time and
Plant Council meeting time which fall in the earnings period shall be counted
as clocked hours.

 

3)                                      Clocked hours shall be computed in full
calendar weeks. Starting with the Monday before June 1, or June 1, if
it falls on a Sunday or Monday of the previous vacation year.

 

a)                                      Time lost, during the earnings period, in any
work week under forty (40) hours because of a shutdown due to holiday, vacation,
power failure, storm, strike, fire or cause beyond the power of the Company,
shall not be considered clocked hours.

 

b)                                     Earnings Period covers from June 1 to May 31
of the preceding vacation year. Earnings Period shall be computed in full calendar
weeks, in the same manner as clocked hours.

 

4)                                      Vacation schedules may be canceled in the
event of a National Emergency. Employees affected shall receive vacation pay on
the same basis as outlined in the Vacation Pay Schedule.

 

5)                                      Vacation Payment after Separation

 

a)                                      Employees who die, or go on leave or lay off,
on or before May 31 of the preceding vacation year shall be issued the
Vacation Pay for which they qualify under the above Sections.

 

b)                                     Employees who leave before December 31 of
the preceding vacation year for any reason other than those listed in 4.A. above,
are not eligible for Vacation Pay.

 

c)                                      Anyone leaving the employ of the Company
between December 31st of the preceding vacation year, and the following May 31,
who qualified for vacation pay, shall receive that pay based on the applicable
percentage of their wages earned between the previous June 1st and their
date of leaving.

 

d)                                     Anyone retiring between December 31st of
the preceding vacation year, and the following May 31, shall be issued the
vacation pay for which they qualify.

 

24

 

6)                                      An employee who returns to work from a
Military Leave and who has not been back at work for a full year on June 1
of the current vacation year will be paid his applicable percentage of 2000
hours, times the total of his June 1st regular straight time hourly rate
and applicable shift premium.

 

7)                                      Vacation Time:

 

a)                                      Vacation may be taken as 1/2 days (4 hrs), one
day at a time or weekly or any variety of the above.

 

b)                                     A vacation request form must be completed,
approved, and turned in to Human Resources on Mondays at 8am for proper payroll
processing.

 

c)                                      Employees may take a vacation day in place of
being off sick by notifying their supervisor prior to the start of their shift.
Their perfect attendance money and attendance record will not be affected.

 

d)                                     Employees may choose either a lump sum or “pay
as you go” method for vacation pay. Employees must elect their vacation payment
method by May 1 of the vacation year.

 

e)                                      Lump sum payments will be made by the end of
the second full week in June.

 

f)                                        Any balance of money owed for “pay as you go”
vacation not used during the year will be paid by the first full week in June.

 

g)                                     RBC will have advanced vacation checks ready
on the payday of the week before the employee goes on vacation, or write a
replacement check the same day. This applies to pre-approved vacation of one
week or more in the same week with two weeks notice.

 

ARTICLE 24

HOLIDAYS

 

1.             Hourly rated employees shall be
paid for the following Holidays without work being performed, provided they
meet the eligibility requirements described below:

 

25

 

1.)              New Year’s Day

2.)              Good Friday

3.)              Memorial Day

4.)              Independence Day

5.)              Labor Day

6.)              Thanksgiving Day

7.)              Friday following Thanksgiving Day

8.)              Christmas Eve

9.)              Christmas Day

10.)        Three (3) weekdays between Christmas Day and New Year’s Eve

11.)        New Year’s Eve

 

In applying
this procedure, when any of the above enumerated holidays falls on Sunday the
day following (Monday) will be observed as the holiday and it shall be paid as
such holiday. When any of the above enumerated holidays falls on Saturday the
previous day (Friday) will be observed as the holiday and it shall be paid as
such holiday.

 

2.                                       To be eligible for Holiday Pay, an employee
must have completed his probationary period and have worked the last scheduled
work day before and the next scheduled work day after the holiday within the
same work week or have an acceptable explanation for not doing so.

 

3.                                       Eligible employees shall receive eight (8) hours’
pay at their regular straight time hourly rate exclusive of night shift and
overtime premium for each of the paid holidays.

 

4.                                       If work is performed on these holidays,
employees shall, in addition to the regular holiday payment, receive twice
their regular hourly rate for hours actually worked, exclusive of night shift
and overtime premium. Employees who have accepted such holiday work assignment
and then fail to report for and perform such work without reasonable
explanation, shall not receive pay for the holiday.

 

ARTICLE 25

401K

 

1.                                       A non discretionary Company contribution on
behalf of each covered employee, in the amount of four (4) percent of
gross wages will be deposited in each account monthly. An additional
contribution on behalf of certain current older employees designed to replace
the contribution made to the former defined pension plan will be deposited
yearly.

 

2.                                       In addition to their regular contribution of
4%, the Company will contribute an additional one (1%) percent on any employee
contributions of 10% or more to their 401K.

 

3.                                       Loans will be permitted on moneys contributed
by the employee. You

 

26

 

must be a plan participant for one year before you may take a loan.

 

4.                                       Loans are allowed for the following reasons:

Purchase of, or renovations
to a primary home

Unreimbursed medical expenses

Secondary
tuition for yourself or your dependents

Avoid
eviction from or foreclosure to your primary home

 

5.                                       Minimum loan: $1000; Maximum loan: 50% of
vested account value, or $50,000 (whichever is less)

 

ARTICLE 26

PERSONAL INJURIES/WORKERS’
COMPENSATION

 

1.                                       Return to work from injury and/or illness -
Not Work Related

 

A.                                   An employee who has been incapacitated by a
personal injury or illness may return to work when he is able to return to
their regular job with no restrictions. Full duty with no restrictions.

 

2.                                       Procedures for Handling On-the-Job Injuries

 

A.                                   When injured on the job, employees must use the
medical facilities made available by the Company for all services in connection
with the injury. Any employee who bypasses the Company facilities will act on his
own responsibility insofar as the expense involved.

 

B.                                     Employees who, while at home, require
emergency medical attention for injuries sustained at work, will report to the
Capitol Health System - Mercer Campus or Helene Fuld Campus emergency room.

 

C.                                     Employees who are injured at their work in the
plant and sent to the hospital, shall, if they are sent home from the hospital,
receive pay at their regular rate for the balance of their shift or time in the
hospital, whichever is less. This applies to the first time they are sent home
for such injury.

 

1)                                      Doctor visits on day shift will be scheduled
to finish not later than normal quitting time, if possible.

 

D.                                    The Company may elect to provide work for
workers’ compensation illnesses or injuries provided the work available meets
the physical restrictions outlined by the attending physician.

 

27

 

E.                                      If an employee disputes the treatment or
course of action taken by the attending physician he may request a second
opinion through the workers’ compensation carrier. A second opinion must be
approved by the workers’ compensation carier for all medical treatment to be
paid.

 

ARTICLE 27

SAFETY AND HEALTH

 

1.                                       The Company agrees that it will provide
sanitary and safety devices within the plant. The Union agrees that the
employees will take proper care of such equipment.

 

2.                                       A Company Representative and Union President,
or his designee, will tour the shop once per month during working hours to
review matters for safety and health.

 

3.                                       Safety and Environmental Committee

 

A.                                   The Company and Union will expand its Safety
Committee to include responsibility for analyzing and correcting unsafe and
unhealthful working conditions inside the plant, insuring that the plant does
not pose a threat to the outside environment, and overseeing training on health,
safety, and environmental issues.

 

B.                                     The Committee will consist of two (2) persons
appointed by the Union President and two (2) persons appointed by the RBC
Plant Manager.

 

C.                                     The Committee will meet at least once per
month or as often as necessary.

 

D.                                    The Committee will conduct regular inspections
of the different areas of the plant to ensure that conditions are not
hazardous.  Reports of these inspections
will be given to the Work Groups that were inspected and to the Plant Council.

 

E.                                      Employee training required by law regarding
Health and Safety will be separate from the minimum time for training required
in the Training and Education Section of this Agreement.  Such training, however, will be part of the
Training and Education Committee’s regular plan.

 

4.                                       Safety Glasses

 

A.                                   The
Company will provide up to $110 ($25 credit for exam and $85 for

 

28

 

glasses) for each employee purchasing prescription
safety glasses once per contract year. Policy choices will be explained when PO
is issued. All doctor’s and lab visits will be made on the employee’s own time.

 

B.                                     The Company will supply non-prescription
Safety Glasses.

 

C.                                     Employees are responsible for the care of
their safety glasses (prescription and non-prescription). The Company will
replace any glasses that are broken during the course of work.

 

D.                                    Safety glasses are required on the shop floor.

 

5.                                       Safety Work Shoes - Under the shoe policy, one
pair of work shoes per year will be provided. Payments will be made in
accordance with current safety shoe policy.

 

ARTICLE 28

UNION FACILITIES

 

The Company
agrees to provide the Union with a suitable Bulletin Board on which it may post
notices, provided such Union notices deal with meetings, election of officers,
appointment of committees and other non-controversial matters concerning the
affairs of Local 502, U.A.W.

 

The Company
will provide the Union officials with office space, as well as telephone and
computer services, for use in conjunction with performance of their duties
under the terms of the Agreement.

 

ARTICLE 29

DISPUTE RESOLUTION

 

It is
recognized that, from time to time, disputes will arise, and that, although
every effort will be made to resolve issues at the source, resolution will not
always be reached without intervention from others.

 

Disputes on
the shop floor will first be discussed with the affected employees and
supervisors, as appropriate, in an attempt to settle the issue. If the matter
cannot be resolved, the aggrieved employee may request that the Supervisor call
a member of the Union Plant Committee to discuss the issue. Other disputes will
be handled at the level that they arise. All disputes involving discipline or
affecting employment will be reviewed by

 

29

 

the Plant Council.

 

If the dispute
cannot be resolved at the first level, a member of the Union Plant Committee
may submit the dispute as a written grievance, along with all the facts, to the
Plant Council, not more than ten (10) days after the dispute arose. A
meeting will be scheduled within one (1) week of such submission to review
the issues with the Plant Council and the appropriate parties.

 

If the Plant
Council cannot find resolution of the issue acceptable to the affected
employee, the issue will be discussed in a meeting with the Plant Council and
the UAW International Representative and individuals selected to represent the
Company. If the issue cannot be satisfactorily resolved at this meeting, the
Company will respond in writing to the issue within five (5) days after
the meeting. At that time, the party who raised the issue may demand final and
binding arbitration. In order to demand arbitration, the party must submit its
demand, in writing, within thirty (30) days after the dispute was submitted as
a written grievance. This thirty (30)-day time limit can only be extended by
consensus of the Plant Council, and then only for thirty (30) additional days.
A log will be kept of all written grievances in order to comply with the
timeliness provisions.

 

Arbitration
will be in accordance with the Rules of Voluntary Labor Arbitration of the
American Arbitration Association and a dispute may be submitted to
arbitration by filing a Demand for Arbitration in accordance with such rules within
thirty (30) days of the submission of the grievance to arbitration. If made
within the scope of the authority of the Arbitrator, the decision of the
Arbitrator upon the issues submitted shall be final and binding upon the
parties to the Agreement.

 

The
compensation and expense of the Arbitrator and the Arbitration proceedings
shall be borne equally by the parties.

 

ARTICLE 30

LIVING AGREEMENT

 

In keeping
with our Philosophy Statement, this is a “Living Agreement”. As a “Living
Agreement,” both the Union and Management understand that there may be issues
that arise during the implementation of this Agreement that have not been
addressed or discussed during bargaining. However, it may only be modified
through consensus of the Parties.

 

30

 

ARTICLE 31

INSURANCE

 

1.                                      Insurance Benefits - Active
Employees

 

A.                                   Subject to the provisions of this Agreement,
life insurance and AD&D Insurance will be procured by the Company for all
regular employees for the life of this contract. This insurance will be
provided at no expense to the employee.

 

B.                                     Life insurance is valued at $20,000 and
AD&D is valued at $40,000.

 

C.                                     The group medical and prescription plans will
be provided to eligible employees and dependents for the life of this contract.
The prescription plan will provide mail order provisions for qualified
maintenance drugs. The Company will select the carrier and reserves the right to change carriers.

 

The medical and prescription
plan premium on 5/1/04 is the “2004 premium” for calculating increases in
company and union employee contributions.

 

1)                                      The premium increase between 5/1/03 and
5/1/04, 2004 premium, the premium will be shared as follows:

 

a)              The
company will first pay premium increases calculated as follows.

 

2003 premium X 112.5%

 

b)             The
balance of the premium increase, 2004 premium - (minus 2003 premium X 112.5%)
will be shared as follows:

 

(1)           80%
will be paid by the company

(2)           20%
will be paid by the union employees

(3)           The
union paid premium increase will be added to their 2003 rate

 

2)                                      The premium increase between 5/1/04 and
5/1/05, 2005 premium, the premium will be shared as follows:

 

a)              The
company will first pay premium increases calculated as follows.

 

2004 premium X 112.5%

 

31

 

b)    The balance of the premium increase, 2005 premium - (minus 2004
premium X 112.5%) will be shared as follows:

 

(1)           80%
will be paid by the company

(2)           20%
will be paid by the union employees

(3)           The
union paid premium increase will be added to their 2004 rate

 

3)                                      The premium increase between 5/1/05 and
5/1/06, 2006 premium, the premium will be shared as follows:

 

a)              The
company will first pay premium increases calculated as follows.

 

2005  premium X
112.5%

 

b)             The
balance of the premium increase, 2006 premium - (minus 2005 premium X 112.5%)
will be shared as follows:

 

(1)           80%
will be paid by the company

(2)           20%
will be paid by the union employees

(3)           The
union paid premium increase will be added to their 2005 rate

 

Any changes to
the present health/prescription insurance carrier will be equal or better than
the current coverage.

 

D.                                    The Union will have the right to discuss
insurance rates and medical plan coverage changes. In order to improve health
insurance costs and coverage the Union will work with RBC and the insurance
carrier during the 60 day period following notification of the rate change by
the carrier.

 

E.                                      Group medical and prescription plans, dental
and life insurance plans will remain in effect for all active employees,
employees on disability and employees on approved Family Leave of Absence.

 

 F.                                   The Company will procure a group dental plan
for the life of this contract. This dental plan will be provided at no expense
to the employee. Such plan shall be evidenced by a written agreement conforming
to the requirements of law.

 

G.                                     Employees hired on or after the effective date
of this Agreement shall be

 

32

 

eligible for the above plans after they complete
their probationary period.

 

H.                                    All administrative expense shall be borne by
the Company and the Company shall determine all administrative procedures which
may be required to execute such a program.

 

I.                                         Employee weekly medical co-pay contribuitions
will be deducted on a pre-tax basis and will be automatically deducted from the
pay of employees who are enrolled in the plans. Employees on the disability,
workers’ comp, temporary disability, or an approved leave of absence will be
expected to make monthly contributions toward their co-pay. Employees who are
on layoff and eligible to receive benefit continuation will receive that
coverage at no cost. Employees who enroll in the plan will be covered for
individual or family coverage as applicable.

 

J.                                        Payment of $100 per month to employees who
elect to decline the company’s medical insurance program, provided they provide
proof of coverage and spousal consent. In case of subsequent change in spouse’s
insurance status, employees would be immediately eligible to rejoin the company’s
plan.

 

2.            
Insurance Benefits - Retirees

 

A.                                   The following identifies requirements for
retirement from the Company with respect to benefit continuation eligibility
and benefit coverage.

 

1)                                      Retirees are defined as employees who
terminate their employment with the Company, and are, at the time of
termination, at least age sixty-five (65) or are eligible for Medicare
benefits, and have at least ten (10) years of service with the Company.

 

2)                                      Early Retirees are defined as employees who
terminate their employment with the Company, and are, at the time of
termination, at least sixty (60) years of age, and who have at least ten (10) years
of service, but are not yet eligible as Retirees.  Early Retirees who leave the Company, but who
later meet the eligibility requirements as Retirees will be considered
thereafter to be eligible for benefit continuation and coverage for Retirees.

 

B.                                     Early Retirees may continue on the active
employee’s medical, prescription and dental plans described above until age 65
or until they become Medicare eligible. Such coverage will also apply to
spouses of retirees.  The coverage,
active or Medicare, will depend of the

 

33

 

spouse’s age.

 

1)                                      A monthly co-pay per household, payable in
advance, for all employees who retire prior to age 65, or

 

2)                                      When an Early Retiree is totally disabled,
continuation will remain in effect by paying the current active co-pay.
Continuation will be available for a period of up to two (2) years
provided the early retiree does not become eligible for Medicare. After two
years the early retiree can remain in the active employees’ plan by paying the monthly
medical co-pay until they are 65 years of age. At 65 years the employee will be
transferred to Medicare coverage as provided under the length of the contract.

 

3)                                      Early retirees spouses will have 6 months of
additional coverage beyond the death of the RBC early retiree, provided, the
spouse continues to pay the monthly medical co-pay.

 

C.                                     Retirees age 65 who become Medicare eligible
are no longer eligible for coverage under the active employee benefit plans.
They are eligible for the following coverages for the life of this contract:

 

1)                                      Life insurance in the amount of $6,500
procured and paid by the Company.

 

2)                                      Any retiree may purchase and pay for any
Medicare supplemental coverage and upon proof of purchase will be reimbursed
the Company’s portion of the monthly premium for the life of this contract.

 

3)                                      Surviving spouses will continue to receive the
Company’s monthly Medicare reimbursement for 6 months beyond the death of the RBC
retiree provided they submit proof of continued insurance coverage.

 

3.             Insurance
Plans - General Information

 

A.                                   Terms of any contract issued by an insurance
company shall be controlling in all matters pertaining to benefits thereunder
and it is understood that the grievance procedure of any collective bargaining agreement
between the parties hereto shall not apply to this plan of insurance or any
insurance plan in connection therewith.

 

B.                                     All insurance is term insurance without cash,
loan or paid up values.

 

34

 

C.                                     All of the benefits provided under a health
care carrier to an employee or his dependents, if any, are subject to the
coordination of benefits provisions of the medical care contract.

 

4.             Insurance
Plans - Termination of Employment

 

TERMINATION SCHEDULE

 

	
   

  	
   

  	
  Life

  	
   

  	
  AD&D/Medical/Dental/

  Prescription Drugs

  
	
  Quit

  	
   

  	
  Same
  day

  	
   

  	
  Same
  day

  
	
  Discharge

  	
   

  	
  Same
  day

  	
   

  	
  Same
  day

  
	
  Layoff

  	
   

  	
  Six
  months Same day AD&D

  	
   

  	
  Six
  months – Medical

  
	
  Services

  	
   

  	
  Six
  months

  	
   

  	
  Same
  day

  
	
  Leave
  of Absence  *

  	
   

  	
   

  	
   

  	
   

  
	
  Personal

  	
   

  	
  Six
  months

  	
   

  	
  Sixty
  days

  
	
  Union

  	
   

  	
  Six
  months

  	
   

  	
  Six
  months

  
	
  Sick
  or Injury (Non-Occupational)

  	
   

  	
  One
  year

  	
   

  	
  One
  year

  
	
  Maternity

  	
   

  	
  Six
  months

  	
   

  	
  Nine
  months from date of leaving or upon completion of pregnancy whichever occurs
  first.

  
	
  Sick
  or Injury (Occupational)

  	
   

  	
  Six
  months

  	
   

  	
  Until
  seniority acquired on last day worked is equaled by the period of time
  involved in the disability.

  
	
  Retirement

  	
   

  	
  Same
  day for AD&D only

  	
   

  	
  As
  per contract and age at retirement

  
	
  Strike

  	
   

  	
  Suspended

  	
   

  	
  Suspended

  

 

* Following
the applicable period of subsidized coverage by the Company, employees may pick
up Life Insurance premiums through the Company to continue coverage for the
duration of the Leave of Absence. 

 

A.            Employees on Leave of Absence are
expected to maintain coverage

 

35

 

by paying the
appropriate medical co-pay. It is their responsibility to contact the HR
Department to arrange for payments. Once Company subsidized coverage is ended,
employees may continue coverage under COBRA.

 

B.                                     Employees who request and receive severance pay in a lump sum as
outlined in this Agreement will thereafter have no further rights to company-paid
benefit continuation as described in this Article, but may continue coverage
under COBRA.

 

C.                                     Employees who are recalled from layoff and are
subsequently laid off again within one month of the recall date, will not be
eligible for insurance continuation as described above, but rather, all insurance
will be terminated as of the last day of work and they can apply for COBRA.

 

D.                                    In no event will Company-paid insurance
coverage continue for longer than the initial six-month period. If an employee
on the layoff list refuses recall for the third time or refuses an offer of his
original position or is recalled but fails the job to which he is called his
benefits will be terminated and he will be offered COBRA.

 

5.            Insurance
Coverage - Surviving Dependents

 

The Company
will maintain the current health benefits for surviving spouses and eligible
dependent children of deceased active members for 6 (six) months from the date
of death of the employee for the life of this contract. The cost of this
coverage will be paid by the Company.

 

ARTICLE 32

WAIVER OF ANY CLAUSE

 

A waiver of
any clause in this contract does not mean a permanent waiver.

 

36

 

ARTICLE 33

NO STRIKE-NO LOCKOUT

 

The Company
agrees that there shall be no lockout, and the Union agrees that there shall be
no strike, walk-out, slow-down, stoppage of or other interference with
work, during the term of this Agreement.

 

ARTICLE 34

DURATION OF AGREEMENT

 

This Agreement
shall remain in full force and effect until midnight, June 30, 2007 and
thereafter shall continue from year to year until either party gives the other
ninety (90) days prior written notice of a desire to change, modify or
terminate same. If neither party gives notice to terminate this Agreement, but
one or both of the parties gives notice as aforesaid of an intention to change
or modify any of the terms or provisions of this Agreement, then within ten (10) days
after such notice or not less than thirty (30) days prior to the expiration of
this Agreement, representatives of the Company, and the Union shall meet to
discuss, negotiate, and, if possible, agree upon such changes. In the event
such Agreement continues beyond the expiration date of this Agreement, then the
terms and conditions of this Agreement, shall remain in full force and effect
until such time as said negotiations have terminated, either by reason of the
inability of the parties to finally conclude a new Agreement, or because a new
Agreement between the parties has been concluded.

 

This Agreement
shall be binding on the parties hereto, their executors, administrators, and
successors.

 

IN WITNESS WHEREOF, the duly chosen representatives of the parties
hereto affix their hands and seals this 1st day of July,
2004.

 

	
  FOR THE
  UNION:

  	
  FOR THE
  COMPANY:

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Robert
  Pike

  	
  Robert Pike

  	
  /s/ Paul Harclerode

  	
  Paul Harclerode

  
	
  International
  Rep.

  	
   

  	
  Plan Manager

  
	
   

  	
   

  	
   

  
	
  /s/ Joseph
  Csik, Jr.

  	
  Joseph Csik,
  Jr.

  	
  /s/ Rosa
  Rivera

  	
  Rosa Rivera

  
	
  President

  	
   

  	
  Human
  Resources

  
	
   

  	
   

  	
   

  
	
  /s/ Douglas
  Large

  	
  Douglas
  Large

  	
   

  
	
  Vice-President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jeffrey
  Maon

  	
  Jeffrey Maon

  	
   

  
	
  Committee
  member

  	
   

  	
   

  
					

 

 

37

 

APPENDIX A

 

PRODUCTION JOBS

 

	
  Pay Rates

  	
   

  	
  7/1/04

  3%

  	
   

  	
  7/1/05

  3%

  	
   

  	
  7/1/06

  3%

  	
   

  
	
  Advanced

  	
   

  	
  19.28

  	
   

  	
  19.86

  	
   

  	
  20.46

  	
   

  
	
  Intermediate

  	
   

  	
  17.67

  	
   

  	
  18.20

  	
   

  	
  18.75

  	
   

  
	
  Core

  	
   

  	
  16.05

  	
   

  	
  16.53

  	
   

  	
  17.03

  	
   

  
	
  Basic

  	
   

  	
  14.11

  	
   

  	
  14.53

  	
   

  	
  14.97

  	
   

  
	
  Starting Rate

  	
   

  	
  11.69

  	
   

  	
  12.04

  	
   

  	
  12.40

  	
   

  
	
  Hire Rate

  	
   

  	
  9.75

  	
   

  	
  10.04

  	
   

  	
  10.34

  	
   

  

 

SKILLED TRADE JOBS

 

	
  Pay Rates

  	
   

  	
  7/1/04

  3%

  	
   

  	
  7/1/05

  3%

  	
   

  	
  7/1/06

  3%

  	
   

  
	
  Advanced

  	
   

  	
  21.89

  	
   

  	
  22.55

  	
   

  	
  23.23

  	
   

  
	
  Intermediate

  	
   

  	
  20.42

  	
   

  	
  21.03

  	
   

  	
  21.66

  	
   

  
	
  Core

  	
   

  	
  18.63

  	
   

  	
  19.19

  	
   

  	
  19.77

  	
   

  
	
  Basic

  	
   

  	
  17.35

  	
   

  	
  17.87

  	
   

  	
  18.41

  	
   

  
	
  Starting
  Rate

  	
   

  	
  15.57

  	
   

  	
  16.04

  	
   

  	
  16.52

  	
   

  
	
  Hire
  Rate

  	
   

  	
  12.98

  	
   

  	
  13.37

  	
   

  	
  13.77

  	
   

  

 

Monthly
Medical Co-pay for Early Retiree:

 

$135 per month per family 

 

Company’s
Monthly Contribution to Supplemental Medicare Health Insurance per Retiree/Spouse:

 

7/1/04 - 7/1/06 = $45.80

 

38

 

MEMORANDUM OF UNDERSTANDING NO. 1

Transition Issues

Work Group Issues

 

This Memorandum of
Understanding outlines the process of transition of current employees to
Product Line focused Work Groups. The Bushing Work Group has been identified as
the Experimental Work Group for greater employee involvement and participation.
As the members of the Work Groups are identified, the traditional departments
will be eliminated, and group members will begin to function as a Work Group,
even though they may not be physically located in the same area. The physical
transition of machines and equipment to Product Line Work Groups is expected to
be completed no later than December 1999.

 

Any issues not specifically
addressed in this Memorandum of Understanding No. 1 will be handled
through the procedures and philosophy statement of the Agreement.

 

1.            Establishing
the Work Groups

 

Within two (2) weeks after
the ratification of the Agreement, the Company will identify the specific
technical skills required in each Work Group to insure production requirements
can be met during the transition period.

 

The jobs will then be posted
and the Plant Council will select employees by seniority, insuring that the
required technical skills identified by the Company are included in each Work
Group. Once employees are assigned to a Work Group, they may be asked to work
on any job within their classification (either Production, Skilled Trades
Maintenance, or Skilled Trades Tool & Die Maker). Employees may be
asked to work in their same classification in another Work Group if needed for
business reasons. At that time, current job descriptions and job classes will
no longer apply.

 

Each Work Group will then select
a representative to serve as spokesperson to others outside the group.

 

39

 

2.             Developing the Pay for Skill and
Knowledge Program

 

The Training and Education
Committee will identify the skills and knowledge required for each level of the
Pay for Skill and Knowledge system, the method of training, and the measure of
successful completion for each of the three job classifications. The Plant
Council shall use its best efforts to retain the services of the trainer
mentioned in Article 8 of the Agreement within one month after
ratification, if possible, to assist the Training and Education Committee in
this effort.

 

As a guideline, the Basic and
Core levels will consist of basic education requirements in such areas as
safety, trade unionism, and introductory accounting, team building and problem
solving and will consist of job skills generally associated with the present Class 1
and Class 2 jobs. The Intermediate and Advanced levels will consist of
further business, group management, and problem solving training, as well as
job skills generally associated with the present Class 3 and Class 4
jobs.

 

The Training and Education
Committee along with the Work Group Representative and the Work Group
Supervisor will develop individual training plans for the first six months to
allow all employees to meet the Basic level training requirements within one
year (by June 1,1998). The plans will be submitted to the Plant Council
for final approval. The Education and Training Committee along with the members
of the Work Group will be responsible for insuring that employees are given the
training identified on their individual training plan or rescheduling within a
reasonable time period.

 

The Education and Training
Committee will have developed and implemented the individual training plans by June 1,
1997.

 

3.             Group Management

 

Initially, all Work Groups will
be managed in a traditional sense with the Supervisor retaining group
management responsibilities.

 

40

 

As the Bushing Work Group
completes training for problem-solving, decision-making, group management,
scheduling work, and accounting it will begin taking on those responsibilities.
The other Work Groups will continue to be managed more traditionally through a
supervisor, but may increase the employee participation in the management of
the Work Group as mutually agreed by the Work Group and members of the Plant
Council, after evaluating the effectiveness of this approach in the Bushing
Work Group.

 

It is understood that the
twenty (20) hours per week given to the Union President for the performance of
Union business (see Article 6) is intended to cover all his normal
functions, such as attendance at Plant Council meetings, training as a Union
official, answering employee or retiree inquiries, investigating grievances,
etc. In this connection, the parties recognize that, in contrast to the 1994-96
contract, these functions no longer include a formal daily tour of the plant.

 

4.             Area/Machine
Layout

 

Each Work Group (including both
represented and non-represented employees and supervisors) will determine the
most effective machine layout of the manufacturing area and will develop a plan
for moving the equipment (including timetables). The Bushing Work area will be
established first.

 

MEMORANDUM OF UNDERSTANDING NO. 2

Transition Issues

Pay and Benefits

 

A.                                   In connection with 1996-97 negotiations,
the parties have agreed to a new pay structure which will go into effect when
the three-classification and pay for knowledge and skills system is instituted.
The parties have also agreed to certain general increases and a flexibility
increase, as described in Article 16 of the Agreement. In applying these
increases, the parties have

 

41

 

reached the following understandings:

 

1.                                       Employees will be provided training
opportunities with a goal of completing each level of training within their
classification in the time indicated in Appendix A or less.

 

2.                                       When a level of training has been
satisfactorily completed as of June 1st, the employee will thereafter be
paid at the rate of pay of the level attained or at his then current individual
rate of pay, whichever is higher.

 

3.                                       All employees will begin training by June 1,
1997.

 

4.                                       An employee who has been at work and available
to accept training opportunities and who, through no fault of his own, has not
been offered the training necessary to complete a level of training, will be
paid at such level commencing with the end of the training year, June 1.

 

5.                                       The one year training period may be extended
by mutual agreement to accommodate an employee who has not satisfactorily
completed a level of training by June 1, such extensions to be determined
on an individual

case-by-case basis.

 

B.                                     The parties have also agreed to eliminate the
incentive pay clause which appeared in Article 20, paragraph 5, of the 1994-96
Agreement, effective upon the ratification of this Agreement. It is recognized,
however, that certain employees will not have had an opportunity to advance to
the top of their former ranges at the time such clause is eliminated. The
parties have agreed that such employees will continue to receive increases in
the amount, at the intervals, and subject to the conditions set forth in such
former paragraph 5, until they have received the number of increases they would
have received if that clause had not been eliminated.

 

C.                                     The parties have also agreed to terminate the
former defined benefit pension plan. 
Termination will take place as soon as

 

42

 

practicable after legal approvals have been obtained, effective on the
last day of a calendar month. Current accruals will be converted into annuities
in accordance with current vesting schedules and legal obligations with respect
to lump sum and retirement options. It is anticipated that such termination
shall not occur until sometime after June 1, 1997, that is, until after
the next plan year begins. Accordingly, it is anticipated that covered employee
will accrue another year of service credit under such plan.

 

As a result,
effective June 1, 1998, the Company will institute a defined contribution
plan for covered bargaining unit employees, subject to the following terms:

 

1.                                       Necessary governmental approvals and qualifications.

 

2.                                       An annual non discretionary Company contribution on behalf of each covered employee, in the amount of four (4) percent of gross wages, plus an additional contribution on behalf of certain
current older employees designed to replace the current $17.00 benefit for such
employees.

 

3.                                       No hardship withdrawals.

 

4.                                       No loans.

 

5.                                       Full and immediate vesting for current
employees. New employees to vest 50 percent at the end of the plan year in which
two (2) years’ service is attained and 100 percent at the end of the
plan year in which three (3) years’ service is attained.

 

6.                                       Quarterly investment statements.

 

7.                                       Employees eligible to make
individual contributions up to 15 percent of gross wages.

 

8.                                       Investment options to be determined
by the parties and to include at least one bond and one income fund.

 

43

 

9.                                       Employees eligible to change investments
quarterly.

 

10.                                 Plan pays administrative costs up to a limit
of $20,000 per year over and above forfeitures.

 

11.                                 Upon retirement or termination, employee may
take vested amounts in cash, may leave funds in Plan (if they exceed $3,500),
may roll over his funds or may direct the Plan to purchase an annuity on his behalf.  The cost of purchasing such an annuity shall
be an administrative expense of the Plan, subject to paragraph 10 above.

 

12.                                 The precise terms are subject to drafting by
legal and financial consultants to be retained by the Company and will be reviewed
further by the parties.

 

D.                                    Finally, the Company has agreed to pay each
employee who was a member of the Union negotiating committee eight (8) hours
of pay at straight time rates, less deductions required by laws, for each day
when the parties engaged in collective bargaining and the employee was thereby
unable to report for work on his regularly scheduled shift.

 

44

 

INDEX

 

	
  ARTICLE

  	
   

  
	
   

  	
   

  	
   

  
	
  29

  	
  Dispute
  Resolution

  	
   

  
	
  34

  	
  Duration
  of Agreement

  	
   

  
	
  25

  	
  401K

  	
   

  
	
  24

  	
  Holidays

  	
   

  
	
  31

  	
  Insurance

  	
   

  
	
  11

  	
  Layoffs and Recall to Work

  	
   

  
	
  14

  	
  Leave of
  Absence

  	
   

  
	
  30

  	
  Living
  Agreement

  	
   

  
	
  18

  	
  New Products

  	
   

  
	
  33

  	
  No
  Strike – No Lockout

  	
   

  
	
  5

  	
  Non-Discrimination

  	
   

  
	
  12

  	
  Open Jobs

  	
   

  
	
  15

  	
  Overtime

  	
   

  
	
  20

  	
  Paid Break and Lunch
  Periods

  	
   

  
	
  1

  	
  Parties to the Agreement

  	
   

  
	
   

  	
  Pay Rates

  	
   

  
	
  17

  	
  Perfect
  Attendance/Service Time Award

  	
   

  
	
  26

  	
  Personal
  Illness/Workers’ Compensation

  	
   

  
	
  2

  	
  Philosophy
  Statement

  	
   

  
	
  9

  	
  Probation
  Period

  	
   

  
	
  21

  	
  Reporting Pay

  	
   

  
	
   

  	
  Retiree Health Insurance
  Company Contribution

  	
   

  
	
  27

  	
  Safety
  and Health

  	
   

  
	
  10

  	
  Seniority

  	
   

  
	
  13

  	
  Severance Pay

  	
   

  
	
  19

  	
  Shift Premium

  	
   

  
	
  6

  	
  Structure and
  Decision-Making Process

  	
   

  
	
  22

  	
  Temporay
  Transfers

  	
   

  
	
  8

  	
  Training

  	
   

  
	
  28

  	
  Union
  Facilities

  	
   

  
	
  3

  	
  Union
  Recognition

  	
   

  
	
  4

  	
  Union Security and
  Check-off

  	
   

  
	
  23

  	
  Vacations

  	
   

  
	
  16

  	
  Wages and Other
  Compensation

  	
   

  
	
  32

  	
  Waiver
  of Any Clause

  	
   

  
	
  7

  	
  Work
  Performed Outside the Bargaining UnitEXHIBIT
10.19

 

EMPLOYMENT
AGREEMENT

 

WITH

 

MICHAEL
J. HARTNETT

 

This Employment Agreement
(the “Employment Agreement”) is dated as of this 18th day of December, 2000
(the “Commencement Date”), and made between Roller Bearing Company of America, Inc.,
a Delaware corporation (“Employer” or the “Company”), and Michael J. Hartnett
Ph.D. (“Employee”). Employer hereby employs Employee and Employee hereby
accepts employment, on the terms and conditions hereinafter set forth.

 

1.         DEFINITIONS.

 

As used in this Agreement,
and unless the context requires a different meaning, the following terms shall
be defined as follows:

 

“Competing Business” means
any business or commercial activity (including, without limitation, research
and development) that is carried on in any material respect during the Term by
Employer or any of Employer’s Affiliates. 

 

“Person” means any natural
person, partnership, corporation, trust, company or other entity.

 

“Territory” means the
geographical area in which the Employer or any of Employer’s Affiliates engages
in any business (other than an insignificant amount of business).

 

2.         TERM.

 

Subject to the terms and
conditions of this Agreement, the Company shall employ Employee as its
President and Chief Executive Officer, for a term commencing on the
Commencement Date hereof and continuing until December 17, 2005 unless
earlier terminated pursuant to the provisions of Section 7 hereof (the “Term”).

 

3.         DUTIES.

 

(a)        During the Term, Employee agrees to serve
Employer as its President, Chief Executive Officer and Chairman of its Board of
Directors (the “Board”), reporting to the Board, and in such other executive
capacities as may be requested from time to time by the Board or a duly
authorized committee thereof; provided that (i) Employee’s duties shall at
all times be limited to those commensurate with the foregoing offices, and (ii) Employee
shall not be obligated, without his consent, to relocate his principal office
location from Fairfield, Connecticut (or the surrounding area), although the
foregoing limitation is not intended to limit Employee’s requirement, in the
normal course of business, to travel to the Employer’s other business
locations. Employee shall serve, if elected, as a member of the Board, and
shall render similar such services for corporations directly or indirectly
controlled by Employer or by Roller Bearing Holding Company, Inc. (“Employer’s
Affiliates”) as Employer may from time to time

 

 

reasonably request (but only
such services as shall be consistent with the duties Employee is to perform for
Employer and with Employee’s stature and experience). All duties and services
contemplated by this Section 3 are hereinafter referred to as the “Services.”

 

(b)       During the Term, Employee will devote his full
business time and attention to, and use his good faith efforts to advance, the
business and welfare of Employer; provided that the foregoing shall not
restrict Employee’s rights to engage in passive investment activities, to serve
on the boards of directors of other entities (so long as such activities are
not violative of Section 4 below), or to engage in civic and other similar
activities.

 

4.         CONFIDENTIAL INFORMATION AND COVENANT NOT TO
COMPETE.

 

(a)        Employee hereby agrees that, during the Term
and thereafter, he will not disclose to any Person, or otherwise use or exploit
in competition with Employer or Employer’s Affiliates, any of the proprietary
or confidential information or knowledge treated by the Employer or Employer’s
Affiliates as confidential, including without limitation, trade secrets,
processes, records of research, information included in proposals, reports,
methods, processes, techniques, computer software or programming, or budgets or
other financial information, regarding Employer or Employer’s Affiliates, its
or their business, properties or affairs obtained by him at any time (i) during
the Term or (ii) during any employment of Employee with the Employer or
any of Employer’s Affiliates prior to the Commencement Date (“Prior Employment”),
except to the extent required to perform the Services; PROVIDED that the
foregoing shall not apply to: (A) information in the public domain other
than by reason of a violation of this Agreement by Employee, or (B) information
that Employee is compelled to disclose by operation of law or legal process (so
long as Employee provides Employer with prior notice of any such compelled
disclosure and an opportunity to defend against such disclosure), or (C) information
generally known to Employee by reason of his particular expertise that is not
specific to the Employer.

 

(b)       Employee hereby agrees that during the Term
and for a period of two years thereafter (the “Non-Compete Term”), he will not (i) engage
in or carry on, directly or indirectly, any Competing Business in any Territory
in which such Competing Business is then engaged in by the Employer or Employer’s
Affiliates, (ii) allow his name to be used by any Person engaged in any
Competing Business, (iii) invest in, directly or indirectly, any Person
engaged in any Competing Business, or (iv) serve as an officer or
director, employee, agent, associate or consultant of any Person engaged in a
Competing Business (other than Employer or any Employer’s Affiliate).
Notwithstanding the foregoing, the Non-Compete Term shall be only the Term hereof
in the event Employee’s employment hereunder is terminated by the Employer
hereunder without cause (as provided in Section 8(c) below). Subject
to Section 3(b) hereof, nothing herein shall prohibit the Employee
from (A) investing in any business that is not a Competing Business or (B) investing
in a publicly-held entity if such investment (individually or as part of a
group) is limited to not more than five percent (5%) of the outstanding equity
issue of such entity.

 

(c)        All intellectual properties developed by
Employee during the Term or during any Prior Employment and related to the
business (or foreseeable business prospects) of

 

2

 

the Employer shall be for the
account of the Employer. Employee agrees to enter into such agreements
(including transfer documents) as may be reasonably required by Employer to
confirm the foregoing.

 

(d)       Employee shall not, during the Non-Compete
Term, directly or indirectly, solicit or induce or attempt to solicit or induce
any affiliate, director, agent, or employee of Employer or any of Employer’s
Affiliates or contractor then under contract to the Employer, to terminate his,
her or its employment or other relationship for the purpose of entering into an
employment or other relationship with any of the Employer’s competitors or for
any other purpose or no purpose. Employee shall not, during the Non-Compete
Term, directly or indirectly, solicit or induce or attempt to solicit or induce
any customer or supplier of Employer or of any of Employer’s Affiliates to
terminate his, her or its relationship for the purpose of entering into a
similar relationship with any competitors of Employer or Employer’s Affiliates
or for any other purpose or no purpose.

 

(e)        Employee agrees that the remedy at law for any
breach by him of any of the covenants and agreements set forth in this Section 4
will be inadequate and will cause immediate and irreparable injury to Employer
and that in the event of any such breach, Employer, in addition to the other
remedies which may be available to it at law, shall be entitled to obtain
injunctive relief prohibiting him (together with all those persons associated
with him) from the breach of such covenants and agreements.

 

(f)        The parties hereto intend that the covenants
and agreements contained in this Section 4 shall be deemed to include a
series of separate covenants and agreements, one for each and every county of
the states in which the Employer or any of the Employer’s Affiliates does
business. If, in any judicial proceeding, the duration or scope of any covenant
or agreement of Employee contained in this Section 4 shall be adjudicated
to be invalid or unenforceable, the parties agree that this Agreement shall be
deemed amended to reduce such duration or scope to the extent necessary to
permit enforcement of such covenant or agreement, such amendment to apply only
with respect to the operation of such covenant and agreement in the particular
jurisdiction in which such adjudication is made.

 

5.         INDEMNIFICATION.

 

Employer hereby agrees to
indemnify Employee to the maximum extent permitted by Delaware law at the time
of the assertion, against any liability against Employee arising out of or
relating to his status as an employee acting within the course and scope of
employment, officer or director of Employer or any Employer’s Affiliate at any
time during the Term, whether such liability is asserted during or after the
Term.

 

6.         BASE SALARY AND BENEFITS.

 

During the Term, Employer
shall pay Employee a salary at the rate of thirty-seven thousand five hundred
dollars ($37,500) per month payable at least as frequently as monthly and
subject to payroll deductions as may be necessary or customary in respect of
Employer’s salaried employees (“Base Salary”). The Base Salary will be subject
to an automatic annual increase

 

3

 

effective December 1 of
each year during the Term in a percentage amount equal to the greater of (i) five
percent (5%) or (ii) the annual percentage increase in the All-Items
Consumer Price Index for All Urban Consumers for such year as determined for
the month of August. Employee shall also be entitled to receive the normal
executive benefits of Employer and the benefits set forth in Schedule A
hereto (the “Additional Benefits”) and to the following (the “Special Benefits”):

 

(a)        four weeks of paid vacation for each twelve
month period during the Term, to accrue PRO RATA during the course of each such
twelve month period; and

 

(b)       medical and hospitalization insurance
furnished to all other executive employees of Employer, as such insurance may
be in effect from time to time (subject always to the right of Employer to
amend such insurance).

 

7.         EXPENSES.

 

Employer will pay or
reimburse Employee for such reasonable travel, entertainment, or other expenses
as he may incur on behalf of Employer during the Term in connection with the
performance of his duties hereunder. Employee shall furnish Employer with such
evidence that such expenses were incurred as Employer may from time to time
reasonably require or request.

 

8.         TERMINATION OF EMPLOYMENT.

 

Notwithstanding Section 1
hereof, the Term may be terminated prior to December 17, 2005, under the
following circumstances:

 

(a)        DEATH OR TOTAL DISABILITY. The Term shall
automatically and immediately terminate upon Employee’s death or “Total
Disability.” For purposes of this Agreement, “Total Disability” shall mean
Employee’s physical or mental incapacitation or disability that renders
Employee unable to perform the Services as performed prior to such
incapacitation or disability for a period of twenty-six (26) consecutive weeks
or during any one hundred fifty (150) business days (whether or not
consecutive) during any twelve (12) month period during the Term.

 

(b)       TERMINATION BY EMPLOYER FOR CAUSE. Employer,
at its election, shall have the right to terminate the Term, by written notice
to Employee to that effect, for “Cause”. The term “Cause” shall mean:

 

(i)            any act of fraud, embezzlement, theft or
commission of a crime involving moral turpitude;

 

(ii)           any material breach by Employee of any
material covenant, condition, or agreement in this Agreement (“Employee’s
Material Breach”); or

 

(iii)          any chemical dependency by Employee (other
than in connection with medicines prescribed for Employee).

 

4

 

To terminate the Term
pursuant to this Section 8(b), Employer shall give written notice (“Cause
Notice”) to the Employee specifying the claimed Cause. If Employee fails to
cure the same within thirty (30) days after the receipt of the applicable Cause
Notice (or such longer period as may be reasonably required if such actions are
subject to cure), the Term shall terminate at the end of such thirty (30) day
period or such longer reasonable period, as the case may be. Notwithstanding
anything that may be interpreted to the contrary, it is expressly agreed that
no act of the type contemplated by or described in Section 8(b)(i) shall
be capable of being cured by Employee and the Employer may terminate Employee
immediately without the requirement for such cure period.

 

(c)        TERMINATION BY EMPLOYER WITHOUT CAUSE.
Employer shall have the right, at its election, to terminate the Term at any
time for any reason other than “Cause” upon not less than sixty (60) days prior
written notice to Employee.

 

(d)       TERMINATION BY EMPLOYEE. Employee shall have
the right, at his election, to terminate the Term at any time by written notice
to Employer upon not less than one hundred and twenty (120) days prior written
notice; provided, however, that (i) such notice period shall be thirty
(30) days in the case of a termination for “Good Reason”; and (ii) if such
termination is other than for Good Reason the Term, for purposes of Section 4(b) and
(d), shall continue through November 30, 2005.

 

(e)        SALARY AND BENEFITS IN EVENT OF TERMINATION.
Upon termination of the Term, the following shall be applicable,
notwithstanding anything to the contrary elsewhere herein:

 

(i)        If the Term is terminated by Employer pursuant
to Section 8(b) or by Employee pursuant to Section 8(d) other
than for “Good Reason,” Employee shall thereafter be entitled to the Base
Salary, the Special Benefits and the Additional Benefits only until the
effective date of such termination, unless otherwise agreed by Employer.

 

(ii)       If the Term is terminated (A) pursuant to
Employee’s death or Total Disability pursuant to Section 8(a) hereof,
or (B) by the Employer without Cause pursuant to Section 8(c) hereof,
or (C) by Employee with Good Reason pursuant to Section 8(d) hereof,
(x) Employer shall pay to Employee on the date of termination the Base Salary
due to Employee for the then remainder of the Term, net of any benefits paid to
Employee pursuant to any policy of disability insurance maintained by Employer,
plus a PRO RATA portion of the Employee’s annual bonus for the fiscal year of
the Employer in which such termination occurs (provided that in the case of
Employee’s death or Total Disability such payment and benefits shall extend for
no longer than two (2) years following such event), and (y) Employee shall
be entitled to the Special Benefits described in Section 6(b) hereof
for the then remainder of the Term.

 

(f)        GOOD REASON. For purposes of this Agreement,
Good Reason shall mean any of the following which occurs subsequent to the date
of this Agreement:

 

(i)        a substantial reduction in the Employee’s
position, duties, responsibilities and status with the Company inconsistent
with the Employee’s duties,

 

5

 

responsibilities and status
immediately prior to a change in the Employee’s titles or offices, or any
removal of the Employee from or any failure to reelect the Employee to any of
such positions, except in connection with the termination of his employment for
disability, retirement or Cause or by the Employee other than for Good Reason;
PROVIDED that such reduction or removal occurs at a time when (A) Employee
does not have a majority of the voting power of the Company or (B) Employee
has a majority of the voting power of the Company, but, notwithstanding
Employee’s objections, the Board of Directors of the Company has approved the
taking of such actions;

 

(ii)       a relocation of Employee without his consent
to a location more than 75 miles from the Company’s headquarters at Fairfield,
Connecticut;

 

(iii)      any material breach by the
Company of any provision of this Agreement; or

 

(iv)     any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company.

 

(g)       DELIVERY OF RECORDS UPON TERMINATION. Upon
termination of the Term, Employee will deliver to Employer all records of
research, proposals, reports, memoranda, computer software and programming,
budgets and other financial information, and other materials or records
(including any copies thereof) made, used or obtained by Employee in connection
with his employment by Employer and/or any Employer’s Affiliate.

 

9.         MISCELLANEOUS.

 

(a)        MODIFICATION AND WAIVER OF BREACH. No waiver
or modification of this Employment Agreement shall be binding unless it is in
writing signed by the parties hereto and expressly stating that it is intended
to modify this Agreement. No waiver of a breach hereof shall be deemed to
constitute a waiver of a future breach, whether of a similar or dissimilar
nature.

 

(b)       NOTICES. All notices and other communications
required or permitted under this Employment Agreement shall be in writing,
served personally on, or made by certified or registered United States mail to,
the party to be charged with receipt thereof. Notices and other communications
served in person shall be deemed delivered when so served. Notices and other
communications served by mail shall be deemed delivered hereunder 72 hours
after deposit of such notice or communication in the United States Post Office
as certified or registered mail with postage prepaid and duly addressed to whom
such notice or communications is to be given, in the case of

 

(i)        Employer:

 

Roller Bearing Holding
Company, Inc.

c/o Roller Bearing Company of
America, Inc.

60 Round Hill Road

Fairfield, Connecticut  06430

 

6

 

with a copy (which shall not
constitute notice to Employer) to:

 

Whitney Acquisition II Corp.

177 Broad Street

Stamford, Connecticut 06901

Attention:     David
A. Scherl

                      Michael
C. Salvator

                      William
Dawson

 

(ii)       Employee:

 

Michael J. Hartnett

c/o Roller Bearing Company of
America, Inc.

60 Round Hill Road

Fairfield, Connecticut  06430

 

Any party may change said
party’s address for purposes of this Section by giving to the party
intended to be bound thereby, in the manner provided herein, a written notice
of such change.

 

(c)        COUNTERPARTS. This instrument may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same Employment Agreement.

 

(d)       GOVERNING LAW. This Employment Agreement shall
be construed in accordance with, and governed by, the internal laws of the
State of Delaware applicable to agreements executed and to be performed in such
state without regard to principles of choice of law or conflicts of laws.

 

(e)        COMPLETE EMPLOYMENT AGREEMENT. This Employment
Agreement and its Exhibits and Schedules, together contain the entire agreement
between the parties hereto with respect to the subject matter of this
Employment Agreement and supersedes all prior and contemporaneous oral and
written negotiations, commitments, writings, and understandings with respect to
the subject matter of Employee’s relationship with Employer, including that
certain Employment Agreement, dated June 23, 1997 between the Company and
the Employee.

 

(f)        NON-TRANSFERABILITY OF EMPLOYEE’S INTEREST.
None of the rights of Employee to receive any form of compensation payable
pursuant to this Employment Agreement shall be assignable or transferable. Any
attempted assignment, transfer, conveyance, or other disposition of any
interest in the rights of Employee hereunder shall be void.

 

7

 

IN WITNESS WHEREOF, the
undersigned have executed this Employment Agreement on the day and year first
above written.

 

	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
  /s/ Michael
  J. Hartnett

  	
   

  
	
   

  	
  MICHAEL J.
  HARTNETT

  
	
   

  	
   

  
	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  ROLLER
  BEARING COMPANY OF AMERICA,

  
	
   

  	
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony
  S. Cavalieri

  	
   

  
	
   

  	
   

  	
  Anthony S.
  Cavalieri

  	
   

  
	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  
					

 

8

 

SCHEDULE A

 

MICHAEL HARTNETT

 

EMPLOYEE BENEFITS

 

1.         Continuation of existing
life insurance coverage in the amount of $1,500,000, with Employee’s designees
as beneficiaries.

 

2.         Executive Medical
Coverage ($6000 supplemental coverage).

 

Dental
insurance.

 

Prescription
drug coverage.

 

The above
benefits are subject to change at any time at the discretion of the Board of
Directors of Employer; provided that such coverages provided to Employee shall
at all times be consistent with coverages provided to others of Employer’s
executive employees.

 

3.         Disability insurance (as
currently provided by Roller Bearing Company, provided that such insurance may
be modified from time to time at the discretion of the Board of Directors of
Employer).

 

4.         Employee shall be
entitled to an annual performance bonus with respect to each fiscal year of the
Employer during which Employee remains an employee of the Company beginning
with the fiscal year ending March 31, 2001, in an amount determined as a
percentage of Employee’s Base Salary, based on the following criteria:

 

	
  Percentage of Actual EBITDA to
  Plan

  	
   

  	
  Amount of Bonus

  
	
   

  	
   

  	
   

  
	
  Less than 90%

  	
   

  	
  Discretion of Board of
  Directors

  
	
   

  	
   

  	
   

  
	
  90% to 99.9%

  	
   

  	
  100% of Base Salary

  
	
   

  	
   

  	
   

  
	
  100% to 109.9%

  	
   

  	
  150% of Base Salary

  
	
   

  	
   

  	
   

  
	
  110% or higher

  	
   

  	
  200% of Base Salary

  

 

The amount payable under this
paragraph 3, if any, shall be paid to Employee within fifteen (15) days
following the delivery of the Company’s financial statements for each fiscal
year of the Employer during the Term, but in no event later than one hundred
twenty (120) days following the end of such fiscal year.

 

“Plan” shall
mean the operating plan established by the Employee, in his status as CEO of
Employer and as approved by the Board within thirty (30) days following the
beginning of each fiscal year, as applicable to Employer and all of Employer’s
Affiliates and as applicable to the determination of bonuses payable to others
of Employer’s (and Employer’s Affiliates) employees to the extent such bonuses
are calculated by reference to operating results.

 

9

 

“EBITDA” shall
mean the income of the Employer and the Employer’s Affiliates increased by
interest, taxes, depreciation and amortization, calculated in a manner
consistent with the calculation of the Plan.

 

For the
purposes hereof, (i) the performance bonus for the fiscal year ending March 31,
2001 shall encompass the period beginning April 1, 2000 and the plan for
such fiscal year shall be [$                      ];
and (ii) the performance bonus for the period April 1, 2005 through December 17,
2005 shall be calculated on the basis of the Plan for fiscal year ending March 31,
2006, pro rated for the applicable short period.

 

5.         Contributions by Employer
to 401(K) or other pension or profit sharing plans pursuant to arrangements
applicable to all executive level employees.

 

6.         The Employer shall
maintain an apartment in Los Angeles for use by the Employee while on business.

 

10

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